<PAGE>

    As filed with the Securities and Exchange Commission on January 21, 1998

                                                       Registration No. 33-85608
================================================================================


                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549
                                 --------------
                                    FORM S-1
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933

                                 --------------
                             A.I. RECEIVABLES CORP.
                    (Depositor to the Trust described herein)
                (Exact name as specified in registrant's charter)

                      AIC PREMIUM FINANCE LOAN MASTER TRUST
                    (Issuer with respect to the Certificates)

<TABLE>
<S>                                   <C>                              <C>  
          Delaware                              9999                   Application Pending
(State or other jurisdiction of     (Primary Standard Industrial        (I.R.S. Employer
incorporation or organization)       Classification Code Number)     Identification Number)
</TABLE>


                             A.I. RECEIVABLES CORP.
                                160 Water Street
                            New York, New York 10038
                                 (212) 428-5500

          (Address, including zip code, and telephone number, including
             area code, of registrant's principal executive office)
                               
                                 --------------

                               MICHAEL D. VOGEN
                                  TREASURER
                            A.I. RECEIVABLES CORP.
                               160 Water Street
                           New York, New York 10038
                                (212) 428-5500
          (Name, address, including zip code, and telephone number,
                  including area code, of agent for service)

                                   COPIES TO:


      SYLVIE DURHAM                              ANDREA G. PODOLSKY, ESQ.
 Weil, Gotshal & Manges LLP                Cleary, Gottlieb, Steen & Hamilton
      767 Fifth Avenue                               One Liberty Plaza
 New York, New York 10153                         New York, New York 10006
      (212) 310-8000                                  (212) 225-2000

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

         Approximate date of commencement of proposed sale to the public: As
soon as practicable on or after this registration statement becomes effective.

         If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. [ ]

         If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

         If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]

         If this form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]

         If delivery of the prospectus is expected to be made pursuant to Rule
434, check the following box. [ ]

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

                        CALCULATION OF REGISTRATION FEE
================================================================================

<TABLE>
<CAPTION>
                                                                                             PROPOSED
  TITLE OF SECURITIES                  AMOUNT TO                PROPOSED MAXIMUM         MAXIMUM AGGREGATE         AMOUNT OF
   BEING REGISTERED                  BE REGISTERED          OFFERING PRICE PER UNIT*       OFFERING PRICE       REGISTRATION FEE
<S>                                 <C>                     <C>                           <C>                   <C>
Series 1998-1 Floating Rate
Class A Asset Backed Certificates      $900,000                    100%                      $900,000                $265.50


Series 1998-1 Floating Rate
Class B Asset Backed Certificates      $100,000                    100%                      $100,000                $ 29.50

</TABLE>
================================================================================
* Estimated solely for the purpose of calculating the registration fee.



         The Registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.

<PAGE>

                             A.I. RECEIVABLES CORP.

                              CROSS REFERENCE SHEET
<TABLE>
<CAPTION>

ITEM
NUMBER          NAME AND CAPTION IN FORM S-1                                     CAPTION IN PROSPECTUS
------          ----------------------------                                     ---------------------
<S>         <C>                                                          <C>

Item 1.     Forepart of the Registration Statement and
            Outside Front Cover Page of Prospectus..............         Front Cover Page of Registration Statement;
                                                                          Outside Front Cover Page of Prospectus
Item 2.     Inside Front and Outside Back Cover Pages
            of Prospectus.......................................         Inside Front Cover Page; Outside Back
                                                                          Cover Page of Prospectus
Item 3.     Summary Information, Risk Factors and Ratio of 
             Earnings to Fixed Charges..........................         Prospectus Summary; Special Considerations

Item 4.     Use of Proceeds.....................................         Use of Proceeds

Item 5.     Determination of Offering Price.....................         *

Item 6.     Dilution............................................         *

Item 7.     Selling Security Holders............................         *

Item 8.     Plan of Distribution................................         Underwriting

Item 9.     Description of Securities to be Registered..........         Prospectus Summary; Description of the Offered
                                                                          Certificates 

Item 10.    Interests of Named Experts and Counsel..............         Legal Matters

Item 11.    Information with Respect to the Registrant..........         Business of A.I. Receivables Corp., A.I. Credit Corp. 
                                                                          and AICCO, Inc.
Item 12.    Disclosure of Commission Position on 
             Indemnification for Securities Act Liabilities.....         *

Item 13.    Other Expenses of Issuance and Distribution.........         See Part II

Item 14.    Indemnification of Directors and Officers...........         See Part II

Item 15.    Recent Sales of Unregistered Securities.............         *

Item 16.    Exhibits and Financial Statement Schedules..........         See Part II

Item 17.    Undertakings........................................         See Part II
</TABLE>

----------

*    Not applicable.


                                        2
<PAGE>

PROSPECTUS

                                [GRAPHIC OMITTED]

                                  $[----------]

                      AIC PREMIUM FINANCE LOAN MASTER TRUST

   $[_________] Series 1998-1 Floating Rate Class A Asset Backed Certificates

             $[_________] Series 1998-1 Floating Rate Class B Asset
                              Backed Certificates

                             A.I. RECEIVABLES CORP.
                                   Transferor

                                A.I. CREDIT CORP.
                                   AICCO, INC.
                        Original Transferors and Servicer

            Each Series 1998-1 Floating Rate Class A Asset Backed Certificate
(collectively, the "Series 1998-1 Class A Certificates") and each Series 1998-1
Floating Rate Class B Asset Backed Certificate (collectively, the "Series 1998-1
Class B Certificates" and, together with the Series 1998-1 Class A Certificates,
the "Offered Certificates") offered hereby will evidence an undivided interest
in the assets of AIC Premium Finance Loan Master Trust (the "Trust") created
pursuant to a Pooling and Servicing Agreement dated as of December 1, 1994, as
will be amended and restated as of the Closing Date (together with all
supplements to such agreement, the "Agreement"), among A.I. Receivables Corp.
("AIR"), as transferor (the "Transferor"), A.I. Credit Corp. ("AIC"), as an
original transferor and servicer, AICCO, Inc. ("AICCO"), as an original
transferor and servicer (together with AIC, the "Original Transferors" or the
"Servicer"), and The First National Bank of Chicago, as trustee (the "Trustee").
AICCO is a wholly owned subsidiary of AIC which, in turn, is a wholly owned
subsidiary of American International Group, Inc. ("AIG"). Each of AIC and AICCO
owns 50% of AIR.

            The assets of the Trust will include the entire beneficial interest
in commercial premium finance loans to borrowers to finance premiums on property
and casualty insurance policies governed by the law of a State in the United
States of America or the District of Columbia under which the borrowers are the
insureds, made or purchased by either AIC or AICCO (the "Loans"), including (i)
all amounts due and to become due and all collections and recoveries on the
Loans, and (ii) the proceeds of certain collateral security securing the Loans,
each as described herein. The beneficial interests described above are herein
referred to as the "Receivables." AIC and AICCO will service the Loans. The
Trust has previously issued a Series of certificates (the "Series 1994-1
Certificates").

                                                       (continued on next page)

            THERE CURRENTLY IS NO SECONDARY MARKET FOR THE OFFERED CERTIFICATES

AND THERE IS NO ASSURANCE THAT ONE WILL DEVELOP. POTENTIAL INVESTORS SHOULD
CONSIDER, AMONG OTHER THINGS, THE INFORMATION SET FORTH IN "SPECIAL
CONSIDERATIONS," WHICH DESCRIBES MATERIAL RISKS INVOLVED WITH AN INVESTMENT IN
THE OFFERED CERTIFICATES.

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

<PAGE>

            THE OFFERED CERTIFICATES REPRESENT INTERESTS IN THE TRUST ONLY AND
DO NOT REPRESENT INTERESTS IN OR RECOURSE OBLIGATIONS OF A.I. RECEIVABLES CORP.,
A.I. CREDIT CORP., AICCO, INC., AMERICAN INTERNATIONAL GROUP, INC. OR ANY OF
THEIR RESPECTIVE AFFILIATES. NEITHER THE OFFERED CERTIFICATES, THE LOANS NOR THE
RECEIVABLES ARE INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR
INSTRUMENTALITY OR ANY OTHER PERSON.

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

            THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

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

================================================================================
<TABLE>
<CAPTION>

                                    PRICE TO               UNDERWRITING                            PROCEEDS TO
                                     PUBLIC                  DISCOUNT                              TRANSFEROR(1)
<S>                                  <C>                       <C>                               <C>       <C> 

Per 1998-1 Class A Certificate                               [_____]%                            [____]%  [_____]%
Per 1998-1 Class B Certificate                               [_____]%                            [____]%  [_____]%
Total.......................      $[_______]                $[_____]                               $[________]
</TABLE>
================================================================================

(1) Before deduction of expenses of the offering payable by AIR estimated to be
$[______].

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

            The Offered Certificates are offered by the Underwriters as
specified herein, subject to receipt and acceptance by the Underwriters and
subject to their right to reject in whole or in part. It is expected that the
Offered Certificates will be delivered in book-entry form on or about January
[___], 1998, through the facilities of The Depository Trust Company.

                              GOLDMAN, SACHS & CO.
                                -----------------


                The date of this Prospectus is January [__], 1998

                                        1

<PAGE>

(continued from previous page)

         Concurrently with the issuance of the Series 1998-1 Class A
Certificates and Series 1998-1 Class B Certificates, the Trust will issue from
the same Series another class of certificates (the "Series 1998-1 Class C
Certificates," and collectively with the Series 1998-1 Class A Certificates and
the Series 1998-1 Class B Certificates, the "Series 1998-1 Certificates")
described herein, which will be owned by the Transferor. The Transferor will
also own the undivided interest in the Trust represented neither by the Series
1998-1 Certificates nor the Series 1994-1 Certificates (the "Transferor
Ownership Interest"). The Transferor may offer from time to time other Series of
certificates which evidence fractional undivided interests in certain assets of
the Trust, which may have terms significantly different from the Series 1998-1
Certificates, by reducing its interest in the Trust. See "Description of the
Offered Certificates--New Series Issuances."

         Interest will accrue on the Series 1998-1 Class A Certificates from
[_____________], 1998 (the "Closing Date") through [__________], 1998 at the per
annum rate of [_______]%. From [________], 1998 through [________], 1998 and
with respect to each Interest Period thereafter, interest will accrue on the
Series 1998-1 Class A Certificates at the per annum rate of [____]% above the
rate per annum shown on page 3750 of the Telerate screen or any successor page
as the composite London interbank offered rate for one-month United States
dollar deposits ("LIBOR") determined as set forth herein on the related LIBOR
Determination Date with respect to each such period, but in no event in excess
of [______]% per annum (the "Series 1998-1 Class A Certificate Rate"). Interest
will accrue on the Series 1998-1 Class B Certificates from the Closing Date
through [______________], 1998 at the per annum rate of [______]%. From
[________], 1998 through [________________], 1998 and with respect to each
Interest Period thereafter, interest will accrue on the Series 1998-1 Class B
Certificates at the per annum rate of [____]% above LIBOR determined as set
forth herein on the related LIBOR Determination Date with respect to each such
period, but in no event in excess of [____]% per annum (the "Series 1998-1 Class
B Certificate Rate"). The initial LIBOR Determination Date will be [_________],
1998. Interest with respect to the Series 1998-1 Certificates will be
distributed on [_________], 1998 and on the 15th day of each month thereafter
(or, if such 15th day is not a business day, the next succeeding business day)
(each a "Distribution Date").

         Principal with respect to the Series 1998-1 Class A Certificates is
scheduled to be distributed monthly on each Distribution Date during the Series
1998-1 Class A Controlled Amortization Period (as defined herein). The first
such Distribution Date is scheduled to occur in [_______] and the last such
Distribution Date is scheduled to occur in [______]; however, principal with
respect to the Series 1998-1 Class A Certificates may be paid earlier or later
under certain limited circumstances described herein. Principal with respect to
the Series 1998-1 Class B Certificates is scheduled to be distributed in a
single payment, after the Series 1998-1 Class A Certificates have been paid in

full, on the Distribution Date in [______], but may be paid earlier or later
under certain limited circumstances described herein. See "Maturity
Considerations" and "Description of the Offered Certificates--Pay Out Events."
During the Series 1998-1 Class A Controlled Amortization Period, the amount
scheduled to be paid as principal on the Series 1998-1 Class A Certificates on
each of the aforementioned Distribution Dates, out of collections received with
respect to the Receivables, and to the extent of the Series 1998-1 Class A
Ownership Interest (as defined herein) will equal $[_____________]. See
"Description of the Offered Certificates--Principal Payments."

         On each Distribution Date distributions of interest will be made first
in respect of the Series 1998-1 Class A Certificates, second in respect of the
Series 1998-1 Class B Certificates and third in respect of the Series 1998-1
Class C Certificates. On each Distribution Date on which principal is
distributable in respect of the Series 1998-1 Class A Certificates, such
principal will be payable after interest on the Series 1998-1 Class A
Certificates and


                                        2
<PAGE>

Series 1998-1 Class B Certificates has been paid. Principal payments will not be
made to Series 1998-1 Class B Certificateholders until the final principal
payment due in respect of the Series 1998-1 Class A Certificates has been paid.
Thus on each Distribution Date on which principal is distributable in respect of
the Series 1998-1 Class B Certificates, such principal will be payable after
interest on the Series 1998-1 Class A Certificates and Series 1998-1 Class B
Certificates and principal on the Series 1998-1 Class A Certificates have been
paid. On each such Distribution Date no payments of interest or principal will
be made in respect of the Series 1998-1 Class C Certificates unless principal
due in respect of the Series 1998-1 Class B Certificates has been paid. For
further information regarding the extent to which the Series 1998-1 Class B
Certificates are subordinated to the Series 1998-1 Class A Certificates and the
extent to which the Series 1998-1 Class C Certificates are subordinated to the
Series 1998-1 Class A Certificates and Series 1998-1 Class B Certificates, see
"Description of the Offered Certificates--Application of Collections." In
addition, a portion of the Principal Receivables and Finance Charge Receivables
allocable to the Transferor Ownership Interest will be deposited monthly in the
Series 1998-1 Yield Enhancement Account and will be available to fund payments
due with respect to the Series 1998-1 Certificates to the extent described
herein.

         Certain employee benefit plans, including plans subject to ERISA, may
not purchase any Offered Certificates. See "Summary--ERISA Plans" herein.

         IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE OFFERED
CERTIFICATES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

         Until [_________], 1998, all dealers effecting transactions in the
registered securities, whether or not participating in this distribution, may be
required to deliver a prospectus. This is in addition to the obligation of

dealers to deliver a prospectus when acting as underwriters and with respect to
their unsold allotments or subscriptions.

                   REPORTS TO HOLDERS OF OFFERED CERTIFICATES

         Unless and until Definitive Certificates (as defined herein) are
issued, monthly and annual reports, containing information concerning the Trust
and prepared by the Servicer, will be sent on behalf of the Trust to Cede & Co.
("Cede"), as nominee of The Depository Trust Company ("DTC") and registered
holder of the Offered Certificates, pursuant to the Agreement. See "Description
of the Offered Certificates--Book-Entry Registration," "--Reports to Holders of
Offered Certificates" and "--Evidence as to Compliance." Such reports will not
constitute financial statements prepared in accordance with generally accepted
accounting principles. The Transferor does not intend to send any of its
financial reports to Holders of Offered Certificates (as defined herein) or to
the owners of beneficial interests in the Offered Certificates ("Certificate
Owners"). The Servicer will file with the Securities and Exchange Commission
(the "Commission") such periodic reports with respect to the Trust as are
required under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations of the Commission thereunder.


                                        3

<PAGE>

                              AVAILABLE INFORMATION

         The Transferor, as transferor to the Trust, has filed a Registration
Statement under the Securities Act of 1933, as amended (the "Securities Act"),
with the Commission on behalf of the Trust with respect to the Offered
Certificates offered pursuant to this Prospectus. For further information,
reference is made to the Registration Statement and amendments thereof and
exhibits thereto, which are available for inspection without charge at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549; 7 World Trade Center, New York, New York 10048;
and Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of the Registration Statement and amendments thereof and
exhibits thereto may be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
The Commission also maintains a site on the World Wide Web at
"http://www.sec.gov" at which users can view and download copies of reports,
proxies and other information filed electronically through the Electronic Data
Gathering, Analysis and Retrieval ("EDGAR") system.

                               PROSPECTUS SUMMARY

         The following is qualified in its entirety by reference to the detailed
information appearing elsewhere in this Prospectus, including the description of
material risks set forth under "Special Considerations." Certain capitalized
terms used herein are defined elsewhere in this Prospectus. A listing of the
pages on which some of such terms are defined is found in the "Index of Key
Terms For Prospectus." Unless the context requires otherwise, certain
capitalized terms used herein relate only to the Offered Certificates.


<TABLE>
<S>                                  <C> 
Title of Securities................. Series 1998-1 Floating Rate Class A Asset Backed Certificates (the "Series
                                     1998-1 Class A Certificates") and Series 1998-1 Floating Rate Class B Asset
                                     Backed Certificates (the "Series 1998-1 Class B Certificates" and, together
                                     with the Series 1998-1 Class A Certificates, the "Offered Certificates") that
                                     are being issued pursuant to an Amended and Restated Pooling and Servicing
                                     Agreement, to be dated as of the Closing Date, among AIR, as Transferor,
                                     AIC and AICCO, as the Original Transferors and Servicer, and the Trustee,
                                     and the Series 1998-1 Supplement thereto of the same date (collectively,
                                     together with the Amended and Restated Series 1994-1 Supplement thereto,
                                     to be dated as of the Closing Date, unless the context otherwise requires, the
                                     "Agreement").  The original Pooling and Servicing Agreement that is to be
                                     amended and restated is dated as of December 1, 1994 and was entered into
                                     among AIC and AICCO, as the Transferors and Servicer, and the Trustee
                                     (together with the original Series 1994-1 Supplement thereto of the same date
                                     (the "Original Series 1994-1 Supplement"), the "Original Agreement").

Issuer of Securities................ AIC Premium Finance Loan Master Trust will issue on the Closing Date the
                                     Offered Certificates, which will represent an undivided interest in the assets
                                     of the Trust formed pursuant to the Agreement.  Concurrently with the
                                     issuance of the Offered Certificates, the Trust will issue from the same
                                     Series another class of certificates (the "Series 1998-1 Class C Certificates,"
                                     and, collectively with the Series 1998-1 Class A Certificates and the Series
                                     1998-1 Class B Certificates, the "Series 1998-1 Certificates"), which will be
                                     owned by the Transferor as the Series 1998-1 Class C Certificateholder.  The
                                     remaining undivided interest in the Trust not represented by the Series


                                        4

<PAGE>

                                     1998-1 Certificates or the Series 1994-1 Certificates will also be owned by the
                                     Transferor as the Transferor Ownership Interest.

The Trust Generally................. AIC Premium Finance Loan Master Trust is a master trust.  The Trust will
                                     issue the Series 1998-1 Certificates as its second Series and may issue
                                     additional Series from time to time.  The Trust has previously issued a Series
                                     of certificates (the "Series 1994-1 Certificates").  See "The Trust--Other
                                     Series."  The assets of the Trust will include a pool of Receivables which
                                     relate to premium finance loans funded by AIC or AICCO ("funded" and
                                     like terms, when used with respect to Loans, refer to the making or
                                     purchasing of such Loans by AIC or AICCO, unless the context otherwise
                                     requires; see "Business of A.I. Receivables Corp., A.I. Credit Corp. and
                                     AICCO, Inc.--Premium Finance Loan Purchase Policies") and collections
                                     thereon, as more fully described herein, and either (i) were transferred
                                     directly to the Trust by AIC and AICCO pursuant to the Original Agreement
                                     (the "Existing Receivables") or (ii) are to be sold to AIR by AIC and AICCO
                                     pursuant to a Receivables Sale Agreement, to be dated as of the Closing
                                     Date, among AIC, AICCO and AIR (the "Receivables Sale Agreement"),
                                     and subsequently transferred to the Trust by AIR, as Transferor, pursuant to
                                     the Agreement (the "Future Receivables").  The assets of the Trust are

                                     expected to change over the life of the Trust as Additional Receivables are
                                     transferred to the Trust and Receivables held by the Trust are collected,
                                     charged off or removed from the Trust.

                                     Collections in respect of Principal Receivables and Finance Charge
                                     Receivables will be allocated among the Series 1998-1 Certificateholders, the
                                     Series 1994-1 Certificateholders and the Transferor based generally on their
                                     respective ownership interests in the Trust, as described herein, provided that
                                     such collections allocable to the Series 1998-1 Certificates will be allocated
                                     as more fully described herein to pay interest only on the Series 1998-1
                                     Certificates during a revolving period and then to pay both principal and
                                     interest thereon during an amortization period scheduled to commence in
                                     [__________].
                                      
Transferor of Receivables
to the Trust........................ A.I. Receivables Corp., a Delaware corporation ("AIR"), was recently
                                     created for the sole purpose of acting as Transferor of the Receivables under
                                     the Trust.  See "Business of A.I. Receivables Corp., A.I. Credit Corp. and
                                     AICCO, Inc.--General."  AIR will purchase the Receivables from its two
                                     parent companies,  A.I. Credit Corp., a New Hampshire corporation
                                     ("AIC"), and AICCO, Inc., a California corporation ("AICCO") and a
                                     wholly-owned subsidiary of AIC, which collectively were the original
                                     transferors of Receivables to the Trust under the Original Agreement.  AIC
                                     funds loans to commercial borrowers to finance premiums on property and
                                     casualty insurance policies throughout the United States, except in California
                                     where premium finance loans are funded by AICCO.  AIC is a
                                     wholly-owned subsidiary of American International Group, Inc., a Delaware
                                     corporation ("AIG").  AIG is a holding company which through its


                                        5

<PAGE>

                                     subsidiaries is primarily engaged in a broad range of insurance and
                                     insurance-related activities in the United States and abroad.

Trust Assets Generally.............. The assets of the Trust will include the entire beneficial interest in
                                     commercial premium finance loans to borrowers ("Obligors") to finance
                                     premiums on property and casualty insurance policies governed by the law of
                                     a State of the United States of America or the District of Columbia under
                                     which the Obligors are the insureds (the "Loans"), funded by AIC or
                                     AICCO, including (i) all amounts due and to become due and all collections
                                     and recoveries on the Loans, and (ii) the proceeds of certain collateral
                                     security securing the Loans.  The beneficial interests described above are
                                     herein referred to as the "Receivables."

                                     The Loans are usually short-term in duration, generally with maturities under
                                     one year, and bear fixed interest rates that are established generally based on
                                     spreads over interest rates on money market investments of comparable
                                     maturities prevailing at the time the Loans are made.  Obligors usually
                                     secure their Loan obligations to AIC or AICCO by pledging the Obligors'
                                     rights to recover any unearned premium from the insurance company upon
                                     cancellation of the related insurance policy prior to its expiration.  AIC and

                                     AICCO generally have the right to cancel the insurance policy and collect
                                     such unearned premium from the insurance company following a payment
                                     default on the related Loan.  At December 31, 1997, in excess of 35% of the
                                     aggregate outstanding loan account balance (as defined herein in the table
                                     entitled "Outstanding Loan Account Balances by Size" under "The
                                     Receivables"), represented loans funded by AIC or AICCO to finance
                                     premiums on insurance policies issued by insurance affiliates of AIG.  See
                                     "Business of A.I. Receivables Corp., A.I. Credit Corp. and AICCO,
                                     Inc.--Premium Finance Loan Origination; Collection Policy" and
                                     "--Premium Finance Loan Underwriting Procedures."

                                     AIC and AICCO originally conveyed to the Trustee pursuant to the Original
                                     Agreement all Eligible Receivables owned by them as of November 30, 1994
                                     (the "Cut-Off Date") and, subsequently, all Eligible Receivables relating to
                                     Loans funded by them thereafter.  AIC and AICCO will continue to transfer
                                     Receivables to the Trustee prior to the Closing Date, but will cease doing so
                                     as of the Closing Date.  Receivables arising on the Closing Date and from
                                     time to time thereafter may, and under certain circumstances set forth in the
                                     Agreement will, be transferred to the Trustee by the Transferor until
                                     termination of the Trust (such Receivables, the "Additional Receivables").
                                     The Transferor will acquire such Receivables from AIC and AICCO
                                     pursuant to the Receivables Sale Agreement.  See "Description of the
                                     Offered Certificates--Addition of Receivables" and "--Removal of
                                     Receivables."

                                     As of December 31, 1997, the average outstanding loan account balance (as
                                     defined herein in the table entitled "Outstanding Loan Account Balances by
                                     Size" under "The Receivables") was approximately $16,100, ranging from

</TABLE>

                                        6

<PAGE>
<TABLE>

<S>                                  <C>
                                     approximately 46,000 loan accounts with balances of under $5,000, to 12
                                     loan accounts with balances in excess of $5 million. The Transferor has 
                                     agreed that in the event Receivables relating to a single Obligor result 
                                     in Default Amounts equal to 0.60% or more of the outstanding principal balance of 
                                     the Receivables owned by the Trust as of the end of a Monthly Period,
                                     such Default Amounts in excess of 0.60% of the outstanding principal balance of 
                                     Receivables owned by the Trust will be allocated solely to the Transferor Ownership 
                                     Interest. See "The Receivables" and "Description of the Offered Certificates." 
                                     For a description of certain other Default Amounts that may be allocated solely to the 
                                     Transferor Ownership Interest based upon the proportion of Receivables in the Trust relating 
                                     to Loans  made to finance premiums paid to certain insurers, see "Description of the Offered
                                     Certificates--Defaulted Loans; Charge-Offs."

Securities Offered.................. The aggregate initial principal amount of the Series 1998-1 Class A
                                     Certificates will be $[__________] and of the Series 1998-1 Class B
                                     Certificates will be $[__________].  The aggregate initial principal amount 
                                     of the Series 1998-1 Class C Certificates, which will be acquired on the

                                     Closing Date by the Transferor and are not being offered hereby, will be
                                     $[__________].  The Offered Certificates will be issued in book-entry form
                                     only and will be represented by one or more Offered Certificates registered
                                     in the name of Cede.  A Certificate Owner will not be entitled to receive a
                                     definitive certificate representing such person's interest, except in the event
                                     that Definitive Certificates are issued under the limited circumstances
                                     described herein.  In such event, interests in the Offered Certificates will be
                                     available in minimum denominations of $1,000 and integral multiples
                                     thereof.  See "Description of the Offered Certificates--Definitive
                                     Certificates."

                                     As used herein, the term "Holders of Offered Certificates" refers collectively
                                     to the holders of the Series 1998-1 Class A Certificates and the Series 1998-1
                                     Class B Certificates; the term "Series 1998-1 Certificateholders" refers
                                     collectively to the holders of the Series 1998-1 Certificates; the terms "Series
                                     1998-1 Class A Certificateholders," "Series 1998-1 Class B
                                     Certificateholders" and "Series 1998-1 Class C Certificateholders" refer to
                                     the holders of the Series 1998-1 Class A Certificates, the Series 1998-1 Class
                                     B Certificates and the Series 1998-1 Class C Certificates, respectively; and
                                     the term "Series 1994-1 Certificateholders" refers collectively to the holders
                                     of the Series 1994-1 Certificates.  All references herein to Holders of
                                     Offered Certificates shall include Certificate Owners except as otherwise
                                     specified herein.

Rights of Series 1998-1
Certificateholders
Generally........................... Each of the Series 1998-1 Certificates offered hereby and issued pursuant to
                                     the Agreement (and each of the Series 1994-1 Certificates, which were
                                     previously issued) represents an undivided interest in the assets of the Trust.
                                     Each Series 1998-1 Certificate offered hereby represents the right to receive
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                                     payments of interest and principal, funded from a percentage of the collections in
                                     respect of Principal Receivables and Finance Charge Receivables allocated to the
                                     Series 1998-1 Certificates, and, under certain circumstances, from funds on
                                     deposit in the Series 1998-1 Yield Enhancement Account and its allocable
                                     portion of funds on deposit in the Excess Funding Account. On each Distribution Date
                                     distributions of interest will be made first in respect of the Series 1998-1 Class
                                     A Certificates, second in respect of the Series 1998-1 Class B Certificates and
                                     third in respect of the Series 1998-1 Class C Certificates. On each Distribution Date
                                     on which principal is distributable in respect of the Series 1998-1 Class A
                                     Certificates, such principal will be payable after interest on the Series 1998-1
                                     Class A Certificates and Series 1998-1 Class B Certificates has been paid.
                                     Principal payments will not be made to Series 1998-1 Class B Certificateholders
                                     until the final principal payment due in respect of the Series 1998-1 Class A
                                     Certificates has been paid. Thus on each Distribution Date on which principal is
                                     distributable in respect of the Series 1998-1 Class B Certificates, such principal

                                     will be payable after interest on the Series 1998-1 Class A Certificates and
                                     Series 1998-1 Class B Certificates and principal on the Series 1998-1 Class A
                                     Certificates has been paid. On each such Distribution Date no payments of interest
                                     or principal will be made in respect of the Series 1998-1 Class C Certificates unless
                                     principal due in respect of the Series 1998-1 Class B Certificates has been paid.
                                     For further information regarding the extent to which the Series 1998-1 Class B
                                     Certificates are subordinated to the Series 1998-1 Class A Certificates and the extent
                                     to which the Series 1998-1 Class C Certificates are subordinated to the Series
                                     1998-1 Class A Certificates and Series 1998-1 Class B Certificates, see
                                     "Description of the Offered Certificates--Application of Collections."
                                     The Series 1998-1 Yield Enhancement Account will be funded on each Transfer Date with a
                                     portion of the collections in respect of the Receivables otherwise allocable to the
                                     Transferor Ownership Interest to cover shortfalls, if any, in the allocable funds
                                     of the Trust available to pay amounts due on the related Distribution Date with
                                     respect to the Series 1998-1 Certificates, to the extent provided herein. See "Series
                                     1998-1 Yield Enhancement Account" in this Summary and "Description of the Offered
                                     Certificates--Series 1998-1 Yield Enhancement Account."

                                     The Series 1998-1 Certificates represent interests in the Trust only and do
                                     not represent interests in or recourse obligations of AIR, AIC, AICCO, AIG
                                     or any of their respective affiliates.  Neither the Series 1998-1 Certificates,
                                     the Loans nor the Receivables are insured or guaranteed by any
                                     governmental agency or instrumentality or any other person.

Allocations of Collections
Among the Certificateholders
and the Transferor
Generally........................... Collections with respect to the Receivables will be allocated, based on the
                                     respective ownership interests, among (i) the Series 1998-1 Class A
                                     Certificateholders, the Series 1998-1 Class B Certificateholders and the
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                                     Series 1998-1 Class C Certificateholders, (ii) the Series 1994-1 Certificateholders,
                                     (iii) the ownership interest of the certificateholders of any other Series that
                                     may be issued by the Trust in the future pursuant to the Agreement and the
                                     applicable Series Supplement and (iv) the retained Transferor Ownership Interest, as
                                     described below. The Series 1998-1 Class C Ownership Interest in the initial amount of
                                     $[________] (which amount represents approximately [___]% of the sum of the
                                     Series 1998-1 Class A Initial Ownership Interest, the Series 1998-1 Class B Initial
                                     Ownership Interest and the Series 1998-1 Class C Initial Ownership Interest)
                                     constitutes credit enhancement for the Offered Certificates, to the extent
                                     described herein, and the Series 1998-1 Class B Ownership Interest in the amount of
                                     $[_________] (which amount represents approximately [__]% of the sum of the
                                     Series 1998-1 Class A Initial Ownership Interest, the Series 1998-1 Class B Initial
                                     Ownership Interest and the Series 1998-1 Class C Initial Ownership Interest)
                                     constitutes credit enhancement for the Series 1998-1 Class A Certificates, to the
                                     extent described herein. The Transferor Ownership Interest is not subordinate to
                                     the Series 1998-1 Certificates, although a portion of the collections in respect of

                                     Receivables otherwise allocable to the Transferor Ownership Interest will be
                                     available to the Series 1998-1 Certificates as yield enhancement (see "Description of
                                     the Offered Certificates--Series 1998-1 Yield Enhancement Account") and under the
                                     circumstances described under "Description of the Offered Certificates--Excess Funding
                                     Account," a portion of losses on Receivables meeting specified concentration
                                     levels (based on the identity of the related Obligor or the insurer to whom
                                     financed premiums were paid) that would otherwise be allocable to the Series 1998-1
                                     Certificates may be allocated to the Transferor Ownership Interest. See
                                     "Description of Offered Certificates--Series 1998-1 Yield Enhancement Account," "--Excess
                                     Funding Account" and "--Defaulted Loans; Charge-Offs."

Allocations of Finance
Charge Receivables,
Principal Receivables and
Default Amounts..................... The Series 1998-1 Class A Certificates, the Series 1998-1 Class B
                                     Certificates and the Series 1998-1 Class C Certificates will each represent the
                                     right to receive varying percentages of collections by the Trust of Finance
                                     Charge Receivables and Principal Receivables, and will be allocated varying
                                     percentages of Default Amounts, during each calendar month ending after the
                                     Closing Date (a "Monthly Period").  Default Amounts arise as a result of a
                                     charge-off by the Servicer as uncollectable of a Defaulted Loan related to a
                                     Receivable held by the Trust.  Collections of Finance Charge Receivables
                                     and Default Amounts at all times, and collections of Principal Receivables
                                     during the Series 1998-1 Revolving Period, will be allocated to the Series
                                     1998-1 Certificateholders Ownership Interests based on the Series 1998-1
                                     Floating Investor Percentage.  Collections of Principal Receivables during the
                                     Series 1998-1 Controlled Amortization Period and, if applicable, the Series
                                     1998-1 Rapid Amortization Period will be allocated to the Series 1998-1
                                     Certificateholders Ownership Interests based on the Series 1998-1 Fixed

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                                     Investor Percentage.  See  "Description  of  the  Offered Certificates--Allocation Percentages"
                                     and "--Pay Out Events."

Payment Rights of Series
1998-1 Class A
Certificateholders
Generally........................... The Series 1998-1 Class A Certificates will represent the right to receive from collections 
                                     with respect to the Receivables allocated to the Series 1998-1 Class A Certificates funds up 
                                     to (but not in excess of) the amounts required to make (a) payments of interest accruing from 
                                     the Closing Date through [____________] at the per annum rate of [______]% and, with
                                     respect to each Interest Period thereafter, at the per annum rate of [____]% above the
                                     rate per annum shown on page 3750 of the Telerate screen or any successor page as
                                     the composite London interbank offered rate for one-month United States dollar deposits
                                     ("LIBOR") determined as set forth herein on the related LIBOR Determination Date, but
                                     in no event in excess of [____]% per annum (such rate, the "Series 1998-1 Class A
                                     Certificate Rate"), and (b) payments of principal in the amounts described below
                                     during the Series 1998-1 Class A Controlled Amortization Period or, if applicable,

                                     during the Series 1998-1 Rapid Amortization Period, to the extent of the Series 1998-1
                                     Class A Ownership Interest. Principal will be payable on each Distribution Date during
                                     such period to Series 1998-1 Class A Certificateholders only after interest
                                     payable on such date in respect of the Series 1998-1 Class A Certificates and the
                                     Series 1998-1 Class B Certificates has been paid. The Series 1998-1 Class A Ownership
                                     Interest may be less than the unpaid principal balance of the Series 1998-1
                                     Class A Certificates in certain circumstances described herein, such as in
                                     the event of significant losses on the Receivables. In the event of a reduction in
                                     the Series 1998-1 Class A Ownership Interest, the Series 1998-1 Class A Monthly
                                     Interest payable with respect to the Series 1998-1 Class A Certificates may be reduced.

Payment Rights of Series
1998-1 Class B
Certificateholders
Generally........................... The Series 1998-1 Class B Certificates will represent the right to receive from collections 
                                     with respect to the Receivables allocated to the Series 1998-1 Class B Certificates funds up  
                                     to (but not in excess of) the amounts required to make (a) payments of interest accruing from 
                                     the Closing Date through [____________] at the per annum rate of [_______]% and, with
                                     respect to each Interest Period thereafter, at the per annum rate of [___]% above LIBOR 
                                     determined as set forth herein on the related LIBOR Determination Date, but in no event in 
                                     excess of [_____]% per annum (such rate, the "Series 1998-1 Class B Certificate Rate"), 
                                     and (b) payments of principal in the amounts described below during the Series 1998-1 Class B
                                     Controlled Amortization Period or, if applicable, during the Series 1998-1 Rapid Amortization 
                                     Period, to the extent of the Series 1998-1 Class B Ownership Interest.  If Series 1998-1 
                                     Available Investor Principal Collections are sufficient to pay the Series 1998-1 Controlled 
                                     Amortization Amount on
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                                     each Distribution Date during the Series 1998-1 Controlled Amortization Period, the
                                     principal amount of the Series 1998-1 Class B Ownership Interest will be paid in a
                                     single payment on the [________] Distribution Date. No principal will be
                                     paid to the Series 1998-1 Class B Certificateholders until the final
                                     principal payment has been made in respect of the Series 1998-1 Class A Certificates.
                                     On each Distribution Date, no interest will be paid to the Series 1998-1 Class B
                                     Certificateholders until interest due and owing the Series 1998-1 Class A
                                     Certificateholders on such Distribution Date is paid in full. The Series 1998-1
                                     Class B Ownership Interest may be less than the total unpaid principal balance of the
                                     Series 1998-1 Class B Certificates in certain circumstances described herein,
                                     such as in the event of significant losses on the Receivables. In the event of a
                                     reduction in the Series 1998-1 Class B Ownership Interest, the Series 1998-1 Class
                                     B Monthly Interest payable with respect to the Series 1998-1 Class B Certificates may
                                     be reduced.

Possible Reductions in
Series 1998-1
Certificateholders
Ownership Interests................. The initial amount of the Series 1998-1 Class A Ownership Interest is $[________] and 
                                     the initial amount of the Series 1998-1 Class B Ownership Interest is $[________].  

                                     The Series 1998-1 Class A Ownership Interest is subject to reduction, in the absence of 
                                     distributions thereon, in certain circumstances if the Series 1998-1 Class B Ownership 
                                     Interest and the Series 1998-1 Class C Ownership Interest are zero and (a) collections of
                                      Principal Receivables otherwise allocable to the Series 1998-1 Certificateholders
                                     Ownership Interests are reallocated to cover interest payable in respect of the
                                     Offered Certificates and (b) Default Amounts allocated to the Series 1998-1
                                     Class A Certificates exceed amounts available therefor as described herein.
                                     The Series 1998-1 Class B Ownership Interest is subject to reduction, in the
                                     absence of distributions thereon, in certain circumstances as a result of (a)
                                     the reallocation of collections of Principal Receivables otherwise allocable to
                                     the Series 1998-1 Certificateholders Ownership Interests to cover interest
                                     payable in respect of the Offered Certificates and (b) the allocation to the
                                     Series 1998-1 Class B Ownership Interest of Default Amounts, including
                                     such amounts otherwise allocable to the Series 1998-1 Class A Ownership
                                     Interest, in each case when the Series 1998-1 Class C Ownership Interest is
                                     zero.  See "Description of the Offered Certificates--Defaulted Loans;
                                     Charge-Offs" and "--Reallocation of Cash Flows."

Payment Rights of the
Transferor Ownership
Interest............................ The Transferor Ownership Interest will represent the right to collections with
                                     respect to the Receivables not allocated to the Series 1998-1 Class A
                                     Ownership Interest, the Series 1998-1 Class B Ownership Interest, the Series
                                     1998-1 Class C Ownership Interest, the Series 1994-1 Certificateholders or
                                     the future holders of other Series of certificates that may be issued by the
                                     Trust.  As Additional Receivables are added to the Trust and as collections
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                                     with respect to Principal Receivables and Default Amounts, if any, are
                                     allocated to the Transferor Ownership Interest, the Transferor Ownership Interest
                                     will fluctuate. Also, pursuant to the Agreement, (i) the Transferor may reduce
                                     the Transferor Ownership Interest or (ii) if provided in the relevant Supplement,
                                     certificateholders may tender certificates representing any outstanding Series of
                                     certificates to the Trustee and the Transferor may reduce Transferor Ownership
                                     Interest, and, upon satisfying certain conditions in the Agreement and as
                                     described herein, cause the Trustee to issue one or more new Series as described
                                     below in this Summary under "New Series Issuances Generally" and in "Description of
                                     the Offered Certificates--New Series Issuances."

Series 1998-1
Termination......................... The final distribution by the Trust of principal and interest on the Offered
                                     Certificates will be made no later than the [_________] Distribution Date (the
                                     "Series 1998-1 Termination Date").  After the Series 1998-1 Termination
                                     Date, the Trust will have no further obligation to pay principal or interest on
                                     the Offered Certificates.

Other Series........................ The Trust has previously issued one other Series of certificates.  In addition
                                     to the Series 1998-1 Certificates to be issued pursuant to the Agreement on

                                     the Closing Date, the Trust has previously offered by means of a separate
                                     prospectus $200,000,000 in aggregate principal amount of Class A Floating
                                     Rate Asset Backed Certificates, Series 1994-1 and $7,600,000 in aggregate
                                     principal amount of Class B Floating Rate Asset Backed Certificates, Series
                                     1994-1 (the "Series 1994-1 Offered Certificates").  Concurrently with the
                                     issuance of the Series 1994-1 Offered Certificates, the Trust issued another
                                     class of certificates (the "Series 1994-1 Class C Certificates") which are and
                                     will continue to be held by the Original Transferors.  See "The Trust--Other
                                     Series" for a summary of the terms of the Series 1994-1 Offered Certificates.
                                     Additional Series may be issued from time to time by the Trust.  See
                                     "Description of the Offered Certificates--New Series Issuances."

Receivables......................... The Receivables represent the entire beneficial interest in the related Loans,
                                     including all monies due or to become due from the Obligors in payment of
                                     finance charges, fees and service charges (collectively, together with
                                     recoveries on Defaulted Loans, "Finance Charge Receivables") and principal
                                     ("Principal Receivables") owing or to become owing with respect to the
                                     Loans and recoveries received with respect to Defaulted Loans.  The
                                     aggregate amount of Principal Receivables as of the Closing Date will be no
                                     less than $[________].  The amounts of the Series 1998-1 Certificateholders
                                     Ownership Interests, the Series 1994-1 certificateholders ownership interests
                                     and the Transferor Ownership Interest will be determined on the basis of the
                                     amount of Principal Receivables in the Trust from time to time.  The
                                     aggregate undivided interest in the Principal Receivables in the Trust
                                     evidenced by the Series 1998-1 Certificates will never exceed the amount of
                                     the Series 1998-1 Certificateholders Ownership Interests regardless of the
                                     total amount of Principal Receivables in the Trust at any time.
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                                     Pursuant to the Agreement, the Transferor may, and under certain
                                     circumstances set forth in the Agreement will be required to, transfer to the
                                     Trust Additional Receivables relating to Loans funded by AIC or AICCO in
                                     the ordinary course of their businesses, and, in each case, sold to the
                                     Transferor from time to time under the Receivables Sale Agreement.  AIC
                                     and AICCO presently expect to transfer all Eligible Receivables relating to
                                     Loans funded by them from time to time to the Transferor for subsequent
                                     transfer to the Trust. The Transferor will in any event be required to
                                     transfer sufficient Additional Receivables to the Trust to maintain the
                                     Minimum Transferor Ownership Interest; otherwise, a Pay Out Event will
                                     occur and the Series 1998-1 Rapid Amortization Period will commence.  See
                                     "Description of the Offered Certificates--Addition of Receivables" and
                                     "--Pay Out Events."

                                     Further, pursuant to the Agreement, the Transferor has the right, subject to
                                     certain limitations and conditions set forth in the Agreement and as described
                                     herein, to remove certain Receivables designated by the Transferor from the
                                     Trust (the "Removed Receivables") and accept the transfer of all the
                                     Removed Receivables from the Trust.  In connection with any permitted

                                     removal of Receivables, the selection procedure for removal cannot be
                                     materially adverse to Series 1998-1 Certificateholders and neither the then
                                     ratings nor the federal income tax treatment of the Offered Certificates shall
                                     be adversely affected by such removal.  The Transferor does not presently
                                     expect to remove Receivables from the Trust.  See "Description of the
                                     Offered Certificates--Removal of Receivables."

Servicer and
Servicing Fee....................... AIC is the servicer with respect to all Loans, other than those originated in
                                     California, for which AICCO is the servicer.  AIC will be fully obligated to
                                     the Trust for AICCO's servicing performance.  In certain limited
                                     circumstances set forth in the Agreement and as described herein, AIC and
                                     AICCO may resign or be removed as Servicer, in which event the Trustee or
                                     a third party servicer may be appointed as successor servicer (AIC and
                                     AICCO collectively (unless the context otherwise requires), or any such
                                     successor servicer, are referred to herein as the "Servicer").  The Servicer is
                                     permitted to delegate certain of its duties as servicer under the Agreement to
                                     any of its affiliates other than AIR, but any such delegation will not relieve
                                     the Servicer of its obligations thereunder.

                                     For so long as AIC and AICCO are the Servicer, the Servicer will not be
                                     paid a monthly fee as servicing compensation from the Trust (the "Servicing
                                     Fee").  If AIC and AICCO cease to be the Servicer, then the monthly
                                     Servicing Fee allocable to the Series 1998-1 Certificateholders will be equal
                                     to one-twelfth of the product of 0.50% per annum and the then aggregate
                                     Series 1998-1 Certificateholders Ownership Interests.  On each Transfer
                                     Date, funds on deposit in the Finance Charge Account will, if necessary, be
                                     withdrawn for payment to the Servicer in respect of the Servicing Fee to be
                                     allocated among the Series 1998-1 Certificateholders as described under
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                                     "Description of the Offered Certificates--Servicing Compensation and
                                     Payment of Expenses."

AIG Support
Agreements.......................... AIC, AICCO and AIG are parties to a support agreement in which AIG has
                                     agreed to cause each of AIC and AICCO to have a minimum net worth of at
                                     least $1 and to provide AIC and AICCO with sufficient funds on a timely
                                     basis to meet when due their respective obligations under the Agreement and
                                     certain other obligations as described herein.  AIG and AIR will enter into a
                                     similar support agreement on the Closing Date in which AIG will agree to
                                     cause AIR to have a minimum net worth of at least $1 and to provide AIR
                                     with sufficient funds on a timely basis to meet when due its obligations under
                                     the Agreement and certain other obligations as described herein.  AIG, AIC
                                     and AIR have not, however, agreed to guarantee payment of the Series 1998-1 
                                     Certificates, Loans or Receivables.  See "Description of the Offered
                                     Certificates--Support Agreements" and "Special Considerations--Bankruptcy

                                     Considerations."

Interest............................ Interest on the Offered Certificates for each Interest Period will be distributed on
                                     [_________], 1998 and on the 15th day of each month thereafter, or if such day is
                                     not a business day, on the next succeeding business day (each, a "Distribution Date"),
                                     in an amount equal to (a) with respect to the Series 1998-1 Class A Certificates, the
                                     product of (i) the actual number of days in the related Interest Period divided by 360,
                                     (ii) the Series 1998-1 Class A Certificate Rate for such Interest Period and (iii) the
                                     Series 1998-1 Class A Ownership Interest as of the preceding Record Date (or, in the
                                     case of the first Distribution Date, as of the Closing Date) and (b) with respect to
                                     the Series 1998-1 Class B Certificates, the product of (i) the actual number of days in
                                     the related Interest Period divided by 360, (ii) the Series 1998-1 Class B Certificate
                                     Rate for such Interest Period and (iii) the Series 1998-1 Class B Ownership Interest as
                                     of the preceding Record Date (or, in the case of the first Distribution Date, as of
                                     the Closing Date). Interest for any Distribution Date due but not paid on such
                                     Distribution Date will be payable on the next succeeding Distribution Date, together
                                     with additional interest on such amount at 2% over the applicable Certificate Rate
                                     (such overdue interest, and additional interest thereon, "Additional Interest").
                                     If the Series 1998-1 Class B Ownership Interest or the Series 1998-1 Class A
                                     Ownership Interest is reduced as a result of the allocation of Default Amounts, the
                                     related interest payable with respect to the Series 1998-1 Class B Certificates or
                                     the Series 1998-1 Class A Certificates, as the case may be, in subsequent months will
                                     be less than the amount of interest that would be payable by applying the applicable
                                     Certificate Rate to the unpaid principal balance of the related class of Series
                                     1998-1 Certificates. If the Series 1998-1 Class A Ownership Interest or the Series
                                     1998-1 Class B Ownership Interest is reimbursed in full on any subsequent
                                     Transfer Date from funds available for such purpose as described elsewhere herein,
                                     interest that would have accrued on the Series 1998-1 Class A Ownership Interest or
                                     Series 1998-1 Class B Ownership Interest, as the case may be, had the same not
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                                     been reduced ("Prior Period Interest"), will be payable on the next succeeding
                                     Distribution Date at the rate described under "Description of the Offered
                                     Certificates--Application of Collections." In addition, the Agreement will provide
                                     that payment of any Series 1998-1 Class B Additional Interest shall be suspended
                                     during any period when the Series 1998-1 Class B Ownership Interest is zero and will
                                     further provide for the cancellation of any such interest remaining unpaid on the first
                                     date during the Series 1998-1 Class B Controlled Amortization Period or, if
                                     applicable, the Series 1998-1 Rapid Amortization Period when the Series 1998-1
                                     Class B Ownership Interest is or becomes zero. See "Description of the Offered
                                     Certificates--Defaulted Loans; Charge-Offs," "--Series 1998-1 Yield Enhancement Account"
                                     and "--Interest Payments."

                                     The "Interest Period," with respect to any Distribution Date, will be the
                                     period from the previous Distribution Date through the day preceding such
                                     Distribution Date, except the initial Interest Period will be the period from
                                     the Closing Date through the day preceding the initial Distribution Date.


                                     In general, interest payments distributable to the Series 1998-1 Class A
                                     Certificateholders will be funded from the portion of Finance Charge Receivables
                                     collected during the preceding Monthly Period that is allocable to the Series
                                     1998-1 Certificateholders Ownership Interests. If on any Transfer Date such
                                     collections are insufficient to fully fund the Series 1998-1 Class A Monthly Interest,
                                     then funds on deposit in the Series 1998-1 Yield Enhancement Account will be
                                     allocated, to the extent available, for distribution to the Series 1998-1 Class A
                                     Certificateholders in payment of such shortfall. If funds on deposit in the
                                     Series 1998-1 Yield Enhancement Account are insufficient to fund the Series 1998-1
                                     Class A Required Amount, which includes any shortfall in the payment of Series 1998-1
                                     Class A Monthly Interest, then Series 1998-1 Reallocated Principal Collections
                                     will be allocated, to the extent available, to fund the Series 1998-1 Class A Monthly
                                     Interest.

                                     In general, interest payments distributable to the Series 1998-1 Class B
                                     Certificateholders will be funded from the portion of Finance Charge
                                     Receivables collected during the preceding Monthly Period allocable to the
                                     Series 1998-1 Certificateholders Ownership Interests remaining after payment
                                     of interest due and owing the Series 1998-1 Class A Certificateholders on
                                     each Distribution Date.  If on any Transfer Date such collections are
                                     insufficient to fully fund the Series 1998-1 Class B Monthly Interest, then
                                     funds on deposit in the Series 1998-1 Yield Enhancement Account will be
                                     allocated, to the extent available, for distribution to the Series 1998-1 Class
                                     B Certificateholders in payment of such shortfall.  If funds on deposit in the
                                     Series 1998-1 Yield Enhancement Account are insufficient to fund the Series
                                     1998-1 Class B Required Amount, which includes any shortfall in the
                                     payment of Series 1998-1 Class B Monthly Interest, then Series 1998-1
                                     Reallocated Principal Collections will be allocated, to the extent available, to
                                     fund the Series 1998-1 Class B Monthly Interest.  See "Series 1998-1 Yield
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<S>                                  <C> 

                                     Enhancement Account Generally" in this Summary and "Description of the
                                     Offered Certificates--Interest Payments," "--Principal Payments" and
                                     "--Reallocation of Cash Flows."

Revolving Period Prior to
Principal Amortization.............. The "Series 1998-1 Revolving Period" with respect to the Series 1998-1 Certificates means the 
                                     period from and including the Closing Date to, but not including, the earlier of (a) the 
                                     commencement of the Series 1998-1 Controlled Amortization Period and (b) the commencement of 
                                     the Series 1998-1 Rapid Amortization Period. The purpose of the Series 1998-1 Revolving 
                                     Period is to provide the Series 1998-1 Certificateholders with a period of time
                                     during which they will be entitled to receive interest only, and no principal,
                                     thereby extending the expected weighted average lives of the Series 1998-1
                                     Certificates. During the Series 1998-1 Revolving Period, collections in respect of
                                     Principal Receivables otherwise allocable in respect of one or more classes of the
                                     Series 1998-1 Certificates will, subject to certain limitations set forth in the

                                     Agreement and as described herein, be available to cover payments of interest on
                                     the Offered Certificates. Any remaining such collections will be treated as Shared
                                     Principal Collections and will be available to be applied to cover principal payments
                                     due to or for the benefit of the Series 1994-1 Certificateholders and/or
                                     certificateholders of other Series that may be issued in the future by the Trust, if so
                                     specified in the Supplements for such other Series, or paid to the holder of the
                                     Transferor Certificate. Conversely, Shared Principal Collections from the Series
                                     1994-1 Certificates may be available to be applied to cover principal payments due to
                                     or for the benefit of the Series 1998-1 Certificateholders. See "Description of the
                                     Offered Certificates--Shared Principal Collections." Payment of principal with
                                     respect to the Series 1998-1 Certificates is not scheduled to commence until the
                                     [_______] Distribution Date, when principal payments are scheduled to begin with
                                     respect to the Series 1998-1 Class A Certificates during the Series 1998-1 Class
                                     A Controlled Amortization Period. See "Description of the Offered
                                     Certificates--Principal Payments." See also the description under "Description of the
                                     Offered Certificates--Pay Out Events" for the events which would lead to the
                                     commencement of the Series 1998-1 Rapid Amortization Period and that could result
                                     in earlier payments of principal with respect to the Offered Certificates.

Controlled Amortization
Period Generally.................... Unless a Pay Out Event has occurred, the Series 1998-1 Revolving Period
                                     will end and the controlled amortization period with respect to the Series
                                     1998-1 Certificates (the "Series 1998-1 Controlled Amortization Period"),
                                     which includes controlled amortization periods for each class (the "Series
                                     1998-1 Class A Controlled Amortization Period," the "Series 1998-1 Class B
                                     Controlled Amortization Period" and the "Series 1998-1 Class C Controlled
                                     Amortization Period," respectively), will commence on [________] (and the
                                     first distribution of principal to the Series 1998-1 Class A Certificateholders
                                     will occur on the [________________] Distribution Date).  The purpose of
                                     the Series 1998-1 Controlled Amortization Period is to provide the Series
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                                     1998-1 Certificateholders with a period of time during which they will be entitled to
                                     receive scheduled principal payments, thereby enabling them to estimate the
                                     expected weighted average lives of the Series 1998-1 Certificates. The Series
                                     1998-1 Class A Controlled Amortization Period will end on the earliest of (a) the
                                     commencement of the Series 1998-1 Rapid Amortization Period, (b) the payment in
                                     full of the Series 1998-1 Class A Ownership Interest or (c) the Series 1998-1
                                     Termination Date. Unless a Pay Out Event has occurred, the Series 1998-1 Class B
                                     Controlled Amortization Period will commence on the Distribution Date on which
                                     the Series 1998-1 Class A Ownership Interest is paid in full (the "Series
                                     1998-1 Class B Principal Commencement Date") and end on the earliest of (a) the
                                     commencement of the Series 1998-1 Rapid Amortization Period, (b) the payment in
                                     full of the Series 1998-1 Class B Ownership Interest or (c) the Series 1998-1
                                     Termination Date. Unless a Pay Out Event has occurred, the Series 1998-1 Class C
                                     Controlled Amortization Period will commence on the Distribution Date on which
                                     the Series 1998-1 Class B Ownership Interest is paid in full (the "Series

                                     1998-1 Class C Principal Commencement Date") and end on the earliest of (a) the
                                     commencement of the Series 1998-1 Rapid Amortization Period, (b) the payment in
                                     full of the Series 1998-1 Class C Ownership Interest or (c) the Series 1998-1
                                     Termination Date.

Principal Amortization
of the Series 1998-1 Class
A Certificates...................... No principal will be payable to Series 1998-1 Class A Certificateholders until
                                     the first Distribution Date with respect to the Series 1998-1 Class A
                                     Controlled Amortization Period, or, upon the occurrence of a Pay Out Event
                                     as described herein, the first Distribution Date with respect to the Series
                                     1998-1 Rapid Amortization Period.  On each Distribution Date during the
                                     Series 1998-1 Class A Controlled Amortization Period, the Series 1998-1
                                     Class A Certificateholders will receive a principal payment equal to the least
                                     of (i) Series 1998-1 Available Investor Principal Collections on deposit in the
                                     Principal Account with respect to such Distribution Date, (ii) the Series
                                     1998-1 Controlled Distribution Amount, which is equal to the sum of the
                                     Series 1998-1 Controlled Amortization Amount, which is $[_________], and
                                     any existing applicable Series 1998-1 Deficit Controlled Amortization
                                     Amount and (iii) the Series 1998-1 Class A Ownership Interest for such
                                     Distribution Date.  See "Description of the Offered Certificates--Principal
                                     Payments" and "--Application of Collections."

Principal Amortization of
the Series 1998-1
Class B Certificates................ No principal will be payable to the Series 1998-1 Class B Certificateholders
                                     until the Series 1998-1 Class A Ownership Interest is paid in full.  On each
                                     Distribution Date during the Series 1998-1 Class B Controlled Amortization
                                     Period, the Series 1998-1 Class B Certificateholders will receive a principal
                                     payment equal to the least of (i) Series 1998-1 Available Investor Principal
                                     Collections on deposit in the Principal Account with respect to such
                                     Distribution Date (minus the portion of such Series 1998-1 Available Investor
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                                     Principal Collections applied to Series 1998-1 Class A Monthly Principal on such
                                     date), (ii) the Series 1998-1 Controlled Distribution Amount (minus the portion of
                                     such Series 1998-1 Controlled Distribution Amount applied to Series 1998-1 Class A
                                     Monthly Principal on such date) and (iii) the Series 1998-1 Class B Ownership
                                     Interest for such Distribution Date. If Series 1998-1 Available Investor Principal
                                     Collections are sufficient to pay the Series 1998-1 Controlled Amortization
                                     Amount on each Distribution Date during the Series 1998-1 Controlled Amortization
                                     Period, the Series 1998-1 Class B Ownership Interest will be paid in a single payment
                                     on the [______] Distribution Date. No principal will be payable to the Series
                                     1998-1 Class C Certificateholders until the Series 1998-1 Class A Ownership Interest
                                     and Series 1998-1 Class B Ownership Interest are paid in full. See "Description
                                     of the Offered Certificates--Principal Payments" and "--Application of Collections."


Rapid Amortization
Period.............................. During the period from the day on which a Pay Out Event has occurred and ending on
                                     the earlier of (a) the date on which the Series 1998-1 Certificateholders Ownership
                                     Interests have been paid in full and (b) the Series 1998-1 Termination Date (the
                                     "Series 1998-1 Rapid Amortization Period"), all Series 1998-1 Available Investor
                                     Principal Collections received during each Monthly Period will be distributed on the
                                     related Distribution Date in the order of priority described below, up to the
                                     aggregate Series 1998-1 Certificateholders Ownership Interests on such date. This is
                                     in contrast to the Series 1998-1 Controlled Amortization Period during which the amount
                                     of collections in respect of Principal Receivables to be distributed to Series
                                     1998-1 Certificateholders on any related Distribution Date will be subject to
                                     specific limits as described above and may be less than the total Series 1998-1
                                     Available Investor Principal Collections received by the Trust during the related
                                     Monthly Period. During the Series 1998-1 Rapid Amortization Period, all Series
                                     1998-1 Available Investor Principal Collections will be distributed monthly on
                                     each Distribution Date to the Series 1998-1 Class A Certificateholders and, following
                                     payment in full of the Series 1998-1 Class A Ownership Interest, to the Series 1998-1
                                     Class B Certificateholders and, following payment in full of the Series 1998-1 Class
                                     B Ownership Interest, to the Series 1998-1 Class C Certificateholders, beginning with
                                     the first Distribution Date following commencement of the Series 1998-1 Rapid
                                     Amortization Period.

Pay Out Events...................... Pay Out Events, that is, events that will cause the commencement of the
                                     Series 1998-1 Rapid Amortization Period and may result in the payment of
                                     Principal Receivables collections allocable to the Series 1998-1
                                     Certificateholders earlier than scheduled generally include such events as (a)
                                     specified defaults in the remittance or deposit of funds or covenant breaches
                                     by AIC, AICCO or the Transferor, (b)  breaches of specified representations
                                     and warranties by AIC, AICCO or the Transferor, (c) a Series 1998-1
                                     Annualized Monthly Excess Spread Amount below 400 basis points for three
                                     consecutive Monthly Periods, (d) specified failure of the Transferor to
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                                     maintain the Transferor Ownership Interest at least equal to the Minimum Transferor
                                     Ownership Interest, (e) specified Servicer Defaults, (f) a Monthly Payment Rate of
                                     less than 14% for three consecutive Monthly Periods, (g) a Financed Premium Percentage
                                     of more than 90% in respect of Additional Receivables transferred to the Trust for
                                     three consecutive Monthly Periods, (h) certain events of bankruptcy or insolvency
                                     related to AIC, AICCO or the Transferor, (i) the inability, for any reason, of the
                                     Transferor to transfer Additional Receivables to the Trust and (j) a breach
                                     by AIG of the AIC Support Agreement or a breach by AIC of its support obligations
                                     under the Agreement or the AIC Support Agreement with respect to AICCO or a breach
                                     by AIG of the AIR Support Agreement. See "Description of the Offered
                                     Certificates--Pay Out Events" for a further discussion of the events which might lead
                                     to the commencement of the Series 1998-1 Rapid Amortization Period.

Payment Priorities.................. On each Distribution Date during the Series 1998-1 Revolving Period

                                     collections allocable to the Series 1998-1 Certificates will be allocated as
                                     described herein to pay, in the following priority: (i) interest due the Series
                                     1998-1 Class A Certificateholders, (ii) interest due the Series 1998-1 Class B
                                     Certificateholders, and (iii) interest due the Series 1998-1 Class C
                                     Certificateholders.  On each Distribution Date during the Series 1998-1
                                     Controlled Amortization Period or the Series 1998-1 Rapid Amortization
                                     Period, collections allocable to the Series 1998-1 Certificates will be
                                     allocated as described herein to pay, in the following priority: (i) interest due
                                     the Series 1998-1 Class A Certificateholders, (ii) interest due the Series
                                     1998-1 Class B Certificateholders, (iii) principal due the Series 1998-1 Class
                                     A Certificateholders, (iv) principal due the Series 1998-1 Class B
                                     Certificateholders, (v) interest due the Series 1998-1 Class C
                                     Certificateholders, and (vi) principal due the Series 1998-1 Class C
                                     Certificateholders.  See  "Description  of  the  Offered
                                     Certificates--Application of Collections."

Series 1998-1 Yield
Enhancement Account
Generally........................... On each Transfer Date, the Servicer shall deposit into an account (the
                                     "Series 1998-1 Yield Enhancement Account") maintained by the Trustee for
                                     the benefit of the Series 1998-1 Certificateholders an amount equal to the
                                     Series 1998-1 Available Yield Enhancement Amount for such date out of
                                     Receivables collections otherwise allocable to the holder of the Transferor
                                     Certificate in respect of the immediately preceding Monthly Period.  In
                                     addition, the Servicer will deposit into the Series 1998-1 Yield Enhancement
                                     Account on each Transfer Date any Series 1998-1 Excess Finance Charges.

                                     The Series 1998-1 Available Yield Enhancement Amount on any Transfer
                                     Date will equal (a) during the Series 1998-1 Revolving Period, the product of
                                     (i) [___]% and (ii) the product of (A) the collections for the related Monthly
                                     Period otherwise allocable to the Transferor Ownership Interest and (B) the
                                     Series 1998-1 Floating Investor Percentage divided by one minus the
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                                     Aggregate Investor Percentage, and (b) during the Series 1998-1 Controlled
                                     Amortization Period and the Series 1998-1 Rapid Amortization Period, if any, the
                                     product of (i) [___]% and (ii) the product of (A) the collections for the related
                                     Monthly Period otherwise allocable to the Transferor Ownership Interest and (B) in
                                     the case of collections of Finance Charge Receivables allocable to the Transferor
                                     Ownership Interest, the Series 1998-1 Floating Investor Percentage divided by one
                                     minus the Aggregate Investor Percentage, and in the case of collections of Principal
                                     Receivables allocable to the Transferor Ownership Interest, the Series 1998-1 Fixed
                                     Investor Percentage divided by one minus the Aggregate Investor Percentage; provided
                                     that the Series 1998-1 Available Yield Enhancement Amount for any Transfer Date
                                     will be capped so that it will not exceed the sum of Series 1998-1 Class A Monthly
                                     Interest, Series 1998-1 Class A Additional Interest, Series 1998-1 Class B Monthly
                                     Interest, Series 1998-1 Class B Additional Interest, Series 1998-1 Class C Monthly

                                     Interest and Series 1998-1 Class C Additional Interest, for such Transfer
                                     Date. See "Description of the Offered Certificates--Series 1998-1 Yield
                                     Enhancement Account" and "--Interest Payments."

Uses of Funds in the
Series 1998-1 Yield
Enhancement Account
Generally........................... Funds on deposit in the Series 1998-1 Yield Enhancement Account on each
                                     Transfer Date will be available for application on the next Distribution Date
                                     in respect of the Series 1998-1 Certificates to the extent and in the priorities
                                     set forth under "Description of the Offered Certificates--Series 1998-1 Yield
                                     Enhancement Account." In general, such funds will be available to cover
                                     interest payments due on the Series 1998-1 Certificates, to cover servicing
                                     fees allocable to the Series 1998-1 Certificates, to avoid a reduction in their
                                     respective ownership interests due to Default Amounts otherwise allocable to
                                     the Series 1998-1 Certificates and to reimburse reductions in such ownership
                                     interests due to allocation of Default Amounts in respect of previous Transfer
                                     Dates.  There can be no assurance that funds on deposit in the Series 1998-1
                                     Yield Enhancement Account, together with the portion of Finance Charge
                                     Receivables collections allocable to the Series 1998-1 Certificates on any
                                     particular Transfer Date, will be sufficient to cover any or all of such
                                     purposes.

                                     On each Transfer Date, any amount in excess of the Series 1998-1 91 Day
                                     Delinquency Amount remaining in the Series 1998-1 Yield Enhancement
                                     Account after application of the funds on deposit therein for the purposes
                                     described above will be paid to the holder of the Transferor Certificate,
                                     provided that a Pay Out Event has not occurred.  Amounts so paid will not
                                     be available on future Distribution Dates for payment or allocation to the
                                     holders of the Series 1998-1 Certificates.  See "Description of the Offered
                                     Certificates--Series 1998-1 Yield Enhancement Account."
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Principal Collections
Available to Supplement
Series 1998-1 Yield
Enhancement Amount.................. If, on any Transfer Date, funds on deposit in the Series 1998-1 Yield Enhancement 
                                     Account are less than the Series 1998-1 Class A Required Amount, collections in respect of 
                                     Principal Receivables during the preceding Monthly Period that are allocable first to the 
                                     Series 1998-1 Class C Ownership Interest, then to the Series 1998-1 Class B Ownership Interest
                                     and finally to the Series 1998-1 Class A Ownership Interest with respect to such Monthly 
                                     Period will be used to fund the remaining Series 1998-1 Class A Required Amount. Any 
                                     reallocation of Principal Receivables collections to fund the Series 1998-1 Class A Required
                                     Amount or, as described in the following paragraph, the Series 1998-1 Class B
                                     Required Amount will result in a corresponding reduction in the Series
                                     1998-1 Certificateholders Ownership Interests. The amount of any such reduction
                                     will be allocated first to reduce the Series 1998-1 Class C Ownership Interest,

                                     second to reduce the Series 1998-1 Class B Ownership Interest and lastly to reduce the
                                     Series 1998-1 Class A Ownership Interest.

                                     If Series 1998-1 Reallocated Principal Collections are insufficient to fund
                                     such remaining Series 1998-1 Class A Required Amount, then the Series
                                     1998-1 Class C Ownership Interest (after giving effect to reductions therein
                                     for any Series 1998-1 Class C Charge-Offs and Series 1998-1 Reallocated
                                     Principal Collections on such Transfer Date) will be reduced by the amount
                                     of such deficiency.  In the event that such reduction would cause the Series
                                     1998-1 Class C Ownership Interest to be a negative number, the Series
                                     1998-1 Class C Ownership Interest will be reduced to zero, and the Series
                                     1998-1 Class B Ownership Interest (after giving effect to reductions therein
                                     for any Series 1998-1 Class B Charge-Offs and any Series 1998-1
                                     Reallocated Principal Collections on such Transfer Date) will be reduced by
                                     the amount by which the Series 1998-1 Class C Ownership Interest would
                                     have been reduced below zero.  In the event that such reduction would cause
                                     the Series 1998-1 Class B Ownership Interest to be a negative number, the
                                     Series 1998-1 Class B Ownership Interest will be reduced to zero and the
                                     Series 1998-1 Class A Ownership Interest (after giving effect to reductions
                                     therein for any Series 1998-1 Reallocated Principal Collections on such
                                     Transfer Date) will be reduced (but not below zero) by the amount by which
                                     the Series 1998-1 Class B Ownership Interest would have been reduced
                                     below zero (such reduction, a "Series 1998-1 Class A Charge-Off").  If the
                                     Series 1998-1 Class C Ownership Interest and the Series 1998-1 Class B
                                     Ownership Interest are reduced to zero, the Series 1998-1 Class A
                                     Certificateholders will bear directly the credit risks associated with their
                                     undivided interests in the Trust.  See "Special Considerations--Premium
                                     Finance Loan Credit and Related Considerations," "Description  of the
                                     Offered Certificates--Reallocation of Cash Flows" and "--Defaulted Loans;
                                     Charge-Offs."
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                                     If, on any Transfer Date, funds on deposit in the Series 1998-1 Yield Enhancement
                                     Account and not required to pay the Series 1998-1 Class A Required Amount are less
                                     than the Series 1998-1 Class B Required Amount, collections in respect of Principal
                                     Receivables during the preceding Monthly Period that are available but not required
                                     to pay the Series 1998-1 Class A Required Amount will be used to fund such remaining
                                     Series 1998-1 Class B Required Amount. If Series 1998-1 Reallocated Principal
                                     Collections are insufficient to fund the remaining Series 1998-1 Class B Required
                                     Amount, then the Series 1998-1 Class C Ownership Interest (after giving effect to
                                     reductions therein for any Series 1998-1 Class C Charge-Offs and Series 1998-1
                                     Reallocated Principal Collections on such Transfer Date) will be reduced by the
                                     amount of such deficiency. In the event that such reduction would cause the Series
                                     1998-1 Class C Ownership Interest to be a negative number, the Series 1998-1 Class C
                                     Ownership Interest will be reduced to zero, and the Series 1998-1 Class B Ownership
                                     Interest (after giving effect to reductions therein for any Series 1998-1 Reallocated
                                     Principal Collections on such Transfer Date) will be reduced (but not below zero)

                                     by the amount by which the Series 1998-1 Class C Ownership Interest would have been
                                     reduced below zero (such reduction, a "Series 1998-1 Class B Charge-Off"). If the
                                     Series 1998-1 Class C Ownership Interest is reduced to zero, the Series 1998-1 Class B
                                     Certificateholders will bear directly the credit risks associated with their
                                     undivided interests in the Trust.

                                     Any reallocation of Principal Receivables collections described above that
                                     occurs during the Series 1998-1 Controlled Amortization Period or any
                                     Series 1998-1 Rapid Amortization Period could slow the rate of amortization
                                     of the Series 1998-1 Class A Certificates and/or the Series 1998-1 Class B
                                     Certificates.

                                     In the event of a reduction of the Series 1998-1 Class A Ownership Interest,
                                     the Series 1998-1 Class B Ownership Interest or the Series 1998-1 Class C
                                     Ownership Interest, the percentage of future collections of Finance Charge
                                     Receivables and Principal Receivables available to fund payments with
                                     respect to the Series 1998-1 Class A Certificates and the Series 1998-1 Class
                                     B Certificates will be decreased.  See "Description of the Offered
                                     Certificates--Reallocation of Cash Flows" and "--Defaulted Loans;
                                     Charge-Offs."

New Series Issuances
Generally........................... The Agreement will authorize the Trustee to issue pursuant to one or more
                                     supplements to the Agreement (each, a "Supplement") two types of
                                     certificates: (i) one or more series of certificates (each, a "Series") which
                                     may be issued in more than one class with varying rights and priorities and
                                     which will be transferable and have the characteristics described below and
                                     (ii) certificates evidencing the Transferor Ownership Interest (collectively,
                                     the "Transferor Certificate"), currently held by AIC and AICCO and to be
                                     transferred to the Transferor on or about the Closing Date, and thereafter
                                     held by the Transferor.  Such Transferor Certificate will be transferable only
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                                     as provided in the Agreement. The Series 1994-1 Certificates have previously been
                                     issued pursuant to such authority under the Original Agreement. See "The Trust--Other
                                     Series." The Agreement also provides that, pursuant to any one or more Supplements,
                                     the Transferor may reduce the Transferor Ownership Interest (a "Transferor Ownership
                                     Interest Reduction") or, if provided in the relevant Supplement, certificateholders may
                                     tender certificates representing any outstanding Series of certificates to the
                                     Trustee and the Transferor may reduce the Transferor Ownership Interest (an "Investor
                                     Exchange"), in either case to effectuate the issuance of one or more new Series (any
                                     new Series issuance pursuant to a Transferor Ownership Interest Reduction or
                                     an Investor Exchange is referred to as a "New Series Issuance"). The Series 1998-1
                                     Supplement permits an Investor Exchange and corresponding New Series Issuance with
                                     respect to the Series 1998-1 Certificates. See "Description of the Offered
                                     Certificates--New Series Issuances." Under the Agreement, the Transferor may define,
                                     with respect to any Series, the Principal Terms of the Series. The Transferor may

                                     offer any Series to the public or other investors under a prospectus or other
                                     disclosure document (a "Disclosure Document") in transactions either
                                     registered under the Securities Act or exempt from registration thereunder,
                                     directly or through the Underwriters or one or more other underwriters or placement
                                     agents, in fixed-price offerings or in negotiated transactions or otherwise. The
                                     Transferor may offer, from time to time, additional Series issued by the Trust. The
                                     Trust will, as promptly as practicable, include in a periodic report filed with the
                                     Securities and Exchange Commission with respect to the Series 1998-1 Certificates,
                                     disclosure of all information related to issuance of any Series not required to be
                                     registered under the Securities Act that is material to the holders of, or potential
                                     investors in, the Series 1998-1 Certificates. See "Description of the
                                     Offered Certificates--New Series Issuances." However, at all times, the interest in the
                                     Principal Receivables in the Trust represented by the Transferor Ownership
                                     Interest is required to equal or exceed the Minimum Transferor Ownership Interest.

Requirements For
New Series Issuances................ Under the Agreement and pursuant to a Supplement, a New Series Issuance
                                     may occur only upon delivery to the Trustee of the following: (i) a
                                     Supplement specifying the Principal Terms of such Series, (ii) an opinion of
                                     counsel covering certain tax matters as described herein, (iii) if required by
                                     the related Supplement, the form of Enhancement, (iv) if an Enhancement is
                                     required by the Supplement, an appropriate Enhancement instrument or
                                     agreement, (v) written confirmation from each Rating Agency that the New
                                     Series Issuance will not result in such Rating Agency reducing or
                                     withdrawing its then existing rating on any then outstanding Series rated by
                                     it, and (vi) if applicable, the certificates representing the Series to be
                                     exchanged.

                                     In light of the aforementioned requirements for a New Series Issuance,
                                     including the required ratings confirmation and tax opinion, the Transferor
                                     does not presently expect that any New Series Issuance, including any
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                                     issuance as part of an Investor Exchange, will have a material adverse effect on the
                                     Series 1998-1 Certificates. There can be no assurance, however, that the Principal
                                     Terms of any other Series, including any Series issued from time to time hereafter,
                                     might not have an impact on the timing and amount of payments received by a Series
                                     1998-1 Certificateholder, including as a result of the refixing of the percentage
                                     utilized with respect to the allocation of the Principal Receivables. See "Description
                                     of the Offered Certificates--New Series Issuances" and "--Allocation Percentages."

Denomination........................ The Offered Certificates will be offered for purchase in minimum
                                     denominations of $1,000 and integral multiples thereof.

Registration of
Certificates........................ The Offered Certificates will initially be represented by certificates registered
                                     in the name of Cede, as the nominee of DTC.  No Certificate Owner will be

                                     entitled to receive a definitive certificate representing such person's interest,
                                     except in the event that Definitive Certificates are issued under the limited
                                     circumstances described herein.  See "Description of the Offered
                                     Certificates--Definitive Certificates."

Collections......................... The Servicer will deposit collections of Receivables in the Collection
                                     Account described under "Description of the Offered Certificates--The
                                     Collection Account" at the times and to the extent therein described.  All
                                     amounts deposited in the Collection Account will be allocated in the manner
                                     provided in the Agreement, as supplemented by the Series 1994-1
                                     Supplement, the Series 1998-1 Supplement and the Supplements relating to
                                     any future Series, by the Servicer between amounts collected on Principal
                                     Receivables and amounts collected on Finance Charge Receivables.  All such
                                     amounts will then be allocated in accordance with the respective interests of
                                     the Series 1998-1 Certificateholders, the Series 1994-1 Certificateholders, the
                                     certificateholders of any other Series and the holder of the Transferor
                                     Certificate in the Principal Receivables and in the Finance Charge
                                     Receivables of the Trust.  See "Description of the Offered
                                     Certificates--Allocation Percentages."

Shared Principal
Collections......................... The Offered Certificates are included in Series 1998-1.  The Series 1994-1
                                     Certificates were previously issued and other Series may be issued in the
                                     future.  Collections of Principal Receivables allocated to the Series 1998-1
                                     Certificateholders Ownership Interests with respect to the Series 1998-1
                                     Certificates that are not needed to make payments on the Series 1998-1
                                     Certificates will be allocated, if necessary, to cover principal payments due
                                     to or for the benefit of the Series 1994-1 Certificateholders and may be
                                     allocated for such purposes with respect to other Series of certificates
                                     ("Shared Principal Collections").  Any such reallocation will not result in a
                                     reduction in the Series 1998-1 Certificateholders Ownership Interests.  In
                                     addition, collections of Principal Receivables and certain other amounts
                                     otherwise allocable to the Series 1994-1 Certificateholders, to the extent such
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                                     collections are not needed to make payments to or deposits for the benefit of
                                     the Series 1994-1 Certificateholders, will be allocated, if necessary, to cover
                                     principal payments due to or for the benefit of the Series 1998-1
                                     Certificateholders and may be applied for such purposes with respect to other
                                     Series of certificates.  See "Description of the Offered Certificates--Shared
                                     Principal Collections."

Deposits in the
Excess Funding
Account............................. In certain circumstances as described herein, if on any date the Transferor
                                     Ownership Interest equals or is less than the Minimum Transferor Ownership
                                     Interest as of the end of the preceding Monthly Period, funds (to the extent

                                     available therefor as described herein) otherwise payable to the holder of the
                                     Transferor Certificate on such date will be deposited in the Excess Funding
                                     Account.  Funds allocable to the Series 1998-1 Certificates on deposit in the
                                     Excess Funding Account at the beginning of any Series 1998-1 Rapid
                                     Amortization Period for the Series 1998-1 Certificates will be available for
                                     payment to the Series 1998-1 Certificateholders in respect of principal.  See
                                     "Description of the Offered Certificates--Excess Funding Account."

Optional
Repurchase.......................... The Series 1998-1 Certificates will be subject to optional repurchase by the
                                     Transferor on any Distribution Date on or after the Distribution Date on
                                     which the Series 1998-1 Certificateholders Ownership Interests are reduced
                                     to an amount less than or equal to $[________] (10% of the Series 1998-1
                                     Initial Certificateholders Ownership Interests), if certain conditions set forth
                                     in the Agreement and as described herein are met (a "Cleanup Call").  The
                                     repurchase price will be equal to the sum of the unpaid Series 1998-1
                                     Certificateholders Ownership Interests and all accrued and unpaid interest on
                                     the Series 1998-1 Certificates through the day preceding the Distribution
                                     Date on which the Cleanup Call occurs less amounts, if any, on deposit at
                                     such Distribution Date in the Series 1998-1 Distribution Account for the
                                     payment of principal and interest due on the Series 1998-1 Certificates.  See
                                     "Description of the Offered Certificates--Final Payment of Principal;
                                     Termination of the Trust."

Trustee............................. The First National Bank of Chicago, a national banking association (the
                                     "Trustee").  The Corporate Trust Office is located at One First National
                                     Plaza, Suite 0126, Chicago, Illinois, 60670-0126, except that for purposes of
                                     notices to the Trustee and the registration of transfer and exchange of the
                                     Series 1998-1 Certificates, the Corporate Trust Office is located at 14 Wall
                                     Street, Eighth Floor, New York, New York 10005.

Tax Status.......................... On the Closing Date, counsel to the Transferor will issue its opinion, subject
                                     to the assumptions set forth therein, that under existing law, as more fully
                                     discussed under "Certain United States Federal Income Tax Consequences,"
                                     the Offered Certificates will be characterized as debt secured by the
                                     Receivables for federal income tax purposes.  Under the Agreement, the
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                                     holder of the Transferor Certificate and the Certificate Owners will agree to treat
                                     the Offered Certificates as debt of the Transferor for federal, state and local
                                     income, franchise and other tax purposes. See "Certain United States Federal Income
                                     Tax Consequences" for additional information concerning the application of
                                     United States federal income and certain state and local tax laws to an investment
                                     in the Offered Certificates.

ERISA Plans......................... The purchase of Offered Certificates by (a) any employee benefit plan that is
                                     subject to the Employee Retirement Income Security Act of 1974, as

                                     amended ("ERISA"), (b) any plan or other arrangement (including an
                                     individual retirement account or Keogh plan) that is subject to section 4975
                                     of the Code, or (c) any entity whose underlying assets include "plan assets"
                                     under regulations issued by the Department of Labor by reason of any such
                                     plan's investment in the entity ("ERISA Plans") may constitute or result in
                                     prohibited transactions or other violations of ERISA.  Therefore, the Offered
                                     Certificates may not be acquired by any ERISA Plans.  By their acceptance
                                     of Offered Certificates, the Holders of Offered Certificates will be deemed to
                                     have represented and warranted that they are not subject to the foregoing
                                     limitation.

Ratings of Offered
Certificates........................ It is a condition to the issuance of the Series 1998-1 Class A Certificates that
                                     they be rated "AAA" by Standard & Poor's Ratings Group ("Standard &
                                     Poor's") and Aaa by Moody's Investors Service, Inc. ("Moody's").  The
                                     rating of the Series 1998-1 Class A Certificates is based on the collectability
                                     of the Receivables, the terms of the Series 1998-1 Class B Certificates and of
                                     the Series 1998-1 Class C Certificates, including the subordination terms, the
                                     availability of funds to be deposited into the Series 1998-1 Yield
                                     Enhancement Account, the loss allocation method and the Support
                                     Agreements with AIG.

                                     It is a condition to the issuance of the Series 1998-1 Class B Certificates that
                                     they be rated at least "A" by Standard & Poor's and "A2" by Moody's.  The
                                     rating of the Series 1998-1 Class B Certificates is based on the collectability
                                     of the Receivables, the terms of the Series 1998-1 Class C Certificates,
                                     including the subordination terms, the availability of funds to be deposited
                                     into the Series 1998-1 Yield Enhancement Account, the loss allocation
                                     method and the Support Agreements with AIG.

                                     The ratings address the likelihood of full payment of principal and interest of
                                     the Offered Certificates by the Series 1998-1 Termination Date.  Any such
                                     rating will not address the possibility of the occurrence of a Pay Out Event
                                     with respect to any such class or the possibility of the imposition of United
                                     States withholding tax with respect to non-U.S. Holders of Offered
                                     Certificates.  The rating will not be a recommendation to purchase, hold or
                                     sell any such Offered Certificates, and such rating will not comment as to the
                                     marketability of such Offered Certificates, any market price or suitability for
                                     a particular investor.  There is no assurance that any rating will not be
</TABLE>


                                       26

<PAGE>
<TABLE>

<S>                                  <C>

                                     lowered or withdrawn entirely by a Rating Agency if in such Rating
                                     Agency's judgment future circumstances relating to the basis of the ratings,
                                     such as adverse changes in the collectability of the Receivables or a lowering
                                     of AIG's present long-term debt rating, so warrant.  See "Special
                                     Considerations--Certificate Rating."

</TABLE>


                                       27

<PAGE>

                             SPECIAL CONSIDERATIONS


         Limited Liquidity. There is currently no market for the Offered
Certificates. The Underwriters intend to make a market in the Offered
Certificates but are not obligated to do so. There is no assurance that a
secondary market will develop or, if it does develop, that it will provide
Holders of Offered Certificates with liquidity of investment or that it will
continue until the Offered Certificates are paid in full.

         Premium Finance Loan Credit and Related Considerations. Commercial
premium finance loans entail several different risks, including (a) the
creditworthiness of the borrower (the "Obligor"), (b) the creditworthiness of
the insurance company, in those cases where reliance is placed on the right to
unearned premiums as collateral for the loan, and (c) the capabilities and
operating procedures of the insurance agent or broker that (i) places the
insurance policy, (ii) serves as a source of significant information concerning
the loan transaction and (iii) may disburse the loan proceeds or collect
unearned premium funds. Application of federal and state bankruptcy, debtor
relief or insolvency laws to an insolvency of an Obligor, insurance company or
insurance agent or broker involved with a loan would affect the interests of the
Holders of Offered Certificates in the Receivables if such laws result in any
Receivables being written off as uncollectable or prevent the cancellation of
such Obligor's insurance policy or the collection of related unearned premium,
if any, which may serve as collateral for such Obligor's Loan. See "Business of
A.I. Receivables Corp., A.I. Credit Corp. and AICCO, Inc.--Premium Finance Loan
Underwriting Procedures" and "Description of the Offered Certificates--Defaulted
Loans; Charge-Offs."

         Bankruptcy Considerations. The Transferor will transfer to the Trust
pursuant to the Agreement the entire beneficial interest in the Loans funded by
AIC or AICCO to Obligors to finance premiums on property and casualty insurance
policies, including (a) the right to receive payments on the Loans, all amounts
due and to become due and all collections and recoveries thereon and (b) the
proceeds of certain collateral security with respect thereto. Only the
beneficial interest in the Loans has heretofore been transferred to the Trust by
the Original Transferors under the Original Agreement, and only the beneficial
interest therein will be transferred by the Original Transferors to the
Transferor under the Receivables Sale Agreement and by the Transferor to the
Trust under the Agreement. It is intended that AIC or AICCO, as the case may be,
will hold legal title to the Loans for state regulatory purposes and in order to
service and collect the Loans, but that otherwise AIC or AICCO will be acting as
nominal title holder only. Accordingly, the Trust's rights with respect to the
Loans will be derivative through the Transferor and AIC and AICCO. Neither the
Transferor nor the Trust will (i) have made any loans directly to any Obligor,
(ii) directly purchase any loans from Third Party Originators, (iii) have any
direct contractual relationships with any Obligors or (iv) have any direct

security interest in, or direct rights with respect to, any assets or rights of
any Obligors pledged as collateral for the Loans. Accordingly, the Trustee may
not have the ability to exercise remedies directly against Obligors and the
exercise of any such remedies may require the assistance or cooperation of AIC
or AICCO.

         The Transferor will represent and warrant in the Agreement that its
transfer of Future Receivables to the Trust as of the Closing Date and
thereafter is a valid transfer of Receivables to the Trust. The Transferor will
also warrant and covenant in the Agreement that the Future Receivables have been
and will be transferred free and clear of any adverse claim and that, except for
transfers to the Trust pursuant to the Agreement or as otherwise provided
therein with respect to a permitted merger, consolidation or sale of assets by
the Transferor, the Transferor will not sell, pledge, assign, transfer or grant
any adverse claim on any Receivable (or interest therein) or any other asset of
the Trust. The Original Transferors will have made similar representations,
warranties and covenants with respect to the Existing Receivables under the
Agreement.


                                       28

<PAGE>

         Section 541(d) of the United States Bankruptcy Code (the "Bankruptcy
Code") provides, in pertinent part, that where a debtor retains only legal title
to property to service the property, but does not retain an equitable interest,
the property included in the debtor's bankruptcy estate will be limited to the
debtor's legal title interest only and not to any equitable interest it does not
hold. Since (i) there appears to be uncertainty as to the application of Section
541(d) to property interests outside of real estate mortgage loans, (ii) AIC and
AICCO will be retaining an equitable interest in the Receivables through the
ownership of the Series 1994-1 Class C Certificates, and (iii) the Transferor
will be retaining an equitable interest in the Receivables through the
Transferor Ownership Interest and through the ownership of the Series 1998-1
Class C Certificates, a court could find that the Receivables had not been sold
and removed from the estate of either AIC, AICCO or the Transferor, but remain
part of any such entity's estate in the event of bankruptcy. Further, in Octagon
Gas Systems, Inc. v. Rimmer, 995 F.2d 948 (10th Cir. 1993), cert. den., 114 S.
Ct. 554, the United States Court of Appeals for the 10th Circuit suggested that
even where a transfer of accounts from a seller to a buyer constitutes a "true
sale," the accounts would nevertheless constitute property of the seller's
estate in a bankruptcy of the seller.

         In light of the foregoing, a creditor or trustee-in-bankruptcy of any
of AIC, AICCO or AIR could attempt to take the position that the transfer of
such beneficial interest pursuant to the Receivables Sale Agreement or the
Agreement was not a sale and should be recharacterized as an assignment of
collateral as security for the benefit of the Transferor or the holders of
certificates issued by the Trust. If the transfer to the Transferor or to the
Trust were deemed to be a grant to the Transferor or to the Trust of a security
interest in the Receivables, the Trustee may have an unperfected security
interest therein that will not have a priority over other, unsecured creditors,
and would be subordinate to secured creditors, of AIC, AICCO or the Transferor.

Also, if it were determined that the Trust or the Transferor had only an
unperfected security interest in its assets, payments made within one year of a
bankruptcy proceeding in respect of AIC, AICCO or the Transferor could be
subject to recapture as assets of such entity's bankruptcy estate pursuant to
Section 547 of the Bankruptcy Code. Holders of Offered Certificates,
consequently, could experience delays in payment or possibly losses in their
investment in the Offered Certificates if a bankruptcy proceeding in respect of
AIC, AICCO or the Transferor were to occur. AIG has agreed for the benefit of
the Trustee and the certificateholders of all outstanding Series in the AIC
Support Agreement described elsewhere herein to cause each of AIC and AICCO to
have a minimum net worth of at least $1 and, if AIC or AICCO has insufficient
funds to (a) meet any of its obligations under the Agreement or (b) pay any of
its other obligations when due (except for any such obligations which are the
subject of a bona fide dispute), the non-payment of which could constitute a
basis for the filing of an involuntary case against either AIC or AICCO under
the Bankruptcy Code, to provide AIC or AICCO, as the case may be, funds on a
timely basis to cause such obligations to be satisfied when due. AIG has agreed
for the benefit of the Trustee and the certificateholders of all outstanding
Series in the AIR Support Agreement described elsewhere herein to cause AIR to
have a minimum net worth of at least $1 and, if (a) AIR has insufficient funds
to meet any of its obligations under the Agreement or (b) AIR has insufficient
funds to pay any of its other obligations when due (except for any such
obligations which are the subject of a bona fide dispute), the non-payment of
which could constitute a basis for the filing of an involuntary case against AIR
under the Bankruptcy Code, to provide AIR funds on a timely basis to cause such
obligations to be satisfied when due. The Support Agreements and AIC's
undertaking in the Agreement reduce the probability that an Original Transferor
or the Transferor might be subject to a bankruptcy proceeding or have unpaid
creditors who might take the aforementioned position. See "Description of the
Offered Certificates--Support Agreements."

         If a bankruptcy-related event involving AIC, AICCO or the Transferor
were to occur, then a Pay Out Event could occur with respect to all Series then
outstanding and, pursuant to the Agreement, Additional Receivables would not be
transferred to the Trust and the Trustee would be obligated to sell the
Receivables (unless holders of more than 50% of the certificateholders ownership
interests of each Series of certificates issued and outstanding, including any
certificates held by the Transferor if no bankruptcy-related event has occurred
as


                                       29

<PAGE>

to the Transferor (or, with respect to any Series with two or more classes, more
than 50% of each class) and the holder of the Transferor Certificate (if no
bankruptcy-related event has occurred as to such holder), instruct otherwise) in
accordance with the Agreement in a commercially reasonable manner and on
commercially reasonable terms, which may cause early termination of the Trust
and a loss to certificateholders of each such Series (including the Series
1998-1 Certificateholders) if the proceeds from such early sale allocable to
such Series, if any, and the amounts available under any Enhancement applicable
to such Series were insufficient to pay certificateholders of such Series in

full. If a Pay Out Event occurs that is due to the bankruptcy of either AIC or
AICCO, a bankruptcy trustee may have the power to prohibit continued transfers
of Receivables to the Transferor and to repudiate the servicing obligations of
AIC or AICCO, as the case may be. If a Pay Out Event occurs that is due either
to the bankruptcy of the Transferor or the appointment of a trustee for the
Transferor, the trustee would have the power to prevent the early sale,
liquidation or disposition of the Receivables and the commencement of the Series
1998-1 Rapid Amortization Period. A bankruptcy trustee in such event may also
have the power to cause the early sale of the Receivables and the early
retirement of the Offered Certificates and to prohibit the continued transfer of
Additional Receivables to the Trust.

         In addition, in the event of a Servicer Default relating to the
bankruptcy of the Servicer, if no Servicer Default other than such bankruptcy
exists, the trustee for the Servicer may have the power to prevent either the
Trustee or the certificateholders of outstanding Series of certificates from
appointing a successor servicer.

         State Regulation of Premium Finance Lending. The making, purchasing and
servicing of insurance premium loans is subject to numerous state laws and
regulations which impose requirements on the making, enforcement and collection
of insurance premium loans. The states may enact additional laws and regulations
and amendments to existing laws and regulations to regulate further the premium
loan industry or to reduce finance charges or other fees or charges applicable
to insurance premium loans. Such laws, as well as any new laws or rulings which
may be adopted, may adversely affect the Servicer's ability to collect on the
Receivables or maintain the required level of finance charges and other fees and
charges and the ability of the Trust to retain a successor servicer in the event
AIC or AICCO shall cease for any reason to continue as a Servicer. Since neither
the Trust nor the Transferor makes or services premium finance loans or has
acquired legal title to any such loans, AIC and AICCO believe that there is no
requirement that either the Transferor or the Trust be licensed under any state
premium finance licensing laws.

         Pursuant to the Agreement, the Transferor will covenant to accept
reassignment of each Future Receivable, and AIC or AICCO, as the case may be,
will covenant to accept reassignment of each Existing Receivable, that does not
comply with certain representations and warranties, including representations
concerning compliance with applicable state law and regulations, if, as a result
of such noncompliance, the related Loan becomes a Defaulted Loan. Pursuant to
the Receivables Sale Agreement, each of the Original Transferors will covenant
to accept reassignment of each Future Receivable sold by it to the Transferor
that may be reassigned to the Transferor because of a breach of a representation
and warranty. See "Description of the Offered Certificates--Representations and
Warranties." The Trustee has not made, and it is not anticipated that it will
make, any examination of the Receivables or the records relating thereto for the
purpose of establishing the presence or absence of defects, compliance with such
representations and warranties, or for any other purpose. The Trust's remedy if
any such representation or warranty is breached and such breach continues beyond
the applicable cure period and the related Loan becomes a Defaulted Loan because
of such breach is that (i) in the case of a Future Receivable, the Transferor
will be obligated to accept reassignment of the Receivable affected thereby and,
in turn, the Transferor will reassign such Future Receivable to either AIC or
AICCO, as applicable, which will be obligated to accept a reassignment of such

Receivable pursuant to the terms of the Receivables Sale Agreement, or (ii) in
the case of an Existing Receivable, the applicable Original Transferor will be
obligated to


                                       30

<PAGE>

accept reassignment of such Receivable. See "--Bankruptcy Considerations" and
"Description of the Offered Certificates--Representations and Warranties."

         Competition in the Premium Finance Loan Industry. The premium finance
loan industry is competitive and includes banks as well as other premium finance
lending companies that offer financing to companies that purchase commercial
insurance. Insurance premium lenders may compete on the basis of loan pricing
and terms, underwriting criteria and servicing quality. If commercial insurance
consumers choose to utilize competing sources of credit, the amount of available
Additional Receivables relating to Loans funded by AIC or AICCO may be reduced.
The size of the Trust will be dependent upon the Transferor's continued ability
to transfer to the Trust Additional Receivables, which in turn will be dependent
upon the continued ability of AIC and AICCO to generate Additional Receivables
for subsequent sale to the Transferor and transfer by the Transferor to the
Trust. If the amount of Additional Receivables generated declines significantly,
Additional Receivables available to be transferred to the Trust will decline. If
the amount of Additional Receivables generated declines to such an extent that
the Transferor is unable to maintain the Minimum Transferor Ownership Interest,
a Pay Out Event would occur, in which event the Series 1998-1 Rapid Amortization
Period would commence. If the Series 1998-1 Rapid Amortization Period commences,
Series 1998-1 Certificateholders are likely to be repaid principal amounts
earlier than anticipated with respect to their Series 1998-1 Certificates, which
would affect the anticipated average life of the Series 1998-1 Certificates and
could result in reinvestment risk with respect to such earlier repayments. In
addition, the amount otherwise allocable to the holder of the Transferor
Certificate that would be available to be deposited into the Series 1998-1 Yield
Enhancement Account could be reduced thereby, reducing funds available to pay
amounts due with respect to the Series 1998-1 Certificates. See "Description of
the Offered Certificates--Pay Out Events" and "--Series 1998-1 Yield Enhancement
Account."

         Economic Factors. Economic factors, including the occurrence of a
recession, the rate of inflation, and relative interest rates, may have an
adverse impact upon the performance of the Receivables and on the ability of AIC
and AICCO to generate Additional Receivables for subsequent sale to the
Transferor and transfer by the Transferor to the Trust. In particular, negative
economic developments could have an adverse impact on the timing and amounts of
payments made by Obligors in respect of Receivables and could cause such
Obligors to become bankrupt or insolvent. See "--Premium Finance Loan Credit and
Related Considerations" and "Maturity Considerations."

         Limitations on Subordination and Yield Enhancement. Although the
probability of payment of amounts due with respect to the Offered Certificates
is intended to be enhanced by the subordination described herein of payments on
the Series 1998-1 Class C Certificates and by the availability of amounts in the

Series 1998-1 Yield Enhancement Account as described herein and, in the case of
the Series 1998-1 Class A Certificates, also by the subordination of payments on
the Series 1998-1 Class B Certificates to the Series 1998-1 Class A Certificates
as described herein, the amount of such enhancement is limited and may decline
during the Series 1998-1 Controlled Amortization Period or any Series 1998-1
Rapid Amortization Period or as a result of Defaulted Loans. If the
subordination of payments on the Series 1998-1 Class C Certificates and any
amounts deposited into the Series 1998-1 Yield Enhancement Account are
insufficient to protect the Series 1998-1 Class B Certificates from shortfalls
or delays in collections on the Receivables, then the Series 1998-1 Class B
Certificateholders will bear directly the credit risk associated with their
undivided interests in the Trust. If the subordination of payments on the Series
1998-1 Class C Certificates and the Series 1998-1 Class B Certificates and any
amounts deposited into the Series 1998-1 Yield Enhancement Account are
insufficient to protect the Series 1998-1 Class A Certificates from shortfalls
or delays in collections on the Receivables, then the Series 1998-1 Class A
Certificateholders will bear directly the credit risk associated with their
undivided interests in the Trust. The credit risk associated with the Series
1998-1 Certificateholders' undivided interests in the Trust is the risk that the
Trust will not receive full and timely payment of the Receivables. This risk is
described further in "--Premium Finance Loan Credit and


                                       31

<PAGE>

Related Considerations" above. Series of certificates issued in the future may
share with the Offered Certificates in the benefits of the subordination of the
Series 1998-1 Class C Certificates, the yield enhancement provided by deposits
into the Series 1998-1 Yield Enhancement Account and any amounts deposited into
the Excess Funding Account. The Series 1994-1 Offered Certificates will share
with the Offered Certificates in the benefits of amounts deposited into the
Excess Funding Account. See "Description of the Offered
Certificates--Subordination," "--Series 1998-1 Yield Enhancement Account" and
"--Excess Funding Account."

         Master Trust Considerations. The Trust, as a master trust, has issued
the Series 1994-1 Certificates, will issue the Series 1998-1 Certificates, and
may issue additional Series of certificates. While the Principal Terms of any
Series will be specified in a Supplement, the provisions of a Supplement and,
therefore, the terms of any additional Series, will not be subject to the prior
review or consent of holders of the certificates of any previously issued
Series, including the Series 1998-1 Certificateholders. Such Principal Terms may
include methods for determining applicable investor percentages and allocating
collections, provisions creating different or additional security or other
Enhancement and/or provisions subordinating such Series to another Series (if
the Supplement relating to such Series so permits; the Series 1998-1 Supplement
will not permit such subordination of the Offered Certificates to any other
Series). It is a condition precedent to any New Series Issuance that either (A)
each Rating Agency deliver written confirmation to the Trustee that such
issuance will not result in such Rating Agency reducing or withdrawing its
then-existing rating on any outstanding Series or (B) if at the time of the
issuance there is no outstanding Series which is currently rated by a Rating

Agency, a nationally recognized investment banking firm or commercial bank
deliver a certificate to the Trustee to the effect that the issuance will not
have an adverse effect on the timing or distribution of payments to such other
Series. There can be no assurance, however, that the Principal Terms of any
other Series, including Series 1994-1 and any other Series issued from time to
time hereafter, will not have an impact on the timing and amount of payments
received by a Series 1998-1 Certificateholder, including as a result of the
refixing of the percentage utilized with respect to the allocation of the
Principal Receivables. See "Description of the Offered Certificates--New Series
Issuances" and "--Allocation Percentages."

         If the Trust issues any additional Series in a future public offering,
the Trust will do so pursuant to a registration statement (and prospectus) under
the Securities Act that is separate from this Prospectus and its related
registration statement. The new prospectus will not take the form of a
supplement to this Prospectus as is utilized in shelf offerings under the
Securities Act.

         Certificateholder Control Limitations. Subject to certain exceptions,
the certificateholders of each Series may take certain actions, or direct
certain actions to be taken, under the Agreement, including the related
Supplement. However, under certain circumstances, the consent or approval of a
specified percentage of the aggregate certificateholders ownership interests of
all Series or of the certificateholders ownership interests of each Series or of
classes within a Series will be required to take or direct certain actions,
including requiring the appointment of a successor Servicer following a Servicer
Default, amending the Agreement in certain circumstances and directing a
repurchase by the Transferor and/or the Original Transferors of some or all
outstanding Receivables upon the breach of certain representations and
warranties by the Transferor and/or the Original Transferors. In such instances,
the interests of the Series 1998-1 Certificateholders may not be aligned with
the interests of the holders of certificates of such other Series. Thus, even if
the requisite majority of Series 1998-1 Certificateholders votes to take or
direct such action, the holders of certificates of such other Series may control
whether or not such action occurs.

         Additional Receivables Considerations. The Transferor expects, and in
some cases will be obligated, to transfer Additional Receivables to the Trust.
Such Additional Receivables may include Receivables originated using criteria
different from those which were applied to the Existing Receivables because such
Receivables were


                                       32

<PAGE>

originated at a different date. Consequently, there can be no assurance that
Additional Receivables designated in the future will be of the same credit
quality as previously designated Receivables. The designation of Additional
Receivables will be subject to the satisfaction of certain conditions described
herein under "Description of the Offered Certificates--Addition of Receivables."

         Payments And Maturity. There is no assurance that there will be at any

time after the Closing Date sufficient Additional Receivables available for
transfer to the Transferor and to the Trust to avoid a Pay Out Event. The
commencement and continuation of a Series 1998-1 Controlled Amortization Period
for a class with respect to the Trust will be dependent upon the continued
generation of Additional Receivables to be conveyed to the Trust. A significant
decline in the amount of Receivables generated could result in the occurrence of
a Pay Out Event and the commencement of the Series 1998-1 Rapid Amortization
Period. See "Maturity Considerations" and "Description of the Offered
Certificates--Pay Out Events."

         Certificate Rating. Any rating assigned to a class of the Offered
Certificates by Standard & Poor's or Moody's (individually, a "Rating Agency"
and collectively, the "Rating Agencies") will reflect such Rating Agency's
assessment of the likelihood that certificateholders of such class will receive
the payments of interest and principal required to be made under the Agreement
and will be based on the collectability of the Receivables in the Trust, the
terms, including the subordination terms, of other classes, the availability of
amounts in the Series 1998-1 Yield Enhancement Account, the loss allocation
method and the Support Agreements with AIG. The rating addresses the likelihood
of full payment of principal and interest of the Offered Certificates by the
Series 1998-1 Termination Date. Any such rating will not address the possibility
of the occurrence of a Pay Out Event with respect to such class or the
possibility of the imposition of United States withholding tax with respect to
non-U.S. Holders of Offered Certificates. The rating will not be a
recommendation to purchase, hold or sell certificates of such class, and such
rating will not comment as to the marketability of such Offered Certificates,
any market price or suitability for a particular investor. There is no assurance
that any rating will remain for any given period of time or that any rating will
not be lowered or withdrawn entirely by a Rating Agency if in such Rating
Agency's judgment future circumstances relating to the basis of the rating, such
as adverse changes in the collectability of the Receivables or a lowering of
AIG's long-term debt rating, so warrant.

         The Transferor will request a rating of the Offered Certificates by the
two Rating Agencies. There can be no assurance as to whether any rating agency
not requested to rate the Offered Certificates will nonetheless issue a rating
with respect to any Offered Certificate or class thereof, and, if so, what such
rating would be. A rating assigned to any Offered Certificates or class thereof
by a rating agency that has not been requested by the Transferor to do so may be
lower than the rating assigned by a Rating Agency pursuant to the Transferor's
request.

         Book-Entry Registration. The Offered Certificates will be initially
represented by one or more certificates registered in the name of Cede, the
nominee for DTC, and will not be registered in the names of the Certificate
Owners or their nominees. Because of this, unless and until Definitive
Certificates are issued, Certificate Owners will not be recognized by the
Trustee as Series 1998-1 Certificateholders, as that term will be used in the
Agreement. Hence, until such time, Certificate Owners will only be able to
exercise the rights of Series 1998-1 Certificateholders indirectly through DTC
and its participating organizations. See "Description of the Offered
Certificates--Book-Entry Registration" and "--Definitive Certificates."

         Reports To Certificateholders. Unless and until Definitive Certificates

are issued, monthly and annual reports containing information concerning the
Trust and prepared by the Trustee will be sent on behalf of the Trust to Cede,
as nominee for DTC and the registered holder of the Offered Certificates. Such
reports will not constitute financial statements prepared in accordance with
generally accepted accounting principles and will not


                                       33

<PAGE>

be sent by the Servicer or the Trustee to the Certificate Owners. See
"Description of the Offered Certificates--Book-Entry Registration,"
"--Definitive Certificates," and "--Reports to Holders of Offered Certificates."

                             MATURITY CONSIDERATIONS

         The Agreement provides that the Series 1998-1 Class A
Certificateholders will not receive payments of principal until the first
Distribution Date with respect to the Series 1998-1 Controlled Amortization
Period, which is the [__________] Distribution Date, or earlier in the event of
a Pay Out Event which results in the commencement of the Series 1998-1 Rapid
Amortization Period. Series 1998-1 Class A Certificateholders will receive
payments of principal on each Distribution Date following the commencement of
the Series 1998-1 Rapid Amortization Period, to the extent of funds available
therefor, until the Series 1998-1 Class A Ownership Interest has been paid in
full or the Series 1998-1 Termination Date has occurred. The Series 1998-1 Class
B Certificateholders will not begin to receive payments of principal until the
Series 1998-1 Class A Ownership Interest has been fully paid.

         On each Distribution Date during the Series 1998-1 Class A Controlled
Amortization Period (which is presently scheduled to include the Distribution
Dates occurring in the months from [_______ to ______]), the Series 1998-1 Class
A Certificateholders will be entitled to receive monthly payments of principal
until the Series 1998-1 Class A Ownership Interest has been paid in full equal
to the least of (a) Series 1998-1 Available Investor Principal Collections (see
"Description of the Offered Certificates--Principal Payments") on deposit in the
Principal Account with respect to the related Transfer Date, (b) the applicable
Series 1998-1 Controlled Distribution Amount, which is equal to the sum of the
applicable Series 1998-1 Controlled Amortization Amount and any existing
applicable Series 1998-1 Deficit Controlled Amortization Amount (both as defined
under "Description of the Offered Certificates--Principal Payments") and (c) the
Series 1998-1 Class A Ownership Interest. On each Distribution Date during the
Series 1998-1 Class B Controlled Amortization Period (which is presently
scheduled to be only the Distribution Date occurring in [________]), the Series
1998-1 Class B Certificateholders will be entitled to receive monthly payments
of principal until the Series 1998-1 Class B Ownership Interest has been paid in
full equal to the least of (a) Series 1998-1 Available Investor Principal
Collections (see "Description of the Offered Certificates--Principal Payments")
on deposit in the Principal Account with respect to the related Transfer Date
(minus the portion of such Series 1998-1 Available Investor Principal
Collections applied to Series 1998-1 Class A Monthly Principal on such date),
(b) the applicable Series 1998-1 Controlled Distribution Amount (minus the
portion of such Series 1998-1 Controlled Distribution Amount applied to Series

1998-1 Class A Monthly Principal on such date), and (c) the Series 1998-1 Class
B Ownership Interest.

         If a Pay Out Event occurs before or during the Series 1998-1 Controlled
Amortization Period, the Series 1998-1 Rapid Amortization Period will commence.
To the extent that the Series 1998-1 Class A Ownership Interest has not been
paid in full, the Series 1998-1 Class A Certificateholders will be entitled to
monthly payments of principal equal to the Series 1998-1 Available Investor
Principal Collections until the earlier of the date on which the Series 1998-1
Class A Ownership Interest has been paid in full and the Series 1998-1
Termination Date. After the Series 1998-1 Class A Ownership Interest has been
paid in full, Series 1998-1 Available Investor Principal Collections will be
paid to the Series 1998-1 Class B Certificateholders on each Distribution Date
until the earlier of the date on which the Series 1998-1 Class B Ownership
Interest has been paid in full and the Series 1998-1 Termination Date. A Pay Out
Event occurs, either automatically or after specified notice, upon certain
events, including generally (a) the failure of AIC, AICCO or the Transferor to
make certain remittances or deposits of funds for the benefit of the Series
1998-1 Certificateholders within the time periods stated in the Agreement, (b)
breaches of specified representations and warranties by AIC, AICCO or the


                                       34

<PAGE>

Transferor, (c) a Series 1998-1 Annualized Monthly Excess Spread Amount below
400 basis points for three consecutive Monthly Periods, (d) specified failure of
the Transferor to maintain the Transferor Ownership Interest at an amount at
least equal to the Minimum Transferor Ownership Interest, (e) specified Servicer
Defaults, (f) a Monthly Payment Rate of less than 14% for three consecutive
Monthly Periods, (g) a Financed Premium Percentage of more than 90% in respect
of Additional Receivables transferred to the Trust for three consecutive Monthly
Periods, (h) certain events of bankruptcy or insolvency related to AIC, AICCO or
the Transferor, (i) the inability, for any reason, of the Transferor to transfer
Additional Receivables to the Trust, and (j) a breach by AIG of either of the
Support Agreements or a breach of AIC of its support obligations under the
Agreement or the AIC Support Agreement with respect to AICCO. See "Description
of the Offered Certificates--Pay Out Events."

         Because there may be a slowdown in the payment rate of the Receivables
below the payment rates used to determine the Series 1998-1 Controlled
Distribution Amounts, or a Pay Out Event may occur which would initiate the
Series 1998-1 Rapid Amortization Period, there can be no assurance that the
respective final Distribution Dates of the Series 1998-1 Class A Certificates
and the Series 1998-1 Class B Certificates will be as indicated herein. See
"Special Considerations--Payments and Maturity."

         The ability of the Series 1998-1 Certificateholders to receive payments
of principal during the Series 1998-1 Controlled Amortization Period or any
Series 1998-1 Rapid Amortization Period depends on the amount and schedule of
installments of outstanding Receivables, delinquencies, charge-offs and the
generation and transfer of Additional Receivables and the potential issuance by
the Trust of additional Series. There can be no assurance as to the actual rate

of payment of principal of the Series 1998-1 Certificates. See "Description of
the Offered Certificates--Principal Payments."

         In addition, the amount of outstanding Receivables, as well as
delinquencies, charge-offs and the generation of new Receivables may vary from
month to month due to seasonal variations, regulatory factors, general economic
conditions and conditions in the markets for the services offered by AIC and
AICCO. There can be no assurance that collections of Receivables with respect to
the Trust, and thus the rate at which the Series 1998-1 Certificateholders could
expect to receive payments of principal on the Series 1998-1 Certificates, will
be as indicated herein. In addition, the Trust, as a master trust, may issue
additional Series from time to time, and there can be no assurance that the
terms of any such Series would not have an impact on the timing or amount of
payments received by the Holders of Offered Certificates. Further, if a Pay Out
Event occurs, the average life and maturity of the Offered Certificates could be
significantly reduced. No prepayment premium will be payable on account of any
prepayment of the Series 1998-1 Certificates as the result of the occurrence of
the Series 1998-1 Rapid Amortization Period.

         If an event of bankruptcy relating to AIC, AICCO or the Transferor were
to occur, then a Pay Out Event could occur with respect to all Series then
outstanding and, pursuant to the Agreement, the Transferor would immediately
cease to transfer Receivables to the Trust, and the Trustee would sell all
Receivables then in the Trust (unless holders of more than 50% of the
certificateholders ownership interests of each Series issued and outstanding,
including any certificates held by the Transferor if no bankruptcy-related event
has occurred as to the Transferor (or, with respect to any Series with two or
more classes, more than 50% of each class) and the holder of the Transferor
Certificate (if no bankruptcy-related event has occurred as to such holder),
instruct otherwise), in accordance with the Agreement in a commercially
reasonable manner and on commercially reasonable terms, which may cause early
termination of the Trust. However, in a bankruptcy proceeding, neither the
Trustee nor the Transferor may be permitted to suspend transfers of Receivables
to the Trust and the Transferor, respectively, and the instructions to sell or
not to sell the Receivables may not be given effect. See "Special
Considerations--Bankruptcy Considerations." The proceeds from the sale of the
Receivables would be treated as collections on the Receivables and allocated
accordingly among holders of certificates of each Series and the


                                       35

<PAGE>

holder of the Transferor Certificate. If the proceeds from such early sale
allocable to such Series, if any, and the amounts available under any
Enhancement applicable to such Series were insufficient to pay
certificateholders of such Series fully, a loss to certificateholders of each
such Series (including the Series 1998-1 Certificateholders) would result.

                                    THE TRUST

         General. The Trust was formed pursuant to the Original Agreement in
accordance with the laws of the State of New York. Prior to its formation, the

Trust did not have any assets or obligations. The Trust has not engaged and will
not engage in any activity, other than as described herein. In addition to the
Receivables, the assets of the Trust will also include (a) all monies on deposit
in certain bank accounts of the Trust, (b) all monies on deposit in certain bank
accounts established and maintained for the benefit of certificateholders of any
Series, and (c) any Enhancement issued with respect to any other Series (the
benefits of such Enhancement with respect to other Series will not be available
for the benefit of the Series 1998-1 Certificateholders). The term "Enhancement"
shall mean, with respect to any Series, any letter of credit, cash collateral
account, surety bond, guaranteed rate agreement, maturity guaranty facility, tax
protection agreement, interest rate swap or other contract or agreement
principally for the benefit of certificateholders of such Series. The Trust will
exist only for the transactions described herein, including the collection of
payments with respect to the Receivables and holding such Receivables, the
issuance of the Transferor Certificate, the issuance of the Series 1998-1
Certificates, the Series 1994-1 Certificates and certificates representing
additional Series and related activities (including, with respect to any Series,
receiving any Enhancement and entering into the Enhancement agreement relating
thereto) and making payments thereon. As a consequence, the Trust is not
expected to have any need for additional capital resources.

         Other Series. The Trust previously issued pursuant to the Original
Agreement and the Original Series 1994-1 Supplement the Series 1994-1
Certificates, consisting of $200,000,000 in aggregate principal amount of Series
1994-1 Floating Rate Class A Asset Backed Certificates (the "Series 1994-1 Class
A Certificates"), $7,600,000 in aggregate principal amount of Series 1994-1
Floating Rate Class B Asset Backed Certificates (the "Series 1994-1 Class B
Certificates") and the Series 1994-1 Class C Certificates, and the Transferor
Certificate. The Series 1994-1 Class C Certificates and the Transferor
Certificate have been and until the Closing Date or thereabout will continue to
be held by AIC and AICCO and represent their respective interests in the Trust
as Original Transferors. Simultaneously with the issuance of the Series 1998-1
Certificates, the Transferor Certificate will be transferred to AIR by AIC and
AICCO. AIC and AICCO will retain the Series 1994-1 Class C Certificates. AIC and
AICCO will, on the Closing Date, cease to transfer Receivables to the Trust and
all such future conveyances to the Trust will be made by AIR, which will
purchase Receivables from AIC and AICCO pursuant to the terms of the Receivables
Sale Agreement.

         The table below sets forth the principal economic characteristics of
the Series 1994-1 Offered Certificates heretofore issued by the Trust. For more
specific information with respect to any Series, any prospective investor should
contact the Servicer at [____________]. The Servicer will provide, without
charge, to any prospective purchaser of the Series 1998-1 Certificates, a copy
of the prospectus for the Series 1994-1 Certificates.

Series 1994-1

<TABLE>
<S>     <C>                                       <C>

1.      Class A Certificates

        Initial Ownership Interest                 $200,000,000

        Certificate Rate                           One-month LIBOR + 0.23%, subject to a cap of 16.00%
</TABLE>


                                       36

<PAGE>
<TABLE>
<S>     <C>                                       <C>

        Current Ownership Interest                 $200,000,000
        Controlled Amortization Amount             $28,571,428.58
        Expected Commencement of
          Controlled Amortization Period           September 1, 1999
        Monthly Servicing Fee                      No fee while AIC and AICCO are Servicer;
                                                   otherwise one-twelfth of the product of 0.5% and the
                                                   Series 1994-1 Class A Ownership Interest
        Other                                      Enhancement Subordination of Series 1994-1 Class B
                                                   Certificates and Series 1994-1 Class C Certificates;
                                                   series-specific yield enhancement account
        Expected Final Payment Date                March 2000
        Scheduled Series Termination Date          October 2001
        Series Issuance Date                       December 22, 1994

2.      Class B Certificates

        Initial Ownership Interest                 $7,600,000
        Certificate Rate                           One-month LIBOR + 0.43%, subject to a cap of 16.00%
        Current Ownership Interest                 $7,600,000
        Controlled Amortization Amount             $28,571,428.58
        Expected Commencement of
          Controlled Amortization Period           April 2000
        Monthly Servicing Fee                      No fee while AIC and AICCO are Servicer;
                                                   otherwise one-twelfth of the product of 0.5% and the
                                                   Series 1994-1 Class B Ownership Interest
        Other Enhancement                          Subordination of Series 1994-1 Class C Certificates; series-
                                                   specific yield enhancement account
        Expected Final Payment Date                April 2000
        Scheduled Series Termination Date          October 2001
        Series Issuance Date                       December 22, 1994
</TABLE>


                                       37

<PAGE>

      BUSINESS OF A.I. RECEIVABLES CORP., A.I. CREDIT CORP. AND AICCO, INC.

General

        A.I. Receivables Corp. was incorporated in Delaware in January of 1998
and is wholly owned by A.I. Credit Corp. and AICCO, Inc., each of which holds a
50% interest therein. AIR was created for the sole and limited purpose of acting

as Transferor under the Trust and as purchaser under the Receivables Sale
Agreement. Receivables relating to Loans funded by AIC and AICCO, as described
below, will be purchased by AIR pursuant to the Receivables Sale Agreement and
subsequently transferred from AIR to the Trust pursuant to the Agreement. The
principal executive office of AIR is located at 160 Water Street, New York, New
York 10038, telephone number (212) 428-5500.

        A.I. Credit Corp. was incorporated in New Hampshire in 1973 and is a
wholly-owned subsidiary of American International Group, Inc., a Delaware
corporation ("AIG"). AIG is a holding company which through its subsidiaries is
primarily engaged in a broad range of insurance and insurance related activities
in the United States and abroad. The principal business of A.I. Credit Corp.
consists of funding loans to commercial borrowers ("Obligors") to finance
property and casualty insurance premiums throughout the United States, other
than in California. AICCO, Inc. ("AICCO"), a wholly-owned subsidiary of A.I.
Credit Corp. that was incorporated in California in 1974, conducts such premium
finance lending activities in California. As used in this "Business" section
(unless otherwise indicated), "AIC" refers to A.I. Credit Corp. and AICCO
collectively. AIC finances premiums for most lines of property and casualty
insurance. AIC believes that it is the second largest insurance premium finance
company in the United States. AIC financed insurance premiums during each of
1996 and 1997 in excess of $2 billion. The principal executive office of AIC is
located at 160 Water Street, New York, New York 10038, telephone number (212)
428-5400 and of AICCO is located at 777 South Figueroa Street, Los Angeles,
California 90017, telephone number (213) 689-3600.

        A commercial premium finance loan typically is an installment loan made
to a commercial insurance buyer, the proceeds of which pay premiums which are
due to the insurance company. Financed commercial insurance policies commonly
(a) are for a term of one year or less, (b) require the full premium to be paid
at inception and (c) provide upon early cancellation for a return of unearned
premium to the insured. Obligors generally make fixed scheduled payments which
include a finance charge based on a spread over the estimated yield at the date
of origination of the loan of money market investments with a maturity
comparable to the loan. The finance charges on premium finance loans funded by
AIC may vary considerably, depending on the term and amount of the loan, the
insured's credit payment history, the size of the premium down payment and other
considerations. During each of calendar years 1995, 1996 and 1997, the average
yield on the Loan Portfolio has exceeded the monthly average of the daily rates
in the London interbank market for offers of one-month United States dollar
deposits by at least 200 basis points for each monthly period. Due to future
changes in the interest rate environment, competition from other lenders and
other relevant factors, there can be no assurance the average spread between the
Loans and one-month LIBOR will not be lower in the future. For additional
information concerning the calculation of AIC's finance charges, see
"Description of the Offered Certificates--Allocation Percentages." For
information concerning additional amounts intended to be available as yield
enhancement for the Offered Certificates, see "The Receivables" and "Description
of the Offered Certificates--Series 1998-1 Yield Enhancement Account."

        AIC utilizes standardized premium finance loan agreements that give AIC
a limited power of attorney allowing it to cancel the insurance coverage upon
non-payment of a loan installment by the Obligor and to collect from the
insurance company any unearned premium that may secure the loan. Depending on

the terms of the loan



                                       38




<PAGE>



and of the related insurance policy, the return premium may or may not be
sufficient to pay off the outstanding balance of the loan. AIC also has a right
to recover any unpaid loan balance directly from the Obligor.

        A common premium finance loan structure may include a 20% down payment
on the premium paid by the Obligor with the remaining 80% funded by a loan from
the insurance premium finance company to be repaid by the Obligor in nine equal
monthly installments. AIC's premium finance loans generally have terms that
range from 6 to 12 monthly installments with higher or lower down payment
percentages depending upon AIC's applicable credit and underwriting policies.
Certain loans do not have level repayment requirements, usually to accommodate a
borrower's cash flow. Given the relatively short duration of most premium
finance loans, such loans are generally not prepaid prior to the scheduled
payment dates although the loan terms do not prohibit prepayments or provide for
penalties in the event of prepayment.

        Financed commercial insurance policies usually require that the full
insurance premium be paid at the commencement of the policy period. The
insurance company customarily earns the right to the full premium over the
course of the policy period. If the insured cancels the policy prior to the end
of the policy period, the insured is commonly entitled to a repayment of the
portion of premium payment that is unearned by the insurance company at the time
of cancellation. Depending on the type of insurance coverage and the terms of
the particular insurance policy, the amount of unearned premium available upon
cancellation will vary in light of relevant factors such as (a) the applicable
method for measuring unearned premium which may be by proration over the policy
term or, as required by some states, by an accelerated method under which more
premium is earned in the earlier portion of the policy period, (b) the extent of
the policy period that has expired at the time of cancellation, (c) the loss
experience under the policy prior to cancellation and (d) variations after the
commencement of the policy period in the scope of the risks covered. The
insurance company may, depending on the terms of the policy, be entitled to
retroactively review and evaluate factors (c) and (d) above after cancellation
which may result in a reduction of the amount, and affect the timing, of
repayment of any unearned premiums. Also, in certain cases the insurance company
may earn the entire premium at inception of the policy or upon the occurrence of
an insured loss under the policy, in either of which cases there would be no
unearned premium to be returned.

        Premium finance lending activities are regulated by most states. Among
other matters, many states regulate various terms of the premium finance loans

such as refund policies and rates of interest and late charges that may be
charged an insured. Premium finance loans are funded by AIC on standardized loan
forms, the provisions and format of which are also usually subject to state
regulation. AIC regards its relations with state regulatory agencies as good.
See "--State Regulation of Premium Finance Lending Activities" below.

Premium Finance Loan Origination; Collection Policy

      AIC generally locates premium finance borrowers through independent
insurance agents and brokers that are licensed under state laws, who offer
premium loan programs to enable their commercial customers to purchase the full
amount of insurance coverage needed and spread out the premium payments over
time. Thus, origination is usually dependent on relationships with insurance
brokers and agents and knowledge of the insurance marketplace. The funding by
AIC of insurance premium finance loans is commonly commenced by an agent or
broker contacting AIC to initiate the premium loan process and outlining to AIC
the proposed loan transaction, including borrower and insurance company
information and coverage types and amounts. AIC then reviews the information
submitted by such agent or broker in light of its underwriting procedures. See
"--Premium Finance Loan Underwriting Procedures" below. After AIC approval, the
borrower executes a standard premium finance loan agreement, which contains a
promise to repay the loan, a limited power of attorney giving AIC the authority
in the event of default on the loan to contact the insurance company directly
and cancel coverage, and a collateral assignment to AIC of the unearned
insurance premium, if any, returnable following such cancellation.



                                       39


<PAGE>



        Following receipt and acceptance of the signed premium finance loan
agreement, AIC either sends the loan proceeds to the insurance company to pay
the premium balance due or releases funds to the insurance agent or broker who
then pays the insurance company. AIC bills the borrower directly on a monthly
basis. Each borrower is directed to remit payments to the appropriate regional
lockbox account maintained by AIC.

        Since the insurance company generally earns a portion of the premium
each day, thereby reducing unearned premium amounts for loans secured by such
collateral, prompt action on loan defaults is important. On defaulted loans,
most states allow premium finance companies such as AIC to issue a notice of
"intent to cancel" the related insurance policy within five or ten days after
the premium loan installment due date on which the borrower defaulted. A "notice
of cancellation" can then be issued generally ten days after an "intent to
cancel" notice has been mailed. Once a cancellation notice has been issued, AIC
will customarily proceed to take steps to collect any unearned premium available
from the insurance company and apply it to the loan balance. If the returned
premium does not retire the loan balance due, AIC will customarily seek payment
from the borrower pursuant to the terms of the premium finance loan agreement.

AIC's policy is to (a) seek to collect past due installments prior to policy
cancellation and (b) if a cancellation occurs, attempt to both collect the
delinquent payment and obtain reinstatement of the insurance coverage. Since
borrowers usually need to maintain insurance (and to reinstate cancelled
policies) to meet their business objectives, collections often continue even
after policy cancellation and cancelled policies are often reinstated.

        Generally, the policy cancellation date occurs within one month of the
related loan installment default. The current policy of AIC is to charge off as
a loss the unpaid defaulted loan balance one year after the cancellation of the
related policy. Following cancellation, AIC will process the collection of any
unearned premium with the appropriate insurance company or may pursue collection
against the borrower if sufficient unearned premium is unavailable. If during
this period AIC determines the unpaid loan is not likely to be collected, AIC
may charge off the loan prior to such first anniversary. Under the terms of the
Agreement, any recoveries with respect to Loans that have been written off will
be included in the assets of the Trust and considered Finance Charge
Receivables. See "The Receivables."

Premium Finance Loan Purchase Policies

        In addition to directly originating premium finance loans, AIC has
entered into purchase agreements whereby AIC purchases premium finance loans
("Purchased Loans") from third party premium finance loan originators ("Third
Party Originators") immediately upon their origination by such Third Party
Originators. The terms "fund," "funded" and "funding," when used herein with
respect to Loans, refer both to the making of such Loans directly by AIC or
AICCO to Obligors and to the purchase of such Loans by AIC or AICCO from Third
Party Originators immediately upon the origination of such Loans by Third Party
Originators, unless the context otherwise requires. Third Party Originators are
commonly affiliated with insurance agents and/or brokers. Purchased Loans are
originated on substantially similar terms as, and pursuant to the same credit
standards, policies and procedures applied to, loans directly originated by AIC.
The beneficial interest and rights in and to the Purchased Loans acquired by AIC
as purchaser are substantially similar to those in loans which are directly
originated by AIC, including, but not limited to, the limited power of attorney
allowing it to cancel the insurance coverage upon non-payment of a loan
installment by the Obligor and to collect from the insurance company any
unearned premium that may secure the loan. AIC will make identical
representations and warranties with respect to Purchased Loans sold to the
Transferor pursuant to the Receivables Sale Agreement as are made with respect
to Loans directly originated by AIC.

                                       40


<PAGE>



Premium Finance Loan Underwriting Procedures

        AIC considers and evaluates a variety of risks in evaluating each
instance of funding an insurance premium finance loan. These include (a) the

loan structure (the loan term, the amount of down payment and the availability
of unearned premium as collateral), (b) the creditworthiness of the borrower,
(c) the creditworthiness of the insurance company, in those cases where reliance
is placed on the right to unearned premiums, and (d) the capabilities and
operating procedures of the insurance agent or broker that (i) places the
insurance policy, (ii) serves as a source of significant information regarding
the loan transaction, and (iii) may disburse the loan proceeds or collect
unearned premium funds for AIC. These factors may be given different weight in
the case of any particular loans.

        All applications from insureds for loans to be funded by AIC are
reviewed for completeness and creditworthiness based on the loan underwriting
criteria established by AIC. Under AIC's current underwriting policies, loan
applications are reviewed by a branch office. Loans that have special factors,
such as large principal amounts, low down payments or the absence of unearned
premium collateral, are also subject to evaluation and approval by the head
office credit department. In most cases AIC receives applications directly from
insurance agents or brokers.

        AIC's general guideline for approval of an insurance company is a rating
of at least B+ by A.M. Best Company. Based upon AIC's own credit determination,
it may finance insurance policies issued by insurance companies that have a
lower rating or, in the case of foreign insurers and certain domestic insurers
that meet AIC credit requirements, that are unrated. While Receivables may
relate to Loans made to finance premiums payable to such unrated or lower rated
foreign or domestic insurers, AIC believes that each of such insurers is subject
to state insurance law requirements relating to the repayment of unearned
insurance premiums upon cancellation of the related policy. At December 31,
1997, in excess of 35% of the aggregate outstanding loan account balance (as
defined herein in the table entitled "Outstanding Loan Account Balances by Size"
under "The Receivables") represented loans funded by AIC to finance premiums on
policies issued by insurance affiliates of AIG. As of such date, no other
insurance company group accounted for more than 5.0% of the outstanding
insurance premium loans funded by AIC. With respect to agents and brokers, AIC
monitors loans in its portfolio originated by particular agents and brokers to
assist in assessing their capabilities and performance as agents or brokers.

State Regulation of Premium Finance Lending Activities

        The making, purchasing, enforcement and collection of insurance premium
loans is subject to extensive regulation by many states' laws. Such laws vary
widely by state, but often (i) require that premium finance lenders be licensed
by the state, (ii) restrict the content of premium finance loan agreements, and
impose certain disclosure requirements on such agreements, (iii) limit the
amount of finance charges that may be lawfully imposed, (iv) regulate the amount
of refunds due an obligor who prepays the premium finance loan prior to
maturity, (v) regulate the amount of late fees, if any, and finance charges that
may be charged upon a premium finance loan becoming overdue, (vi) regulate the
manner and method of cancelling an insurance policy upon non-payment of the
premium finance loan, including a requirement that the premium finance lender
provide the obligor with appropriate notice prior to such cancellation, and
(vii) allow imposition of penalties, which may be significant, upon premium
finance lenders for violations of the state's premium finance laws. See "Special
Considerations--State Regulation of Premium Finance Lending."



As Servicer

        AIC and AICCO will act as the Servicer for the Loans giving rise to
Receivables in accordance with the Agreement. In certain limited circumstances,
AIC and AICCO may resign or be removed as Servicer, in which



                                       41




<PAGE>



case a third party may be appointed as its successor. See "Special
Considerations--State Regulation of Premium Finance Lending," "Description of
the Offered Certificates--Collection and Other Servicing Procedures," "--Certain
Matters Regarding the Servicer, the Transferor and the Original Transferors" and
"--Servicer Default."

                                 THE RECEIVABLES

        The assets of the Trust will include (i) the entire beneficial interest
in Loans, which interest has been previously transferred to the Trust by AIC and
AICCO prior to the Closing Date, and (ii) to the extent described under
"Description of Offered Certificates--Addition of Receivables," the entire
beneficial interest in Loans funded by either AIC or AICCO on the Closing Date
and from time to time thereafter, including (A) all amounts due and to become
due and all collections and recoveries on such Loans, and (B) the proceeds of
certain collateral security securing such Loans. The beneficial interests
described above are herein referred to as the "Receivables." The Trust assets
will not include, as of any date of determination, (a) with respect to any
Receivable arising under a Loan which is not a Defaulted Loan, any collections
received by the Servicer on such Loan in excess of the sum of (i) the amounts
due and payable on such Loan during the month in which such date occurs and (ii)
all accrued and unpaid amounts, if any, on such Loan in respect of any month or
months prior to the month in which such date occurs or (b) with respect to any
Receivable arising under a Defaulted Loan, any collections received by the
Servicer on such Defaulted Loan in excess of all amounts due thereon (each, a
"Credit Balance").

        Each Loan will have been funded by AIC or AICCO to finance commercial
insurance premiums. Neither the Loans nor the Receivables are guaranteed by AIR,
AIC, AICCO, AIG or any affiliate thereof, and the Trust, as holder of the
Receivables, has no recourse against AIR, AIC, AICCO, AIG or any affiliate
thereof for the non-collectability of the Receivables, except that, under
certain limited circumstances, the Transferor and each of the Original
Transferors will be required to repurchase certain Receivables from the Trust
and to provide indemnification to the Trust in certain events. See "Description

of the Offered Certificates--Certain Matters Regarding the Servicer, the
Transferor and the Original Transferors." AIC and AICCO will each act as
Servicer with respect to the Receivables relating to Loans it funded and which
it transferred to the Trust (or sold to AIR for transfer to the Trust). As set
forth in the Agreement, each Receivable to be transferred to the Trust must
satisfy certain eligibility criteria. See "Description of the Offered
Certificates--Representations and Warranties."

        Certain information regarding the performance and composition of the
portfolio of Loans of AIC and AICCO (the "Loan Portfolio") is set forth below.
While AIC and AICCO expect to transfer their beneficial interest in the entire
Loan Portfolio to the Transferor for transfer to the Trust pursuant to the
Receivables Sale Agreement, there can be no assurance that the performance
experience of the Receivables transferred to the Trust will be comparable to
that set forth below. In addition, there are many legal, economic and
competitive factors that could adversely affect the amount and collectability of
the Loans related to the Receivables, including insureds' decisions to use new
sources of credit, which would affect the ability of AIC and AICCO to generate
Additional Receivables, and changes in usage of credit, payment patterns and
general economic conditions. Because the impact of these and other factors
(including the composition of the Receivables and the interest rates, fees and
charges assessed thereon) may change in the future, the text and tables set
forth below are not necessarily indicative of the future performance of the
Receivables that are transferred to the Trust.

        The following tables set forth certain summary information regarding the
Loan Portfolio. During each of the calendar years 1995, 1996 and 1997, the
average yield on the Loan Portfolio has exceeded the monthly average of the
daily rates in the London interbank market for offers of one-month United States
dollar deposits by at least 200 basis points for each monthly period. Due to
future changes in the interest rate environment,



                                       42


<PAGE>



competition from other lenders and other relevant factors, there can be no
assurance the average spread between the Loans and one-month LIBOR will not be
lower in the future. Also, during each of the calendar years 1995, 1996 and
1997, the average monthly payment rate on commercial premium finance loans
exceeded 17%. Assuming (i) a 17% payment rate each month, (ii) twelve equal
30-day monthly periods, and (iii) ownership by the Transferor during each
Monthly Period of at least the Minimum Transferor Ownership Interest, the amount
available under the Agreement during the Series 1998-1 Revolving Period for
yield enhancement would be [___] basis points on the outstanding principal of
the Offered Certificates on an annualized basis and may be greater during an
amortization period (unless the amount of interest due on the outstanding
principal of the Offered Certificates during such Monthly Period is less than
[___] basis points on an annualized basis, in which case the amount available

for yield enhancement would be such lesser amount). There can be no assurance,
however, that the monthly payment rate on the Loans will not be less than 17%
since the payment rate will vary depending on a variety of factors, including
loan maturities, interest rates and delinquency and default rates. Lower payment
rates will result in lower yield enhancement amounts. See "Description of the
Offered Certificates--Series 1998-1 Yield Enhancement Account."


                                       43


<PAGE>


                    Outstanding Loan Account Balances by Size
                             as of December 31, 1997
                             (Dollars in Thousands)

<TABLE>
<CAPTION>
                                                                                                      % of
                                                                                                    Aggregate
                                                                                  Outstanding      Outstanding
                                                                                      Loan             Loan
                                                No. of Loan        % of Loan        Account           Account
OUTSTANDING LOAN ACCOUNT BALANCE(1)             Accounts(2)        Accounts         Balance           Balance
                                                -----------        ---------      -----------      ----------
<S>                                                <C>               <C>          <C>               <C>

$5,000 or less.................................    45,931            72.38%          $63,811           6.26%
$5,001 to $10,000..............................     6,914            10.90%           48,660           4.77%
$10,001 to $25,000.............................     5,691             8.97%           89,185           8.75%
$25,001 to $50,000.............................     2,264             3.57%           78,696           7.72%
$50,001 to $75,000.............................       774             1.22%           46,959           4.61%
$75,001 to $100,000............................       439             0.69%           37,916           3.72%
$100,001 to $250,000...........................       860             1.36%          133,429          13.09%
$250,001 to $500,000...........................       339             0.53%          117,154          11.49%
$500,001 to $1,000,000.........................       146             0.23%           99,558           9.77%
$1,000,001 to $5,000,000.......................        90             0.14%          174,603          17.13%
Over $5,000,000................................        12             0.02%          129,443          12.70%

Total (3)......................................    63,460           100.00%       $1,019,414         100.00%

</TABLE>
----------
(1)     Loan account balances include outstanding principal balances (including
        committed but unfunded amounts) and unearned finance charges.
(2)     A loan account is generally a single Obligor that may have loans with
        respect to one or more commercial insurance policies outstanding at the
        time of determination.
(3)     The average outstanding loan account balance of each loan as of
        December 31, 1997 was approximately $16,100.



           Composition of Loan Accounts by Remaining Installment Term
                             as of December 31, 1997
                             (Dollars In Thousands)

<TABLE>
<CAPTION>
                                                                                             % of Aggregate
                                                                       Outstanding            Outstanding
                                              No. Of Loan              Loan Account            Loan Account
REMAINING INSTALLMENT TERM(1)                  Accounts                   Balance               Balance
                                             -------------            ---------------        -------------

<S>                                             <C>                     <C>                      <C>   
3 months or less......................          26,703                  $118,582                 11.63%
4 to 6 months.........................          17,115                   233,538                 22.91%
7 to 9 months.........................          15,511                   293,252                 28.77%
10 to 12 months.......................           3,586                   119,698                 11.74%
13 to 18 months.......................             276                    63,569                  6.24%
More than 18 months...................             269                   190,775                 18.71%

Total.................................          63,460                $1,019,414                100.00%
</TABLE>
----------
(1)     Terms of the loans commonly provide for level payments of principal and
        finance charges on a monthly basis, although certain loans do not have
        level repayment requirement.

                                       44

<PAGE>



                            Geographic Concentration

        The Loan Portfolio includes commercial premium finance loans originated
in all 50 states and the District of Columbia. The following table sets forth
information regarding the concentration of loans by outstanding loan account
balance in the Loan Portfolio among the states with the largest concentration of
loans as of December 31, 1997. No other state accounted for more than 2% of the
Loan Portfolio at such date.


                             Geographic Distribution
                             As Of December 31, 1997
                             (Dollars In Thousands)

                                                                % of Aggregate
                                               Outstanding         Outstanding
                                              Loan Account        Loan Account
                                                 Balance              Balance
                                              ------------      --------------

New York(1)..............................           238,838           23.43%

California(1)............................           172,286           16.90%
Texas....................................            98,385            9.65%
New Jersey...............................            69,672            6.83%
Pennsylvania.............................            42,063            4.13%
Massachusetts............................            38,463            3.77%
Florida..................................            36,111            3.54%
Illinois.................................            29,377            2.88%
Tennessee................................            22,044            2.16%
Georgia..................................            20,945            2.05%
Alabama..................................            20,813            2.04%
All Others(2)............................           230,417           22.60%

Total....................................         1,019,414          100.00%

----------
(1)     Significant percentages of the loans funded by AIC and AICCO are
        originated in New York and California, and accordingly, adverse economic
        developments in such areas could adversely affect collections of
        Receivables related to loans originated in such areas.

(2)     States with 2% or less of the total loan account balances.


                                       45

<PAGE>



                              Loan Loss Experience
                             (Dollars In Thousands)

        The following table sets forth loss experience with respect to payments
by Obligors on loans for each of the periods shown. There can be no assurance
that the loss experience for the Trust with respect to the Receivables will be
similar to the historical experience set forth below.


<TABLE>
<CAPTION>
                                                                 Year Ended December 31,
                                                    ------------------------------------------------
                                                        1997                 1996             1995
                                                        ----                 ----             ----

<S>                                                  <C>                    <C>             <C>
Average Aggregate Outstanding
    Principal Balance(1).....................         924,616                796,566         802,881
Gross Loan Charge-Offs(2)....................          12,582                  9,160           6,410
Recoveries(3)................................           2,598                  2,145           2,697
Net Loan Charge-Offs as Percentage ..........           9,984                  7,015           3,713
    of Average Aggregate Outstanding.........
    Principal Balance, Net(2)................           1.08%                  0.88%           0.46%
</TABLE>


----------
(1)  Calculated as the average of (a) the average monthly beginning receivables
     balance and (b) the average monthly ending receivables balance, over the
     relevant periods.
(2)  A loan is generally charged-off one year after cancellation. The related
     insurance policy is cancelled generally within one month following an
     Obligor's failure to make a scheduled loan installment payment.
(3)  A recovery occurs if, after a loan is written off, AIC or AICCO, as the
     case may be, receives additional funds to pay in whole or in part the
     outstanding balance due.


                                       46

<PAGE>



               Loan Delinquency Experience Following Cancellation

      The following table sets forth the delinquency experience with respect to
payments by Obligors on loans at each of the dates shown. In conformity with
state requirements regarding cancellation notification, insurance policies are
generally cancelled within one month following an Obligor's failure to make a
related scheduled loan installment payment. Cancellation occurs on an automated
basis unless the loan is carried in the "hold" category by AIC. The "hold"
category includes primarily loans that require manual servicing procedures and
loans where cancellation of the related policy is stayed due to the Obligors'
bankruptcy, some of which loans may be delinquent. At December 31, 1997 "hold"
category loans represented approximately 0.44% of the aggregate principal loan
balance (excluding unearned finance charges) for the Loan Portfolio. The loan
delinquency data presented in the following table are measured from the date of
insurance policy cancellation. The percentages presented for each aging category
reflect the sum of the balance of principal and unearned finance charges
(including the overdue installment(s) as well as all of the remaining
installment payments not yet due) on all canceled accounts within each category
divided by the aggregate principal loan balance (excluding unearned finance
charges) for the Loan Portfolio. Since the table reflects percentages calculated
by including unearned finance charges in the cancelled accounts, but not
including such amounts in the aggregate loan balances, the resulting percentages
may reflect higher percentages of delinquencies than actually experienced.
Variations from one measurement date to another measurement date within aging
categories are primarily a reflection of the variability of time required to
collect the unearned insurance premium from the insurance carrier or,
alternatively, the remaining loan balance from the Obligor, on a revolving pool
of loans. There can be no assurance that the delinquency experience with respect
to the Receivables will be similar to the historical experience set forth below.


Number Of Days A Loan Remains Overdue After                At December 31,
                                                   -----------------------------
Cancellation Of The Related Insurance Policy:        1997       1996       1995
                                                   --------   --------   ------


1-30 days.....................................       1.60%      1.90%     1.94%
31-60 days....................................       0.78%      0.63%     0.46%
61-90 days....................................       0.69%      0.52%     0.70%
91-120 days...................................       0.72%      0.39%     0.43%
121-150 days..................................       0.35%      0.32%     0.18%
151 days or greater(1)........................       1.18%      1.44%     0.92%

Total.........................................       5.31%      5.19%     4.63%

----------
(1) A loan is generally charged-off one year after cancellation of the related
insurance policy.


                                       47




<PAGE>



                                 USE OF PROCEEDS

      The net proceeds from the sale of the Offered Certificates, approximately
$[________], before deduction of expenses, will be paid to the Transferor. The
Transferor will use such proceeds to purchase a portion of the Transferor
Ownership Interest from AIC and AICCO.

                     DESCRIPTION OF THE OFFERED CERTIFICATES

      The Offered Certificates will be issued pursuant to the Agreement, which
includes the Series 1998-1 Supplement, to be entered into between AIR, as
Transferor of the Receivables, AIC, as an Original Transferor of the Receivables
and as Servicer of the Loans, AICCO, as an Original Transferor of the
Receivables and as Servicer of the Loans, and The First National Bank of
Chicago, as Trustee for the certificateholders, substantially in the form filed
as exhibits to the Registration Statement of which this Prospectus is a part.
Pursuant to the Agreement, the Transferor may execute further Supplements
thereto between the Transferor, the Original Transferors, the Servicer and the
Trustee in order to issue additional Series of certificates. See "--New Series
Issuances." The Trustee will provide a copy of the Agreement (without exhibits
or schedules), including the related Supplement, to Series 1998-1
Certificateholders without charge upon written request. The following summary
describes certain terms of, and is qualified in its entirety by reference to,
the Agreement (including the Series 1998-1 Supplement and the Series 1994-1
Supplement).

General

      The Series 1998-1 Certificates will represent an undivided interest in the
assets of the Trust, including the right to the applicable allocation percentage

of all payments on the Receivables in the Trust. Each Series 1998-1 Class A
Certificate represents the right to receive payments of interest at the Series
1998-1 Class A Certificate Rate for the related Interest Period and payments of
principal, to the extent of the Series 1998-1 Class A Ownership Interest, during
the Series 1998-1 Controlled Amortization Period or, if applicable, the Series
1998-1 Rapid Amortization Period, funded from collections of Finance Charge
Receivables and Principal Receivables, allocated to the Series 1998-1
Certificates and certain other available amounts. Each Series 1998-1 Class B
Certificate represents the right to receive payments of interest at the
applicable Series 1998-1 Class B Certificate Rate for the related Interest
Period and, after the Series 1998-1 Class A Ownership Interest has been paid in
full, payments of principal to the extent of the Series 1998-1 Class B Ownership
Interest during the Series 1998-1 Controlled Amortization Period or, if
applicable, the Series 1998-1 Rapid Amortization Period, funded from collections
of Finance Charge Receivables and Principal Receivables, allocated to the Series
1998-1 Certificates and certain other available amounts. In addition to
representing the right to payment from collections of Finance Charge Receivables
and Principal Receivables allocated to such class, each Series 1998-1 Class A
Certificate also represents the right to receive payments from funds on deposit
in the Series 1998-1 Yield Enhancement Account, Series 1998-1 Reallocated
Principal Collections and Shared Principal Collections and certain other
available amounts. In addition to representing the right to payment from
collections of Finance Charge Receivables and Principal Receivables allocated to
such class, each Series 1998-1 Class B Certificate also represents the right to
receive payments from funds on deposit in the Series 1998-1 Yield Enhancement
Account and not applied in respect of Series 1998-1 Class A Certificates, Series
1998-1 Reallocated Principal Collections and Shared Principal Collections and
certain other available amounts, all as more fully described below. Payments of
interest and principal will be made on each Distribution Date on which such
amounts are due to Series 1998-1 Certificateholders in whose names the Series
1998-1 Certificates were registered on the last business day of the calendar
month preceding such Distribution Date (each a "Record Date").


                                       48


<PAGE>



      The Transferor will own the Transferor Certificate. The Transferor
Certificate will represent the right to receive certain payments from the assets
of the Trust, including the right to a percentage of all payments on the
Receivables in the Trust equal to 100% minus the sum of the applicable investor
percentages for all Series of certificates then outstanding. The Transferor
Certificate may be transferred in whole or in part only upon certain merger or
consolidation events with respect to the Transferor set forth in the Agreement.
See "--Certain Matters Regarding the Servicer, the Transferor and the Original
Transferors."

      The Offered Certificates will initially be represented by certificates
registered in the name of the nominee of DTC (together with any successor
depository selected by the Transferor, the "Depository") except as set forth

below. The Offered Certificates will be available for purchase in minimum
denominations of $1,000 and integral multiples thereof in book-entry form. The
Transferor has been informed by DTC that DTC's nominee will be Cede.
Accordingly, Cede is expected to be the holder of record of the Offered
Certificates. No Certificate Owner acquiring an interest in the Offered
Certificates will be entitled to receive a definitive certificate representing
such person's interest in the Offered Certificates except under the limited
circumstances described below. Unless and until Definitive Certificates are
issued under such limited circumstances, all references herein to actions by
Holders of Offered Certificates shall refer to actions taken by DTC upon
instructions from its Participants (as defined below), and all references herein
to distributions, notices, reports and statements to Holders of Offered
Certificates shall refer to distributions, notices, reports and statements to
DTC or Cede, as the registered holder of the Offered Certificates, as the case
may be, for distribution to Certificate Owners in accordance with DTC
procedures. See "--Book-Entry Registration" and "--Definitive Certificates."

Book-Entry Registration

      Holders of Offered Certificates may hold their Offered Certificates
through DTC (in the United States) or Cedel or Euroclear (in Europe) if they are
participants of such system, or indirectly through organizations that are
participants in such system.

      Cede, as nominee for DTC, will hold the Offered Certificates. Cedel and
Euroclear will hold omnibus positions on behalf of the Cedel Participants and
the Euroclear Participants, respectively, through customers' securities accounts
in Cedel's and Euroclear's names on the books of their respective depositaries,
which in turn will hold such positions in customers' securities accounts in the
depositaries' names on the books of DTC.

      DTC is a limited-purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Exchange Act. DTC was created to hold securities for its participating
organizations ("Participants") and to facilitate the clearance and settlement of
securities transactions between Participants through electronic book-entry
changes in accounts of its Participants, thereby eliminating the need for
physical movement of certificates. Participants include securities brokers and
dealers (including the Underwriters), banks, trust companies and clearing
corporations and may include certain other organizations. Indirect access to the
DTC system also is available to others such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly (the "Indirect Participants").

      Transfers between DTC Participants will occur in accordance with DTC
rules. Transfers between Cedel Participants and Euroclear Participants will
occur in the ordinary way in accordance with their applicable rules and
operating procedures.


                                       49


<PAGE>



      Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through Cedel
Participants or Euroclear Participants, on the other, will be effected in DTC in
accordance with DTC rules on behalf of the relevant European international
clearing system by its depositary; however, such cross-market transactions will
require delivery of instructions to the relevant European international clearing
system by the counterparty in such system in accordance with its rules and
procedures and within its established deadlines (Brussels time). The relevant
European international clearing system will, if the transaction meets its
settlement requirements, deliver instructions to its depositary to take action
to effect final settlement on its behalf by delivering or receiving securities
in DTC, and making or receiving payment in accordance with normal procedures for
same-day funds settlement applicable to DTC. Cedel Participants and Euroclear
Participants may not deliver instructions directly to the depositaries.

      Because of time-zone differences, credits of securities in Cedel or
Euroclear as a result of a transaction with a DTC Participant will be made
during the subsequent securities settlement processing, dated the business day
following the DTC settlement date, and such credits or any transactions in such
securities settled during such processing will be reported to the relevant Cedel
Participant or Euroclear Participant on such business day. Cash received in
Cedel or Euroclear as a result of sales of securities by or through a Cedel
Participant or a Euroclear Participant to a DTC Participant will be received
with value on the DTC settlement date but will be available in the relevant
Cedel or Euroclear cash account only as of the business day following settlement
in DTC.

      Certificate Owners that are not Participants or Indirect Participants but
desire to purchase, sell or otherwise transfer ownership of, or other interest
in, Offered Certificates may do so only through Participants and Indirect
Participants. In addition, Certificate Owners will receive all distributions of
principal and of interest on the Offered Certificates from the Trustee through
the Participants who in turn will receive them from DTC. Under a book-entry
format, Certificate Owners may experience some delay in their receipt of
payments, since such payments will be forwarded by the Trustee to Cede, as
nominee for DTC. DTC will forward such payments to its Participants which
thereafter will forward them to Indirect Participants or Certificate Owners. It
is anticipated that the only "Certificateholder" (as such term will be used in
the Agreement) of the Series 1998-1 Class A Certificates and of the Series
1998-1 Class B Certificates will be Cede, as nominee of DTC. Certificate Owners
will not be recognized by the Trustee as Certificateholders, as such term will
be used in the Agreement, and Certificate Owners will only be permitted to
exercise the rights of Holders of Offered Certificates indirectly through the
Participants who in turn will exercise the rights of Holders of Offered
Certificates through DTC.

      Under the rules, regulations and procedures creating and affecting DTC and
its operations, DTC is required to make book-entry transfers among Participants
on whose behalf it acts with respect to the Offered Certificates and is required
to receive and transmit distributions of principal and interest on the Offered

Certificates. Participants and Indirect Participants with which Certificate
Owners have accounts with respect to the Offered Certificates similarly are
required to make book-entry transfers and receive and transmit such payments on
behalf of their respective Certificate Owners.

      Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a Certificate
Owner to pledge Offered Certificates to persons or entities that do not
participate in the DTC system, or otherwise take actions in respect of such
Offered Certificates, may be limited due to the lack of a physical certificate
for such Offered Certificates. The laws of some jurisdictions require that
certain persons take physical delivery in definitive form. Consequently, the
ability to transfer Offered Certificates to such persons may be limited.

      DTC has advised the Transferor that it will take any action permitted to
be taken by any of the Holders of Offered Certificates under the Agreement only
at the direction of one or more Participants to whose account with


                                       50

<PAGE>



DTC the Offered Certificates are credited. Additionally, DTC has advised the
Transferor that it will take such actions with respect to specified percentages
of the Series 1998-1 Class A Ownership Interest or Series 1998-1 Class B
Ownership Interest, as the case may be, only at the direction of and on behalf
of Participants whose holdings include undivided interests that satisfy such
specified percentages. DTC may take conflicting actions with respect to other
undivided interests to the extent that such actions are taken on behalf of
Participants whose holdings include such undivided interests.

      Cedel Bank, societe anonyme ("Cedel") is incorporated under the laws of
Luxembourg as a professional depository. Cedel holds securities for its
participating organizations ("Cedel Participants") and facilitates the clearance
and settlement of securities transactions between Cedel Participants through
electronic book-entry changes in accounts of Cedel Participants, thereby
eliminating the need for physical movement of certificates. Transactions may be
settled in Cedel in any of [28] currencies, including United States dollars.
Cedel provides to its Cedel Participants, among other things, services for
safekeeping, administration, clearance and settlement of internationally traded
securities and securities lending and borrowing. Cedel interfaces with domestic
markets in several countries. As a professional depository, Cedel is subject to
regulation by the Luxembourg Monetary Institute. Cedel Participants are
recognized financial institutions around the world, including underwriters,
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations and may include the underwriters of the Offered
Certificates. Indirect access to Cedel is also available to others, such as
banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a Cedel Participant, either directly or indirectly.

      The Euroclear System was created in 1968 to hold securities for

participants of the Euroclear System ("Euroclear Participants") and to clear and
settle transactions between Euroclear Participants through simultaneous
electronic book-entry delivery against payment, thereby eliminating the need for
physical movement of certificates and any risk from lack of simultaneous
transfers of securities and cash. Transactions may be settled in any of [27]
currencies, including United States dollars. The Euroclear System includes
various other services, including securities lending and borrowing and
interfaces with domestic markets in several countries generally similar to the
arrangements for cross-market transfers with DTC described above. The Euroclear
System is operated by Morgan Guaranty Trust Company of New York, Brussels,
Belgium office (the "Euroclear Operator" or "Euroclear"), under contract with
Euroclear Clearance System, S.C., a Belgian cooperative corporation (the
"Cooperative"). All operations are conducted by the Euroclear Operator, and all
Euroclear securities clearance accounts and Euroclear cash accounts are accounts
with the Euroclear Operator, not the Cooperative. The Cooperative establishes
policy for the Euroclear System on behalf of Euroclear Participants. Euroclear
Participants include banks (including central banks), securities brokers and
dealers and other professional financial intermediaries and may include the
underwriters of the Offered Certificates. Indirect access to the Euroclear
System is also available to other firms that clear through or maintain a
custodial relationship with a Euroclear Participant, either directly or
indirectly.

      The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it is
regulated and examined by the Board of Governors of the Federal Reserve System
and the New York State Banking Department, as well as the Belgian Banking
Commission.

      Securities clearance accounts and cash accounts with the Euroclear
Operator are governed by the Terms and Conditions Governing Use of Euroclear and
the related Operating Procedures of the Euroclear System and applicable Belgian
law (collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within the Euroclear System, withdrawal of
securities and cash from the Euroclear System, and receipts of payments with
respect to securities in the Euroclear System. All securities in the Euroclear
System are held on a fungible basis without attribution of specific certificates
to specific securities clearance accounts. The


                                       51

<PAGE>



Euroclear Operator acts under the Terms and Conditions only on behalf of
Euroclear Participants and has no record or relationship with persons holding
through Euroclear Participants.

      Distributions with respect to Series 1998-1 Certificates held through
Cedel or Euroclear will be credited to the cash accounts of Cedel Participants
or Euroclear Participants in accordance with the relevant system's rules and
procedures, to the extent received by its depositary. Such distributions will be

subject to tax reporting in accordance with relevant United States tax laws and
regulations. See "Certain United States Federal Income Tax Consequences." Cedel
or the Euroclear Operator, as the case may be, will take any other action
permitted to be taken by any of the Holders of Offered Certificates under the
Agreement on behalf of a Cedel Participant or Euroclear Participant only in
accordance with its relevant rules and procedures and subject to its
depositary's ability to effect such actions on its behalf through DTC.

      Although DTC, Cedel and Euroclear have agreed to the foregoing procedures
in order to facilitate transfers of Offered Certificates among participants of
DTC, Cedel and Euroclear, they are under no obligation to perform or continue to
perform such procedures and such procedures may be discontinued at any time.
Neither the Transferor nor the Trustee will have any responsibility for the
performance by DTC, Cedel or Euroclear or their respective participants or
indirect participants of their respective obligations under the rules and
procedures governing their operations.

Definitive Certificates

      The Offered Certificates will be issued in fully registered, certificated
form to Certificate Owners or their nominees ("Definitive Certificates"), rather
than to DTC or its nominee, only if (i) the Transferor advises the Trustee in
writing that DTC is no longer willing or able to properly discharge its
responsibilities as Depository with respect to the Offered Certificates, and
neither the Trustee nor the Transferor is able to locate a qualified successor,
(ii) the Transferor, at its option, elects to terminate the book-entry system
through DTC or (iii) after the occurrence of a Servicer Default, Certificate
Owners representing not less than 50% of the Series 1998-1 Class A Ownership
Interest or Series 1998-1 Class B Ownership Interest, as the case may be, advise
the Trustee and DTC through Participants in writing that the continuation of a
book-entry system through DTC (or a successor thereto) is no longer in the best
interests of the Certificate Owners.

      Upon the occurrence of any of the events described in the immediately
preceding paragraph, DTC is required to notify all the Certificate Owners
through Participants of the availability through DTC of Definitive Certificates.
Upon surrender by DTC of the definitive certificate representing the Offered
Certificates and instructions for re-registration, the Trustee will issue the
Offered Certificates as Definitive Certificates, and thereafter the Trustee will
recognize the holders of such Definitive Certificates as holders of the Offered
Certificates under the Agreement ("Holders").

      Distribution of principal and interest on the Offered Certificates will be
made by The First National Bank of Chicago, as paying agent, or its successor in
such capacity (the "Paying Agent") directly to Holders of Definitive
Certificates in accordance with the procedures set forth in the Agreement.
During the Series 1998-1 Revolving Period, interest payments, and during either
the Series 1998-1 Controlled Amortization Period or Series 1998-1 Rapid
Amortization Period, interest and principal payments in respect of the Offered
Certificates, will be made to Holders of Offered Certificates on each
Distribution Date to the Holders in whose names the Definitive Certificates were
registered at the close of business on the related Record Date. Distributions
will be made by check mailed to the address of such Holder as it appears on the
certificate register. The final payment on any Offered Certificate (whether a

Definitive Certificate or a certificate registered in the name of Cede
representing such Series 1998-1 Certificate), however, will be made only upon
presentation and surrender of such Offered


                                       52


<PAGE>



Certificate at the office or agency specified in the notice of final
distribution to Holders of Offered Certificates. The Trustee will provide such
notice to registered Holders of Offered Certificates not later than the fifth
day of the month of such final distributions.

      Definitive Certificates will be transferable and exchangeable at the
offices of The First National Bank of Chicago, as transfer agent and registrar,
or its successor in such capacity (the "Transfer Agent and Registrar"). No
service charge will be imposed for any registration of transfer or exchange, but
the Transfer Agent and Registrar may require payment of a sum sufficient to
cover any tax or other governmental charge imposed in connection therewith. The
Transfer Agent and Registrar shall not be required to register the transfer or
exchange of any Offered Certificates for a period of 5 business days preceding
the due date for any payment with respect to such Offered Certificates.

Interest Payments

      Interest will accrue on the Series 1998-1 Class A Ownership Interest at
the Series 1998-1 Class A Certificate Rate and on the Series 1998-1 Class B
Ownership Interest at the Series 1998-1 Class B Certificate Rate from the
Closing Date. Interest will be distributed on [_________], 1998, and on each
Distribution Date thereafter to Holders of Offered Certificates. Interest
payments on the Series 1998-1 Class A Certificates and the Series 1998-1 Class B
Certificates on any Distribution Date will be calculated on the Series 1998-1
Class A Ownership Interest and the Series 1998-1 Class B Ownership Interest, as
applicable, as of the preceding Record Date, except that interest for the first
Distribution Date will accrue at the applicable Certificate Rate on the Series
1998-1 Class A Initial Ownership Interest (which is $[_______]) and the Series
1998-1 Class B Initial Ownership Interest (which is $[__________]) from the
Closing Date. Interest due on the Series 1998-1 Class A Certificates but not
paid on any Distribution Date will be payable on the next succeeding
Distribution Date together with additional interest on such amount at the
applicable Certificate Rate plus 2% per annum (together, the "Series 1998-1
Class A Additional Interest"). Interest due on the Series 1998-1 Class B
Certificates but not paid on any Distribution Date will be payable on the next
succeeding Distribution Date together with additional interest on such amount at
the applicable Certificate Rate plus 2% per annum (together, the "Series 1998-1
Class B Additional Interest"). Interest due on the Series 1998-1 Class C
Certificates but not paid on any Distribution Date will be payable on the next
succeeding Distribution Date together with additional interest on such amount at
the applicable Certificate Rate plus 2% per annum (together, the "Series 1998-1
Class C Additional Interest"). Such Additional Interest shall accrue on the same

basis as interest on the Series 1998-1 Certificates, and shall accrue from the
date such overdue interest became due, to but excluding the Distribution Date on
which such overdue interest is paid. Subject to the priority of payments for
each Distribution Date described under "--Application of Collections" below,
interest payments on the Series 1998-1 Class A Certificates on any Distribution
Date will be paid from Series 1998-1 Class A Available Funds for the related
Monthly Period and, to the extent such Series 1998-1 Class A Available Funds are
insufficient to pay such interest, from amounts on deposit in the Series 1998-1
Yield Enhancement Account and Series 1998-1 Reallocated Principal Collections
(in each case, to the extent available therefor) for such Monthly Period.
Subject to the aforementioned priority of payments, interest payments on the
Series 1998-1 Class B Certificates on any Distribution Date will be paid from
Series 1998-1 Class B Available Funds for the related Monthly Period and, to the
extent such Series 1998-1 Class B Available Funds are insufficient to pay such
interest, from amounts on deposit in the Series 1998-1 Yield Enhancement Account
and Series 1998-1 Reallocated Principal Collections (in each case, to the extent
available therefor) remaining after certain other payments have been made with
respect to the Series 1998-1 Class A Certificates. The Agreement will provide
that payment of any Series 1998-1 Class B Additional Interest shall be suspended
during any period when the Series 1998-1 Class B Ownership Interest is zero and
will further provide for the cancellation of any such interest remaining unpaid
on the first date during the Series 1998-1 Class B Controlled Amortization
Period


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<PAGE>



or, if applicable, the Series 1998-1 Rapid Amortization Period when the Series
1998-1 Class B Ownership Interest is or becomes zero.

      "Series 1998-1 Class A Available Funds" means, with respect to any Monthly
Period, an amount equal to the Series 1998-1 Class A Floating Allocation of
collections of Finance Charge Receivables allocated to the Series 1998-1
Certificateholders Ownership Interests with respect to such Monthly Period.
"Series 1998-1 Class B Available Funds" means, with respect to any Monthly
Period, an amount equal to the Series 1998-1 Class B Floating Allocation of
collections of Finance Charge Receivables allocated to the Series 1998-1
Certificateholders Ownership Interests with respect to such Monthly Period.

      The Series 1998-1 Class A Certificates will bear interest from the Closing
Date through [___________] at the per annum rate of [______]% and with respect
to each Interest Period thereafter at a per annum rate of [____]% above
one-month LIBOR prevailing on the related LIBOR Determination Date with respect
to each such period, but in no event in excess of [______]% (the "Series 1998-1
Class A Certificate Rate").

      The Series 1998-1 Class B Certificates will bear interest from the Closing
Date through [___________] at the per annum rate of [______]% and with respect
to each Interest Period thereafter at a per annum rate of [____]% above
one-month LIBOR prevailing on the related LIBOR Determination Date with respect

to each such period, but in no event in excess of [_____]% (the "Series 1998-1
Class B Certificate Rate").

      The Trustee will determine LIBOR for each Interest Period commencing after
[_________], on the second business day prior to the Distribution Date on which
such Interest Period commences (each, a "LIBOR Determination Date"). For
purposes of calculating LIBOR, a business day is any day other than a day on
which banking institutions in London trading in United States dollar deposits in
the London interbank market are authorized or obligated by law or executive
order to be closed. The Trustee will determine LIBOR in accordance with the
following provisions:

             (i) On each LIBOR Determination Date, the Trustee will determine
      LIBOR on the basis of the rate for deposits in United States dollars for a
      period equal to one month (commencing on the first day of the applicable
      Interest Period) which appears on Telerate Page 3750 as of 11:00 a.m.
      (London time) on such LIBOR Determination Date (or such other page as may
      replace that page on the Dow Jones Telerate Service for the purpose of
      displaying London interbank offered rates of major banks).

            (ii) If, on any LIBOR Determination Date, such rate does not appear
      on Telerate Page 3750 (or such other page), then LIBOR for the applicable
      Interest Period shall be determined on the basis of the rates at which
      deposits in United States dollars are offered by four major banks in the
      London interbank market selected by the Servicer (the "Reference Banks")
      as of approximately 11:00 a.m. (London time). LIBOR as determined by the
      Trustee is the arithmetic mean of such quotations (rounded, if necessary,
      to the nearest multiple of 0.0625%) if at least two such quotations are
      provided.

           (iii) If, on the LIBOR Determination Date, only one or none of the
      Reference Banks provides such offered quotations, LIBOR will be:

                (a) the rate per annum (rounded as aforesaid) that the Trustee
           determines to be either (x) the arithmetic mean of the offered
           quotations that leading banks in The City of New York selected by the
           Servicer are quoting at or about 11:00 a.m. (New York time) on the
           relevant LIBOR Determination Date to leading European banks for
           one-month United States dollar deposits; or



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<PAGE>



                (b) if the banks selected as aforesaid by the Servicer are not
           quoting as described in clause (a) above, LIBOR for such Interest
           Period will be LIBOR as determined on the previous LIBOR
           Determination Date (or [_____]%, in the case of the first LIBOR
           Determination Date).


      The Series 1998-1 Class A Certificate Rate and the Series 1998-1 Class B
Certificate Rate applicable to the then current and immediately preceding
Interest Period may be obtained by telephoning the Trustee at its Corporate
Trust Office at (800) 524-9472 or (312) 407-4660.

      Interest on the Series 1998-1 Class A Certificates and on the Series
1998-1 Class B Certificates will be calculated on the basis of the actual number
of days in the Interest Period and a 360-day year.

Principal Payments

      During the Series 1998-1 Revolving Period (which begins on the Closing
Date and ends on the day before the commencement of the Series 1998-1 Controlled
Amortization Period or, if earlier, the Series 1998-1 Rapid Amortization
Period), no principal payments will be made to the Series 1998-1
Certificateholders. During the Series 1998-1 Controlled Amortization Period,
which is scheduled to begin on [_______], and during the Series 1998-1 Rapid
Amortization Period, which will begin upon the occurrence of a Pay Out Event,
and until the Series 1998-1 Termination Date occurs, principal will be paid
first to the Series 1998-1 Class A Certificateholders until the Series 1998-1
Class A Ownership Interest has been paid in full, and then to the Series 1998-1
Class B Certificateholders until the Series 1998-1 Class B Ownership Interest
has been paid in full, and then to the Series 1998-1 Class C Certificateholders
until the Series 1998-1 Class C Ownership Interest has been paid in full.

      On each Distribution Date with respect to the Series 1998-1 Class A
Controlled Amortization Period, unless the Series 1998-1 Class A Ownership
Interest has been paid in full or a Series 1998-1 Rapid Amortization Period
commences, the Series 1998-1 Class A Certificateholders will be entitled to
receive for each related Monthly Period an amount equal to the least of (i)
Series 1998-1 Available Investor Principal Collections on deposit in the
Principal Account with respect to the related Transfer Date, (ii) the Series
1998-1 Controlled Distribution Amount and (iii) the Series 1998-1 Class A
Ownership Interest. After payment in full of the Series 1998-1 Class A Ownership
Interest, the Series 1998-1 Class B Certificateholders will be entitled to
receive on each Distribution Date during the Series 1998-1 Class B Controlled
Amortization Period the least of (i) the amount of Series 1998-1 Available
Investor Principal Collections on deposit in the Principal Account with respect
to the related Transfer Date (minus the portion of such Series 1998-1 Available
Investor Principal Collections applied to Series 1998-1 Class A Monthly
Principal on such Transfer Date), (ii) the Series 1998-1 Controlled Distribution
Amount (minus the portion of such Series 1998-1 Controlled Distribution Amount
applied to Series 1998-1 Class A Monthly Principal on such Transfer Date), and
(iii) the Series 1998-1 Class B Ownership Interest. After payment in full of the
Series 1998-1 Class A Ownership Interest and the Series 1998-1 Class B Ownership
Interest, the Series 1998-1 Class C Certificateholders will be entitled to
receive on each Distribution Date during the Series 1998-1 Class C Controlled
Amortization Period the least of (i) the amount of Series 1998-1 Available
Investor Principal Collections on deposit in the Principal Account with respect
to the related Transfer Date (minus the portion of such Series 1998-1 Available
Investor Principal Collections applied to Series 1998-1 Class A Monthly
Principal and Series 1998-1 Class B Monthly Principal on such Transfer Date),
(ii) the Series 1998-1 Controlled Distribution Amount (minus the portion of such
Series 1998-1 Controlled Distribution Amount applied to Series 1998-1 Class A

Monthly Principal and Series 1998-1 Class B Monthly Principal on such Transfer
Date), and (iii) the Series 1998-1 Class C Ownership Interest.

      "Series 1998-1 Available Investor Principal Collections" means, with
respect to any Monthly Period, an amount generally equal to the sum of (a)(i)
collections of Principal Receivables received during such Monthly



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<PAGE>



Period allocable to the Series 1998-1 Certificateholders Ownership Interests
minus (ii) the amount of Series 1998-1 Reallocated Principal Collections with
respect to such Monthly Period used to fund the Series 1998-1 Class A Required
Amount and the Series 1998-1 Class B Required Amount as described under
"--Reallocation of Cash Flows" below, plus (b) any Shared Principal Collections
with respect to any other Series (including Series 1994-1) that are allocated to
Series 1998-1, plus (c) amounts withdrawn from the Series 1998-1 Yield
Enhancement Account on the related Transfer Date for the purpose of covering the
Series 1998-1 Class A Default Amount, the Series 1998-1 Class B Default Amount
and/or the Series 1998-1 Class C Default Amount, plus (d) amounts withdrawn from
the Excess Funding Account allocable to the Series 1998-1 Certificateholders
Ownership Interests (as more fully described under "--Series 1998-1 Yield
Enhancement Account" and "--Excess Funding Account" below).

      "Series 1998-1 Controlled Distribution Amount" means, for any Distribution
Date with respect to the Series 1998-1 Controlled Amortization Period, an amount
equal to the sum of the Series 1998-1 Controlled Amortization Amount for such
Distribution Date and any Series 1998-1 Deficit Controlled Amortization Amount
for the immediately preceding Distribution Date.

      "Series 1998-1 Controlled Amortization Amount" means for any Distribution
Date during the Series 1998-1 Controlled Amortization Period, $[_____________].

      "Series 1998-1 Deficit Controlled Amortization Amount" means (a) on the
first Distribution Date with respect to the Series 1998-1 Class A Controlled
Amortization Period, the Series 1998-1 Class B Controlled Amortization Period or
the Series 1998-1 Class C Controlled Amortization Period, the excess, if any, of
the Series 1998-1 Controlled Amortization Amount for such Distribution Date over
the amount distributed from the Series 1998-1 Distribution Account as Series
1998-1 Class A Monthly Principal, Series 1998-1 Class B Monthly Principal or
Series 1998-1 Class C Monthly Principal, as the case may be, for such
Distribution Date and (b) on each subsequent Distribution Date with respect to
the Series 1998-1 Class A Controlled Amortization Period, the Series 1998-1
Class B Controlled Amortization Period or the Series 1998-1 Class C Controlled
Amortization Period, the excess, if any, of the Series 1998-1 Controlled
Amortization Amount for such subsequent Distribution Date plus any Series 1998-1
Deficit Controlled Amortization Amount for the prior Distribution Date over the
amount distributed from the Series 1998-1 Distribution Account as Series 1998-1
Class A Monthly Principal, Series 1998-1 Class B Monthly Principal or Series

1998-1 Class C Monthly Principal, as the case may be, for such subsequent
Distribution Date.

      On each Distribution Date during the Series 1998-1 Rapid Amortization
Period, the Series 1998-1 Class A Certificateholders will be entitled to receive
Series 1998-1 Available Investor Principal Collections for the related Monthly
Period until the earlier of the date the Series 1998-1 Class A Ownership
Interest is paid in full and the Series 1998-1 Termination Date. After payment
in full of the Series 1998-1 Class A Ownership Interest, the Series 1998-1 Class
B Certificateholders will be entitled to receive on each Distribution Date
during the Series 1998-1 Rapid Amortization Period Series 1998-1 Available
Investor Principal Collections (minus the portion of such Series 1998-1
Available Investor Principal Collections applied to Series 1998-1 Class A
Monthly Principal on such date) until the earlier of the date the Series 1998-1
Class B Ownership Interest is paid in full and the Series 1998-1 Termination
Date. After payment in full of the Series 1998-1 Class B Ownership Interest, the
Series 1998-1 Class C Certificateholders will be entitled to receive on each
Distribution Date during the Series 1998-1 Rapid Amortization Period Series
1998-1 Available Investor Principal Collections (minus the portion of such
Series 1998-1 Available Investor Principal Collections applied to Series 1998-1
Class A Monthly Principal and Series 1998-1 Class B Monthly Principal on such
date) until the earlier of the date the Series 1998-1 Class C Ownership Interest
is paid in full and the Series 1998-1 Termination Date. See "--Pay Out Events"
below for a discussion of events which might lead to the commencement of the
Series 1998-1 Rapid Amortization Period.



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<PAGE>



Subordination

      On each Distribution Date distributions of interest will be made first in
respect of the Series 1998-1 Class A Certificates, second in respect of the
Series 1998-1 Class B Certificates and third in respect of the Series 1998-1
Class C Certificates. On each Distribution Date on which principal is
distributable in respect of the Series 1998-1 Class A Certificates, such
principal will be payable after interest on the Series 1998-1 Class A
Certificates and Series 1998-1 Class B Certificates has been paid. Principal
payments will not be made to Series 1998-1 Class B Certificateholders until the
final principal payment due in respect of the Series 1998-1 Class A Certificates
has been paid. Thus on each Distribution Date on which principal is
distributable in respect of the Series 1998-1 Class B Certificates, such
principal will be payable after interest on the Series 1998-1 Class A and Series
1998-1 Class B Certificates and principal on the Series 1998-1 Class A
Certificates has been paid. On each such Distribution Date no payments of
interest or principal will be made in respect of the Series 1998-1 Class C
Certificates unless principal due in respect of the Series 1998-1 Class B
Certificates has been paid. For further information regarding the extent to
which the Series 1998-1 Class B Certificates are subordinated to the Series

1998-1 Class A Certificates and the extent to which the Series 1998-1 Class C
Certificates are subordinated to the Series 1998-1 Class A and Series 1998-1
Class B Certificates, including a description of the manner in which Principal
Receivables collections and Default Amounts may be preferentially allocated
among the classes of Series 1998-1 Certificates, see "Description of the Offered
Certificates--Application of Collections" and "--Reallocation of Cash Flows."

Conveyance of Receivables

      AIC and AICCO originally conveyed to the Trustee pursuant to the Original
Agreement their entire beneficial interest in all Loans owned by them as of
November 30, 1994 (the "Cut-Off Date") and all Loans funded by them thereafter
relating to Eligible Receivables, including (i) all amounts due and to become
due and all collections and recoveries on such Loans, and (ii) the proceeds of
certain collateral security securing such Loans. AIC and AICCO will continue to
transfer such beneficial interests to the Trustee until the Closing Date. On the
Closing Date and thereafter, AIC and AICCO will transfer such beneficial
interests to the Transferor pursuant to the Receivables Sale Agreement and the
Transferor will immediately thereafter transfer such beneficial interests to the
Trust pursuant to the Agreement. The beneficial interests in Loans so
transferred may include beneficial interests in Loans where the Obligor has
filed for protection under the bankruptcy laws of the United States. The
beneficial interests to be transferred by the Transferor to the Trust are
referred to herein as the "Future Receivables," and the beneficial interests in
the Loans existing in the Trust prior to the Closing Date, which have been
transferred directly from the Original Transferors to the Trust pursuant to the
Original Agreement, are referred to herein as the "Existing Receivables." The
Future Receivables and the Existing Receivables together will comprise the
Receivables.

      On or prior to the Determination Date immediately following a Monthly
Period during which Additional Receivables are conveyed to the Trust as
contemplated by the Agreement, the Transferor (i) will cause AIC and AICCO to
provide the Trustee an updated list of each Receivable transferred to the Trust
since the Cut-Off Date, identified by account number and indicating the total
outstanding receivable balance as of the end of such Monthly Period, and (ii)
will provide the Trustee a written assignment of Additional Receivables conveyed
to the Trust during such Monthly Period. The Transferor will not deliver or
cause to be delivered to the Trustee any other records or agreements relating to
the Receivables. Except as stated above, the records and agreements relating to
the Receivables maintained or caused to be maintained by the Transferor or the
Servicer will not be segregated or caused to be segregated by the Transferor or
the Servicer from other documents and agreements relating to other premium
finance loan receivables and will not be stamped or marked (or caused to be
stamped or marked) to reflect the transfer of the entire beneficial interest in
the Loans to the Trust, but AIC and AICCO are required to


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<PAGE>




indicate on their computer records that the Receivables have been transferred to
the Trust. Neither the Original Transferors nor the Transferor have taken or
will be obligated to take any actions in order to perfect for the benefit of the
Transferor or the Trust, respectively, a security interest in the Receivables,
other than the filing in the appropriate filing offices in the States of New
York, Delaware and California of financing statements on Form UCC-1. See
"Special Considerations--Bankruptcy Considerations."

New Series Issuances

      The Agreement will authorize the Trustee to issue two types of
certificates: (i) one or more Series of certificates which may be issued in more
than one class with varying rights and priorities and which will be transferable
and have the characteristics described below and (ii) certificates evidencing
the Transferor Ownership Interest (collectively, the "Transferor Certificate").
The Transferor Certificate has been held by AIC and AICCO and will be, on or
about the Closing Date, transferred to and thereafter held by the Transferor.
Such Transferor Certificate will be transferable only as provided in the
Agreement. The Agreement will also provide that, pursuant to any one or more
Supplements, the Transferor may reduce the Transferor Ownership Interest (a
"Transferor Ownership Interest Reduction") or, if provided in the relevant
Supplement, certificateholders may tender certificates representing any
outstanding Series of certificates to the Trustee and the Transferor may reduce
the Transferor Ownership Interest (an "Investor Exchange"), in either case for
the purpose of effectuating the issuance of one or more new Series (any new
Series issuance pursuant to a Transferor Ownership Interest Reduction or an
Investor Exchange is referred to as a "New Series Issuance"). The Series 1998-1
Supplement permits, but does not require in any circumstance, an Investor
Exchange and corresponding New Series Issuance with respect to the Offered
Certificates.

      Under the Agreement, the Transferor may define, with respect to any newly
issued Series (including a Series being issued in an Investor Exchange) certain
terms of a new Series, which will be described in the Disclosure Document being
used in connection with such New Series Issuance. These terms may include: (i)
its name or designation; (ii) its initial principal amount (or method for
calculating such amount); (iii) its coupon rate (or formula for the
determination thereof); (iv) the closing date; (v) the rating agency or
agencies, if any, rating the Series; (vi) the interest periods, the interest
payment date or dates and the date or dates from which interest shall accrue
including the interest accrual period with respect to such Series; (vii) the
name of the clearing agency, if any; (viii) the periods during which or dates on
which principal will be paid or accrued; (ix) the method for allocating
collections with respect to Principal Receivables for such Series and, if
applicable, with respect to other Series and the method by which certificates of
such Series shall amortize or accrete and the method for allocating collections
with respect to Finance Charge Receivables and Recoveries; (x) any other
collections with respect to Receivables or other amounts available to be paid
with respect to such Series; (xi) the Receivables to be allocated with respect
to such Series and the provisions governing the allocations of any such
Receivables; (xii) the names of any accounts to be used by such Series and the
terms governing the operation of any such account and use of moneys therein;
(xiii) the Series Servicing Fee and the percentage used to calculate monthly
servicing fees; (xiv) the Minimum Transferor Ownership Interest; (xv) the

enhancer, if any, and terms of any Enhancement with respect thereto; (xvi) the
base rate, if any, applicable to such Series; (xvii) the terms on which the
certificates of such Series may be repurchased by the Transferor or remarketed
to other investors; (xviii) the Series termination date; (xix) any deposit into
any account maintained for the benefit of certificateholders of such Series;
(xx) the number of classes of such Series and, if more than one class, the
rights and priorities of each such class; (xxi) the extent to which the
certificates of such Series will be issuable in temporary or permanent global
form (and, in such case, the depositary for such global certificate or
certificates, the terms and conditions, if any, upon which such global
certificate may be exchanged, in whole or in part, for definitive certificates,
and the manner in which any interest payable on a temporary or global
certificate will be paid); (xxii) whether the certificates of such Series may be
issued in bearer form and any limitations imposed thereon; (xxiii) the priority
of any Series with respect



                                       58

<PAGE>



to any other Series; (xxiv) the rights of the holder of the Transferor
Certificate that have been transferred to the holders of such Series; (xxv)
whether such Series will or may be a companion Series and the Series with which
it will be paired; and (xxvi) any other relevant terms (all such terms, the
"Principal Terms" of such Series). None of the Original Transferors, the
Transferor, the Servicer, the Trustee or the Trust is required or intends to
obtain the consent of any Series 1998-1 Certificateholder to issue any
additional Series. However, as a condition of a New Series Issuance, the holder
of the Transferor Certificate will be required to deliver to the Trustee written
confirmation from each Rating Agency that the New Series Issuance will not
result in such Rating Agency reducing or withdrawing its rating of the
certificates of any outstanding Series, including the Series 1998-1
Certificates. The Transferor may offer any Series to the public under a
Disclosure Document in transactions either registered under the Securities Act
or exempt from registration thereunder directly, through the Underwriters or one
or more other underwriters or placement agents, in fixed-price offerings or in
negotiated transactions or otherwise. Any such Series may be issued in fully
registered or book-entry form in minimum denominations determined by the
Transferor. The Transferor may offer, from time to time, additional Series. The
Trust will, as promptly as practicable, include in a periodic report filed with
the Commission with respect to the Series 1998-1 Certificates, disclosure of all
information related to issuance of any Series not required to be registered
under the Securities Act that is material to the holders of, or potential
investors in, the Series 1998-1 Certificates.

      The Agreement provides that the holder of the Transferor Certificate may
effect New Series Issuances and define Principal Terms such that each Series has
a period during which amortization of the principal amount thereof is intended
to occur which may have a different length and begin on a different date than
such period for any other Series. Further, one or more Series may be in their

amortization periods while other Series are not. Thus, certain Series may not be
amortizing, while other Series are amortizing. Moreover, each Series may have
the benefits of an Enhancement which is available only to such Series. Under the
Agreement, the Trustee shall hold any such form of Enhancement only on behalf of
the Series with respect to which each relates. Likewise, with respect to each
such form of Enhancement, the holder of the Transferor Certificate may deliver a
different form of Enhancement agreement. The Agreement also provides that the
holder of the Transferor Certificate may specify different coupon rates and
monthly servicing fees with respect to each Series (or a particular class within
such Series). The holder of the Transferor Certificate also has the option under
the Agreement to vary between Series the terms upon which a Series (or a
particular class within such Series) may be repurchased by the Transferor or
remarketed to other investors. In addition, a Series Supplement may permit (as
does the Series 1998-1 Supplement) an Investor Exchange where the holders of
such Series could elect to exchange their certificates for one or more newly
issued Series of certificates upon the satisfaction of certain conditions
specified in the Agreement and the related Supplement. Additionally, certain
Series may be subordinated to other Series, or classes within a Series may have
different priorities. The Series 1998-1 Supplement will not permit the
subordination of such Series to Series 1994-1 or any other Series which may
hereafter be issued by the Trust. There is no limit to the number of New Series
Issuances that may be performed under the Agreement. The Trust will terminate
only as provided in the Agreement.

      Under the Agreement and pursuant to a Supplement, a New Series Issuance
may only occur upon the satisfaction of certain conditions provided in the
Agreement. Under the Agreement, the holder of the Transferor Certificate may
effect a New Series Issuance by notifying the Trustee at least three days in
advance of the date upon which the New Series Issuance is to occur. Under the
Agreement, the notice will state the designation of any Series (and class
thereof, if applicable) to be issued on the date of the New Series Issuance and,
with respect to each such Series: (i) its initial principal amount (or method
for calculating such amount) which amount may not be greater than the then
current Transferor Ownership Interest plus, in the case of an Investor Exchange,
the certificateholders ownership interests of the certificates to be exchanged,
(ii) its certificate rate (or method for calculating such rate) and (iii) the
provider of the Enhancement, if any, which is expected to provide credit



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support with respect to it. On the date of the New Series Issuance, the
Agreement provides that the Trustee will execute and authenticate any such
Series only upon delivery to it of the following, among others, (i) a Supplement
in form satisfactory to the Trustee signed by the Transferor and specifying the
Principal Terms of such Series, (ii) an opinion of counsel that, for United
States federal income tax purposes and for income and/or franchise tax purposes
of the states (or, if appropriate, localities) in which the Servicers maintain
their principal places of business and any additional states (or, if

appropriate, localities) in which the Servicers, after the date of the
Agreement, conduct substantial servicing activities in respect of Receivables,
(1) the issuance of such Series will not adversely affect the characterization
of any outstanding Series of certificates (other than certificates retained by
the Transferor) as indebtedness, (2) the Trust will not be treated as a taxable
entity and (3) the issuance of such Series will not cause or constitute a
taxable event to any certificateholder of any outstanding Series, (iii) the
Enhancement, if any, and an appropriate form of Enhancement agreement or
instrument with respect thereto executed by the Transferor and the issuer of the
Enhancement, (iv) written confirmation from each Rating Agency that the New
Series Issuance will not result in such Rating Agency's reducing or withdrawing
its rating on any outstanding Series, and (v) in the case of an Investor
Exchange, the existing certificates of the Series to be exchanged. Upon
satisfaction of such conditions, the Trustee will execute and authenticate the
new Series (and, in the case of an Investor Exchange, cancel the certificates of
the exchanged Series).

      In light of the aforementioned requirements for a New Series Issuance,
including the required ratings confirmation and tax opinion, the Transferor does
not presently expect that any New Series Issuance, including any New Series
Issuance as part of an Investor Exchange, will have a material adverse effect on
the Series 1998-1 Certificates. There can be no assurance, however, that the
Principal Terms of any other Series, including any Series issued from time to
time hereafter, might not have an impact on the timing and amount of payments
received by a Series 1998-1 Certificateholder, including as a result of the
refixing of the percentage utilized with respect to the allocation of the
Principal Receivables. See "Description of the Offered Certificates--New Series
Issuances" and "--Allocation Percentages."

Representations and Warranties

      Each of the Original Transferors and the Transferor will make upon
execution of each Supplement (including the Series 1998-1 Supplement) certain
representations and warranties to the Trust to the effect that, among other
things, as of the closing date of the issuance by the Trust of the related
Series (including the Closing Date), it is duly incorporated and in good
standing and that it has the authority to consummate the transactions
contemplated by the Agreement. If (i) any of these representations and
warranties proves to have been incorrect in any material respect when made, and
continues to be materially incorrect for 60 days after notice to the related
Original Transferor or the Transferor, as applicable, by the Trustee, and (ii)
as a result the interests of the Series 1998-1 Certificateholders are materially
adversely affected, and continue to be materially adversely affected during such
period, then the Trustee or the specified percentage of Series 1998-1
Certificateholders may give notice to the Transferor declaring that a Pay Out
Event has occurred, thereby commencing the Series 1998-1 Rapid Amortization
Period. See "--Pay Out Events."

      The Original Transferors will make with respect to the Existing
Receivables, and the Transferor will make with respect to the Future
Receivables, upon the execution of each Supplement (including the Series 1998-1
Supplement), representations and warranties to the Trust to the effect, among
other things, that, as of the date of transfer of each such Receivable to the
Trust (a) such Receivable is an Eligible Receivable (as defined below), and (b)

all material consents, licenses, approvals or authorizations of or registrations
or declarations with any governmental authority required to be obtained,
effected or given in connection with the origination and/or servicing of the
related Loan and the conveyance of each such Receivable to the Trust have been
duly effected or given and are in full force and effect. In the event of a
breach of any representation and warranty set forth in this



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paragraph as a result of which the Loan relating to a Receivable becomes a
Defaulted Loan, within 60 days, or such longer period as may be agreed to by the
Trustee (but no longer than 120 days), of receipt by the related Original
Transferor or the Transferor, as applicable, of written notice of such breach
given by the Trustee, the related Original Transferor or the Transferor, as
applicable, shall accept reassignment of each Receivable as to which such breach
relates if such breach continues throughout the aforementioned applicable period
(an "Ineligible Receivable") on the terms and conditions referred to below. The
Transferor, with respect to the Future Receivables, or the related Original
Transferor, with respect to the Existing Receivables, shall accept reassignment
of each such Ineligible Receivable by (i) depositing into the Collection Account
an amount equal to the Finance Charge Receivables due but not collected with
respect to such Ineligible Receivable, (ii) in the case of the Transferor with
respect to Future Receivables, directing the Servicer to deduct the unpaid
principal amount of each such Ineligible Receivable from the aggregate amount of
Principal Receivables used to calculate the Transferor Ownership Interest and
(iii) in the case of the Original Transferors with respect to Existing
Receivables, depositing into the Collection Account an amount equal to the
principal balance of such Ineligible Receivable; provided, however, that if the
exclusion of an Ineligible Receivable from the calculation of the Transferor
Ownership Interest would cause the Transferor Ownership Interest to be less than
the Minimum Transferor Ownership Interest or would otherwise not be permitted by
law, then such Ineligible Receivable shall be removed upon the Transferor,
depositing in the Principal Account (for allocation as a Principal Receivable)
in immediately available funds an amount equal to the amount by which the
Transferor Ownership Interest would be reduced below the Minimum Transferor
Ownership Interest. Upon any such reassignment of a Future Receivable to the
Transferor, the Transferor shall reassign such Receivable to AIC or AICCO, as
applicable, pursuant to the terms of the Receivables Sale Agreement. The
obligation of the Transferor or the related Original Transferor, as applicable,
to accept reassignment of any Ineligible Receivable is the sole remedy
respecting any breach of the representations and warranties referred to in this
paragraph with respect to such Receivable available to the Series 1998-1
Certificateholders or the Trustee on behalf of the Series 1998-1
Certificateholders.

      The Transferor will make upon the execution of each Supplement (including
the Series 1998-1 Supplement) with respect to the Future Receivables,
representations and warranties to the Trust to the effect, among other things,

that as of the closing date of the issuance by the Trust of the related Series
of certificates (including the Closing Date) (a) the Agreement, including the
related Supplement, constitutes a valid and legally binding obligation of it,
(b) the transfer of Receivables by it to the Trust under the Agreement
constitutes a valid transfer to the Trust of the entire right, title and
interest of it in and to the related Receivables and the proceeds thereof
(including amounts in any of the accounts established for the benefit of the
related certificateholders), and recoveries thereon. Each Original Transferor
and the Transferor will make upon the execution of each Supplement (including
the Series 1998-1 Supplement), representations and warranties to the Trust to
the effect, among other things, that as of the closing date of the issuance by
the Trust of the related Series of certificates (including the Closing Date) (x)
all information previously furnished by it or to be furnished by it in writing
to the Trustee in connection with the Agreement and the transactions
contemplated thereby is and will be true and accurate in all material respects,
and (y) all approvals, authorizations, consents, orders or other actions of any
person or of any governmental body or official required in connection with the
execution and delivery of the Agreement and the certificates and the performance
of the transactions contemplated by the Agreement have been obtained. The
Transferor will make with respect to the Future Receivables, representations and
warranties to the Trust similar to those described in the two foregoing
sentences in connection with each assignment of Receivables added to the Trust
from time to time in accordance with the terms and conditions of the Agreement.
In the event of a breach of any of the representations and warranties described
in clause (a) or (b) above, if such breach has a material adverse effect on the
Trust, the Trustee, by written notice to the Transferor, may direct the
Transferor to accept reassignment of all the Receivables in the Trust portfolio
within 60 days of such notice, or within such longer period specified in such
notice (but no longer than 120 days). Such reassignment will not be required to
be made, however, if at any time during such applicable period, or such longer
period, the representations and



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warranties described in (a) above shall be true and correct in all respects and
the representations and warranties described in (b) above shall be true and
correct in all material respects. The deposit amount for such reassignment with
respect to each Series of certificates required to be repurchased following such
notice, including the Series 1998-1 Certificates, will generally be equal to the
certificateholders ownership interests of such Series on the last day of the
Monthly Period preceding the date on which the reassignment is scheduled to be
made plus an amount equal to all interest accrued but unpaid on such
certificates at the applicable certificate rate (less the amounts previously
allocated for payment of interest and principal with respect to each such Series
of certificates) through the end of the interest accrual period in which such
reassignment occurs of each such Series. The reassignment deposit amount shall
equal the sum of the reassignment deposits with respect to each Series then
issued and outstanding which is required to be repurchased following such

notice. The payment of the allocable portion of such reassignment deposit amount
into the Series 1998-1 Distribution Account will be considered a prepayment in
full of all Receivables and will be paid in full to the certificateholders of
such Series upon presentation and surrender of their certificates. If the
Trustee or the holders of the outstanding certificates give notice directing the
Transferor to accept reassignment as provided in the Agreement, the obligation
of the Transferor to accept reassignment of the Receivables and to pay the
reassignment deposit amount will constitute the sole remedy respecting a breach
of the representations and warranties described in (a) or (b) above.

      "Eligible Receivable" is defined to mean each Receivable (a) which has
arisen from a Loan, having a stated maturity, that was in material compliance
with all requirements of law applicable to AIC, AICCO, any Third Party
Originator (each, an "Originator") and the Servicer and which, at the time of
the transfer of such Receivable to the Trust, complies in all material respects
with all requirements of law applicable to AIC, AICCO, any Third Party
Originator and the Servicer, (b) with respect to which all material consents,
licenses, approvals or authorizations of, or registrations or declarations with,
each governmental authority required to be obtained, effected or given in
connection with the creation of such Receivable or the execution, delivery and
performance by the related Originator of the Loan relating to such Receivable,
have been duly obtained, effected or given and are in full force and effect as
of the date of transfer to the Trust, (c) which, at the time of transfer of such
Receivable to the Trust, represents a beneficial interest in a Loan that has
been originated in accordance with AIC's underwriting guidelines and has not
been waived or modified except for waivers or modifications that were made by
the Servicer in accordance with its customary servicing standards, (d) as to
which the related Loan is not subject to any right of rescission, setoff,
counterclaim, defense arising out of violations of usury laws, or any other
defenses of any Obligor at the time of the transfer of such Receivable to the
Trust, other than defenses that may arise after the time of transfer out of
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights in general and general equity
principles, (e) as to which all obligations of the related Originator with
respect to such Receivable required to be fulfilled pursuant to the related
premium finance loan agreement and the Agreement, including the funding of the
related Loan, are satisfied, (f) as to which, at the time of transfer of such
Receivable to the Trust, the related Originator has not taken any action which
would impair, or failed to take any action necessary to avoid impairing, the
rights of the Trust or the certificateholders therein, (g) with respect to
which, in the case of Existing Receivables transferred to the Trust after the
Initial Closing Date and Additional Receivables only, the Obligor under the
related Loan is not the direct obligor under any Defaulted Loan (other than
under any Loan which is a Defaulted Loan solely due to an event of bankruptcy
with respect to an obligor other than such direct obligor), (h) which, in the
case of Existing Receivables transferred to the Trust after the Initial Closing
Date and Additional Receivables only, does not relate to a Defaulted Loan or a
Loan which is overdue, (i) as to which the related Loan and all amounts due
thereon are denominated and payable only in United States dollars, (j) which has
arisen from a Loan whereby the related premium finance agreement provides the
related Originator a limited power of attorney allowing it to cancel the related
insurance policy, if cancelable, in accordance with state law upon non-payment
of a loan installment by the Obligor thereunder, and (k) which has arisen from a
Loan whereby the related premium finance agreement allows the related Originator

to direct the insurance company to pay to such party any unearned



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<PAGE>



premium under the related insurance policy calculated as of the time of
cancellation of the insurance policy, if cancelable.

      The Trustee has not made, and it is not required or anticipated that the
Trustee will make, any general examination of the Receivables or any records
relating to the Receivables for the purpose of establishing the presence or
absence of defects, compliance with an Original Transferor's or the Transferor's
representations and warranties or for any other purpose.

Addition of Receivables

      The Transferor has the right and, in some circumstances, is obligated to
designate from time to time Additional Receivables to be transferred to the
Trust. The Original Transferors presently expect to sell to the Transferor all
Additional Receivables generated by them from time to time. The Transferor will
be required in any event to transfer sufficient Additional Receivables to the
Trust to maintain the Minimum Transferor Ownership Interest; otherwise, a Pay
Out Event will occur and the Series 1998-1 Rapid Amortization Period will
commence. Each such Additional Receivable must be an "Eligible Additional
Receivable." An "Eligible Additional Receivable" is, as of the date such
Receivable is added to the Trust, a Receivable which satisfies the criteria set
forth in the definition of Eligible Receivable. The Transferor will convey to
the Trust its entire interest in all such Additional Receivables, subject to the
following additional conditions, among others: (i) no selection procedures
materially adverse to the interests of the holders of any Series of
certificates, including the Holders of Offered Certificates, were used in
selecting the Additional Receivables, (ii) the Transferor shall deliver, on or
prior to the Determination Date following a Monthly Period during which
Additional Receivables are conveyed to the Trust, a written assignment to the
Trust of the Additional Receivables and a computer file or microfiche list
containing a true and complete list of all Receivables, including Additional
Receivables, as of the end of such Monthly Period and (iii) the transfer of
Additional Receivables by the Transferor to the Trust constitutes a valid
transfer and sale of the entire right and beneficial interest in and to the
Additional Receivables. The Transferor is not required to give notice to either
Rating Agency of its intention to convey Additional Receivables to the Trust.

Removal of Receivables

      Subject to the conditions set forth in the next succeeding sentence, on
each Determination Date on which the Transferor Ownership Interest exceeds the
Minimum Transferor Ownership Interest on such Determination Date, the Transferor
may, but shall not be obligated to, not more than once during the Monthly Period
during which such Determination Date occurs, designate Receivables for deletion

and removal from the Trust with five business days' prior written notice to the
Trustee and Servicer but without notice to the Series 1998-1 Certificateholders
(the "Removed Receivables"). The Transferor is permitted to designate and
require reassignment of Removed Receivables only upon satisfaction of the
following conditions among other things: (i) on or prior to the reassignment
date, the Transferor shall have delivered to the Trustee for execution a written
reassignment and, within five business days after the reassignment date, the
Transferor shall have delivered to the Trustee a computer file or microfiche
list containing a true and complete list of all Removed Receivables, the Removed
Receivables to be identified by, among other things, account number and their
aggregate amount of Principal Receivables as of the date of their removal (the
"Removal Date"); (ii) the Transferor shall represent and warrant that no
selection procedure used by the Transferor which is materially adverse to the
interests of the holders of any certificates issued by the Trust was utilized in
selecting the Removed Receivables; (iii) the removal of any Removed Receivables
shall not, in the reasonable belief of the Transferor, (a) cause a Pay Out Event
to occur, (b) cause the Transferor Ownership Interest to be less than the
Minimum Transferor Ownership Interest on such Removal Date or (c) result in the
failure to make any payment with respect to any Series; (iv) the Transferor
shall



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<PAGE>



have delivered prior written notice of the removal to the Rating Agencies and
prior to the date on which such Receivables are to be removed, the Transferor
shall not have received notice from either Rating Agency that such removal will
result in the reduction or withdrawal of the then-existing rating of any Series
of certificates; (v) the Transferor shall have delivered to the Trustee an
officer's certificate confirming the items set forth in clauses (i) through (iv)
above; and (vi) the Transferor, the Trustee and each Rating Agency will have
received an opinion of counsel that the proposed removal will not adversely
affect the federal income tax characterization of the Trust. The Transferor does
not presently expect to remove Receivables from the Trust, nor do AIC or AICCO
presently expect that any such removal will take place.

The Collection Account

      The Servicer has established and will maintain, or cause to be maintained,
in the name of the Trust, for the benefit of the certificateholders of all
outstanding Series, a "Collection Account," which is a non-interest bearing
segregated account established with a Qualified Institution. A "Qualified
Institution" is a depositary institution (which may include the Trustee),
organized under the laws of the United States or any one of the states thereof
or the District of Columbia, which either (a) has corporate trust powers and at
all times has a certificate of deposit rating of at least P-1 by Moody's
Investors Service, Inc. ("Moody's") and of A-1 by Standard & Poor's Ratings
Group ("Standard & Poor's") or a long-term rating of at least A by Moody's and
of at least A by Standard & Poor's and deposit insurance as required by the

Federal Deposit Insurance Corporation (the "FDIC") or (b) at all times has a
certificate of deposit rating of at least P-1 by Moody's and A-1+ by Standard &
Poor's or a long-term rating of at least Aa by Moody's and of at least AA by
Standard & Poor's and deposit insurance as required by the FDIC. In addition,
the Supplement with respect to any Series may require the Trustee to establish
and maintain a subaccount of the Collection Account for such Series (such
subaccount, a "Collection Subaccount"). Funds in the Collection Account or, as
provided in the related Supplement, any Collection Subaccount that are not both
deposited and to be withdrawn on the same date may be invested to the extent
provided in such Supplement, at the direction of the Servicer, in (i)
obligations of or fully guaranteed by the United States of America, (ii) demand
deposits, time deposits or certificates of deposit of (A) depositary
institutions with corporate trust powers, the certificates of deposit of which
have ratings from Moody's and Standard & Poor's of P-1 and A-1, respectively,
and long-term unsecured debt obligations of which have a rating from Moody's and
Standard & Poor's of A and A, respectively or (B) depositary institutions, the
certificates of deposit of which have ratings from Moody's and Standard & Poor's
of P-1 and A-1+, respectively, and long-term unsecured debt obligations of which
have a rating from Moody's and Standard & Poor's of Aa and AA, respectively,
(iii) commercial paper having, at the time of the Trust's investment or
contractual commitment to invest therein, a rating of P-1 and A-1+,
respectively, from Moody's and Standard & Poor's, (iv) demand deposits, time
deposits and certificates of deposit which are fully insured to the limits as
required by law and by the FDIC, (v) bankers acceptances issued by any
depositary institution or trust company described in clause (ii) above, (vi)
money market funds rated AAA-M or AAA-MG by Standard & Poor's or P-1 by Moody's
or which have otherwise been approved in writing by each Rating Agency and (vii)
certain open end diversified investment companies which each Rating Agency
designates in writing will not result in a withdrawal or downgrade of its then
current rating of any Series it rates ("Permitted Investments"). Any such
investment shall mature and such funds shall be available for withdrawal on or
prior to the Transfer Date related to the Monthly Period in which such funds
were received or deposited. Any earnings (net of losses and investment expenses)
on funds in the Collection Account or any Collection Subaccount will be paid
monthly to the holder of the Transferor Certificate. If such losses and
investment expenses exceed earnings on funds in the Collection Account or any
Collection Subaccount during a Monthly Period, then such excess shall be treated
in the same manner as Default Amounts are treated. The Transferor is not
required to reimburse the Trust with respect to such excess. See "--Defaulted
Loans; Charge-Offs."



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      Except as otherwise provided below, the Servicer will deposit into the
Collection Account, no later than the second business day following the date of
receipt, any payment collected by the Servicer on the Receivables; provided,
however, that for as long as AIC remains a Servicer under the Agreement and
either (i) the AIC Support Agreement remains in effect with respect to the

Servicer and is not terminated, amended or modified other than in accordance
with its terms, and AIG has and maintains a long-term rating of at least Aa by
Moody's and of at least AA by Standard & Poor's or (ii) AIC has and maintains a
commercial paper rating of P-1 by Moody's and of A-1 by Standard & Poor's, then
the Servicer may make such deposits into the Collection Account monthly on each
Transfer Date, in an amount equal to the lesser of (a) collections received in
the immediately preceding Monthly Period allocable to the certificateholders
ownership interests of all outstanding Series and (b) the amount required to be
deposited into the Finance Charge Account, the Principal Account or any other
Series account or, without duplication, distributed on or prior to the related
Distribution Date to certificateholders of all outstanding Series. On the same
date as any deposit is made to the Collection Account, the Servicer will (i)
transfer funds from the Collection Account to the Finance Charge Account and
Principal Account to the extent required under "--Application of Collections"
below, and (ii) make such further distributions and payments as required
thereunder. Deposits required to be made by AIC as Servicer into the Finance
Charge Account, Principal Account, the Series 1998-1 Yield Enhancement Account,
Excess Funding Account and any other account established for the benefit of the
holders of any Series of certificates may also be made on a monthly basis rather
than on a more frequent basis if the conditions referred to in the first
sentence of this paragraph are met.

      With respect to the certificates of any outstanding Series, whether the
Servicer is required to make monthly or daily deposits from the Collection
Account into the Finance Charge Account, the Principal Account or any other
Series account, with respect to any Monthly Period, (i) the Servicer will only
be required to deposit Collections from the Collection Account into the Finance
Charge Account, the Principal Account or any other Series account up to the
required amount to be deposited into any such deposit account or, without
duplication, distributed on or prior to the related Distribution Date to
certificateholders of such outstanding Series and (ii) if at any time prior to
such Distribution Date the amount of Collections deposited in the Collection
Account exceeds the amount required to be deposited pursuant to clause (i)
above, the Servicer will be permitted to withdraw the excess from the Collection
Account and allocate and pay such excess to the holder of the Transferor
Certificate as provided in the Agreement.

      The Paying Agent shall have the revocable power to withdraw funds from the
Collection Account or any Collection Subaccount for the purpose of making
distributions to the certificateholders of all outstanding Series in the manner
provided in the related Supplement.

Series 1998-1 Accounts

      The Trustee has established and will maintain with a Qualified Institution
in the name of the Trust, two non-interest bearing segregated trust accounts, a
"Finance Charge Account," for deposits of collections in respect of Finance
Charge Receivables, and a "Principal Account," for deposits of collections in
respect of Principal Receivables, for the benefit of the certificateholders of
all outstanding Series. The Trustee will establish a "Series 1998-1 Distribution
Account" (a non-interest bearing segregated trust account established with a
Qualified Institution).

      Funds in the Principal Account and the Finance Charge Account will be

invested, at the direction of the Transferor, in Permitted Investments. Any
earnings (net of losses and investment expenses) on funds in the Finance Charge
Account or the Principal Account will be paid monthly to the holder of the
Transferor Certificate. If losses and investment expenses exceed earnings on
funds in the Principal Account or the Finance Charge Account during a Monthly
Period, then such excess shall be treated in the same manner as Default Amounts
are



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treated. The Transferor is not required to reimburse the Trust with respect to
such excess. The Servicer will have the revocable power to withdraw funds from
the Collection Account, the Finance Charge Account, the Principal Account, the
Series 1998-1 Yield Enhancement Account and the Excess Funding Account referred
to below for the purpose of carrying out the Servicer's duties under the
Agreement. The Paying Agent shall have the revocable power to withdraw funds
from the Series 1998-1 Distribution Account for the purpose of making
distributions to the Series 1998-1 Certificateholders. The Series 1998-1
Distribution Account shall not contain any funds of the Transferor or amounts
allocable to the Transferor Ownership Interest, and no amounts on deposit
therein shall be made available to the Transferor.

      The Finance Charge Account, Principal Account, Series 1998-1 Yield
Enhancement Account, Excess Funding Account and Series 1998-1 Distribution
Account are collectively referred to as the "Accounts."

Series 1998-1 Yield Enhancement Account

      The Servicer will establish and maintain or cause to be maintained with a
Qualified Institution in the name of the Trustee, on behalf of the Trust, a
segregated account, the "Series 1998-1 Yield Enhancement Account," for the
benefit of the Series 1998-1 Certificateholders. Amounts on deposit in the
Series 1998-1 Yield Enhancement Account will be invested in the manner directed
by the Transferor in Permitted Investments. Any earnings (net of losses and
investment expenses) on funds in the Series 1998-1 Yield Enhancement Account
will be paid monthly to the holder of the Transferor Certificate. If losses and
investment expenses exceed earnings on funds in the Series 1998-1 Yield
Enhancement Account during a Monthly Period, then such excess shall be charged
against funds on deposit in such account. The Transferor is not required to
reimburse the Trust with respect to such excess. On each Transfer Date, an
amount equal to the Series 1998-1 Available Yield Enhancement Amount shall be
deposited into the Series 1998-1 Yield Enhancement Account out of collections
otherwise allocable to the holder of the Transferor Certificate for the Monthly
Period immediately preceding such Transfer Date. If collections otherwise
allocable to the holder of the Transferor Certificate for such Monthly Period on

such Transfer Date are not sufficient therefor, then the Transferor shall
deposit the amount of the insufficiency out of its own funds. Notwithstanding
the two preceding sentences, if AIR is no longer the Transferor or if the AIR
Support Agreement is not in effect with respect to AIR, then prior to any
payment to the holder of the Transferor Certificate of any collections with
respect to Principal Receivables or Finance Charge Receivables not allocated to
the Series 1998-1 Certificateholders, there shall be deposited into the Series
1998-1 Yield Enhancement Account on each date amounts allocable to the Series
1998-1 Certificates which would otherwise be allocable to the holder of the
Transferor Certificate until the amount so deposited equals the Series 1998-1
Maximum Yield Enhancement Amount for the next Transfer Date. The "Series 1998-1
Maximum Yield Enhancement Amount" shall mean, with respect to any Transfer Date,
the amount calculated pursuant to the proviso to the definition of "Series
1998-1 Available Yield Enhancement Amount" set forth below, determined on the
assumption that the Series 1998-1 Class A Certificate Rate, the Series 1998-1
Class B Certificate Rate and the Series 1998-1 Class C Certificate Rate used in
determining Series 1998-1 Class A Monthly Interest, Series 1998-1 Class B
Monthly Interest and Series 1998-1 Class C Monthly Interest, respectively,
equals in each case [16.00]% per annum. In addition, in all cases the Servicer
will deposit into the Series 1998-1 Yield Enhancement Account on each Transfer
Date any Series 1998-1 Excess Finance Charges. "Series 1998-1 Excess Finance
Charges" means, with respect to any Transfer Date, an amount equal to the excess
of Series 1998-1 Class A Available Funds, Series 1998-1 Class B Available Funds
and Series 1998-1 Class C Available Funds for the related Monthly Period over
the aggregate, with respect to such Transfer Date, of the amounts set forth in
clauses (a) through (e) of the definitions of Series 1998-1 Class A Required
Amount, Series 1998-1 Class B Required Amount and Series 1998-1 Class C Required
Amount. See "--Reallocation of Cash Flows."



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<PAGE>



      On each Transfer Date the Servicer will calculate the "Series 1998-1
Available Yield Enhancement Amount," which with respect to any Transfer Date (a)
during the Series 1998-1 Revolving Period means the product of (i) [___]% and
(ii) the product of (A) the collections for the related Monthly Period otherwise
allocable to the Transferor Ownership Interest and (B) the Series 1998-1
Floating Investor Percentage divided by one minus the Aggregate Investor
Percentage, and (b) during the Series 1998-1 Controlled Amortization Period and
the Series 1998-1 Rapid Amortization Period means the product of (i) [____]% and
(ii) the product of (A) the collections for the related Monthly Period otherwise
allocable to the Transferor Ownership Interest and (B) in the case of
collections of Finance Charge Receivables allocable to the Transferor Ownership
Interest, the Series 1998-1 Floating Investor Percentage divided by one minus
the Aggregate Investor Percentage, and in the case of collections of Principal
Receivables allocable to the Transferor Ownership Interest, the Series 1998-1
Fixed Investor Percentage divided by one minus the Aggregate Investor
Percentage; provided that in no event shall the Series 1998-1 Available Yield
Enhancement Amount for any Transfer Date exceed the sum of Series 1998-1 Class A

Monthly Interest, Series 1998-1 Class A Additional Interest, Series 1998-1 Class
B Monthly Interest, Series 1998-1 Class B Additional Interest, Series 1998-1
Class C Monthly Interest and Series 1998-1 Class C Additional Interest for such
Transfer Date. "Aggregate Investor Percentage" with respect to Principal
Receivables and Finance Charge Receivables, as the case may be, means, as of any
date of determination, the sum of the applicable Investor Percentages of all
Series of certificates issued and outstanding on such date of determination, to
a maximum of 100%. "Investor Percentage," with respect to a Series, means, for
any Monthly Period, (a) with respect to Finance Charge Receivables and Default
Amounts at any time and Principal Receivables during the Revolving Period for
such Series, the floating investor percentage for such Series and (b) with
respect to Principal Receivables during the Controlled Amortization Period for
such Series or the Rapid Amortization Period for such Series, the fixed investor
percentage for such Series.

      During each of the calendar years 1995, 1996 and 1997, the average monthly
payment rate on commercial premium finance loans exceeded 17%. Assuming (i) a
17% payment rate each month, (ii) twelve equal 30-day monthly periods, and (iii)
ownership by the Transferor during each Monthly Period of at least the Minimum
Transferor Ownership Interest, the amount available under the Agreement during
the Series 1998-1 Revolving Period for yield enhancement would be [___] basis
points on the outstanding principal of the Offered Certificates on an annualized
basis and may be greater during an amortization period (unless the amount of
interest due on the outstanding principal of the Offered Certificates during
such Monthly Period is less than [___] basis points on an annualized basis, in
which case the amount available for yield enhancement would be such lesser
amount). There can be no assurance, however, that the monthly payment rate on
the Loans will not be less than 17% since the payment rate will vary depending
on a variety of factors, including loan maturities, interest rates and
delinquency and default rates. Lower payment rates will result in lower yield
enhancement amounts.

      On each Transfer Date, the Trustee, acting pursuant to the Servicer's
instructions, will apply funds on deposit in the Series 1998-1 Yield Enhancement
Account with respect to the related Monthly Period to make the following
distributions in the following priority:

           (a) an amount equal to the Series 1998-1 Class A Required Amount, if
      any, with respect to such Transfer Date will be transferred to the Finance
      Charge Account and used to fund the Series 1998-1 Class A Required Amount;
      provided, that in the event the Series 1998-1 Class A Required Amount for
      such Transfer Date exceeds the funds on deposit in the Series 1998-1 Yield
      Enhancement Account, such funds shall be applied to pay amounts due with
      respect to such Transfer Date pursuant to clauses (a), (b), (c), (d) and
      (e) (in that order) under the definition of Series 1998-1 Class A Required
      Amount;

           (b) an amount equal to the Series 1998-1 Class B Required Amount, if
      any, with respect to such Transfer Date will be transferred to the Finance
      Charge Account and used to fund the Series 1998-1 Class B



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      Required Amount; provided, that in the event the Series 1998-1 Class B
      Required Amount for such Transfer Date exceeds the funds on deposit in the
      Series 1998-1 Yield Enhancement Account after giving effect to clause (a)
      above, such funds shall be applied to pay amounts due with respect to such
      Transfer Date pursuant to clauses (a), (b), (c), (d) and (e) (in that
      order) under the definition of Series 1998-1 Class B Required Amount;

           (c) an amount equal to the aggregate amount by which the Series
      1998-1 Class A Ownership Interest has been reduced below the initial
      Series 1998-1 Class A Ownership Interest on previous Transfer Dates for
      reasons other than the payment of principal to the Series 1998-1 Class A
      Certificateholders (but not in excess of the aggregate amount of such
      reductions which have not been previously reimbursed) will be deposited
      into the Principal Account on such Transfer Date (and the Series 1998-1
      Class A Ownership Interest shall be deemed to have been reimbursed by such
      amount up to the initial Series 1998-1 Class A Ownership Interest but only
      if the Series 1998-1 Class A Ownership Interest shall not have previously
      been reduced to zero during the Series 1998-1 Class A Controlled
      Amortization Period or the Series 1998-1 Rapid Amortization Period);

           (d) an amount equal to the aggregate amount by which the Series
      1998-1 Class B Ownership Interest has been reduced below the initial
      Series 1998-1 Class B Ownership Interest on previous Transfer Dates for
      reasons other than the payment of principal to the Series 1998-1 Class B
      Certificateholders (but not in excess of the aggregate amount of such
      reductions which have not been previously reimbursed) will be deposited
      into the Principal Account on such Transfer Date (and the Series 1998-1
      Class B Ownership Interest shall be deemed to have been reimbursed by such
      amount up to the initial Series 1998-1 Class B Ownership Interest but only
      if the Series 1998-1 Class B Ownership Interest shall not have previously
      been reduced to zero during the Series 1998-1 Class B Controlled
      Amortization Period or the Series 1998-1 Rapid Amortization Period);

           (e) an amount equal to the Series 1998-1 Class C Required Amount, if
      any, with respect to such Transfer Date will be transferred to the Finance
      Charge Account and used to fund the Series 1998-1 Class C Required Amount;
      provided, that in the event the Series 1998-1 Class C Required Amount for
      such Transfer Date exceeds the funds on deposit in the Series 1998-1 Yield
      Enhancement Account after giving effect to clauses (a), (b), (c) and (d)
      above, such funds shall be applied to pay amounts due with respect to such
      Transfer Date pursuant to clauses (a), (b), (c), (d) and (e) (in that
      order) under the definition of Series 1998-1 Class C Required Amount;

           (f) an amount equal to the aggregate amount by which the Series
      1998-1 Class C Ownership Interest has been reduced below the initial
      Series 1998-1 Class C Ownership Interest on previous Transfer Dates for
      reasons other than the payment of principal to the Series 1998-1 Class C
      Certificateholders (but not in excess of the aggregate amount of such
      reductions which have not been previously reimbursed) will be deposited
      into the Principal Account on such Transfer Date (and the Series 1998-1

      Class C Ownership Interest shall be deemed to have been reimbursed by such
      amount up to the initial Series 1998-1 Class C Ownership Interest but only
      if the Series 1998-1 Class C Ownership Interest shall not have previously
      been reduced to zero during the Series 1998-1 Class C Controlled
      Amortization Period or the Series 1998-1 Rapid Amortization Period); and

           (g) the balance, if any, in excess of the Series 1998-1 91 Day
      Delinquency Amount, after giving effect to the payments made pursuant to
      subparagraphs (a) through (f) above, shall be distributed to the holder of
      the Transferor Certificate provided that a Pay Out Event has not occurred
      and will not be available for any future payments to the Series 1998-1
      Certificateholders; provided, however, that such amount shall be paid



                                       68




<PAGE>



      to the holder of the Transferor Certificate only to the extent that the
      Transferor Ownership Interest as of such date is greater than the Minimum
      Transferor Ownership Interest as of the end of the immediately preceding
      Monthly Period (after giving effect to the inclusion in the Trust of all
      Receivables transferred to the Trust on or prior to such date and the
      application of collections received) and otherwise shall be deposited into
      the Excess Funding Account; provided further, that in no event shall the
      amount payable to the holder of the Transferor Certificate be greater than
      the Transferor Ownership Interest.

      The "Series 1998-1 91 Day Delinquency Amount" shall equal, as of each
Transfer Date, the product of (a) the Series 1998-1 Floating Investor Percentage
and (b) the aggregate outstanding principal amount as of the end of the
preceding Monthly Period of the Loans relating to Receivables in the Trust that
are then overdue 91 days or more (i) after cancellation of the related insurance
policies or (ii) if cancellation is delayed, whether due to a stay by reason of
an Obligor's bankruptcy or other reason, after the date the policy would have
been cancelled in the absence of such delay. Funds remaining on deposit in the
Series 1998-1 Yield Enhancement Account under clause (g) above shall be
available on the next Transfer Date for application, together with any
additional amounts required to be deposited therein on such Transfer Date, in
accordance with clauses (a) through (g) above.

Excess Funding Account

      The Servicer has established and maintained or caused to be maintained
with a Qualified Institution in the name of the Trustee, on behalf of the Trust,
a segregated account, the "Excess Funding Account," for the benefit of the
certificateholders of all outstanding Series, including the Series 1998-1
Certificateholders. If on any date the Transferor Ownership Interest equals or

is less than the Minimum Transferor Ownership Interest as of the end of the
immediately preceding Monthly Period, funds (to the extent available therefor as
described herein) otherwise payable to the holder of the Transferor Certificate
on such date will be deposited in the Excess Funding Account. Funds on deposit
in the Excess Funding Account will be withdrawn and paid to the holder of the
Transferor Certificate to the extent that on any day the Transferor Ownership
Interest exceeds the Minimum Transferor Ownership Interest as of the end of the
immediately preceding Monthly Period as a result of the transfer of Additional
Receivables to the Trust. Such deposits in and withdrawals from the Excess
Funding Account may be made on a daily basis (except, if AIC is the Servicer,
under the circumstances described above under "--The Collection Account").

      The allocable portion of funds on deposit in the Excess Funding Account at
the beginning of the Series 1998-1 Rapid Amortization Period will be paid to the
Series 1998-1 Certificateholders as a payment in respect of principal, and
during the Series 1998-1 Controlled Amortization Period will be paid to the
Series 1998-1 Certificateholders as a payment in respect of principal to the
extent that monthly collections received in respect of Principal Receivables and
Shared Principal Collections allocable to the Series 1998-1 Certificateholders
Ownership Interests are insufficient to pay the Series 1998-1 Controlled
Distribution Amount. Funds on deposit in the Excess Funding Account will be
allocated, if necessary, among the certificateholders ownership interests of
each outstanding Series of certificates on a pro rata basis in accordance with
each such Series' fixed investor percentage.

      Funds on deposit in the Excess Funding Account will be invested by the
Trustee at the direction of the Transferor in Permitted Investments. All net
investment income earned on amounts in the Excess Funding Account will be
retained in the Excess Funding Account to the extent that the Transferor
Ownership Interest is less than the Minimum Transferor Ownership Interest. If
losses and investment expenses exceed earnings on funds in the Excess Funding
Account during a Monthly Period, then such excess shall be treated in the same
manner as Default Amounts are treated. The Transferor is not required to
reimburse the Trust with respect to such excess.



                                       69

<PAGE>



      The "Minimum Transferor Ownership Interest" shall mean, as of any date of
determination, an amount equal to the sum of (a) (i) 107% of an amount equal to
the aggregate initial certificateholders ownership interests of all outstanding
Series minus (ii) the aggregate certificateholders ownership interests of all
outstanding Series as of such date and (b) the Excess Receivables Amount for
such date; provided, however, that the Minimum Transferor Ownership Interest
shall be calculated without reference to the Excess Receivables Amount if (i)
prior to such date there shall have been delivered to the Trustee (a) a written
agreement, in form and substance satisfactory to the Rating Agencies, executed
by a person having a long-term unsecured debt rating of AAA from Standard &
Poor's and Aaa from Moody's pursuant to which such person shall have

unconditionally agreed to indemnify the Trust for all losses in respect of
amounts constituting the Excess Receivables Amount at any time and (b) written
confirmation from each of the Rating Agencies to the effect that such
substitution will not result in such Rating Agency reducing or withdrawing its
rating on any then outstanding class of investor certificates of any Series,
including the Series 1994-1 Certificates and the Series 1998-1 Certificates, and
(ii) the agreement and the rating referred to in clause (a) above remain in
effect on such date of determination.

      "Excess Receivables Amount" shall mean, as of any date of determination,
the sum of:

             (i) the aggregate unpaid principal balance of all Receivables in
      the Trust as of the end of the immediately preceding Monthly Period having
      the same Obligor but only to the extent such aggregate balance is in
      excess of 0.60% of the aggregate unpaid principal balance of all
      Receivables in the Trust as of the end of such Monthly Period; and

            (ii) the greater of:

           (a) the sum, for each Moody's Non-Investment Grade Insurer (including
      for this purpose any affiliated Moody's Non-Investment Grade Insurer) of,
      if more than [5]% of the aggregate unpaid principal balance of all
      Receivables in the Trust as of the end of such Monthly Period arise from
      Loans made to finance premiums due to such insurer (including any such
      affiliated insurer), the aggregate unpaid principal balance of such
      Receivables but only to the extent in excess of such percentage;

           (b) the sum, for each insurer (including any affiliated insurer)
      referred to below, of the greater of:

                     (I) if more than [2]% of the aggregate unpaid principal
                balance of all Receivables in the Trust as of the end of such
                Monthly Period arise from Loans made to finance premiums due to
                the same S&P Non-Investment Grade Insurer (including for this
                purpose any affiliated S&P Non-Investment Grade Insurer), the
                aggregate unpaid principal balance of such Receivables but only
                to the extent in excess of such percentage; and

                     (II) if more than [4]% of the aggregate unpaid principal
                balance of all Receivables in the Trust as of the end of such
                Monthly Period arise from Loans made to finance premiums due to
                the same S&P Non-AAA Insurer (including for this purpose any
                affiliated S&P Non-AAA Insurer), the aggregate unpaid principal
                balance of such Receivables but only to the extent in excess of
                such percentage.

For purposes of making any calculation: (x) pursuant to clause (ii) above, an
amount that would be part of the Excess Receivables Amount under such clause
shall be taken into account only to the extent not already taken into account
under clause (i) above and (y) pursuant to clause (i) or clause (ii) above, the
aggregate of the losses, if any, previously realized in respect of any Obligor
subject to clause (i) above or any insurer referred to in subclauses (a), (b)(I)
and/or (b)(II) of clause (ii) above (to the extent relating to insurer

insolvency) shall reduce



                                       70
<PAGE>



the percentage levels used in calculating the excess amounts set forth or
referred to in such clause or subclauses with respect to any single Obligor or
insurer.

      "Moody's Non-Investment Grade Insurer" shall mean, on any date of
determination, an insurer that as of the end of the immediately preceding
Monthly Period did not have an insurance financial strength rating of at least
investment grade (i.e., in one of the top four generic rating categories,
irrespective of any plus or minus) by Moody's (other than AIG or any wholly
owned subsidiary of AIG), unless Moody's shall have previously notified the
Transferor in writing that such insurer is not to be deemed a "Moody's
Non-Investment Grade Insurer" (and shall not have revoked such notification).

      "S&P Non-AAA Insurer" shall mean, on any date of determination, an insurer
that as of the end of the immediately preceding Monthly Period did not have a
claims-paying ability rating at least as high as the then applicable rating
assigned by Standard & Poor's to the Series 1998-1 Class A Certificates or the
Series 1994-1 Class A Certificates unless Standard & Poor's shall have
previously notified the Transferor in writing that such insurer is not to be
deemed an "S&P Non-AAA Insurer" (and shall not have revoked such notification).

      "S&P Non-Investment Grade Insurer" shall mean, on any date of
determination, an insurer that as of the end of the immediately preceding
Monthly Period did not have a claims-paying ability rating of at least
investment grade (i.e., in one of the top four generic rating categories,
irrespective of any plus or minus) by Standard & Poor's (other than any
affiliate of AIG with a Standard & Poor's qualified solvency rating of BBBq)
unless Standard & Poor's shall have previously notified the Transferor in
writing that such insurer is not to be deemed an "S&P Non-Investment Grade
Insurer" (and shall not have revoked such notification).

Shared Principal Collections

      Collections of Principal Receivables for any Monthly Period allocated to
the Series 1998-1 Certificateholders Ownership Interests will first be used to
cover, with respect to any Monthly Period during the Series 1998-1 Controlled
Amortization Period, deposits of the Series 1998-1 Controlled Distribution
Amount to the Series 1998-1 Distribution Account, and during the Series 1998-1
Rapid Amortization Period, payments to the Holders of Offered Certificates and
then payments to the Series 1998-1 Class C Certificateholders. The Servicer will
determine the amount of collections of Principal Receivables for any Monthly
Period allocated to the Series 1998-1 Certificateholders Ownership Interests
remaining after covering required payments to the Series 1998-1
Certificateholders and any similar amounts remaining for the Series 1994-1
Certificates or any additional Series ("Shared Principal Collections"). The

Servicer will allocate the Shared Principal Collections to cover any scheduled
or permitted principal distributions to certificateholders and deposits to
principal funding accounts, if any, for any Series which have not been covered
out of the collections of Principal Receivables allocable to such Series and
certain other amounts for such Series ("Principal Shortfalls"). Shared Principal
Collections will not be used to reimburse certificateholders for investor
charge-offs for any Series to cover interest shortfalls for any Series. If
Principal Shortfalls exceed Shared Principal Collections for any Monthly Period,
Shared Principal Collections will be allocated pro rata among the applicable
Series based on the relative amounts of Principal Shortfalls. To the extent that
Shared Principal Collections exceed Principal Shortfalls, the balance will be
paid to the holder of the Transferor Certificate; provided, however, that such
amount shall be paid to the holder of the Transferor Certificate only to the
extent that the Transferor Ownership Interest on such date is greater than the
Minimum Transferor Ownership Interest as of the immediately preceding Monthly
Period (after giving effect to the inclusion in the Trust of all Receivables
transferred to the Trust on or prior to such date and the application of
collections received) and otherwise shall be deposited into the Excess Funding
Account; provided further, that in no event shall the amount payable to the
holder of the Transferor Certificate be greater than the Transferor Ownership
Interest.



                                       71

<PAGE>

Defaulted Loans; Charge-Offs

      Losses resulting from the charge-off of Loans in each Monthly Period
("Default Amounts") are generally shared between the certificateholders
ownership interests of each outstanding Series, based on their respective
floating investor percentages (see "--Allocation Percentages" below with respect
to Series 1998-1), and the Transferor Ownership Interest. Certain losses
resulting from charge-offs of Receivables in excess of specified levels will be
allocated entirely to the Transferor Ownership Interest. Accordingly, such
excess losses will not be borne by the Series 1998-1 Certificateholders
Ownership Interests and will not be taken into account in calculating the Series
1998-1 Investor Default Amount (defined below). The circumstances under which
excess losses will be allocated entirely to the Transferor Ownership Interest
will occur when there are losses on Receivables relating to Loans to a single
Obligor exceeding 0.60% of the aggregate principal balances of Receivables at
the end of any Monthly Period, or when losses on Receivables resulting from the
insolvency of certain insurance carriers (to the extent not taken into account
as a result of the single Obligor excess loss allocation) exceed 2% of the
aggregate principal balances of Receivables at the end of any Monthly Period
(see the definition of "Excess Receivables Amount" under "--Excess Funding
Account" above). In addition, all losses will be allocated to the Transferor
Ownership Interest after the occurrence of the Pay Out Event described under
clause (d) of "--Pay Out Events" below or after the Transferor Ownership
Interest falls below the Minimum Transferor Ownership Interest following the
occurrence of any other Pay Out Event.


      On the fourth business day preceding each Transfer Date (the
"Determination Date"), the Servicer will calculate the Series 1998-1 Investor
Default Amount for the preceding Monthly Period. The term "Series 1998-1
Investor Default Amount" means, with respect to any Monthly Period and any
Receivable under a Loan that became a Defaulted Loan during such Monthly Period,
an amount equal to the product of (a) the unpaid amount (including both
principal and accrued unpaid finance charges) of such Receivable as of the date
that such Loan became a Defaulted Loan and (b) the Series 1998-1 Floating
Investor Percentage with respect to such Monthly Period. The term "Defaulted
Loan" shall mean any Loan which (i) remains in default as of the beginning of
the month immediately following the first anniversary of the cancellation of the
related insurance policy, which cancellation results from such default, or (ii)
is overdue and which the Servicer determines, in accordance with the Servicer's
policies and procedures relating to the operation of their business, is
incapable of collection. A Loan shall be considered to be a Defaulted Loan upon
the earlier to occur of (i) or (ii) above.

      State laws impose limitations on the amount of finance charges that may
accrue upon the unpaid balance of a Loan after its scheduled maturity and the
late fees that may be imposed upon an Obligor's default in payment of any
installments due under a Loan. Such laws vary widely by state, but often provide
for the recovery of only minimal additional interest and fees, if any.

      A portion of the Series 1998-1 Investor Default Amount will be allocated
to the Series 1998-1 Class A Certificateholders (the "Series 1998-1 Class A
Default Amount") on each Transfer Date in an amount equal to the product of the
Series 1998-1 Class A Floating Allocation applicable during the related Monthly
Period and the Series 1998-1 Investor Default Amount for such Monthly Period. A
portion of the Series 1998-1 Investor Default Amount will be allocated to the
Series 1998-1 Class B Certificateholders (the "Series 1998-1 Class B Default
Amount") on each Transfer Date in an amount equal to the product of the Series
1998-1 Class B Floating Allocation applicable during the related Monthly Period
and the Series 1998-1 Investor Default Amount for such Monthly Period. A portion
of the Series 1998-1 Investor Default Amount will be allocated to the Series
1998-1 Class C Certificateholders (the "Series 1998-1 Class C Default Amount")
on each Transfer Date in an amount equal to the product of the Series 1998-1
Class C Floating Allocation applicable during the related Monthly Period and the
Series 1998-1 Investor Default Amount for such Monthly Period.


                                       72

<PAGE>



      On each Transfer Date, if the Series 1998-1 Class A Default Amount for
such Transfer Date exceeds the funds on deposit in the Series 1998-1 Yield
Enhancement Account available to cover such amount with respect to the Monthly
Period immediately preceding such Transfer Date, the Series 1998-1 Class C
Ownership Interest (after giving effect to reductions therein for any Series
1998-1 Class C Charge-Offs and any Series 1998-1 Reallocated Principal
Collections on such Transfer Date) will be reduced by the amount of such excess.
In the event that such reduction would cause the Series 1998-1 Class C Ownership

Interest to be a negative number, the Series 1998-1 Class C Ownership Interest
will be reduced to zero, and the Series 1998-1 Class B Ownership Interest (after
giving effect to reductions therein for any Series 1998-1 Class B Charge-Offs
and any Series 1998-1 Reallocated Principal Collections on such Transfer Date)
will be reduced by the amount by which the Series 1998-1 Class C Ownership
Interest would have been reduced below zero. In the event that such reduction
would cause the Series 1998-1 Class B Ownership Interest to be a negative
number, the Series 1998-1 Class B Ownership Interest will be reduced to zero,
and the Series 1998-1 Class A Ownership Interest (after giving effect to
reductions therein for any Series 1998-1 Reallocated Principal Collections on
such Transfer Date) will be reduced (but not below zero) by the amount by which
the Series 1998-1 Class B Ownership Interest would have been reduced below zero
(any such reduction, a "Series 1998-1 Class A Charge-Off"). The Series 1998-1
Class A Ownership Interest will also be reduced by the amount of Series 1998-1
Reallocated Principal Collections used to cover the Series 1998-1 Class A
Required Amount and Series 1998-1 Class B Required Amount if the Series 1998-1
Class B Ownership Interest and Series 1998-1 Class C Ownership Interest have
been reduced to zero. Such reductions in the Series 1998-1 Class A Ownership
Interest will have the effect of slowing or reducing the return of principal and
the payment of interest to the Series 1998-1 Class A Certificateholders. The
Series 1998-1 Class A Ownership Interest will thereafter be reimbursed if not
previously reduced to zero during the Series 1998-1 Class A Controlled
Amortization Period or the Series 1998-1 Rapid Amortization Period (but not in
excess of reductions in the Series 1998-1 Class A Ownership Interest that have
not been previously reimbursed) on any Transfer Date by the amount of funds on
deposit in the Series 1998-1 Yield Enhancement Account allocated and available
for such purpose as described under "--Series 1998-1 Yield Enhancement Account."

      If on any Transfer Date, the Series 1998-1 Class B Default Amount for such
Transfer Date exceeds the amount of funds on deposit in the Series 1998-1 Yield
Enhancement Account which are allocated and available to fund such amount as
described under "--Series 1998-1 Yield Enhancement Account," the Series 1998-1
Class C Ownership Interest (after giving effect to reductions therein for any
Series 1998-1 Class C Charge-Offs and any Series 1998-1 Reallocated Principal
Collections on such Transfer Date and after giving effect to any adjustments
with respect thereto as described in the preceding paragraph) will be reduced by
the amount of such excess. In the event that such reduction would cause the
Series 1998-1 Class C Ownership Interest to be a negative number, the Series
1998-1 Class C Ownership Interest will be reduced to zero and the Series 1998-1
Class B Ownership Interest (after giving effect to reductions therein for any
Series 1998-1 Reallocated Principal Collections on such Transfer Date) will be
reduced (but not below zero) by the amount by which the Series 1998-1 Class C
Ownership Interest would have been reduced below zero (any such reduction, a
"Series 1998-1 Class B Charge-Off"). The Series 1998-1 Class B Ownership
Interest will also be reduced by the amount of Series 1998-1 Reallocated
Principal Collections in excess of the Series 1998-1 Class C Ownership Interest
and the amount of any portion of the Series 1998-1 Class B Ownership Interest
allocated to the Series 1998-1 Class A Certificates to avoid a reduction in the
Series 1998-1 Class A Ownership Interest. Such reductions in the Series 1998-1
Class B Ownership Interest will have the effect of slowing or reducing the
return of principal and the payment of interest to the Series 1998-1 Class B
Certificateholders. The Series 1998-1 Class B Ownership Interest will thereafter
be reimbursed if not previously reduced to zero during the Series 1998-1 Class B
Controlled Amortization Period or the Series 1998-1 Rapid Amortization Period

(but not in excess of reductions in the Series 1998-1 Class B Ownership Interest
that have not been previously reimbursed) on any Transfer Date by the amount of
funds on deposit in the Series 1998-1 Yield Enhancement Account allocated and
available for that purpose as described under "--Series 1998-1 Yield Enhancement
Account."



                                       73

<PAGE>



      If on any Transfer Date, the Series 1998-1 Class C Default Amount for such
Transfer Date exceeds the amount of funds on deposit in the Series 1998-1 Yield
Enhancement Account which are allocated and available to fund such amount as
described under "--Series 1998-1 Yield Enhancement Account," the Series 1998-1
Class C Ownership Interest will be reduced by the amount of such excess but not
more than the lesser of the Series 1998-1 Class C Default Amount and the Series
1998-1 Class C Ownership Interest for such Transfer Date (any such reduction, a
"Series 1998-1 Class C Charge-Off"). The Series 1998-1 Class C Ownership
Interest will also be reduced by the amount of Series 1998-1 Reallocated
Principal Collections used to cover payment of interest on the Offered
Certificates and the amount of any portion of the Series 1998-1 Class C
Ownership Interest allocated to the Series 1998-1 Class A Certificates to avoid
a reduction in the Series 1998-1 Class A Ownership Interest or to the Series
1998-1 Class B Certificates to avoid a reduction in the Series 1998-1 Class B
Ownership Interest. The Series 1998-1 Class C Ownership Interest will thereafter
be reimbursed if not previously reduced to zero during the Series 1998-1 Class C
Controlled Amortization Period or the Series 1998-1 Rapid Amortization Period
(but not in excess of reductions in the Series 1998-1 Class C Ownership Interest
that have not been previously reimbursed) on any Transfer Date by the amount of
funds on deposit in the Series 1998-1 Yield Enhancement Account allocated and
available for that purpose as described under "--Series 1998-1 Yield Enhancement
Account."

Allocation Percentages

      Pursuant to the Agreement, with respect to each Monthly Period the
Servicer will allocate among the Series 1998-1 Certificateholders Ownership
Interests, the certificateholders ownership interests for each other Series
issued and outstanding and the Transferor Ownership Interest, all amounts
collected on Finance Charge Receivables, all amounts collected on Principal
Receivables and all Default Amounts with respect to such Monthly Period. Finance
charges on the Loans are recognized under the actuarial interest method.

      Collections of Finance Charge Receivables, which under the terms of the
Agreement will include any recoveries with respect to Loans that have been
written off, and Default Amounts at any time and collections of Principal
Receivables during the Series 1998-1 Revolving Period will be allocated to the
Series 1998-1 Certificateholders Ownership Interests based on the Series 1998-1
Floating Investor Percentage. The "Series 1998-1 Floating Investor Percentage"
means, with respect to any Monthly Period, the percentage equivalent of a

fraction, the numerator of which is the Series 1998-1 Certificateholders
Ownership Interests as of the close of business on the last day of the preceding
Monthly Period (or with respect to the first Monthly Period, the Series 1998-1
Initial Certificateholders Ownership Interests) and the denominator of which is
the greater of (x) the aggregate amount of Principal Receivables as of the close
of business on the last day of the preceding Monthly Period (or with respect to
the first Monthly Period, the aggregate amount of Principal Receivables as of
the close of business on the day immediately preceding the Closing Date that
will be included in the Trust on such date), and (y) the sum of the numerators
used to calculate the investor percentages for allocations with respect to
Finance Charge Receivables, Default Amounts or Principal Receivables, as
applicable, for all outstanding Series on such date of determination. Such
amounts so allocated will be further allocated between the Series 1998-1 Class A
Certificateholders, Series 1998-1 Class B Certificateholders and the Series
1998-1 Class C Certificateholders based on the Series 1998-1 Class A Floating
Allocation, the Series 1998-1 Class B Floating Allocation and the Series 1998-1
Class C Floating Allocation, respectively. The "Series 1998-1 Class A Floating
Allocation" means, with respect to any Monthly Period, the percentage equivalent
(which percentage shall never exceed 100%) of a fraction, the numerator of which
is equal to the Series 1998-1 Class A Ownership Interest as of the close of
business on the last day of the preceding Monthly Period (or with respect to the
first Monthly Period, as of the Closing Date) and the denominator of which is
equal to the Series 1998-1 Certificateholders Ownership Interests as of the
close of business on such day. The "Series 1998-1 Class B Floating Allocation"
means, with respect to any Monthly Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the



                                       74
<PAGE>



numerator of which is equal to the Series 1998-1 Class B Ownership Interest as
of the close of business on the last day of the preceding Monthly Period (or
with respect to the first Monthly Period, as of the Closing Date) and the
denominator of which is equal to the Series 1998-1 Certificateholders Ownership
Interests as of the close of business on such day. The "Series 1998-1 Class C
Floating Allocation" means, with respect to any Monthly Period, the percentage
equivalent (which percentage shall never exceed 100%) of a fraction, the
numerator of which is equal to the Series 1998-1 Class C Ownership Interest as
of the close of business on the last day of the preceding Monthly Period (or
with respect to the first Monthly Period, as of the Closing Date) and the
denominator of which is equal to the Series 1998-1 Certificateholders Ownership
Interests as of the close of business on such day.

      Collections of Principal Receivables during the Series 1998-1 Controlled
Amortization Period and Series 1998-1 Rapid Amortization Period will be
allocated to the Series 1998-1 Certificateholders Ownership Interests based on
the Series 1998-1 Fixed Investor Percentage. The "Series 1998-1 Fixed Investor
Percentage" means, with respect to any Monthly Period, the percentage equivalent
of a fraction, the numerator of which is the Series 1998-1 Certificateholders
Ownership Interests as of the close of business on the last day of the Series

1998-1 Revolving Period and the denominator of which is the greater of (x) the
aggregate amount of Principal Receivables in the Trust as of the close of
business on the last day of the prior Monthly Period and (y) the sum of the
numerators used to calculate the investor percentages for allocations with
respect to Principal Receivables for all outstanding Series for such Monthly
Period.

      "Series 1998-1 Certificateholders Ownership Interests" for any date means
an amount equal to the sum of (a) the Series 1998-1 Class A Ownership Interest,
(b) the Series 1998-1 Class B Ownership Interest and (c) the Series 1998-1 Class
C Ownership Interest, each as of such date.

      "Series 1998-1 Class A Ownership Interest" for any date means an amount
equal to (a) $[___________] (the "Series 1998-1 Class A Initial Ownership
Interest"), minus (b) the aggregate amount of principal payments made to Series
1998-1 Class A Certificateholders prior to such date, minus (c) the aggregate
amount of Series 1998-1 Class A Charge-Offs for all prior Transfer Dates, minus
(d) the aggregate amount of Series 1998-1 Reallocated Principal Collections for
all prior Transfer Dates for which the Series 1998-1 Class B Ownership Interest
and the Series 1998-1 Class C Ownership Interest have not been reduced, and plus
(e) the aggregate amount of funds on deposit in the Series 1998-1 Yield
Enhancement Account allocated on all prior Transfer Dates for the purpose of
reimbursing amounts deducted pursuant to the foregoing clauses (c) and (d);
provided, however, that the Series 1998-1 Class A Ownership Interest may not be
reduced below zero.

      "Series 1998-1 Class B Ownership Interest" for any date means an amount
equal to (a) $[_________] (the "Series 1998-1 Class B Initial Ownership
Interest"), minus (b) the aggregate amount of principal payments made to Series
1998-1 Class B Certificateholders prior to such date, minus (c) the aggregate
amount of Series 1998-1 Class B Charge-Offs for all prior Transfer Dates, minus
(d) the aggregate amount of Series 1998-1 Reallocated Principal Collections for
all prior Transfer Dates for which the Series 1998-1 Class C Ownership Interest
has not been reduced, minus (e) an amount equal to the aggregate amount by which
the Series 1998-1 Class B Ownership Interest has been reduced to fund the Series
1998-1 Class A Default Amount on all prior Transfer Dates as described under
"--Defaulted Loans; Charge-Offs," and plus (f) the aggregate amount of funds on
deposit in the Series 1998-1 Yield Enhancement Account allocated on all prior
Transfer Dates for the purpose of reimbursing amounts deducted pursuant to the
foregoing clauses (c), (d) and (e); provided, however, that the Series 1998-1
Class B Ownership Interest may not be reduced below zero.

      "Series 1998-1 Class C Ownership Interest" for any date means an amount
equal to (a) $[________] (the "Series 1998-1 Class C Initial Ownership
Interest"), minus (b) the aggregate amount of principal payments made


                                       75
<PAGE>



to the holders of the Series 1998-1 Class C Ownership Interest prior to such
date, minus (c) the aggregate amount of Series 1998-1 Class C Charge-Offs for

all prior Transfer Dates, minus (d) the aggregate amount of Series 1998-1
Reallocated Principal Collections for all prior Transfer Dates for which the
Series 1998-1 Class C Ownership Interest has been reduced, minus (e) an amount
equal to the aggregate amount by which the Series 1998-1 Class C Ownership
Interest has been reduced to fund the Series 1998-1 Class A Default Amount and
the Series 1998-1 Class B Default Amount on all prior Transfer Dates as
described under "--Defaulted Loans; Charge-Offs," and plus (f) the aggregate
amount of funds on deposit in the Series 1998-1 Yield Enhancement Account
allocated on all prior Transfer Dates for the purpose of reimbursing amounts
deducted pursuant to the foregoing clauses (c), (d) and (e); provided, however,
that the Series 1998-1 Class C Ownership Interest may not be reduced below zero.

Reallocation of Cash Flows

      With respect to each Transfer Date, the Servicer will determine the
"Series 1998-1 Class A Required Amount," which will be equal to the amount, if
any, by which the sum of (a) Series 1998-1 Class A Monthly Interest due on the
related Distribution Date, (b) Series 1998-1 Class A Additional Interest due on
such Distribution Date, (c) the Series 1998-1 Class A Servicing Fee for the
related Monthly Period and any overdue Series 1998-1 Class A Servicing Fee, (d)
the Series 1998-1 Class A Default Amount, if any, for the related Monthly Period
and (e) Series 1998-1 Class A Prior Period Interest, if any, exceeds the Series
1998-1 Class A Available Funds for the related Monthly Period. If the Series
1998-1 Class A Required Amount is greater than zero, funds on deposit in the
Series 1998-1 Yield Enhancement Account and available for such purpose will be
used to fund the Series 1998-1 Class A Required Amount with respect to such
Transfer Date. If the funds on deposit in the Series 1998-1 Yield Enhancement
Account are insufficient to fund the remaining Series 1998-1 Class A Required
Amount, first, Series 1998-1 Reallocated Class C Principal Collections, then,
Series 1998-1 Reallocated Class B Principal Collections and finally, Series
1998-1 Reallocated Class A Principal Collections will be used to fund the Series
1998-1 Class A Required Amount. Any reallocation of Principal Receivables
collections to fund the Series 1998-1 Class A Required Amount or, as described
in the next succeeding paragraph, the Series 1998-1 Class B Required Amount will
result in a corresponding reduction in the Series 1998-1 Certificateholders
Ownership Interests. The amount of such reduction will be allocated first to
reduce the Series 1998-1 Class C Ownership Interest, second to reduce the Series
1998-1 Class B Ownership Interest and lastly to reduce the Series 1998-1 Class A
Ownership Interest. If Series 1998-1 Reallocated Principal Collections with
respect to the Monthly Period, together with the funds on deposit in the Series
1998-1 Yield Enhancement Account, are insufficient to fund the Series 1998-1
Class A Required Amount for such related Monthly Period, then the Series 1998-1
Class C Ownership Interest (after giving effect to reductions therein for any
Series 1998-1 Class C Charge-Offs and Series 1998-1 Reallocated Principal
Collections for the related Transfer Date) will be reduced by the amount of such
excess. In the event that such reduction would cause the Series 1998-1 Class C
Ownership Interest to be a negative number, the Series 1998-1 Class C Ownership
Interest will be reduced to zero, and the Series 1998-1 Class B Ownership
Interest (after giving effect to reductions therein for any Series 1998-1 Class
B Charge-Offs and Series 1998-1 Reallocated Principal Collections for such
Transfer Date) will be reduced by the amount by which the Series 1998-1 Class C
Ownership Interest would have been reduced below zero. In the event that such
reduction would cause the Series 1998-1 Class B Ownership Interest to be a
negative number, the Series 1998-1 Class B Ownership Interest will be reduced to

zero and the Series 1998-1 Class A Ownership Interest (after giving effect to
reductions therein for any Series 1998-1 Class A Charge-Offs and Series 1998-1
Reallocated Principal Collections for such Transfer Date) will be reduced (but
not below zero) by the amount by which the Series 1998-1 Class B Ownership
Interest would have been reduced below zero. Any such reduction in the Series
1998-1 Class A Ownership Interest will have the effect of slowing or reducing
the return of principal and payment of interest to the Series 1998-1 Class A
Certificateholders. If the Series 1998-1 Class B Ownership Interest and the
Series 1998-1 Class C Ownership Interest have both been reduced to zero, the
Series



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<PAGE>



1998-1 Class A Certificateholders will bear directly the credit risks associated
with their interests in the Trust. See "--Defaulted Loans; Charge-Offs."

      With respect to each Transfer Date, the Servicer will determine the
"Series 1998-1 Class B Required Amount," which will be equal to the amount, if
any, by which the sum of (a) Series 1998-1 Class B Monthly Interest due on the
related Distribution Date, (b) Series 1998-1 Class B Additional Interest due on
such Distribution Date, (c) the Series 1998-1 Class B Servicing Fee for the
related Monthly Period and any overdue Series 1998-1 Class B Servicing Fee, (d)
the Series 1998-1 Class B Default Amount, if any, for such Transfer Date and (e)
Series 1998-1 Class B Prior Period Interest, if any, exceeds the Series 1998-1
Class B Available Funds for the related Monthly Period. If the Series 1998-1
Class B Required Amount is greater than zero, funds on deposit in the Series
1998-1 Yield Enhancement Account not required to pay the Series 1998-1 Class A
Required Amount will be used to fund the Series 1998-1 Class B Required Amount
with respect to such Transfer Date. If funds on deposit in the Series 1998-1
Yield Enhancement Account are insufficient to fund the remaining Series 1998-1
Class B Required Amount, then Series 1998-1 Reallocated Principal Collections
not required to fund the Series 1998-1 Class A Required Amount for the related
Monthly Period will be used to fund the Series 1998-1 Class B Required Amount.
If such Series 1998-1 Reallocated Principal Collections with respect to the
related Monthly Period are insufficient to fund the remaining Series 1998-1
Class B Required Amount, then the Series 1998-1 Class C Ownership Interest
(after giving effect to reductions therein for any Series 1998-1 Class C
Charge-Offs and Series 1998-1 Reallocated Principal Collections for the related
Transfer Date) will be reduced by the amount of such deficiency. In the event
that such a reduction would cause the Series 1998-1 Class C Ownership Interest
to be a negative number, the Series 1998-1 Class C Ownership Interest will be
reduced to zero, and the Series 1998-1 Class B Ownership Interest (after giving
effect to reductions therein for any Series 1998-1 Class B Charge-Offs and
Series 1998-1 Reallocated Principal Collections for such Transfer Date) will be
reduced (but not below zero) by the amount by which the Series 1998-1 Class C
Ownership Interest would have been reduced below zero. Any such reduction in the
Series 1998-1 Class B Ownership Interest will have the effect of slowing or
reducing the return of principal and payment of interest to the Series 1998-1

Class B Certificateholders. If the Series 1998-1 Class C Ownership Interest has
been reduced to zero, the Series 1998-1 Class B Certificateholders will bear
directly the credit risks associated with their interests in the Trust. See
"--Defaulted Loans; Charge-Offs."

      With respect to each Transfer Date, the Servicer will determine the
"Series 1998-1 Class C Required Amount," which will be equal to the amount, if
any, by which the sum of (a) Series 1998-1 Class C Monthly Interest due on the
related Distribution Date, (b) Series 1998-1 Class C Additional Interest due on
such Distribution Date, (c) the Series 1998-1 Class C Servicing Fee for the
related Monthly Period and any overdue Series 1998-1 Class C Servicing Fee, (d)
the Series 1998-1 Class C Default Amount, if any, for such Transfer Date, and
(e) Series 1998-1 Class C Prior Period Interest, if any, exceeds the Series
1998-1 Class C Available Funds for the related Monthly Period.

      Reductions of the Series 1998-1 Class A Ownership Interest or Series
1998-1 Class B Ownership Interest described above on any Transfer Date shall be
reimbursed by, and the Series 1998-1 Class A Ownership Interest or Series 1998-1
Class B Ownership Interest increased to the extent of, funds on deposit in the
Series 1998-1 Yield Enhancement Account available for such purposes on each
subsequent Transfer Date. See "--Series 1998-1 Yield Enhancement Account." If
and when such reductions of the Series 1998-1 Class A Ownership Interest and
Series 1998-1 Class B Ownership Interest have been fully reimbursed, reductions
of the Series 1998-1 Class C Ownership Interest shall be reimbursed in a similar
manner until reimbursed in full.

      "Series 1998-1 Reallocated Class A Principal Collections" for any Monthly
Period means collections of Principal Receivables allocable to the Series 1998-1
Class A Ownership Interest for such Monthly Period in an


                                       77

<PAGE>



amount not to exceed the amount required to fund the Series 1998-1 Class A
Required Amount and the Series 1998-1 Class B Required Amount for the related
Transfer Date; provided, however, that such amount will not exceed the Series
1998-1 Class A Ownership Interest after giving effect to any Series 1998-1 Class
A Charge-Offs for such Transfer Date.

      "Series 1998-1 Reallocated Class B Principal Collections" for any Monthly
Period means collections of Principal Receivables allocable to the Series 1998-1
Class B Ownership Interest for such Monthly Period in an amount not to exceed
the amount applied to fund the Series 1998-1 Class A Required Amount and the
Series 1998-1 Class B Required Amount, if any; provided, however, that such
amount will not exceed the Series 1998-1 Class B Ownership Interest after giving
effect to any Series 1998-1 Class B Charge-Offs for the related Transfer Date.

      "Series 1998-1 Reallocated Class C Principal Collections" for any Monthly
Period means collections of Principal Receivables allocable to the Series 1998-1
Class C Ownership Interest for such Monthly Period in an amount not to exceed

the amount applied to fund the Series 1998-1 Class A Required Amount and the
Series 1998-1 Class B Required Amount, if any; provided, however, that such
amount will not exceed the Series 1998-1 Class C Ownership Interest after giving
effect to any Series 1998-1 Class C Charge-Offs for the related Transfer Date.

      "Series 1998-1 Reallocated Principal Collections" for any Monthly Period
means the sum of the Series 1998-1 Reallocated Series 1998-1 Class A Principal
Collections, the Series 1998-1 Reallocated Class B Principal Collections and the
Series 1998-1 Reallocated Class C Principal Collections, in each case for such
Monthly Period.

Application of Collections

      On each Distribution Date, the Trustee, acting pursuant to the Servicer's
instructions, will apply funds on deposit in the Series 1998-1 Distribution
Account (consisting of Series 1998-1 Class A Available Funds, Series 1998-1
Class B Available Funds, Series 1998-1 Class C Available Funds, Series 1998-1
Available Investor Principal Collections (including allocable amounts from the
Excess Funding Account), Series 1998-1 Reallocated Principal Collections, and
amounts from the Series 1998-1 Yield Enhancement Account, in each case to the
extent deposited into the Series 1998-1 Distribution Account for purposes of
making distributions to Series 1998-1 Certificateholders) to pay the following
amounts (in each case determined as of the immediately preceding Transfer Date)
in the following order of priority:

      (a)  to the Series 1998-1 Class A Certificateholders:

           (i)  Series 1998-1 Class A Monthly Interest;

           (ii) Series 1998-1 Class A Additional Interest, if any;

           (iii) Series 1998-1 Class A Prior Period Interest, if any, to the
      extent distributable on such Distribution Date;

      (b)  to the Series 1998-1 Class B Certificateholders:

           (i)  Series 1998-1 Class B Monthly Interest;


                                       78


<PAGE>



           (ii) Series 1998-1 Class B Additional Interest, if any;

           (iii) Series 1998-1 Class B Prior Period Interest, if any, to the
      extent distributable on such Distribution Date;

      (c) during the Series 1998-1 Revolving Period, to the Series 1998-1 Class
C Certificateholders:


           (i)  Series 1998-1 Class C Monthly Interest;

           (ii) Series 1998-1 Class C Additional Interest, if any;

           (iii) Series 1998-1 Class C Prior Period Interest, if any, to the
      extent distributable on such Distribution Date;

      (d) during the Series 1998-1 Controlled Amortization Period or the Series
1998-1 Rapid Amortization Period:

           (i) to the Series 1998-1 Class A Certificateholders, Series 1998-1
      Class A Monthly Principal;

           (ii) to the Series 1998-1 Class B Certificateholders, Series 1998-1
      Class B Monthly Principal;

           (iii) to the Series 1998-1 Class C Certificateholders, the amounts
      set forth in clause (c) above (in the order of priority set forth in such
      clause); and

           (iv) to the Series 1998-1 Class C Certificateholders, Series 1998-1
      Class C Monthly Principal.

      "Series 1998-1 Class A Monthly Interest" with respect to any Transfer Date
will equal the product of (i) the Series 1998-1 Class A Certificate Rate for the
related Interest Period, (ii) the actual number of days in such Interest Period
divided by 360 and (iii) the Series 1998-1 Class A Ownership Interest on the
related Record Date; provided, however, with respect to the first Distribution
Date, Series 1998-1 Class A Monthly Interest shall be equal to the interest
accrued on the Series 1998-1 Class A Initial Ownership Interest at the
applicable Series 1998-1 Class A Certificate Rate for the period from the
Closing Date through [February 15, 1998.]

      "Series 1998-1 Class B Monthly Interest" with respect to any Transfer Date
will equal the product of (i) the Series 1998-1 Class B Certificate Rate for the
related Interest Period, (ii) the actual number of days in such Interest Period
divided by 360 and (iii) the Series 1998-1 Class B Ownership Interest on the
related Record Date; provided, however, with respect to the first Distribution
Date, Series 1998-1 Class B Monthly Interest shall be equal to the interest
accrued on the Series 1998-1 Class B Initial Ownership Interest at the
applicable Series 1998-1 Class B Certificate Rate for the period from the
Closing Date through [February 15, 1998.]

      "Series 1998-1 Class C Monthly Interest" with respect to any Transfer Date
will equal the product of (i) the Series 1998-1 Class C Certificate Rate for the
related Interest Period, (ii) the actual number of days in such Interest Period
divided by 360, and (iii) the Series 1998-1 Class C Ownership Interest on the
related Record Date; provided, however, with respect to the first Distribution
Date, Series 1998-1 Class C Monthly Interest shall be equal to the interest
accrued on the Series 1998-1 Class C Initial Ownership Interest at the
applicable Series 1998-1 Class C Certificate Rate for the period from the
Closing Date through [February 15, 1998.]



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<PAGE>



      "Series 1998-1 Class A Prior Period Interest," with respect to each
Interest Period in which the Series 1998-1 Class A Certificates would have
accrued interest on the Series 1998-1 Class A Ownership Interest had such Series
1998-1 Class A Ownership Interest not been reduced for reasons other than the
payment of principal to the Series 1998-1 Class A Certificateholders, will equal
the product of (i) the Series 1998-1 Class A Certificate Rate in effect during
such Interest Period plus 2% per annum, (ii) the actual number of days in such
Interest Period divided by 360 and (iii) the amount by which the Series 1998-1
Class A Ownership Interest was less than the Series 1998-1 Class A Ownership
Interest during such Interest Period for reasons other than the payment of
principal to the Series 1998-1 Class A Certificateholders; provided, however,
that Series 1998-1 Class A Prior Period Interest will not be distributed until
the Distribution Date(s) following the Transfer Date on which the Series 1998-1
Class A Ownership Interest has been reimbursed in full for any reductions.

      "Series 1998-1 Class B Prior Period Interest," with respect to each
Interest Period in which the Series 1998-1 Class B Certificates would have
accrued interest on the Series 1998-1 Class B Ownership Interest had such Series
1998-1 Class B Ownership Interest not been reduced for reasons other than the
payment of principal to the Series 1998-1 Class B Certificateholders, will equal
the product of (i) the Series 1998-1 Class B Certificate Rate in effect during
such Interest Period plus 2% per annum, (ii) the actual number of days in such
Interest Period divided by 360 and (iii) the amount by which the Series 1998-1
Class B Ownership Interest was less than the Series 1998-1 Class B Ownership
Interest during such Interest Period for reasons other than the payment of
principal to the Series 1998-1 Class B Certificateholders; provided, however,
that Series 1998-1 Class B Prior Period Interest will not be distributed until
the Distribution Date(s) following the Transfer Date on which the Series 1998-1
Class B Ownership Interest has been reimbursed in full for any reductions.

      "Series 1998-1 Class C Prior Period Interest," with respect to each
Interest Period in which the Series 1998-1 Class C Certificates would have
accrued interest on the Series 1998-1 Class C Ownership Interest had such Series
1998-1 Class C Ownership Interest not been reduced for reasons other than the
payment of principal to the Series 1998-1 Class C Certificateholders, will equal
the product of (i) the Series 1998-1 Class C Certificate Rate in effect during
such Interest Period plus 2% per annum, (ii) the actual number of days in such
Interest Period divided by 360 and (iii) the amount by which the Series 1998-1
Class C Ownership Interest was less than the Series 1998-1 Class C Ownership
Interest during such Interest Period for reasons other than the payment of
principal to the Series 1998-1 Class C Certificateholders; provided, however,
that Series 1998-1 Class C Prior Period Interest will not be distributed until
the Distribution Date(s) following the Transfer Date on which the Series 1998-1
Class C Ownership Interest has been reimbursed in full for any reductions.

      "Series 1998-1 Class C Available Funds" means, with respect to any Monthly
Period, an amount equal to the Series 1998-1 Class C Floating Allocation of
collections of Finance Charge Receivables allocated to the Series 1998-1

Certificateholders Ownership Interests with respect to such Monthly Period.

      "Series 1998-1 Class A Monthly Principal" with respect to any Transfer
Date relating to (i) the Series 1998-1 Class A Controlled Amortization Period,
prior to the payment in full of the Series 1998-1 Class A Ownership Interest,
will equal the least of (a) the Series 1998-1 Available Investor Principal
Collections on deposit in the Principal Account with respect to such Transfer
Date, (b) the Series 1998-1 Controlled Distribution Amount for the related
Distribution Date, and (c) the Series 1998-1 Class A Ownership Interest on such
Transfer Date, and (ii) the Series 1998-1 Rapid Amortization Period, prior to
payment in full of the Series 1998-1 Class A Ownership Interest, will equal the
lesser of (a) Series 1998-1 Available Investor Principal Collections on deposit
in the Principal Account with respect to such Transfer Date, and (b) the Series
1998-1 Class A Ownership Interest on such Transfer Date.



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<PAGE>



      "Series 1998-1 Class B Monthly Principal" with respect to any Transfer
Date relating to (i) the Series 1998-1 Class B Controlled Amortization Period,
after the Series 1998-1 Class A Ownership Interest has been paid in full (after
taking into account payments to be made on the related Distribution Date in
respect of the Series 1998-1 Class A Certificates), will equal the least of (a)
the Series 1998-1 Available Investor Principal Collections on deposit in the
Principal Account with respect to such Transfer Date (minus the portion of such
Series 1998-1 Available Investor Principal Collections applied to Series 1998-1
Class A Monthly Principal on such Transfer Date), (b) the Series 1998-1
Controlled Distribution Amount for the related Distribution Date (minus the
portion of such Series 1998-1 Controlled Distribution Amount applied to Series
1998-1 Class A Monthly Principal on such Transfer Date), and (c) the Series
1998-1 Class B Ownership Interest for such Transfer Date, and (ii) the Series
1998-1 Rapid Amortization Period, after the Series 1998-1 Class A Ownership
Interest has been paid in full (after taking into account payments to be made on
the related Distribution Date in respect of the Series 1998-1 Class A
Certificates), will equal the lesser of (a) Series 1998-1 Available Investor
Principal Collections on deposit in the Principal Account with respect to such
Transfer Date (minus the portion of such Series 1998-1 Available Investor
Principal Collections applied to Series 1998-1 Class A Monthly Principal on such
Transfer Date), and (b) the Series 1998-1 Class B Ownership Interest on such
Transfer Date.

      "Series 1998-1 Class C Monthly Principal" with respect to any Transfer
Date relating to (i) the Series 1998-1 Class C Controlled Amortization Period,
after the Series 1998-1 Class B Ownership Interest has been paid in full (after
taking into account payments to be made on the related Distribution Date in
respect of the Series 1998-1 Class A Certificates and the Series 1998-1 Class B
Certificates), will equal the least of (a) the Series 1998-1 Available Investor
Principal Collections on deposit in the Principal Account with respect to such
Transfer Date (minus the portion of such Series 1998-1 Available Investor

Principal Collections applied to Series 1998-1 Class A Monthly Principal, if
any, and Series 1998-1 Class B Monthly Principal on the related Distribution
Date), (b) the Series 1998-1 Controlled Distribution Amount for the related
Distribution Date (minus the portion of such Series 1998-1 Controlled
Distribution Amount applied to Series 1998-1 Class A Monthly Principal and
Series 1998-1 Class B Monthly Principal on such Transfer Date), and (c) the
Series 1998-1 Class C Ownership Interest for such Transfer Date, and (ii) the
Series 1998-1 Rapid Amortization Period, after the Series 1998-1 Class B
Ownership Interest has been paid in full (after taking into account payments to
be made on such Distribution Date in respect of the Series 1998-1 Class A
Certificates and the Series 1998-1 Class B Certificates), will equal the lesser
of (a) Series 1998-1 Available Investor Principal Collections on deposit in the
Principal Account with respect to such Transfer Date (minus the portion of such
Series 1998-1 Available Investor Principal Collections applied to Series 1998-1
Class A Monthly Principal, if any, and Series 1998-1 Class B Monthly Principal
on such Distribution Date), and (b) the Series 1998-1 Class C Ownership Interest
on such Transfer Date.

Final Payment of Principal; Termination of Trust

      The Series 1998-1 Certificates will be subject to optional repurchase by
the Transferor (a "Cleanup Call") on any Distribution Date on or after which the
Series 1998-1 Certificateholders Ownership Interests are reduced to an amount
less than or equal to [10% of $_________] (the "Series 1998-1 Initial
Certificateholders Ownership Interests"). Such Cleanup Call is conditioned upon
(i) deposit into the Series 1998-1 Distribution Account of the repurchase price
by or on behalf of the Transferor and (ii) receipt by the Trustee of an
acceptable opinion of counsel to the effect that such deposit would not
constitute a fraudulent transfer of the Transferor. The repurchase price will
generally be equal to the Series 1998-1 Certificateholders Ownership Interests,
plus accrued and unpaid interest on the Series 1998-1 Certificates at the
respective Series 1998-1 Certificate Rates through the date preceding the
Distribution Date on which the repurchase occurs, less the amounts, if any, on
deposit at such Distribution Date in the Series 1998-1 Distribution Account for
the payment of principal and interest thereon. The net proceeds of such Cleanup
Call and any collections on the Receivables available for such purpose will be
distributed pro rata and in accordance with the priority for each class under
the Agreement to the Series 1998-1



                                       81

<PAGE>



Certificateholders on the Distribution Date following the Monthly Period in
which such Cleanup Call occurs as final payment of the Series 1998-1
Certificates. The Agreement provides that the final distribution of principal
and interest on the Offered Certificates will be made on the [_________]
Distribution Date (the "Series 1998-1 Termination Date").

      Unless the Servicer and the holder of the Transferor Certificate instruct

the Trustee otherwise, the Trust will terminate on the earliest of: (a) the day
after the Distribution Date with respect to any Series following the day on
which funds shall have been deposited in the applicable distribution account for
each such Series sufficient to pay in full (i) the aggregate certificateholders
ownership interests plus accrued interest thereon at the applicable certificate
rates through the applicable interest accrual period prior to the Distribution
Date with respect to each such Series and (ii) all amounts owed to each person
that provides Enhancement; (b) if a trust extension has occurred, the extended
trust termination date, which shall be no later than the earlier of December 31,
2034 and the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the father of the late President of the United
States, living on the date of the Agreement; or (c) immediately following the
liquidation of all of the Receivables, as provided under "--Pay Out Events"
below, subsequent to the insolvency of the Transferor, AIC or AICCO. Upon the
termination of the Trust, payment of all amounts due under the Agreement and the
surrender of the Transferor Certificate, the Trustee shall convey to the holder
of the Transferor Certificate all right, title and interest of the Trust in and
to the Receivables and other assets of the Trust.

Pay Out Events

      A Pay Out Event may occur during either the Series 1998-1 Revolving Period
or the Series 1998-1 Controlled Amortization Period, which is scheduled to
commence at the end of the Series 1998-1 Revolving Period on [______________].
The Series 1998-1 Rapid Amortization Period will commence on the day that a Pay
Out Event occurs. A "Pay Out Event" refers to any of the following events:

           (a) failure on the part of either of the Original Transferors or the
      Transferor (i) to make any payment or deposit on the date required under
      the Agreement (or within the applicable grace period which shall not
      exceed five business days) or (ii) to observe or perform in any material
      respect any other covenants or agreements of either of the Original
      Transferors or the Transferor set forth in the Agreement or the Series
      1998-1 Supplement, which failure has a material adverse effect on the
      Series 1998-1 Certificateholders (which determination shall be made
      without reference to whether any funds are available in the Series 1998-1
      Yield Enhancement Account or by reason of the subordination of any class
      of the Series 1998-1 Certificates) and continues unremedied for a period
      of 60 days after written notice and continues to materially and adversely
      affect the interests of the Series 1998-1 Certificateholders (which
      determination shall be made without reference to whether any funds are
      available in the Series 1998-1 Yield Enhancement Account or by reason of
      the subordination of any class of the Series 1998-1 Certificates) for such
      period;

           (b) any representation or warranty made by either of the Original
      Transferors or the Transferor in the Agreement or the 1998-1 Supplement,
      or any information required to be given by either of the Original
      Transferors or the Transferor to the Trustee to identify the Receivables,
      proves to have been incorrect in any material respect when made and which
      continues to be incorrect in any material respect for a period of 60 days
      after written notice and as a result of which the interests of the Series
      1998-1 Certificateholders are materially and adversely affected (which
      determination shall be made without reference to whether any funds are

      available in the Series 1998-1 Yield Enhancement Account or by reason of
      the subordination of any class of the Series 1998-1 Certificates) and
      continue to be materially and adversely affected (which determination
      shall be made without reference to whether any funds are available in the
      Series 1998-1 Yield Enhancement



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<PAGE>



      Account or by reason of the subordination of any class of the Series
      1998-1 Certificates) for such period; provided, however, that a Pay Out
      Event described in this subparagraph (b) shall not be deemed to occur if
      the related Original Transferor or the Transferor has accepted
      reassignment of the related Receivable or all such Receivables, if
      applicable, during such period in accordance with the provisions of the
      Agreement;

           (c) if the Series 1998-1 Annualized Monthly Excess Spread Amount is
      less than 400 basis points for three consecutive Monthly Periods;

           (d) the Transferor Ownership Interest as of the fourth business day
      prior to each Transfer Date does not at least equal the Minimum Transferor
      Ownership Interest as of the end of the immediately preceding Monthly
      Period and on the immediately following Transfer Date the Transferor shall
      have failed to transfer Additional Receivables to the Trust pursuant to
      the Agreement;

           (e) any Servicer Default occurs which would have a material adverse
      effect on the Series 1998-1 Certificateholders (which determination shall
      be made without reference to whether any funds are available in the Series
      1998-1 Yield Enhancement Account or by reason of the subordination of any
      class of the Series 1998-1 Certificates);

           (f) if the Monthly Payment Rate is less than 14% for three
      consecutive Monthly Periods;

           (g) a Financed Premium Percentage of more than 90% in respect of
      Additional Receivables transferred to the Trust for three consecutive
      Monthly Periods;

           (h) certain events of bankruptcy or insolvency, relating to either of
      the Original Transferors or the Transferor;

           (i) the Transferor becomes unable for any reason to transfer
      Receivables to the Trust in accordance with the provisions of the
      Agreement; and

           (j) AIG shall fail to meet its obligations under either of the
      Support Agreements in any respect or AIC shall fail to meet its support

      obligations with respect to AICCO under the Agreement or the AIC Support
      Agreement or such support obligations of AIC shall have been modified,
      amended or terminated, except as otherwise expressly permitted by the
      terms of the Agreement.

      In the case of any event described in clause (a), (b) or (e) above, after
any applicable grace period, a Pay Out Event will be deemed to have occurred
with respect to the Series 1998-1 Certificates on the tenth Business Day
thereafter unless prior to such day holders of Series 1998-1 Certificates
evidencing undivided interests aggregating not less than 50% of the Series
1998-1 Certificateholders Ownership Interests notify the Trustee, the Transferor
and the Servicer in writing that a Pay Out Event should not occur. In the case
of any event described in clause (h), (i) or (j), a Pay Out Event with respect
to all Series then outstanding, and in the case of any event described in clause
(c), (d), (f) or (g), a Pay Out Event with respect to only the Series 1998-1
Certificates, will be deemed to have occurred without any notice or other action
on the part of the Trustee or the Series 1998-1 Certificateholders or all
certificateholders of all outstanding Series, as appropriate, immediately upon
the occurrence of such event. On the date on which a Pay Out Event is deemed to
have occurred, the Series 1998-1 Rapid Amortization Period will commence. In
such event, distributions of principal to the Series 1998-1 Certificateholders
will begin on the first Distribution Date following the date on which such Pay
Out Event occurred. If, because of the occurrence of a Pay Out Event, the Series
1998-1 Rapid Amortization Period begins earlier than [____________], the
scheduled commencement of the Series 1998-1 Controlled Amortization Period,



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Series 1998-1 Certificateholders will begin receiving distributions of principal
earlier than they otherwise would have, which may shorten the average life of
the Series 1998-1 Certificates.

      In addition to the consequences of a Pay Out Event discussed above, if a
bankruptcy-related event involving AIC, AICCO or the Transferor were to occur,
then a Pay Out Event could occur with respect to all Series then outstanding
and, pursuant to the Agreement, Additional Receivables would not be transferred
to the Trust, and the Trustee would be obligated to sell the Receivables (unless
certificateholders holding more than 50% of the certificateholders ownership
interests of each Series outstanding (or, with respect to any Series with two or
more classes, more than 50% of each class) instruct otherwise) in accordance
with the Agreement in a commercially reasonable manner and on commercially
reasonable terms which may cause early termination of the Trust and a loss to
certificateholders of each such Series (including the Series 1998-1
Certificateholders) if the proceeds from such early sale allocable to such
Series, if any, and the amounts available under any Enhancement applicable to
such Series were insufficient to pay certificateholders of such Series in full.
If a Pay Out Event occurs that is due either to the bankruptcy of AIC, AICCO or

the Transferor or the appointment of a trustee for AIC, AICCO or the Transferor,
the trustee would have the power to prevent the early sale, liquidation or
disposition of the Receivables and the commencement of the Series 1998-1 Rapid
Amortization Period. A bankruptcy trustee may also have the power to cause the
early sale of the Receivables and the early retirement of the Offered
Certificates, to prohibit the continued transfer of Additional Receivables to
the Trust, and to repudiate the servicing obligations of AIC or AICCO. The
proceeds from the sale of the Receivables will be treated as collections on the
Receivables and allocated accordingly among the certificateholders of all
outstanding Series and the Transferor.

      "Series 1998-1 Annualized Monthly Excess Spread Amount" shall mean, in
respect of any Monthly Period, the number of basis points calculated by dividing
(i) the sum of (A) the amount of collections in respect of Finance Charge
Receivables allocable to Series 1998-1 Certificateholders for such Monthly
Period, plus (B) the Series 1998-1 Available Yield Enhancement Amount for the
immediately succeeding Transfer Date, minus (C) the aggregate Series 1998-1
Investor Default Amount for such Monthly Period minus (D) the Series 1998-1
Investor Servicing Fee payable on such Transfer Date minus (E) the aggregate
amount payable to Series 1998-1 Certificateholders in respect of interest on the
immediately succeeding Distribution Date by (ii) the Series 1998-1
Certificateholders Ownership Interests as of the end of such Monthly Period and
multiplying the resulting quotient by 12.

      "Financed Premium Percentage" means, in respect of any Monthly Period, the
ratio (expressed as a percentage) of the aggregate of the portions of premiums
financed or committed to be financed, as of the respective dates of origination
of the related Loans, of all Additional Receivables transferred to the Trust
during such Monthly Period to the aggregate of the premiums paid or committed to
be paid with respect to such Loans.

      "Monthly Payment Rate" shall mean, in respect of any Monthly Period, a
fraction (expressed as a percentage), the numerator of which shall equal the
aggregate of all collections received by the Trust in respect of the Receivables
during such Monthly Period and the denominator of which shall equal the
aggregate amount of Principal Receivables in the Trust at the end of the
preceding Monthly Period.

           Upon the occurrence of a Pay Out Event, if more than 10% of the
principal balance of the Receivables have a remaining maturity of more than
twelve months, the Transferor will purchase from the Trust sufficient
Receivables with a remaining maturity of more than twelve months, at a price
equal to the principal amount thereof plus accrued but unpaid Finance Charges to
the date of purchase, so that the percentage of Receivables having a remaining
maturity as of the date of purchase of more than twelve months shall be no more
than 10% of the principal balance of Receivables remaining in the Trust after
giving effect to such purchase.



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Servicing Compensation and Payment of Expenses

      The Series 1998-1 Investor Servicing Fee (as defined herein) will be
funded from collections of Finance Charge Receivables allocated to the Series
1998-1 Certificateholders Ownership Interests and will be paid each month from
amounts so allocated and on deposit in the Finance Charge Account and, if
necessary, from funds on deposit in the Series 1998-1 Yield Enhancement Account
available for such purpose. The remainder of the servicing fee for the Trust
will be allocable to the Transferor Ownership Interest and the
certificateholders ownership interests of any other Series issued by the Trust.
Neither the Trust nor the Series 1998-1 Certificateholders will have any
obligation to pay the portion of the servicing fee allocable to the Transferor
Ownership Interest.

      For so long as AIC and AICCO are collectively the Servicer, then the
Servicer will not be paid the Servicing Fee. If AIC and AICCO cease to be the
Servicer, then the share of the Servicing Fee allocable to the Series 1998-1
Certificateholders Ownership Interests with respect to any Transfer Date (the
"Series 1998-1 Investor Servicing Fee") shall be equal to the sum of the Series
1998-1 Class A Servicing Fee, the Series 1998-1 Class B Servicing Fee and the
Series 1998-1 Class C Servicing Fee with respect to such date.

      The share of the Series 1998-1 Investor Servicing Fee allocable to the
Series 1998-1 Class A Certificateholders with respect to any Transfer Date in
which AIC and AICCO are not the Servicer (the "Series 1998-1 Class A Servicing
Fee") shall be equal to one-twelfth of the product of (a) the Series 1998-1
Class A Floating Allocation, (b) 0.50% (the "Series 1998-1 Net Servicing Fee
Rate") and (c) the Series 1998-1 Certificateholders Ownership Interests as of
the last day of the Monthly Period preceding such Transfer Date. The share of
the Series 1998-1 Investor Servicing Fee allocable to the Series 1998-1 Class B
Certificateholders with respect to any Transfer Date in which AIC and AICCO are
not the Servicer (the "Series 1998-1 Class B Servicing Fee") shall be equal to
one-twelfth of the product of (a) the Series 1998-1 Class B Floating Allocation,
(b) the Series 1998-1 Net Servicing Fee Rate and (c) the Series 1998-1
Certificateholders Ownership Interests as of the last day of the Monthly Period
preceding such Transfer Date. The share of the Series 1998-1 Investor Servicing
Fee allocable to the Series 1998-1 Class C Ownership Interest with respect to
any Transfer Date (the "Series 1998-1 Class C Servicing Fee") shall be equal to
one-twelfth of the product of (a) the Series 1998-1 Class C Floating Allocation,
(b) the Series 1998-1 Net Servicing Fee Rate and (c) the Series 1998-1
Certificateholders Ownership Interests as of the last day of the Monthly Period
preceding such Transfer Date. The Series 1998-1 Class A Servicing Fee, Series
1998-1 Class B Servicing Fee and Series 1998-1 Class C Servicing Fee shall be
payable to the Servicer solely to the extent amounts are available for
distribution in respect thereof.

      The Servicer will pay certain expenses incurred in connection with
servicing the Loans including, without limitation, payment of the fees and
disbursements of the Trustee and independent certified public accountants and
other fees which are not expressly stated in the Agreement to be payable by the
Trust, the Series 1998-1 Certificateholders or the Series 1994-1
Certificateholders other than federal, state and local income and franchise

taxes, if any, of the Trust.

Collection and Other Servicing Procedures

      Pursuant to the Agreement, the Servicer is responsible for servicing,
collecting, enforcing and administering the Loans in accordance with the
Servicer's policies and procedures for servicing premium finance loan
receivables.

      Servicing activities performed by the Servicer include collecting and
recording payments, communicating with obligors, investigating payment
delinquencies, providing billing records to obligors and maintaining internal



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<PAGE>



records with respect to each premium finance loan. Managerial and custodial
services performed by the Servicer on behalf of the Trust include providing
assistance in any inspections of the documents and records relating to the
Receivables by the Trustee pursuant to the Agreement, maintaining the
agreements, documents and files relating to the Receivables as custodian for the
Trust and providing related data processing and reporting services for
Certificateholders and on behalf of the Trustee.

Servicer Covenants

      In the Agreement, the Servicer covenants with the certificateholders of
each outstanding Series and the Trustee, as to each Receivable, that: (a) it
will duly fulfill all obligations on its part to be fulfilled under or in
connection with the related Loan and will maintain in effect all licenses and
qualifications required in order to service such Receivable and the related Loan
and will comply with all requirements of law in servicing each Receivable and
the related Loan, the failure to comply with which would have a material adverse
effect on the certificateholders of any outstanding Series; (b) it will not
permit any rescission or cancellation of the Loans, except in accordance with
its customary and usual servicing procedures or as ordered by a court of
competent jurisdiction or other governmental authority; (c) it will take no
action which, nor will it omit to take any action the omission of which, would
materially impair the rights of the certificateholders of any outstanding Series
in the Receivables or the related Loans; and (d) it will not reschedule, revise
or defer payments due on the Loans except in accordance with its customary and
usual servicing procedures.

      Under the terms of the Agreement, a Receivable will be assigned and
transferred or reassigned and transferred to the Servicer and such Receivable
shall no longer be included as a Receivable if the Servicer discovers, or
receives written notice from the Trustee, that any covenant of the Servicer set
forth above has not been complied with and such noncompliance has not been cured
within 60 days thereafter and has a material adverse effect on the interest of

the certificateholders of any outstanding Series in such Receivable. Such
reassignment and retransfer shall be made when the Servicer deposits an amount
equal to the amount of such Receivable in the Collection Account. The amount of
such deposit shall be for allocation as collections pursuant to the Agreement.
In either case, this retransfer and reassignment or transfer and assignment to
the Servicer constitutes the sole remedy available to the certificateholders of
each outstanding Series if such covenant or warranty of the Servicer is not
satisfied. In either case, the Trust's interest in any such assigned Receivables
shall be automatically assigned to the Servicer.

Certain Matters Regarding the Servicer, the Transferor and the Original
Transferors

      The Servicer may not resign from its obligations and duties under the
Agreement, except upon determination that performance of its duties is no longer
permissible, and there is no reasonable action the Servicer could take to make
the performance of such duties permissible, under applicable law and except as
described below. No such resignation will become effective until the Trustee or
a successor to the Servicer has assumed the Servicer's responsibilities and
obligations under the Agreement. Notwithstanding the foregoing, each of AIC and
AICCO may transfer its servicing obligations to any of its affiliates (which
meets certain eligibility standards set forth in the Agreement) or, subject to
certain conditions set forth in the Agreement, to any other entity which each
Rating Agency has advised in writing will not result in the reduction or
withdrawal of its then-existing rating of the Series 1998-1 Certificates and be
relieved of its obligations and duties under the Agreement.

      The Agreement provides that the Servicer will indemnify the Trust, for the
benefit of the certificateholders of all Series, and the Trustee from and
against any loss, liability, expense, damage or injury suffered or sustained by
reason of any acts or omissions or alleged acts or omissions of the Servicer
with respect to the activities of the Trust or the Trustee pursuant to the
Agreement; provided, however, that the Servicer shall not indemnify (a) the



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Trustee for liabilities imposed by or resulting from or by reason of fraud,
negligence, breach of fiduciary duty or willful misconduct by the Trustee in the
performance of its duties under the Agreement, (b) the Trust, the Series 1998-1
Certificateholders or the Certificate Owners for liabilities arising from
actions taken by the Trustee at the request of Series 1998-1 Certificateholders,
(c) the Trust, the Series 1998-1 Certificateholders or the Certificate Owners
for any losses, claims, damages or liabilities incurred by any Series 1998-1
Certificateholder in its capacity as an investor, including without limitation
losses incurred as a result of Defaulted Loans or (d) the Trust, the Series
1998-1 Certificateholders or the Certificate Owners for any liabilities, costs
or expenses of the Trust, the Series 1998-1 Certificateholders or the
Certificate Owners arising under any tax law, including without limitation any

United States federal, state or local or foreign income or franchise tax or any
other tax imposed on or measured by income (or any interest or penalties with
respect thereto or arising from a failure to comply therewith) required to be
paid by the Trust, the Series 1998-1 Certificateholders or the Certificate
Owners in connection therewith to any taxing authority (except to the extent
that such liabilities, taxes or expenses arose as a result of the Servicer's
breach of certain obligations set forth in the Agreement).

      The Agreement provides that the Transferor with respect to the Future
Receivables and the Original Transferor with respect to the Existing Receivables
will indemnify the Trust, for the benefit of the certificateholders of all
Series, and the Trustee from and against any loss, liability, expense, damage or
injury suffered or sustained by reason of any violation by the Trust, the
Trustee or the Servicer of any state premium finance licensing laws with respect
to any Receivable; provided, however, that the Transferor and the Original
Transferors shall not indemnify (a) the Trustee for liabilities imposed by
reason of fraud, negligence, or willful misconduct by the Trustee in the
performance of its duties under the Agreement or (b) the Trust, the Series
1998-1 Certificateholders or the Certificate Owners for liabilities, costs or
expenses of the Trust arising from actions taken by the Trustee at the request
of Series 1998-1 Certificateholders. Any such indemnification shall not be
payable from the assets of the Trust.

      Under the Agreement, the Transferor has agreed to be liable directly to an
injured party for the entire amount of any losses, claims, damages or
liabilities (other than those incurred by a certificateholder in the capacity of
an investor in the Series 1998-1 Certificates or the certificates of any other
Series) arising out of or based on the arrangement created by the Agreement as
though such agreement created a partnership under the New York Uniform
Partnership Act in which the Transferor were a general partner. The Transferor
has agreed to pay, indemnify and hold harmless each Series 1998-1
Certificateholder against and from such losses, claims, damages or liabilities
except to the extent that they arise from any action by such holder.

      The Agreement provides that neither the Original Transferors, the
Transferor, the Servicer nor any of their respective directors, officers,
employees or agents will be under any other liability to the Trust, the Series
1998-1 Certificateholders or any other person for any action taken, or for
refraining from taking any action, in good faith pursuant to the Agreement.
Neither the Original Transferors, the Transferor, the Servicer nor any of their
respective directors, officers, employees or agents will be protected against
any liability which would otherwise be imposed by reason of willful misfeasance,
bad faith or gross negligence of the Original Transferors, the Transferor, the
Servicer or any such person in the performance of its duties or by reason of
reckless disregard of obligations and duties thereunder. In addition, the
Agreement provides that the Servicer is not under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its servicing
responsibilities under the Agreement and which in its reasonable opinion may
expose it to any expense or liability.

      Any person into which, in accordance with the Agreement, the Original
Transferors, the Transferor or the Servicer may be merged or consolidated or any
person resulting from any merger or consolidation to which the Original
Transferors, the Transferor or the Servicer is a party, or any person succeeding

to the business of the Original Transferors, the Transferor or the Servicer,
upon execution of an amendment to the Agreement and



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delivery of an officer's certificate with respect to the compliance of the
transaction with the applicable provisions of the Agreement and an opinion of
counsel to the effect that such supplemental agreement is legal, valid, binding
and enforceable, will be the successor to the Original Transferors, the
Transferor or the Servicer, as the case may be, under the Agreement. The
Original Transferor, the Transferor or Servicer may effect any merger,
consolidation or assumption which is in accordance with the provisions of the
preceding sentence so long as, among other conditions set forth in the
Agreement: (a) if the Original Transferors, the Transferor or the Servicer, as
the case may be, is not the surviving entity, such person certifies in writing
to the Trustee that all of the applicable representations and warranties are
true and correct with respect to such person; (b) each Rating Agency indicates
that such event will not adversely affect the then-existing rating of
certificates of any Series outstanding including the Series 1998-1 Certificates;
(c) the successor entity executes a supplemental agreement whereby such entity
agrees to assume all the obligations and covenants of the Original Transferors,
the Transferor or Servicer, as the case may be; and (d) in the case of merger or
consolidation of the Transferor when the Transferor is not the surviving entity,
the AIR Support Agreement remains in effect with respect to the successor
entity.

      Under the Agreement, each of the Original Transferors, the Transferor, the
Servicer and the Trustee has agreed that it will not at any time institute
against the Trust, or join in any institution against the Trust of, any
bankruptcy proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to the
certificateholders of any Series or the Agreement.

Support Agreements

      AIC, AICCO and AIG have entered into a Support Agreement dated as of
December 1, 1994 (the "AIC Support Agreement"). Under the AIC Support Agreement,
AIG has agreed to be the ultimate beneficial owner of all of the voting capital
stock of AIC, and AIG or AIC has agreed to be the ultimate beneficial owner of
all of the voting capital stock of AICCO. AIR and AIG will enter into a similar
support agreement to be dated as of the Closing Date (the "AIR Support
Agreement" and, together with the AIC Support Agreement, the "Support
Agreements"). Under the AIR Support Agreement, AIG will agree to be the ultimate
beneficial owner of all of the voting capital stock of AIR.

      The AIC Support Agreement further provides that AIG will cause each of AIC
and AICCO to maintain a net worth of not less than one dollar, and that if (a)
AIC or AICCO needs funds to meet any of its obligations as an Original

Transferor or a Servicer under the Agreement, or (b) AIC or AICCO has
insufficient funds to pay any of its obligations when due (except for any such
obligations which are the subject of a bona fide dispute) the non-payment of
which could constitute a basis for the filing of an involuntary case against
either AIC or AICCO under the Bankruptcy Code, AIG shall provide AIC or AICCO,
as the case may be, funds on a timely basis to cause such obligations to be
satisfied when due. The AIR Support Agreement will further provide that AIG will
cause AIR to maintain a net worth of not less than one dollar, and that if (a)
AIR needs funds to meet any of its obligations as Transferor under the Agreement
or (b) AIR has insufficient funds to pay any of its obligations when due (except
for any such obligations which are the subject of a bona fide dispute) the
non-payment of which could constitute a basis for the filing of an involuntary
case against AIR under the Bankruptcy Code, AIG shall provide AIR funds on a
timely basis to cause such obligations to be satisfied when due. The Support
Agreements are not direct or indirect guarantees by AIG to any person of the
payment of the principal of or interest on any indebtedness, liability or
obligation of AIC, AICCO or AIR. The Agreement will allow the Support Agreements
to be amended or terminated; provided, however, that no amendment or termination
will be effective unless each certificateholder of each outstanding Series
consents in writing to such amendment and each Rating Agency confirms in writing
that such termination or amendment will not adversely affect the then-existing
rating of any outstanding Series or class for which it is a Rating Agency. AIG
may terminate either or both of the Support



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<PAGE>



Agreements by assuming the obligations of AIC and AICCO, or AIR, as the case may
be. See "--Pay Out Events" above.

      In connection with the AIC Support Agreement, AIG has entered into a
letter agreement with the Trustee (the "AIC Letter Agreement") for the benefit
of the certificateholders of all outstanding Series pursuant to which AIG has
agreed that it will not default under the AIC Support Agreement and it will not
amend or terminate the AIC Support Agreement other than in accordance with its
terms; provided, however, that the AIC Letter Agreement may be amended with the
prior written consent of each such certificateholder and prior written
confirmation of each Rating Agency that such amendment will not have an adverse
effect on the then-existing ratings of the certificates of any outstanding
Series. The AIC Letter Agreement provides that if AIG fails to perform any of
the covenants or agreements contained in the Letter Agreement, the Trustee may
in its discretion proceed to protect and enforce its rights and the rights of
the certificateholders by appropriate judicial proceedings or by any other
proper remedy. AIG will enter into a similar letter agreement with the Trustee
in connection with the AIR Support Agreement (together with the AIC Letter
Agreement, the "Letter Agreements").

      For purposes of determining whether a Pay Out Event occurs by reason of

any default by AIG under either of the Support Agreements, the Letter Agreements
shall be deemed to be part of the respective Support Agreements.

Servicer Default

      In the event of any Servicer Default (as defined herein) which is not
remedied or otherwise cured, either the Trustee or holders representing
undivided interests aggregating more than 50% of the sum of the
certificateholders ownership interests of all certificates outstanding, by
written notice to the Servicer (and to the Trustee if given by the
certificateholders), may terminate all of the rights and obligations of the
Servicer as servicer under the Agreement and in and to the Receivables and the
proceeds thereof and the Trustee may appoint a new Servicer (a "Service
Transfer"). The rights and obligations of the Original Transferors and the
Transferor under the Agreement will not be affected by such termination. The
Trustee shall as promptly as possible appoint a successor Servicer, which
successor Servicer must satisfy certain eligibility criteria contained in the
Agreement. If no such Servicer has been appointed and has accepted such
appointment by the time the Servicer ceases to act as Servicer, all authority,
power and obligations of the Servicer under the Agreement shall pass to and be
vested in the Trustee. If the Trustee is unable to obtain any bids from eligible
servicers and the Servicer delivers an officer's certificate to the effect that
it cannot in good faith cure the Servicer Default which gave rise to a transfer
of servicing, and if the Trustee is legally unable to act as successor Servicer,
then the Trustee shall give the Transferor the right to accept reassignment of
the Receivables at a price generally equal to the higher of the outstanding
principal balance of the certificates of all Series plus accrued interest
through the date of reassignment and the average bid quoted by two recognized
dealers for similar securities rated in comparable rating categories by the
Rating Agencies and having a remaining maturity approximately equal to the
remaining maturity of such Series.

      A "Servicer Default" refers to any of the following events:

           (a) failure by the Servicer to make any payment, transfer or deposit
      (other than with respect to Credit Balances) or to give instructions to
      the Trustee to make any withdrawal, on the date the Servicer is required
      to do so under the Agreement (or within the applicable grace period, which
      shall not exceed ten business days);


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<PAGE>



           (b) failure on the part of the Servicer duly to observe or perform in
      any respect any other covenants or agreements of the Servicer which has a
      material adverse effect on the certificateholders of any outstanding
      Series (including the Series 1998-1 Certificateholders) (which
      determination shall be made without regard to whether funds are available
      by reason of any credit enhancement or credit support device) and which
      continues unremedied for a period of 60 days after written notice of such
      failure and continues to have a material adverse effect on such

      certificateholders for such period; or the delegation or assignment by the
      Servicer of its duties under the Agreement, except as specifically
      permitted thereunder; provided, however, that failure on the part of the
      Servicer duly to observe or perform in any respect certain specified
      covenants or agreements of the Servicer set forth in the Agreement, which
      has a material adverse effect on the certificateholders of any outstanding
      Series (which determination shall be made without regard to the
      availability of any credit enhancement or credit support device) and which
      continues after, and notwithstanding the removal by the Servicer of the
      related Receivable, shall be a Servicer Default unless the Servicer shall
      have, within 60 days after the date (following such removal) on which
      written notice of such continuing material adverse effect shall have been
      given to the Servicer, remedied such failure;

           (c) any representation, warranty or certification made by the
      Servicer in the Agreement (including any Supplement), or in any
      certificate delivered pursuant to the Agreement or any Supplement, proves
      to have been incorrect when made, which has a material adverse effect on
      the rights of any of the certificateholders of any outstanding Series
      (which determination shall be made without regard to whether funds are
      available by reason of any credit enhancement or credit support device)
      and which continues to be incorrect in any material respect for a period
      of 60 days after written notice; or

           (d) the occurrence of certain events of bankruptcy or insolvency of
      the Servicer.

Reports to Holders of Offered Certificates

      On each Distribution Date, the Trustee will forward to each Series 1998-1
Certificateholder of record a statement (the "Monthly Certificateholders
Statement") setting forth among other things: (a) the total amount distributed
to Series 1998-1 Certificateholders, (b) the amount of the distribution made on
such Distribution Date allocable to principal on the Series 1998-1 Certificates,
(c) the amount of the distribution made on such Distribution Date allocable to
interest on the Series 1998-1 Certificates, (d) the amount of collections of
Principal Receivables received during the preceding Monthly Period and allocated
in respect of the Series 1998-1 Certificates, (e) the aggregate amount of
Principal Receivables, the Series 1998-1 Certificateholders Ownership Interests
and the Series 1998-1 Certificateholders Ownership Interests as a percentage of
the aggregate amount of the Principal Receivables in the Trust as of the end of
the last day of the preceding Monthly Period, (f) following cancellation of the
related Loans, the aggregate outstanding balance of Receivables which are
delinquent, broken down by period of delinquency as provided in the Agreement,
in accordance with the Servicer's then-existing premium finance loan guidelines
as of the end of the preceding Monthly Period, (g) the aggregate Default Amount
for the preceding Monthly Period, (h) the aggregate amount of charge-offs
allocable to the Series 1998-1 Certificateholders Ownership Interests for the
preceding Monthly Period and the aggregate amount of charge-offs allocable to
the Series 1998-1 Certificateholders Ownership Interests which were deemed
reimbursed on the Transfer Date immediately preceding such Distribution Date,
(i) the amount of the Monthly Servicing Fee for the preceding Monthly Period,
(j) the "Pool Factor" as of the end of the last day of the preceding Monthly
Period (consisting of a seven-digit decimal expressing the ratio of Series

1998-1 Certificateholders Ownership Interests to Series 1998-1 Initial
Certificateholders Ownership Interests), (k) the aggregate amount of collections
of Finance Charge Receivables allocable to the Series 1998-1 Certificateholders
Ownership Interests for the preceding Monthly Period, (l) the amount, if any, of
funds required to be withdrawn from the Series 1998-1 Yield Enhancement Account
with respect to the Series 1998-1 Certificates and such Distribution Date, and
(m) certain



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information relating to the Series 1998-1 Class A Certificate Rate, the Series
1998-1 Class B Certificate Rate and the Series 1998-1 Class C Certificate Rate
for the Interest Period ending on such immediately preceding Transfer Date. The
Servicer shall not be required to calculate the Minimum Transferor Ownership
Interest for any Monthly Period if the Servicer certifies in the Monthly
Servicer Report for such Monthly Period that the Transferor Ownership Interest
as of the date thereof equals or exceeds 50% of the Trust assets as of the close
of business on the last business day of the preceding Monthly Period and that
such Transferor Ownership Interest exceeds the Minimum Transferor Ownership
Interest as of the end of such Monthly Period.

      On or before January 31 of each calendar year, beginning with 1999, the
Trustee will furnish to each person who at any time during the preceding
calendar year was a Series 1998-1 Certificateholder of record a statement
prepared by the Trustee containing the information required to be contained in
the Monthly Servicer Report, as set forth in clauses (a), (b) and (c) above,
aggregated for such calendar year or the applicable portion thereof during which
such person was a Series 1998-1 Certificateholder, together with such other
customary information (consistent with the treatment of the Series 1998-1
Certificates as debt) as the Trustee deems necessary or desirable to enable the
Series 1998-1 Certificateholders to prepare their tax returns.

Evidence as to Compliance

      The Agreement provides that on or before April 30 of each calendar year,
the Servicer will cause a firm of nationally recognized independent accountants
(who may also render other services to the Servicer or the Transferor) to
furnish a report to the effect that such firm has examined the assertion by an
officer of the Servicer, made pursuant to the Agreement, that the Servicer has
complied with the terms of the Agreement relating to the servicing of
Receivables, which examination includes a review of certain documents and
records relating to the servicing of the Receivables and has compared the
information contained in the Servicer's certificates delivered under the
Agreement during the period covered by the report with such documents and
records and that, on the basis of such examination, such firm is of the opinion
that the assertion by the Servicer's officer is fairly stated in all material
respects except for such exceptions as such firm shall believe to be immaterial
and such other exceptions as shall be set forth in such report. In addition, on

or before April 30 of each calendar year, the Servicer will also cause a firm of
nationally recognized independent accountants (who may also render other
services to the Servicer or Transferor) to furnish a report to the effect that
such firm has compared the mathematical calculations of each amount set forth in
the Servicer's certificates delivered under the Agreement during the period
covered by the report with the Servicer's computer reports which were the source
of such amounts and that, based on such comparison, such amounts are in
agreement except for such exceptions as such firm believes to be immaterial and
such other exceptions as set forth in such firms's report.

      The Agreement provides for delivery to the Trustee on or before April 30
of each calendar year, of an annual statement signed by an officer of the
Servicer to the effect that, to the best of such officer's knowledge, the
Servicer has fully performed, or has caused to be performed, all its obligations
under the Agreement throughout the preceding year in all material respects, or,
if there has been a default in the performance of any such obligation in any
material respect, specifying the nature and status of the default.

Amendments

      The Agreement and any Supplement may be amended in writing by the
Transferor, the Original Transferors, the Servicer and the Trustee, without
certificateholder consent, to cure any ambiguity, to correct or supplement any
provision therein which may be inconsistent with any other provision therein,
and to add any other provisions with respect to matters or questions arising
under the Agreement and any Supplement which are not inconsistent with the
provisions of the Agreement and any Supplement; provided, that such action does
not adversely affect in



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<PAGE>



any material respect the interests of any certificateholder. The Agreement may
be amended in writing from time to time by the Transferor, the Original
Transferors, the Servicer and the Trustee, with the consent of the Trustee and
without the consent of the certificateholders, to provide for the purchase of
Principal Receivables by the Trust at a price which is less than 100% of the
outstanding balance thereof, and to provide for the treatment of collections of
Principal Receivables, in an amount up to the aggregate amount by which the
purchase price of Principal Receivables as sold thereafter is less than 100%, as
collections of Finance Charge Receivables; provided, however, that any such
action shall not adversely affect in any material respect the interests of the
certificateholders; further provided that the Servicer and the Trustee shall
have received notice from each Rating Agency that any such amendment will not
result in the reduction or withdrawal of its then-existing rating of the
certificates of any Series. Moreover, any Supplement in connection with a new
Series will not be considered amendments requiring certificateholder consent
under the provisions of the Agreement or any Supplement.


      The Agreement may be amended in writing by the Transferor, the Original
Transferors, the Servicer and the Trustee with the consent of the holders of
certificates evidencing undivided interests aggregating not less than 66 2/3% of
the principal amount of all Series adversely affected, for the purpose of adding
any provisions to, changing in any manner or eliminating any of the provisions
of the Agreement or any Supplement or of modifying in any manner the rights of
certificateholders of any Series. No such amendment, however, may (a) reduce in
any manner the amount of, or delay the timing of, distributions required to be
made on such Series, (b) change the definition of or the manner of calculating
the certificateholders ownership interests, the aggregate default amount or the
investor percentage of such Series, (c) reduce the aforesaid percentage of
undivided interests, the holders of which are required to consent to any such
amendment, in each case without the consent of all certificateholders of all
Series adversely affected or (d) modify AIC's support obligations with respect
to AICCO, without the consent of the holders of certificates of all Series.
Promptly following the execution of any amendment to the Agreement or any
Supplement, the Trustee will furnish written notice of the substance of such
amendment to each certificateholder of all Series (or with respect to an
amendment of a Supplement, to the applicable Series).

List of Certificateholders

      Upon written request of Series 1998-1 Certificateholders aggregating not
less than 20% of the Series 1998-1 Certificateholders Ownership Interests, the
Trustee, after having been adequately indemnified by such Series 1998-1
Certificateholders for its costs and expenses, and having given the Servicer
notice that such request has been made, will afford such Series 1998-1
Certificateholders access during business hours to the current list of
certificateholders of the Trust for purposes of communicating with other
certificateholders with respect to their rights under the Agreement or under the
related certificates. The Agreement generally does not provide for any annual or
other meetings of certificateholders. See "--Book-Entry Registration" and
"--Definitive Certificates" above.



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<PAGE>



              CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

      The following summary is a discussion of certain of the material federal
income tax consequences of the ownership and disposition of the Offered
Certificates. This summary is based on the Internal Revenue Code of 1986, as
amended (the "Code"), the Treasury Regulations promulgated and proposed
thereunder (the "Regulations"), judicial decisions and published administrative
rulings and pronouncements of the Internal Revenue Service (the "Service") as in
effect on the date hereof. Legislative, judicial or administrative changes or
interpretations hereafter enacted or promulgated could alter or modify the
analysis and conclusions set forth below, possibly on a retroactive basis. This
summary does not purport to address the federal income tax consequences either

to special classes of taxpayers (such as S corporations, banks, thrifts, other
financial institutions, insurance companies, mutual funds, small business
investment companies, real estate investment trusts, regulated investment
companies, broker-dealers, tax-exempt organizations and persons that hold the
securities described herein as part of a straddle, hedging or conversion
transaction) or to a person or entity holding an interest in a holder (e.g., as
a stockholder, partner, or holder of an interest as a beneficiary). This summary
assumes that (i) the Offered Certificates will be held by the holders thereof as
capital assets as defined in the Code and (ii) except as indicated (and other
than for purposes of the discussion under "Treatment of the Certificates as
Indebtedness" and "Possible Alternative Characterization" below), the Offered
Certificates are properly characterized as debt for federal income tax purposes.
Except under "Certain State and Local Tax Considerations," no information is
provided herein with respect to any foreign, state or local tax consequences of
the ownership and disposition of the Offered Certificates nor of any federal
estate and gift tax considerations.

      Except for "Non-United States Investors" and "Information Reporting and
Backup Withholding" below, the following discussion applies only to holders that
are citizens or residents of the United States, domestic corporations or
partnerships, or other entities subject to United States federal income tax on a
net income basis in respect of Offered Certificates (a "U.S.
Certificateholder").

      Prospective investors are therefore advised to consult their own tax
advisors with regard to the United States federal income tax consequences of
holding and disposing of the Offered Certificates in their own particular
circumstances, as well as the tax consequences arising under the laws of any
state, foreign country or other jurisdiction to which they may be subject.

      For purposes of the discussion set forth below, a "Certificateholder" will
mean a beneficial owner of an Offered Certificate.

Treatment of the Certificates as Indebtedness

      The Transferor and Certificateholders express in the Agreement the intent
that, for United States federal, state and local income, franchise and other tax
purposes, the Offered Certificates will be indebtedness of the Transferor
secured by the Receivables. The Transferor, by entering into the Agreement, and
each Certificateholder, by the acceptance of an Offered Certificate, agree to
treat the Offered Certificates as indebtedness of the Transferor for all such
tax purposes. Because different criteria are used in determining the financial
and regulatory accounting treatment of the transaction, however, the Transferor
will treat the Agreement, for certain non-tax accounting purposes, as effecting
a transfer of ownership interests in the Receivables and not as creating debt
obligations of the Transferor.

      A basic premise of federal income tax law is that the economic substance
of a transaction generally determines its tax consequences. The form of a
transaction, while a relevant factor, is not conclusive evidence of its economic
substance. In appropriate circumstances, the courts have allowed taxpayers as
well as the Service to




                                       93

<PAGE>



treat a transaction in accordance with its economic substance as determined
under federal income tax principles, even though the participants in the
transaction have characterized it differently for non-tax purposes.

      The determination of whether the economic substance of a transfer of an
interest in property is instead a loan secured by the transferred property has
been made by the Service and the courts on the basis of numerous factors
designed to determine whether the transferor has relinquished (and the
transferee has obtained) substantial incidents of ownership in the property. The
primary factors examined are whether the transferee has the opportunity to gain
if the property increases in value, and has the risk of loss if the property
decreases in value. Based upon its analysis of such factors, Weil, Gotshal &
Manges LLP, counsel to the Transferor ("Counsel"), will render its opinion at
the closing that, subject to the assumptions set forth therein, and although no
transaction closely comparable to that contemplated herein has been the subject
of any Regulations, revenue ruling or judicial decision, for federal income tax
purposes the Offered Certificates will not constitute an ownership interest in
the Receivables, but properly will be characterized as debt secured by the
Receivables. In the further opinion of Counsel, the Trust will not be an
association or publicly-traded partnership taxable as a corporation. Except
where indicated to the contrary, the following discussion assumes that the
Offered Certificates are debt for federal income tax purposes.

Possible Alternative Characterization

      Although as described above, it is the opinion of Counsel that the Offered
Certificates properly will be characterized as debt for federal income tax
purposes, none of the AICCO, AIR, AIC, or the Trust will seek a ruling from the
Service on the characterization of the Offered Certificates for federal income
tax purposes and the opinion of Counsel will not be binding on the Service.
Thus, no assurance can be given that such a characterization will prevail. Were
the Service to contend successfully that the Offered Certificates were not debt
obligations for federal income tax purposes, the Trust would be classified for
federal income tax purposes as a partnership.

      If some or all of the Offered Certificates were treated as equity
interests in a partnership, the partnership would likely be treated as a
"publicly traded partnership." A publicly traded partnership is taxed in the
same manner as a corporation unless at least 90% of its gross income consists of
specified types of "qualifying income." Such qualifying income includes, among
other things, "interest income" that is "not derived in the conduct of a
financial or insurance business." It is unclear whether, were the Trust treated
as a partnership, interest received by it in respect of the Receivables would be
considered to be derived from the conduct of a financial or insurance business
by the Trust.

      If a deemed partnership between the Transferor and the Certificateholders

were to qualify for the foregoing exception from taxation as a corporation, the
deemed partnership would not be subject to federal income tax, but each item of
income, gain, loss and deduction generated as a result of the ownership of the
Receivables by the partnership would be passed through to the partners in such a
partnership (including any Certificateholders that are treated as holding equity
interests in the partnership) according to their respective interests therein.
The amount of income reportable by the Certificateholders as partners in such a
partnership could differ from that reportable by the Certificateholders as
holders of debt. A cash basis Certificateholder treated as a partner, for
example, might be required to report income when it accrues to the partnership
rather than when it is received by the Certificateholder. Moreover, an
individual Certificateholder's share of expenses of the partnership would
constitute miscellaneous itemized deductions, which in the aggregate (i) are
allowed as deductions only to the extent they exceed two percent of the
Certificateholder's adjusted gross income and (ii) are subject to reduction in
the hands of a Certificateholder whose adjusted gross income exceeds a certain
amount. As a result, the Certificateholder might be taxed on an amount of income
greater than the amount of interest received on the



                                       94
<PAGE>



Certificateholder's Offered Certificate. In addition, partnership
characterization may have adverse state or local tax consequences for
Certificateholders. Finally, if the Trust were treated as a partnership not
taxable as a corporation, with the Series 1998-1 Class A Certificates treated as
debt of such partnership and the Series 1998-1 Class B Certificates treated as
equity interests in such partnership, a portion of the taxable income allocated
to any Series 1998-1 Class B Certificateholder that was a pension,
profit-sharing or employee benefit plan or other tax-exempt entity (including an
individual retirement account) would constitute "unrelated business taxable
income" generally taxable to such a Certificateholder under the Code.

      If, alternatively, some or all of the Offered Certificates were treated as
equity interests in a publicly traded partnership taxable as a corporation, the
Trust (or other deemed entity) would be subject to United States federal income
taxes (and state and local taxes) at corporate tax rates on its income from the
Receivables. Distributions on the Offered Certificates, certificates of any
other Series issued by the Trust and the Transferor Certificate might not be
deductible in computing the Trust's (or other deemed entity's) taxable income,
and distributions to the Certificateholders would probably be treated as
dividends to the extent paid out of after-tax earnings. Such an entity-level tax
could result in reduced distributions to Certificateholders, or the
Certificateholders could be liable for a share of such tax.

      Because the Transferor will treat the Offered Certificates as indebtedness
for federal income tax purposes, the Servicer and the Paying Agent (and
Participants and Indirect Participants) will not comply with the tax reporting
requirements applicable to the possible alternative characterizations of the
Offered Certificates discussed above.


Interest Income to Certificateholders

      It is anticipated that the Offered Certificates will be issued at par
value (or at an insubstantial discount from par value) and that, except as
indicated, no original issue discount ("OID") will arise with respect to the
Offered Certificates. Under the OID regulations, a holder of an Offered
Certificate issued with more than a de minimis amount of OID must include such
OID in income on a pro rata basis, as principal payments are made on the Offered
Certificate. It is possible, however, that under regulations issued by the U.S.
Treasury, interest payable on the Offered Certificates, as well as any discount
from par value, will constitute OID because late payment or nonpayment of
interest would not be regarded as subject to penalties or to reasonable remedies
to compel payment. Were the Offered Certificates treated as being issued with
OID, the principal consequence would be that Certificateholders using the cash
basis method of accounting would be required to report interest income from the
Offered Certificates on an accrual basis. In any event, a purchaser who buys an
Offered Certificate for more or less than its issue price will generally be
subject, respectively, to the premium amortization or market discount rules of
the Code.

Sale or Exchange of Offered Certificates

      If an Offered Certificate is sold or exchanged, the seller will recognize
gain or loss equal to the difference between the amount realized upon the sale
or exchange and its adjusted basis in the Offered Certificate. The adjusted
basis of an Offered Certificate will equal its cost, increased by any unpaid OID
and market discount includable in income with respect to the Offered Certificate
prior to its sale, and reduced by any principal payments previously received
with respect to the Offered Certificate and any premium amortization previously
applied to offset interest income. The gain or loss recognized on the sale or
exchange of an Offered Certificate will generally be capital gain or loss if the
Offered Certificate was held as a capital asset and will be long-term or
mid-term capital gain or loss if the Offered Certificate was held by the
Certificateholder for the requisite holding periods at the time of the
disposition.



                                       95

<PAGE>



Non-United States Investors

      As described above, Counsel will render its opinion that the Offered
Certificates will properly be classified as debt for federal income tax
purposes. If the Offered Certificates are so treated:

           (a) interest paid to a nonresident alien or foreign corporation or
      partnership would be exempt from U.S. withholding taxes (including backup
      withholding taxes), provided the holder complies with applicable

      identification requirements (and does not actually or constructively own
      10% or more of the voting stock of AIG and is not a controlled foreign
      corporation with respect to AIG). Applicable identification requirements
      will be satisfied if there is delivered to a securities clearing
      organization (or bank or other financial institution that holds Offered
      Certificates on behalf of the customer in the ordinary course of its trade
      or business), (i) IRS Form W-8 signed under penalties of perjury by the
      beneficial owner of the Offered Certificates stating that the holder is
      not a U.S. person and providing such holder's name and address, (ii) IRS
      Form 1001 signed by the beneficial owner of the Offered Certificates or
      such owner's agent claiming exemption from withholding under an applicable
      tax treaty or (iii) IRS Form 4224 signed by the beneficial owner of the
      Offered Certificates or such owner's agent claiming exemption from
      withholding of tax on income connected with the conduct of a trade or
      business in the United States; provided that in any such case (x) the
      applicable form is delivered pursuant to applicable procedures and is
      properly transmitted to the United States entity otherwise required to
      withhold tax and (y) none of the entities receiving the form has actual
      knowledge that the holder is a U.S. person or that any certification on
      the form is false;

           (b) a holder of an Offered Certificate who is a nonresident alien or
      foreign corporation will not be subject to United States federal income
      tax on gain realized on the sale, exchange or redemption of such Offered
      Certificate, provided that (i) such gain is not effectively connected to a
      trade or business carried on by the holder in the United States, (ii) in
      the case of a holder that is an individual, such holder neither is present
      in the United States for 183 days or more during the taxable year in which
      such sale, exchange or redemption occurs, nor ceased being a U.S. citizen
      or long-term resident for tax avoidance purposes and (iii) in the case of
      gain representing accrued interest, the conditions described in clause (a)
      are satisfied; and

           (c) an Offered Certificate held by an individual who at the time of
      death is a nonresident alien will not be subject to United States federal
      estate tax as a result of such individual's death if, immediately before
      his death, (i) the individual did not actually or constructively own 10%
      or more of the voting stock of AIG and (ii) the holding of such Offered
      Certificate was not effectively connected with the conduct by the decedent
      of a trade or business in the United States and (iii) the individual did
      not cease being a U.S. citizen or long-term resident for tax avoidance
      purposes.

      The Service recently issued final regulations (the "New Regulations")
which would provide alternative methods of satisfying the certification
requirement described above. The New Regulations are effective January 1, 1999,
although valid withholding certificates that are held on December 31, 1998
remain valid until the earlier of December 31, 1999 or the date of expiration of
the certificate under the rules as currently in effect. The New Regulations
would require, in the case of Offered Certificates held by a foreign
partnership, that (x) the certification described in clause (a) above be
provided by the partners rather than by the foreign partnership and (y) the
partnership provide certain information. A look-through rule would apply in the
case of tiered partnerships. Non-U.S. Certificateholders should consult their

own tax advisors concerning the application of the certification requirements in
the New Regulations.

      If the Service were to contend successfully that some or all of the
Offered Certificates were equity interests in a partnership (not taxable as a
corporation), a holder of such an Offered Certificate that is a nonresident
alien



                                       96
<PAGE>



or foreign corporation might be required to file a U.S. individual or corporate
income tax return and pay tax on its share of partnership income at regular U.S.
rates, including in the case of a corporation the branch profits tax (and would
be subject to withholding tax on its share of partnership income). In addition,
if the Offered Certificates are equity interests in a partnership, an individual
holder that is a nonresident alien at death may be required to include the value
of the Offered Certificates in such holder's gross estate (unless otherwise
provided in an applicable treaty). If some or all of the Offered Certificates
are recharacterized as equity interests in a "publicly traded partnership"
taxable as a corporation, to the extent distributions on such Offered
Certificates were treated as dividends, a nonresident alien individual or
foreign corporation generally would be taxed on the gross amount of such
dividends (and subject to withholding) at the rate of 30% unless such rate were
reduced by an applicable treaty. In addition, an individual holder that is a
nonresident alien at death would be required to include the value of such
Offered Certificate in such holder's gross estate (unless otherwise provided in
an applicable treaty).

Information Reporting And Backup Withholding

      Certain holders may be subject to backup withholding at a rate of 31% on
interest (including any original issue discount) on the Offered Certificates if
the holder fails to supply its taxpayer identification number (or if the
taxpayer identification number furnished by the holder is incorrect), fails to
report interest, dividends or other "reportable payments" (as defined in the
Code) properly, or, under certain circumstances, fails to provide a certified
statement, under penalties of perjury, that it is not subject to backup
withholding. Information returns will be sent annually to the Service and to the
holders of record setting forth the amount of interest paid or the original
issue discount accrued and the amount of tax withheld therefrom. It is
anticipated that Persons who hold Offered Certificates as nominees for
beneficial owners will report the required tax information to beneficial owners
on Service Form 1099. United States Aliens that are exempt from withholding
under the provisions described above generally will not be subject to
information reporting on Service Form 1099 and backup withholding on the
payments of interest on an Offered Certificate if the applicable certification
requirements are satisfied. However, interest on an Offered Certificate
beneficially owned by a United States Alien will be required to be reported
annually on Service Form 1042S.


      Payment of the proceeds from the sale of an Offered Certificate to or
through a foreign office of a broker will not be subject to information
reporting or backup withholding, except that if the broker is a U.S. Person, a
controlled foreign corporation for United States tax purposes, a foreign person
50% or more of whose gross income is effectively connected with the conduct of a
trade or business within the United States for a specified three-year period or,
with respect to payments made after December 31, 1998, a foreign partnership
that, at any time during the taxable year, is 50% or more owned (measured by
either income or capital) by U.S. persons or engaged in a U.S. trade or
business, information reporting will apply to such payments unless such
custodian, nominee or other agent has documentary evidence in its files of the
owner's foreign status and has no actual knowledge to the contrary, or the owner
otherwise establishes an exemption. Payment of the proceeds from a sale of an
Offered Certificate to or through the United States office of a broker is
subject to information reporting and backup withholding unless the holder or
beneficial owner certifies as to its non-United States status or otherwise
establishes an exemption from information reporting and backup withholding. The
New Regulations change certain of the rules relating to certain presumptions
currently available relating to information reporting and backup withholding.
Non-U.S. Certificateholders are urged to contact their own tax advisors
regarding the application to them of backup withholding and information
reporting.


                                     97

<PAGE>



                    CERTAIN STATE AND LOCAL TAX CONSEQUENCES

      The following discussion of certain state and local tax consequences of
the ownership of Offered Certificates is a general summary and does not purport
to address all state or local tax considerations that may be relevant to
Certificateholders. (For purposes of the following discussion, a
"Certificateholder" will mean a beneficial owner of an Offered Certificate.)
Except as otherwise indicated, the following assumes that for federal income tax
purposes the Offered Certificates will be treated as indebtedness and, if the
Offered Certificates are so treated, the Trust will not be a taxable entity.

In General

      The state and local tax consequences of each Certificateholder's ownership
of Offered Certificates will depend upon the provisions of the state and local
tax laws to which that Certificateholder is subject. Because such tax laws vary,
it is impossible to discuss the tax consequences of Certificateholder's
ownership of Offered Certificates in each state or local taxing jurisdiction in
which the Certificateholder is subject to tax.

New York And California

      Although there is no directly relevant New York or California authority

and accordingly the matter is not free from doubt, if the Offered Certificates
are treated as debt for federal income tax purposes, for New York and California
state income and franchise tax purposes and for New York City personal income
and general corporation tax purposes, the Offered Certificates will be treated
as indebtedness secured by the Receivables and the Trust will not be treated as
a taxable entity. In addition, if the Offered Certificates are treated as debt,
Certificateholders not otherwise subject to New York and California state income
or franchise taxes or New York City personal income or general corporation taxes
will not become subject to such taxes solely as a result of their investment in
the Offered Certificates, but Certificateholders already subject to tax in New
York State or New York City or California may be required to pay additional
state or local taxes as a result of their ownership of the Offered Certificates.

Other States

      The Trust will be created under the laws of New York and most activities
relating to the servicing and collection of the Receivables will take place in
New York and California. Nevertheless, there can be no assurance another state
will not claim that the Trust has engaged in activities in that state and is
consequently subject to tax therein. Were another state successfully to make
such a claim, it is possible that under such state's tax laws the Offered
Certificates would not be treated as debt, the Trust would be treated as an
entity subject to taxation by such state and Certificateholders not otherwise
subject to taxation by such state could be taxed by such state in respect of the
activities of the Trust therein.

Possible Recharacterizations

      If all or a portion of the Offered Certificates were treated as interests
in a partnership or a "publicly traded partnership," the New York, California,
and other state and local tax consequences of owning Offered Certificates could
be materially different from and less favorable than those described above.

      EACH PROSPECTIVE INVESTOR IS URGED TO CONSULT ITS OWN TAX ADVISOR
REGARDING THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THE
PURCHASE, OWNERSHIP AND DISPOSITION OF THE OFFERED CERTIFICATES.



                                       98

<PAGE>



                                  UNDERWRITING

      Subject to the terms and conditions set forth in the underwriting
agreement (the "Underwriting Agreement") between the Transferor, the Original
Transferors and Goldman, Sachs & Co. (the "Underwriters"), the Transferor has
agreed to sell to the Underwriters, and the Underwriters have agreed to
purchase, the Offered Certificates.

      In the Underwriting Agreement, the Underwriters have agreed, subject to

the terms and conditions set forth therein, to purchase all the Offered
Certificates if any of the Series 1998-1 Certificates are purchased.

      The Underwriters propose initially to offer the Series 1998-1 Class A
Certificates to the public at the price set forth on the cover page hereof and
to certain dealers at such price less concessions not in excess of [____]% of
the principal amount of the Series 1998-1 Class A Certificates. The Underwriters
may allow, and such dealers may reallow, concessions not in excess of [____]% of
the principal amount of the Series 1998-1 Class A Certificates to certain
brokers and dealers. After the initial public offering, the public offering
price and other selling terms of the Series 1998-1 Class A Certificates may be
changed by the Underwriters.

      The Underwriters propose initially to offer the Series 1998-1 Class B
Certificates to the public at the price set forth on the cover page hereof and
to certain dealers at such price less concessions not in excess of [___]% of the
principal amount of the Series 1998-1 Class B Certificates. The Underwriters may
allow, and such dealers may reallow, concessions not in excess of [____]% of the
principal amount of the Series 1998-1 Class B Certificates to certain brokers
and dealers. After the initial public offering, the public offering price and
other selling terms of the Series 1998-1 Class B Certificates may be changed by
the Underwriters.

      Only offers and sales of the Offered Certificates in the United States, as
part of the initial distribution thereof or in connection with resales thereof
under circumstances where this Prospectus must be delivered, are made pursuant
to the Registration Statement of which this Prospectus is a part.

      The Transferor will indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, or contribute to
payments the Underwriters may be required to make in respect thereof.

                          VALIDITY OF THE CERTIFICATES

      The validity of the Series 1998-1 Certificates will be passed upon for the
Trust, the Original Transferors, the Transferor and the Servicer by Weil,
Gotshal & Manges LLP, New York, New York, and for the Underwriters by Cleary,
Gottlieb, Steen & Hamilton, New York, New York. Certain United States federal
income tax and other matters will be passed upon for the Trust by Weil, Gotshal
& Manges LLP, New York, New York. Certain legal matters relating to the Series
1998-1 Certificates will be passed upon for the Trust, the Original Transferors,
the Transferor and the Servicer by Kenneth V. Harkins, Associate General Counsel
of AIG and General Counsel of AIC.


                                       99


<PAGE>



                        INDEX OF KEY TERMS FOR PROSPECTUS
                        ---------------------------------

Term                                                                        Page
----                                                                        ----

Accounts......................................................................66
Additional Interest...........................................................14
Additional Receivables.........................................................6
Aggregate Investor Percentage.................................................67
Agreement...................................................................1, 4
AIC........................................................................1, 38
AIC Letter Agreement..........................................................89
AIC Support Agreement.........................................................88
AICCO...................................................................1, 5, 38
AIG.....................................................................1, 5, 38
AIR.........................................................................1, 5
AIR Support Agreement.........................................................88
Bankruptcy Code...............................................................29
Cede...........................................................................3
Cedel.........................................................................51
Cedel Participants............................................................51
Certificate Owners.............................................................3
Certificateholder.........................................................93, 98
Cleanup Call..............................................................25, 81
Closing Date...................................................................2
Code..........................................................................93
Collection Account............................................................64
Collection Subaccount.........................................................64
Commission.....................................................................3
Cooperative...................................................................51
Counsel.......................................................................94
Credit Balance................................................................42
Cut-Off Date...............................................................6, 57
Default Amounts...............................................................72
Defaulted Loan................................................................72
Definitive Certificates.......................................................52
Depository....................................................................49
Determination Date............................................................72
Disclosure Document...........................................................23
Distribution Date..........................................................2, 14
DTC............................................................................3
EDGAR..........................................................................4
Eligible Additional Receivable................................................63
Eligible Receivable...........................................................62
Enhancement...................................................................36
ERISA.........................................................................26
ERISA Plans...................................................................26
Euroclear.....................................................................51
Euroclear Operator............................................................51

Euroclear Participants........................................................51
Excess Funding Account........................................................69



                                        i

<PAGE>



Term                                                                        Page
----                                                                        ----

Excess Receivables Amount.....................................................70
Exchange Act...................................................................3
Existing Receivables.......................................................5, 57
FDIC..........................................................................64
Finance Charge Account........................................................65
Finance Charge Receivables....................................................12
Financed Premium Percentage...................................................84
Future Receivables.........................................................5, 57
Holders.......................................................................52
Holders of Offered Certificates................................................7
Indirect Participants.........................................................49
Ineligible Receivable.........................................................61
Interest Period...............................................................15
Investor Exchange.........................................................23, 58
Investor Percentage...........................................................67
Letter Agreements.............................................................89
LIBOR......................................................................2, 10
LIBOR Determination Date......................................................54
Loan Portfolio................................................................42
Loans.......................................................................1, 6
Minimum Transferor Ownership Interest.........................................70
Monthly Certificateholders Statement..........................................90
Monthly Payment Rate..........................................................84
Monthly Period.................................................................9
Moody's...................................................................26, 64
Moody's Non-Investment Grade Insurer..........................................71
New Regulations...............................................................96
New Series Issuance.......................................................23, 58
Obligor.......................................................................28
Obligors...................................................................6, 38
Offered Certificates........................................................1, 4
OID...........................................................................95
Original Agreement.............................................................4
Original Series 1994-1 Supplement..............................................4
Original Transferors...........................................................1
Originator....................................................................62
Participants..................................................................49
Pay Out Event.................................................................82
Paying Agent..................................................................52
Permitted Investments.........................................................64

Pool Factor...................................................................90
Principal Account.............................................................65
Principal Receivables.........................................................12
Principal Shortfalls..........................................................71
Principal Terms...............................................................59
Prior Period Interest.........................................................15
Purchased Loans...............................................................40
Qualified Institution.........................................................64
Rating Agencies...............................................................33
Rating Agency.................................................................33


                                       ii

<PAGE>



Term                                                                        Page
----                                                                        ----

Receivables.............................................................1, 6, 42
Receivables Sale Agreement.....................................................5
Record Date...................................................................48
Reference Banks...............................................................54
Regulations...................................................................93
Removal Date..................................................................63
Removed Receivables.......................................................13, 63
S&P Non-AAA Insurer...........................................................71
S&P Non-Investment Grade Insurer..............................................71
Securities Act.................................................................4
Series........................................................................22
Series 1994-1 Certificateholders...............................................7
Series 1994-1 Certificates..................................................1, 5
Series 1994-1 Class A Certificates............................................36
Series 1994-1 Class B Certificates............................................36
Series 1994-1 Class C Certificates............................................12
Series 1994-1 Offered Certificates............................................12
Series 1998-1 91 Day Delinquency Amount.......................................69
Series 1998-1 Annualized Monthly Excess Spread Amount.........................84
Series 1998-1 Available Investor Principal Collections........................55
Series 1998-1 Available Yield Enhancement Amount..............................67
Series 1998-1 Certificateholders...............................................7
Series 1998-1 Certificateholders Ownership Interests..........................75
Series 1998-1 Certificates..................................................2, 4
Series 1998-1 Class A Additional Interest.....................................53
Series 1998-1 Class A Available Funds.........................................54
Series 1998-1 Class A Certificate Rate.................................2, 10, 54
Series 1998-1 Class A Certificateholders.......................................7
Series 1998-1 Class A Certificates..........................................1, 4
Series 1998-1 Class A Charge-Off..........................................21, 73
Series 1998-1 Class A Controlled Amortization Period..........................16
Series 1998-1 Class A Default Amount..........................................72
Series 1998-1 Class A Floating Allocation.....................................74

Series 1998-1 Class A Initial Ownership Interest..............................75
Series 1998-1 Class A Monthly Interest........................................79
Series 1998-1 Class A Monthly Principal.......................................80
Series 1998-1 Class A Ownership Interest......................................75
Series 1998-1 Class A Prior Period Interest...................................80
Series 1998-1 Class A Required Amount.........................................76
Series 1998-1 Class A Servicing Fee...........................................85
Series 1998-1 Class B Additional Interest.....................................53
Series 1998-1 Class B Available Funds.........................................54
Series 1998-1 Class B Certificate Rate.................................2, 10, 54
Series 1998-1 Class B Certificateholders.......................................7
Series 1998-1 Class B Certificates..........................................1, 4
Series 1998-1 Class B Charge-Off..........................................22, 73
Series 1998-1 Class B Controlled Amortization Period..........................16
Series 1998-1 Class B Default Amount..........................................72
Series 1998-1 Class B Floating Allocation.....................................74
Series 1998-1 Class B Initial Ownership Interest..............................75



                                       iii


<PAGE>



Term                                                                        Page
----                                                                        ----

Series 1998-1 Class B Monthly Interest........................................79
Series 1998-1 Class B Monthly Principal.......................................81
Series 1998-1 Class B Ownership Interest......................................75
Series 1998-1 Class B Principal Commencement Date.............................17
Series 1998-1 Class B Prior Period Interest...................................80
Series 1998-1 Class B Required Amount.........................................77
Series 1998-1 Class B Servicing Fee...........................................85
Series 1998-1 Class C Additional Interest.....................................53
Series 1998-1 Class C Available Funds.........................................80
Series 1998-1 Class C Certificateholders.......................................7
Series 1998-1 Class C Certificates..........................................2, 4
Series 1998-1 Class C Charge-Off..............................................74
Series 1998-1 Class C Controlled Amortization Period..........................16
Series 1998-1 Class C Default Amount..........................................72
Series 1998-1 Class C Floating Allocation.....................................75
Series 1998-1 Class C Initial Ownership Interest..............................75
Series 1998-1 Class C Monthly Interest........................................79
Series 1998-1 Class C Monthly Principal.......................................81
Series 1998-1 Class C Ownership Interest......................................75
Series 1998-1 Class C Principal Commencement Date.............................17
Series 1998-1 Class C Prior Period Interest...................................80
Series 1998-1 Class C Required Amount.........................................77
Series 1998-1 Class C Servicing Fee...........................................85
Series 1998-1 Controlled Amortization Amount..................................56

Series 1998-1 Controlled Amortization Period..................................16
Series 1998-1 Controlled Distribution Amount..................................56
Series 1998-1 Deficit Controlled Amortization Amount..........................56
Series 1998-1 Distribution Account............................................65
Series 1998-1 Excess Finance Charges..........................................66
Series 1998-1 Fixed Investor Percentage.......................................75
Series 1998-1 Floating Investor Percentage....................................74
Series 1998-1 Initial Certificateholders Ownership Interests..................81
Series 1998-1 Investor Default Amount.........................................72
Series 1998-1 Investor Servicing Fee..........................................85
Series 1998-1 Maximum Yield Enhancement Amount................................66
Series 1998-1 Net Servicing Fee Rate..........................................85
Series 1998-1 Rapid Amortization Period.......................................18
Series 1998-1 Reallocated Class A Principal Collections.......................77
Series 1998-1 Reallocated Class B Principal Collections.......................78
Series 1998-1 Reallocated Class C Principal Collections.......................78
Series 1998-1 Reallocated Principal Collections...............................78
Series 1998-1 Revolving Period................................................16
Series 1998-1 Termination Date............................................12, 82
Series 1998-1 Yield Enhancement Account...................................19, 66
Service.......................................................................93
Service Transfer..............................................................89
Servicer...................................................................1, 13
Servicer Default..............................................................89
Servicing Fee.................................................................13
Shared Principal Collections..............................................24, 71



                                       iv


<PAGE>


Term                                                                        Page
----                                                                        ----

Standard & Poor's.........................................................26, 64
Supplement....................................................................22
Support Agreements............................................................88
Terms and Conditions..........................................................51
Third Party Originators.......................................................40
Transfer Agent and Registrar..................................................53
Transferor.....................................................................1
Transferor Certificate....................................................22, 58
Transferor Ownership Interest..................................................2
Transferor Ownership Interest Reduction...................................23, 58
Trust..........................................................................1
Trustee....................................................................1, 25
U.S. Certificateholder........................................................93
Underwriters..................................................................99
Underwriting Agreement........................................................99




                                        v


<PAGE>



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

      No dealer, salesperson or other person has been authorized to give any
information or to make any representation not contained in this Prospectus and,
if given or made, such information or representation must not be relied upon as
having been authorized by A.I. Receivables Corp. or the Underwriters. Neither
the delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that the information contained herein or
therein is correct as of any time subsequent to the date of such information.
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any of the securities offered hereby in any jurisdiction to any
person to whom it is unlawful to make such offer in such jurisdiction.
                                           
                                           
                                 --------------


                                TABLE OF CONTENTS


                                                                 PAGE
                                                                 ----

Reports to Holders of
 Offered Certificates ....................................         3
Available Information ....................................         4
Prospectus Summary .......................................         4
Special Considerations ...................................        28
Maturity Considerations ..................................        34
The Trust ................................................        36
Business of A.I. Receivables
  Corp., A.I. Credit Corp and AICCO, Inc. ................        38
The Receivables ..........................................        42
Use of Proceeds ..........................................        48
Description of the Offered
 Certificates ............................................        48
Certain United States Federal
 Income Tax Consequences .................................        93
Certain State and Local Tax
   Consequences ..........................................        97
Underwriting .............................................        99
Validity of the Certificates .............................        99
Index of Key Terms .......................................       100

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


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

                                 $[___________]

                                        
                                        
                                        
                            AIC PREMIUM FINANCE LOAN
                                  MASTER TRUST
                                        
                                        
                                        
                            $[________] SERIES 1998-1
                              FLOATING RATE CLASS A
                            ASSET BACKED CERTIFICATES
                                        
                                        
                                        
                           $[_________] SERIES 1998-1
                              FLOATING RATE CLASS B
                            ASSET BACKED CERTIFICATES
                                        
                                        
                                        
                             A.I. RECEIVABLES CORP.
                                   TRANSFEROR
                                        
                                [GRAPHIC OMITTED]
                                        
                                     [LOGO]
                                        
                                 --------------
                                   PROSPECTUS
                                 --------------



                              GOLDMAN, SACHS & CO.
                                    
                                    
                                    
                            DATED JANUARY [__], 1998
                                    
================================================================================

<PAGE>

                                     PART II
                     INFORMATION NOT REQUIRED IN PROSPECTUS


Item 13.    Other Expenses Of Issuance And Distribution

     The following table sets forth the estimated expenses in connection with
the offering described in this Registration Statement:

     Registration...................................... $       295
     Printing and Engraving............................           *
     Trustee's Fees....................................           *
     Legal Fees and Expenses...........................           *
     Accountants' Fees and Expenses....................           *
     Rating Agency Fees................................           *
     Miscellaneous.....................................           *

     Total............................................. $         *

----------
*    To be furnished by Amendment

Item 14     Indemnification Of Directors And Officers

     The indemnification provisions contained in Article NINTH of the
Certificate of Incorporation of A.I. Receivables Corp. provide:

            The Corporation shall indemnify, to the full extent permitted by
     Section 145 of the General Corporation Law of Delaware, as amended from
     time to time, all persons who it may indemnify pursuant thereto.

     Section 145 of the General Corporation Law of Delaware provides as follows:

            (a) A corporation shall have power to indemnify any person who was
     or is a party or is threatened to be made a party to any threatened,
     pending or completed action, suit or proceeding, whether civil, criminal,
     administrative or investigative (other than an action by or in the right of
     the corporation) by reason of the fact that the person is or was a
     director, officer, employee or agent of the corporation, or is or was
     serving at the request of the corporation as a director, officer, employee
     or agent of another corporation, partnership, joint venture, trust or other
     enterprise, against expenses (including attorneys' fees), judgments, fines
     and amounts paid in settlement actually and reasonably incurred by the
     person in connection with such action, suit or proceeding if the person
     acted in good faith and in a manner the person reasonably believed to be in
     or not opposed to the best interests of the corporation, and, with respect
     to any criminal action or proceeding, had no reasonable cause to believe
     the person's conduct was unlawful. The termination of any action, suit or
     proceeding by judgment, order, settlement, conviction, or upon a plea of
     nolo contendere or its equivalent, shall not, of itself, create a
     presumption that the person did not act in good faith and in a manner which
     the person reasonably believed to be in or not opposed to the best

     interests of the corporation, and, with respect to any criminal action or
     proceeding, had reasonable cause to believe that the person's conduct was
     unlawful.

            (b) A corporation shall have power to indemnify any person who was
     or is a party or is threatened to be made a party to any threatened,
     pending or completed action or suit by or in the right of the corporation
     to procure a judgment in its favor by reason of the fact that the person is
     or was a director, officer, employee or agent of the corporation, or is or
     was serving at the request of the

                                      II-1

<PAGE>



     corporation as a director, officer, employee or agent of another
     corporation, partnership, joint venture, trust or other enterprise against
     expenses (including attorneys' fees) actually and reasonably incurred by
     the person in connection with the defense or settlement of such action or
     suit if the person acted in good faith and in a manner the person
     reasonably believed to be in or not opposed to the best interests of the
     corporation and except that no indemnification shall be made in respect of
     any claim, issue or matter as to which such person shall have been adjudged
     to be liable to the corporation unless and only to the extent that the
     Court of Chancery or the court in which such action or suit was brought
     shall determine upon application that, despite the adjudication of
     liability but in view of all the circumstances of the case, such person is
     fairly and reasonably entitled to indemnity for such expenses which the
     Court of Chancery or such other court shall deem proper.

            (c) To the extent that a present or former director or officer of a
     corporation has been successful on the merits or otherwise in defense of
     any action, suit or proceeding referred to in subsections (a) and (b) of
     this section, or in defense of any claim, issue or matter therein, such
     person shall be indemnified against expenses (including attorneys' fees)
     actually and reasonably incurred by such person in connection therewith.

            (d) Any indemnification under subsections (a) and (b) of this
     section (unless ordered by a court) shall be made by the corporation only
     as authorized in the specific case upon a determination that
     indemnification of the present or former director, officer, employee or
     agent is proper in the circumstances because the person has met the
     applicable standard of conduct set forth in subsections (a) and (b) of this
     section. Such determination shall be made, with respect to a person who is
     a director or officer at the time of such determination, (1) by a majority
     vote of the directors who are not parties to such action, suit or
     proceeding, even though less than a quorum, or (2) by a committee of such
     directors designated by majority vote of such directors, even though less
     than a quorum, or (3) if there are no such directors, or if such directors
     so direct, by independent legal counsel in a written opinion, or (4) by the
     stockholders.


            (e) Expenses (including attorneys' fees) incurred by an officer or
     director in defending any civil, criminal, administrative or investigative
     action, suit or proceeding may be paid by the corporation in advance of the
     final disposition of such action, suit or proceeding upon receipt of an
     undertaking by or on behalf of such director or officer to repay such
     amount if it shall ultimately be determined that such person is not
     entitled to be indemnified by the corporation as authorized in this
     section. Such expenses (including attorneys' fees) incurred by former
     directors and officers or other employees and agents may be so paid upon
     such terms and conditions, if any, as the corporation deems appropriate.

            (f) The indemnification and advancement of expenses provided by, or
     granted pursuant to, the other subsections of this section shall not be
     deemed exclusive of any other rights to which those seeking indemnification
     or advancement of expenses may be entitled under any by law, agreement,
     vote of stockholders or disinterested directors or otherwise, both as to
     action in such person's official capacity and as to action in another
     capacity while holding such office.

            (g) A corporation shall have power to purchase and maintain
     insurance on behalf of any person who is or was a director, officer,
     employee or agent of the corporation, or is or was serving at the request
     of the corporation as a director, officer, employee or agent of another
     corporation, partnership, joint venture, trust or other enterprise against
     any liability asserted against such person and incurred by such person in
     any such capacity, or arising out of such person's status as such, whether
     or not the corporation would have the power to indemnify such person
     against such liability under this section.

            (h) For purposes of this section, references to "the corporation"
     shall include, in addition to the resulting corporation, any constituent
     corporation (including any constituent of a constituent) absorbed in a
     consolidation or merger which, if its separate existence had continued,
     would have had power and

                                      II-2

<PAGE>



     authority to indemnify its directors, officers, and employees or agents, so
     that any person who is or was a director, officer, employee or agent of
     such constituent corporation, or is or was serving at the request of such
     constituent corporation as a director, officer, employee or agent of
     another corporation, partnership, joint venture, trust or other enterprise,
     shall stand in the same position under this section with respect to the
     resulting or surviving corporation as such person would have with respect
     to such constituent corporation if its separate existence had continued.

            (i) For purposes of this section, references to "other enterprises"
     shall include employee benefit plans; references to "fines" shall include
     any excise taxes assessed on a person with respect to any employee benefit
     plan; and references to "serving at the request of the corporation" shall

     include any service as a director, officer, employee or agent of the
     corporation which imposes duties on, or involves services by, such
     director, officer, employee or agent with respect to an employee benefit
     plan, its participants or beneficiaries; and a person who acted in good
     faith and in a manner such person reasonably believed to be in the interest
     of the participants and beneficiaries of an employee benefit plan shall be
     deemed to have acted in a manner "not opposed to the best interests of the
     corporation" as referred to in this section.

            (j) The indemnification and advancement of expenses provided by, or
     granted pursuant to, this section shall, unless otherwise provided when
     authorized or ratified, continue as to a person who has ceased to be a
     director, officer, employee or agent and shall inure to the benefit of the
     heirs, executors and administrators of such a person.

            (k) The Court of Chancery is hereby vested with exclusive
     jurisdiction to hear and determine all actions for advancement of expenses
     or indemnification brought under this section or under any by-law,
     agreement, vote of stockholders or disinterested directors, or otherwise.
     The Court of Chancery may summarily determine a corporation's obligation to
     advance expenses (including attorneys' fees).

     The indemnification provisions contained in Article V of the By-Laws of
A.I. Receivables Corp. provide:

            The Corporation, to the full extent permitted, and in the manner
     required by the laws of the State of Delaware as in effect at the time of
     the adoption of this Article V or as the same may be amended from time to
     time, shall (i) indemnify any person (and the heirs and legal
     representatives of such person) who is made or is threatened to be made a
     party to any threatened, pending, or completed action, suit or proceeding,
     whether in nature civil, criminal, administrative or investigative, by
     reason of the fact that he or she is or was a director, officer, employee
     or agent of the Corporation or of any constituent Corporation absorbed into
     the Corporation by consolidation or merger or served or served with another
     Corporation, partnership, joint venture, trust or other enterprise at the
     request of the Corporation or of any such constituent Corporation and (ii)
     provide to any such person (and the heirs and legal representatives of such
     person) advances for expenses incurred in defending any such action, suit
     or proceeding, upon receipt of an undertaking by or on behalf of such
     person (and the heirs and legal representatives of such person) to repay
     such advances unless it is ultimately determined that he or she is entitled
     to indemnification by the Corporation.

     The Underwriting Agreement will also provide for indemnification in certain
instances by the Registrant of the Underwriters, their officers and controlled
persons.

Item 15.    Recent Sales Of Unregistered Securities

     None.




                                      II-3

<PAGE>


Item 16.    Exhibits And Financial Statement Schedules


     (a) Exhibits

1.1          - Form of Underwriting Agreement with respect to the Series 1998-1
               Class A Certificates and the Series 1998-1 Class B 
               Certificates. *
3.1          - Articles of Incorporation of A.I. Receivables Corp.
3.2          - By-Laws of A.I. Receivables Corp.
4.1          - Form of Master Amended & Restated Pooling and Servicing Agreement
               between the Registrant, A.I. Credit Corp., AICCO, Inc. and the
               Trustee.
4.2          - Form of Series Supplement (including forms of Series 1998-1 Class
               A and Series 1998-1 Class B Certificates). *
5.1          - Form of Opinion of Weil, Gotshal & Manges LLP with respect to
               legality.
8.1          - Opinion of Weil, Gotshal & Manges LLP with respect to tax 
               matters.
10.1         - Form of Receivables Sale Agreement among the Registrant, A.I.
               Credit Corp. and AICCO, Inc. 
10.2         - Form of Support Agreement between the Registrant and American
               International Group, Inc.*
23.1         - Consent of Weil, Gotshal & Manges LLP (included in its opinions 
               filed as Exhibits 5.1 and 8.1).
----------
*    To be filed by Amendment.

     (b)  Financial Statement Schedules

     All financial statements, schedules and historical financial information
have been omitted as they are not applicable.

Item 17.    Undertakings

     The undersigned Registrant hereby undertakes as follows:

     (a) To provide to the Underwriters at the closing specified in the
Underwriting Agreement certificates in such denominations and registered in such
names as required by the Underwriters to permit prompt delivery to each
purchaser.

     (b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions described under Item 14 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the

Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the questions whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

     (c) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of the
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act of 1933 shall be deemed to be part of this Registration
Statement as of the time it was declared effective.

     (d) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

                                      II-4

<PAGE>



                                   SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 21st day of January, 1998.


                                      A.I. RECEIVABLES CORP.


                                      By: /s/ Gerald V. Vitkauskas
                                          ------------------------
                                          Gerald V. Vitkauskas
                                          President


     Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.


<TABLE>
<CAPTION>

         SIGNATURE                                   TITLE                                 DATE
         ---------                                   -----                                 ----
<S>                                        <C>                                      <C> 
/s/ Gerald V. Vitkauskas                   President and Director                   January 21, 1998
------------------------
Gerald V. Vitkauskas                       (Principal executive officer)

/s/ Michael D. Vogen                       Treasurer and Director                   January 21, 1998
------------------------
Michael D. Vogen                           (Principal financial officer and
                                           accounting officer)
</TABLE>


                                      II-5

<PAGE>



                                  EXHIBIT INDEX

<TABLE>
<CAPTION>

EXHIBIT                                                                             SEQUENTIALLY
   NO.       DESCRIPTION                                                            NUMBERED PAGE
<S>          <C>

1.1          - Form of Underwriting Agreement with respect to the Series 1998-1 
               Class A Certificates and the Series 1998-1 Class B Certificates. *
3.1          - Articles of Incorporation of A.I. Receivables Corp.
3.2          - By-Laws of A.I. Receivables Corp.
4.1          - Form of Master Amended & Restated Pooling and Servicing Agreement
               between the Registrant, A.I. Credit Corp., AICCO, Inc. and the
               Trustee.
4.2          - Form of Series Supplement (including forms of Series 1998-1 Class
               A and Series 1998-1 Class B Certificates). *
5.1          - Form of Opinion of Weil, Gotshal & Manges LLP with respect to
               legality.
8.1          - Opinion of Weil, Gotshal & Manges LLP with respect to tax matters.
10.1         - Form of Receivables Sale Agreement among the Registrant, A.I.
               Credit Corp. and AICCO, Inc.
10.2         - Form of Support Agreement between the Registrant and American
               International Group, Inc. *
23.1         - Consent of Weil, Gotshal & Manges LLP (included in its opinions
               filed as Exhibits 5.1 and 8.1).

</TABLE>

----------
*  To be filed by Amendment.


                                      II-6
[{"type": "S-1", "sequence": "1", "description": "REGISTRATION STATEMENT", "secsgml_size_bytes": 486766}]
{"company-data": {"conformed-name": "A I RECEIVABLES CORP", "cik": "0001053428", "assigned-sic": "", "irs-number": "132736972", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-44653", "film-number": "98510559"}, "business-address": {"street1": "160 WATER ST", "city": "NEW YORK", "state": "NY", "zip": "10038", "phone": "2124285500"}, "mail-address": {"street1": "160 WATER ST", "city": "NEW YORK", "state": "NY", "zip": "10038"}}
As filed with the Securities and Exchange Commission on January 21, 1998

                                                       Registration No. 33-85608
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549
                                 --------------
                                    FORM S-1
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933

                                 --------------
                             A.I. RECEIVABLES CORP.
                    (Depositor to the Trust described herein)
                (Exact name as specified in registrant's charter)

                      AIC PREMIUM FINANCE LOAN MASTER TRUST
                    (Issuer with respect to the Certificates)
Delaware                              9999                   Application Pending
(State or other jurisdiction of     (Primary Standard Industrial        (I.R.S. Employer
incorporation or organization)       Classification Code Number)     Identification Number)
A.I. RECEIVABLES CORP.
                                160 Water Street
                            New York, New York 10038
                                 (212) 428-5500

          (Address, including zip code, and telephone number, including
             area code, of registrant's principal executive office)
                               
                                 --------------

                               MICHAEL D. VOGEN
                                  TREASURER
                            A.I. RECEIVABLES CORP.
                               160 Water Street
                           New York, New York 10038
                                (212) 428-5500
          (Name, address, including zip code, and telephone number,
                  including area code, of agent for service)

                                   COPIES TO:

      SYLVIE DURHAM                              ANDREA G. PODOLSKY, ESQ.
 Weil, Gotshal & Manges LLP                Cleary, Gottlieb, Steen & Hamilton
      767 Fifth Avenue                               One Liberty Plaza
 New York, New York 10153                         New York, New York 10006
      (212) 310-8000                                  (212) 225-2000

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

         Approximate date of commencement of proposed sale to the public: As
soon as practicable on or after this registration statement becomes effective.

         If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. [ ]

         If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

         If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]

         If this form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]

         If delivery of the prospectus is expected to be made pursuant to Rule
434, check the following box. [ ]

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

                        CALCULATION OF REGISTRATION FEE
================================================================================
PROPOSED
  TITLE OF SECURITIES                  AMOUNT TO                PROPOSED MAXIMUM         MAXIMUM AGGREGATE         AMOUNT OF
   BEING REGISTERED                  BE REGISTERED          OFFERING PRICE PER UNIT*       OFFERING PRICE       REGISTRATION FEE
Series 1998-1 Floating Rate
Class A Asset Backed Certificates      $900,000                    100%                      $900,000                $265.50

Series 1998-1 Floating Rate
Class B Asset Backed Certificates      $100,000                    100%                      $100,000                $ 29.50
================================================================================
* Estimated solely for the purpose of calculating the registration fee.

         The Registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
A.I. RECEIVABLES CORP.

                              CROSS REFERENCE SHEET
ITEM
NUMBER          NAME AND CAPTION IN FORM S-1                                     CAPTION IN PROSPECTUS
------          ----------------------------                                     ---------------------
Item 1.     Forepart of the Registration Statement and
            Outside Front Cover Page of Prospectus..............         Front Cover Page of Registration Statement;
                                                                          Outside Front Cover Page of Prospectus
Item 2.     Inside Front and Outside Back Cover Pages
            of Prospectus.......................................         Inside Front Cover Page; Outside Back
                                                                          Cover Page of Prospectus
Item 3.     Summary Information, Risk Factors and Ratio of 
             Earnings to Fixed Charges..........................         Prospectus Summary; Special Considerations

Item 4.     Use of Proceeds.....................................         Use of Proceeds

Item 5.     Determination of Offering Price.....................         *

Item 6.     Dilution............................................         *

Item 7.     Selling Security Holders............................         *

Item 8.     Plan of Distribution................................         Underwriting

Item 9.     Description of Securities to be Registered..........         Prospectus Summary; Description of the Offered
                                                                          Certificates 

Item 10.    Interests of Named Experts and Counsel..............         Legal Matters

Item 11.    Information with Respect to the Registrant..........         Business of A.I. Receivables Corp., A.I. Credit Corp. 
                                                                          and AICCO, Inc.
Item 12.    Disclosure of Commission Position on 
             Indemnification for Securities Act Liabilities.....         *

Item 13.    Other Expenses of Issuance and Distribution.........         See Part II

Item 14.    Indemnification of Directors and Officers...........         See Part II

Item 15.    Recent Sales of Unregistered Securities.............         *

Item 16.    Exhibits and Financial Statement Schedules..........         See Part II

Item 17.    Undertakings........................................         See Part II
----------

*    Not applicable.

                                        2
PROSPECTUS

                                [GRAPHIC OMITTED]

                                  $[----------]

                      AIC PREMIUM FINANCE LOAN MASTER TRUST

   $[_________] Series 1998-1 Floating Rate Class A Asset Backed Certificates

             $[_________] Series 1998-1 Floating Rate Class B Asset
                              Backed Certificates

                             A.I. RECEIVABLES CORP.
                                   Transferor

                                A.I. CREDIT CORP.
                                   AICCO, INC.
                        Original Transferors and Servicer

            Each Series 1998-1 Floating Rate Class A Asset Backed Certificate
(collectively, the "Series 1998-1 Class A Certificates") and each Series 1998-1
Floating Rate Class B Asset Backed Certificate (collectively, the "Series 1998-1
Class B Certificates" and, together with the Series 1998-1 Class A Certificates,
the "Offered Certificates") offered hereby will evidence an undivided interest
in the assets of AIC Premium Finance Loan Master Trust (the "Trust") created
pursuant to a Pooling and Servicing Agreement dated as of December 1, 1994, as
will be amended and restated as of the Closing Date (together with all
supplements to such agreement, the "Agreement"), among A.I. Receivables Corp.
("AIR"), as transferor (the "Transferor"), A.I. Credit Corp. ("AIC"), as an
original transferor and servicer, AICCO, Inc. ("AICCO"), as an original
transferor and servicer (together with AIC, the "Original Transferors" or the
"Servicer"), and The First National Bank of Chicago, as trustee (the "Trustee").
AICCO is a wholly owned subsidiary of AIC which, in turn, is a wholly owned
subsidiary of American International Group, Inc. ("AIG"). Each of AIC and AICCO
owns 50% of AIR.

            The assets of the Trust will include the entire beneficial interest
in commercial premium finance loans to borrowers to finance premiums on property
and casualty insurance policies governed by the law of a State in the United
States of America or the District of Columbia under which the borrowers are the
insureds, made or purchased by either AIC or AICCO (the "Loans"), including (i)
all amounts due and to become due and all collections and recoveries on the
Loans, and (ii) the proceeds of certain collateral security securing the Loans,
each as described herein. The beneficial interests described above are herein
referred to as the "Receivables." AIC and AICCO will service the Loans. The
Trust has previously issued a Series of certificates (the "Series 1994-1
Certificates").

                                                       (continued on next page)

            THERE CURRENTLY IS NO SECONDARY MARKET FOR THE OFFERED CERTIFICATES

AND THERE IS NO ASSURANCE THAT ONE WILL DEVELOP. POTENTIAL INVESTORS SHOULD
CONSIDER, AMONG OTHER THINGS, THE INFORMATION SET FORTH IN "SPECIAL
CONSIDERATIONS," WHICH DESCRIBES MATERIAL RISKS INVOLVED WITH AN INVESTMENT IN
THE OFFERED CERTIFICATES.

                               -----------------
THE OFFERED CERTIFICATES REPRESENT INTERESTS IN THE TRUST ONLY AND
DO NOT REPRESENT INTERESTS IN OR RECOURSE OBLIGATIONS OF A.I. RECEIVABLES CORP.,
A.I. CREDIT CORP., AICCO, INC., AMERICAN INTERNATIONAL GROUP, INC. OR ANY OF
THEIR RESPECTIVE AFFILIATES. NEITHER THE OFFERED CERTIFICATES, THE LOANS NOR THE
RECEIVABLES ARE INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR
INSTRUMENTALITY OR ANY OTHER PERSON.

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

            THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

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

================================================================================
PRICE TO               UNDERWRITING                            PROCEEDS TO
                                     PUBLIC                  DISCOUNT                              TRANSFEROR(1)
Per 1998-1 Class A Certificate                               [_____]%                            [____]%  [_____]%
Per 1998-1 Class B Certificate                               [_____]%                            [____]%  [_____]%
Total.......................      $[_______]                $[_____]                               $[________]
================================================================================

(1) Before deduction of expenses of the offering payable by AIR estimated to be
$[______].

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

            The Offered Certificates are offered by the Underwriters as
specified herein, subject to receipt and acceptance by the Underwriters and
subject to their right to reject in whole or in part. It is expected that the
Offered Certificates will be delivered in book-entry form on or about January
[___], 1998, through the facilities of The Depository Trust Company.

                              GOLDMAN, SACHS & CO.
                                -----------------

                The date of this Prospectus is January [__], 1998

                                        1
(continued from previous page)

         Concurrently with the issuance of the Series 1998-1 Class A
Certificates and Series 1998-1 Class B Certificates, the Trust will issue from
the same Series another class of certificates (the "Series 1998-1 Class C
Certificates," and collectively with the Series 1998-1 Class A Certificates and
the Series 1998-1 Class B Certificates, the "Series 1998-1 Certificates")
described herein, which will be owned by the Transferor. The Transferor will
also own the undivided interest in the Trust represented neither by the Series
1998-1 Certificates nor the Series 1994-1 Certificates (the "Transferor
Ownership Interest"). The Transferor may offer from time to time other Series of
certificates which evidence fractional undivided interests in certain assets of
the Trust, which may have terms significantly different from the Series 1998-1
Certificates, by reducing its interest in the Trust. See "Description of the
Offered Certificates--New Series Issuances."

         Interest will accrue on the Series 1998-1 Class A Certificates from
[_____________], 1998 (the "Closing Date") through [__________], 1998 at the per
annum rate of [_______]%. From [________], 1998 through [________], 1998 and
with respect to each Interest Period thereafter, interest will accrue on the
Series 1998-1 Class A Certificates at the per annum rate of [____]% above the
rate per annum shown on page 3750 of the Telerate screen or any successor page
as the composite London interbank offered rate for one-month United States
dollar deposits ("LIBOR") determined as set forth herein on the related LIBOR
Determination Date with respect to each such period, but in no event in excess
of [______]% per annum (the "Series 1998-1 Class A Certificate Rate"). Interest
will accrue on the Series 1998-1 Class B Certificates from the Closing Date
through [______________], 1998 at the per annum rate of [______]%. From
[________], 1998 through [________________], 1998 and with respect to each
Interest Period thereafter, interest will accrue on the Series 1998-1 Class B
Certificates at the per annum rate of [____]% above LIBOR determined as set
forth herein on the related LIBOR Determination Date with respect to each such
period, but in no event in excess of [____]% per annum (the "Series 1998-1 Class
B Certificate Rate"). The initial LIBOR Determination Date will be [_________],
1998. Interest with respect to the Series 1998-1 Certificates will be
distributed on [_________], 1998 and on the 15th day of each month thereafter
(or, if such 15th day is not a business day, the next succeeding business day)
(each a "Distribution Date").

         Principal with respect to the Series 1998-1 Class A Certificates is
scheduled to be distributed monthly on each Distribution Date during the Series
1998-1 Class A Controlled Amortization Period (as defined herein). The first
such Distribution Date is scheduled to occur in [_______] and the last such
Distribution Date is scheduled to occur in [______]; however, principal with
respect to the Series 1998-1 Class A Certificates may be paid earlier or later
under certain limited circumstances described herein. Principal with respect to
the Series 1998-1 Class B Certificates is scheduled to be distributed in a
single payment, after the Series 1998-1 Class A Certificates have been paid in

full, on the Distribution Date in [______], but may be paid earlier or later
under certain limited circumstances described herein. See "Maturity
Considerations" and "Description of the Offered Certificates--Pay Out Events."
During the Series 1998-1 Class A Controlled Amortization Period, the amount
scheduled to be paid as principal on the Series 1998-1 Class A Certificates on
each of the aforementioned Distribution Dates, out of collections received with
respect to the Receivables, and to the extent of the Series 1998-1 Class A
Ownership Interest (as defined herein) will equal $[_____________]. See
"Description of the Offered Certificates--Principal Payments."

         On each Distribution Date distributions of interest will be made first
in respect of the Series 1998-1 Class A Certificates, second in respect of the
Series 1998-1 Class B Certificates and third in respect of the Series 1998-1
Class C Certificates. On each Distribution Date on which principal is
distributable in respect of the Series 1998-1 Class A Certificates, such
principal will be payable after interest on the Series 1998-1 Class A
Certificates and

                                        2
Series 1998-1 Class B Certificates has been paid. Principal payments will not be
made to Series 1998-1 Class B Certificateholders until the final principal
payment due in respect of the Series 1998-1 Class A Certificates has been paid.
Thus on each Distribution Date on which principal is distributable in respect of
the Series 1998-1 Class B Certificates, such principal will be payable after
interest on the Series 1998-1 Class A Certificates and Series 1998-1 Class B
Certificates and principal on the Series 1998-1 Class A Certificates have been
paid. On each such Distribution Date no payments of interest or principal will
be made in respect of the Series 1998-1 Class C Certificates unless principal
due in respect of the Series 1998-1 Class B Certificates has been paid. For
further information regarding the extent to which the Series 1998-1 Class B
Certificates are subordinated to the Series 1998-1 Class A Certificates and the
extent to which the Series 1998-1 Class C Certificates are subordinated to the
Series 1998-1 Class A Certificates and Series 1998-1 Class B Certificates, see
"Description of the Offered Certificates--Application of Collections." In
addition, a portion of the Principal Receivables and Finance Charge Receivables
allocable to the Transferor Ownership Interest will be deposited monthly in the
Series 1998-1 Yield Enhancement Account and will be available to fund payments
due with respect to the Series 1998-1 Certificates to the extent described
herein.

         Certain employee benefit plans, including plans subject to ERISA, may
not purchase any Offered Certificates. See "Summary--ERISA Plans" herein.

         IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE OFFERED
CERTIFICATES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

         Until [_________], 1998, all dealers effecting transactions in the
registered securities, whether or not participating in this distribution, may be
required to deliver a prospectus. This is in addition to the obligation of

dealers to deliver a prospectus when acting as underwriters and with respect to
their unsold allotments or subscriptions.

                   REPORTS TO HOLDERS OF OFFERED CERTIFICATES

         Unless and until Definitive Certificates (as defined herein) are
issued, monthly and annual reports, containing information concerning the Trust
and prepared by the Servicer, will be sent on behalf of the Trust to Cede & Co.
("Cede"), as nominee of The Depository Trust Company ("DTC") and registered
holder of the Offered Certificates, pursuant to the Agreement. See "Description
of the Offered Certificates--Book-Entry Registration," "--Reports to Holders of
Offered Certificates" and "--Evidence as to Compliance." Such reports will not
constitute financial statements prepared in accordance with generally accepted
accounting principles. The Transferor does not intend to send any of its
financial reports to Holders of Offered Certificates (as defined herein) or to
the owners of beneficial interests in the Offered Certificates ("Certificate
Owners"). The Servicer will file with the Securities and Exchange Commission
(the "Commission") such periodic reports with respect to the Trust as are
required under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations of the Commission thereunder.

                                        3
AVAILABLE INFORMATION

         The Transferor, as transferor to the Trust, has filed a Registration
Statement under the Securities Act of 1933, as amended (the "Securities Act"),
with the Commission on behalf of the Trust with respect to the Offered
Certificates offered pursuant to this Prospectus. For further information,
reference is made to the Registration Statement and amendments thereof and
exhibits thereto, which are available for inspection without charge at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549; 7 World Trade Center, New York, New York 10048;
and Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of the Registration Statement and amendments thereof and
exhibits thereto may be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
The Commission also maintains a site on the World Wide Web at
"http://www.sec.gov" at which users can view and download copies of reports,
proxies and other information filed electronically through the Electronic Data
Gathering, Analysis and Retrieval ("EDGAR") system.

                               PROSPECTUS SUMMARY

         The following is qualified in its entirety by reference to the detailed
information appearing elsewhere in this Prospectus, including the description of
material risks set forth under "Special Considerations." Certain capitalized
terms used herein are defined elsewhere in this Prospectus. A listing of the
pages on which some of such terms are defined is found in the "Index of Key
Terms For Prospectus." Unless the context requires otherwise, certain
capitalized terms used herein relate only to the Offered Certificates.
Title of Securities................. Series 1998-1 Floating Rate Class A Asset Backed Certificates (the "Series
                                     1998-1 Class A Certificates") and Series 1998-1 Floating Rate Class B Asset
                                     Backed Certificates (the "Series 1998-1 Class B Certificates" and, together
                                     with the Series 1998-1 Class A Certificates, the "Offered Certificates") that
                                     are being issued pursuant to an Amended and Restated Pooling and Servicing
                                     Agreement, to be dated as of the Closing Date, among AIR, as Transferor,
                                     AIC and AICCO, as the Original Transferors and Servicer, and the Trustee,
                                     and the Series 1998-1 Supplement thereto of the same date (collectively,
                                     together with the Amended and Restated Series 1994-1 Supplement thereto,
                                     to be dated as of the Closing Date, unless the context otherwise requires, the
                                     "Agreement").  The original Pooling and Servicing Agreement that is to be
                                     amended and restated is dated as of December 1, 1994 and was entered into
                                     among AIC and AICCO, as the Transferors and Servicer, and the Trustee
                                     (together with the original Series 1994-1 Supplement thereto of the same date
                                     (the "Original Series 1994-1 Supplement"), the "Original Agreement").

Issuer of Securities................ AIC Premium Finance Loan Master Trust will issue on the Closing Date the
                                     Offered Certificates, which will represent an undivided interest in the assets
                                     of the Trust formed pursuant to the Agreement.  Concurrently with the
                                     issuance of the Offered Certificates, the Trust will issue from the same
                                     Series another class of certificates (the "Series 1998-1 Class C Certificates,"
                                     and, collectively with the Series 1998-1 Class A Certificates and the Series
                                     1998-1 Class B Certificates, the "Series 1998-1 Certificates"), which will be
                                     owned by the Transferor as the Series 1998-1 Class C Certificateholder.  The
                                     remaining undivided interest in the Trust not represented by the Series

                                        4
1998-1 Certificates or the Series 1994-1 Certificates will also be owned by the
                                     Transferor as the Transferor Ownership Interest.

The Trust Generally................. AIC Premium Finance Loan Master Trust is a master trust.  The Trust will
                                     issue the Series 1998-1 Certificates as its second Series and may issue
                                     additional Series from time to time.  The Trust has previously issued a Series
                                     of certificates (the "Series 1994-1 Certificates").  See "The Trust--Other
                                     Series."  The assets of the Trust will include a pool of Receivables which
                                     relate to premium finance loans funded by AIC or AICCO ("funded" and
                                     like terms, when used with respect to Loans, refer to the making or
                                     purchasing of such Loans by AIC or AICCO, unless the context otherwise
                                     requires; see "Business of A.I. Receivables Corp., A.I. Credit Corp. and
                                     AICCO, Inc.--Premium Finance Loan Purchase Policies") and collections
                                     thereon, as more fully described herein, and either (i) were transferred
                                     directly to the Trust by AIC and AICCO pursuant to the Original Agreement
                                     (the "Existing Receivables") or (ii) are to be sold to AIR by AIC and AICCO
                                     pursuant to a Receivables Sale Agreement, to be dated as of the Closing
                                     Date, among AIC, AICCO and AIR (the "Receivables Sale Agreement"),
                                     and subsequently transferred to the Trust by AIR, as Transferor, pursuant to
                                     the Agreement (the "Future Receivables").  The assets of the Trust are

                                     expected to change over the life of the Trust as Additional Receivables are
                                     transferred to the Trust and Receivables held by the Trust are collected,
                                     charged off or removed from the Trust.

                                     Collections in respect of Principal Receivables and Finance Charge
                                     Receivables will be allocated among the Series 1998-1 Certificateholders, the
                                     Series 1994-1 Certificateholders and the Transferor based generally on their
                                     respective ownership interests in the Trust, as described herein, provided that
                                     such collections allocable to the Series 1998-1 Certificates will be allocated
                                     as more fully described herein to pay interest only on the Series 1998-1
                                     Certificates during a revolving period and then to pay both principal and
                                     interest thereon during an amortization period scheduled to commence in
                                     [__________].
                                      
Transferor of Receivables
to the Trust........................ A.I. Receivables Corp., a Delaware corporation ("AIR"), was recently
                                     created for the sole purpose of acting as Transferor of the Receivables under
                                     the Trust.  See "Business of A.I. Receivables Corp., A.I. Credit Corp. and
                                     AICCO, Inc.--General."  AIR will purchase the Receivables from its two
                                     parent companies,  A.I. Credit Corp., a New Hampshire corporation
                                     ("AIC"), and AICCO, Inc., a California corporation ("AICCO") and a
                                     wholly-owned subsidiary of AIC, which collectively were the original
                                     transferors of Receivables to the Trust under the Original Agreement.  AIC
                                     funds loans to commercial borrowers to finance premiums on property and
                                     casualty insurance policies throughout the United States, except in California
                                     where premium finance loans are funded by AICCO.  AIC is a
                                     wholly-owned subsidiary of American International Group, Inc., a Delaware
                                     corporation ("AIG").  AIG is a holding company which through its

                                        5
subsidiaries is primarily engaged in a broad range of insurance and
                                     insurance-related activities in the United States and abroad.

Trust Assets Generally.............. The assets of the Trust will include the entire beneficial interest in
                                     commercial premium finance loans to borrowers ("Obligors") to finance
                                     premiums on property and casualty insurance policies governed by the law of
                                     a State of the United States of America or the District of Columbia under
                                     which the Obligors are the insureds (the "Loans"), funded by AIC or
                                     AICCO, including (i) all amounts due and to become due and all collections
                                     and recoveries on the Loans, and (ii) the proceeds of certain collateral
                                     security securing the Loans.  The beneficial interests described above are
                                     herein referred to as the "Receivables."

                                     The Loans are usually short-term in duration, generally with maturities under
                                     one year, and bear fixed interest rates that are established generally based on
                                     spreads over interest rates on money market investments of comparable
                                     maturities prevailing at the time the Loans are made.  Obligors usually
                                     secure their Loan obligations to AIC or AICCO by pledging the Obligors'
                                     rights to recover any unearned premium from the insurance company upon
                                     cancellation of the related insurance policy prior to its expiration.  AIC and

                                     AICCO generally have the right to cancel the insurance policy and collect
                                     such unearned premium from the insurance company following a payment
                                     default on the related Loan.  At December 31, 1997, in excess of 35% of the
                                     aggregate outstanding loan account balance (as defined herein in the table
                                     entitled "Outstanding Loan Account Balances by Size" under "The
                                     Receivables"), represented loans funded by AIC or AICCO to finance
                                     premiums on insurance policies issued by insurance affiliates of AIG.  See
                                     "Business of A.I. Receivables Corp., A.I. Credit Corp. and AICCO,
                                     Inc.--Premium Finance Loan Origination; Collection Policy" and
                                     "--Premium Finance Loan Underwriting Procedures."

                                     AIC and AICCO originally conveyed to the Trustee pursuant to the Original
                                     Agreement all Eligible Receivables owned by them as of November 30, 1994
                                     (the "Cut-Off Date") and, subsequently, all Eligible Receivables relating to
                                     Loans funded by them thereafter.  AIC and AICCO will continue to transfer
                                     Receivables to the Trustee prior to the Closing Date, but will cease doing so
                                     as of the Closing Date.  Receivables arising on the Closing Date and from
                                     time to time thereafter may, and under certain circumstances set forth in the
                                     Agreement will, be transferred to the Trustee by the Transferor until
                                     termination of the Trust (such Receivables, the "Additional Receivables").
                                     The Transferor will acquire such Receivables from AIC and AICCO
                                     pursuant to the Receivables Sale Agreement.  See "Description of the
                                     Offered Certificates--Addition of Receivables" and "--Removal of
                                     Receivables."

                                     As of December 31, 1997, the average outstanding loan account balance (as
                                     defined herein in the table entitled "Outstanding Loan Account Balances by
                                     Size" under "The Receivables") was approximately $16,100, ranging from
6
approximately 46,000 loan accounts with balances of under $5,000, to 12
                                     loan accounts with balances in excess of $5 million. The Transferor has 
                                     agreed that in the event Receivables relating to a single Obligor result 
                                     in Default Amounts equal to 0.60% or more of the outstanding principal balance of 
                                     the Receivables owned by the Trust as of the end of a Monthly Period,
                                     such Default Amounts in excess of 0.60% of the outstanding principal balance of 
                                     Receivables owned by the Trust will be allocated solely to the Transferor Ownership 
                                     Interest. See "The Receivables" and "Description of the Offered Certificates." 
                                     For a description of certain other Default Amounts that may be allocated solely to the 
                                     Transferor Ownership Interest based upon the proportion of Receivables in the Trust relating 
                                     to Loans  made to finance premiums paid to certain insurers, see "Description of the Offered
                                     Certificates--Defaulted Loans; Charge-Offs."

Securities Offered.................. The aggregate initial principal amount of the Series 1998-1 Class A
                                     Certificates will be $[__________] and of the Series 1998-1 Class B
                                     Certificates will be $[__________].  The aggregate initial principal amount 
                                     of the Series 1998-1 Class C Certificates, which will be acquired on the

                                     Closing Date by the Transferor and are not being offered hereby, will be
                                     $[__________].  The Offered Certificates will be issued in book-entry form
                                     only and will be represented by one or more Offered Certificates registered
                                     in the name of Cede.  A Certificate Owner will not be entitled to receive a
                                     definitive certificate representing such person's interest, except in the event
                                     that Definitive Certificates are issued under the limited circumstances
                                     described herein.  In such event, interests in the Offered Certificates will be
                                     available in minimum denominations of $1,000 and integral multiples
                                     thereof.  See "Description of the Offered Certificates--Definitive
                                     Certificates."

                                     As used herein, the term "Holders of Offered Certificates" refers collectively
                                     to the holders of the Series 1998-1 Class A Certificates and the Series 1998-1
                                     Class B Certificates; the term "Series 1998-1 Certificateholders" refers
                                     collectively to the holders of the Series 1998-1 Certificates; the terms "Series
                                     1998-1 Class A Certificateholders," "Series 1998-1 Class B
                                     Certificateholders" and "Series 1998-1 Class C Certificateholders" refer to
                                     the holders of the Series 1998-1 Class A Certificates, the Series 1998-1 Class
                                     B Certificates and the Series 1998-1 Class C Certificates, respectively; and
                                     the term "Series 1994-1 Certificateholders" refers collectively to the holders
                                     of the Series 1994-1 Certificates.  All references herein to Holders of
                                     Offered Certificates shall include Certificate Owners except as otherwise
                                     specified herein.

Rights of Series 1998-1
Certificateholders
Generally........................... Each of the Series 1998-1 Certificates offered hereby and issued pursuant to
                                     the Agreement (and each of the Series 1994-1 Certificates, which were
                                     previously issued) represents an undivided interest in the assets of the Trust.
                                     Each Series 1998-1 Certificate offered hereby represents the right to receive
7
payments of interest and principal, funded from a percentage of the collections in
                                     respect of Principal Receivables and Finance Charge Receivables allocated to the
                                     Series 1998-1 Certificates, and, under certain circumstances, from funds on
                                     deposit in the Series 1998-1 Yield Enhancement Account and its allocable
                                     portion of funds on deposit in the Excess Funding Account. On each Distribution Date
                                     distributions of interest will be made first in respect of the Series 1998-1 Class
                                     A Certificates, second in respect of the Series 1998-1 Class B Certificates and
                                     third in respect of the Series 1998-1 Class C Certificates. On each Distribution Date
                                     on which principal is distributable in respect of the Series 1998-1 Class A
                                     Certificates, such principal will be payable after interest on the Series 1998-1
                                     Class A Certificates and Series 1998-1 Class B Certificates has been paid.
                                     Principal payments will not be made to Series 1998-1 Class B Certificateholders
                                     until the final principal payment due in respect of the Series 1998-1 Class A
                                     Certificates has been paid. Thus on each Distribution Date on which principal is
                                     distributable in respect of the Series 1998-1 Class B Certificates, such principal

                                     will be payable after interest on the Series 1998-1 Class A Certificates and
                                     Series 1998-1 Class B Certificates and principal on the Series 1998-1 Class A
                                     Certificates has been paid. On each such Distribution Date no payments of interest
                                     or principal will be made in respect of the Series 1998-1 Class C Certificates unless
                                     principal due in respect of the Series 1998-1 Class B Certificates has been paid.
                                     For further information regarding the extent to which the Series 1998-1 Class B
                                     Certificates are subordinated to the Series 1998-1 Class A Certificates and the extent
                                     to which the Series 1998-1 Class C Certificates are subordinated to the Series
                                     1998-1 Class A Certificates and Series 1998-1 Class B Certificates, see
                                     "Description of the Offered Certificates--Application of Collections."
                                     The Series 1998-1 Yield Enhancement Account will be funded on each Transfer Date with a
                                     portion of the collections in respect of the Receivables otherwise allocable to the
                                     Transferor Ownership Interest to cover shortfalls, if any, in the allocable funds
                                     of the Trust available to pay amounts due on the related Distribution Date with
                                     respect to the Series 1998-1 Certificates, to the extent provided herein. See "Series
                                     1998-1 Yield Enhancement Account" in this Summary and "Description of the Offered
                                     Certificates--Series 1998-1 Yield Enhancement Account."

                                     The Series 1998-1 Certificates represent interests in the Trust only and do
                                     not represent interests in or recourse obligations of AIR, AIC, AICCO, AIG
                                     or any of their respective affiliates.  Neither the Series 1998-1 Certificates,
                                     the Loans nor the Receivables are insured or guaranteed by any
                                     governmental agency or instrumentality or any other person.

Allocations of Collections
Among the Certificateholders
and the Transferor
Generally........................... Collections with respect to the Receivables will be allocated, based on the
                                     respective ownership interests, among (i) the Series 1998-1 Class A
                                     Certificateholders, the Series 1998-1 Class B Certificateholders and the
8
Series 1998-1 Class C Certificateholders, (ii) the Series 1994-1 Certificateholders,
                                     (iii) the ownership interest of the certificateholders of any other Series that
                                     may be issued by the Trust in the future pursuant to the Agreement and the
                                     applicable Series Supplement and (iv) the retained Transferor Ownership Interest, as
                                     described below. The Series 1998-1 Class C Ownership Interest in the initial amount of
                                     $[________] (which amount represents approximately [___]% of the sum of the
                                     Series 1998-1 Class A Initial Ownership Interest, the Series 1998-1 Class B Initial
                                     Ownership Interest and the Series 1998-1 Class C Initial Ownership Interest)
                                     constitutes credit enhancement for the Offered Certificates, to the extent
                                     described herein, and the Series 1998-1 Class B Ownership Interest in the amount of
                                     $[_________] (which amount represents approximately [__]% of the sum of the
                                     Series 1998-1 Class A Initial Ownership Interest, the Series 1998-1 Class B Initial
                                     Ownership Interest and the Series 1998-1 Class C Initial Ownership Interest)
                                     constitutes credit enhancement for the Series 1998-1 Class A Certificates, to the
                                     extent described herein. The Transferor Ownership Interest is not subordinate to
                                     the Series 1998-1 Certificates, although a portion of the collections in respect of

                                     Receivables otherwise allocable to the Transferor Ownership Interest will be
                                     available to the Series 1998-1 Certificates as yield enhancement (see "Description of
                                     the Offered Certificates--Series 1998-1 Yield Enhancement Account") and under the
                                     circumstances described under "Description of the Offered Certificates--Excess Funding
                                     Account," a portion of losses on Receivables meeting specified concentration
                                     levels (based on the identity of the related Obligor or the insurer to whom
                                     financed premiums were paid) that would otherwise be allocable to the Series 1998-1
                                     Certificates may be allocated to the Transferor Ownership Interest. See
                                     "Description of Offered Certificates--Series 1998-1 Yield Enhancement Account," "--Excess
                                     Funding Account" and "--Defaulted Loans; Charge-Offs."

Allocations of Finance
Charge Receivables,
Principal Receivables and
Default Amounts..................... The Series 1998-1 Class A Certificates, the Series 1998-1 Class B
                                     Certificates and the Series 1998-1 Class C Certificates will each represent the
                                     right to receive varying percentages of collections by the Trust of Finance
                                     Charge Receivables and Principal Receivables, and will be allocated varying
                                     percentages of Default Amounts, during each calendar month ending after the
                                     Closing Date (a "Monthly Period").  Default Amounts arise as a result of a
                                     charge-off by the Servicer as uncollectable of a Defaulted Loan related to a
                                     Receivable held by the Trust.  Collections of Finance Charge Receivables
                                     and Default Amounts at all times, and collections of Principal Receivables
                                     during the Series 1998-1 Revolving Period, will be allocated to the Series
                                     1998-1 Certificateholders Ownership Interests based on the Series 1998-1
                                     Floating Investor Percentage.  Collections of Principal Receivables during the
                                     Series 1998-1 Controlled Amortization Period and, if applicable, the Series
                                     1998-1 Rapid Amortization Period will be allocated to the Series 1998-1
                                     Certificateholders Ownership Interests based on the Series 1998-1 Fixed
9
Investor Percentage.  See  "Description  of  the  Offered Certificates--Allocation Percentages"
                                     and "--Pay Out Events."

Payment Rights of Series
1998-1 Class A
Certificateholders
Generally........................... The Series 1998-1 Class A Certificates will represent the right to receive from collections 
                                     with respect to the Receivables allocated to the Series 1998-1 Class A Certificates funds up 
                                     to (but not in excess of) the amounts required to make (a) payments of interest accruing from 
                                     the Closing Date through [____________] at the per annum rate of [______]% and, with
                                     respect to each Interest Period thereafter, at the per annum rate of [____]% above the
                                     rate per annum shown on page 3750 of the Telerate screen or any successor page as
                                     the composite London interbank offered rate for one-month United States dollar deposits
                                     ("LIBOR") determined as set forth herein on the related LIBOR Determination Date, but
                                     in no event in excess of [____]% per annum (such rate, the "Series 1998-1 Class A
                                     Certificate Rate"), and (b) payments of principal in the amounts described below
                                     during the Series 1998-1 Class A Controlled Amortization Period or, if applicable,

                                     during the Series 1998-1 Rapid Amortization Period, to the extent of the Series 1998-1
                                     Class A Ownership Interest. Principal will be payable on each Distribution Date during
                                     such period to Series 1998-1 Class A Certificateholders only after interest
                                     payable on such date in respect of the Series 1998-1 Class A Certificates and the
                                     Series 1998-1 Class B Certificates has been paid. The Series 1998-1 Class A Ownership
                                     Interest may be less than the unpaid principal balance of the Series 1998-1
                                     Class A Certificates in certain circumstances described herein, such as in
                                     the event of significant losses on the Receivables. In the event of a reduction in
                                     the Series 1998-1 Class A Ownership Interest, the Series 1998-1 Class A Monthly
                                     Interest payable with respect to the Series 1998-1 Class A Certificates may be reduced.

Payment Rights of Series
1998-1 Class B
Certificateholders
Generally........................... The Series 1998-1 Class B Certificates will represent the right to receive from collections 
                                     with respect to the Receivables allocated to the Series 1998-1 Class B Certificates funds up  
                                     to (but not in excess of) the amounts required to make (a) payments of interest accruing from 
                                     the Closing Date through [____________] at the per annum rate of [_______]% and, with
                                     respect to each Interest Period thereafter, at the per annum rate of [___]% above LIBOR 
                                     determined as set forth herein on the related LIBOR Determination Date, but in no event in 
                                     excess of [_____]% per annum (such rate, the "Series 1998-1 Class B Certificate Rate"), 
                                     and (b) payments of principal in the amounts described below during the Series 1998-1 Class B
                                     Controlled Amortization Period or, if applicable, during the Series 1998-1 Rapid Amortization 
                                     Period, to the extent of the Series 1998-1 Class B Ownership Interest.  If Series 1998-1 
                                     Available Investor Principal Collections are sufficient to pay the Series 1998-1 Controlled 
                                     Amortization Amount on
10
each Distribution Date during the Series 1998-1 Controlled Amortization Period, the
                                     principal amount of the Series 1998-1 Class B Ownership Interest will be paid in a
                                     single payment on the [________] Distribution Date. No principal will be
                                     paid to the Series 1998-1 Class B Certificateholders until the final
                                     principal payment has been made in respect of the Series 1998-1 Class A Certificates.
                                     On each Distribution Date, no interest will be paid to the Series 1998-1 Class B
                                     Certificateholders until interest due and owing the Series 1998-1 Class A
                                     Certificateholders on such Distribution Date is paid in full. The Series 1998-1
                                     Class B Ownership Interest may be less than the total unpaid principal balance of the
                                     Series 1998-1 Class B Certificates in certain circumstances described herein,
                                     such as in the event of significant losses on the Receivables. In the event of a
                                     reduction in the Series 1998-1 Class B Ownership Interest, the Series 1998-1 Class
                                     B Monthly Interest payable with respect to the Series 1998-1 Class B Certificates may
                                     be reduced.

Possible Reductions in
Series 1998-1
Certificateholders
Ownership Interests................. The initial amount of the Series 1998-1 Class A Ownership Interest is $[________] and 
                                     the initial amount of the Series 1998-1 Class B Ownership Interest is $[________].  

                                     The Series 1998-1 Class A Ownership Interest is subject to reduction, in the absence of 
                                     distributions thereon, in certain circumstances if the Series 1998-1 Class B Ownership 
                                     Interest and the Series 1998-1 Class C Ownership Interest are zero and (a) collections of
                                      Principal Receivables otherwise allocable to the Series 1998-1 Certificateholders
                                     Ownership Interests are reallocated to cover interest payable in respect of the
                                     Offered Certificates and (b) Default Amounts allocated to the Series 1998-1
                                     Class A Certificates exceed amounts available therefor as described herein.
                                     The Series 1998-1 Class B Ownership Interest is subject to reduction, in the
                                     absence of distributions thereon, in certain circumstances as a result of (a)
                                     the reallocation of collections of Principal Receivables otherwise allocable to
                                     the Series 1998-1 Certificateholders Ownership Interests to cover interest
                                     payable in respect of the Offered Certificates and (b) the allocation to the
                                     Series 1998-1 Class B Ownership Interest of Default Amounts, including
                                     such amounts otherwise allocable to the Series 1998-1 Class A Ownership
                                     Interest, in each case when the Series 1998-1 Class C Ownership Interest is
                                     zero.  See "Description of the Offered Certificates--Defaulted Loans;
                                     Charge-Offs" and "--Reallocation of Cash Flows."

Payment Rights of the
Transferor Ownership
Interest............................ The Transferor Ownership Interest will represent the right to collections with
                                     respect to the Receivables not allocated to the Series 1998-1 Class A
                                     Ownership Interest, the Series 1998-1 Class B Ownership Interest, the Series
                                     1998-1 Class C Ownership Interest, the Series 1994-1 Certificateholders or
                                     the future holders of other Series of certificates that may be issued by the
                                     Trust.  As Additional Receivables are added to the Trust and as collections
11
with respect to Principal Receivables and Default Amounts, if any, are
                                     allocated to the Transferor Ownership Interest, the Transferor Ownership Interest
                                     will fluctuate. Also, pursuant to the Agreement, (i) the Transferor may reduce
                                     the Transferor Ownership Interest or (ii) if provided in the relevant Supplement,
                                     certificateholders may tender certificates representing any outstanding Series of
                                     certificates to the Trustee and the Transferor may reduce Transferor Ownership
                                     Interest, and, upon satisfying certain conditions in the Agreement and as
                                     described herein, cause the Trustee to issue one or more new Series as described
                                     below in this Summary under "New Series Issuances Generally" and in "Description of
                                     the Offered Certificates--New Series Issuances."

Series 1998-1
Termination......................... The final distribution by the Trust of principal and interest on the Offered
                                     Certificates will be made no later than the [_________] Distribution Date (the
                                     "Series 1998-1 Termination Date").  After the Series 1998-1 Termination
                                     Date, the Trust will have no further obligation to pay principal or interest on
                                     the Offered Certificates.

Other Series........................ The Trust has previously issued one other Series of certificates.  In addition
                                     to the Series 1998-1 Certificates to be issued pursuant to the Agreement on

                                     the Closing Date, the Trust has previously offered by means of a separate
                                     prospectus $200,000,000 in aggregate principal amount of Class A Floating
                                     Rate Asset Backed Certificates, Series 1994-1 and $7,600,000 in aggregate
                                     principal amount of Class B Floating Rate Asset Backed Certificates, Series
                                     1994-1 (the "Series 1994-1 Offered Certificates").  Concurrently with the
                                     issuance of the Series 1994-1 Offered Certificates, the Trust issued another
                                     class of certificates (the "Series 1994-1 Class C Certificates") which are and
                                     will continue to be held by the Original Transferors.  See "The Trust--Other
                                     Series" for a summary of the terms of the Series 1994-1 Offered Certificates.
                                     Additional Series may be issued from time to time by the Trust.  See
                                     "Description of the Offered Certificates--New Series Issuances."

Receivables......................... The Receivables represent the entire beneficial interest in the related Loans,
                                     including all monies due or to become due from the Obligors in payment of
                                     finance charges, fees and service charges (collectively, together with
                                     recoveries on Defaulted Loans, "Finance Charge Receivables") and principal
                                     ("Principal Receivables") owing or to become owing with respect to the
                                     Loans and recoveries received with respect to Defaulted Loans.  The
                                     aggregate amount of Principal Receivables as of the Closing Date will be no
                                     less than $[________].  The amounts of the Series 1998-1 Certificateholders
                                     Ownership Interests, the Series 1994-1 certificateholders ownership interests
                                     and the Transferor Ownership Interest will be determined on the basis of the
                                     amount of Principal Receivables in the Trust from time to time.  The
                                     aggregate undivided interest in the Principal Receivables in the Trust
                                     evidenced by the Series 1998-1 Certificates will never exceed the amount of
                                     the Series 1998-1 Certificateholders Ownership Interests regardless of the
                                     total amount of Principal Receivables in the Trust at any time.
12
Pursuant to the Agreement, the Transferor may, and under certain
                                     circumstances set forth in the Agreement will be required to, transfer to the
                                     Trust Additional Receivables relating to Loans funded by AIC or AICCO in
                                     the ordinary course of their businesses, and, in each case, sold to the
                                     Transferor from time to time under the Receivables Sale Agreement.  AIC
                                     and AICCO presently expect to transfer all Eligible Receivables relating to
                                     Loans funded by them from time to time to the Transferor for subsequent
                                     transfer to the Trust. The Transferor will in any event be required to
                                     transfer sufficient Additional Receivables to the Trust to maintain the
                                     Minimum Transferor Ownership Interest; otherwise, a Pay Out Event will
                                     occur and the Series 1998-1 Rapid Amortization Period will commence.  See
                                     "Description of the Offered Certificates--Addition of Receivables" and
                                     "--Pay Out Events."

                                     Further, pursuant to the Agreement, the Transferor has the right, subject to
                                     certain limitations and conditions set forth in the Agreement and as described
                                     herein, to remove certain Receivables designated by the Transferor from the
                                     Trust (the "Removed Receivables") and accept the transfer of all the
                                     Removed Receivables from the Trust.  In connection with any permitted

                                     removal of Receivables, the selection procedure for removal cannot be
                                     materially adverse to Series 1998-1 Certificateholders and neither the then
                                     ratings nor the federal income tax treatment of the Offered Certificates shall
                                     be adversely affected by such removal.  The Transferor does not presently
                                     expect to remove Receivables from the Trust.  See "Description of the
                                     Offered Certificates--Removal of Receivables."

Servicer and
Servicing Fee....................... AIC is the servicer with respect to all Loans, other than those originated in
                                     California, for which AICCO is the servicer.  AIC will be fully obligated to
                                     the Trust for AICCO's servicing performance.  In certain limited
                                     circumstances set forth in the Agreement and as described herein, AIC and
                                     AICCO may resign or be removed as Servicer, in which event the Trustee or
                                     a third party servicer may be appointed as successor servicer (AIC and
                                     AICCO collectively (unless the context otherwise requires), or any such
                                     successor servicer, are referred to herein as the "Servicer").  The Servicer is
                                     permitted to delegate certain of its duties as servicer under the Agreement to
                                     any of its affiliates other than AIR, but any such delegation will not relieve
                                     the Servicer of its obligations thereunder.

                                     For so long as AIC and AICCO are the Servicer, the Servicer will not be
                                     paid a monthly fee as servicing compensation from the Trust (the "Servicing
                                     Fee").  If AIC and AICCO cease to be the Servicer, then the monthly
                                     Servicing Fee allocable to the Series 1998-1 Certificateholders will be equal
                                     to one-twelfth of the product of 0.50% per annum and the then aggregate
                                     Series 1998-1 Certificateholders Ownership Interests.  On each Transfer
                                     Date, funds on deposit in the Finance Charge Account will, if necessary, be
                                     withdrawn for payment to the Servicer in respect of the Servicing Fee to be
                                     allocated among the Series 1998-1 Certificateholders as described under
13
"Description of the Offered Certificates--Servicing Compensation and
                                     Payment of Expenses."

AIG Support
Agreements.......................... AIC, AICCO and AIG are parties to a support agreement in which AIG has
                                     agreed to cause each of AIC and AICCO to have a minimum net worth of at
                                     least $1 and to provide AIC and AICCO with sufficient funds on a timely
                                     basis to meet when due their respective obligations under the Agreement and
                                     certain other obligations as described herein.  AIG and AIR will enter into a
                                     similar support agreement on the Closing Date in which AIG will agree to
                                     cause AIR to have a minimum net worth of at least $1 and to provide AIR
                                     with sufficient funds on a timely basis to meet when due its obligations under
                                     the Agreement and certain other obligations as described herein.  AIG, AIC
                                     and AIR have not, however, agreed to guarantee payment of the Series 1998-1 
                                     Certificates, Loans or Receivables.  See "Description of the Offered
                                     Certificates--Support Agreements" and "Special Considerations--Bankruptcy

                                     Considerations."

Interest............................ Interest on the Offered Certificates for each Interest Period will be distributed on
                                     [_________], 1998 and on the 15th day of each month thereafter, or if such day is
                                     not a business day, on the next succeeding business day (each, a "Distribution Date"),
                                     in an amount equal to (a) with respect to the Series 1998-1 Class A Certificates, the
                                     product of (i) the actual number of days in the related Interest Period divided by 360,
                                     (ii) the Series 1998-1 Class A Certificate Rate for such Interest Period and (iii) the
                                     Series 1998-1 Class A Ownership Interest as of the preceding Record Date (or, in the
                                     case of the first Distribution Date, as of the Closing Date) and (b) with respect to
                                     the Series 1998-1 Class B Certificates, the product of (i) the actual number of days in
                                     the related Interest Period divided by 360, (ii) the Series 1998-1 Class B Certificate
                                     Rate for such Interest Period and (iii) the Series 1998-1 Class B Ownership Interest as
                                     of the preceding Record Date (or, in the case of the first Distribution Date, as of
                                     the Closing Date). Interest for any Distribution Date due but not paid on such
                                     Distribution Date will be payable on the next succeeding Distribution Date, together
                                     with additional interest on such amount at 2% over the applicable Certificate Rate
                                     (such overdue interest, and additional interest thereon, "Additional Interest").
                                     If the Series 1998-1 Class B Ownership Interest or the Series 1998-1 Class A
                                     Ownership Interest is reduced as a result of the allocation of Default Amounts, the
                                     related interest payable with respect to the Series 1998-1 Class B Certificates or
                                     the Series 1998-1 Class A Certificates, as the case may be, in subsequent months will
                                     be less than the amount of interest that would be payable by applying the applicable
                                     Certificate Rate to the unpaid principal balance of the related class of Series
                                     1998-1 Certificates. If the Series 1998-1 Class A Ownership Interest or the Series
                                     1998-1 Class B Ownership Interest is reimbursed in full on any subsequent
                                     Transfer Date from funds available for such purpose as described elsewhere herein,
                                     interest that would have accrued on the Series 1998-1 Class A Ownership Interest or
                                     Series 1998-1 Class B Ownership Interest, as the case may be, had the same not
14
been reduced ("Prior Period Interest"), will be payable on the next succeeding
                                     Distribution Date at the rate described under "Description of the Offered
                                     Certificates--Application of Collections." In addition, the Agreement will provide
                                     that payment of any Series 1998-1 Class B Additional Interest shall be suspended
                                     during any period when the Series 1998-1 Class B Ownership Interest is zero and will
                                     further provide for the cancellation of any such interest remaining unpaid on the first
                                     date during the Series 1998-1 Class B Controlled Amortization Period or, if
                                     applicable, the Series 1998-1 Rapid Amortization Period when the Series 1998-1
                                     Class B Ownership Interest is or becomes zero. See "Description of the Offered
                                     Certificates--Defaulted Loans; Charge-Offs," "--Series 1998-1 Yield Enhancement Account"
                                     and "--Interest Payments."

                                     The "Interest Period," with respect to any Distribution Date, will be the
                                     period from the previous Distribution Date through the day preceding such
                                     Distribution Date, except the initial Interest Period will be the period from
                                     the Closing Date through the day preceding the initial Distribution Date.

                                     In general, interest payments distributable to the Series 1998-1 Class A
                                     Certificateholders will be funded from the portion of Finance Charge Receivables
                                     collected during the preceding Monthly Period that is allocable to the Series
                                     1998-1 Certificateholders Ownership Interests. If on any Transfer Date such
                                     collections are insufficient to fully fund the Series 1998-1 Class A Monthly Interest,
                                     then funds on deposit in the Series 1998-1 Yield Enhancement Account will be
                                     allocated, to the extent available, for distribution to the Series 1998-1 Class A
                                     Certificateholders in payment of such shortfall. If funds on deposit in the
                                     Series 1998-1 Yield Enhancement Account are insufficient to fund the Series 1998-1
                                     Class A Required Amount, which includes any shortfall in the payment of Series 1998-1
                                     Class A Monthly Interest, then Series 1998-1 Reallocated Principal Collections
                                     will be allocated, to the extent available, to fund the Series 1998-1 Class A Monthly
                                     Interest.

                                     In general, interest payments distributable to the Series 1998-1 Class B
                                     Certificateholders will be funded from the portion of Finance Charge
                                     Receivables collected during the preceding Monthly Period allocable to the
                                     Series 1998-1 Certificateholders Ownership Interests remaining after payment
                                     of interest due and owing the Series 1998-1 Class A Certificateholders on
                                     each Distribution Date.  If on any Transfer Date such collections are
                                     insufficient to fully fund the Series 1998-1 Class B Monthly Interest, then
                                     funds on deposit in the Series 1998-1 Yield Enhancement Account will be
                                     allocated, to the extent available, for distribution to the Series 1998-1 Class
                                     B Certificateholders in payment of such shortfall.  If funds on deposit in the
                                     Series 1998-1 Yield Enhancement Account are insufficient to fund the Series
                                     1998-1 Class B Required Amount, which includes any shortfall in the
                                     payment of Series 1998-1 Class B Monthly Interest, then Series 1998-1
                                     Reallocated Principal Collections will be allocated, to the extent available, to
                                     fund the Series 1998-1 Class B Monthly Interest.  See "Series 1998-1 Yield
15
Enhancement Account Generally" in this Summary and "Description of the
                                     Offered Certificates--Interest Payments," "--Principal Payments" and
                                     "--Reallocation of Cash Flows."

Revolving Period Prior to
Principal Amortization.............. The "Series 1998-1 Revolving Period" with respect to the Series 1998-1 Certificates means the 
                                     period from and including the Closing Date to, but not including, the earlier of (a) the 
                                     commencement of the Series 1998-1 Controlled Amortization Period and (b) the commencement of 
                                     the Series 1998-1 Rapid Amortization Period. The purpose of the Series 1998-1 Revolving 
                                     Period is to provide the Series 1998-1 Certificateholders with a period of time
                                     during which they will be entitled to receive interest only, and no principal,
                                     thereby extending the expected weighted average lives of the Series 1998-1
                                     Certificates. During the Series 1998-1 Revolving Period, collections in respect of
                                     Principal Receivables otherwise allocable in respect of one or more classes of the
                                     Series 1998-1 Certificates will, subject to certain limitations set forth in the

                                     Agreement and as described herein, be available to cover payments of interest on
                                     the Offered Certificates. Any remaining such collections will be treated as Shared
                                     Principal Collections and will be available to be applied to cover principal payments
                                     due to or for the benefit of the Series 1994-1 Certificateholders and/or
                                     certificateholders of other Series that may be issued in the future by the Trust, if so
                                     specified in the Supplements for such other Series, or paid to the holder of the
                                     Transferor Certificate. Conversely, Shared Principal Collections from the Series
                                     1994-1 Certificates may be available to be applied to cover principal payments due to
                                     or for the benefit of the Series 1998-1 Certificateholders. See "Description of the
                                     Offered Certificates--Shared Principal Collections." Payment of principal with
                                     respect to the Series 1998-1 Certificates is not scheduled to commence until the
                                     [_______] Distribution Date, when principal payments are scheduled to begin with
                                     respect to the Series 1998-1 Class A Certificates during the Series 1998-1 Class
                                     A Controlled Amortization Period. See "Description of the Offered
                                     Certificates--Principal Payments." See also the description under "Description of the
                                     Offered Certificates--Pay Out Events" for the events which would lead to the
                                     commencement of the Series 1998-1 Rapid Amortization Period and that could result
                                     in earlier payments of principal with respect to the Offered Certificates.

Controlled Amortization
Period Generally.................... Unless a Pay Out Event has occurred, the Series 1998-1 Revolving Period
                                     will end and the controlled amortization period with respect to the Series
                                     1998-1 Certificates (the "Series 1998-1 Controlled Amortization Period"),
                                     which includes controlled amortization periods for each class (the "Series
                                     1998-1 Class A Controlled Amortization Period," the "Series 1998-1 Class B
                                     Controlled Amortization Period" and the "Series 1998-1 Class C Controlled
                                     Amortization Period," respectively), will commence on [________] (and the
                                     first distribution of principal to the Series 1998-1 Class A Certificateholders
                                     will occur on the [________________] Distribution Date).  The purpose of
                                     the Series 1998-1 Controlled Amortization Period is to provide the Series
16
1998-1 Certificateholders with a period of time during which they will be entitled to
                                     receive scheduled principal payments, thereby enabling them to estimate the
                                     expected weighted average lives of the Series 1998-1 Certificates. The Series
                                     1998-1 Class A Controlled Amortization Period will end on the earliest of (a) the
                                     commencement of the Series 1998-1 Rapid Amortization Period, (b) the payment in
                                     full of the Series 1998-1 Class A Ownership Interest or (c) the Series 1998-1
                                     Termination Date. Unless a Pay Out Event has occurred, the Series 1998-1 Class B
                                     Controlled Amortization Period will commence on the Distribution Date on which
                                     the Series 1998-1 Class A Ownership Interest is paid in full (the "Series
                                     1998-1 Class B Principal Commencement Date") and end on the earliest of (a) the
                                     commencement of the Series 1998-1 Rapid Amortization Period, (b) the payment in
                                     full of the Series 1998-1 Class B Ownership Interest or (c) the Series 1998-1
                                     Termination Date. Unless a Pay Out Event has occurred, the Series 1998-1 Class C
                                     Controlled Amortization Period will commence on the Distribution Date on which
                                     the Series 1998-1 Class B Ownership Interest is paid in full (the "Series

                                     1998-1 Class C Principal Commencement Date") and end on the earliest of (a) the
                                     commencement of the Series 1998-1 Rapid Amortization Period, (b) the payment in
                                     full of the Series 1998-1 Class C Ownership Interest or (c) the Series 1998-1
                                     Termination Date.

Principal Amortization
of the Series 1998-1 Class
A Certificates...................... No principal will be payable to Series 1998-1 Class A Certificateholders until
                                     the first Distribution Date with respect to the Series 1998-1 Class A
                                     Controlled Amortization Period, or, upon the occurrence of a Pay Out Event
                                     as described herein, the first Distribution Date with respect to the Series
                                     1998-1 Rapid Amortization Period.  On each Distribution Date during the
                                     Series 1998-1 Class A Controlled Amortization Period, the Series 1998-1
                                     Class A Certificateholders will receive a principal payment equal to the least
                                     of (i) Series 1998-1 Available Investor Principal Collections on deposit in the
                                     Principal Account with respect to such Distribution Date, (ii) the Series
                                     1998-1 Controlled Distribution Amount, which is equal to the sum of the
                                     Series 1998-1 Controlled Amortization Amount, which is $[_________], and
                                     any existing applicable Series 1998-1 Deficit Controlled Amortization
                                     Amount and (iii) the Series 1998-1 Class A Ownership Interest for such
                                     Distribution Date.  See "Description of the Offered Certificates--Principal
                                     Payments" and "--Application of Collections."

Principal Amortization of
the Series 1998-1
Class B Certificates................ No principal will be payable to the Series 1998-1 Class B Certificateholders
                                     until the Series 1998-1 Class A Ownership Interest is paid in full.  On each
                                     Distribution Date during the Series 1998-1 Class B Controlled Amortization
                                     Period, the Series 1998-1 Class B Certificateholders will receive a principal
                                     payment equal to the least of (i) Series 1998-1 Available Investor Principal
                                     Collections on deposit in the Principal Account with respect to such
                                     Distribution Date (minus the portion of such Series 1998-1 Available Investor
17
Principal Collections applied to Series 1998-1 Class A Monthly Principal on such
                                     date), (ii) the Series 1998-1 Controlled Distribution Amount (minus the portion of
                                     such Series 1998-1 Controlled Distribution Amount applied to Series 1998-1 Class A
                                     Monthly Principal on such date) and (iii) the Series 1998-1 Class B Ownership
                                     Interest for such Distribution Date. If Series 1998-1 Available Investor Principal
                                     Collections are sufficient to pay the Series 1998-1 Controlled Amortization
                                     Amount on each Distribution Date during the Series 1998-1 Controlled Amortization
                                     Period, the Series 1998-1 Class B Ownership Interest will be paid in a single payment
                                     on the [______] Distribution Date. No principal will be payable to the Series
                                     1998-1 Class C Certificateholders until the Series 1998-1 Class A Ownership Interest
                                     and Series 1998-1 Class B Ownership Interest are paid in full. See "Description
                                     of the Offered Certificates--Principal Payments" and "--Application of Collections."

Rapid Amortization
Period.............................. During the period from the day on which a Pay Out Event has occurred and ending on
                                     the earlier of (a) the date on which the Series 1998-1 Certificateholders Ownership
                                     Interests have been paid in full and (b) the Series 1998-1 Termination Date (the
                                     "Series 1998-1 Rapid Amortization Period"), all Series 1998-1 Available Investor
                                     Principal Collections received during each Monthly Period will be distributed on the
                                     related Distribution Date in the order of priority described below, up to the
                                     aggregate Series 1998-1 Certificateholders Ownership Interests on such date. This is
                                     in contrast to the Series 1998-1 Controlled Amortization Period during which the amount
                                     of collections in respect of Principal Receivables to be distributed to Series
                                     1998-1 Certificateholders on any related Distribution Date will be subject to
                                     specific limits as described above and may be less than the total Series 1998-1
                                     Available Investor Principal Collections received by the Trust during the related
                                     Monthly Period. During the Series 1998-1 Rapid Amortization Period, all Series
                                     1998-1 Available Investor Principal Collections will be distributed monthly on
                                     each Distribution Date to the Series 1998-1 Class A Certificateholders and, following
                                     payment in full of the Series 1998-1 Class A Ownership Interest, to the Series 1998-1
                                     Class B Certificateholders and, following payment in full of the Series 1998-1 Class
                                     B Ownership Interest, to the Series 1998-1 Class C Certificateholders, beginning with
                                     the first Distribution Date following commencement of the Series 1998-1 Rapid
                                     Amortization Period.

Pay Out Events...................... Pay Out Events, that is, events that will cause the commencement of the
                                     Series 1998-1 Rapid Amortization Period and may result in the payment of
                                     Principal Receivables collections allocable to the Series 1998-1
                                     Certificateholders earlier than scheduled generally include such events as (a)
                                     specified defaults in the remittance or deposit of funds or covenant breaches
                                     by AIC, AICCO or the Transferor, (b)  breaches of specified representations
                                     and warranties by AIC, AICCO or the Transferor, (c) a Series 1998-1
                                     Annualized Monthly Excess Spread Amount below 400 basis points for three
                                     consecutive Monthly Periods, (d) specified failure of the Transferor to
18
maintain the Transferor Ownership Interest at least equal to the Minimum Transferor
                                     Ownership Interest, (e) specified Servicer Defaults, (f) a Monthly Payment Rate of
                                     less than 14% for three consecutive Monthly Periods, (g) a Financed Premium Percentage
                                     of more than 90% in respect of Additional Receivables transferred to the Trust for
                                     three consecutive Monthly Periods, (h) certain events of bankruptcy or insolvency
                                     related to AIC, AICCO or the Transferor, (i) the inability, for any reason, of the
                                     Transferor to transfer Additional Receivables to the Trust and (j) a breach
                                     by AIG of the AIC Support Agreement or a breach by AIC of its support obligations
                                     under the Agreement or the AIC Support Agreement with respect to AICCO or a breach
                                     by AIG of the AIR Support Agreement. See "Description of the Offered
                                     Certificates--Pay Out Events" for a further discussion of the events which might lead
                                     to the commencement of the Series 1998-1 Rapid Amortization Period.

Payment Priorities.................. On each Distribution Date during the Series 1998-1 Revolving Period

                                     collections allocable to the Series 1998-1 Certificates will be allocated as
                                     described herein to pay, in the following priority: (i) interest due the Series
                                     1998-1 Class A Certificateholders, (ii) interest due the Series 1998-1 Class B
                                     Certificateholders, and (iii) interest due the Series 1998-1 Class C
                                     Certificateholders.  On each Distribution Date during the Series 1998-1
                                     Controlled Amortization Period or the Series 1998-1 Rapid Amortization
                                     Period, collections allocable to the Series 1998-1 Certificates will be
                                     allocated as described herein to pay, in the following priority: (i) interest due
                                     the Series 1998-1 Class A Certificateholders, (ii) interest due the Series
                                     1998-1 Class B Certificateholders, (iii) principal due the Series 1998-1 Class
                                     A Certificateholders, (iv) principal due the Series 1998-1 Class B
                                     Certificateholders, (v) interest due the Series 1998-1 Class C
                                     Certificateholders, and (vi) principal due the Series 1998-1 Class C
                                     Certificateholders.  See  "Description  of  the  Offered
                                     Certificates--Application of Collections."

Series 1998-1 Yield
Enhancement Account
Generally........................... On each Transfer Date, the Servicer shall deposit into an account (the
                                     "Series 1998-1 Yield Enhancement Account") maintained by the Trustee for
                                     the benefit of the Series 1998-1 Certificateholders an amount equal to the
                                     Series 1998-1 Available Yield Enhancement Amount for such date out of
                                     Receivables collections otherwise allocable to the holder of the Transferor
                                     Certificate in respect of the immediately preceding Monthly Period.  In
                                     addition, the Servicer will deposit into the Series 1998-1 Yield Enhancement
                                     Account on each Transfer Date any Series 1998-1 Excess Finance Charges.

                                     The Series 1998-1 Available Yield Enhancement Amount on any Transfer
                                     Date will equal (a) during the Series 1998-1 Revolving Period, the product of
                                     (i) [___]% and (ii) the product of (A) the collections for the related Monthly
                                     Period otherwise allocable to the Transferor Ownership Interest and (B) the
                                     Series 1998-1 Floating Investor Percentage divided by one minus the
19
Aggregate Investor Percentage, and (b) during the Series 1998-1 Controlled
                                     Amortization Period and the Series 1998-1 Rapid Amortization Period, if any, the
                                     product of (i) [___]% and (ii) the product of (A) the collections for the related
                                     Monthly Period otherwise allocable to the Transferor Ownership Interest and (B) in
                                     the case of collections of Finance Charge Receivables allocable to the Transferor
                                     Ownership Interest, the Series 1998-1 Floating Investor Percentage divided by one
                                     minus the Aggregate Investor Percentage, and in the case of collections of Principal
                                     Receivables allocable to the Transferor Ownership Interest, the Series 1998-1 Fixed
                                     Investor Percentage divided by one minus the Aggregate Investor Percentage; provided
                                     that the Series 1998-1 Available Yield Enhancement Amount for any Transfer Date
                                     will be capped so that it will not exceed the sum of Series 1998-1 Class A Monthly
                                     Interest, Series 1998-1 Class A Additional Interest, Series 1998-1 Class B Monthly
                                     Interest, Series 1998-1 Class B Additional Interest, Series 1998-1 Class C Monthly

                                     Interest and Series 1998-1 Class C Additional Interest, for such Transfer
                                     Date. See "Description of the Offered Certificates--Series 1998-1 Yield
                                     Enhancement Account" and "--Interest Payments."

Uses of Funds in the
Series 1998-1 Yield
Enhancement Account
Generally........................... Funds on deposit in the Series 1998-1 Yield Enhancement Account on each
                                     Transfer Date will be available for application on the next Distribution Date
                                     in respect of the Series 1998-1 Certificates to the extent and in the priorities
                                     set forth under "Description of the Offered Certificates--Series 1998-1 Yield
                                     Enhancement Account." In general, such funds will be available to cover
                                     interest payments due on the Series 1998-1 Certificates, to cover servicing
                                     fees allocable to the Series 1998-1 Certificates, to avoid a reduction in their
                                     respective ownership interests due to Default Amounts otherwise allocable to
                                     the Series 1998-1 Certificates and to reimburse reductions in such ownership
                                     interests due to allocation of Default Amounts in respect of previous Transfer
                                     Dates.  There can be no assurance that funds on deposit in the Series 1998-1
                                     Yield Enhancement Account, together with the portion of Finance Charge
                                     Receivables collections allocable to the Series 1998-1 Certificates on any
                                     particular Transfer Date, will be sufficient to cover any or all of such
                                     purposes.

                                     On each Transfer Date, any amount in excess of the Series 1998-1 91 Day
                                     Delinquency Amount remaining in the Series 1998-1 Yield Enhancement
                                     Account after application of the funds on deposit therein for the purposes
                                     described above will be paid to the holder of the Transferor Certificate,
                                     provided that a Pay Out Event has not occurred.  Amounts so paid will not
                                     be available on future Distribution Dates for payment or allocation to the
                                     holders of the Series 1998-1 Certificates.  See "Description of the Offered
                                     Certificates--Series 1998-1 Yield Enhancement Account."
20
Principal Collections
Available to Supplement
Series 1998-1 Yield
Enhancement Amount.................. If, on any Transfer Date, funds on deposit in the Series 1998-1 Yield Enhancement 
                                     Account are less than the Series 1998-1 Class A Required Amount, collections in respect of 
                                     Principal Receivables during the preceding Monthly Period that are allocable first to the 
                                     Series 1998-1 Class C Ownership Interest, then to the Series 1998-1 Class B Ownership Interest
                                     and finally to the Series 1998-1 Class A Ownership Interest with respect to such Monthly 
                                     Period will be used to fund the remaining Series 1998-1 Class A Required Amount. Any 
                                     reallocation of Principal Receivables collections to fund the Series 1998-1 Class A Required
                                     Amount or, as described in the following paragraph, the Series 1998-1 Class B
                                     Required Amount will result in a corresponding reduction in the Series
                                     1998-1 Certificateholders Ownership Interests. The amount of any such reduction
                                     will be allocated first to reduce the Series 1998-1 Class C Ownership Interest,

                                     second to reduce the Series 1998-1 Class B Ownership Interest and lastly to reduce the
                                     Series 1998-1 Class A Ownership Interest.

                                     If Series 1998-1 Reallocated Principal Collections are insufficient to fund
                                     such remaining Series 1998-1 Class A Required Amount, then the Series
                                     1998-1 Class C Ownership Interest (after giving effect to reductions therein
                                     for any Series 1998-1 Class C Charge-Offs and Series 1998-1 Reallocated
                                     Principal Collections on such Transfer Date) will be reduced by the amount
                                     of such deficiency.  In the event that such reduction would cause the Series
                                     1998-1 Class C Ownership Interest to be a negative number, the Series
                                     1998-1 Class C Ownership Interest will be reduced to zero, and the Series
                                     1998-1 Class B Ownership Interest (after giving effect to reductions therein
                                     for any Series 1998-1 Class B Charge-Offs and any Series 1998-1
                                     Reallocated Principal Collections on such Transfer Date) will be reduced by
                                     the amount by which the Series 1998-1 Class C Ownership Interest would
                                     have been reduced below zero.  In the event that such reduction would cause
                                     the Series 1998-1 Class B Ownership Interest to be a negative number, the
                                     Series 1998-1 Class B Ownership Interest will be reduced to zero and the
                                     Series 1998-1 Class A Ownership Interest (after giving effect to reductions
                                     therein for any Series 1998-1 Reallocated Principal Collections on such
                                     Transfer Date) will be reduced (but not below zero) by the amount by which
                                     the Series 1998-1 Class B Ownership Interest would have been reduced
                                     below zero (such reduction, a "Series 1998-1 Class A Charge-Off").  If the
                                     Series 1998-1 Class C Ownership Interest and the Series 1998-1 Class B
                                     Ownership Interest are reduced to zero, the Series 1998-1 Class A
                                     Certificateholders will bear directly the credit risks associated with their
                                     undivided interests in the Trust.  See "Special Considerations--Premium
                                     Finance Loan Credit and Related Considerations," "Description  of the
                                     Offered Certificates--Reallocation of Cash Flows" and "--Defaulted Loans;
                                     Charge-Offs."
21
If, on any Transfer Date, funds on deposit in the Series 1998-1 Yield Enhancement
                                     Account and not required to pay the Series 1998-1 Class A Required Amount are less
                                     than the Series 1998-1 Class B Required Amount, collections in respect of Principal
                                     Receivables during the preceding Monthly Period that are available but not required
                                     to pay the Series 1998-1 Class A Required Amount will be used to fund such remaining
                                     Series 1998-1 Class B Required Amount. If Series 1998-1 Reallocated Principal
                                     Collections are insufficient to fund the remaining Series 1998-1 Class B Required
                                     Amount, then the Series 1998-1 Class C Ownership Interest (after giving effect to
                                     reductions therein for any Series 1998-1 Class C Charge-Offs and Series 1998-1
                                     Reallocated Principal Collections on such Transfer Date) will be reduced by the
                                     amount of such deficiency. In the event that such reduction would cause the Series
                                     1998-1 Class C Ownership Interest to be a negative number, the Series 1998-1 Class C
                                     Ownership Interest will be reduced to zero, and the Series 1998-1 Class B Ownership
                                     Interest (after giving effect to reductions therein for any Series 1998-1 Reallocated
                                     Principal Collections on such Transfer Date) will be reduced (but not below zero)

                                     by the amount by which the Series 1998-1 Class C Ownership Interest would have been
                                     reduced below zero (such reduction, a "Series 1998-1 Class B Charge-Off"). If the
                                     Series 1998-1 Class C Ownership Interest is reduced to zero, the Series 1998-1 Class B
                                     Certificateholders will bear directly the credit risks associated with their
                                     undivided interests in the Trust.

                                     Any reallocation of Principal Receivables collections described above that
                                     occurs during the Series 1998-1 Controlled Amortization Period or any
                                     Series 1998-1 Rapid Amortization Period could slow the rate of amortization
                                     of the Series 1998-1 Class A Certificates and/or the Series 1998-1 Class B
                                     Certificates.

                                     In the event of a reduction of the Series 1998-1 Class A Ownership Interest,
                                     the Series 1998-1 Class B Ownership Interest or the Series 1998-1 Class C
                                     Ownership Interest, the percentage of future collections of Finance Charge
                                     Receivables and Principal Receivables available to fund payments with
                                     respect to the Series 1998-1 Class A Certificates and the Series 1998-1 Class
                                     B Certificates will be decreased.  See "Description of the Offered
                                     Certificates--Reallocation of Cash Flows" and "--Defaulted Loans;
                                     Charge-Offs."

New Series Issuances
Generally........................... The Agreement will authorize the Trustee to issue pursuant to one or more
                                     supplements to the Agreement (each, a "Supplement") two types of
                                     certificates: (i) one or more series of certificates (each, a "Series") which
                                     may be issued in more than one class with varying rights and priorities and
                                     which will be transferable and have the characteristics described below and
                                     (ii) certificates evidencing the Transferor Ownership Interest (collectively,
                                     the "Transferor Certificate"), currently held by AIC and AICCO and to be
                                     transferred to the Transferor on or about the Closing Date, and thereafter
                                     held by the Transferor.  Such Transferor Certificate will be transferable only
22
as provided in the Agreement. The Series 1994-1 Certificates have previously been
                                     issued pursuant to such authority under the Original Agreement. See "The Trust--Other
                                     Series." The Agreement also provides that, pursuant to any one or more Supplements,
                                     the Transferor may reduce the Transferor Ownership Interest (a "Transferor Ownership
                                     Interest Reduction") or, if provided in the relevant Supplement, certificateholders may
                                     tender certificates representing any outstanding Series of certificates to the
                                     Trustee and the Transferor may reduce the Transferor Ownership Interest (an "Investor
                                     Exchange"), in either case to effectuate the issuance of one or more new Series (any
                                     new Series issuance pursuant to a Transferor Ownership Interest Reduction or
                                     an Investor Exchange is referred to as a "New Series Issuance"). The Series 1998-1
                                     Supplement permits an Investor Exchange and corresponding New Series Issuance with
                                     respect to the Series 1998-1 Certificates. See "Description of the Offered
                                     Certificates--New Series Issuances." Under the Agreement, the Transferor may define,
                                     with respect to any Series, the Principal Terms of the Series. The Transferor may

                                     offer any Series to the public or other investors under a prospectus or other
                                     disclosure document (a "Disclosure Document") in transactions either
                                     registered under the Securities Act or exempt from registration thereunder,
                                     directly or through the Underwriters or one or more other underwriters or placement
                                     agents, in fixed-price offerings or in negotiated transactions or otherwise. The
                                     Transferor may offer, from time to time, additional Series issued by the Trust. The
                                     Trust will, as promptly as practicable, include in a periodic report filed with the
                                     Securities and Exchange Commission with respect to the Series 1998-1 Certificates,
                                     disclosure of all information related to issuance of any Series not required to be
                                     registered under the Securities Act that is material to the holders of, or potential
                                     investors in, the Series 1998-1 Certificates. See "Description of the
                                     Offered Certificates--New Series Issuances." However, at all times, the interest in the
                                     Principal Receivables in the Trust represented by the Transferor Ownership
                                     Interest is required to equal or exceed the Minimum Transferor Ownership Interest.

Requirements For
New Series Issuances................ Under the Agreement and pursuant to a Supplement, a New Series Issuance
                                     may occur only upon delivery to the Trustee of the following: (i) a
                                     Supplement specifying the Principal Terms of such Series, (ii) an opinion of
                                     counsel covering certain tax matters as described herein, (iii) if required by
                                     the related Supplement, the form of Enhancement, (iv) if an Enhancement is
                                     required by the Supplement, an appropriate Enhancement instrument or
                                     agreement, (v) written confirmation from each Rating Agency that the New
                                     Series Issuance will not result in such Rating Agency reducing or
                                     withdrawing its then existing rating on any then outstanding Series rated by
                                     it, and (vi) if applicable, the certificates representing the Series to be
                                     exchanged.

                                     In light of the aforementioned requirements for a New Series Issuance,
                                     including the required ratings confirmation and tax opinion, the Transferor
                                     does not presently expect that any New Series Issuance, including any
23
issuance as part of an Investor Exchange, will have a material adverse effect on the
                                     Series 1998-1 Certificates. There can be no assurance, however, that the Principal
                                     Terms of any other Series, including any Series issued from time to time hereafter,
                                     might not have an impact on the timing and amount of payments received by a Series
                                     1998-1 Certificateholder, including as a result of the refixing of the percentage
                                     utilized with respect to the allocation of the Principal Receivables. See "Description
                                     of the Offered Certificates--New Series Issuances" and "--Allocation Percentages."

Denomination........................ The Offered Certificates will be offered for purchase in minimum
                                     denominations of $1,000 and integral multiples thereof.

Registration of
Certificates........................ The Offered Certificates will initially be represented by certificates registered
                                     in the name of Cede, as the nominee of DTC.  No Certificate Owner will be

                                     entitled to receive a definitive certificate representing such person's interest,
                                     except in the event that Definitive Certificates are issued under the limited
                                     circumstances described herein.  See "Description of the Offered
                                     Certificates--Definitive Certificates."

Collections......................... The Servicer will deposit collections of Receivables in the Collection
                                     Account described under "Description of the Offered Certificates--The
                                     Collection Account" at the times and to the extent therein described.  All
                                     amounts deposited in the Collection Account will be allocated in the manner
                                     provided in the Agreement, as supplemented by the Series 1994-1
                                     Supplement, the Series 1998-1 Supplement and the Supplements relating to
                                     any future Series, by the Servicer between amounts collected on Principal
                                     Receivables and amounts collected on Finance Charge Receivables.  All such
                                     amounts will then be allocated in accordance with the respective interests of
                                     the Series 1998-1 Certificateholders, the Series 1994-1 Certificateholders, the
                                     certificateholders of any other Series and the holder of the Transferor
                                     Certificate in the Principal Receivables and in the Finance Charge
                                     Receivables of the Trust.  See "Description of the Offered
                                     Certificates--Allocation Percentages."

Shared Principal
Collections......................... The Offered Certificates are included in Series 1998-1.  The Series 1994-1
                                     Certificates were previously issued and other Series may be issued in the
                                     future.  Collections of Principal Receivables allocated to the Series 1998-1
                                     Certificateholders Ownership Interests with respect to the Series 1998-1
                                     Certificates that are not needed to make payments on the Series 1998-1
                                     Certificates will be allocated, if necessary, to cover principal payments due
                                     to or for the benefit of the Series 1994-1 Certificateholders and may be
                                     allocated for such purposes with respect to other Series of certificates
                                     ("Shared Principal Collections").  Any such reallocation will not result in a
                                     reduction in the Series 1998-1 Certificateholders Ownership Interests.  In
                                     addition, collections of Principal Receivables and certain other amounts
                                     otherwise allocable to the Series 1994-1 Certificateholders, to the extent such
24
collections are not needed to make payments to or deposits for the benefit of
                                     the Series 1994-1 Certificateholders, will be allocated, if necessary, to cover
                                     principal payments due to or for the benefit of the Series 1998-1
                                     Certificateholders and may be applied for such purposes with respect to other
                                     Series of certificates.  See "Description of the Offered Certificates--Shared
                                     Principal Collections."

Deposits in the
Excess Funding
Account............................. In certain circumstances as described herein, if on any date the Transferor
                                     Ownership Interest equals or is less than the Minimum Transferor Ownership
                                     Interest as of the end of the preceding Monthly Period, funds (to the extent

                                     available therefor as described herein) otherwise payable to the holder of the
                                     Transferor Certificate on such date will be deposited in the Excess Funding
                                     Account.  Funds allocable to the Series 1998-1 Certificates on deposit in the
                                     Excess Funding Account at the beginning of any Series 1998-1 Rapid
                                     Amortization Period for the Series 1998-1 Certificates will be available for
                                     payment to the Series 1998-1 Certificateholders in respect of principal.  See
                                     "Description of the Offered Certificates--Excess Funding Account."

Optional
Repurchase.......................... The Series 1998-1 Certificates will be subject to optional repurchase by the
                                     Transferor on any Distribution Date on or after the Distribution Date on
                                     which the Series 1998-1 Certificateholders Ownership Interests are reduced
                                     to an amount less than or equal to $[________] (10% of the Series 1998-1
                                     Initial Certificateholders Ownership Interests), if certain conditions set forth
                                     in the Agreement and as described herein are met (a "Cleanup Call").  The
                                     repurchase price will be equal to the sum of the unpaid Series 1998-1
                                     Certificateholders Ownership Interests and all accrued and unpaid interest on
                                     the Series 1998-1 Certificates through the day preceding the Distribution
                                     Date on which the Cleanup Call occurs less amounts, if any, on deposit at
                                     such Distribution Date in the Series 1998-1 Distribution Account for the
                                     payment of principal and interest due on the Series 1998-1 Certificates.  See
                                     "Description of the Offered Certificates--Final Payment of Principal;
                                     Termination of the Trust."

Trustee............................. The First National Bank of Chicago, a national banking association (the
                                     "Trustee").  The Corporate Trust Office is located at One First National
                                     Plaza, Suite 0126, Chicago, Illinois, 60670-0126, except that for purposes of
                                     notices to the Trustee and the registration of transfer and exchange of the
                                     Series 1998-1 Certificates, the Corporate Trust Office is located at 14 Wall
                                     Street, Eighth Floor, New York, New York 10005.

Tax Status.......................... On the Closing Date, counsel to the Transferor will issue its opinion, subject
                                     to the assumptions set forth therein, that under existing law, as more fully
                                     discussed under "Certain United States Federal Income Tax Consequences,"
                                     the Offered Certificates will be characterized as debt secured by the
                                     Receivables for federal income tax purposes.  Under the Agreement, the
25
holder of the Transferor Certificate and the Certificate Owners will agree to treat
                                     the Offered Certificates as debt of the Transferor for federal, state and local
                                     income, franchise and other tax purposes. See "Certain United States Federal Income
                                     Tax Consequences" for additional information concerning the application of
                                     United States federal income and certain state and local tax laws to an investment
                                     in the Offered Certificates.

ERISA Plans......................... The purchase of Offered Certificates by (a) any employee benefit plan that is
                                     subject to the Employee Retirement Income Security Act of 1974, as

                                     amended ("ERISA"), (b) any plan or other arrangement (including an
                                     individual retirement account or Keogh plan) that is subject to section 4975
                                     of the Code, or (c) any entity whose underlying assets include "plan assets"
                                     under regulations issued by the Department of Labor by reason of any such
                                     plan's investment in the entity ("ERISA Plans") may constitute or result in
                                     prohibited transactions or other violations of ERISA.  Therefore, the Offered
                                     Certificates may not be acquired by any ERISA Plans.  By their acceptance
                                     of Offered Certificates, the Holders of Offered Certificates will be deemed to
                                     have represented and warranted that they are not subject to the foregoing
                                     limitation.

Ratings of Offered
Certificates........................ It is a condition to the issuance of the Series 1998-1 Class A Certificates that
                                     they be rated "AAA" by Standard & Poor's Ratings Group ("Standard &
                                     Poor's") and Aaa by Moody's Investors Service, Inc. ("Moody's").  The
                                     rating of the Series 1998-1 Class A Certificates is based on the collectability
                                     of the Receivables, the terms of the Series 1998-1 Class B Certificates and of
                                     the Series 1998-1 Class C Certificates, including the subordination terms, the
                                     availability of funds to be deposited into the Series 1998-1 Yield
                                     Enhancement Account, the loss allocation method and the Support
                                     Agreements with AIG.

                                     It is a condition to the issuance of the Series 1998-1 Class B Certificates that
                                     they be rated at least "A" by Standard & Poor's and "A2" by Moody's.  The
                                     rating of the Series 1998-1 Class B Certificates is based on the collectability
                                     of the Receivables, the terms of the Series 1998-1 Class C Certificates,
                                     including the subordination terms, the availability of funds to be deposited
                                     into the Series 1998-1 Yield Enhancement Account, the loss allocation
                                     method and the Support Agreements with AIG.

                                     The ratings address the likelihood of full payment of principal and interest of
                                     the Offered Certificates by the Series 1998-1 Termination Date.  Any such
                                     rating will not address the possibility of the occurrence of a Pay Out Event
                                     with respect to any such class or the possibility of the imposition of United
                                     States withholding tax with respect to non-U.S. Holders of Offered
                                     Certificates.  The rating will not be a recommendation to purchase, hold or
                                     sell any such Offered Certificates, and such rating will not comment as to the
                                     marketability of such Offered Certificates, any market price or suitability for
                                     a particular investor.  There is no assurance that any rating will not be
26
lowered or withdrawn entirely by a Rating Agency if in such Rating
                                     Agency's judgment future circumstances relating to the basis of the ratings,
                                     such as adverse changes in the collectability of the Receivables or a lowering
                                     of AIG's present long-term debt rating, so warrant.  See "Special
                                     Considerations--Certificate Rating."
27
SPECIAL CONSIDERATIONS

         Limited Liquidity. There is currently no market for the Offered
Certificates. The Underwriters intend to make a market in the Offered
Certificates but are not obligated to do so. There is no assurance that a
secondary market will develop or, if it does develop, that it will provide
Holders of Offered Certificates with liquidity of investment or that it will
continue until the Offered Certificates are paid in full.

         Premium Finance Loan Credit and Related Considerations. Commercial
premium finance loans entail several different risks, including (a) the
creditworthiness of the borrower (the "Obligor"), (b) the creditworthiness of
the insurance company, in those cases where reliance is placed on the right to
unearned premiums as collateral for the loan, and (c) the capabilities and
operating procedures of the insurance agent or broker that (i) places the
insurance policy, (ii) serves as a source of significant information concerning
the loan transaction and (iii) may disburse the loan proceeds or collect
unearned premium funds. Application of federal and state bankruptcy, debtor
relief or insolvency laws to an insolvency of an Obligor, insurance company or
insurance agent or broker involved with a loan would affect the interests of the
Holders of Offered Certificates in the Receivables if such laws result in any
Receivables being written off as uncollectable or prevent the cancellation of
such Obligor's insurance policy or the collection of related unearned premium,
if any, which may serve as collateral for such Obligor's Loan. See "Business of
A.I. Receivables Corp., A.I. Credit Corp. and AICCO, Inc.--Premium Finance Loan
Underwriting Procedures" and "Description of the Offered Certificates--Defaulted
Loans; Charge-Offs."

         Bankruptcy Considerations. The Transferor will transfer to the Trust
pursuant to the Agreement the entire beneficial interest in the Loans funded by
AIC or AICCO to Obligors to finance premiums on property and casualty insurance
policies, including (a) the right to receive payments on the Loans, all amounts
due and to become due and all collections and recoveries thereon and (b) the
proceeds of certain collateral security with respect thereto. Only the
beneficial interest in the Loans has heretofore been transferred to the Trust by
the Original Transferors under the Original Agreement, and only the beneficial
interest therein will be transferred by the Original Transferors to the
Transferor under the Receivables Sale Agreement and by the Transferor to the
Trust under the Agreement. It is intended that AIC or AICCO, as the case may be,
will hold legal title to the Loans for state regulatory purposes and in order to
service and collect the Loans, but that otherwise AIC or AICCO will be acting as
nominal title holder only. Accordingly, the Trust's rights with respect to the
Loans will be derivative through the Transferor and AIC and AICCO. Neither the
Transferor nor the Trust will (i) have made any loans directly to any Obligor,
(ii) directly purchase any loans from Third Party Originators, (iii) have any
direct contractual relationships with any Obligors or (iv) have any direct

security interest in, or direct rights with respect to, any assets or rights of
any Obligors pledged as collateral for the Loans. Accordingly, the Trustee may
not have the ability to exercise remedies directly against Obligors and the
exercise of any such remedies may require the assistance or cooperation of AIC
or AICCO.

         The Transferor will represent and warrant in the Agreement that its
transfer of Future Receivables to the Trust as of the Closing Date and
thereafter is a valid transfer of Receivables to the Trust. The Transferor will
also warrant and covenant in the Agreement that the Future Receivables have been
and will be transferred free and clear of any adverse claim and that, except for
transfers to the Trust pursuant to the Agreement or as otherwise provided
therein with respect to a permitted merger, consolidation or sale of assets by
the Transferor, the Transferor will not sell, pledge, assign, transfer or grant
any adverse claim on any Receivable (or interest therein) or any other asset of
the Trust. The Original Transferors will have made similar representations,
warranties and covenants with respect to the Existing Receivables under the
Agreement.

                                       28
Section 541(d) of the United States Bankruptcy Code (the "Bankruptcy
Code") provides, in pertinent part, that where a debtor retains only legal title
to property to service the property, but does not retain an equitable interest,
the property included in the debtor's bankruptcy estate will be limited to the
debtor's legal title interest only and not to any equitable interest it does not
hold. Since (i) there appears to be uncertainty as to the application of Section
541(d) to property interests outside of real estate mortgage loans, (ii) AIC and
AICCO will be retaining an equitable interest in the Receivables through the
ownership of the Series 1994-1 Class C Certificates, and (iii) the Transferor
will be retaining an equitable interest in the Receivables through the
Transferor Ownership Interest and through the ownership of the Series 1998-1
Class C Certificates, a court could find that the Receivables had not been sold
and removed from the estate of either AIC, AICCO or the Transferor, but remain
part of any such entity's estate in the event of bankruptcy. Further, in Octagon
Gas Systems, Inc. v. Rimmer, 995 F.2d 948 (10th Cir. 1993), cert. den., 114 S.
Ct. 554, the United States Court of Appeals for the 10th Circuit suggested that
even where a transfer of accounts from a seller to a buyer constitutes a "true
sale," the accounts would nevertheless constitute property of the seller's
estate in a bankruptcy of the seller.

         In light of the foregoing, a creditor or trustee-in-bankruptcy of any
of AIC, AICCO or AIR could attempt to take the position that the transfer of
such beneficial interest pursuant to the Receivables Sale Agreement or the
Agreement was not a sale and should be recharacterized as an assignment of
collateral as security for the benefit of the Transferor or the holders of
certificates issued by the Trust. If the transfer to the Transferor or to the
Trust were deemed to be a grant to the Transferor or to the Trust of a security
interest in the Receivables, the Trustee may have an unperfected security
interest therein that will not have a priority over other, unsecured creditors,
and would be subordinate to secured creditors, of AIC, AICCO or the Transferor.

Also, if it were determined that the Trust or the Transferor had only an
unperfected security interest in its assets, payments made within one year of a
bankruptcy proceeding in respect of AIC, AICCO or the Transferor could be
subject to recapture as assets of such entity's bankruptcy estate pursuant to
Section 547 of the Bankruptcy Code. Holders of Offered Certificates,
consequently, could experience delays in payment or possibly losses in their
investment in the Offered Certificates if a bankruptcy proceeding in respect of
AIC, AICCO or the Transferor were to occur. AIG has agreed for the benefit of
the Trustee and the certificateholders of all outstanding Series in the AIC
Support Agreement described elsewhere herein to cause each of AIC and AICCO to
have a minimum net worth of at least $1 and, if AIC or AICCO has insufficient
funds to (a) meet any of its obligations under the Agreement or (b) pay any of
its other obligations when due (except for any such obligations which are the
subject of a bona fide dispute), the non-payment of which could constitute a
basis for the filing of an involuntary case against either AIC or AICCO under
the Bankruptcy Code, to provide AIC or AICCO, as the case may be, funds on a
timely basis to cause such obligations to be satisfied when due. AIG has agreed
for the benefit of the Trustee and the certificateholders of all outstanding
Series in the AIR Support Agreement described elsewhere herein to cause AIR to
have a minimum net worth of at least $1 and, if (a) AIR has insufficient funds
to meet any of its obligations under the Agreement or (b) AIR has insufficient
funds to pay any of its other obligations when due (except for any such
obligations which are the subject of a bona fide dispute), the non-payment of
which could constitute a basis for the filing of an involuntary case against AIR
under the Bankruptcy Code, to provide AIR funds on a timely basis to cause such
obligations to be satisfied when due. The Support Agreements and AIC's
undertaking in the Agreement reduce the probability that an Original Transferor
or the Transferor might be subject to a bankruptcy proceeding or have unpaid
creditors who might take the aforementioned position. See "Description of the
Offered Certificates--Support Agreements."

         If a bankruptcy-related event involving AIC, AICCO or the Transferor
were to occur, then a Pay Out Event could occur with respect to all Series then
outstanding and, pursuant to the Agreement, Additional Receivables would not be
transferred to the Trust and the Trustee would be obligated to sell the
Receivables (unless holders of more than 50% of the certificateholders ownership
interests of each Series of certificates issued and outstanding, including any
certificates held by the Transferor if no bankruptcy-related event has occurred
as

                                       29
to the Transferor (or, with respect to any Series with two or more classes, more
than 50% of each class) and the holder of the Transferor Certificate (if no
bankruptcy-related event has occurred as to such holder), instruct otherwise) in
accordance with the Agreement in a commercially reasonable manner and on
commercially reasonable terms, which may cause early termination of the Trust
and a loss to certificateholders of each such Series (including the Series
1998-1 Certificateholders) if the proceeds from such early sale allocable to
such Series, if any, and the amounts available under any Enhancement applicable
to such Series were insufficient to pay certificateholders of such Series in

full. If a Pay Out Event occurs that is due to the bankruptcy of either AIC or
AICCO, a bankruptcy trustee may have the power to prohibit continued transfers
of Receivables to the Transferor and to repudiate the servicing obligations of
AIC or AICCO, as the case may be. If a Pay Out Event occurs that is due either
to the bankruptcy of the Transferor or the appointment of a trustee for the
Transferor, the trustee would have the power to prevent the early sale,
liquidation or disposition of the Receivables and the commencement of the Series
1998-1 Rapid Amortization Period. A bankruptcy trustee in such event may also
have the power to cause the early sale of the Receivables and the early
retirement of the Offered Certificates and to prohibit the continued transfer of
Additional Receivables to the Trust.

         In addition, in the event of a Servicer Default relating to the
bankruptcy of the Servicer, if no Servicer Default other than such bankruptcy
exists, the trustee for the Servicer may have the power to prevent either the
Trustee or the certificateholders of outstanding Series of certificates from
appointing a successor servicer.

         State Regulation of Premium Finance Lending. The making, purchasing and
servicing of insurance premium loans is subject to numerous state laws and
regulations which impose requirements on the making, enforcement and collection
of insurance premium loans. The states may enact additional laws and regulations
and amendments to existing laws and regulations to regulate further the premium
loan industry or to reduce finance charges or other fees or charges applicable
to insurance premium loans. Such laws, as well as any new laws or rulings which
may be adopted, may adversely affect the Servicer's ability to collect on the
Receivables or maintain the required level of finance charges and other fees and
charges and the ability of the Trust to retain a successor servicer in the event
AIC or AICCO shall cease for any reason to continue as a Servicer. Since neither
the Trust nor the Transferor makes or services premium finance loans or has
acquired legal title to any such loans, AIC and AICCO believe that there is no
requirement that either the Transferor or the Trust be licensed under any state
premium finance licensing laws.

         Pursuant to the Agreement, the Transferor will covenant to accept
reassignment of each Future Receivable, and AIC or AICCO, as the case may be,
will covenant to accept reassignment of each Existing Receivable, that does not
comply with certain representations and warranties, including representations
concerning compliance with applicable state law and regulations, if, as a result
of such noncompliance, the related Loan becomes a Defaulted Loan. Pursuant to
the Receivables Sale Agreement, each of the Original Transferors will covenant
to accept reassignment of each Future Receivable sold by it to the Transferor
that may be reassigned to the Transferor because of a breach of a representation
and warranty. See "Description of the Offered Certificates--Representations and
Warranties." The Trustee has not made, and it is not anticipated that it will
make, any examination of the Receivables or the records relating thereto for the
purpose of establishing the presence or absence of defects, compliance with such
representations and warranties, or for any other purpose. The Trust's remedy if
any such representation or warranty is breached and such breach continues beyond
the applicable cure period and the related Loan becomes a Defaulted Loan because
of such breach is that (i) in the case of a Future Receivable, the Transferor
will be obligated to accept reassignment of the Receivable affected thereby and,
in turn, the Transferor will reassign such Future Receivable to either AIC or
AICCO, as applicable, which will be obligated to accept a reassignment of such

Receivable pursuant to the terms of the Receivables Sale Agreement, or (ii) in
the case of an Existing Receivable, the applicable Original Transferor will be
obligated to

                                       30
accept reassignment of such Receivable. See "--Bankruptcy Considerations" and
"Description of the Offered Certificates--Representations and Warranties."

         Competition in the Premium Finance Loan Industry. The premium finance
loan industry is competitive and includes banks as well as other premium finance
lending companies that offer financing to companies that purchase commercial
insurance. Insurance premium lenders may compete on the basis of loan pricing
and terms, underwriting criteria and servicing quality. If commercial insurance
consumers choose to utilize competing sources of credit, the amount of available
Additional Receivables relating to Loans funded by AIC or AICCO may be reduced.
The size of the Trust will be dependent upon the Transferor's continued ability
to transfer to the Trust Additional Receivables, which in turn will be dependent
upon the continued ability of AIC and AICCO to generate Additional Receivables
for subsequent sale to the Transferor and transfer by the Transferor to the
Trust. If the amount of Additional Receivables generated declines significantly,
Additional Receivables available to be transferred to the Trust will decline. If
the amount of Additional Receivables generated declines to such an extent that
the Transferor is unable to maintain the Minimum Transferor Ownership Interest,
a Pay Out Event would occur, in which event the Series 1998-1 Rapid Amortization
Period would commence. If the Series 1998-1 Rapid Amortization Period commences,
Series 1998-1 Certificateholders are likely to be repaid principal amounts
earlier than anticipated with respect to their Series 1998-1 Certificates, which
would affect the anticipated average life of the Series 1998-1 Certificates and
could result in reinvestment risk with respect to such earlier repayments. In
addition, the amount otherwise allocable to the holder of the Transferor
Certificate that would be available to be deposited into the Series 1998-1 Yield
Enhancement Account could be reduced thereby, reducing funds available to pay
amounts due with respect to the Series 1998-1 Certificates. See "Description of
the Offered Certificates--Pay Out Events" and "--Series 1998-1 Yield Enhancement
Account."

         Economic Factors. Economic factors, including the occurrence of a
recession, the rate of inflation, and relative interest rates, may have an
adverse impact upon the performance of the Receivables and on the ability of AIC
and AICCO to generate Additional Receivables for subsequent sale to the
Transferor and transfer by the Transferor to the Trust. In particular, negative
economic developments could have an adverse impact on the timing and amounts of
payments made by Obligors in respect of Receivables and could cause such
Obligors to become bankrupt or insolvent. See "--Premium Finance Loan Credit and
Related Considerations" and "Maturity Considerations."

         Limitations on Subordination and Yield Enhancement. Although the
probability of payment of amounts due with respect to the Offered Certificates
is intended to be enhanced by the subordination described herein of payments on
the Series 1998-1 Class C Certificates and by the availability of amounts in the

Series 1998-1 Yield Enhancement Account as described herein and, in the case of
the Series 1998-1 Class A Certificates, also by the subordination of payments on
the Series 1998-1 Class B Certificates to the Series 1998-1 Class A Certificates
as described herein, the amount of such enhancement is limited and may decline
during the Series 1998-1 Controlled Amortization Period or any Series 1998-1
Rapid Amortization Period or as a result of Defaulted Loans. If the
subordination of payments on the Series 1998-1 Class C Certificates and any
amounts deposited into the Series 1998-1 Yield Enhancement Account are
insufficient to protect the Series 1998-1 Class B Certificates from shortfalls
or delays in collections on the Receivables, then the Series 1998-1 Class B
Certificateholders will bear directly the credit risk associated with their
undivided interests in the Trust. If the subordination of payments on the Series
1998-1 Class C Certificates and the Series 1998-1 Class B Certificates and any
amounts deposited into the Series 1998-1 Yield Enhancement Account are
insufficient to protect the Series 1998-1 Class A Certificates from shortfalls
or delays in collections on the Receivables, then the Series 1998-1 Class A
Certificateholders will bear directly the credit risk associated with their
undivided interests in the Trust. The credit risk associated with the Series
1998-1 Certificateholders' undivided interests in the Trust is the risk that the
Trust will not receive full and timely payment of the Receivables. This risk is
described further in "--Premium Finance Loan Credit and

                                       31
Related Considerations" above. Series of certificates issued in the future may
share with the Offered Certificates in the benefits of the subordination of the
Series 1998-1 Class C Certificates, the yield enhancement provided by deposits
into the Series 1998-1 Yield Enhancement Account and any amounts deposited into
the Excess Funding Account. The Series 1994-1 Offered Certificates will share
with the Offered Certificates in the benefits of amounts deposited into the
Excess Funding Account. See "Description of the Offered
Certificates--Subordination," "--Series 1998-1 Yield Enhancement Account" and
"--Excess Funding Account."

         Master Trust Considerations. The Trust, as a master trust, has issued
the Series 1994-1 Certificates, will issue the Series 1998-1 Certificates, and
may issue additional Series of certificates. While the Principal Terms of any
Series will be specified in a Supplement, the provisions of a Supplement and,
therefore, the terms of any additional Series, will not be subject to the prior
review or consent of holders of the certificates of any previously issued
Series, including the Series 1998-1 Certificateholders. Such Principal Terms may
include methods for determining applicable investor percentages and allocating
collections, provisions creating different or additional security or other
Enhancement and/or provisions subordinating such Series to another Series (if
the Supplement relating to such Series so permits; the Series 1998-1 Supplement
will not permit such subordination of the Offered Certificates to any other
Series). It is a condition precedent to any New Series Issuance that either (A)
each Rating Agency deliver written confirmation to the Trustee that such
issuance will not result in such Rating Agency reducing or withdrawing its
then-existing rating on any outstanding Series or (B) if at the time of the
issuance there is no outstanding Series which is currently rated by a Rating

Agency, a nationally recognized investment banking firm or commercial bank
deliver a certificate to the Trustee to the effect that the issuance will not
have an adverse effect on the timing or distribution of payments to such other
Series. There can be no assurance, however, that the Principal Terms of any
other Series, including Series 1994-1 and any other Series issued from time to
time hereafter, will not have an impact on the timing and amount of payments
received by a Series 1998-1 Certificateholder, including as a result of the
refixing of the percentage utilized with respect to the allocation of the
Principal Receivables. See "Description of the Offered Certificates--New Series
Issuances" and "--Allocation Percentages."

         If the Trust issues any additional Series in a future public offering,
the Trust will do so pursuant to a registration statement (and prospectus) under
the Securities Act that is separate from this Prospectus and its related
registration statement. The new prospectus will not take the form of a
supplement to this Prospectus as is utilized in shelf offerings under the
Securities Act.

         Certificateholder Control Limitations. Subject to certain exceptions,
the certificateholders of each Series may take certain actions, or direct
certain actions to be taken, under the Agreement, including the related
Supplement. However, under certain circumstances, the consent or approval of a
specified percentage of the aggregate certificateholders ownership interests of
all Series or of the certificateholders ownership interests of each Series or of
classes within a Series will be required to take or direct certain actions,
including requiring the appointment of a successor Servicer following a Servicer
Default, amending the Agreement in certain circumstances and directing a
repurchase by the Transferor and/or the Original Transferors of some or all
outstanding Receivables upon the breach of certain representations and
warranties by the Transferor and/or the Original Transferors. In such instances,
the interests of the Series 1998-1 Certificateholders may not be aligned with
the interests of the holders of certificates of such other Series. Thus, even if
the requisite majority of Series 1998-1 Certificateholders votes to take or
direct such action, the holders of certificates of such other Series may control
whether or not such action occurs.

         Additional Receivables Considerations. The Transferor expects, and in
some cases will be obligated, to transfer Additional Receivables to the Trust.
Such Additional Receivables may include Receivables originated using criteria
different from those which were applied to the Existing Receivables because such
Receivables were

                                       32
originated at a different date. Consequently, there can be no assurance that
Additional Receivables designated in the future will be of the same credit
quality as previously designated Receivables. The designation of Additional
Receivables will be subject to the satisfaction of certain conditions described
herein under "Description of the Offered Certificates--Addition of Receivables."

         Payments And Maturity. There is no assurance that there will be at any

time after the Closing Date sufficient Additional Receivables available for
transfer to the Transferor and to the Trust to avoid a Pay Out Event. The
commencement and continuation of a Series 1998-1 Controlled Amortization Period
for a class with respect to the Trust will be dependent upon the continued
generation of Additional Receivables to be conveyed to the Trust. A significant
decline in the amount of Receivables generated could result in the occurrence of
a Pay Out Event and the commencement of the Series 1998-1 Rapid Amortization
Period. See "Maturity Considerations" and "Description of the Offered
Certificates--Pay Out Events."

         Certificate Rating. Any rating assigned to a class of the Offered
Certificates by Standard & Poor's or Moody's (individually, a "Rating Agency"
and collectively, the "Rating Agencies") will reflect such Rating Agency's
assessment of the likelihood that certificateholders of such class will receive
the payments of interest and principal required to be made under the Agreement
and will be based on the collectability of the Receivables in the Trust, the
terms, including the subordination terms, of other classes, the availability of
amounts in the Series 1998-1 Yield Enhancement Account, the loss allocation
method and the Support Agreements with AIG. The rating addresses the likelihood
of full payment of principal and interest of the Offered Certificates by the
Series 1998-1 Termination Date. Any such rating will not address the possibility
of the occurrence of a Pay Out Event with respect to such class or the
possibility of the imposition of United States withholding tax with respect to
non-U.S. Holders of Offered Certificates. The rating will not be a
recommendation to purchase, hold or sell certificates of such class, and such
rating will not comment as to the marketability of such Offered Certificates,
any market price or suitability for a particular investor. There is no assurance
that any rating will remain for any given period of time or that any rating will
not be lowered or withdrawn entirely by a Rating Agency if in such Rating
Agency's judgment future circumstances relating to the basis of the rating, such
as adverse changes in the collectability of the Receivables or a lowering of
AIG's long-term debt rating, so warrant.

         The Transferor will request a rating of the Offered Certificates by the
two Rating Agencies. There can be no assurance as to whether any rating agency
not requested to rate the Offered Certificates will nonetheless issue a rating
with respect to any Offered Certificate or class thereof, and, if so, what such
rating would be. A rating assigned to any Offered Certificates or class thereof
by a rating agency that has not been requested by the Transferor to do so may be
lower than the rating assigned by a Rating Agency pursuant to the Transferor's
request.

         Book-Entry Registration. The Offered Certificates will be initially
represented by one or more certificates registered in the name of Cede, the
nominee for DTC, and will not be registered in the names of the Certificate
Owners or their nominees. Because of this, unless and until Definitive
Certificates are issued, Certificate Owners will not be recognized by the
Trustee as Series 1998-1 Certificateholders, as that term will be used in the
Agreement. Hence, until such time, Certificate Owners will only be able to
exercise the rights of Series 1998-1 Certificateholders indirectly through DTC
and its participating organizations. See "Description of the Offered
Certificates--Book-Entry Registration" and "--Definitive Certificates."

         Reports To Certificateholders. Unless and until Definitive Certificates

are issued, monthly and annual reports containing information concerning the
Trust and prepared by the Trustee will be sent on behalf of the Trust to Cede,
as nominee for DTC and the registered holder of the Offered Certificates. Such
reports will not constitute financial statements prepared in accordance with
generally accepted accounting principles and will not

                                       33
be sent by the Servicer or the Trustee to the Certificate Owners. See
"Description of the Offered Certificates--Book-Entry Registration,"
"--Definitive Certificates," and "--Reports to Holders of Offered Certificates."

                             MATURITY CONSIDERATIONS

         The Agreement provides that the Series 1998-1 Class A
Certificateholders will not receive payments of principal until the first
Distribution Date with respect to the Series 1998-1 Controlled Amortization
Period, which is the [__________] Distribution Date, or earlier in the event of
a Pay Out Event which results in the commencement of the Series 1998-1 Rapid
Amortization Period. Series 1998-1 Class A Certificateholders will receive
payments of principal on each Distribution Date following the commencement of
the Series 1998-1 Rapid Amortization Period, to the extent of funds available
therefor, until the Series 1998-1 Class A Ownership Interest has been paid in
full or the Series 1998-1 Termination Date has occurred. The Series 1998-1 Class
B Certificateholders will not begin to receive payments of principal until the
Series 1998-1 Class A Ownership Interest has been fully paid.

         On each Distribution Date during the Series 1998-1 Class A Controlled
Amortization Period (which is presently scheduled to include the Distribution
Dates occurring in the months from [_______ to ______]), the Series 1998-1 Class
A Certificateholders will be entitled to receive monthly payments of principal
until the Series 1998-1 Class A Ownership Interest has been paid in full equal
to the least of (a) Series 1998-1 Available Investor Principal Collections (see
"Description of the Offered Certificates--Principal Payments") on deposit in the
Principal Account with respect to the related Transfer Date, (b) the applicable
Series 1998-1 Controlled Distribution Amount, which is equal to the sum of the
applicable Series 1998-1 Controlled Amortization Amount and any existing
applicable Series 1998-1 Deficit Controlled Amortization Amount (both as defined
under "Description of the Offered Certificates--Principal Payments") and (c) the
Series 1998-1 Class A Ownership Interest. On each Distribution Date during the
Series 1998-1 Class B Controlled Amortization Period (which is presently
scheduled to be only the Distribution Date occurring in [________]), the Series
1998-1 Class B Certificateholders will be entitled to receive monthly payments
of principal until the Series 1998-1 Class B Ownership Interest has been paid in
full equal to the least of (a) Series 1998-1 Available Investor Principal
Collections (see "Description of the Offered Certificates--Principal Payments")
on deposit in the Principal Account with respect to the related Transfer Date
(minus the portion of such Series 1998-1 Available Investor Principal
Collections applied to Series 1998-1 Class A Monthly Principal on such date),
(b) the applicable Series 1998-1 Controlled Distribution Amount (minus the
portion of such Series 1998-1 Controlled Distribution Amount applied to Series

1998-1 Class A Monthly Principal on such date), and (c) the Series 1998-1 Class
B Ownership Interest.

         If a Pay Out Event occurs before or during the Series 1998-1 Controlled
Amortization Period, the Series 1998-1 Rapid Amortization Period will commence.
To the extent that the Series 1998-1 Class A Ownership Interest has not been
paid in full, the Series 1998-1 Class A Certificateholders will be entitled to
monthly payments of principal equal to the Series 1998-1 Available Investor
Principal Collections until the earlier of the date on which the Series 1998-1
Class A Ownership Interest has been paid in full and the Series 1998-1
Termination Date. After the Series 1998-1 Class A Ownership Interest has been
paid in full, Series 1998-1 Available Investor Principal Collections will be
paid to the Series 1998-1 Class B Certificateholders on each Distribution Date
until the earlier of the date on which the Series 1998-1 Class B Ownership
Interest has been paid in full and the Series 1998-1 Termination Date. A Pay Out
Event occurs, either automatically or after specified notice, upon certain
events, including generally (a) the failure of AIC, AICCO or the Transferor to
make certain remittances or deposits of funds for the benefit of the Series
1998-1 Certificateholders within the time periods stated in the Agreement, (b)
breaches of specified representations and warranties by AIC, AICCO or the

                                       34
Transferor, (c) a Series 1998-1 Annualized Monthly Excess Spread Amount below
400 basis points for three consecutive Monthly Periods, (d) specified failure of
the Transferor to maintain the Transferor Ownership Interest at an amount at
least equal to the Minimum Transferor Ownership Interest, (e) specified Servicer
Defaults, (f) a Monthly Payment Rate of less than 14% for three consecutive
Monthly Periods, (g) a Financed Premium Percentage of more than 90% in respect
of Additional Receivables transferred to the Trust for three consecutive Monthly
Periods, (h) certain events of bankruptcy or insolvency related to AIC, AICCO or
the Transferor, (i) the inability, for any reason, of the Transferor to transfer
Additional Receivables to the Trust, and (j) a breach by AIG of either of the
Support Agreements or a breach of AIC of its support obligations under the
Agreement or the AIC Support Agreement with respect to AICCO. See "Description
of the Offered Certificates--Pay Out Events."

         Because there may be a slowdown in the payment rate of the Receivables
below the payment rates used to determine the Series 1998-1 Controlled
Distribution Amounts, or a Pay Out Event may occur which would initiate the
Series 1998-1 Rapid Amortization Period, there can be no assurance that the
respective final Distribution Dates of the Series 1998-1 Class A Certificates
and the Series 1998-1 Class B Certificates will be as indicated herein. See
"Special Considerations--Payments and Maturity."

         The ability of the Series 1998-1 Certificateholders to receive payments
of principal during the Series 1998-1 Controlled Amortization Period or any
Series 1998-1 Rapid Amortization Period depends on the amount and schedule of
installments of outstanding Receivables, delinquencies, charge-offs and the
generation and transfer of Additional Receivables and the potential issuance by
the Trust of additional Series. There can be no assurance as to the actual rate

of payment of principal of the Series 1998-1 Certificates. See "Description of
the Offered Certificates--Principal Payments."

         In addition, the amount of outstanding Receivables, as well as
delinquencies, charge-offs and the generation of new Receivables may vary from
month to month due to seasonal variations, regulatory factors, general economic
conditions and conditions in the markets for the services offered by AIC and
AICCO. There can be no assurance that collections of Receivables with respect to
the Trust, and thus the rate at which the Series 1998-1 Certificateholders could
expect to receive payments of principal on the Series 1998-1 Certificates, will
be as indicated herein. In addition, the Trust, as a master trust, may issue
additional Series from time to time, and there can be no assurance that the
terms of any such Series would not have an impact on the timing or amount of
payments received by the Holders of Offered Certificates. Further, if a Pay Out
Event occurs, the average life and maturity of the Offered Certificates could be
significantly reduced. No prepayment premium will be payable on account of any
prepayment of the Series 1998-1 Certificates as the result of the occurrence of
the Series 1998-1 Rapid Amortization Period.

         If an event of bankruptcy relating to AIC, AICCO or the Transferor were
to occur, then a Pay Out Event could occur with respect to all Series then
outstanding and, pursuant to the Agreement, the Transferor would immediately
cease to transfer Receivables to the Trust, and the Trustee would sell all
Receivables then in the Trust (unless holders of more than 50% of the
certificateholders ownership interests of each Series issued and outstanding,
including any certificates held by the Transferor if no bankruptcy-related event
has occurred as to the Transferor (or, with respect to any Series with two or
more classes, more than 50% of each class) and the holder of the Transferor
Certificate (if no bankruptcy-related event has occurred as to such holder),
instruct otherwise), in accordance with the Agreement in a commercially
reasonable manner and on commercially reasonable terms, which may cause early
termination of the Trust. However, in a bankruptcy proceeding, neither the
Trustee nor the Transferor may be permitted to suspend transfers of Receivables
to the Trust and the Transferor, respectively, and the instructions to sell or
not to sell the Receivables may not be given effect. See "Special
Considerations--Bankruptcy Considerations." The proceeds from the sale of the
Receivables would be treated as collections on the Receivables and allocated
accordingly among holders of certificates of each Series and the

                                       35
holder of the Transferor Certificate. If the proceeds from such early sale
allocable to such Series, if any, and the amounts available under any
Enhancement applicable to such Series were insufficient to pay
certificateholders of such Series fully, a loss to certificateholders of each
such Series (including the Series 1998-1 Certificateholders) would result.

                                    THE TRUST

         General. The Trust was formed pursuant to the Original Agreement in
accordance with the laws of the State of New York. Prior to its formation, the

Trust did not have any assets or obligations. The Trust has not engaged and will
not engage in any activity, other than as described herein. In addition to the
Receivables, the assets of the Trust will also include (a) all monies on deposit
in certain bank accounts of the Trust, (b) all monies on deposit in certain bank
accounts established and maintained for the benefit of certificateholders of any
Series, and (c) any Enhancement issued with respect to any other Series (the
benefits of such Enhancement with respect to other Series will not be available
for the benefit of the Series 1998-1 Certificateholders). The term "Enhancement"
shall mean, with respect to any Series, any letter of credit, cash collateral
account, surety bond, guaranteed rate agreement, maturity guaranty facility, tax
protection agreement, interest rate swap or other contract or agreement
principally for the benefit of certificateholders of such Series. The Trust will
exist only for the transactions described herein, including the collection of
payments with respect to the Receivables and holding such Receivables, the
issuance of the Transferor Certificate, the issuance of the Series 1998-1
Certificates, the Series 1994-1 Certificates and certificates representing
additional Series and related activities (including, with respect to any Series,
receiving any Enhancement and entering into the Enhancement agreement relating
thereto) and making payments thereon. As a consequence, the Trust is not
expected to have any need for additional capital resources.

         Other Series. The Trust previously issued pursuant to the Original
Agreement and the Original Series 1994-1 Supplement the Series 1994-1
Certificates, consisting of $200,000,000 in aggregate principal amount of Series
1994-1 Floating Rate Class A Asset Backed Certificates (the "Series 1994-1 Class
A Certificates"), $7,600,000 in aggregate principal amount of Series 1994-1
Floating Rate Class B Asset Backed Certificates (the "Series 1994-1 Class B
Certificates") and the Series 1994-1 Class C Certificates, and the Transferor
Certificate. The Series 1994-1 Class C Certificates and the Transferor
Certificate have been and until the Closing Date or thereabout will continue to
be held by AIC and AICCO and represent their respective interests in the Trust
as Original Transferors. Simultaneously with the issuance of the Series 1998-1
Certificates, the Transferor Certificate will be transferred to AIR by AIC and
AICCO. AIC and AICCO will retain the Series 1994-1 Class C Certificates. AIC and
AICCO will, on the Closing Date, cease to transfer Receivables to the Trust and
all such future conveyances to the Trust will be made by AIR, which will
purchase Receivables from AIC and AICCO pursuant to the terms of the Receivables
Sale Agreement.

         The table below sets forth the principal economic characteristics of
the Series 1994-1 Offered Certificates heretofore issued by the Trust. For more
specific information with respect to any Series, any prospective investor should
contact the Servicer at [____________]. The Servicer will provide, without
charge, to any prospective purchaser of the Series 1998-1 Certificates, a copy
of the prospectus for the Series 1994-1 Certificates.

Series 1994-1
1.      Class A Certificates

        Initial Ownership Interest                 $200,000,000

        Certificate Rate                           One-month LIBOR + 0.23%, subject to a cap of 16.00%
36
Current Ownership Interest                 $200,000,000
        Controlled Amortization Amount             $28,571,428.58
        Expected Commencement of
          Controlled Amortization Period           September 1, 1999
        Monthly Servicing Fee                      No fee while AIC and AICCO are Servicer;
                                                   otherwise one-twelfth of the product of 0.5% and the
                                                   Series 1994-1 Class A Ownership Interest
        Other                                      Enhancement Subordination of Series 1994-1 Class B
                                                   Certificates and Series 1994-1 Class C Certificates;
                                                   series-specific yield enhancement account
        Expected Final Payment Date                March 2000
        Scheduled Series Termination Date          October 2001
        Series Issuance Date                       December 22, 1994

2.      Class B Certificates

        Initial Ownership Interest                 $7,600,000
        Certificate Rate                           One-month LIBOR + 0.43%, subject to a cap of 16.00%
        Current Ownership Interest                 $7,600,000
        Controlled Amortization Amount             $28,571,428.58
        Expected Commencement of
          Controlled Amortization Period           April 2000
        Monthly Servicing Fee                      No fee while AIC and AICCO are Servicer;
                                                   otherwise one-twelfth of the product of 0.5% and the
                                                   Series 1994-1 Class B Ownership Interest
        Other Enhancement                          Subordination of Series 1994-1 Class C Certificates; series-
                                                   specific yield enhancement account
        Expected Final Payment Date                April 2000
        Scheduled Series Termination Date          October 2001
        Series Issuance Date                       December 22, 1994
37
BUSINESS OF A.I. RECEIVABLES CORP., A.I. CREDIT CORP. AND AICCO, INC.

General

        A.I. Receivables Corp. was incorporated in Delaware in January of 1998
and is wholly owned by A.I. Credit Corp. and AICCO, Inc., each of which holds a
50% interest therein. AIR was created for the sole and limited purpose of acting

as Transferor under the Trust and as purchaser under the Receivables Sale
Agreement. Receivables relating to Loans funded by AIC and AICCO, as described
below, will be purchased by AIR pursuant to the Receivables Sale Agreement and
subsequently transferred from AIR to the Trust pursuant to the Agreement. The
principal executive office of AIR is located at 160 Water Street, New York, New
York 10038, telephone number (212) 428-5500.

        A.I. Credit Corp. was incorporated in New Hampshire in 1973 and is a
wholly-owned subsidiary of American International Group, Inc., a Delaware
corporation ("AIG"). AIG is a holding company which through its subsidiaries is
primarily engaged in a broad range of insurance and insurance related activities
in the United States and abroad. The principal business of A.I. Credit Corp.
consists of funding loans to commercial borrowers ("Obligors") to finance
property and casualty insurance premiums throughout the United States, other
than in California. AICCO, Inc. ("AICCO"), a wholly-owned subsidiary of A.I.
Credit Corp. that was incorporated in California in 1974, conducts such premium
finance lending activities in California. As used in this "Business" section
(unless otherwise indicated), "AIC" refers to A.I. Credit Corp. and AICCO
collectively. AIC finances premiums for most lines of property and casualty
insurance. AIC believes that it is the second largest insurance premium finance
company in the United States. AIC financed insurance premiums during each of
1996 and 1997 in excess of $2 billion. The principal executive office of AIC is
located at 160 Water Street, New York, New York 10038, telephone number (212)
428-5400 and of AICCO is located at 777 South Figueroa Street, Los Angeles,
California 90017, telephone number (213) 689-3600.

        A commercial premium finance loan typically is an installment loan made
to a commercial insurance buyer, the proceeds of which pay premiums which are
due to the insurance company. Financed commercial insurance policies commonly
(a) are for a term of one year or less, (b) require the full premium to be paid
at inception and (c) provide upon early cancellation for a return of unearned
premium to the insured. Obligors generally make fixed scheduled payments which
include a finance charge based on a spread over the estimated yield at the date
of origination of the loan of money market investments with a maturity
comparable to the loan. The finance charges on premium finance loans funded by
AIC may vary considerably, depending on the term and amount of the loan, the
insured's credit payment history, the size of the premium down payment and other
considerations. During each of calendar years 1995, 1996 and 1997, the average
yield on the Loan Portfolio has exceeded the monthly average of the daily rates
in the London interbank market for offers of one-month United States dollar
deposits by at least 200 basis points for each monthly period. Due to future
changes in the interest rate environment, competition from other lenders and
other relevant factors, there can be no assurance the average spread between the
Loans and one-month LIBOR will not be lower in the future. For additional
information concerning the calculation of AIC's finance charges, see
"Description of the Offered Certificates--Allocation Percentages." For
information concerning additional amounts intended to be available as yield
enhancement for the Offered Certificates, see "The Receivables" and "Description
of the Offered Certificates--Series 1998-1 Yield Enhancement Account."

        AIC utilizes standardized premium finance loan agreements that give AIC
a limited power of attorney allowing it to cancel the insurance coverage upon
non-payment of a loan installment by the Obligor and to collect from the
insurance company any unearned premium that may secure the loan. Depending on

the terms of the loan

                                       38
and of the related insurance policy, the return premium may or may not be
sufficient to pay off the outstanding balance of the loan. AIC also has a right
to recover any unpaid loan balance directly from the Obligor.

        A common premium finance loan structure may include a 20% down payment
on the premium paid by the Obligor with the remaining 80% funded by a loan from
the insurance premium finance company to be repaid by the Obligor in nine equal
monthly installments. AIC's premium finance loans generally have terms that
range from 6 to 12 monthly installments with higher or lower down payment
percentages depending upon AIC's applicable credit and underwriting policies.
Certain loans do not have level repayment requirements, usually to accommodate a
borrower's cash flow. Given the relatively short duration of most premium
finance loans, such loans are generally not prepaid prior to the scheduled
payment dates although the loan terms do not prohibit prepayments or provide for
penalties in the event of prepayment.

        Financed commercial insurance policies usually require that the full
insurance premium be paid at the commencement of the policy period. The
insurance company customarily earns the right to the full premium over the
course of the policy period. If the insured cancels the policy prior to the end
of the policy period, the insured is commonly entitled to a repayment of the
portion of premium payment that is unearned by the insurance company at the time
of cancellation. Depending on the type of insurance coverage and the terms of
the particular insurance policy, the amount of unearned premium available upon
cancellation will vary in light of relevant factors such as (a) the applicable
method for measuring unearned premium which may be by proration over the policy
term or, as required by some states, by an accelerated method under which more
premium is earned in the earlier portion of the policy period, (b) the extent of
the policy period that has expired at the time of cancellation, (c) the loss
experience under the policy prior to cancellation and (d) variations after the
commencement of the policy period in the scope of the risks covered. The
insurance company may, depending on the terms of the policy, be entitled to
retroactively review and evaluate factors (c) and (d) above after cancellation
which may result in a reduction of the amount, and affect the timing, of
repayment of any unearned premiums. Also, in certain cases the insurance company
may earn the entire premium at inception of the policy or upon the occurrence of
an insured loss under the policy, in either of which cases there would be no
unearned premium to be returned.

        Premium finance lending activities are regulated by most states. Among
other matters, many states regulate various terms of the premium finance loans

such as refund policies and rates of interest and late charges that may be
charged an insured. Premium finance loans are funded by AIC on standardized loan
forms, the provisions and format of which are also usually subject to state
regulation. AIC regards its relations with state regulatory agencies as good.
See "--State Regulation of Premium Finance Lending Activities" below.

Premium Finance Loan Origination; Collection Policy

      AIC generally locates premium finance borrowers through independent
insurance agents and brokers that are licensed under state laws, who offer
premium loan programs to enable their commercial customers to purchase the full
amount of insurance coverage needed and spread out the premium payments over
time. Thus, origination is usually dependent on relationships with insurance
brokers and agents and knowledge of the insurance marketplace. The funding by
AIC of insurance premium finance loans is commonly commenced by an agent or
broker contacting AIC to initiate the premium loan process and outlining to AIC
the proposed loan transaction, including borrower and insurance company
information and coverage types and amounts. AIC then reviews the information
submitted by such agent or broker in light of its underwriting procedures. See
"--Premium Finance Loan Underwriting Procedures" below. After AIC approval, the
borrower executes a standard premium finance loan agreement, which contains a
promise to repay the loan, a limited power of attorney giving AIC the authority
in the event of default on the loan to contact the insurance company directly
and cancel coverage, and a collateral assignment to AIC of the unearned
insurance premium, if any, returnable following such cancellation.

                                       39
Following receipt and acceptance of the signed premium finance loan
agreement, AIC either sends the loan proceeds to the insurance company to pay
the premium balance due or releases funds to the insurance agent or broker who
then pays the insurance company. AIC bills the borrower directly on a monthly
basis. Each borrower is directed to remit payments to the appropriate regional
lockbox account maintained by AIC.

        Since the insurance company generally earns a portion of the premium
each day, thereby reducing unearned premium amounts for loans secured by such
collateral, prompt action on loan defaults is important. On defaulted loans,
most states allow premium finance companies such as AIC to issue a notice of
"intent to cancel" the related insurance policy within five or ten days after
the premium loan installment due date on which the borrower defaulted. A "notice
of cancellation" can then be issued generally ten days after an "intent to
cancel" notice has been mailed. Once a cancellation notice has been issued, AIC
will customarily proceed to take steps to collect any unearned premium available
from the insurance company and apply it to the loan balance. If the returned
premium does not retire the loan balance due, AIC will customarily seek payment
from the borrower pursuant to the terms of the premium finance loan agreement.

AIC's policy is to (a) seek to collect past due installments prior to policy
cancellation and (b) if a cancellation occurs, attempt to both collect the
delinquent payment and obtain reinstatement of the insurance coverage. Since
borrowers usually need to maintain insurance (and to reinstate cancelled
policies) to meet their business objectives, collections often continue even
after policy cancellation and cancelled policies are often reinstated.

        Generally, the policy cancellation date occurs within one month of the
related loan installment default. The current policy of AIC is to charge off as
a loss the unpaid defaulted loan balance one year after the cancellation of the
related policy. Following cancellation, AIC will process the collection of any
unearned premium with the appropriate insurance company or may pursue collection
against the borrower if sufficient unearned premium is unavailable. If during
this period AIC determines the unpaid loan is not likely to be collected, AIC
may charge off the loan prior to such first anniversary. Under the terms of the
Agreement, any recoveries with respect to Loans that have been written off will
be included in the assets of the Trust and considered Finance Charge
Receivables. See "The Receivables."

Premium Finance Loan Purchase Policies

        In addition to directly originating premium finance loans, AIC has
entered into purchase agreements whereby AIC purchases premium finance loans
("Purchased Loans") from third party premium finance loan originators ("Third
Party Originators") immediately upon their origination by such Third Party
Originators. The terms "fund," "funded" and "funding," when used herein with
respect to Loans, refer both to the making of such Loans directly by AIC or
AICCO to Obligors and to the purchase of such Loans by AIC or AICCO from Third
Party Originators immediately upon the origination of such Loans by Third Party
Originators, unless the context otherwise requires. Third Party Originators are
commonly affiliated with insurance agents and/or brokers. Purchased Loans are
originated on substantially similar terms as, and pursuant to the same credit
standards, policies and procedures applied to, loans directly originated by AIC.
The beneficial interest and rights in and to the Purchased Loans acquired by AIC
as purchaser are substantially similar to those in loans which are directly
originated by AIC, including, but not limited to, the limited power of attorney
allowing it to cancel the insurance coverage upon non-payment of a loan
installment by the Obligor and to collect from the insurance company any
unearned premium that may secure the loan. AIC will make identical
representations and warranties with respect to Purchased Loans sold to the
Transferor pursuant to the Receivables Sale Agreement as are made with respect
to Loans directly originated by AIC.

                                       40
Premium Finance Loan Underwriting Procedures

        AIC considers and evaluates a variety of risks in evaluating each
instance of funding an insurance premium finance loan. These include (a) the

loan structure (the loan term, the amount of down payment and the availability
of unearned premium as collateral), (b) the creditworthiness of the borrower,
(c) the creditworthiness of the insurance company, in those cases where reliance
is placed on the right to unearned premiums, and (d) the capabilities and
operating procedures of the insurance agent or broker that (i) places the
insurance policy, (ii) serves as a source of significant information regarding
the loan transaction, and (iii) may disburse the loan proceeds or collect
unearned premium funds for AIC. These factors may be given different weight in
the case of any particular loans.

        All applications from insureds for loans to be funded by AIC are
reviewed for completeness and creditworthiness based on the loan underwriting
criteria established by AIC. Under AIC's current underwriting policies, loan
applications are reviewed by a branch office. Loans that have special factors,
such as large principal amounts, low down payments or the absence of unearned
premium collateral, are also subject to evaluation and approval by the head
office credit department. In most cases AIC receives applications directly from
insurance agents or brokers.

        AIC's general guideline for approval of an insurance company is a rating
of at least B+ by A.M. Best Company. Based upon AIC's own credit determination,
it may finance insurance policies issued by insurance companies that have a
lower rating or, in the case of foreign insurers and certain domestic insurers
that meet AIC credit requirements, that are unrated. While Receivables may
relate to Loans made to finance premiums payable to such unrated or lower rated
foreign or domestic insurers, AIC believes that each of such insurers is subject
to state insurance law requirements relating to the repayment of unearned
insurance premiums upon cancellation of the related policy. At December 31,
1997, in excess of 35% of the aggregate outstanding loan account balance (as
defined herein in the table entitled "Outstanding Loan Account Balances by Size"
under "The Receivables") represented loans funded by AIC to finance premiums on
policies issued by insurance affiliates of AIG. As of such date, no other
insurance company group accounted for more than 5.0% of the outstanding
insurance premium loans funded by AIC. With respect to agents and brokers, AIC
monitors loans in its portfolio originated by particular agents and brokers to
assist in assessing their capabilities and performance as agents or brokers.

State Regulation of Premium Finance Lending Activities

        The making, purchasing, enforcement and collection of insurance premium
loans is subject to extensive regulation by many states' laws. Such laws vary
widely by state, but often (i) require that premium finance lenders be licensed
by the state, (ii) restrict the content of premium finance loan agreements, and
impose certain disclosure requirements on such agreements, (iii) limit the
amount of finance charges that may be lawfully imposed, (iv) regulate the amount
of refunds due an obligor who prepays the premium finance loan prior to
maturity, (v) regulate the amount of late fees, if any, and finance charges that
may be charged upon a premium finance loan becoming overdue, (vi) regulate the
manner and method of cancelling an insurance policy upon non-payment of the
premium finance loan, including a requirement that the premium finance lender
provide the obligor with appropriate notice prior to such cancellation, and
(vii) allow imposition of penalties, which may be significant, upon premium
finance lenders for violations of the state's premium finance laws. See "Special
Considerations--State Regulation of Premium Finance Lending."

As Servicer

        AIC and AICCO will act as the Servicer for the Loans giving rise to
Receivables in accordance with the Agreement. In certain limited circumstances,
AIC and AICCO may resign or be removed as Servicer, in which

                                       41
case a third party may be appointed as its successor. See "Special
Considerations--State Regulation of Premium Finance Lending," "Description of
the Offered Certificates--Collection and Other Servicing Procedures," "--Certain
Matters Regarding the Servicer, the Transferor and the Original Transferors" and
"--Servicer Default."

                                 THE RECEIVABLES

        The assets of the Trust will include (i) the entire beneficial interest
in Loans, which interest has been previously transferred to the Trust by AIC and
AICCO prior to the Closing Date, and (ii) to the extent described under
"Description of Offered Certificates--Addition of Receivables," the entire
beneficial interest in Loans funded by either AIC or AICCO on the Closing Date
and from time to time thereafter, including (A) all amounts due and to become
due and all collections and recoveries on such Loans, and (B) the proceeds of
certain collateral security securing such Loans. The beneficial interests
described above are herein referred to as the "Receivables." The Trust assets
will not include, as of any date of determination, (a) with respect to any
Receivable arising under a Loan which is not a Defaulted Loan, any collections
received by the Servicer on such Loan in excess of the sum of (i) the amounts
due and payable on such Loan during the month in which such date occurs and (ii)
all accrued and unpaid amounts, if any, on such Loan in respect of any month or
months prior to the month in which such date occurs or (b) with respect to any
Receivable arising under a Defaulted Loan, any collections received by the
Servicer on such Defaulted Loan in excess of all amounts due thereon (each, a
"Credit Balance").

        Each Loan will have been funded by AIC or AICCO to finance commercial
insurance premiums. Neither the Loans nor the Receivables are guaranteed by AIR,
AIC, AICCO, AIG or any affiliate thereof, and the Trust, as holder of the
Receivables, has no recourse against AIR, AIC, AICCO, AIG or any affiliate
thereof for the non-collectability of the Receivables, except that, under
certain limited circumstances, the Transferor and each of the Original
Transferors will be required to repurchase certain Receivables from the Trust
and to provide indemnification to the Trust in certain events. See "Description

of the Offered Certificates--Certain Matters Regarding the Servicer, the
Transferor and the Original Transferors." AIC and AICCO will each act as
Servicer with respect to the Receivables relating to Loans it funded and which
it transferred to the Trust (or sold to AIR for transfer to the Trust). As set
forth in the Agreement, each Receivable to be transferred to the Trust must
satisfy certain eligibility criteria. See "Description of the Offered
Certificates--Representations and Warranties."

        Certain information regarding the performance and composition of the
portfolio of Loans of AIC and AICCO (the "Loan Portfolio") is set forth below.
While AIC and AICCO expect to transfer their beneficial interest in the entire
Loan Portfolio to the Transferor for transfer to the Trust pursuant to the
Receivables Sale Agreement, there can be no assurance that the performance
experience of the Receivables transferred to the Trust will be comparable to
that set forth below. In addition, there are many legal, economic and
competitive factors that could adversely affect the amount and collectability of
the Loans related to the Receivables, including insureds' decisions to use new
sources of credit, which would affect the ability of AIC and AICCO to generate
Additional Receivables, and changes in usage of credit, payment patterns and
general economic conditions. Because the impact of these and other factors
(including the composition of the Receivables and the interest rates, fees and
charges assessed thereon) may change in the future, the text and tables set
forth below are not necessarily indicative of the future performance of the
Receivables that are transferred to the Trust.

        The following tables set forth certain summary information regarding the
Loan Portfolio. During each of the calendar years 1995, 1996 and 1997, the
average yield on the Loan Portfolio has exceeded the monthly average of the
daily rates in the London interbank market for offers of one-month United States
dollar deposits by at least 200 basis points for each monthly period. Due to
future changes in the interest rate environment,

                                       42
competition from other lenders and other relevant factors, there can be no
assurance the average spread between the Loans and one-month LIBOR will not be
lower in the future. Also, during each of the calendar years 1995, 1996 and
1997, the average monthly payment rate on commercial premium finance loans
exceeded 17%. Assuming (i) a 17% payment rate each month, (ii) twelve equal
30-day monthly periods, and (iii) ownership by the Transferor during each
Monthly Period of at least the Minimum Transferor Ownership Interest, the amount
available under the Agreement during the Series 1998-1 Revolving Period for
yield enhancement would be [___] basis points on the outstanding principal of
the Offered Certificates on an annualized basis and may be greater during an
amortization period (unless the amount of interest due on the outstanding
principal of the Offered Certificates during such Monthly Period is less than
[___] basis points on an annualized basis, in which case the amount available

for yield enhancement would be such lesser amount). There can be no assurance,
however, that the monthly payment rate on the Loans will not be less than 17%
since the payment rate will vary depending on a variety of factors, including
loan maturities, interest rates and delinquency and default rates. Lower payment
rates will result in lower yield enhancement amounts. See "Description of the
Offered Certificates--Series 1998-1 Yield Enhancement Account."

                                       43
Outstanding Loan Account Balances by Size
                             as of December 31, 1997
                             (Dollars in Thousands)
% of
                                                                                                    Aggregate
                                                                                  Outstanding      Outstanding
                                                                                      Loan             Loan
                                                No. of Loan        % of Loan        Account           Account
OUTSTANDING LOAN ACCOUNT BALANCE(1)             Accounts(2)        Accounts         Balance           Balance
                                                -----------        ---------      -----------      ----------
$5,000 or less.................................    45,931            72.38%          $63,811           6.26%
$5,001 to $10,000..............................     6,914            10.90%           48,660           4.77%
$10,001 to $25,000.............................     5,691             8.97%           89,185           8.75%
$25,001 to $50,000.............................     2,264             3.57%           78,696           7.72%
$50,001 to $75,000.............................       774             1.22%           46,959           4.61%
$75,001 to $100,000............................       439             0.69%           37,916           3.72%
$100,001 to $250,000...........................       860             1.36%          133,429          13.09%
$250,001 to $500,000...........................       339             0.53%          117,154          11.49%
$500,001 to $1,000,000.........................       146             0.23%           99,558           9.77%
$1,000,001 to $5,000,000.......................        90             0.14%          174,603          17.13%
Over $5,000,000................................        12             0.02%          129,443          12.70%

Total (3)......................................    63,460           100.00%       $1,019,414         100.00%
----------
(1)     Loan account balances include outstanding principal balances (including
        committed but unfunded amounts) and unearned finance charges.
(2)     A loan account is generally a single Obligor that may have loans with
        respect to one or more commercial insurance policies outstanding at the
        time of determination.
(3)     The average outstanding loan account balance of each loan as of
        December 31, 1997 was approximately $16,100.

           Composition of Loan Accounts by Remaining Installment Term
                             as of December 31, 1997
                             (Dollars In Thousands)
% of Aggregate
                                                                       Outstanding            Outstanding
                                              No. Of Loan              Loan Account            Loan Account
REMAINING INSTALLMENT TERM(1)                  Accounts                   Balance               Balance
                                             -------------            ---------------        -------------
3 months or less......................          26,703                  $118,582                 11.63%
4 to 6 months.........................          17,115                   233,538                 22.91%
7 to 9 months.........................          15,511                   293,252                 28.77%
10 to 12 months.......................           3,586                   119,698                 11.74%
13 to 18 months.......................             276                    63,569                  6.24%
More than 18 months...................             269                   190,775                 18.71%

Total.................................          63,460                $1,019,414                100.00%
----------
(1)     Terms of the loans commonly provide for level payments of principal and
        finance charges on a monthly basis, although certain loans do not have
        level repayment requirement.

                                       44
Geographic Concentration

        The Loan Portfolio includes commercial premium finance loans originated
in all 50 states and the District of Columbia. The following table sets forth
information regarding the concentration of loans by outstanding loan account
balance in the Loan Portfolio among the states with the largest concentration of
loans as of December 31, 1997. No other state accounted for more than 2% of the
Loan Portfolio at such date.

                             Geographic Distribution
                             As Of December 31, 1997
                             (Dollars In Thousands)

                                                                % of Aggregate
                                               Outstanding         Outstanding
                                              Loan Account        Loan Account
                                                 Balance              Balance
                                              ------------      --------------

New York(1)..............................           238,838           23.43%

California(1)............................           172,286           16.90%
Texas....................................            98,385            9.65%
New Jersey...............................            69,672            6.83%
Pennsylvania.............................            42,063            4.13%
Massachusetts............................            38,463            3.77%
Florida..................................            36,111            3.54%
Illinois.................................            29,377            2.88%
Tennessee................................            22,044            2.16%
Georgia..................................            20,945            2.05%
Alabama..................................            20,813            2.04%
All Others(2)............................           230,417           22.60%

Total....................................         1,019,414          100.00%

----------
(1)     Significant percentages of the loans funded by AIC and AICCO are
        originated in New York and California, and accordingly, adverse economic
        developments in such areas could adversely affect collections of
        Receivables related to loans originated in such areas.

(2)     States with 2% or less of the total loan account balances.

                                       45
Loan Loss Experience
                             (Dollars In Thousands)

        The following table sets forth loss experience with respect to payments
by Obligors on loans for each of the periods shown. There can be no assurance
that the loss experience for the Trust with respect to the Receivables will be
similar to the historical experience set forth below.
Year Ended December 31,
                                                    ------------------------------------------------
                                                        1997                 1996             1995
                                                        ----                 ----             ----
Average Aggregate Outstanding
    Principal Balance(1).....................         924,616                796,566         802,881
Gross Loan Charge-Offs(2)....................          12,582                  9,160           6,410
Recoveries(3)................................           2,598                  2,145           2,697
Net Loan Charge-Offs as Percentage ..........           9,984                  7,015           3,713
    of Average Aggregate Outstanding.........
    Principal Balance, Net(2)................           1.08%                  0.88%           0.46%
----------
(1)  Calculated as the average of (a) the average monthly beginning receivables
     balance and (b) the average monthly ending receivables balance, over the
     relevant periods.
(2)  A loan is generally charged-off one year after cancellation. The related
     insurance policy is cancelled generally within one month following an
     Obligor's failure to make a scheduled loan installment payment.
(3)  A recovery occurs if, after a loan is written off, AIC or AICCO, as the
     case may be, receives additional funds to pay in whole or in part the
     outstanding balance due.

                                       46
Loan Delinquency Experience Following Cancellation

      The following table sets forth the delinquency experience with respect to
payments by Obligors on loans at each of the dates shown. In conformity with
state requirements regarding cancellation notification, insurance policies are
generally cancelled within one month following an Obligor's failure to make a
related scheduled loan installment payment. Cancellation occurs on an automated
basis unless the loan is carried in the "hold" category by AIC. The "hold"
category includes primarily loans that require manual servicing procedures and
loans where cancellation of the related policy is stayed due to the Obligors'
bankruptcy, some of which loans may be delinquent. At December 31, 1997 "hold"
category loans represented approximately 0.44% of the aggregate principal loan
balance (excluding unearned finance charges) for the Loan Portfolio. The loan
delinquency data presented in the following table are measured from the date of
insurance policy cancellation. The percentages presented for each aging category
reflect the sum of the balance of principal and unearned finance charges
(including the overdue installment(s) as well as all of the remaining
installment payments not yet due) on all canceled accounts within each category
divided by the aggregate principal loan balance (excluding unearned finance
charges) for the Loan Portfolio. Since the table reflects percentages calculated
by including unearned finance charges in the cancelled accounts, but not
including such amounts in the aggregate loan balances, the resulting percentages
may reflect higher percentages of delinquencies than actually experienced.
Variations from one measurement date to another measurement date within aging
categories are primarily a reflection of the variability of time required to
collect the unearned insurance premium from the insurance carrier or,
alternatively, the remaining loan balance from the Obligor, on a revolving pool
of loans. There can be no assurance that the delinquency experience with respect
to the Receivables will be similar to the historical experience set forth below.

Number Of Days A Loan Remains Overdue After                At December 31,
                                                   -----------------------------
Cancellation Of The Related Insurance Policy:        1997       1996       1995
                                                   --------   --------   ------

1-30 days.....................................       1.60%      1.90%     1.94%
31-60 days....................................       0.78%      0.63%     0.46%
61-90 days....................................       0.69%      0.52%     0.70%
91-120 days...................................       0.72%      0.39%     0.43%
121-150 days..................................       0.35%      0.32%     0.18%
151 days or greater(1)........................       1.18%      1.44%     0.92%

Total.........................................       5.31%      5.19%     4.63%

----------
(1) A loan is generally charged-off one year after cancellation of the related
insurance policy.

                                       47
USE OF PROCEEDS

      The net proceeds from the sale of the Offered Certificates, approximately
$[________], before deduction of expenses, will be paid to the Transferor. The
Transferor will use such proceeds to purchase a portion of the Transferor
Ownership Interest from AIC and AICCO.

                     DESCRIPTION OF THE OFFERED CERTIFICATES

      The Offered Certificates will be issued pursuant to the Agreement, which
includes the Series 1998-1 Supplement, to be entered into between AIR, as
Transferor of the Receivables, AIC, as an Original Transferor of the Receivables
and as Servicer of the Loans, AICCO, as an Original Transferor of the
Receivables and as Servicer of the Loans, and The First National Bank of
Chicago, as Trustee for the certificateholders, substantially in the form filed
as exhibits to the Registration Statement of which this Prospectus is a part.
Pursuant to the Agreement, the Transferor may execute further Supplements
thereto between the Transferor, the Original Transferors, the Servicer and the
Trustee in order to issue additional Series of certificates. See "--New Series
Issuances." The Trustee will provide a copy of the Agreement (without exhibits
or schedules), including the related Supplement, to Series 1998-1
Certificateholders without charge upon written request. The following summary
describes certain terms of, and is qualified in its entirety by reference to,
the Agreement (including the Series 1998-1 Supplement and the Series 1994-1
Supplement).

General

      The Series 1998-1 Certificates will represent an undivided interest in the
assets of the Trust, including the right to the applicable allocation percentage

of all payments on the Receivables in the Trust. Each Series 1998-1 Class A
Certificate represents the right to receive payments of interest at the Series
1998-1 Class A Certificate Rate for the related Interest Period and payments of
principal, to the extent of the Series 1998-1 Class A Ownership Interest, during
the Series 1998-1 Controlled Amortization Period or, if applicable, the Series
1998-1 Rapid Amortization Period, funded from collections of Finance Charge
Receivables and Principal Receivables, allocated to the Series 1998-1
Certificates and certain other available amounts. Each Series 1998-1 Class B
Certificate represents the right to receive payments of interest at the
applicable Series 1998-1 Class B Certificate Rate for the related Interest
Period and, after the Series 1998-1 Class A Ownership Interest has been paid in
full, payments of principal to the extent of the Series 1998-1 Class B Ownership
Interest during the Series 1998-1 Controlled Amortization Period or, if
applicable, the Series 1998-1 Rapid Amortization Period, funded from collections
of Finance Charge Receivables and Principal Receivables, allocated to the Series
1998-1 Certificates and certain other available amounts. In addition to
representing the right to payment from collections of Finance Charge Receivables
and Principal Receivables allocated to such class, each Series 1998-1 Class A
Certificate also represents the right to receive payments from funds on deposit
in the Series 1998-1 Yield Enhancement Account, Series 1998-1 Reallocated
Principal Collections and Shared Principal Collections and certain other
available amounts. In addition to representing the right to payment from
collections of Finance Charge Receivables and Principal Receivables allocated to
such class, each Series 1998-1 Class B Certificate also represents the right to
receive payments from funds on deposit in the Series 1998-1 Yield Enhancement
Account and not applied in respect of Series 1998-1 Class A Certificates, Series
1998-1 Reallocated Principal Collections and Shared Principal Collections and
certain other available amounts, all as more fully described below. Payments of
interest and principal will be made on each Distribution Date on which such
amounts are due to Series 1998-1 Certificateholders in whose names the Series
1998-1 Certificates were registered on the last business day of the calendar
month preceding such Distribution Date (each a "Record Date").

                                       48
The Transferor will own the Transferor Certificate. The Transferor
Certificate will represent the right to receive certain payments from the assets
of the Trust, including the right to a percentage of all payments on the
Receivables in the Trust equal to 100% minus the sum of the applicable investor
percentages for all Series of certificates then outstanding. The Transferor
Certificate may be transferred in whole or in part only upon certain merger or
consolidation events with respect to the Transferor set forth in the Agreement.
See "--Certain Matters Regarding the Servicer, the Transferor and the Original
Transferors."

      The Offered Certificates will initially be represented by certificates
registered in the name of the nominee of DTC (together with any successor
depository selected by the Transferor, the "Depository") except as set forth

below. The Offered Certificates will be available for purchase in minimum
denominations of $1,000 and integral multiples thereof in book-entry form. The
Transferor has been informed by DTC that DTC's nominee will be Cede.
Accordingly, Cede is expected to be the holder of record of the Offered
Certificates. No Certificate Owner acquiring an interest in the Offered
Certificates will be entitled to receive a definitive certificate representing
such person's interest in the Offered Certificates except under the limited
circumstances described below. Unless and until Definitive Certificates are
issued under such limited circumstances, all references herein to actions by
Holders of Offered Certificates shall refer to actions taken by DTC upon
instructions from its Participants (as defined below), and all references herein
to distributions, notices, reports and statements to Holders of Offered
Certificates shall refer to distributions, notices, reports and statements to
DTC or Cede, as the registered holder of the Offered Certificates, as the case
may be, for distribution to Certificate Owners in accordance with DTC
procedures. See "--Book-Entry Registration" and "--Definitive Certificates."

Book-Entry Registration

      Holders of Offered Certificates may hold their Offered Certificates
through DTC (in the United States) or Cedel or Euroclear (in Europe) if they are
participants of such system, or indirectly through organizations that are
participants in such system.

      Cede, as nominee for DTC, will hold the Offered Certificates. Cedel and
Euroclear will hold omnibus positions on behalf of the Cedel Participants and
the Euroclear Participants, respectively, through customers' securities accounts
in Cedel's and Euroclear's names on the books of their respective depositaries,
which in turn will hold such positions in customers' securities accounts in the
depositaries' names on the books of DTC.

      DTC is a limited-purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Exchange Act. DTC was created to hold securities for its participating
organizations ("Participants") and to facilitate the clearance and settlement of
securities transactions between Participants through electronic book-entry
changes in accounts of its Participants, thereby eliminating the need for
physical movement of certificates. Participants include securities brokers and
dealers (including the Underwriters), banks, trust companies and clearing
corporations and may include certain other organizations. Indirect access to the
DTC system also is available to others such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly (the "Indirect Participants").

      Transfers between DTC Participants will occur in accordance with DTC
rules. Transfers between Cedel Participants and Euroclear Participants will
occur in the ordinary way in accordance with their applicable rules and
operating procedures.

                                       49
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through Cedel
Participants or Euroclear Participants, on the other, will be effected in DTC in
accordance with DTC rules on behalf of the relevant European international
clearing system by its depositary; however, such cross-market transactions will
require delivery of instructions to the relevant European international clearing
system by the counterparty in such system in accordance with its rules and
procedures and within its established deadlines (Brussels time). The relevant
European international clearing system will, if the transaction meets its
settlement requirements, deliver instructions to its depositary to take action
to effect final settlement on its behalf by delivering or receiving securities
in DTC, and making or receiving payment in accordance with normal procedures for
same-day funds settlement applicable to DTC. Cedel Participants and Euroclear
Participants may not deliver instructions directly to the depositaries.

      Because of time-zone differences, credits of securities in Cedel or
Euroclear as a result of a transaction with a DTC Participant will be made
during the subsequent securities settlement processing, dated the business day
following the DTC settlement date, and such credits or any transactions in such
securities settled during such processing will be reported to the relevant Cedel
Participant or Euroclear Participant on such business day. Cash received in
Cedel or Euroclear as a result of sales of securities by or through a Cedel
Participant or a Euroclear Participant to a DTC Participant will be received
with value on the DTC settlement date but will be available in the relevant
Cedel or Euroclear cash account only as of the business day following settlement
in DTC.

      Certificate Owners that are not Participants or Indirect Participants but
desire to purchase, sell or otherwise transfer ownership of, or other interest
in, Offered Certificates may do so only through Participants and Indirect
Participants. In addition, Certificate Owners will receive all distributions of
principal and of interest on the Offered Certificates from the Trustee through
the Participants who in turn will receive them from DTC. Under a book-entry
format, Certificate Owners may experience some delay in their receipt of
payments, since such payments will be forwarded by the Trustee to Cede, as
nominee for DTC. DTC will forward such payments to its Participants which
thereafter will forward them to Indirect Participants or Certificate Owners. It
is anticipated that the only "Certificateholder" (as such term will be used in
the Agreement) of the Series 1998-1 Class A Certificates and of the Series
1998-1 Class B Certificates will be Cede, as nominee of DTC. Certificate Owners
will not be recognized by the Trustee as Certificateholders, as such term will
be used in the Agreement, and Certificate Owners will only be permitted to
exercise the rights of Holders of Offered Certificates indirectly through the
Participants who in turn will exercise the rights of Holders of Offered
Certificates through DTC.

      Under the rules, regulations and procedures creating and affecting DTC and
its operations, DTC is required to make book-entry transfers among Participants
on whose behalf it acts with respect to the Offered Certificates and is required
to receive and transmit distributions of principal and interest on the Offered

Certificates. Participants and Indirect Participants with which Certificate
Owners have accounts with respect to the Offered Certificates similarly are
required to make book-entry transfers and receive and transmit such payments on
behalf of their respective Certificate Owners.

      Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a Certificate
Owner to pledge Offered Certificates to persons or entities that do not
participate in the DTC system, or otherwise take actions in respect of such
Offered Certificates, may be limited due to the lack of a physical certificate
for such Offered Certificates. The laws of some jurisdictions require that
certain persons take physical delivery in definitive form. Consequently, the
ability to transfer Offered Certificates to such persons may be limited.

      DTC has advised the Transferor that it will take any action permitted to
be taken by any of the Holders of Offered Certificates under the Agreement only
at the direction of one or more Participants to whose account with

                                       50
DTC the Offered Certificates are credited. Additionally, DTC has advised the
Transferor that it will take such actions with respect to specified percentages
of the Series 1998-1 Class A Ownership Interest or Series 1998-1 Class B
Ownership Interest, as the case may be, only at the direction of and on behalf
of Participants whose holdings include undivided interests that satisfy such
specified percentages. DTC may take conflicting actions with respect to other
undivided interests to the extent that such actions are taken on behalf of
Participants whose holdings include such undivided interests.

      Cedel Bank, societe anonyme ("Cedel") is incorporated under the laws of
Luxembourg as a professional depository. Cedel holds securities for its
participating organizations ("Cedel Participants") and facilitates the clearance
and settlement of securities transactions between Cedel Participants through
electronic book-entry changes in accounts of Cedel Participants, thereby
eliminating the need for physical movement of certificates. Transactions may be
settled in Cedel in any of [28] currencies, including United States dollars.
Cedel provides to its Cedel Participants, among other things, services for
safekeeping, administration, clearance and settlement of internationally traded
securities and securities lending and borrowing. Cedel interfaces with domestic
markets in several countries. As a professional depository, Cedel is subject to
regulation by the Luxembourg Monetary Institute. Cedel Participants are
recognized financial institutions around the world, including underwriters,
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations and may include the underwriters of the Offered
Certificates. Indirect access to Cedel is also available to others, such as
banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a Cedel Participant, either directly or indirectly.

      The Euroclear System was created in 1968 to hold securities for

participants of the Euroclear System ("Euroclear Participants") and to clear and
settle transactions between Euroclear Participants through simultaneous
electronic book-entry delivery against payment, thereby eliminating the need for
physical movement of certificates and any risk from lack of simultaneous
transfers of securities and cash. Transactions may be settled in any of [27]
currencies, including United States dollars. The Euroclear System includes
various other services, including securities lending and borrowing and
interfaces with domestic markets in several countries generally similar to the
arrangements for cross-market transfers with DTC described above. The Euroclear
System is operated by Morgan Guaranty Trust Company of New York, Brussels,
Belgium office (the "Euroclear Operator" or "Euroclear"), under contract with
Euroclear Clearance System, S.C., a Belgian cooperative corporation (the
"Cooperative"). All operations are conducted by the Euroclear Operator, and all
Euroclear securities clearance accounts and Euroclear cash accounts are accounts
with the Euroclear Operator, not the Cooperative. The Cooperative establishes
policy for the Euroclear System on behalf of Euroclear Participants. Euroclear
Participants include banks (including central banks), securities brokers and
dealers and other professional financial intermediaries and may include the
underwriters of the Offered Certificates. Indirect access to the Euroclear
System is also available to other firms that clear through or maintain a
custodial relationship with a Euroclear Participant, either directly or
indirectly.

      The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it is
regulated and examined by the Board of Governors of the Federal Reserve System
and the New York State Banking Department, as well as the Belgian Banking
Commission.

      Securities clearance accounts and cash accounts with the Euroclear
Operator are governed by the Terms and Conditions Governing Use of Euroclear and
the related Operating Procedures of the Euroclear System and applicable Belgian
law (collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within the Euroclear System, withdrawal of
securities and cash from the Euroclear System, and receipts of payments with
respect to securities in the Euroclear System. All securities in the Euroclear
System are held on a fungible basis without attribution of specific certificates
to specific securities clearance accounts. The

                                       51
Euroclear Operator acts under the Terms and Conditions only on behalf of
Euroclear Participants and has no record or relationship with persons holding
through Euroclear Participants.

      Distributions with respect to Series 1998-1 Certificates held through
Cedel or Euroclear will be credited to the cash accounts of Cedel Participants
or Euroclear Participants in accordance with the relevant system's rules and
procedures, to the extent received by its depositary. Such distributions will be

subject to tax reporting in accordance with relevant United States tax laws and
regulations. See "Certain United States Federal Income Tax Consequences." Cedel
or the Euroclear Operator, as the case may be, will take any other action
permitted to be taken by any of the Holders of Offered Certificates under the
Agreement on behalf of a Cedel Participant or Euroclear Participant only in
accordance with its relevant rules and procedures and subject to its
depositary's ability to effect such actions on its behalf through DTC.

      Although DTC, Cedel and Euroclear have agreed to the foregoing procedures
in order to facilitate transfers of Offered Certificates among participants of
DTC, Cedel and Euroclear, they are under no obligation to perform or continue to
perform such procedures and such procedures may be discontinued at any time.
Neither the Transferor nor the Trustee will have any responsibility for the
performance by DTC, Cedel or Euroclear or their respective participants or
indirect participants of their respective obligations under the rules and
procedures governing their operations.

Definitive Certificates

      The Offered Certificates will be issued in fully registered, certificated
form to Certificate Owners or their nominees ("Definitive Certificates"), rather
than to DTC or its nominee, only if (i) the Transferor advises the Trustee in
writing that DTC is no longer willing or able to properly discharge its
responsibilities as Depository with respect to the Offered Certificates, and
neither the Trustee nor the Transferor is able to locate a qualified successor,
(ii) the Transferor, at its option, elects to terminate the book-entry system
through DTC or (iii) after the occurrence of a Servicer Default, Certificate
Owners representing not less than 50% of the Series 1998-1 Class A Ownership
Interest or Series 1998-1 Class B Ownership Interest, as the case may be, advise
the Trustee and DTC through Participants in writing that the continuation of a
book-entry system through DTC (or a successor thereto) is no longer in the best
interests of the Certificate Owners.

      Upon the occurrence of any of the events described in the immediately
preceding paragraph, DTC is required to notify all the Certificate Owners
through Participants of the availability through DTC of Definitive Certificates.
Upon surrender by DTC of the definitive certificate representing the Offered
Certificates and instructions for re-registration, the Trustee will issue the
Offered Certificates as Definitive Certificates, and thereafter the Trustee will
recognize the holders of such Definitive Certificates as holders of the Offered
Certificates under the Agreement ("Holders").

      Distribution of principal and interest on the Offered Certificates will be
made by The First National Bank of Chicago, as paying agent, or its successor in
such capacity (the "Paying Agent") directly to Holders of Definitive
Certificates in accordance with the procedures set forth in the Agreement.
During the Series 1998-1 Revolving Period, interest payments, and during either
the Series 1998-1 Controlled Amortization Period or Series 1998-1 Rapid
Amortization Period, interest and principal payments in respect of the Offered
Certificates, will be made to Holders of Offered Certificates on each
Distribution Date to the Holders in whose names the Definitive Certificates were
registered at the close of business on the related Record Date. Distributions
will be made by check mailed to the address of such Holder as it appears on the
certificate register. The final payment on any Offered Certificate (whether a

Definitive Certificate or a certificate registered in the name of Cede
representing such Series 1998-1 Certificate), however, will be made only upon
presentation and surrender of such Offered

                                       52
Certificate at the office or agency specified in the notice of final
distribution to Holders of Offered Certificates. The Trustee will provide such
notice to registered Holders of Offered Certificates not later than the fifth
day of the month of such final distributions.

      Definitive Certificates will be transferable and exchangeable at the
offices of The First National Bank of Chicago, as transfer agent and registrar,
or its successor in such capacity (the "Transfer Agent and Registrar"). No
service charge will be imposed for any registration of transfer or exchange, but
the Transfer Agent and Registrar may require payment of a sum sufficient to
cover any tax or other governmental charge imposed in connection therewith. The
Transfer Agent and Registrar shall not be required to register the transfer or
exchange of any Offered Certificates for a period of 5 business days preceding
the due date for any payment with respect to such Offered Certificates.

Interest Payments

      Interest will accrue on the Series 1998-1 Class A Ownership Interest at
the Series 1998-1 Class A Certificate Rate and on the Series 1998-1 Class B
Ownership Interest at the Series 1998-1 Class B Certificate Rate from the
Closing Date. Interest will be distributed on [_________], 1998, and on each
Distribution Date thereafter to Holders of Offered Certificates. Interest
payments on the Series 1998-1 Class A Certificates and the Series 1998-1 Class B
Certificates on any Distribution Date will be calculated on the Series 1998-1
Class A Ownership Interest and the Series 1998-1 Class B Ownership Interest, as
applicable, as of the preceding Record Date, except that interest for the first
Distribution Date will accrue at the applicable Certificate Rate on the Series
1998-1 Class A Initial Ownership Interest (which is $[_______]) and the Series
1998-1 Class B Initial Ownership Interest (which is $[__________]) from the
Closing Date. Interest due on the Series 1998-1 Class A Certificates but not
paid on any Distribution Date will be payable on the next succeeding
Distribution Date together with additional interest on such amount at the
applicable Certificate Rate plus 2% per annum (together, the "Series 1998-1
Class A Additional Interest"). Interest due on the Series 1998-1 Class B
Certificates but not paid on any Distribution Date will be payable on the next
succeeding Distribution Date together with additional interest on such amount at
the applicable Certificate Rate plus 2% per annum (together, the "Series 1998-1
Class B Additional Interest"). Interest due on the Series 1998-1 Class C
Certificates but not paid on any Distribution Date will be payable on the next
succeeding Distribution Date together with additional interest on such amount at
the applicable Certificate Rate plus 2% per annum (together, the "Series 1998-1
Class C Additional Interest"). Such Additional Interest shall accrue on the same

basis as interest on the Series 1998-1 Certificates, and shall accrue from the
date such overdue interest became due, to but excluding the Distribution Date on
which such overdue interest is paid. Subject to the priority of payments for
each Distribution Date described under "--Application of Collections" below,
interest payments on the Series 1998-1 Class A Certificates on any Distribution
Date will be paid from Series 1998-1 Class A Available Funds for the related
Monthly Period and, to the extent such Series 1998-1 Class A Available Funds are
insufficient to pay such interest, from amounts on deposit in the Series 1998-1
Yield Enhancement Account and Series 1998-1 Reallocated Principal Collections
(in each case, to the extent available therefor) for such Monthly Period.
Subject to the aforementioned priority of payments, interest payments on the
Series 1998-1 Class B Certificates on any Distribution Date will be paid from
Series 1998-1 Class B Available Funds for the related Monthly Period and, to the
extent such Series 1998-1 Class B Available Funds are insufficient to pay such
interest, from amounts on deposit in the Series 1998-1 Yield Enhancement Account
and Series 1998-1 Reallocated Principal Collections (in each case, to the extent
available therefor) remaining after certain other payments have been made with
respect to the Series 1998-1 Class A Certificates. The Agreement will provide
that payment of any Series 1998-1 Class B Additional Interest shall be suspended
during any period when the Series 1998-1 Class B Ownership Interest is zero and
will further provide for the cancellation of any such interest remaining unpaid
on the first date during the Series 1998-1 Class B Controlled Amortization
Period

                                       53
or, if applicable, the Series 1998-1 Rapid Amortization Period when the Series
1998-1 Class B Ownership Interest is or becomes zero.

      "Series 1998-1 Class A Available Funds" means, with respect to any Monthly
Period, an amount equal to the Series 1998-1 Class A Floating Allocation of
collections of Finance Charge Receivables allocated to the Series 1998-1
Certificateholders Ownership Interests with respect to such Monthly Period.
"Series 1998-1 Class B Available Funds" means, with respect to any Monthly
Period, an amount equal to the Series 1998-1 Class B Floating Allocation of
collections of Finance Charge Receivables allocated to the Series 1998-1
Certificateholders Ownership Interests with respect to such Monthly Period.

      The Series 1998-1 Class A Certificates will bear interest from the Closing
Date through [___________] at the per annum rate of [______]% and with respect
to each Interest Period thereafter at a per annum rate of [____]% above
one-month LIBOR prevailing on the related LIBOR Determination Date with respect
to each such period, but in no event in excess of [______]% (the "Series 1998-1
Class A Certificate Rate").

      The Series 1998-1 Class B Certificates will bear interest from the Closing
Date through [___________] at the per annum rate of [______]% and with respect
to each Interest Period thereafter at a per annum rate of [____]% above
one-month LIBOR prevailing on the related LIBOR Determination Date with respect

to each such period, but in no event in excess of [_____]% (the "Series 1998-1
Class B Certificate Rate").

      The Trustee will determine LIBOR for each Interest Period commencing after
[_________], on the second business day prior to the Distribution Date on which
such Interest Period commences (each, a "LIBOR Determination Date"). For
purposes of calculating LIBOR, a business day is any day other than a day on
which banking institutions in London trading in United States dollar deposits in
the London interbank market are authorized or obligated by law or executive
order to be closed. The Trustee will determine LIBOR in accordance with the
following provisions:

             (i) On each LIBOR Determination Date, the Trustee will determine
      LIBOR on the basis of the rate for deposits in United States dollars for a
      period equal to one month (commencing on the first day of the applicable
      Interest Period) which appears on Telerate Page 3750 as of 11:00 a.m.
      (London time) on such LIBOR Determination Date (or such other page as may
      replace that page on the Dow Jones Telerate Service for the purpose of
      displaying London interbank offered rates of major banks).

            (ii) If, on any LIBOR Determination Date, such rate does not appear
      on Telerate Page 3750 (or such other page), then LIBOR for the applicable
      Interest Period shall be determined on the basis of the rates at which
      deposits in United States dollars are offered by four major banks in the
      London interbank market selected by the Servicer (the "Reference Banks")
      as of approximately 11:00 a.m. (London time). LIBOR as determined by the
      Trustee is the arithmetic mean of such quotations (rounded, if necessary,
      to the nearest multiple of 0.0625%) if at least two such quotations are
      provided.

           (iii) If, on the LIBOR Determination Date, only one or none of the
      Reference Banks provides such offered quotations, LIBOR will be:

                (a) the rate per annum (rounded as aforesaid) that the Trustee
           determines to be either (x) the arithmetic mean of the offered
           quotations that leading banks in The City of New York selected by the
           Servicer are quoting at or about 11:00 a.m. (New York time) on the
           relevant LIBOR Determination Date to leading European banks for
           one-month United States dollar deposits; or

                                       54
(b) if the banks selected as aforesaid by the Servicer are not
           quoting as described in clause (a) above, LIBOR for such Interest
           Period will be LIBOR as determined on the previous LIBOR
           Determination Date (or [_____]%, in the case of the first LIBOR
           Determination Date).

      The Series 1998-1 Class A Certificate Rate and the Series 1998-1 Class B
Certificate Rate applicable to the then current and immediately preceding
Interest Period may be obtained by telephoning the Trustee at its Corporate
Trust Office at (800) 524-9472 or (312) 407-4660.

      Interest on the Series 1998-1 Class A Certificates and on the Series
1998-1 Class B Certificates will be calculated on the basis of the actual number
of days in the Interest Period and a 360-day year.

Principal Payments

      During the Series 1998-1 Revolving Period (which begins on the Closing
Date and ends on the day before the commencement of the Series 1998-1 Controlled
Amortization Period or, if earlier, the Series 1998-1 Rapid Amortization
Period), no principal payments will be made to the Series 1998-1
Certificateholders. During the Series 1998-1 Controlled Amortization Period,
which is scheduled to begin on [_______], and during the Series 1998-1 Rapid
Amortization Period, which will begin upon the occurrence of a Pay Out Event,
and until the Series 1998-1 Termination Date occurs, principal will be paid
first to the Series 1998-1 Class A Certificateholders until the Series 1998-1
Class A Ownership Interest has been paid in full, and then to the Series 1998-1
Class B Certificateholders until the Series 1998-1 Class B Ownership Interest
has been paid in full, and then to the Series 1998-1 Class C Certificateholders
until the Series 1998-1 Class C Ownership Interest has been paid in full.

      On each Distribution Date with respect to the Series 1998-1 Class A
Controlled Amortization Period, unless the Series 1998-1 Class A Ownership
Interest has been paid in full or a Series 1998-1 Rapid Amortization Period
commences, the Series 1998-1 Class A Certificateholders will be entitled to
receive for each related Monthly Period an amount equal to the least of (i)
Series 1998-1 Available Investor Principal Collections on deposit in the
Principal Account with respect to the related Transfer Date, (ii) the Series
1998-1 Controlled Distribution Amount and (iii) the Series 1998-1 Class A
Ownership Interest. After payment in full of the Series 1998-1 Class A Ownership
Interest, the Series 1998-1 Class B Certificateholders will be entitled to
receive on each Distribution Date during the Series 1998-1 Class B Controlled
Amortization Period the least of (i) the amount of Series 1998-1 Available
Investor Principal Collections on deposit in the Principal Account with respect
to the related Transfer Date (minus the portion of such Series 1998-1 Available
Investor Principal Collections applied to Series 1998-1 Class A Monthly
Principal on such Transfer Date), (ii) the Series 1998-1 Controlled Distribution
Amount (minus the portion of such Series 1998-1 Controlled Distribution Amount
applied to Series 1998-1 Class A Monthly Principal on such Transfer Date), and
(iii) the Series 1998-1 Class B Ownership Interest. After payment in full of the
Series 1998-1 Class A Ownership Interest and the Series 1998-1 Class B Ownership
Interest, the Series 1998-1 Class C Certificateholders will be entitled to
receive on each Distribution Date during the Series 1998-1 Class C Controlled
Amortization Period the least of (i) the amount of Series 1998-1 Available
Investor Principal Collections on deposit in the Principal Account with respect
to the related Transfer Date (minus the portion of such Series 1998-1 Available
Investor Principal Collections applied to Series 1998-1 Class A Monthly
Principal and Series 1998-1 Class B Monthly Principal on such Transfer Date),
(ii) the Series 1998-1 Controlled Distribution Amount (minus the portion of such
Series 1998-1 Controlled Distribution Amount applied to Series 1998-1 Class A

Monthly Principal and Series 1998-1 Class B Monthly Principal on such Transfer
Date), and (iii) the Series 1998-1 Class C Ownership Interest.

      "Series 1998-1 Available Investor Principal Collections" means, with
respect to any Monthly Period, an amount generally equal to the sum of (a)(i)
collections of Principal Receivables received during such Monthly

                                       55
Period allocable to the Series 1998-1 Certificateholders Ownership Interests
minus (ii) the amount of Series 1998-1 Reallocated Principal Collections with
respect to such Monthly Period used to fund the Series 1998-1 Class A Required
Amount and the Series 1998-1 Class B Required Amount as described under
"--Reallocation of Cash Flows" below, plus (b) any Shared Principal Collections
with respect to any other Series (including Series 1994-1) that are allocated to
Series 1998-1, plus (c) amounts withdrawn from the Series 1998-1 Yield
Enhancement Account on the related Transfer Date for the purpose of covering the
Series 1998-1 Class A Default Amount, the Series 1998-1 Class B Default Amount
and/or the Series 1998-1 Class C Default Amount, plus (d) amounts withdrawn from
the Excess Funding Account allocable to the Series 1998-1 Certificateholders
Ownership Interests (as more fully described under "--Series 1998-1 Yield
Enhancement Account" and "--Excess Funding Account" below).

      "Series 1998-1 Controlled Distribution Amount" means, for any Distribution
Date with respect to the Series 1998-1 Controlled Amortization Period, an amount
equal to the sum of the Series 1998-1 Controlled Amortization Amount for such
Distribution Date and any Series 1998-1 Deficit Controlled Amortization Amount
for the immediately preceding Distribution Date.

      "Series 1998-1 Controlled Amortization Amount" means for any Distribution
Date during the Series 1998-1 Controlled Amortization Period, $[_____________].

      "Series 1998-1 Deficit Controlled Amortization Amount" means (a) on the
first Distribution Date with respect to the Series 1998-1 Class A Controlled
Amortization Period, the Series 1998-1 Class B Controlled Amortization Period or
the Series 1998-1 Class C Controlled Amortization Period, the excess, if any, of
the Series 1998-1 Controlled Amortization Amount for such Distribution Date over
the amount distributed from the Series 1998-1 Distribution Account as Series
1998-1 Class A Monthly Principal, Series 1998-1 Class B Monthly Principal or
Series 1998-1 Class C Monthly Principal, as the case may be, for such
Distribution Date and (b) on each subsequent Distribution Date with respect to
the Series 1998-1 Class A Controlled Amortization Period, the Series 1998-1
Class B Controlled Amortization Period or the Series 1998-1 Class C Controlled
Amortization Period, the excess, if any, of the Series 1998-1 Controlled
Amortization Amount for such subsequent Distribution Date plus any Series 1998-1
Deficit Controlled Amortization Amount for the prior Distribution Date over the
amount distributed from the Series 1998-1 Distribution Account as Series 1998-1
Class A Monthly Principal, Series 1998-1 Class B Monthly Principal or Series

1998-1 Class C Monthly Principal, as the case may be, for such subsequent
Distribution Date.

      On each Distribution Date during the Series 1998-1 Rapid Amortization
Period, the Series 1998-1 Class A Certificateholders will be entitled to receive
Series 1998-1 Available Investor Principal Collections for the related Monthly
Period until the earlier of the date the Series 1998-1 Class A Ownership
Interest is paid in full and the Series 1998-1 Termination Date. After payment
in full of the Series 1998-1 Class A Ownership Interest, the Series 1998-1 Class
B Certificateholders will be entitled to receive on each Distribution Date
during the Series 1998-1 Rapid Amortization Period Series 1998-1 Available
Investor Principal Collections (minus the portion of such Series 1998-1
Available Investor Principal Collections applied to Series 1998-1 Class A
Monthly Principal on such date) until the earlier of the date the Series 1998-1
Class B Ownership Interest is paid in full and the Series 1998-1 Termination
Date. After payment in full of the Series 1998-1 Class B Ownership Interest, the
Series 1998-1 Class C Certificateholders will be entitled to receive on each
Distribution Date during the Series 1998-1 Rapid Amortization Period Series
1998-1 Available Investor Principal Collections (minus the portion of such
Series 1998-1 Available Investor Principal Collections applied to Series 1998-1
Class A Monthly Principal and Series 1998-1 Class B Monthly Principal on such
date) until the earlier of the date the Series 1998-1 Class C Ownership Interest
is paid in full and the Series 1998-1 Termination Date. See "--Pay Out Events"
below for a discussion of events which might lead to the commencement of the
Series 1998-1 Rapid Amortization Period.

                                       56
Subordination

      On each Distribution Date distributions of interest will be made first in
respect of the Series 1998-1 Class A Certificates, second in respect of the
Series 1998-1 Class B Certificates and third in respect of the Series 1998-1
Class C Certificates. On each Distribution Date on which principal is
distributable in respect of the Series 1998-1 Class A Certificates, such
principal will be payable after interest on the Series 1998-1 Class A
Certificates and Series 1998-1 Class B Certificates has been paid. Principal
payments will not be made to Series 1998-1 Class B Certificateholders until the
final principal payment due in respect of the Series 1998-1 Class A Certificates
has been paid. Thus on each Distribution Date on which principal is
distributable in respect of the Series 1998-1 Class B Certificates, such
principal will be payable after interest on the Series 1998-1 Class A and Series
1998-1 Class B Certificates and principal on the Series 1998-1 Class A
Certificates has been paid. On each such Distribution Date no payments of
interest or principal will be made in respect of the Series 1998-1 Class C
Certificates unless principal due in respect of the Series 1998-1 Class B
Certificates has been paid. For further information regarding the extent to
which the Series 1998-1 Class B Certificates are subordinated to the Series

1998-1 Class A Certificates and the extent to which the Series 1998-1 Class C
Certificates are subordinated to the Series 1998-1 Class A and Series 1998-1
Class B Certificates, including a description of the manner in which Principal
Receivables collections and Default Amounts may be preferentially allocated
among the classes of Series 1998-1 Certificates, see "Description of the Offered
Certificates--Application of Collections" and "--Reallocation of Cash Flows."

Conveyance of Receivables

      AIC and AICCO originally conveyed to the Trustee pursuant to the Original
Agreement their entire beneficial interest in all Loans owned by them as of
November 30, 1994 (the "Cut-Off Date") and all Loans funded by them thereafter
relating to Eligible Receivables, including (i) all amounts due and to become
due and all collections and recoveries on such Loans, and (ii) the proceeds of
certain collateral security securing such Loans. AIC and AICCO will continue to
transfer such beneficial interests to the Trustee until the Closing Date. On the
Closing Date and thereafter, AIC and AICCO will transfer such beneficial
interests to the Transferor pursuant to the Receivables Sale Agreement and the
Transferor will immediately thereafter transfer such beneficial interests to the
Trust pursuant to the Agreement. The beneficial interests in Loans so
transferred may include beneficial interests in Loans where the Obligor has
filed for protection under the bankruptcy laws of the United States. The
beneficial interests to be transferred by the Transferor to the Trust are
referred to herein as the "Future Receivables," and the beneficial interests in
the Loans existing in the Trust prior to the Closing Date, which have been
transferred directly from the Original Transferors to the Trust pursuant to the
Original Agreement, are referred to herein as the "Existing Receivables." The
Future Receivables and the Existing Receivables together will comprise the
Receivables.

      On or prior to the Determination Date immediately following a Monthly
Period during which Additional Receivables are conveyed to the Trust as
contemplated by the Agreement, the Transferor (i) will cause AIC and AICCO to
provide the Trustee an updated list of each Receivable transferred to the Trust
since the Cut-Off Date, identified by account number and indicating the total
outstanding receivable balance as of the end of such Monthly Period, and (ii)
will provide the Trustee a written assignment of Additional Receivables conveyed
to the Trust during such Monthly Period. The Transferor will not deliver or
cause to be delivered to the Trustee any other records or agreements relating to
the Receivables. Except as stated above, the records and agreements relating to
the Receivables maintained or caused to be maintained by the Transferor or the
Servicer will not be segregated or caused to be segregated by the Transferor or
the Servicer from other documents and agreements relating to other premium
finance loan receivables and will not be stamped or marked (or caused to be
stamped or marked) to reflect the transfer of the entire beneficial interest in
the Loans to the Trust, but AIC and AICCO are required to

                                       57
indicate on their computer records that the Receivables have been transferred to
the Trust. Neither the Original Transferors nor the Transferor have taken or
will be obligated to take any actions in order to perfect for the benefit of the
Transferor or the Trust, respectively, a security interest in the Receivables,
other than the filing in the appropriate filing offices in the States of New
York, Delaware and California of financing statements on Form UCC-1. See
"Special Considerations--Bankruptcy Considerations."

New Series Issuances

      The Agreement will authorize the Trustee to issue two types of
certificates: (i) one or more Series of certificates which may be issued in more
than one class with varying rights and priorities and which will be transferable
and have the characteristics described below and (ii) certificates evidencing
the Transferor Ownership Interest (collectively, the "Transferor Certificate").
The Transferor Certificate has been held by AIC and AICCO and will be, on or
about the Closing Date, transferred to and thereafter held by the Transferor.
Such Transferor Certificate will be transferable only as provided in the
Agreement. The Agreement will also provide that, pursuant to any one or more
Supplements, the Transferor may reduce the Transferor Ownership Interest (a
"Transferor Ownership Interest Reduction") or, if provided in the relevant
Supplement, certificateholders may tender certificates representing any
outstanding Series of certificates to the Trustee and the Transferor may reduce
the Transferor Ownership Interest (an "Investor Exchange"), in either case for
the purpose of effectuating the issuance of one or more new Series (any new
Series issuance pursuant to a Transferor Ownership Interest Reduction or an
Investor Exchange is referred to as a "New Series Issuance"). The Series 1998-1
Supplement permits, but does not require in any circumstance, an Investor
Exchange and corresponding New Series Issuance with respect to the Offered
Certificates.

      Under the Agreement, the Transferor may define, with respect to any newly
issued Series (including a Series being issued in an Investor Exchange) certain
terms of a new Series, which will be described in the Disclosure Document being
used in connection with such New Series Issuance. These terms may include: (i)
its name or designation; (ii) its initial principal amount (or method for
calculating such amount); (iii) its coupon rate (or formula for the
determination thereof); (iv) the closing date; (v) the rating agency or
agencies, if any, rating the Series; (vi) the interest periods, the interest
payment date or dates and the date or dates from which interest shall accrue
including the interest accrual period with respect to such Series; (vii) the
name of the clearing agency, if any; (viii) the periods during which or dates on
which principal will be paid or accrued; (ix) the method for allocating
collections with respect to Principal Receivables for such Series and, if
applicable, with respect to other Series and the method by which certificates of
such Series shall amortize or accrete and the method for allocating collections
with respect to Finance Charge Receivables and Recoveries; (x) any other
collections with respect to Receivables or other amounts available to be paid
with respect to such Series; (xi) the Receivables to be allocated with respect
to such Series and the provisions governing the allocations of any such
Receivables; (xii) the names of any accounts to be used by such Series and the
terms governing the operation of any such account and use of moneys therein;
(xiii) the Series Servicing Fee and the percentage used to calculate monthly
servicing fees; (xiv) the Minimum Transferor Ownership Interest; (xv) the

enhancer, if any, and terms of any Enhancement with respect thereto; (xvi) the
base rate, if any, applicable to such Series; (xvii) the terms on which the
certificates of such Series may be repurchased by the Transferor or remarketed
to other investors; (xviii) the Series termination date; (xix) any deposit into
any account maintained for the benefit of certificateholders of such Series;
(xx) the number of classes of such Series and, if more than one class, the
rights and priorities of each such class; (xxi) the extent to which the
certificates of such Series will be issuable in temporary or permanent global
form (and, in such case, the depositary for such global certificate or
certificates, the terms and conditions, if any, upon which such global
certificate may be exchanged, in whole or in part, for definitive certificates,
and the manner in which any interest payable on a temporary or global
certificate will be paid); (xxii) whether the certificates of such Series may be
issued in bearer form and any limitations imposed thereon; (xxiii) the priority
of any Series with respect

                                       58
to any other Series; (xxiv) the rights of the holder of the Transferor
Certificate that have been transferred to the holders of such Series; (xxv)
whether such Series will or may be a companion Series and the Series with which
it will be paired; and (xxvi) any other relevant terms (all such terms, the
"Principal Terms" of such Series). None of the Original Transferors, the
Transferor, the Servicer, the Trustee or the Trust is required or intends to
obtain the consent of any Series 1998-1 Certificateholder to issue any
additional Series. However, as a condition of a New Series Issuance, the holder
of the Transferor Certificate will be required to deliver to the Trustee written
confirmation from each Rating Agency that the New Series Issuance will not
result in such Rating Agency reducing or withdrawing its rating of the
certificates of any outstanding Series, including the Series 1998-1
Certificates. The Transferor may offer any Series to the public under a
Disclosure Document in transactions either registered under the Securities Act
or exempt from registration thereunder directly, through the Underwriters or one
or more other underwriters or placement agents, in fixed-price offerings or in
negotiated transactions or otherwise. Any such Series may be issued in fully
registered or book-entry form in minimum denominations determined by the
Transferor. The Transferor may offer, from time to time, additional Series. The
Trust will, as promptly as practicable, include in a periodic report filed with
the Commission with respect to the Series 1998-1 Certificates, disclosure of all
information related to issuance of any Series not required to be registered
under the Securities Act that is material to the holders of, or potential
investors in, the Series 1998-1 Certificates.

      The Agreement provides that the holder of the Transferor Certificate may
effect New Series Issuances and define Principal Terms such that each Series has
a period during which amortization of the principal amount thereof is intended
to occur which may have a different length and begin on a different date than
such period for any other Series. Further, one or more Series may be in their

amortization periods while other Series are not. Thus, certain Series may not be
amortizing, while other Series are amortizing. Moreover, each Series may have
the benefits of an Enhancement which is available only to such Series. Under the
Agreement, the Trustee shall hold any such form of Enhancement only on behalf of
the Series with respect to which each relates. Likewise, with respect to each
such form of Enhancement, the holder of the Transferor Certificate may deliver a
different form of Enhancement agreement. The Agreement also provides that the
holder of the Transferor Certificate may specify different coupon rates and
monthly servicing fees with respect to each Series (or a particular class within
such Series). The holder of the Transferor Certificate also has the option under
the Agreement to vary between Series the terms upon which a Series (or a
particular class within such Series) may be repurchased by the Transferor or
remarketed to other investors. In addition, a Series Supplement may permit (as
does the Series 1998-1 Supplement) an Investor Exchange where the holders of
such Series could elect to exchange their certificates for one or more newly
issued Series of certificates upon the satisfaction of certain conditions
specified in the Agreement and the related Supplement. Additionally, certain
Series may be subordinated to other Series, or classes within a Series may have
different priorities. The Series 1998-1 Supplement will not permit the
subordination of such Series to Series 1994-1 or any other Series which may
hereafter be issued by the Trust. There is no limit to the number of New Series
Issuances that may be performed under the Agreement. The Trust will terminate
only as provided in the Agreement.

      Under the Agreement and pursuant to a Supplement, a New Series Issuance
may only occur upon the satisfaction of certain conditions provided in the
Agreement. Under the Agreement, the holder of the Transferor Certificate may
effect a New Series Issuance by notifying the Trustee at least three days in
advance of the date upon which the New Series Issuance is to occur. Under the
Agreement, the notice will state the designation of any Series (and class
thereof, if applicable) to be issued on the date of the New Series Issuance and,
with respect to each such Series: (i) its initial principal amount (or method
for calculating such amount) which amount may not be greater than the then
current Transferor Ownership Interest plus, in the case of an Investor Exchange,
the certificateholders ownership interests of the certificates to be exchanged,
(ii) its certificate rate (or method for calculating such rate) and (iii) the
provider of the Enhancement, if any, which is expected to provide credit

                                       59
support with respect to it. On the date of the New Series Issuance, the
Agreement provides that the Trustee will execute and authenticate any such
Series only upon delivery to it of the following, among others, (i) a Supplement
in form satisfactory to the Trustee signed by the Transferor and specifying the
Principal Terms of such Series, (ii) an opinion of counsel that, for United
States federal income tax purposes and for income and/or franchise tax purposes
of the states (or, if appropriate, localities) in which the Servicers maintain
their principal places of business and any additional states (or, if

appropriate, localities) in which the Servicers, after the date of the
Agreement, conduct substantial servicing activities in respect of Receivables,
(1) the issuance of such Series will not adversely affect the characterization
of any outstanding Series of certificates (other than certificates retained by
the Transferor) as indebtedness, (2) the Trust will not be treated as a taxable
entity and (3) the issuance of such Series will not cause or constitute a
taxable event to any certificateholder of any outstanding Series, (iii) the
Enhancement, if any, and an appropriate form of Enhancement agreement or
instrument with respect thereto executed by the Transferor and the issuer of the
Enhancement, (iv) written confirmation from each Rating Agency that the New
Series Issuance will not result in such Rating Agency's reducing or withdrawing
its rating on any outstanding Series, and (v) in the case of an Investor
Exchange, the existing certificates of the Series to be exchanged. Upon
satisfaction of such conditions, the Trustee will execute and authenticate the
new Series (and, in the case of an Investor Exchange, cancel the certificates of
the exchanged Series).

      In light of the aforementioned requirements for a New Series Issuance,
including the required ratings confirmation and tax opinion, the Transferor does
not presently expect that any New Series Issuance, including any New Series
Issuance as part of an Investor Exchange, will have a material adverse effect on
the Series 1998-1 Certificates. There can be no assurance, however, that the
Principal Terms of any other Series, including any Series issued from time to
time hereafter, might not have an impact on the timing and amount of payments
received by a Series 1998-1 Certificateholder, including as a result of the
refixing of the percentage utilized with respect to the allocation of the
Principal Receivables. See "Description of the Offered Certificates--New Series
Issuances" and "--Allocation Percentages."

Representations and Warranties

      Each of the Original Transferors and the Transferor will make upon
execution of each Supplement (including the Series 1998-1 Supplement) certain
representations and warranties to the Trust to the effect that, among other
things, as of the closing date of the issuance by the Trust of the related
Series (including the Closing Date), it is duly incorporated and in good
standing and that it has the authority to consummate the transactions
contemplated by the Agreement. If (i) any of these representations and
warranties proves to have been incorrect in any material respect when made, and
continues to be materially incorrect for 60 days after notice to the related
Original Transferor or the Transferor, as applicable, by the Trustee, and (ii)
as a result the interests of the Series 1998-1 Certificateholders are materially
adversely affected, and continue to be materially adversely affected during such
period, then the Trustee or the specified percentage of Series 1998-1
Certificateholders may give notice to the Transferor declaring that a Pay Out
Event has occurred, thereby commencing the Series 1998-1 Rapid Amortization
Period. See "--Pay Out Events."

      The Original Transferors will make with respect to the Existing
Receivables, and the Transferor will make with respect to the Future
Receivables, upon the execution of each Supplement (including the Series 1998-1
Supplement), representations and warranties to the Trust to the effect, among
other things, that, as of the date of transfer of each such Receivable to the
Trust (a) such Receivable is an Eligible Receivable (as defined below), and (b)

all material consents, licenses, approvals or authorizations of or registrations
or declarations with any governmental authority required to be obtained,
effected or given in connection with the origination and/or servicing of the
related Loan and the conveyance of each such Receivable to the Trust have been
duly effected or given and are in full force and effect. In the event of a
breach of any representation and warranty set forth in this

                                       60
paragraph as a result of which the Loan relating to a Receivable becomes a
Defaulted Loan, within 60 days, or such longer period as may be agreed to by the
Trustee (but no longer than 120 days), of receipt by the related Original
Transferor or the Transferor, as applicable, of written notice of such breach
given by the Trustee, the related Original Transferor or the Transferor, as
applicable, shall accept reassignment of each Receivable as to which such breach
relates if such breach continues throughout the aforementioned applicable period
(an "Ineligible Receivable") on the terms and conditions referred to below. The
Transferor, with respect to the Future Receivables, or the related Original
Transferor, with respect to the Existing Receivables, shall accept reassignment
of each such Ineligible Receivable by (i) depositing into the Collection Account
an amount equal to the Finance Charge Receivables due but not collected with
respect to such Ineligible Receivable, (ii) in the case of the Transferor with
respect to Future Receivables, directing the Servicer to deduct the unpaid
principal amount of each such Ineligible Receivable from the aggregate amount of
Principal Receivables used to calculate the Transferor Ownership Interest and
(iii) in the case of the Original Transferors with respect to Existing
Receivables, depositing into the Collection Account an amount equal to the
principal balance of such Ineligible Receivable; provided, however, that if the
exclusion of an Ineligible Receivable from the calculation of the Transferor
Ownership Interest would cause the Transferor Ownership Interest to be less than
the Minimum Transferor Ownership Interest or would otherwise not be permitted by
law, then such Ineligible Receivable shall be removed upon the Transferor,
depositing in the Principal Account (for allocation as a Principal Receivable)
in immediately available funds an amount equal to the amount by which the
Transferor Ownership Interest would be reduced below the Minimum Transferor
Ownership Interest. Upon any such reassignment of a Future Receivable to the
Transferor, the Transferor shall reassign such Receivable to AIC or AICCO, as
applicable, pursuant to the terms of the Receivables Sale Agreement. The
obligation of the Transferor or the related Original Transferor, as applicable,
to accept reassignment of any Ineligible Receivable is the sole remedy
respecting any breach of the representations and warranties referred to in this
paragraph with respect to such Receivable available to the Series 1998-1
Certificateholders or the Trustee on behalf of the Series 1998-1
Certificateholders.

      The Transferor will make upon the execution of each Supplement (including
the Series 1998-1 Supplement) with respect to the Future Receivables,
representations and warranties to the Trust to the effect, among other things,

that as of the closing date of the issuance by the Trust of the related Series
of certificates (including the Closing Date) (a) the Agreement, including the
related Supplement, constitutes a valid and legally binding obligation of it,
(b) the transfer of Receivables by it to the Trust under the Agreement
constitutes a valid transfer to the Trust of the entire right, title and
interest of it in and to the related Receivables and the proceeds thereof
(including amounts in any of the accounts established for the benefit of the
related certificateholders), and recoveries thereon. Each Original Transferor
and the Transferor will make upon the execution of each Supplement (including
the Series 1998-1 Supplement), representations and warranties to the Trust to
the effect, among other things, that as of the closing date of the issuance by
the Trust of the related Series of certificates (including the Closing Date) (x)
all information previously furnished by it or to be furnished by it in writing
to the Trustee in connection with the Agreement and the transactions
contemplated thereby is and will be true and accurate in all material respects,
and (y) all approvals, authorizations, consents, orders or other actions of any
person or of any governmental body or official required in connection with the
execution and delivery of the Agreement and the certificates and the performance
of the transactions contemplated by the Agreement have been obtained. The
Transferor will make with respect to the Future Receivables, representations and
warranties to the Trust similar to those described in the two foregoing
sentences in connection with each assignment of Receivables added to the Trust
from time to time in accordance with the terms and conditions of the Agreement.
In the event of a breach of any of the representations and warranties described
in clause (a) or (b) above, if such breach has a material adverse effect on the
Trust, the Trustee, by written notice to the Transferor, may direct the
Transferor to accept reassignment of all the Receivables in the Trust portfolio
within 60 days of such notice, or within such longer period specified in such
notice (but no longer than 120 days). Such reassignment will not be required to
be made, however, if at any time during such applicable period, or such longer
period, the representations and

                                       61
warranties described in (a) above shall be true and correct in all respects and
the representations and warranties described in (b) above shall be true and
correct in all material respects. The deposit amount for such reassignment with
respect to each Series of certificates required to be repurchased following such
notice, including the Series 1998-1 Certificates, will generally be equal to the
certificateholders ownership interests of such Series on the last day of the
Monthly Period preceding the date on which the reassignment is scheduled to be
made plus an amount equal to all interest accrued but unpaid on such
certificates at the applicable certificate rate (less the amounts previously
allocated for payment of interest and principal with respect to each such Series
of certificates) through the end of the interest accrual period in which such
reassignment occurs of each such Series. The reassignment deposit amount shall
equal the sum of the reassignment deposits with respect to each Series then
issued and outstanding which is required to be repurchased following such

notice. The payment of the allocable portion of such reassignment deposit amount
into the Series 1998-1 Distribution Account will be considered a prepayment in
full of all Receivables and will be paid in full to the certificateholders of
such Series upon presentation and surrender of their certificates. If the
Trustee or the holders of the outstanding certificates give notice directing the
Transferor to accept reassignment as provided in the Agreement, the obligation
of the Transferor to accept reassignment of the Receivables and to pay the
reassignment deposit amount will constitute the sole remedy respecting a breach
of the representations and warranties described in (a) or (b) above.

      "Eligible Receivable" is defined to mean each Receivable (a) which has
arisen from a Loan, having a stated maturity, that was in material compliance
with all requirements of law applicable to AIC, AICCO, any Third Party
Originator (each, an "Originator") and the Servicer and which, at the time of
the transfer of such Receivable to the Trust, complies in all material respects
with all requirements of law applicable to AIC, AICCO, any Third Party
Originator and the Servicer, (b) with respect to which all material consents,
licenses, approvals or authorizations of, or registrations or declarations with,
each governmental authority required to be obtained, effected or given in
connection with the creation of such Receivable or the execution, delivery and
performance by the related Originator of the Loan relating to such Receivable,
have been duly obtained, effected or given and are in full force and effect as
of the date of transfer to the Trust, (c) which, at the time of transfer of such
Receivable to the Trust, represents a beneficial interest in a Loan that has
been originated in accordance with AIC's underwriting guidelines and has not
been waived or modified except for waivers or modifications that were made by
the Servicer in accordance with its customary servicing standards, (d) as to
which the related Loan is not subject to any right of rescission, setoff,
counterclaim, defense arising out of violations of usury laws, or any other
defenses of any Obligor at the time of the transfer of such Receivable to the
Trust, other than defenses that may arise after the time of transfer out of
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights in general and general equity
principles, (e) as to which all obligations of the related Originator with
respect to such Receivable required to be fulfilled pursuant to the related
premium finance loan agreement and the Agreement, including the funding of the
related Loan, are satisfied, (f) as to which, at the time of transfer of such
Receivable to the Trust, the related Originator has not taken any action which
would impair, or failed to take any action necessary to avoid impairing, the
rights of the Trust or the certificateholders therein, (g) with respect to
which, in the case of Existing Receivables transferred to the Trust after the
Initial Closing Date and Additional Receivables only, the Obligor under the
related Loan is not the direct obligor under any Defaulted Loan (other than
under any Loan which is a Defaulted Loan solely due to an event of bankruptcy
with respect to an obligor other than such direct obligor), (h) which, in the
case of Existing Receivables transferred to the Trust after the Initial Closing
Date and Additional Receivables only, does not relate to a Defaulted Loan or a
Loan which is overdue, (i) as to which the related Loan and all amounts due
thereon are denominated and payable only in United States dollars, (j) which has
arisen from a Loan whereby the related premium finance agreement provides the
related Originator a limited power of attorney allowing it to cancel the related
insurance policy, if cancelable, in accordance with state law upon non-payment
of a loan installment by the Obligor thereunder, and (k) which has arisen from a
Loan whereby the related premium finance agreement allows the related Originator

to direct the insurance company to pay to such party any unearned

                                       62
premium under the related insurance policy calculated as of the time of
cancellation of the insurance policy, if cancelable.

      The Trustee has not made, and it is not required or anticipated that the
Trustee will make, any general examination of the Receivables or any records
relating to the Receivables for the purpose of establishing the presence or
absence of defects, compliance with an Original Transferor's or the Transferor's
representations and warranties or for any other purpose.

Addition of Receivables

      The Transferor has the right and, in some circumstances, is obligated to
designate from time to time Additional Receivables to be transferred to the
Trust. The Original Transferors presently expect to sell to the Transferor all
Additional Receivables generated by them from time to time. The Transferor will
be required in any event to transfer sufficient Additional Receivables to the
Trust to maintain the Minimum Transferor Ownership Interest; otherwise, a Pay
Out Event will occur and the Series 1998-1 Rapid Amortization Period will
commence. Each such Additional Receivable must be an "Eligible Additional
Receivable." An "Eligible Additional Receivable" is, as of the date such
Receivable is added to the Trust, a Receivable which satisfies the criteria set
forth in the definition of Eligible Receivable. The Transferor will convey to
the Trust its entire interest in all such Additional Receivables, subject to the
following additional conditions, among others: (i) no selection procedures
materially adverse to the interests of the holders of any Series of
certificates, including the Holders of Offered Certificates, were used in
selecting the Additional Receivables, (ii) the Transferor shall deliver, on or
prior to the Determination Date following a Monthly Period during which
Additional Receivables are conveyed to the Trust, a written assignment to the
Trust of the Additional Receivables and a computer file or microfiche list
containing a true and complete list of all Receivables, including Additional
Receivables, as of the end of such Monthly Period and (iii) the transfer of
Additional Receivables by the Transferor to the Trust constitutes a valid
transfer and sale of the entire right and beneficial interest in and to the
Additional Receivables. The Transferor is not required to give notice to either
Rating Agency of its intention to convey Additional Receivables to the Trust.

Removal of Receivables

      Subject to the conditions set forth in the next succeeding sentence, on
each Determination Date on which the Transferor Ownership Interest exceeds the
Minimum Transferor Ownership Interest on such Determination Date, the Transferor
may, but shall not be obligated to, not more than once during the Monthly Period
during which such Determination Date occurs, designate Receivables for deletion

and removal from the Trust with five business days' prior written notice to the
Trustee and Servicer but without notice to the Series 1998-1 Certificateholders
(the "Removed Receivables"). The Transferor is permitted to designate and
require reassignment of Removed Receivables only upon satisfaction of the
following conditions among other things: (i) on or prior to the reassignment
date, the Transferor shall have delivered to the Trustee for execution a written
reassignment and, within five business days after the reassignment date, the
Transferor shall have delivered to the Trustee a computer file or microfiche
list containing a true and complete list of all Removed Receivables, the Removed
Receivables to be identified by, among other things, account number and their
aggregate amount of Principal Receivables as of the date of their removal (the
"Removal Date"); (ii) the Transferor shall represent and warrant that no
selection procedure used by the Transferor which is materially adverse to the
interests of the holders of any certificates issued by the Trust was utilized in
selecting the Removed Receivables; (iii) the removal of any Removed Receivables
shall not, in the reasonable belief of the Transferor, (a) cause a Pay Out Event
to occur, (b) cause the Transferor Ownership Interest to be less than the
Minimum Transferor Ownership Interest on such Removal Date or (c) result in the
failure to make any payment with respect to any Series; (iv) the Transferor
shall

                                       63
have delivered prior written notice of the removal to the Rating Agencies and
prior to the date on which such Receivables are to be removed, the Transferor
shall not have received notice from either Rating Agency that such removal will
result in the reduction or withdrawal of the then-existing rating of any Series
of certificates; (v) the Transferor shall have delivered to the Trustee an
officer's certificate confirming the items set forth in clauses (i) through (iv)
above; and (vi) the Transferor, the Trustee and each Rating Agency will have
received an opinion of counsel that the proposed removal will not adversely
affect the federal income tax characterization of the Trust. The Transferor does
not presently expect to remove Receivables from the Trust, nor do AIC or AICCO
presently expect that any such removal will take place.

The Collection Account

      The Servicer has established and will maintain, or cause to be maintained,
in the name of the Trust, for the benefit of the certificateholders of all
outstanding Series, a "Collection Account," which is a non-interest bearing
segregated account established with a Qualified Institution. A "Qualified
Institution" is a depositary institution (which may include the Trustee),
organized under the laws of the United States or any one of the states thereof
or the District of Columbia, which either (a) has corporate trust powers and at
all times has a certificate of deposit rating of at least P-1 by Moody's
Investors Service, Inc. ("Moody's") and of A-1 by Standard & Poor's Ratings
Group ("Standard & Poor's") or a long-term rating of at least A by Moody's and
of at least A by Standard & Poor's and deposit insurance as required by the

Federal Deposit Insurance Corporation (the "FDIC") or (b) at all times has a
certificate of deposit rating of at least P-1 by Moody's and A-1+ by Standard &
Poor's or a long-term rating of at least Aa by Moody's and of at least AA by
Standard & Poor's and deposit insurance as required by the FDIC. In addition,
the Supplement with respect to any Series may require the Trustee to establish
and maintain a subaccount of the Collection Account for such Series (such
subaccount, a "Collection Subaccount"). Funds in the Collection Account or, as
provided in the related Supplement, any Collection Subaccount that are not both
deposited and to be withdrawn on the same date may be invested to the extent
provided in such Supplement, at the direction of the Servicer, in (i)
obligations of or fully guaranteed by the United States of America, (ii) demand
deposits, time deposits or certificates of deposit of (A) depositary
institutions with corporate trust powers, the certificates of deposit of which
have ratings from Moody's and Standard & Poor's of P-1 and A-1, respectively,
and long-term unsecured debt obligations of which have a rating from Moody's and
Standard & Poor's of A and A, respectively or (B) depositary institutions, the
certificates of deposit of which have ratings from Moody's and Standard & Poor's
of P-1 and A-1+, respectively, and long-term unsecured debt obligations of which
have a rating from Moody's and Standard & Poor's of Aa and AA, respectively,
(iii) commercial paper having, at the time of the Trust's investment or
contractual commitment to invest therein, a rating of P-1 and A-1+,
respectively, from Moody's and Standard & Poor's, (iv) demand deposits, time
deposits and certificates of deposit which are fully insured to the limits as
required by law and by the FDIC, (v) bankers acceptances issued by any
depositary institution or trust company described in clause (ii) above, (vi)
money market funds rated AAA-M or AAA-MG by Standard & Poor's or P-1 by Moody's
or which have otherwise been approved in writing by each Rating Agency and (vii)
certain open end diversified investment companies which each Rating Agency
designates in writing will not result in a withdrawal or downgrade of its then
current rating of any Series it rates ("Permitted Investments"). Any such
investment shall mature and such funds shall be available for withdrawal on or
prior to the Transfer Date related to the Monthly Period in which such funds
were received or deposited. Any earnings (net of losses and investment expenses)
on funds in the Collection Account or any Collection Subaccount will be paid
monthly to the holder of the Transferor Certificate. If such losses and
investment expenses exceed earnings on funds in the Collection Account or any
Collection Subaccount during a Monthly Period, then such excess shall be treated
in the same manner as Default Amounts are treated. The Transferor is not
required to reimburse the Trust with respect to such excess. See "--Defaulted
Loans; Charge-Offs."

                                       64
Except as otherwise provided below, the Servicer will deposit into the
Collection Account, no later than the second business day following the date of
receipt, any payment collected by the Servicer on the Receivables; provided,
however, that for as long as AIC remains a Servicer under the Agreement and
either (i) the AIC Support Agreement remains in effect with respect to the

Servicer and is not terminated, amended or modified other than in accordance
with its terms, and AIG has and maintains a long-term rating of at least Aa by
Moody's and of at least AA by Standard & Poor's or (ii) AIC has and maintains a
commercial paper rating of P-1 by Moody's and of A-1 by Standard & Poor's, then
the Servicer may make such deposits into the Collection Account monthly on each
Transfer Date, in an amount equal to the lesser of (a) collections received in
the immediately preceding Monthly Period allocable to the certificateholders
ownership interests of all outstanding Series and (b) the amount required to be
deposited into the Finance Charge Account, the Principal Account or any other
Series account or, without duplication, distributed on or prior to the related
Distribution Date to certificateholders of all outstanding Series. On the same
date as any deposit is made to the Collection Account, the Servicer will (i)
transfer funds from the Collection Account to the Finance Charge Account and
Principal Account to the extent required under "--Application of Collections"
below, and (ii) make such further distributions and payments as required
thereunder. Deposits required to be made by AIC as Servicer into the Finance
Charge Account, Principal Account, the Series 1998-1 Yield Enhancement Account,
Excess Funding Account and any other account established for the benefit of the
holders of any Series of certificates may also be made on a monthly basis rather
than on a more frequent basis if the conditions referred to in the first
sentence of this paragraph are met.

      With respect to the certificates of any outstanding Series, whether the
Servicer is required to make monthly or daily deposits from the Collection
Account into the Finance Charge Account, the Principal Account or any other
Series account, with respect to any Monthly Period, (i) the Servicer will only
be required to deposit Collections from the Collection Account into the Finance
Charge Account, the Principal Account or any other Series account up to the
required amount to be deposited into any such deposit account or, without
duplication, distributed on or prior to the related Distribution Date to
certificateholders of such outstanding Series and (ii) if at any time prior to
such Distribution Date the amount of Collections deposited in the Collection
Account exceeds the amount required to be deposited pursuant to clause (i)
above, the Servicer will be permitted to withdraw the excess from the Collection
Account and allocate and pay such excess to the holder of the Transferor
Certificate as provided in the Agreement.

      The Paying Agent shall have the revocable power to withdraw funds from the
Collection Account or any Collection Subaccount for the purpose of making
distributions to the certificateholders of all outstanding Series in the manner
provided in the related Supplement.

Series 1998-1 Accounts

      The Trustee has established and will maintain with a Qualified Institution
in the name of the Trust, two non-interest bearing segregated trust accounts, a
"Finance Charge Account," for deposits of collections in respect of Finance
Charge Receivables, and a "Principal Account," for deposits of collections in
respect of Principal Receivables, for the benefit of the certificateholders of
all outstanding Series. The Trustee will establish a "Series 1998-1 Distribution
Account" (a non-interest bearing segregated trust account established with a
Qualified Institution).

      Funds in the Principal Account and the Finance Charge Account will be

invested, at the direction of the Transferor, in Permitted Investments. Any
earnings (net of losses and investment expenses) on funds in the Finance Charge
Account or the Principal Account will be paid monthly to the holder of the
Transferor Certificate. If losses and investment expenses exceed earnings on
funds in the Principal Account or the Finance Charge Account during a Monthly
Period, then such excess shall be treated in the same manner as Default Amounts
are

                                       65
treated. The Transferor is not required to reimburse the Trust with respect to
such excess. The Servicer will have the revocable power to withdraw funds from
the Collection Account, the Finance Charge Account, the Principal Account, the
Series 1998-1 Yield Enhancement Account and the Excess Funding Account referred
to below for the purpose of carrying out the Servicer's duties under the
Agreement. The Paying Agent shall have the revocable power to withdraw funds
from the Series 1998-1 Distribution Account for the purpose of making
distributions to the Series 1998-1 Certificateholders. The Series 1998-1
Distribution Account shall not contain any funds of the Transferor or amounts
allocable to the Transferor Ownership Interest, and no amounts on deposit
therein shall be made available to the Transferor.

      The Finance Charge Account, Principal Account, Series 1998-1 Yield
Enhancement Account, Excess Funding Account and Series 1998-1 Distribution
Account are collectively referred to as the "Accounts."

Series 1998-1 Yield Enhancement Account

      The Servicer will establish and maintain or cause to be maintained with a
Qualified Institution in the name of the Trustee, on behalf of the Trust, a
segregated account, the "Series 1998-1 Yield Enhancement Account," for the
benefit of the Series 1998-1 Certificateholders. Amounts on deposit in the
Series 1998-1 Yield Enhancement Account will be invested in the manner directed
by the Transferor in Permitted Investments. Any earnings (net of losses and
investment expenses) on funds in the Series 1998-1 Yield Enhancement Account
will be paid monthly to the holder of the Transferor Certificate. If losses and
investment expenses exceed earnings on funds in the Series 1998-1 Yield
Enhancement Account during a Monthly Period, then such excess shall be charged
against funds on deposit in such account. The Transferor is not required to
reimburse the Trust with respect to such excess. On each Transfer Date, an
amount equal to the Series 1998-1 Available Yield Enhancement Amount shall be
deposited into the Series 1998-1 Yield Enhancement Account out of collections
otherwise allocable to the holder of the Transferor Certificate for the Monthly
Period immediately preceding such Transfer Date. If collections otherwise
allocable to the holder of the Transferor Certificate for such Monthly Period on

such Transfer Date are not sufficient therefor, then the Transferor shall
deposit the amount of the insufficiency out of its own funds. Notwithstanding
the two preceding sentences, if AIR is no longer the Transferor or if the AIR
Support Agreement is not in effect with respect to AIR, then prior to any
payment to the holder of the Transferor Certificate of any collections with
respect to Principal Receivables or Finance Charge Receivables not allocated to
the Series 1998-1 Certificateholders, there shall be deposited into the Series
1998-1 Yield Enhancement Account on each date amounts allocable to the Series
1998-1 Certificates which would otherwise be allocable to the holder of the
Transferor Certificate until the amount so deposited equals the Series 1998-1
Maximum Yield Enhancement Amount for the next Transfer Date. The "Series 1998-1
Maximum Yield Enhancement Amount" shall mean, with respect to any Transfer Date,
the amount calculated pursuant to the proviso to the definition of "Series
1998-1 Available Yield Enhancement Amount" set forth below, determined on the
assumption that the Series 1998-1 Class A Certificate Rate, the Series 1998-1
Class B Certificate Rate and the Series 1998-1 Class C Certificate Rate used in
determining Series 1998-1 Class A Monthly Interest, Series 1998-1 Class B
Monthly Interest and Series 1998-1 Class C Monthly Interest, respectively,
equals in each case [16.00]% per annum. In addition, in all cases the Servicer
will deposit into the Series 1998-1 Yield Enhancement Account on each Transfer
Date any Series 1998-1 Excess Finance Charges. "Series 1998-1 Excess Finance
Charges" means, with respect to any Transfer Date, an amount equal to the excess
of Series 1998-1 Class A Available Funds, Series 1998-1 Class B Available Funds
and Series 1998-1 Class C Available Funds for the related Monthly Period over
the aggregate, with respect to such Transfer Date, of the amounts set forth in
clauses (a) through (e) of the definitions of Series 1998-1 Class A Required
Amount, Series 1998-1 Class B Required Amount and Series 1998-1 Class C Required
Amount. See "--Reallocation of Cash Flows."

                                       66
On each Transfer Date the Servicer will calculate the "Series 1998-1
Available Yield Enhancement Amount," which with respect to any Transfer Date (a)
during the Series 1998-1 Revolving Period means the product of (i) [___]% and
(ii) the product of (A) the collections for the related Monthly Period otherwise
allocable to the Transferor Ownership Interest and (B) the Series 1998-1
Floating Investor Percentage divided by one minus the Aggregate Investor
Percentage, and (b) during the Series 1998-1 Controlled Amortization Period and
the Series 1998-1 Rapid Amortization Period means the product of (i) [____]% and
(ii) the product of (A) the collections for the related Monthly Period otherwise
allocable to the Transferor Ownership Interest and (B) in the case of
collections of Finance Charge Receivables allocable to the Transferor Ownership
Interest, the Series 1998-1 Floating Investor Percentage divided by one minus
the Aggregate Investor Percentage, and in the case of collections of Principal
Receivables allocable to the Transferor Ownership Interest, the Series 1998-1
Fixed Investor Percentage divided by one minus the Aggregate Investor
Percentage; provided that in no event shall the Series 1998-1 Available Yield
Enhancement Amount for any Transfer Date exceed the sum of Series 1998-1 Class A

Monthly Interest, Series 1998-1 Class A Additional Interest, Series 1998-1 Class
B Monthly Interest, Series 1998-1 Class B Additional Interest, Series 1998-1
Class C Monthly Interest and Series 1998-1 Class C Additional Interest for such
Transfer Date. "Aggregate Investor Percentage" with respect to Principal
Receivables and Finance Charge Receivables, as the case may be, means, as of any
date of determination, the sum of the applicable Investor Percentages of all
Series of certificates issued and outstanding on such date of determination, to
a maximum of 100%. "Investor Percentage," with respect to a Series, means, for
any Monthly Period, (a) with respect to Finance Charge Receivables and Default
Amounts at any time and Principal Receivables during the Revolving Period for
such Series, the floating investor percentage for such Series and (b) with
respect to Principal Receivables during the Controlled Amortization Period for
such Series or the Rapid Amortization Period for such Series, the fixed investor
percentage for such Series.

      During each of the calendar years 1995, 1996 and 1997, the average monthly
payment rate on commercial premium finance loans exceeded 17%. Assuming (i) a
17% payment rate each month, (ii) twelve equal 30-day monthly periods, and (iii)
ownership by the Transferor during each Monthly Period of at least the Minimum
Transferor Ownership Interest, the amount available under the Agreement during
the Series 1998-1 Revolving Period for yield enhancement would be [___] basis
points on the outstanding principal of the Offered Certificates on an annualized
basis and may be greater during an amortization period (unless the amount of
interest due on the outstanding principal of the Offered Certificates during
such Monthly Period is less than [___] basis points on an annualized basis, in
which case the amount available for yield enhancement would be such lesser
amount). There can be no assurance, however, that the monthly payment rate on
the Loans will not be less than 17% since the payment rate will vary depending
on a variety of factors, including loan maturities, interest rates and
delinquency and default rates. Lower payment rates will result in lower yield
enhancement amounts.

      On each Transfer Date, the Trustee, acting pursuant to the Servicer's
instructions, will apply funds on deposit in the Series 1998-1 Yield Enhancement
Account with respect to the related Monthly Period to make the following
distributions in the following priority:

           (a) an amount equal to the Series 1998-1 Class A Required Amount, if
      any, with respect to such Transfer Date will be transferred to the Finance
      Charge Account and used to fund the Series 1998-1 Class A Required Amount;
      provided, that in the event the Series 1998-1 Class A Required Amount for
      such Transfer Date exceeds the funds on deposit in the Series 1998-1 Yield
      Enhancement Account, such funds shall be applied to pay amounts due with
      respect to such Transfer Date pursuant to clauses (a), (b), (c), (d) and
      (e) (in that order) under the definition of Series 1998-1 Class A Required
      Amount;

           (b) an amount equal to the Series 1998-1 Class B Required Amount, if
      any, with respect to such Transfer Date will be transferred to the Finance
      Charge Account and used to fund the Series 1998-1 Class B

                                       67
Required Amount; provided, that in the event the Series 1998-1 Class B
      Required Amount for such Transfer Date exceeds the funds on deposit in the
      Series 1998-1 Yield Enhancement Account after giving effect to clause (a)
      above, such funds shall be applied to pay amounts due with respect to such
      Transfer Date pursuant to clauses (a), (b), (c), (d) and (e) (in that
      order) under the definition of Series 1998-1 Class B Required Amount;

           (c) an amount equal to the aggregate amount by which the Series
      1998-1 Class A Ownership Interest has been reduced below the initial
      Series 1998-1 Class A Ownership Interest on previous Transfer Dates for
      reasons other than the payment of principal to the Series 1998-1 Class A
      Certificateholders (but not in excess of the aggregate amount of such
      reductions which have not been previously reimbursed) will be deposited
      into the Principal Account on such Transfer Date (and the Series 1998-1
      Class A Ownership Interest shall be deemed to have been reimbursed by such
      amount up to the initial Series 1998-1 Class A Ownership Interest but only
      if the Series 1998-1 Class A Ownership Interest shall not have previously
      been reduced to zero during the Series 1998-1 Class A Controlled
      Amortization Period or the Series 1998-1 Rapid Amortization Period);

           (d) an amount equal to the aggregate amount by which the Series
      1998-1 Class B Ownership Interest has been reduced below the initial
      Series 1998-1 Class B Ownership Interest on previous Transfer Dates for
      reasons other than the payment of principal to the Series 1998-1 Class B
      Certificateholders (but not in excess of the aggregate amount of such
      reductions which have not been previously reimbursed) will be deposited
      into the Principal Account on such Transfer Date (and the Series 1998-1
      Class B Ownership Interest shall be deemed to have been reimbursed by such
      amount up to the initial Series 1998-1 Class B Ownership Interest but only
      if the Series 1998-1 Class B Ownership Interest shall not have previously
      been reduced to zero during the Series 1998-1 Class B Controlled
      Amortization Period or the Series 1998-1 Rapid Amortization Period);

           (e) an amount equal to the Series 1998-1 Class C Required Amount, if
      any, with respect to such Transfer Date will be transferred to the Finance
      Charge Account and used to fund the Series 1998-1 Class C Required Amount;
      provided, that in the event the Series 1998-1 Class C Required Amount for
      such Transfer Date exceeds the funds on deposit in the Series 1998-1 Yield
      Enhancement Account after giving effect to clauses (a), (b), (c) and (d)
      above, such funds shall be applied to pay amounts due with respect to such
      Transfer Date pursuant to clauses (a), (b), (c), (d) and (e) (in that
      order) under the definition of Series 1998-1 Class C Required Amount;

           (f) an amount equal to the aggregate amount by which the Series
      1998-1 Class C Ownership Interest has been reduced below the initial
      Series 1998-1 Class C Ownership Interest on previous Transfer Dates for
      reasons other than the payment of principal to the Series 1998-1 Class C
      Certificateholders (but not in excess of the aggregate amount of such
      reductions which have not been previously reimbursed) will be deposited
      into the Principal Account on such Transfer Date (and the Series 1998-1

      Class C Ownership Interest shall be deemed to have been reimbursed by such
      amount up to the initial Series 1998-1 Class C Ownership Interest but only
      if the Series 1998-1 Class C Ownership Interest shall not have previously
      been reduced to zero during the Series 1998-1 Class C Controlled
      Amortization Period or the Series 1998-1 Rapid Amortization Period); and

           (g) the balance, if any, in excess of the Series 1998-1 91 Day
      Delinquency Amount, after giving effect to the payments made pursuant to
      subparagraphs (a) through (f) above, shall be distributed to the holder of
      the Transferor Certificate provided that a Pay Out Event has not occurred
      and will not be available for any future payments to the Series 1998-1
      Certificateholders; provided, however, that such amount shall be paid

                                       68
to the holder of the Transferor Certificate only to the extent that the
      Transferor Ownership Interest as of such date is greater than the Minimum
      Transferor Ownership Interest as of the end of the immediately preceding
      Monthly Period (after giving effect to the inclusion in the Trust of all
      Receivables transferred to the Trust on or prior to such date and the
      application of collections received) and otherwise shall be deposited into
      the Excess Funding Account; provided further, that in no event shall the
      amount payable to the holder of the Transferor Certificate be greater than
      the Transferor Ownership Interest.

      The "Series 1998-1 91 Day Delinquency Amount" shall equal, as of each
Transfer Date, the product of (a) the Series 1998-1 Floating Investor Percentage
and (b) the aggregate outstanding principal amount as of the end of the
preceding Monthly Period of the Loans relating to Receivables in the Trust that
are then overdue 91 days or more (i) after cancellation of the related insurance
policies or (ii) if cancellation is delayed, whether due to a stay by reason of
an Obligor's bankruptcy or other reason, after the date the policy would have
been cancelled in the absence of such delay. Funds remaining on deposit in the
Series 1998-1 Yield Enhancement Account under clause (g) above shall be
available on the next Transfer Date for application, together with any
additional amounts required to be deposited therein on such Transfer Date, in
accordance with clauses (a) through (g) above.

Excess Funding Account

      The Servicer has established and maintained or caused to be maintained
with a Qualified Institution in the name of the Trustee, on behalf of the Trust,
a segregated account, the "Excess Funding Account," for the benefit of the
certificateholders of all outstanding Series, including the Series 1998-1
Certificateholders. If on any date the Transferor Ownership Interest equals or

is less than the Minimum Transferor Ownership Interest as of the end of the
immediately preceding Monthly Period, funds (to the extent available therefor as
described herein) otherwise payable to the holder of the Transferor Certificate
on such date will be deposited in the Excess Funding Account. Funds on deposit
in the Excess Funding Account will be withdrawn and paid to the holder of the
Transferor Certificate to the extent that on any day the Transferor Ownership
Interest exceeds the Minimum Transferor Ownership Interest as of the end of the
immediately preceding Monthly Period as a result of the transfer of Additional
Receivables to the Trust. Such deposits in and withdrawals from the Excess
Funding Account may be made on a daily basis (except, if AIC is the Servicer,
under the circumstances described above under "--The Collection Account").

      The allocable portion of funds on deposit in the Excess Funding Account at
the beginning of the Series 1998-1 Rapid Amortization Period will be paid to the
Series 1998-1 Certificateholders as a payment in respect of principal, and
during the Series 1998-1 Controlled Amortization Period will be paid to the
Series 1998-1 Certificateholders as a payment in respect of principal to the
extent that monthly collections received in respect of Principal Receivables and
Shared Principal Collections allocable to the Series 1998-1 Certificateholders
Ownership Interests are insufficient to pay the Series 1998-1 Controlled
Distribution Amount. Funds on deposit in the Excess Funding Account will be
allocated, if necessary, among the certificateholders ownership interests of
each outstanding Series of certificates on a pro rata basis in accordance with
each such Series' fixed investor percentage.

      Funds on deposit in the Excess Funding Account will be invested by the
Trustee at the direction of the Transferor in Permitted Investments. All net
investment income earned on amounts in the Excess Funding Account will be
retained in the Excess Funding Account to the extent that the Transferor
Ownership Interest is less than the Minimum Transferor Ownership Interest. If
losses and investment expenses exceed earnings on funds in the Excess Funding
Account during a Monthly Period, then such excess shall be treated in the same
manner as Default Amounts are treated. The Transferor is not required to
reimburse the Trust with respect to such excess.

                                       69
The "Minimum Transferor Ownership Interest" shall mean, as of any date of
determination, an amount equal to the sum of (a) (i) 107% of an amount equal to
the aggregate initial certificateholders ownership interests of all outstanding
Series minus (ii) the aggregate certificateholders ownership interests of all
outstanding Series as of such date and (b) the Excess Receivables Amount for
such date; provided, however, that the Minimum Transferor Ownership Interest
shall be calculated without reference to the Excess Receivables Amount if (i)
prior to such date there shall have been delivered to the Trustee (a) a written
agreement, in form and substance satisfactory to the Rating Agencies, executed
by a person having a long-term unsecured debt rating of AAA from Standard &
Poor's and Aaa from Moody's pursuant to which such person shall have

unconditionally agreed to indemnify the Trust for all losses in respect of
amounts constituting the Excess Receivables Amount at any time and (b) written
confirmation from each of the Rating Agencies to the effect that such
substitution will not result in such Rating Agency reducing or withdrawing its
rating on any then outstanding class of investor certificates of any Series,
including the Series 1994-1 Certificates and the Series 1998-1 Certificates, and
(ii) the agreement and the rating referred to in clause (a) above remain in
effect on such date of determination.

      "Excess Receivables Amount" shall mean, as of any date of determination,
the sum of:

             (i) the aggregate unpaid principal balance of all Receivables in
      the Trust as of the end of the immediately preceding Monthly Period having
      the same Obligor but only to the extent such aggregate balance is in
      excess of 0.60% of the aggregate unpaid principal balance of all
      Receivables in the Trust as of the end of such Monthly Period; and

            (ii) the greater of:

           (a) the sum, for each Moody's Non-Investment Grade Insurer (including
      for this purpose any affiliated Moody's Non-Investment Grade Insurer) of,
      if more than [5]% of the aggregate unpaid principal balance of all
      Receivables in the Trust as of the end of such Monthly Period arise from
      Loans made to finance premiums due to such insurer (including any such
      affiliated insurer), the aggregate unpaid principal balance of such
      Receivables but only to the extent in excess of such percentage;

           (b) the sum, for each insurer (including any affiliated insurer)
      referred to below, of the greater of:

                     (I) if more than [2]% of the aggregate unpaid principal
                balance of all Receivables in the Trust as of the end of such
                Monthly Period arise from Loans made to finance premiums due to
                the same S&P Non-Investment Grade Insurer (including for this
                purpose any affiliated S&P Non-Investment Grade Insurer), the
                aggregate unpaid principal balance of such Receivables but only
                to the extent in excess of such percentage; and

                     (II) if more than [4]% of the aggregate unpaid principal
                balance of all Receivables in the Trust as of the end of such
                Monthly Period arise from Loans made to finance premiums due to
                the same S&P Non-AAA Insurer (including for this purpose any
                affiliated S&P Non-AAA Insurer), the aggregate unpaid principal
                balance of such Receivables but only to the extent in excess of
                such percentage.

For purposes of making any calculation: (x) pursuant to clause (ii) above, an
amount that would be part of the Excess Receivables Amount under such clause
shall be taken into account only to the extent not already taken into account
under clause (i) above and (y) pursuant to clause (i) or clause (ii) above, the
aggregate of the losses, if any, previously realized in respect of any Obligor
subject to clause (i) above or any insurer referred to in subclauses (a), (b)(I)
and/or (b)(II) of clause (ii) above (to the extent relating to insurer

insolvency) shall reduce

                                       70
the percentage levels used in calculating the excess amounts set forth or
referred to in such clause or subclauses with respect to any single Obligor or
insurer.

      "Moody's Non-Investment Grade Insurer" shall mean, on any date of
determination, an insurer that as of the end of the immediately preceding
Monthly Period did not have an insurance financial strength rating of at least
investment grade (i.e., in one of the top four generic rating categories,
irrespective of any plus or minus) by Moody's (other than AIG or any wholly
owned subsidiary of AIG), unless Moody's shall have previously notified the
Transferor in writing that such insurer is not to be deemed a "Moody's
Non-Investment Grade Insurer" (and shall not have revoked such notification).

      "S&P Non-AAA Insurer" shall mean, on any date of determination, an insurer
that as of the end of the immediately preceding Monthly Period did not have a
claims-paying ability rating at least as high as the then applicable rating
assigned by Standard & Poor's to the Series 1998-1 Class A Certificates or the
Series 1994-1 Class A Certificates unless Standard & Poor's shall have
previously notified the Transferor in writing that such insurer is not to be
deemed an "S&P Non-AAA Insurer" (and shall not have revoked such notification).

      "S&P Non-Investment Grade Insurer" shall mean, on any date of
determination, an insurer that as of the end of the immediately preceding
Monthly Period did not have a claims-paying ability rating of at least
investment grade (i.e., in one of the top four generic rating categories,
irrespective of any plus or minus) by Standard & Poor's (other than any
affiliate of AIG with a Standard & Poor's qualified solvency rating of BBBq)
unless Standard & Poor's shall have previously notified the Transferor in
writing that such insurer is not to be deemed an "S&P Non-Investment Grade
Insurer" (and shall not have revoked such notification).

Shared Principal Collections

      Collections of Principal Receivables for any Monthly Period allocated to
the Series 1998-1 Certificateholders Ownership Interests will first be used to
cover, with respect to any Monthly Period during the Series 1998-1 Controlled
Amortization Period, deposits of the Series 1998-1 Controlled Distribution
Amount to the Series 1998-1 Distribution Account, and during the Series 1998-1
Rapid Amortization Period, payments to the Holders of Offered Certificates and
then payments to the Series 1998-1 Class C Certificateholders. The Servicer will
determine the amount of collections of Principal Receivables for any Monthly
Period allocated to the Series 1998-1 Certificateholders Ownership Interests
remaining after covering required payments to the Series 1998-1
Certificateholders and any similar amounts remaining for the Series 1994-1
Certificates or any additional Series ("Shared Principal Collections"). The

Servicer will allocate the Shared Principal Collections to cover any scheduled
or permitted principal distributions to certificateholders and deposits to
principal funding accounts, if any, for any Series which have not been covered
out of the collections of Principal Receivables allocable to such Series and
certain other amounts for such Series ("Principal Shortfalls"). Shared Principal
Collections will not be used to reimburse certificateholders for investor
charge-offs for any Series to cover interest shortfalls for any Series. If
Principal Shortfalls exceed Shared Principal Collections for any Monthly Period,
Shared Principal Collections will be allocated pro rata among the applicable
Series based on the relative amounts of Principal Shortfalls. To the extent that
Shared Principal Collections exceed Principal Shortfalls, the balance will be
paid to the holder of the Transferor Certificate; provided, however, that such
amount shall be paid to the holder of the Transferor Certificate only to the
extent that the Transferor Ownership Interest on such date is greater than the
Minimum Transferor Ownership Interest as of the immediately preceding Monthly
Period (after giving effect to the inclusion in the Trust of all Receivables
transferred to the Trust on or prior to such date and the application of
collections received) and otherwise shall be deposited into the Excess Funding
Account; provided further, that in no event shall the amount payable to the
holder of the Transferor Certificate be greater than the Transferor Ownership
Interest.

                                       71
Defaulted Loans; Charge-Offs

      Losses resulting from the charge-off of Loans in each Monthly Period
("Default Amounts") are generally shared between the certificateholders
ownership interests of each outstanding Series, based on their respective
floating investor percentages (see "--Allocation Percentages" below with respect
to Series 1998-1), and the Transferor Ownership Interest. Certain losses
resulting from charge-offs of Receivables in excess of specified levels will be
allocated entirely to the Transferor Ownership Interest. Accordingly, such
excess losses will not be borne by the Series 1998-1 Certificateholders
Ownership Interests and will not be taken into account in calculating the Series
1998-1 Investor Default Amount (defined below). The circumstances under which
excess losses will be allocated entirely to the Transferor Ownership Interest
will occur when there are losses on Receivables relating to Loans to a single
Obligor exceeding 0.60% of the aggregate principal balances of Receivables at
the end of any Monthly Period, or when losses on Receivables resulting from the
insolvency of certain insurance carriers (to the extent not taken into account
as a result of the single Obligor excess loss allocation) exceed 2% of the
aggregate principal balances of Receivables at the end of any Monthly Period
(see the definition of "Excess Receivables Amount" under "--Excess Funding
Account" above). In addition, all losses will be allocated to the Transferor
Ownership Interest after the occurrence of the Pay Out Event described under
clause (d) of "--Pay Out Events" below or after the Transferor Ownership
Interest falls below the Minimum Transferor Ownership Interest following the
occurrence of any other Pay Out Event.

      On the fourth business day preceding each Transfer Date (the
"Determination Date"), the Servicer will calculate the Series 1998-1 Investor
Default Amount for the preceding Monthly Period. The term "Series 1998-1
Investor Default Amount" means, with respect to any Monthly Period and any
Receivable under a Loan that became a Defaulted Loan during such Monthly Period,
an amount equal to the product of (a) the unpaid amount (including both
principal and accrued unpaid finance charges) of such Receivable as of the date
that such Loan became a Defaulted Loan and (b) the Series 1998-1 Floating
Investor Percentage with respect to such Monthly Period. The term "Defaulted
Loan" shall mean any Loan which (i) remains in default as of the beginning of
the month immediately following the first anniversary of the cancellation of the
related insurance policy, which cancellation results from such default, or (ii)
is overdue and which the Servicer determines, in accordance with the Servicer's
policies and procedures relating to the operation of their business, is
incapable of collection. A Loan shall be considered to be a Defaulted Loan upon
the earlier to occur of (i) or (ii) above.

      State laws impose limitations on the amount of finance charges that may
accrue upon the unpaid balance of a Loan after its scheduled maturity and the
late fees that may be imposed upon an Obligor's default in payment of any
installments due under a Loan. Such laws vary widely by state, but often provide
for the recovery of only minimal additional interest and fees, if any.

      A portion of the Series 1998-1 Investor Default Amount will be allocated
to the Series 1998-1 Class A Certificateholders (the "Series 1998-1 Class A
Default Amount") on each Transfer Date in an amount equal to the product of the
Series 1998-1 Class A Floating Allocation applicable during the related Monthly
Period and the Series 1998-1 Investor Default Amount for such Monthly Period. A
portion of the Series 1998-1 Investor Default Amount will be allocated to the
Series 1998-1 Class B Certificateholders (the "Series 1998-1 Class B Default
Amount") on each Transfer Date in an amount equal to the product of the Series
1998-1 Class B Floating Allocation applicable during the related Monthly Period
and the Series 1998-1 Investor Default Amount for such Monthly Period. A portion
of the Series 1998-1 Investor Default Amount will be allocated to the Series
1998-1 Class C Certificateholders (the "Series 1998-1 Class C Default Amount")
on each Transfer Date in an amount equal to the product of the Series 1998-1
Class C Floating Allocation applicable during the related Monthly Period and the
Series 1998-1 Investor Default Amount for such Monthly Period.

                                       72
On each Transfer Date, if the Series 1998-1 Class A Default Amount for
such Transfer Date exceeds the funds on deposit in the Series 1998-1 Yield
Enhancement Account available to cover such amount with respect to the Monthly
Period immediately preceding such Transfer Date, the Series 1998-1 Class C
Ownership Interest (after giving effect to reductions therein for any Series
1998-1 Class C Charge-Offs and any Series 1998-1 Reallocated Principal
Collections on such Transfer Date) will be reduced by the amount of such excess.
In the event that such reduction would cause the Series 1998-1 Class C Ownership

Interest to be a negative number, the Series 1998-1 Class C Ownership Interest
will be reduced to zero, and the Series 1998-1 Class B Ownership Interest (after
giving effect to reductions therein for any Series 1998-1 Class B Charge-Offs
and any Series 1998-1 Reallocated Principal Collections on such Transfer Date)
will be reduced by the amount by which the Series 1998-1 Class C Ownership
Interest would have been reduced below zero. In the event that such reduction
would cause the Series 1998-1 Class B Ownership Interest to be a negative
number, the Series 1998-1 Class B Ownership Interest will be reduced to zero,
and the Series 1998-1 Class A Ownership Interest (after giving effect to
reductions therein for any Series 1998-1 Reallocated Principal Collections on
such Transfer Date) will be reduced (but not below zero) by the amount by which
the Series 1998-1 Class B Ownership Interest would have been reduced below zero
(any such reduction, a "Series 1998-1 Class A Charge-Off"). The Series 1998-1
Class A Ownership Interest will also be reduced by the amount of Series 1998-1
Reallocated Principal Collections used to cover the Series 1998-1 Class A
Required Amount and Series 1998-1 Class B Required Amount if the Series 1998-1
Class B Ownership Interest and Series 1998-1 Class C Ownership Interest have
been reduced to zero. Such reductions in the Series 1998-1 Class A Ownership
Interest will have the effect of slowing or reducing the return of principal and
the payment of interest to the Series 1998-1 Class A Certificateholders. The
Series 1998-1 Class A Ownership Interest will thereafter be reimbursed if not
previously reduced to zero during the Series 1998-1 Class A Controlled
Amortization Period or the Series 1998-1 Rapid Amortization Period (but not in
excess of reductions in the Series 1998-1 Class A Ownership Interest that have
not been previously reimbursed) on any Transfer Date by the amount of funds on
deposit in the Series 1998-1 Yield Enhancement Account allocated and available
for such purpose as described under "--Series 1998-1 Yield Enhancement Account."

      If on any Transfer Date, the Series 1998-1 Class B Default Amount for such
Transfer Date exceeds the amount of funds on deposit in the Series 1998-1 Yield
Enhancement Account which are allocated and available to fund such amount as
described under "--Series 1998-1 Yield Enhancement Account," the Series 1998-1
Class C Ownership Interest (after giving effect to reductions therein for any
Series 1998-1 Class C Charge-Offs and any Series 1998-1 Reallocated Principal
Collections on such Transfer Date and after giving effect to any adjustments
with respect thereto as described in the preceding paragraph) will be reduced by
the amount of such excess. In the event that such reduction would cause the
Series 1998-1 Class C Ownership Interest to be a negative number, the Series
1998-1 Class C Ownership Interest will be reduced to zero and the Series 1998-1
Class B Ownership Interest (after giving effect to reductions therein for any
Series 1998-1 Reallocated Principal Collections on such Transfer Date) will be
reduced (but not below zero) by the amount by which the Series 1998-1 Class C
Ownership Interest would have been reduced below zero (any such reduction, a
"Series 1998-1 Class B Charge-Off"). The Series 1998-1 Class B Ownership
Interest will also be reduced by the amount of Series 1998-1 Reallocated
Principal Collections in excess of the Series 1998-1 Class C Ownership Interest
and the amount of any portion of the Series 1998-1 Class B Ownership Interest
allocated to the Series 1998-1 Class A Certificates to avoid a reduction in the
Series 1998-1 Class A Ownership Interest. Such reductions in the Series 1998-1
Class B Ownership Interest will have the effect of slowing or reducing the
return of principal and the payment of interest to the Series 1998-1 Class B
Certificateholders. The Series 1998-1 Class B Ownership Interest will thereafter
be reimbursed if not previously reduced to zero during the Series 1998-1 Class B
Controlled Amortization Period or the Series 1998-1 Rapid Amortization Period

(but not in excess of reductions in the Series 1998-1 Class B Ownership Interest
that have not been previously reimbursed) on any Transfer Date by the amount of
funds on deposit in the Series 1998-1 Yield Enhancement Account allocated and
available for that purpose as described under "--Series 1998-1 Yield Enhancement
Account."

                                       73
If on any Transfer Date, the Series 1998-1 Class C Default Amount for such
Transfer Date exceeds the amount of funds on deposit in the Series 1998-1 Yield
Enhancement Account which are allocated and available to fund such amount as
described under "--Series 1998-1 Yield Enhancement Account," the Series 1998-1
Class C Ownership Interest will be reduced by the amount of such excess but not
more than the lesser of the Series 1998-1 Class C Default Amount and the Series
1998-1 Class C Ownership Interest for such Transfer Date (any such reduction, a
"Series 1998-1 Class C Charge-Off"). The Series 1998-1 Class C Ownership
Interest will also be reduced by the amount of Series 1998-1 Reallocated
Principal Collections used to cover payment of interest on the Offered
Certificates and the amount of any portion of the Series 1998-1 Class C
Ownership Interest allocated to the Series 1998-1 Class A Certificates to avoid
a reduction in the Series 1998-1 Class A Ownership Interest or to the Series
1998-1 Class B Certificates to avoid a reduction in the Series 1998-1 Class B
Ownership Interest. The Series 1998-1 Class C Ownership Interest will thereafter
be reimbursed if not previously reduced to zero during the Series 1998-1 Class C
Controlled Amortization Period or the Series 1998-1 Rapid Amortization Period
(but not in excess of reductions in the Series 1998-1 Class C Ownership Interest
that have not been previously reimbursed) on any Transfer Date by the amount of
funds on deposit in the Series 1998-1 Yield Enhancement Account allocated and
available for that purpose as described under "--Series 1998-1 Yield Enhancement
Account."

Allocation Percentages

      Pursuant to the Agreement, with respect to each Monthly Period the
Servicer will allocate among the Series 1998-1 Certificateholders Ownership
Interests, the certificateholders ownership interests for each other Series
issued and outstanding and the Transferor Ownership Interest, all amounts
collected on Finance Charge Receivables, all amounts collected on Principal
Receivables and all Default Amounts with respect to such Monthly Period. Finance
charges on the Loans are recognized under the actuarial interest method.

      Collections of Finance Charge Receivables, which under the terms of the
Agreement will include any recoveries with respect to Loans that have been
written off, and Default Amounts at any time and collections of Principal
Receivables during the Series 1998-1 Revolving Period will be allocated to the
Series 1998-1 Certificateholders Ownership Interests based on the Series 1998-1
Floating Investor Percentage. The "Series 1998-1 Floating Investor Percentage"
means, with respect to any Monthly Period, the percentage equivalent of a

fraction, the numerator of which is the Series 1998-1 Certificateholders
Ownership Interests as of the close of business on the last day of the preceding
Monthly Period (or with respect to the first Monthly Period, the Series 1998-1
Initial Certificateholders Ownership Interests) and the denominator of which is
the greater of (x) the aggregate amount of Principal Receivables as of the close
of business on the last day of the preceding Monthly Period (or with respect to
the first Monthly Period, the aggregate amount of Principal Receivables as of
the close of business on the day immediately preceding the Closing Date that
will be included in the Trust on such date), and (y) the sum of the numerators
used to calculate the investor percentages for allocations with respect to
Finance Charge Receivables, Default Amounts or Principal Receivables, as
applicable, for all outstanding Series on such date of determination. Such
amounts so allocated will be further allocated between the Series 1998-1 Class A
Certificateholders, Series 1998-1 Class B Certificateholders and the Series
1998-1 Class C Certificateholders based on the Series 1998-1 Class A Floating
Allocation, the Series 1998-1 Class B Floating Allocation and the Series 1998-1
Class C Floating Allocation, respectively. The "Series 1998-1 Class A Floating
Allocation" means, with respect to any Monthly Period, the percentage equivalent
(which percentage shall never exceed 100%) of a fraction, the numerator of which
is equal to the Series 1998-1 Class A Ownership Interest as of the close of
business on the last day of the preceding Monthly Period (or with respect to the
first Monthly Period, as of the Closing Date) and the denominator of which is
equal to the Series 1998-1 Certificateholders Ownership Interests as of the
close of business on such day. The "Series 1998-1 Class B Floating Allocation"
means, with respect to any Monthly Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction, the

                                       74
numerator of which is equal to the Series 1998-1 Class B Ownership Interest as
of the close of business on the last day of the preceding Monthly Period (or
with respect to the first Monthly Period, as of the Closing Date) and the
denominator of which is equal to the Series 1998-1 Certificateholders Ownership
Interests as of the close of business on such day. The "Series 1998-1 Class C
Floating Allocation" means, with respect to any Monthly Period, the percentage
equivalent (which percentage shall never exceed 100%) of a fraction, the
numerator of which is equal to the Series 1998-1 Class C Ownership Interest as
of the close of business on the last day of the preceding Monthly Period (or
with respect to the first Monthly Period, as of the Closing Date) and the
denominator of which is equal to the Series 1998-1 Certificateholders Ownership
Interests as of the close of business on such day.

      Collections of Principal Receivables during the Series 1998-1 Controlled
Amortization Period and Series 1998-1 Rapid Amortization Period will be
allocated to the Series 1998-1 Certificateholders Ownership Interests based on
the Series 1998-1 Fixed Investor Percentage. The "Series 1998-1 Fixed Investor
Percentage" means, with respect to any Monthly Period, the percentage equivalent
of a fraction, the numerator of which is the Series 1998-1 Certificateholders
Ownership Interests as of the close of business on the last day of the Series

1998-1 Revolving Period and the denominator of which is the greater of (x) the
aggregate amount of Principal Receivables in the Trust as of the close of
business on the last day of the prior Monthly Period and (y) the sum of the
numerators used to calculate the investor percentages for allocations with
respect to Principal Receivables for all outstanding Series for such Monthly
Period.

      "Series 1998-1 Certificateholders Ownership Interests" for any date means
an amount equal to the sum of (a) the Series 1998-1 Class A Ownership Interest,
(b) the Series 1998-1 Class B Ownership Interest and (c) the Series 1998-1 Class
C Ownership Interest, each as of such date.

      "Series 1998-1 Class A Ownership Interest" for any date means an amount
equal to (a) $[___________] (the "Series 1998-1 Class A Initial Ownership
Interest"), minus (b) the aggregate amount of principal payments made to Series
1998-1 Class A Certificateholders prior to such date, minus (c) the aggregate
amount of Series 1998-1 Class A Charge-Offs for all prior Transfer Dates, minus
(d) the aggregate amount of Series 1998-1 Reallocated Principal Collections for
all prior Transfer Dates for which the Series 1998-1 Class B Ownership Interest
and the Series 1998-1 Class C Ownership Interest have not been reduced, and plus
(e) the aggregate amount of funds on deposit in the Series 1998-1 Yield
Enhancement Account allocated on all prior Transfer Dates for the purpose of
reimbursing amounts deducted pursuant to the foregoing clauses (c) and (d);
provided, however, that the Series 1998-1 Class A Ownership Interest may not be
reduced below zero.

      "Series 1998-1 Class B Ownership Interest" for any date means an amount
equal to (a) $[_________] (the "Series 1998-1 Class B Initial Ownership
Interest"), minus (b) the aggregate amount of principal payments made to Series
1998-1 Class B Certificateholders prior to such date, minus (c) the aggregate
amount of Series 1998-1 Class B Charge-Offs for all prior Transfer Dates, minus
(d) the aggregate amount of Series 1998-1 Reallocated Principal Collections for
all prior Transfer Dates for which the Series 1998-1 Class C Ownership Interest
has not been reduced, minus (e) an amount equal to the aggregate amount by which
the Series 1998-1 Class B Ownership Interest has been reduced to fund the Series
1998-1 Class A Default Amount on all prior Transfer Dates as described under
"--Defaulted Loans; Charge-Offs," and plus (f) the aggregate amount of funds on
deposit in the Series 1998-1 Yield Enhancement Account allocated on all prior
Transfer Dates for the purpose of reimbursing amounts deducted pursuant to the
foregoing clauses (c), (d) and (e); provided, however, that the Series 1998-1
Class B Ownership Interest may not be reduced below zero.

      "Series 1998-1 Class C Ownership Interest" for any date means an amount
equal to (a) $[________] (the "Series 1998-1 Class C Initial Ownership
Interest"), minus (b) the aggregate amount of principal payments made

                                       75
to the holders of the Series 1998-1 Class C Ownership Interest prior to such
date, minus (c) the aggregate amount of Series 1998-1 Class C Charge-Offs for

all prior Transfer Dates, minus (d) the aggregate amount of Series 1998-1
Reallocated Principal Collections for all prior Transfer Dates for which the
Series 1998-1 Class C Ownership Interest has been reduced, minus (e) an amount
equal to the aggregate amount by which the Series 1998-1 Class C Ownership
Interest has been reduced to fund the Series 1998-1 Class A Default Amount and
the Series 1998-1 Class B Default Amount on all prior Transfer Dates as
described under "--Defaulted Loans; Charge-Offs," and plus (f) the aggregate
amount of funds on deposit in the Series 1998-1 Yield Enhancement Account
allocated on all prior Transfer Dates for the purpose of reimbursing amounts
deducted pursuant to the foregoing clauses (c), (d) and (e); provided, however,
that the Series 1998-1 Class C Ownership Interest may not be reduced below zero.

Reallocation of Cash Flows

      With respect to each Transfer Date, the Servicer will determine the
"Series 1998-1 Class A Required Amount," which will be equal to the amount, if
any, by which the sum of (a) Series 1998-1 Class A Monthly Interest due on the
related Distribution Date, (b) Series 1998-1 Class A Additional Interest due on
such Distribution Date, (c) the Series 1998-1 Class A Servicing Fee for the
related Monthly Period and any overdue Series 1998-1 Class A Servicing Fee, (d)
the Series 1998-1 Class A Default Amount, if any, for the related Monthly Period
and (e) Series 1998-1 Class A Prior Period Interest, if any, exceeds the Series
1998-1 Class A Available Funds for the related Monthly Period. If the Series
1998-1 Class A Required Amount is greater than zero, funds on deposit in the
Series 1998-1 Yield Enhancement Account and available for such purpose will be
used to fund the Series 1998-1 Class A Required Amount with respect to such
Transfer Date. If the funds on deposit in the Series 1998-1 Yield Enhancement
Account are insufficient to fund the remaining Series 1998-1 Class A Required
Amount, first, Series 1998-1 Reallocated Class C Principal Collections, then,
Series 1998-1 Reallocated Class B Principal Collections and finally, Series
1998-1 Reallocated Class A Principal Collections will be used to fund the Series
1998-1 Class A Required Amount. Any reallocation of Principal Receivables
collections to fund the Series 1998-1 Class A Required Amount or, as described
in the next succeeding paragraph, the Series 1998-1 Class B Required Amount will
result in a corresponding reduction in the Series 1998-1 Certificateholders
Ownership Interests. The amount of such reduction will be allocated first to
reduce the Series 1998-1 Class C Ownership Interest, second to reduce the Series
1998-1 Class B Ownership Interest and lastly to reduce the Series 1998-1 Class A
Ownership Interest. If Series 1998-1 Reallocated Principal Collections with
respect to the Monthly Period, together with the funds on deposit in the Series
1998-1 Yield Enhancement Account, are insufficient to fund the Series 1998-1
Class A Required Amount for such related Monthly Period, then the Series 1998-1
Class C Ownership Interest (after giving effect to reductions therein for any
Series 1998-1 Class C Charge-Offs and Series 1998-1 Reallocated Principal
Collections for the related Transfer Date) will be reduced by the amount of such
excess. In the event that such reduction would cause the Series 1998-1 Class C
Ownership Interest to be a negative number, the Series 1998-1 Class C Ownership
Interest will be reduced to zero, and the Series 1998-1 Class B Ownership
Interest (after giving effect to reductions therein for any Series 1998-1 Class
B Charge-Offs and Series 1998-1 Reallocated Principal Collections for such
Transfer Date) will be reduced by the amount by which the Series 1998-1 Class C
Ownership Interest would have been reduced below zero. In the event that such
reduction would cause the Series 1998-1 Class B Ownership Interest to be a
negative number, the Series 1998-1 Class B Ownership Interest will be reduced to

zero and the Series 1998-1 Class A Ownership Interest (after giving effect to
reductions therein for any Series 1998-1 Class A Charge-Offs and Series 1998-1
Reallocated Principal Collections for such Transfer Date) will be reduced (but
not below zero) by the amount by which the Series 1998-1 Class B Ownership
Interest would have been reduced below zero. Any such reduction in the Series
1998-1 Class A Ownership Interest will have the effect of slowing or reducing
the return of principal and payment of interest to the Series 1998-1 Class A
Certificateholders. If the Series 1998-1 Class B Ownership Interest and the
Series 1998-1 Class C Ownership Interest have both been reduced to zero, the
Series

                                       76
1998-1 Class A Certificateholders will bear directly the credit risks associated
with their interests in the Trust. See "--Defaulted Loans; Charge-Offs."

      With respect to each Transfer Date, the Servicer will determine the
"Series 1998-1 Class B Required Amount," which will be equal to the amount, if
any, by which the sum of (a) Series 1998-1 Class B Monthly Interest due on the
related Distribution Date, (b) Series 1998-1 Class B Additional Interest due on
such Distribution Date, (c) the Series 1998-1 Class B Servicing Fee for the
related Monthly Period and any overdue Series 1998-1 Class B Servicing Fee, (d)
the Series 1998-1 Class B Default Amount, if any, for such Transfer Date and (e)
Series 1998-1 Class B Prior Period Interest, if any, exceeds the Series 1998-1
Class B Available Funds for the related Monthly Period. If the Series 1998-1
Class B Required Amount is greater than zero, funds on deposit in the Series
1998-1 Yield Enhancement Account not required to pay the Series 1998-1 Class A
Required Amount will be used to fund the Series 1998-1 Class B Required Amount
with respect to such Transfer Date. If funds on deposit in the Series 1998-1
Yield Enhancement Account are insufficient to fund the remaining Series 1998-1
Class B Required Amount, then Series 1998-1 Reallocated Principal Collections
not required to fund the Series 1998-1 Class A Required Amount for the related
Monthly Period will be used to fund the Series 1998-1 Class B Required Amount.
If such Series 1998-1 Reallocated Principal Collections with respect to the
related Monthly Period are insufficient to fund the remaining Series 1998-1
Class B Required Amount, then the Series 1998-1 Class C Ownership Interest
(after giving effect to reductions therein for any Series 1998-1 Class C
Charge-Offs and Series 1998-1 Reallocated Principal Collections for the related
Transfer Date) will be reduced by the amount of such deficiency. In the event
that such a reduction would cause the Series 1998-1 Class C Ownership Interest
to be a negative number, the Series 1998-1 Class C Ownership Interest will be
reduced to zero, and the Series 1998-1 Class B Ownership Interest (after giving
effect to reductions therein for any Series 1998-1 Class B Charge-Offs and
Series 1998-1 Reallocated Principal Collections for such Transfer Date) will be
reduced (but not below zero) by the amount by which the Series 1998-1 Class C
Ownership Interest would have been reduced below zero. Any such reduction in the
Series 1998-1 Class B Ownership Interest will have the effect of slowing or
reducing the return of principal and payment of interest to the Series 1998-1

Class B Certificateholders. If the Series 1998-1 Class C Ownership Interest has
been reduced to zero, the Series 1998-1 Class B Certificateholders will bear
directly the credit risks associated with their interests in the Trust. See
"--Defaulted Loans; Charge-Offs."

      With respect to each Transfer Date, the Servicer will determine the
"Series 1998-1 Class C Required Amount," which will be equal to the amount, if
any, by which the sum of (a) Series 1998-1 Class C Monthly Interest due on the
related Distribution Date, (b) Series 1998-1 Class C Additional Interest due on
such Distribution Date, (c) the Series 1998-1 Class C Servicing Fee for the
related Monthly Period and any overdue Series 1998-1 Class C Servicing Fee, (d)
the Series 1998-1 Class C Default Amount, if any, for such Transfer Date, and
(e) Series 1998-1 Class C Prior Period Interest, if any, exceeds the Series
1998-1 Class C Available Funds for the related Monthly Period.

      Reductions of the Series 1998-1 Class A Ownership Interest or Series
1998-1 Class B Ownership Interest described above on any Transfer Date shall be
reimbursed by, and the Series 1998-1 Class A Ownership Interest or Series 1998-1
Class B Ownership Interest increased to the extent of, funds on deposit in the
Series 1998-1 Yield Enhancement Account available for such purposes on each
subsequent Transfer Date. See "--Series 1998-1 Yield Enhancement Account." If
and when such reductions of the Series 1998-1 Class A Ownership Interest and
Series 1998-1 Class B Ownership Interest have been fully reimbursed, reductions
of the Series 1998-1 Class C Ownership Interest shall be reimbursed in a similar
manner until reimbursed in full.

      "Series 1998-1 Reallocated Class A Principal Collections" for any Monthly
Period means collections of Principal Receivables allocable to the Series 1998-1
Class A Ownership Interest for such Monthly Period in an

                                       77
amount not to exceed the amount required to fund the Series 1998-1 Class A
Required Amount and the Series 1998-1 Class B Required Amount for the related
Transfer Date; provided, however, that such amount will not exceed the Series
1998-1 Class A Ownership Interest after giving effect to any Series 1998-1 Class
A Charge-Offs for such Transfer Date.

      "Series 1998-1 Reallocated Class B Principal Collections" for any Monthly
Period means collections of Principal Receivables allocable to the Series 1998-1
Class B Ownership Interest for such Monthly Period in an amount not to exceed
the amount applied to fund the Series 1998-1 Class A Required Amount and the
Series 1998-1 Class B Required Amount, if any; provided, however, that such
amount will not exceed the Series 1998-1 Class B Ownership Interest after giving
effect to any Series 1998-1 Class B Charge-Offs for the related Transfer Date.

      "Series 1998-1 Reallocated Class C Principal Collections" for any Monthly
Period means collections of Principal Receivables allocable to the Series 1998-1
Class C Ownership Interest for such Monthly Period in an amount not to exceed

the amount applied to fund the Series 1998-1 Class A Required Amount and the
Series 1998-1 Class B Required Amount, if any; provided, however, that such
amount will not exceed the Series 1998-1 Class C Ownership Interest after giving
effect to any Series 1998-1 Class C Charge-Offs for the related Transfer Date.

      "Series 1998-1 Reallocated Principal Collections" for any Monthly Period
means the sum of the Series 1998-1 Reallocated Series 1998-1 Class A Principal
Collections, the Series 1998-1 Reallocated Class B Principal Collections and the
Series 1998-1 Reallocated Class C Principal Collections, in each case for such
Monthly Period.

Application of Collections

      On each Distribution Date, the Trustee, acting pursuant to the Servicer's
instructions, will apply funds on deposit in the Series 1998-1 Distribution
Account (consisting of Series 1998-1 Class A Available Funds, Series 1998-1
Class B Available Funds, Series 1998-1 Class C Available Funds, Series 1998-1
Available Investor Principal Collections (including allocable amounts from the
Excess Funding Account), Series 1998-1 Reallocated Principal Collections, and
amounts from the Series 1998-1 Yield Enhancement Account, in each case to the
extent deposited into the Series 1998-1 Distribution Account for purposes of
making distributions to Series 1998-1 Certificateholders) to pay the following
amounts (in each case determined as of the immediately preceding Transfer Date)
in the following order of priority:

      (a)  to the Series 1998-1 Class A Certificateholders:

           (i)  Series 1998-1 Class A Monthly Interest;

           (ii) Series 1998-1 Class A Additional Interest, if any;

           (iii) Series 1998-1 Class A Prior Period Interest, if any, to the
      extent distributable on such Distribution Date;

      (b)  to the Series 1998-1 Class B Certificateholders:

           (i)  Series 1998-1 Class B Monthly Interest;

                                       78
(ii) Series 1998-1 Class B Additional Interest, if any;

           (iii) Series 1998-1 Class B Prior Period Interest, if any, to the
      extent distributable on such Distribution Date;

      (c) during the Series 1998-1 Revolving Period, to the Series 1998-1 Class
C Certificateholders:

           (i)  Series 1998-1 Class C Monthly Interest;

           (ii) Series 1998-1 Class C Additional Interest, if any;

           (iii) Series 1998-1 Class C Prior Period Interest, if any, to the
      extent distributable on such Distribution Date;

      (d) during the Series 1998-1 Controlled Amortization Period or the Series
1998-1 Rapid Amortization Period:

           (i) to the Series 1998-1 Class A Certificateholders, Series 1998-1
      Class A Monthly Principal;

           (ii) to the Series 1998-1 Class B Certificateholders, Series 1998-1
      Class B Monthly Principal;

           (iii) to the Series 1998-1 Class C Certificateholders, the amounts
      set forth in clause (c) above (in the order of priority set forth in such
      clause); and

           (iv) to the Series 1998-1 Class C Certificateholders, Series 1998-1
      Class C Monthly Principal.

      "Series 1998-1 Class A Monthly Interest" with respect to any Transfer Date
will equal the product of (i) the Series 1998-1 Class A Certificate Rate for the
related Interest Period, (ii) the actual number of days in such Interest Period
divided by 360 and (iii) the Series 1998-1 Class A Ownership Interest on the
related Record Date; provided, however, with respect to the first Distribution
Date, Series 1998-1 Class A Monthly Interest shall be equal to the interest
accrued on the Series 1998-1 Class A Initial Ownership Interest at the
applicable Series 1998-1 Class A Certificate Rate for the period from the
Closing Date through [February 15, 1998.]

      "Series 1998-1 Class B Monthly Interest" with respect to any Transfer Date
will equal the product of (i) the Series 1998-1 Class B Certificate Rate for the
related Interest Period, (ii) the actual number of days in such Interest Period
divided by 360 and (iii) the Series 1998-1 Class B Ownership Interest on the
related Record Date; provided, however, with respect to the first Distribution
Date, Series 1998-1 Class B Monthly Interest shall be equal to the interest
accrued on the Series 1998-1 Class B Initial Ownership Interest at the
applicable Series 1998-1 Class B Certificate Rate for the period from the
Closing Date through [February 15, 1998.]

      "Series 1998-1 Class C Monthly Interest" with respect to any Transfer Date
will equal the product of (i) the Series 1998-1 Class C Certificate Rate for the
related Interest Period, (ii) the actual number of days in such Interest Period
divided by 360, and (iii) the Series 1998-1 Class C Ownership Interest on the
related Record Date; provided, however, with respect to the first Distribution
Date, Series 1998-1 Class C Monthly Interest shall be equal to the interest
accrued on the Series 1998-1 Class C Initial Ownership Interest at the
applicable Series 1998-1 Class C Certificate Rate for the period from the
Closing Date through [February 15, 1998.]

                                       79
"Series 1998-1 Class A Prior Period Interest," with respect to each
Interest Period in which the Series 1998-1 Class A Certificates would have
accrued interest on the Series 1998-1 Class A Ownership Interest had such Series
1998-1 Class A Ownership Interest not been reduced for reasons other than the
payment of principal to the Series 1998-1 Class A Certificateholders, will equal
the product of (i) the Series 1998-1 Class A Certificate Rate in effect during
such Interest Period plus 2% per annum, (ii) the actual number of days in such
Interest Period divided by 360 and (iii) the amount by which the Series 1998-1
Class A Ownership Interest was less than the Series 1998-1 Class A Ownership
Interest during such Interest Period for reasons other than the payment of
principal to the Series 1998-1 Class A Certificateholders; provided, however,
that Series 1998-1 Class A Prior Period Interest will not be distributed until
the Distribution Date(s) following the Transfer Date on which the Series 1998-1
Class A Ownership Interest has been reimbursed in full for any reductions.

      "Series 1998-1 Class B Prior Period Interest," with respect to each
Interest Period in which the Series 1998-1 Class B Certificates would have
accrued interest on the Series 1998-1 Class B Ownership Interest had such Series
1998-1 Class B Ownership Interest not been reduced for reasons other than the
payment of principal to the Series 1998-1 Class B Certificateholders, will equal
the product of (i) the Series 1998-1 Class B Certificate Rate in effect during
such Interest Period plus 2% per annum, (ii) the actual number of days in such
Interest Period divided by 360 and (iii) the amount by which the Series 1998-1
Class B Ownership Interest was less than the Series 1998-1 Class B Ownership
Interest during such Interest Period for reasons other than the payment of
principal to the Series 1998-1 Class B Certificateholders; provided, however,
that Series 1998-1 Class B Prior Period Interest will not be distributed until
the Distribution Date(s) following the Transfer Date on which the Series 1998-1
Class B Ownership Interest has been reimbursed in full for any reductions.

      "Series 1998-1 Class C Prior Period Interest," with respect to each
Interest Period in which the Series 1998-1 Class C Certificates would have
accrued interest on the Series 1998-1 Class C Ownership Interest had such Series
1998-1 Class C Ownership Interest not been reduced for reasons other than the
payment of principal to the Series 1998-1 Class C Certificateholders, will equal
the product of (i) the Series 1998-1 Class C Certificate Rate in effect during
such Interest Period plus 2% per annum, (ii) the actual number of days in such
Interest Period divided by 360 and (iii) the amount by which the Series 1998-1
Class C Ownership Interest was less than the Series 1998-1 Class C Ownership
Interest during such Interest Period for reasons other than the payment of
principal to the Series 1998-1 Class C Certificateholders; provided, however,
that Series 1998-1 Class C Prior Period Interest will not be distributed until
the Distribution Date(s) following the Transfer Date on which the Series 1998-1
Class C Ownership Interest has been reimbursed in full for any reductions.

      "Series 1998-1 Class C Available Funds" means, with respect to any Monthly
Period, an amount equal to the Series 1998-1 Class C Floating Allocation of
collections of Finance Charge Receivables allocated to the Series 1998-1

Certificateholders Ownership Interests with respect to such Monthly Period.

      "Series 1998-1 Class A Monthly Principal" with respect to any Transfer
Date relating to (i) the Series 1998-1 Class A Controlled Amortization Period,
prior to the payment in full of the Series 1998-1 Class A Ownership Interest,
will equal the least of (a) the Series 1998-1 Available Investor Principal
Collections on deposit in the Principal Account with respect to such Transfer
Date, (b) the Series 1998-1 Controlled Distribution Amount for the related
Distribution Date, and (c) the Series 1998-1 Class A Ownership Interest on such
Transfer Date, and (ii) the Series 1998-1 Rapid Amortization Period, prior to
payment in full of the Series 1998-1 Class A Ownership Interest, will equal the
lesser of (a) Series 1998-1 Available Investor Principal Collections on deposit
in the Principal Account with respect to such Transfer Date, and (b) the Series
1998-1 Class A Ownership Interest on such Transfer Date.

                                       80
"Series 1998-1 Class B Monthly Principal" with respect to any Transfer
Date relating to (i) the Series 1998-1 Class B Controlled Amortization Period,
after the Series 1998-1 Class A Ownership Interest has been paid in full (after
taking into account payments to be made on the related Distribution Date in
respect of the Series 1998-1 Class A Certificates), will equal the least of (a)
the Series 1998-1 Available Investor Principal Collections on deposit in the
Principal Account with respect to such Transfer Date (minus the portion of such
Series 1998-1 Available Investor Principal Collections applied to Series 1998-1
Class A Monthly Principal on such Transfer Date), (b) the Series 1998-1
Controlled Distribution Amount for the related Distribution Date (minus the
portion of such Series 1998-1 Controlled Distribution Amount applied to Series
1998-1 Class A Monthly Principal on such Transfer Date), and (c) the Series
1998-1 Class B Ownership Interest for such Transfer Date, and (ii) the Series
1998-1 Rapid Amortization Period, after the Series 1998-1 Class A Ownership
Interest has been paid in full (after taking into account payments to be made on
the related Distribution Date in respect of the Series 1998-1 Class A
Certificates), will equal the lesser of (a) Series 1998-1 Available Investor
Principal Collections on deposit in the Principal Account with respect to such
Transfer Date (minus the portion of such Series 1998-1 Available Investor
Principal Collections applied to Series 1998-1 Class A Monthly Principal on such
Transfer Date), and (b) the Series 1998-1 Class B Ownership Interest on such
Transfer Date.

      "Series 1998-1 Class C Monthly Principal" with respect to any Transfer
Date relating to (i) the Series 1998-1 Class C Controlled Amortization Period,
after the Series 1998-1 Class B Ownership Interest has been paid in full (after
taking into account payments to be made on the related Distribution Date in
respect of the Series 1998-1 Class A Certificates and the Series 1998-1 Class B
Certificates), will equal the least of (a) the Series 1998-1 Available Investor
Principal Collections on deposit in the Principal Account with respect to such
Transfer Date (minus the portion of such Series 1998-1 Available Investor

Principal Collections applied to Series 1998-1 Class A Monthly Principal, if
any, and Series 1998-1 Class B Monthly Principal on the related Distribution
Date), (b) the Series 1998-1 Controlled Distribution Amount for the related
Distribution Date (minus the portion of such Series 1998-1 Controlled
Distribution Amount applied to Series 1998-1 Class A Monthly Principal and
Series 1998-1 Class B Monthly Principal on such Transfer Date), and (c) the
Series 1998-1 Class C Ownership Interest for such Transfer Date, and (ii) the
Series 1998-1 Rapid Amortization Period, after the Series 1998-1 Class B
Ownership Interest has been paid in full (after taking into account payments to
be made on such Distribution Date in respect of the Series 1998-1 Class A
Certificates and the Series 1998-1 Class B Certificates), will equal the lesser
of (a) Series 1998-1 Available Investor Principal Collections on deposit in the
Principal Account with respect to such Transfer Date (minus the portion of such
Series 1998-1 Available Investor Principal Collections applied to Series 1998-1
Class A Monthly Principal, if any, and Series 1998-1 Class B Monthly Principal
on such Distribution Date), and (b) the Series 1998-1 Class C Ownership Interest
on such Transfer Date.

Final Payment of Principal; Termination of Trust

      The Series 1998-1 Certificates will be subject to optional repurchase by
the Transferor (a "Cleanup Call") on any Distribution Date on or after which the
Series 1998-1 Certificateholders Ownership Interests are reduced to an amount
less than or equal to [10% of $_________] (the "Series 1998-1 Initial
Certificateholders Ownership Interests"). Such Cleanup Call is conditioned upon
(i) deposit into the Series 1998-1 Distribution Account of the repurchase price
by or on behalf of the Transferor and (ii) receipt by the Trustee of an
acceptable opinion of counsel to the effect that such deposit would not
constitute a fraudulent transfer of the Transferor. The repurchase price will
generally be equal to the Series 1998-1 Certificateholders Ownership Interests,
plus accrued and unpaid interest on the Series 1998-1 Certificates at the
respective Series 1998-1 Certificate Rates through the date preceding the
Distribution Date on which the repurchase occurs, less the amounts, if any, on
deposit at such Distribution Date in the Series 1998-1 Distribution Account for
the payment of principal and interest thereon. The net proceeds of such Cleanup
Call and any collections on the Receivables available for such purpose will be
distributed pro rata and in accordance with the priority for each class under
the Agreement to the Series 1998-1

                                       81
Certificateholders on the Distribution Date following the Monthly Period in
which such Cleanup Call occurs as final payment of the Series 1998-1
Certificates. The Agreement provides that the final distribution of principal
and interest on the Offered Certificates will be made on the [_________]
Distribution Date (the "Series 1998-1 Termination Date").

      Unless the Servicer and the holder of the Transferor Certificate instruct

the Trustee otherwise, the Trust will terminate on the earliest of: (a) the day
after the Distribution Date with respect to any Series following the day on
which funds shall have been deposited in the applicable distribution account for
each such Series sufficient to pay in full (i) the aggregate certificateholders
ownership interests plus accrued interest thereon at the applicable certificate
rates through the applicable interest accrual period prior to the Distribution
Date with respect to each such Series and (ii) all amounts owed to each person
that provides Enhancement; (b) if a trust extension has occurred, the extended
trust termination date, which shall be no later than the earlier of December 31,
2034 and the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the father of the late President of the United
States, living on the date of the Agreement; or (c) immediately following the
liquidation of all of the Receivables, as provided under "--Pay Out Events"
below, subsequent to the insolvency of the Transferor, AIC or AICCO. Upon the
termination of the Trust, payment of all amounts due under the Agreement and the
surrender of the Transferor Certificate, the Trustee shall convey to the holder
of the Transferor Certificate all right, title and interest of the Trust in and
to the Receivables and other assets of the Trust.

Pay Out Events

      A Pay Out Event may occur during either the Series 1998-1 Revolving Period
or the Series 1998-1 Controlled Amortization Period, which is scheduled to
commence at the end of the Series 1998-1 Revolving Period on [______________].
The Series 1998-1 Rapid Amortization Period will commence on the day that a Pay
Out Event occurs. A "Pay Out Event" refers to any of the following events:

           (a) failure on the part of either of the Original Transferors or the
      Transferor (i) to make any payment or deposit on the date required under
      the Agreement (or within the applicable grace period which shall not
      exceed five business days) or (ii) to observe or perform in any material
      respect any other covenants or agreements of either of the Original
      Transferors or the Transferor set forth in the Agreement or the Series
      1998-1 Supplement, which failure has a material adverse effect on the
      Series 1998-1 Certificateholders (which determination shall be made
      without reference to whether any funds are available in the Series 1998-1
      Yield Enhancement Account or by reason of the subordination of any class
      of the Series 1998-1 Certificates) and continues unremedied for a period
      of 60 days after written notice and continues to materially and adversely
      affect the interests of the Series 1998-1 Certificateholders (which
      determination shall be made without reference to whether any funds are
      available in the Series 1998-1 Yield Enhancement Account or by reason of
      the subordination of any class of the Series 1998-1 Certificates) for such
      period;

           (b) any representation or warranty made by either of the Original
      Transferors or the Transferor in the Agreement or the 1998-1 Supplement,
      or any information required to be given by either of the Original
      Transferors or the Transferor to the Trustee to identify the Receivables,
      proves to have been incorrect in any material respect when made and which
      continues to be incorrect in any material respect for a period of 60 days
      after written notice and as a result of which the interests of the Series
      1998-1 Certificateholders are materially and adversely affected (which
      determination shall be made without reference to whether any funds are

      available in the Series 1998-1 Yield Enhancement Account or by reason of
      the subordination of any class of the Series 1998-1 Certificates) and
      continue to be materially and adversely affected (which determination
      shall be made without reference to whether any funds are available in the
      Series 1998-1 Yield Enhancement

                                       82
Account or by reason of the subordination of any class of the Series
      1998-1 Certificates) for such period; provided, however, that a Pay Out
      Event described in this subparagraph (b) shall not be deemed to occur if
      the related Original Transferor or the Transferor has accepted
      reassignment of the related Receivable or all such Receivables, if
      applicable, during such period in accordance with the provisions of the
      Agreement;

           (c) if the Series 1998-1 Annualized Monthly Excess Spread Amount is
      less than 400 basis points for three consecutive Monthly Periods;

           (d) the Transferor Ownership Interest as of the fourth business day
      prior to each Transfer Date does not at least equal the Minimum Transferor
      Ownership Interest as of the end of the immediately preceding Monthly
      Period and on the immediately following Transfer Date the Transferor shall
      have failed to transfer Additional Receivables to the Trust pursuant to
      the Agreement;

           (e) any Servicer Default occurs which would have a material adverse
      effect on the Series 1998-1 Certificateholders (which determination shall
      be made without reference to whether any funds are available in the Series
      1998-1 Yield Enhancement Account or by reason of the subordination of any
      class of the Series 1998-1 Certificates);

           (f) if the Monthly Payment Rate is less than 14% for three
      consecutive Monthly Periods;

           (g) a Financed Premium Percentage of more than 90% in respect of
      Additional Receivables transferred to the Trust for three consecutive
      Monthly Periods;

           (h) certain events of bankruptcy or insolvency, relating to either of
      the Original Transferors or the Transferor;

           (i) the Transferor becomes unable for any reason to transfer
      Receivables to the Trust in accordance with the provisions of the
      Agreement; and

           (j) AIG shall fail to meet its obligations under either of the
      Support Agreements in any respect or AIC shall fail to meet its support

      obligations with respect to AICCO under the Agreement or the AIC Support
      Agreement or such support obligations of AIC shall have been modified,
      amended or terminated, except as otherwise expressly permitted by the
      terms of the Agreement.

      In the case of any event described in clause (a), (b) or (e) above, after
any applicable grace period, a Pay Out Event will be deemed to have occurred
with respect to the Series 1998-1 Certificates on the tenth Business Day
thereafter unless prior to such day holders of Series 1998-1 Certificates
evidencing undivided interests aggregating not less than 50% of the Series
1998-1 Certificateholders Ownership Interests notify the Trustee, the Transferor
and the Servicer in writing that a Pay Out Event should not occur. In the case
of any event described in clause (h), (i) or (j), a Pay Out Event with respect
to all Series then outstanding, and in the case of any event described in clause
(c), (d), (f) or (g), a Pay Out Event with respect to only the Series 1998-1
Certificates, will be deemed to have occurred without any notice or other action
on the part of the Trustee or the Series 1998-1 Certificateholders or all
certificateholders of all outstanding Series, as appropriate, immediately upon
the occurrence of such event. On the date on which a Pay Out Event is deemed to
have occurred, the Series 1998-1 Rapid Amortization Period will commence. In
such event, distributions of principal to the Series 1998-1 Certificateholders
will begin on the first Distribution Date following the date on which such Pay
Out Event occurred. If, because of the occurrence of a Pay Out Event, the Series
1998-1 Rapid Amortization Period begins earlier than [____________], the
scheduled commencement of the Series 1998-1 Controlled Amortization Period,

                                       83
Series 1998-1 Certificateholders will begin receiving distributions of principal
earlier than they otherwise would have, which may shorten the average life of
the Series 1998-1 Certificates.

      In addition to the consequences of a Pay Out Event discussed above, if a
bankruptcy-related event involving AIC, AICCO or the Transferor were to occur,
then a Pay Out Event could occur with respect to all Series then outstanding
and, pursuant to the Agreement, Additional Receivables would not be transferred
to the Trust, and the Trustee would be obligated to sell the Receivables (unless
certificateholders holding more than 50% of the certificateholders ownership
interests of each Series outstanding (or, with respect to any Series with two or
more classes, more than 50% of each class) instruct otherwise) in accordance
with the Agreement in a commercially reasonable manner and on commercially
reasonable terms which may cause early termination of the Trust and a loss to
certificateholders of each such Series (including the Series 1998-1
Certificateholders) if the proceeds from such early sale allocable to such
Series, if any, and the amounts available under any Enhancement applicable to
such Series were insufficient to pay certificateholders of such Series in full.
If a Pay Out Event occurs that is due either to the bankruptcy of AIC, AICCO or

the Transferor or the appointment of a trustee for AIC, AICCO or the Transferor,
the trustee would have the power to prevent the early sale, liquidation or
disposition of the Receivables and the commencement of the Series 1998-1 Rapid
Amortization Period. A bankruptcy trustee may also have the power to cause the
early sale of the Receivables and the early retirement of the Offered
Certificates, to prohibit the continued transfer of Additional Receivables to
the Trust, and to repudiate the servicing obligations of AIC or AICCO. The
proceeds from the sale of the Receivables will be treated as collections on the
Receivables and allocated accordingly among the certificateholders of all
outstanding Series and the Transferor.

      "Series 1998-1 Annualized Monthly Excess Spread Amount" shall mean, in
respect of any Monthly Period, the number of basis points calculated by dividing
(i) the sum of (A) the amount of collections in respect of Finance Charge
Receivables allocable to Series 1998-1 Certificateholders for such Monthly
Period, plus (B) the Series 1998-1 Available Yield Enhancement Amount for the
immediately succeeding Transfer Date, minus (C) the aggregate Series 1998-1
Investor Default Amount for such Monthly Period minus (D) the Series 1998-1
Investor Servicing Fee payable on such Transfer Date minus (E) the aggregate
amount payable to Series 1998-1 Certificateholders in respect of interest on the
immediately succeeding Distribution Date by (ii) the Series 1998-1
Certificateholders Ownership Interests as of the end of such Monthly Period and
multiplying the resulting quotient by 12.

      "Financed Premium Percentage" means, in respect of any Monthly Period, the
ratio (expressed as a percentage) of the aggregate of the portions of premiums
financed or committed to be financed, as of the respective dates of origination
of the related Loans, of all Additional Receivables transferred to the Trust
during such Monthly Period to the aggregate of the premiums paid or committed to
be paid with respect to such Loans.

      "Monthly Payment Rate" shall mean, in respect of any Monthly Period, a
fraction (expressed as a percentage), the numerator of which shall equal the
aggregate of all collections received by the Trust in respect of the Receivables
during such Monthly Period and the denominator of which shall equal the
aggregate amount of Principal Receivables in the Trust at the end of the
preceding Monthly Period.

           Upon the occurrence of a Pay Out Event, if more than 10% of the
principal balance of the Receivables have a remaining maturity of more than
twelve months, the Transferor will purchase from the Trust sufficient
Receivables with a remaining maturity of more than twelve months, at a price
equal to the principal amount thereof plus accrued but unpaid Finance Charges to
the date of purchase, so that the percentage of Receivables having a remaining
maturity as of the date of purchase of more than twelve months shall be no more
than 10% of the principal balance of Receivables remaining in the Trust after
giving effect to such purchase.

                                       84
Servicing Compensation and Payment of Expenses

      The Series 1998-1 Investor Servicing Fee (as defined herein) will be
funded from collections of Finance Charge Receivables allocated to the Series
1998-1 Certificateholders Ownership Interests and will be paid each month from
amounts so allocated and on deposit in the Finance Charge Account and, if
necessary, from funds on deposit in the Series 1998-1 Yield Enhancement Account
available for such purpose. The remainder of the servicing fee for the Trust
will be allocable to the Transferor Ownership Interest and the
certificateholders ownership interests of any other Series issued by the Trust.
Neither the Trust nor the Series 1998-1 Certificateholders will have any
obligation to pay the portion of the servicing fee allocable to the Transferor
Ownership Interest.

      For so long as AIC and AICCO are collectively the Servicer, then the
Servicer will not be paid the Servicing Fee. If AIC and AICCO cease to be the
Servicer, then the share of the Servicing Fee allocable to the Series 1998-1
Certificateholders Ownership Interests with respect to any Transfer Date (the
"Series 1998-1 Investor Servicing Fee") shall be equal to the sum of the Series
1998-1 Class A Servicing Fee, the Series 1998-1 Class B Servicing Fee and the
Series 1998-1 Class C Servicing Fee with respect to such date.

      The share of the Series 1998-1 Investor Servicing Fee allocable to the
Series 1998-1 Class A Certificateholders with respect to any Transfer Date in
which AIC and AICCO are not the Servicer (the "Series 1998-1 Class A Servicing
Fee") shall be equal to one-twelfth of the product of (a) the Series 1998-1
Class A Floating Allocation, (b) 0.50% (the "Series 1998-1 Net Servicing Fee
Rate") and (c) the Series 1998-1 Certificateholders Ownership Interests as of
the last day of the Monthly Period preceding such Transfer Date. The share of
the Series 1998-1 Investor Servicing Fee allocable to the Series 1998-1 Class B
Certificateholders with respect to any Transfer Date in which AIC and AICCO are
not the Servicer (the "Series 1998-1 Class B Servicing Fee") shall be equal to
one-twelfth of the product of (a) the Series 1998-1 Class B Floating Allocation,
(b) the Series 1998-1 Net Servicing Fee Rate and (c) the Series 1998-1
Certificateholders Ownership Interests as of the last day of the Monthly Period
preceding such Transfer Date. The share of the Series 1998-1 Investor Servicing
Fee allocable to the Series 1998-1 Class C Ownership Interest with respect to
any Transfer Date (the "Series 1998-1 Class C Servicing Fee") shall be equal to
one-twelfth of the product of (a) the Series 1998-1 Class C Floating Allocation,
(b) the Series 1998-1 Net Servicing Fee Rate and (c) the Series 1998-1
Certificateholders Ownership Interests as of the last day of the Monthly Period
preceding such Transfer Date. The Series 1998-1 Class A Servicing Fee, Series
1998-1 Class B Servicing Fee and Series 1998-1 Class C Servicing Fee shall be
payable to the Servicer solely to the extent amounts are available for
distribution in respect thereof.

      The Servicer will pay certain expenses incurred in connection with
servicing the Loans including, without limitation, payment of the fees and
disbursements of the Trustee and independent certified public accountants and
other fees which are not expressly stated in the Agreement to be payable by the
Trust, the Series 1998-1 Certificateholders or the Series 1994-1
Certificateholders other than federal, state and local income and franchise

taxes, if any, of the Trust.

Collection and Other Servicing Procedures

      Pursuant to the Agreement, the Servicer is responsible for servicing,
collecting, enforcing and administering the Loans in accordance with the
Servicer's policies and procedures for servicing premium finance loan
receivables.

      Servicing activities performed by the Servicer include collecting and
recording payments, communicating with obligors, investigating payment
delinquencies, providing billing records to obligors and maintaining internal

                                       85
records with respect to each premium finance loan. Managerial and custodial
services performed by the Servicer on behalf of the Trust include providing
assistance in any inspections of the documents and records relating to the
Receivables by the Trustee pursuant to the Agreement, maintaining the
agreements, documents and files relating to the Receivables as custodian for the
Trust and providing related data processing and reporting services for
Certificateholders and on behalf of the Trustee.

Servicer Covenants

      In the Agreement, the Servicer covenants with the certificateholders of
each outstanding Series and the Trustee, as to each Receivable, that: (a) it
will duly fulfill all obligations on its part to be fulfilled under or in
connection with the related Loan and will maintain in effect all licenses and
qualifications required in order to service such Receivable and the related Loan
and will comply with all requirements of law in servicing each Receivable and
the related Loan, the failure to comply with which would have a material adverse
effect on the certificateholders of any outstanding Series; (b) it will not
permit any rescission or cancellation of the Loans, except in accordance with
its customary and usual servicing procedures or as ordered by a court of
competent jurisdiction or other governmental authority; (c) it will take no
action which, nor will it omit to take any action the omission of which, would
materially impair the rights of the certificateholders of any outstanding Series
in the Receivables or the related Loans; and (d) it will not reschedule, revise
or defer payments due on the Loans except in accordance with its customary and
usual servicing procedures.

      Under the terms of the Agreement, a Receivable will be assigned and
transferred or reassigned and transferred to the Servicer and such Receivable
shall no longer be included as a Receivable if the Servicer discovers, or
receives written notice from the Trustee, that any covenant of the Servicer set
forth above has not been complied with and such noncompliance has not been cured
within 60 days thereafter and has a material adverse effect on the interest of

the certificateholders of any outstanding Series in such Receivable. Such
reassignment and retransfer shall be made when the Servicer deposits an amount
equal to the amount of such Receivable in the Collection Account. The amount of
such deposit shall be for allocation as collections pursuant to the Agreement.
In either case, this retransfer and reassignment or transfer and assignment to
the Servicer constitutes the sole remedy available to the certificateholders of
each outstanding Series if such covenant or warranty of the Servicer is not
satisfied. In either case, the Trust's interest in any such assigned Receivables
shall be automatically assigned to the Servicer.

Certain Matters Regarding the Servicer, the Transferor and the Original
Transferors

      The Servicer may not resign from its obligations and duties under the
Agreement, except upon determination that performance of its duties is no longer
permissible, and there is no reasonable action the Servicer could take to make
the performance of such duties permissible, under applicable law and except as
described below. No such resignation will become effective until the Trustee or
a successor to the Servicer has assumed the Servicer's responsibilities and
obligations under the Agreement. Notwithstanding the foregoing, each of AIC and
AICCO may transfer its servicing obligations to any of its affiliates (which
meets certain eligibility standards set forth in the Agreement) or, subject to
certain conditions set forth in the Agreement, to any other entity which each
Rating Agency has advised in writing will not result in the reduction or
withdrawal of its then-existing rating of the Series 1998-1 Certificates and be
relieved of its obligations and duties under the Agreement.

      The Agreement provides that the Servicer will indemnify the Trust, for the
benefit of the certificateholders of all Series, and the Trustee from and
against any loss, liability, expense, damage or injury suffered or sustained by
reason of any acts or omissions or alleged acts or omissions of the Servicer
with respect to the activities of the Trust or the Trustee pursuant to the
Agreement; provided, however, that the Servicer shall not indemnify (a) the

                                       86
Trustee for liabilities imposed by or resulting from or by reason of fraud,
negligence, breach of fiduciary duty or willful misconduct by the Trustee in the
performance of its duties under the Agreement, (b) the Trust, the Series 1998-1
Certificateholders or the Certificate Owners for liabilities arising from
actions taken by the Trustee at the request of Series 1998-1 Certificateholders,
(c) the Trust, the Series 1998-1 Certificateholders or the Certificate Owners
for any losses, claims, damages or liabilities incurred by any Series 1998-1
Certificateholder in its capacity as an investor, including without limitation
losses incurred as a result of Defaulted Loans or (d) the Trust, the Series
1998-1 Certificateholders or the Certificate Owners for any liabilities, costs
or expenses of the Trust, the Series 1998-1 Certificateholders or the
Certificate Owners arising under any tax law, including without limitation any

United States federal, state or local or foreign income or franchise tax or any
other tax imposed on or measured by income (or any interest or penalties with
respect thereto or arising from a failure to comply therewith) required to be
paid by the Trust, the Series 1998-1 Certificateholders or the Certificate
Owners in connection therewith to any taxing authority (except to the extent
that such liabilities, taxes or expenses arose as a result of the Servicer's
breach of certain obligations set forth in the Agreement).

      The Agreement provides that the Transferor with respect to the Future
Receivables and the Original Transferor with respect to the Existing Receivables
will indemnify the Trust, for the benefit of the certificateholders of all
Series, and the Trustee from and against any loss, liability, expense, damage or
injury suffered or sustained by reason of any violation by the Trust, the
Trustee or the Servicer of any state premium finance licensing laws with respect
to any Receivable; provided, however, that the Transferor and the Original
Transferors shall not indemnify (a) the Trustee for liabilities imposed by
reason of fraud, negligence, or willful misconduct by the Trustee in the
performance of its duties under the Agreement or (b) the Trust, the Series
1998-1 Certificateholders or the Certificate Owners for liabilities, costs or
expenses of the Trust arising from actions taken by the Trustee at the request
of Series 1998-1 Certificateholders. Any such indemnification shall not be
payable from the assets of the Trust.

      Under the Agreement, the Transferor has agreed to be liable directly to an
injured party for the entire amount of any losses, claims, damages or
liabilities (other than those incurred by a certificateholder in the capacity of
an investor in the Series 1998-1 Certificates or the certificates of any other
Series) arising out of or based on the arrangement created by the Agreement as
though such agreement created a partnership under the New York Uniform
Partnership Act in which the Transferor were a general partner. The Transferor
has agreed to pay, indemnify and hold harmless each Series 1998-1
Certificateholder against and from such losses, claims, damages or liabilities
except to the extent that they arise from any action by such holder.

      The Agreement provides that neither the Original Transferors, the
Transferor, the Servicer nor any of their respective directors, officers,
employees or agents will be under any other liability to the Trust, the Series
1998-1 Certificateholders or any other person for any action taken, or for
refraining from taking any action, in good faith pursuant to the Agreement.
Neither the Original Transferors, the Transferor, the Servicer nor any of their
respective directors, officers, employees or agents will be protected against
any liability which would otherwise be imposed by reason of willful misfeasance,
bad faith or gross negligence of the Original Transferors, the Transferor, the
Servicer or any such person in the performance of its duties or by reason of
reckless disregard of obligations and duties thereunder. In addition, the
Agreement provides that the Servicer is not under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its servicing
responsibilities under the Agreement and which in its reasonable opinion may
expose it to any expense or liability.

      Any person into which, in accordance with the Agreement, the Original
Transferors, the Transferor or the Servicer may be merged or consolidated or any
person resulting from any merger or consolidation to which the Original
Transferors, the Transferor or the Servicer is a party, or any person succeeding

to the business of the Original Transferors, the Transferor or the Servicer,
upon execution of an amendment to the Agreement and

                                       87
delivery of an officer's certificate with respect to the compliance of the
transaction with the applicable provisions of the Agreement and an opinion of
counsel to the effect that such supplemental agreement is legal, valid, binding
and enforceable, will be the successor to the Original Transferors, the
Transferor or the Servicer, as the case may be, under the Agreement. The
Original Transferor, the Transferor or Servicer may effect any merger,
consolidation or assumption which is in accordance with the provisions of the
preceding sentence so long as, among other conditions set forth in the
Agreement: (a) if the Original Transferors, the Transferor or the Servicer, as
the case may be, is not the surviving entity, such person certifies in writing
to the Trustee that all of the applicable representations and warranties are
true and correct with respect to such person; (b) each Rating Agency indicates
that such event will not adversely affect the then-existing rating of
certificates of any Series outstanding including the Series 1998-1 Certificates;
(c) the successor entity executes a supplemental agreement whereby such entity
agrees to assume all the obligations and covenants of the Original Transferors,
the Transferor or Servicer, as the case may be; and (d) in the case of merger or
consolidation of the Transferor when the Transferor is not the surviving entity,
the AIR Support Agreement remains in effect with respect to the successor
entity.

      Under the Agreement, each of the Original Transferors, the Transferor, the
Servicer and the Trustee has agreed that it will not at any time institute
against the Trust, or join in any institution against the Trust of, any
bankruptcy proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to the
certificateholders of any Series or the Agreement.

Support Agreements

      AIC, AICCO and AIG have entered into a Support Agreement dated as of
December 1, 1994 (the "AIC Support Agreement"). Under the AIC Support Agreement,
AIG has agreed to be the ultimate beneficial owner of all of the voting capital
stock of AIC, and AIG or AIC has agreed to be the ultimate beneficial owner of
all of the voting capital stock of AICCO. AIR and AIG will enter into a similar
support agreement to be dated as of the Closing Date (the "AIR Support
Agreement" and, together with the AIC Support Agreement, the "Support
Agreements"). Under the AIR Support Agreement, AIG will agree to be the ultimate
beneficial owner of all of the voting capital stock of AIR.

      The AIC Support Agreement further provides that AIG will cause each of AIC
and AICCO to maintain a net worth of not less than one dollar, and that if (a)
AIC or AICCO needs funds to meet any of its obligations as an Original

Transferor or a Servicer under the Agreement, or (b) AIC or AICCO has
insufficient funds to pay any of its obligations when due (except for any such
obligations which are the subject of a bona fide dispute) the non-payment of
which could constitute a basis for the filing of an involuntary case against
either AIC or AICCO under the Bankruptcy Code, AIG shall provide AIC or AICCO,
as the case may be, funds on a timely basis to cause such obligations to be
satisfied when due. The AIR Support Agreement will further provide that AIG will
cause AIR to maintain a net worth of not less than one dollar, and that if (a)
AIR needs funds to meet any of its obligations as Transferor under the Agreement
or (b) AIR has insufficient funds to pay any of its obligations when due (except
for any such obligations which are the subject of a bona fide dispute) the
non-payment of which could constitute a basis for the filing of an involuntary
case against AIR under the Bankruptcy Code, AIG shall provide AIR funds on a
timely basis to cause such obligations to be satisfied when due. The Support
Agreements are not direct or indirect guarantees by AIG to any person of the
payment of the principal of or interest on any indebtedness, liability or
obligation of AIC, AICCO or AIR. The Agreement will allow the Support Agreements
to be amended or terminated; provided, however, that no amendment or termination
will be effective unless each certificateholder of each outstanding Series
consents in writing to such amendment and each Rating Agency confirms in writing
that such termination or amendment will not adversely affect the then-existing
rating of any outstanding Series or class for which it is a Rating Agency. AIG
may terminate either or both of the Support

                                       88
Agreements by assuming the obligations of AIC and AICCO, or AIR, as the case may
be. See "--Pay Out Events" above.

      In connection with the AIC Support Agreement, AIG has entered into a
letter agreement with the Trustee (the "AIC Letter Agreement") for the benefit
of the certificateholders of all outstanding Series pursuant to which AIG has
agreed that it will not default under the AIC Support Agreement and it will not
amend or terminate the AIC Support Agreement other than in accordance with its
terms; provided, however, that the AIC Letter Agreement may be amended with the
prior written consent of each such certificateholder and prior written
confirmation of each Rating Agency that such amendment will not have an adverse
effect on the then-existing ratings of the certificates of any outstanding
Series. The AIC Letter Agreement provides that if AIG fails to perform any of
the covenants or agreements contained in the Letter Agreement, the Trustee may
in its discretion proceed to protect and enforce its rights and the rights of
the certificateholders by appropriate judicial proceedings or by any other
proper remedy. AIG will enter into a similar letter agreement with the Trustee
in connection with the AIR Support Agreement (together with the AIC Letter
Agreement, the "Letter Agreements").

      For purposes of determining whether a Pay Out Event occurs by reason of

any default by AIG under either of the Support Agreements, the Letter Agreements
shall be deemed to be part of the respective Support Agreements.

Servicer Default

      In the event of any Servicer Default (as defined herein) which is not
remedied or otherwise cured, either the Trustee or holders representing
undivided interests aggregating more than 50% of the sum of the
certificateholders ownership interests of all certificates outstanding, by
written notice to the Servicer (and to the Trustee if given by the
certificateholders), may terminate all of the rights and obligations of the
Servicer as servicer under the Agreement and in and to the Receivables and the
proceeds thereof and the Trustee may appoint a new Servicer (a "Service
Transfer"). The rights and obligations of the Original Transferors and the
Transferor under the Agreement will not be affected by such termination. The
Trustee shall as promptly as possible appoint a successor Servicer, which
successor Servicer must satisfy certain eligibility criteria contained in the
Agreement. If no such Servicer has been appointed and has accepted such
appointment by the time the Servicer ceases to act as Servicer, all authority,
power and obligations of the Servicer under the Agreement shall pass to and be
vested in the Trustee. If the Trustee is unable to obtain any bids from eligible
servicers and the Servicer delivers an officer's certificate to the effect that
it cannot in good faith cure the Servicer Default which gave rise to a transfer
of servicing, and if the Trustee is legally unable to act as successor Servicer,
then the Trustee shall give the Transferor the right to accept reassignment of
the Receivables at a price generally equal to the higher of the outstanding
principal balance of the certificates of all Series plus accrued interest
through the date of reassignment and the average bid quoted by two recognized
dealers for similar securities rated in comparable rating categories by the
Rating Agencies and having a remaining maturity approximately equal to the
remaining maturity of such Series.

      A "Servicer Default" refers to any of the following events:

           (a) failure by the Servicer to make any payment, transfer or deposit
      (other than with respect to Credit Balances) or to give instructions to
      the Trustee to make any withdrawal, on the date the Servicer is required
      to do so under the Agreement (or within the applicable grace period, which
      shall not exceed ten business days);

                                       89
(b) failure on the part of the Servicer duly to observe or perform in
      any respect any other covenants or agreements of the Servicer which has a
      material adverse effect on the certificateholders of any outstanding
      Series (including the Series 1998-1 Certificateholders) (which
      determination shall be made without regard to whether funds are available
      by reason of any credit enhancement or credit support device) and which
      continues unremedied for a period of 60 days after written notice of such
      failure and continues to have a material adverse effect on such

      certificateholders for such period; or the delegation or assignment by the
      Servicer of its duties under the Agreement, except as specifically
      permitted thereunder; provided, however, that failure on the part of the
      Servicer duly to observe or perform in any respect certain specified
      covenants or agreements of the Servicer set forth in the Agreement, which
      has a material adverse effect on the certificateholders of any outstanding
      Series (which determination shall be made without regard to the
      availability of any credit enhancement or credit support device) and which
      continues after, and notwithstanding the removal by the Servicer of the
      related Receivable, shall be a Servicer Default unless the Servicer shall
      have, within 60 days after the date (following such removal) on which
      written notice of such continuing material adverse effect shall have been
      given to the Servicer, remedied such failure;

           (c) any representation, warranty or certification made by the
      Servicer in the Agreement (including any Supplement), or in any
      certificate delivered pursuant to the Agreement or any Supplement, proves
      to have been incorrect when made, which has a material adverse effect on
      the rights of any of the certificateholders of any outstanding Series
      (which determination shall be made without regard to whether funds are
      available by reason of any credit enhancement or credit support device)
      and which continues to be incorrect in any material respect for a period
      of 60 days after written notice; or

           (d) the occurrence of certain events of bankruptcy or insolvency of
      the Servicer.

Reports to Holders of Offered Certificates

      On each Distribution Date, the Trustee will forward to each Series 1998-1
Certificateholder of record a statement (the "Monthly Certificateholders
Statement") setting forth among other things: (a) the total amount distributed
to Series 1998-1 Certificateholders, (b) the amount of the distribution made on
such Distribution Date allocable to principal on the Series 1998-1 Certificates,
(c) the amount of the distribution made on such Distribution Date allocable to
interest on the Series 1998-1 Certificates, (d) the amount of collections of
Principal Receivables received during the preceding Monthly Period and allocated
in respect of the Series 1998-1 Certificates, (e) the aggregate amount of
Principal Receivables, the Series 1998-1 Certificateholders Ownership Interests
and the Series 1998-1 Certificateholders Ownership Interests as a percentage of
the aggregate amount of the Principal Receivables in the Trust as of the end of
the last day of the preceding Monthly Period, (f) following cancellation of the
related Loans, the aggregate outstanding balance of Receivables which are
delinquent, broken down by period of delinquency as provided in the Agreement,
in accordance with the Servicer's then-existing premium finance loan guidelines
as of the end of the preceding Monthly Period, (g) the aggregate Default Amount
for the preceding Monthly Period, (h) the aggregate amount of charge-offs
allocable to the Series 1998-1 Certificateholders Ownership Interests for the
preceding Monthly Period and the aggregate amount of charge-offs allocable to
the Series 1998-1 Certificateholders Ownership Interests which were deemed
reimbursed on the Transfer Date immediately preceding such Distribution Date,
(i) the amount of the Monthly Servicing Fee for the preceding Monthly Period,
(j) the "Pool Factor" as of the end of the last day of the preceding Monthly
Period (consisting of a seven-digit decimal expressing the ratio of Series

1998-1 Certificateholders Ownership Interests to Series 1998-1 Initial
Certificateholders Ownership Interests), (k) the aggregate amount of collections
of Finance Charge Receivables allocable to the Series 1998-1 Certificateholders
Ownership Interests for the preceding Monthly Period, (l) the amount, if any, of
funds required to be withdrawn from the Series 1998-1 Yield Enhancement Account
with respect to the Series 1998-1 Certificates and such Distribution Date, and
(m) certain

                                       90
information relating to the Series 1998-1 Class A Certificate Rate, the Series
1998-1 Class B Certificate Rate and the Series 1998-1 Class C Certificate Rate
for the Interest Period ending on such immediately preceding Transfer Date. The
Servicer shall not be required to calculate the Minimum Transferor Ownership
Interest for any Monthly Period if the Servicer certifies in the Monthly
Servicer Report for such Monthly Period that the Transferor Ownership Interest
as of the date thereof equals or exceeds 50% of the Trust assets as of the close
of business on the last business day of the preceding Monthly Period and that
such Transferor Ownership Interest exceeds the Minimum Transferor Ownership
Interest as of the end of such Monthly Period.

      On or before January 31 of each calendar year, beginning with 1999, the
Trustee will furnish to each person who at any time during the preceding
calendar year was a Series 1998-1 Certificateholder of record a statement
prepared by the Trustee containing the information required to be contained in
the Monthly Servicer Report, as set forth in clauses (a), (b) and (c) above,
aggregated for such calendar year or the applicable portion thereof during which
such person was a Series 1998-1 Certificateholder, together with such other
customary information (consistent with the treatment of the Series 1998-1
Certificates as debt) as the Trustee deems necessary or desirable to enable the
Series 1998-1 Certificateholders to prepare their tax returns.

Evidence as to Compliance

      The Agreement provides that on or before April 30 of each calendar year,
the Servicer will cause a firm of nationally recognized independent accountants
(who may also render other services to the Servicer or the Transferor) to
furnish a report to the effect that such firm has examined the assertion by an
officer of the Servicer, made pursuant to the Agreement, that the Servicer has
complied with the terms of the Agreement relating to the servicing of
Receivables, which examination includes a review of certain documents and
records relating to the servicing of the Receivables and has compared the
information contained in the Servicer's certificates delivered under the
Agreement during the period covered by the report with such documents and
records and that, on the basis of such examination, such firm is of the opinion
that the assertion by the Servicer's officer is fairly stated in all material
respects except for such exceptions as such firm shall believe to be immaterial
and such other exceptions as shall be set forth in such report. In addition, on

or before April 30 of each calendar year, the Servicer will also cause a firm of
nationally recognized independent accountants (who may also render other
services to the Servicer or Transferor) to furnish a report to the effect that
such firm has compared the mathematical calculations of each amount set forth in
the Servicer's certificates delivered under the Agreement during the period
covered by the report with the Servicer's computer reports which were the source
of such amounts and that, based on such comparison, such amounts are in
agreement except for such exceptions as such firm believes to be immaterial and
such other exceptions as set forth in such firms's report.

      The Agreement provides for delivery to the Trustee on or before April 30
of each calendar year, of an annual statement signed by an officer of the
Servicer to the effect that, to the best of such officer's knowledge, the
Servicer has fully performed, or has caused to be performed, all its obligations
under the Agreement throughout the preceding year in all material respects, or,
if there has been a default in the performance of any such obligation in any
material respect, specifying the nature and status of the default.

Amendments

      The Agreement and any Supplement may be amended in writing by the
Transferor, the Original Transferors, the Servicer and the Trustee, without
certificateholder consent, to cure any ambiguity, to correct or supplement any
provision therein which may be inconsistent with any other provision therein,
and to add any other provisions with respect to matters or questions arising
under the Agreement and any Supplement which are not inconsistent with the
provisions of the Agreement and any Supplement; provided, that such action does
not adversely affect in

                                       91
any material respect the interests of any certificateholder. The Agreement may
be amended in writing from time to time by the Transferor, the Original
Transferors, the Servicer and the Trustee, with the consent of the Trustee and
without the consent of the certificateholders, to provide for the purchase of
Principal Receivables by the Trust at a price which is less than 100% of the
outstanding balance thereof, and to provide for the treatment of collections of
Principal Receivables, in an amount up to the aggregate amount by which the
purchase price of Principal Receivables as sold thereafter is less than 100%, as
collections of Finance Charge Receivables; provided, however, that any such
action shall not adversely affect in any material respect the interests of the
certificateholders; further provided that the Servicer and the Trustee shall
have received notice from each Rating Agency that any such amendment will not
result in the reduction or withdrawal of its then-existing rating of the
certificates of any Series. Moreover, any Supplement in connection with a new
Series will not be considered amendments requiring certificateholder consent
under the provisions of the Agreement or any Supplement.

      The Agreement may be amended in writing by the Transferor, the Original
Transferors, the Servicer and the Trustee with the consent of the holders of
certificates evidencing undivided interests aggregating not less than 66 2/3% of
the principal amount of all Series adversely affected, for the purpose of adding
any provisions to, changing in any manner or eliminating any of the provisions
of the Agreement or any Supplement or of modifying in any manner the rights of
certificateholders of any Series. No such amendment, however, may (a) reduce in
any manner the amount of, or delay the timing of, distributions required to be
made on such Series, (b) change the definition of or the manner of calculating
the certificateholders ownership interests, the aggregate default amount or the
investor percentage of such Series, (c) reduce the aforesaid percentage of
undivided interests, the holders of which are required to consent to any such
amendment, in each case without the consent of all certificateholders of all
Series adversely affected or (d) modify AIC's support obligations with respect
to AICCO, without the consent of the holders of certificates of all Series.
Promptly following the execution of any amendment to the Agreement or any
Supplement, the Trustee will furnish written notice of the substance of such
amendment to each certificateholder of all Series (or with respect to an
amendment of a Supplement, to the applicable Series).

List of Certificateholders

      Upon written request of Series 1998-1 Certificateholders aggregating not
less than 20% of the Series 1998-1 Certificateholders Ownership Interests, the
Trustee, after having been adequately indemnified by such Series 1998-1
Certificateholders for its costs and expenses, and having given the Servicer
notice that such request has been made, will afford such Series 1998-1
Certificateholders access during business hours to the current list of
certificateholders of the Trust for purposes of communicating with other
certificateholders with respect to their rights under the Agreement or under the
related certificates. The Agreement generally does not provide for any annual or
other meetings of certificateholders. See "--Book-Entry Registration" and
"--Definitive Certificates" above.

                                       92
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

      The following summary is a discussion of certain of the material federal
income tax consequences of the ownership and disposition of the Offered
Certificates. This summary is based on the Internal Revenue Code of 1986, as
amended (the "Code"), the Treasury Regulations promulgated and proposed
thereunder (the "Regulations"), judicial decisions and published administrative
rulings and pronouncements of the Internal Revenue Service (the "Service") as in
effect on the date hereof. Legislative, judicial or administrative changes or
interpretations hereafter enacted or promulgated could alter or modify the
analysis and conclusions set forth below, possibly on a retroactive basis. This
summary does not purport to address the federal income tax consequences either

to special classes of taxpayers (such as S corporations, banks, thrifts, other
financial institutions, insurance companies, mutual funds, small business
investment companies, real estate investment trusts, regulated investment
companies, broker-dealers, tax-exempt organizations and persons that hold the
securities described herein as part of a straddle, hedging or conversion
transaction) or to a person or entity holding an interest in a holder (e.g., as
a stockholder, partner, or holder of an interest as a beneficiary). This summary
assumes that (i) the Offered Certificates will be held by the holders thereof as
capital assets as defined in the Code and (ii) except as indicated (and other
than for purposes of the discussion under "Treatment of the Certificates as
Indebtedness" and "Possible Alternative Characterization" below), the Offered
Certificates are properly characterized as debt for federal income tax purposes.
Except under "Certain State and Local Tax Considerations," no information is
provided herein with respect to any foreign, state or local tax consequences of
the ownership and disposition of the Offered Certificates nor of any federal
estate and gift tax considerations.

      Except for "Non-United States Investors" and "Information Reporting and
Backup Withholding" below, the following discussion applies only to holders that
are citizens or residents of the United States, domestic corporations or
partnerships, or other entities subject to United States federal income tax on a
net income basis in respect of Offered Certificates (a "U.S.
Certificateholder").

      Prospective investors are therefore advised to consult their own tax
advisors with regard to the United States federal income tax consequences of
holding and disposing of the Offered Certificates in their own particular
circumstances, as well as the tax consequences arising under the laws of any
state, foreign country or other jurisdiction to which they may be subject.

      For purposes of the discussion set forth below, a "Certificateholder" will
mean a beneficial owner of an Offered Certificate.

Treatment of the Certificates as Indebtedness

      The Transferor and Certificateholders express in the Agreement the intent
that, for United States federal, state and local income, franchise and other tax
purposes, the Offered Certificates will be indebtedness of the Transferor
secured by the Receivables. The Transferor, by entering into the Agreement, and
each Certificateholder, by the acceptance of an Offered Certificate, agree to
treat the Offered Certificates as indebtedness of the Transferor for all such
tax purposes. Because different criteria are used in determining the financial
and regulatory accounting treatment of the transaction, however, the Transferor
will treat the Agreement, for certain non-tax accounting purposes, as effecting
a transfer of ownership interests in the Receivables and not as creating debt
obligations of the Transferor.

      A basic premise of federal income tax law is that the economic substance
of a transaction generally determines its tax consequences. The form of a
transaction, while a relevant factor, is not conclusive evidence of its economic
substance. In appropriate circumstances, the courts have allowed taxpayers as
well as the Service to

                                       93
treat a transaction in accordance with its economic substance as determined
under federal income tax principles, even though the participants in the
transaction have characterized it differently for non-tax purposes.

      The determination of whether the economic substance of a transfer of an
interest in property is instead a loan secured by the transferred property has
been made by the Service and the courts on the basis of numerous factors
designed to determine whether the transferor has relinquished (and the
transferee has obtained) substantial incidents of ownership in the property. The
primary factors examined are whether the transferee has the opportunity to gain
if the property increases in value, and has the risk of loss if the property
decreases in value. Based upon its analysis of such factors, Weil, Gotshal &
Manges LLP, counsel to the Transferor ("Counsel"), will render its opinion at
the closing that, subject to the assumptions set forth therein, and although no
transaction closely comparable to that contemplated herein has been the subject
of any Regulations, revenue ruling or judicial decision, for federal income tax
purposes the Offered Certificates will not constitute an ownership interest in
the Receivables, but properly will be characterized as debt secured by the
Receivables. In the further opinion of Counsel, the Trust will not be an
association or publicly-traded partnership taxable as a corporation. Except
where indicated to the contrary, the following discussion assumes that the
Offered Certificates are debt for federal income tax purposes.

Possible Alternative Characterization

      Although as described above, it is the opinion of Counsel that the Offered
Certificates properly will be characterized as debt for federal income tax
purposes, none of the AICCO, AIR, AIC, or the Trust will seek a ruling from the
Service on the characterization of the Offered Certificates for federal income
tax purposes and the opinion of Counsel will not be binding on the Service.
Thus, no assurance can be given that such a characterization will prevail. Were
the Service to contend successfully that the Offered Certificates were not debt
obligations for federal income tax purposes, the Trust would be classified for
federal income tax purposes as a partnership.

      If some or all of the Offered Certificates were treated as equity
interests in a partnership, the partnership would likely be treated as a
"publicly traded partnership." A publicly traded partnership is taxed in the
same manner as a corporation unless at least 90% of its gross income consists of
specified types of "qualifying income." Such qualifying income includes, among
other things, "interest income" that is "not derived in the conduct of a
financial or insurance business." It is unclear whether, were the Trust treated
as a partnership, interest received by it in respect of the Receivables would be
considered to be derived from the conduct of a financial or insurance business
by the Trust.

      If a deemed partnership between the Transferor and the Certificateholders

were to qualify for the foregoing exception from taxation as a corporation, the
deemed partnership would not be subject to federal income tax, but each item of
income, gain, loss and deduction generated as a result of the ownership of the
Receivables by the partnership would be passed through to the partners in such a
partnership (including any Certificateholders that are treated as holding equity
interests in the partnership) according to their respective interests therein.
The amount of income reportable by the Certificateholders as partners in such a
partnership could differ from that reportable by the Certificateholders as
holders of debt. A cash basis Certificateholder treated as a partner, for
example, might be required to report income when it accrues to the partnership
rather than when it is received by the Certificateholder. Moreover, an
individual Certificateholder's share of expenses of the partnership would
constitute miscellaneous itemized deductions, which in the aggregate (i) are
allowed as deductions only to the extent they exceed two percent of the
Certificateholder's adjusted gross income and (ii) are subject to reduction in
the hands of a Certificateholder whose adjusted gross income exceeds a certain
amount. As a result, the Certificateholder might be taxed on an amount of income
greater than the amount of interest received on the

                                       94
Certificateholder's Offered Certificate. In addition, partnership
characterization may have adverse state or local tax consequences for
Certificateholders. Finally, if the Trust were treated as a partnership not
taxable as a corporation, with the Series 1998-1 Class A Certificates treated as
debt of such partnership and the Series 1998-1 Class B Certificates treated as
equity interests in such partnership, a portion of the taxable income allocated
to any Series 1998-1 Class B Certificateholder that was a pension,
profit-sharing or employee benefit plan or other tax-exempt entity (including an
individual retirement account) would constitute "unrelated business taxable
income" generally taxable to such a Certificateholder under the Code.

      If, alternatively, some or all of the Offered Certificates were treated as
equity interests in a publicly traded partnership taxable as a corporation, the
Trust (or other deemed entity) would be subject to United States federal income
taxes (and state and local taxes) at corporate tax rates on its income from the
Receivables. Distributions on the Offered Certificates, certificates of any
other Series issued by the Trust and the Transferor Certificate might not be
deductible in computing the Trust's (or other deemed entity's) taxable income,
and distributions to the Certificateholders would probably be treated as
dividends to the extent paid out of after-tax earnings. Such an entity-level tax
could result in reduced distributions to Certificateholders, or the
Certificateholders could be liable for a share of such tax.

      Because the Transferor will treat the Offered Certificates as indebtedness
for federal income tax purposes, the Servicer and the Paying Agent (and
Participants and Indirect Participants) will not comply with the tax reporting
requirements applicable to the possible alternative characterizations of the
Offered Certificates discussed above.

Interest Income to Certificateholders

      It is anticipated that the Offered Certificates will be issued at par
value (or at an insubstantial discount from par value) and that, except as
indicated, no original issue discount ("OID") will arise with respect to the
Offered Certificates. Under the OID regulations, a holder of an Offered
Certificate issued with more than a de minimis amount of OID must include such
OID in income on a pro rata basis, as principal payments are made on the Offered
Certificate. It is possible, however, that under regulations issued by the U.S.
Treasury, interest payable on the Offered Certificates, as well as any discount
from par value, will constitute OID because late payment or nonpayment of
interest would not be regarded as subject to penalties or to reasonable remedies
to compel payment. Were the Offered Certificates treated as being issued with
OID, the principal consequence would be that Certificateholders using the cash
basis method of accounting would be required to report interest income from the
Offered Certificates on an accrual basis. In any event, a purchaser who buys an
Offered Certificate for more or less than its issue price will generally be
subject, respectively, to the premium amortization or market discount rules of
the Code.

Sale or Exchange of Offered Certificates

      If an Offered Certificate is sold or exchanged, the seller will recognize
gain or loss equal to the difference between the amount realized upon the sale
or exchange and its adjusted basis in the Offered Certificate. The adjusted
basis of an Offered Certificate will equal its cost, increased by any unpaid OID
and market discount includable in income with respect to the Offered Certificate
prior to its sale, and reduced by any principal payments previously received
with respect to the Offered Certificate and any premium amortization previously
applied to offset interest income. The gain or loss recognized on the sale or
exchange of an Offered Certificate will generally be capital gain or loss if the
Offered Certificate was held as a capital asset and will be long-term or
mid-term capital gain or loss if the Offered Certificate was held by the
Certificateholder for the requisite holding periods at the time of the
disposition.

                                       95
Non-United States Investors

      As described above, Counsel will render its opinion that the Offered
Certificates will properly be classified as debt for federal income tax
purposes. If the Offered Certificates are so treated:

           (a) interest paid to a nonresident alien or foreign corporation or
      partnership would be exempt from U.S. withholding taxes (including backup
      withholding taxes), provided the holder complies with applicable

      identification requirements (and does not actually or constructively own
      10% or more of the voting stock of AIG and is not a controlled foreign
      corporation with respect to AIG). Applicable identification requirements
      will be satisfied if there is delivered to a securities clearing
      organization (or bank or other financial institution that holds Offered
      Certificates on behalf of the customer in the ordinary course of its trade
      or business), (i) IRS Form W-8 signed under penalties of perjury by the
      beneficial owner of the Offered Certificates stating that the holder is
      not a U.S. person and providing such holder's name and address, (ii) IRS
      Form 1001 signed by the beneficial owner of the Offered Certificates or
      such owner's agent claiming exemption from withholding under an applicable
      tax treaty or (iii) IRS Form 4224 signed by the beneficial owner of the
      Offered Certificates or such owner's agent claiming exemption from
      withholding of tax on income connected with the conduct of a trade or
      business in the United States; provided that in any such case (x) the
      applicable form is delivered pursuant to applicable procedures and is
      properly transmitted to the United States entity otherwise required to
      withhold tax and (y) none of the entities receiving the form has actual
      knowledge that the holder is a U.S. person or that any certification on
      the form is false;

           (b) a holder of an Offered Certificate who is a nonresident alien or
      foreign corporation will not be subject to United States federal income
      tax on gain realized on the sale, exchange or redemption of such Offered
      Certificate, provided that (i) such gain is not effectively connected to a
      trade or business carried on by the holder in the United States, (ii) in
      the case of a holder that is an individual, such holder neither is present
      in the United States for 183 days or more during the taxable year in which
      such sale, exchange or redemption occurs, nor ceased being a U.S. citizen
      or long-term resident for tax avoidance purposes and (iii) in the case of
      gain representing accrued interest, the conditions described in clause (a)
      are satisfied; and

           (c) an Offered Certificate held by an individual who at the time of
      death is a nonresident alien will not be subject to United States federal
      estate tax as a result of such individual's death if, immediately before
      his death, (i) the individual did not actually or constructively own 10%
      or more of the voting stock of AIG and (ii) the holding of such Offered
      Certificate was not effectively connected with the conduct by the decedent
      of a trade or business in the United States and (iii) the individual did
      not cease being a U.S. citizen or long-term resident for tax avoidance
      purposes.

      The Service recently issued final regulations (the "New Regulations")
which would provide alternative methods of satisfying the certification
requirement described above. The New Regulations are effective January 1, 1999,
although valid withholding certificates that are held on December 31, 1998
remain valid until the earlier of December 31, 1999 or the date of expiration of
the certificate under the rules as currently in effect. The New Regulations
would require, in the case of Offered Certificates held by a foreign
partnership, that (x) the certification described in clause (a) above be
provided by the partners rather than by the foreign partnership and (y) the
partnership provide certain information. A look-through rule would apply in the
case of tiered partnerships. Non-U.S. Certificateholders should consult their

own tax advisors concerning the application of the certification requirements in
the New Regulations.

      If the Service were to contend successfully that some or all of the
Offered Certificates were equity interests in a partnership (not taxable as a
corporation), a holder of such an Offered Certificate that is a nonresident
alien

                                       96
or foreign corporation might be required to file a U.S. individual or corporate
income tax return and pay tax on its share of partnership income at regular U.S.
rates, including in the case of a corporation the branch profits tax (and would
be subject to withholding tax on its share of partnership income). In addition,
if the Offered Certificates are equity interests in a partnership, an individual
holder that is a nonresident alien at death may be required to include the value
of the Offered Certificates in such holder's gross estate (unless otherwise
provided in an applicable treaty). If some or all of the Offered Certificates
are recharacterized as equity interests in a "publicly traded partnership"
taxable as a corporation, to the extent distributions on such Offered
Certificates were treated as dividends, a nonresident alien individual or
foreign corporation generally would be taxed on the gross amount of such
dividends (and subject to withholding) at the rate of 30% unless such rate were
reduced by an applicable treaty. In addition, an individual holder that is a
nonresident alien at death would be required to include the value of such
Offered Certificate in such holder's gross estate (unless otherwise provided in
an applicable treaty).

Information Reporting And Backup Withholding

      Certain holders may be subject to backup withholding at a rate of 31% on
interest (including any original issue discount) on the Offered Certificates if
the holder fails to supply its taxpayer identification number (or if the
taxpayer identification number furnished by the holder is incorrect), fails to
report interest, dividends or other "reportable payments" (as defined in the
Code) properly, or, under certain circumstances, fails to provide a certified
statement, under penalties of perjury, that it is not subject to backup
withholding. Information returns will be sent annually to the Service and to the
holders of record setting forth the amount of interest paid or the original
issue discount accrued and the amount of tax withheld therefrom. It is
anticipated that Persons who hold Offered Certificates as nominees for
beneficial owners will report the required tax information to beneficial owners
on Service Form 1099. United States Aliens that are exempt from withholding
under the provisions described above generally will not be subject to
information reporting on Service Form 1099 and backup withholding on the
payments of interest on an Offered Certificate if the applicable certification
requirements are satisfied. However, interest on an Offered Certificate
beneficially owned by a United States Alien will be required to be reported
annually on Service Form 1042S.

      Payment of the proceeds from the sale of an Offered Certificate to or
through a foreign office of a broker will not be subject to information
reporting or backup withholding, except that if the broker is a U.S. Person, a
controlled foreign corporation for United States tax purposes, a foreign person
50% or more of whose gross income is effectively connected with the conduct of a
trade or business within the United States for a specified three-year period or,
with respect to payments made after December 31, 1998, a foreign partnership
that, at any time during the taxable year, is 50% or more owned (measured by
either income or capital) by U.S. persons or engaged in a U.S. trade or
business, information reporting will apply to such payments unless such
custodian, nominee or other agent has documentary evidence in its files of the
owner's foreign status and has no actual knowledge to the contrary, or the owner
otherwise establishes an exemption. Payment of the proceeds from a sale of an
Offered Certificate to or through the United States office of a broker is
subject to information reporting and backup withholding unless the holder or
beneficial owner certifies as to its non-United States status or otherwise
establishes an exemption from information reporting and backup withholding. The
New Regulations change certain of the rules relating to certain presumptions
currently available relating to information reporting and backup withholding.
Non-U.S. Certificateholders are urged to contact their own tax advisors
regarding the application to them of backup withholding and information
reporting.

                                     97
CERTAIN STATE AND LOCAL TAX CONSEQUENCES

      The following discussion of certain state and local tax consequences of
the ownership of Offered Certificates is a general summary and does not purport
to address all state or local tax considerations that may be relevant to
Certificateholders. (For purposes of the following discussion, a
"Certificateholder" will mean a beneficial owner of an Offered Certificate.)
Except as otherwise indicated, the following assumes that for federal income tax
purposes the Offered Certificates will be treated as indebtedness and, if the
Offered Certificates are so treated, the Trust will not be a taxable entity.

In General

      The state and local tax consequences of each Certificateholder's ownership
of Offered Certificates will depend upon the provisions of the state and local
tax laws to which that Certificateholder is subject. Because such tax laws vary,
it is impossible to discuss the tax consequences of Certificateholder's
ownership of Offered Certificates in each state or local taxing jurisdiction in
which the Certificateholder is subject to tax.

New York And California

      Although there is no directly relevant New York or California authority

and accordingly the matter is not free from doubt, if the Offered Certificates
are treated as debt for federal income tax purposes, for New York and California
state income and franchise tax purposes and for New York City personal income
and general corporation tax purposes, the Offered Certificates will be treated
as indebtedness secured by the Receivables and the Trust will not be treated as
a taxable entity. In addition, if the Offered Certificates are treated as debt,
Certificateholders not otherwise subject to New York and California state income
or franchise taxes or New York City personal income or general corporation taxes
will not become subject to such taxes solely as a result of their investment in
the Offered Certificates, but Certificateholders already subject to tax in New
York State or New York City or California may be required to pay additional
state or local taxes as a result of their ownership of the Offered Certificates.

Other States

      The Trust will be created under the laws of New York and most activities
relating to the servicing and collection of the Receivables will take place in
New York and California. Nevertheless, there can be no assurance another state
will not claim that the Trust has engaged in activities in that state and is
consequently subject to tax therein. Were another state successfully to make
such a claim, it is possible that under such state's tax laws the Offered
Certificates would not be treated as debt, the Trust would be treated as an
entity subject to taxation by such state and Certificateholders not otherwise
subject to taxation by such state could be taxed by such state in respect of the
activities of the Trust therein.

Possible Recharacterizations

      If all or a portion of the Offered Certificates were treated as interests
in a partnership or a "publicly traded partnership," the New York, California,
and other state and local tax consequences of owning Offered Certificates could
be materially different from and less favorable than those described above.

      EACH PROSPECTIVE INVESTOR IS URGED TO CONSULT ITS OWN TAX ADVISOR
REGARDING THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THE
PURCHASE, OWNERSHIP AND DISPOSITION OF THE OFFERED CERTIFICATES.

                                       98
UNDERWRITING

      Subject to the terms and conditions set forth in the underwriting
agreement (the "Underwriting Agreement") between the Transferor, the Original
Transferors and Goldman, Sachs & Co. (the "Underwriters"), the Transferor has
agreed to sell to the Underwriters, and the Underwriters have agreed to
purchase, the Offered Certificates.

      In the Underwriting Agreement, the Underwriters have agreed, subject to

the terms and conditions set forth therein, to purchase all the Offered
Certificates if any of the Series 1998-1 Certificates are purchased.

      The Underwriters propose initially to offer the Series 1998-1 Class A
Certificates to the public at the price set forth on the cover page hereof and
to certain dealers at such price less concessions not in excess of [____]% of
the principal amount of the Series 1998-1 Class A Certificates. The Underwriters
may allow, and such dealers may reallow, concessions not in excess of [____]% of
the principal amount of the Series 1998-1 Class A Certificates to certain
brokers and dealers. After the initial public offering, the public offering
price and other selling terms of the Series 1998-1 Class A Certificates may be
changed by the Underwriters.

      The Underwriters propose initially to offer the Series 1998-1 Class B
Certificates to the public at the price set forth on the cover page hereof and
to certain dealers at such price less concessions not in excess of [___]% of the
principal amount of the Series 1998-1 Class B Certificates. The Underwriters may
allow, and such dealers may reallow, concessions not in excess of [____]% of the
principal amount of the Series 1998-1 Class B Certificates to certain brokers
and dealers. After the initial public offering, the public offering price and
other selling terms of the Series 1998-1 Class B Certificates may be changed by
the Underwriters.

      Only offers and sales of the Offered Certificates in the United States, as
part of the initial distribution thereof or in connection with resales thereof
under circumstances where this Prospectus must be delivered, are made pursuant
to the Registration Statement of which this Prospectus is a part.

      The Transferor will indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, or contribute to
payments the Underwriters may be required to make in respect thereof.

                          VALIDITY OF THE CERTIFICATES

      The validity of the Series 1998-1 Certificates will be passed upon for the
Trust, the Original Transferors, the Transferor and the Servicer by Weil,
Gotshal & Manges LLP, New York, New York, and for the Underwriters by Cleary,
Gottlieb, Steen & Hamilton, New York, New York. Certain United States federal
income tax and other matters will be passed upon for the Trust by Weil, Gotshal
& Manges LLP, New York, New York. Certain legal matters relating to the Series
1998-1 Certificates will be passed upon for the Trust, the Original Transferors,
the Transferor and the Servicer by Kenneth V. Harkins, Associate General Counsel
of AIG and General Counsel of AIC.

                                       99
INDEX OF KEY TERMS FOR PROSPECTUS
                        ---------------------------------

Term                                                                        Page
----                                                                        ----

Accounts......................................................................66
Additional Interest...........................................................14
Additional Receivables.........................................................6
Aggregate Investor Percentage.................................................67
Agreement...................................................................1, 4
AIC........................................................................1, 38
AIC Letter Agreement..........................................................89
AIC Support Agreement.........................................................88
AICCO...................................................................1, 5, 38
AIG.....................................................................1, 5, 38
AIR.........................................................................1, 5
AIR Support Agreement.........................................................88
Bankruptcy Code...............................................................29
Cede...........................................................................3
Cedel.........................................................................51
Cedel Participants............................................................51
Certificate Owners.............................................................3
Certificateholder.........................................................93, 98
Cleanup Call..............................................................25, 81
Closing Date...................................................................2
Code..........................................................................93
Collection Account............................................................64
Collection Subaccount.........................................................64
Commission.....................................................................3
Cooperative...................................................................51
Counsel.......................................................................94
Credit Balance................................................................42
Cut-Off Date...............................................................6, 57
Default Amounts...............................................................72
Defaulted Loan................................................................72
Definitive Certificates.......................................................52
Depository....................................................................49
Determination Date............................................................72
Disclosure Document...........................................................23
Distribution Date..........................................................2, 14
DTC............................................................................3
EDGAR..........................................................................4
Eligible Additional Receivable................................................63
Eligible Receivable...........................................................62
Enhancement...................................................................36
ERISA.........................................................................26
ERISA Plans...................................................................26
Euroclear.....................................................................51
Euroclear Operator............................................................51

Euroclear Participants........................................................51
Excess Funding Account........................................................69

                                        i
Term                                                                        Page
----                                                                        ----

Excess Receivables Amount.....................................................70
Exchange Act...................................................................3
Existing Receivables.......................................................5, 57
FDIC..........................................................................64
Finance Charge Account........................................................65
Finance Charge Receivables....................................................12
Financed Premium Percentage...................................................84
Future Receivables.........................................................5, 57
Holders.......................................................................52
Holders of Offered Certificates................................................7
Indirect Participants.........................................................49
Ineligible Receivable.........................................................61
Interest Period...............................................................15
Investor Exchange.........................................................23, 58
Investor Percentage...........................................................67
Letter Agreements.............................................................89
LIBOR......................................................................2, 10
LIBOR Determination Date......................................................54
Loan Portfolio................................................................42
Loans.......................................................................1, 6
Minimum Transferor Ownership Interest.........................................70
Monthly Certificateholders Statement..........................................90
Monthly Payment Rate..........................................................84
Monthly Period.................................................................9
Moody's...................................................................26, 64
Moody's Non-Investment Grade Insurer..........................................71
New Regulations...............................................................96
New Series Issuance.......................................................23, 58
Obligor.......................................................................28
Obligors...................................................................6, 38
Offered Certificates........................................................1, 4
OID...........................................................................95
Original Agreement.............................................................4
Original Series 1994-1 Supplement..............................................4
Original Transferors...........................................................1
Originator....................................................................62
Participants..................................................................49
Pay Out Event.................................................................82
Paying Agent..................................................................52
Permitted Investments.........................................................64

Pool Factor...................................................................90
Principal Account.............................................................65
Principal Receivables.........................................................12
Principal Shortfalls..........................................................71
Principal Terms...............................................................59
Prior Period Interest.........................................................15
Purchased Loans...............................................................40
Qualified Institution.........................................................64
Rating Agencies...............................................................33
Rating Agency.................................................................33

                                       ii
Term                                                                        Page
----                                                                        ----

Receivables.............................................................1, 6, 42
Receivables Sale Agreement.....................................................5
Record Date...................................................................48
Reference Banks...............................................................54
Regulations...................................................................93
Removal Date..................................................................63
Removed Receivables.......................................................13, 63
S&P Non-AAA Insurer...........................................................71
S&P Non-Investment Grade Insurer..............................................71
Securities Act.................................................................4
Series........................................................................22
Series 1994-1 Certificateholders...............................................7
Series 1994-1 Certificates..................................................1, 5
Series 1994-1 Class A Certificates............................................36
Series 1994-1 Class B Certificates............................................36
Series 1994-1 Class C Certificates............................................12
Series 1994-1 Offered Certificates............................................12
Series 1998-1 91 Day Delinquency Amount.......................................69
Series 1998-1 Annualized Monthly Excess Spread Amount.........................84
Series 1998-1 Available Investor Principal Collections........................55
Series 1998-1 Available Yield Enhancement Amount..............................67
Series 1998-1 Certificateholders...............................................7
Series 1998-1 Certificateholders Ownership Interests..........................75
Series 1998-1 Certificates..................................................2, 4
Series 1998-1 Class A Additional Interest.....................................53
Series 1998-1 Class A Available Funds.........................................54
Series 1998-1 Class A Certificate Rate.................................2, 10, 54
Series 1998-1 Class A Certificateholders.......................................7
Series 1998-1 Class A Certificates..........................................1, 4
Series 1998-1 Class A Charge-Off..........................................21, 73
Series 1998-1 Class A Controlled Amortization Period..........................16
Series 1998-1 Class A Default Amount..........................................72
Series 1998-1 Class A Floating Allocation.....................................74

Series 1998-1 Class A Initial Ownership Interest..............................75
Series 1998-1 Class A Monthly Interest........................................79
Series 1998-1 Class A Monthly Principal.......................................80
Series 1998-1 Class A Ownership Interest......................................75
Series 1998-1 Class A Prior Period Interest...................................80
Series 1998-1 Class A Required Amount.........................................76
Series 1998-1 Class A Servicing Fee...........................................85
Series 1998-1 Class B Additional Interest.....................................53
Series 1998-1 Class B Available Funds.........................................54
Series 1998-1 Class B Certificate Rate.................................2, 10, 54
Series 1998-1 Class B Certificateholders.......................................7
Series 1998-1 Class B Certificates..........................................1, 4
Series 1998-1 Class B Charge-Off..........................................22, 73
Series 1998-1 Class B Controlled Amortization Period..........................16
Series 1998-1 Class B Default Amount..........................................72
Series 1998-1 Class B Floating Allocation.....................................74
Series 1998-1 Class B Initial Ownership Interest..............................75

                                       iii
Term                                                                        Page
----                                                                        ----

Series 1998-1 Class B Monthly Interest........................................79
Series 1998-1 Class B Monthly Principal.......................................81
Series 1998-1 Class B Ownership Interest......................................75
Series 1998-1 Class B Principal Commencement Date.............................17
Series 1998-1 Class B Prior Period Interest...................................80
Series 1998-1 Class B Required Amount.........................................77
Series 1998-1 Class B Servicing Fee...........................................85
Series 1998-1 Class C Additional Interest.....................................53
Series 1998-1 Class C Available Funds.........................................80
Series 1998-1 Class C Certificateholders.......................................7
Series 1998-1 Class C Certificates..........................................2, 4
Series 1998-1 Class C Charge-Off..............................................74
Series 1998-1 Class C Controlled Amortization Period..........................16
Series 1998-1 Class C Default Amount..........................................72
Series 1998-1 Class C Floating Allocation.....................................75
Series 1998-1 Class C Initial Ownership Interest..............................75
Series 1998-1 Class C Monthly Interest........................................79
Series 1998-1 Class C Monthly Principal.......................................81
Series 1998-1 Class C Ownership Interest......................................75
Series 1998-1 Class C Principal Commencement Date.............................17
Series 1998-1 Class C Prior Period Interest...................................80
Series 1998-1 Class C Required Amount.........................................77
Series 1998-1 Class C Servicing Fee...........................................85
Series 1998-1 Controlled Amortization Amount..................................56

Series 1998-1 Controlled Amortization Period..................................16
Series 1998-1 Controlled Distribution Amount..................................56
Series 1998-1 Deficit Controlled Amortization Amount..........................56
Series 1998-1 Distribution Account............................................65
Series 1998-1 Excess Finance Charges..........................................66
Series 1998-1 Fixed Investor Percentage.......................................75
Series 1998-1 Floating Investor Percentage....................................74
Series 1998-1 Initial Certificateholders Ownership Interests..................81
Series 1998-1 Investor Default Amount.........................................72
Series 1998-1 Investor Servicing Fee..........................................85
Series 1998-1 Maximum Yield Enhancement Amount................................66
Series 1998-1 Net Servicing Fee Rate..........................................85
Series 1998-1 Rapid Amortization Period.......................................18
Series 1998-1 Reallocated Class A Principal Collections.......................77
Series 1998-1 Reallocated Class B Principal Collections.......................78
Series 1998-1 Reallocated Class C Principal Collections.......................78
Series 1998-1 Reallocated Principal Collections...............................78
Series 1998-1 Revolving Period................................................16
Series 1998-1 Termination Date............................................12, 82
Series 1998-1 Yield Enhancement Account...................................19, 66
Service.......................................................................93
Service Transfer..............................................................89
Servicer...................................................................1, 13
Servicer Default..............................................................89
Servicing Fee.................................................................13
Shared Principal Collections..............................................24, 71

                                       iv
Term                                                                        Page
----                                                                        ----

Standard & Poor's.........................................................26, 64
Supplement....................................................................22
Support Agreements............................................................88
Terms and Conditions..........................................................51
Third Party Originators.......................................................40
Transfer Agent and Registrar..................................................53
Transferor.....................................................................1
Transferor Certificate....................................................22, 58
Transferor Ownership Interest..................................................2
Transferor Ownership Interest Reduction...................................23, 58
Trust..........................................................................1
Trustee....................................................................1, 25
U.S. Certificateholder........................................................93
Underwriters..................................................................99
Underwriting Agreement........................................................99

                                        v
================================================================================

      No dealer, salesperson or other person has been authorized to give any
information or to make any representation not contained in this Prospectus and,
if given or made, such information or representation must not be relied upon as
having been authorized by A.I. Receivables Corp. or the Underwriters. Neither
the delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that the information contained herein or
therein is correct as of any time subsequent to the date of such information.
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any of the securities offered hereby in any jurisdiction to any
person to whom it is unlawful to make such offer in such jurisdiction.
                                           
                                           
                                 --------------

                                TABLE OF CONTENTS

                                                                 PAGE
                                                                 ----

Reports to Holders of
 Offered Certificates ....................................         3
Available Information ....................................         4
Prospectus Summary .......................................         4
Special Considerations ...................................        28
Maturity Considerations ..................................        34
The Trust ................................................        36
Business of A.I. Receivables
  Corp., A.I. Credit Corp and AICCO, Inc. ................        38
The Receivables ..........................................        42
Use of Proceeds ..........................................        48
Description of the Offered
 Certificates ............................................        48
Certain United States Federal
 Income Tax Consequences .................................        93
Certain State and Local Tax
   Consequences ..........................................        97
Underwriting .............................................        99
Validity of the Certificates .............................        99
Index of Key Terms .......................................       100

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

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

                                 $[___________]

                                        
                                        
                                        
                            AIC PREMIUM FINANCE LOAN
                                  MASTER TRUST
                                        
                                        
                                        
                            $[________] SERIES 1998-1
                              FLOATING RATE CLASS A
                            ASSET BACKED CERTIFICATES
                                        
                                        
                                        
                           $[_________] SERIES 1998-1
                              FLOATING RATE CLASS B
                            ASSET BACKED CERTIFICATES
                                        
                                        
                                        
                             A.I. RECEIVABLES CORP.
                                   TRANSFEROR
                                        
                                [GRAPHIC OMITTED]
                                        
                                     [LOGO]
                                        
                                 --------------
                                   PROSPECTUS
                                 --------------

                              GOLDMAN, SACHS & CO.
                                    
                                    
                                    
                            DATED JANUARY [__], 1998
                                    
================================================================================
PART II
                     INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13.    Other Expenses Of Issuance And Distribution

     The following table sets forth the estimated expenses in connection with
the offering described in this Registration Statement:

     Registration...................................... $       295
     Printing and Engraving............................           *
     Trustee's Fees....................................           *
     Legal Fees and Expenses...........................           *
     Accountants' Fees and Expenses....................           *
     Rating Agency Fees................................           *
     Miscellaneous.....................................           *

     Total............................................. $         *

----------
*    To be furnished by Amendment

Item 14     Indemnification Of Directors And Officers

     The indemnification provisions contained in Article NINTH of the
Certificate of Incorporation of A.I. Receivables Corp. provide:

            The Corporation shall indemnify, to the full extent permitted by
     Section 145 of the General Corporation Law of Delaware, as amended from
     time to time, all persons who it may indemnify pursuant thereto.

     Section 145 of the General Corporation Law of Delaware provides as follows:

            (a) A corporation shall have power to indemnify any person who was
     or is a party or is threatened to be made a party to any threatened,
     pending or completed action, suit or proceeding, whether civil, criminal,
     administrative or investigative (other than an action by or in the right of
     the corporation) by reason of the fact that the person is or was a
     director, officer, employee or agent of the corporation, or is or was
     serving at the request of the corporation as a director, officer, employee
     or agent of another corporation, partnership, joint venture, trust or other
     enterprise, against expenses (including attorneys' fees), judgments, fines
     and amounts paid in settlement actually and reasonably incurred by the
     person in connection with such action, suit or proceeding if the person
     acted in good faith and in a manner the person reasonably believed to be in
     or not opposed to the best interests of the corporation, and, with respect
     to any criminal action or proceeding, had no reasonable cause to believe
     the person's conduct was unlawful. The termination of any action, suit or
     proceeding by judgment, order, settlement, conviction, or upon a plea of
     nolo contendere or its equivalent, shall not, of itself, create a
     presumption that the person did not act in good faith and in a manner which
     the person reasonably believed to be in or not opposed to the best

     interests of the corporation, and, with respect to any criminal action or
     proceeding, had reasonable cause to believe that the person's conduct was
     unlawful.

            (b) A corporation shall have power to indemnify any person who was
     or is a party or is threatened to be made a party to any threatened,
     pending or completed action or suit by or in the right of the corporation
     to procure a judgment in its favor by reason of the fact that the person is
     or was a director, officer, employee or agent of the corporation, or is or
     was serving at the request of the

                                      II-1
corporation as a director, officer, employee or agent of another
     corporation, partnership, joint venture, trust or other enterprise against
     expenses (including attorneys' fees) actually and reasonably incurred by
     the person in connection with the defense or settlement of such action or
     suit if the person acted in good faith and in a manner the person
     reasonably believed to be in or not opposed to the best interests of the
     corporation and except that no indemnification shall be made in respect of
     any claim, issue or matter as to which such person shall have been adjudged
     to be liable to the corporation unless and only to the extent that the
     Court of Chancery or the court in which such action or suit was brought
     shall determine upon application that, despite the adjudication of
     liability but in view of all the circumstances of the case, such person is
     fairly and reasonably entitled to indemnity for such expenses which the
     Court of Chancery or such other court shall deem proper.

            (c) To the extent that a present or former director or officer of a
     corporation has been successful on the merits or otherwise in defense of
     any action, suit or proceeding referred to in subsections (a) and (b) of
     this section, or in defense of any claim, issue or matter therein, such
     person shall be indemnified against expenses (including attorneys' fees)
     actually and reasonably incurred by such person in connection therewith.

            (d) Any indemnification under subsections (a) and (b) of this
     section (unless ordered by a court) shall be made by the corporation only
     as authorized in the specific case upon a determination that
     indemnification of the present or former director, officer, employee or
     agent is proper in the circumstances because the person has met the
     applicable standard of conduct set forth in subsections (a) and (b) of this
     section. Such determination shall be made, with respect to a person who is
     a director or officer at the time of such determination, (1) by a majority
     vote of the directors who are not parties to such action, suit or
     proceeding, even though less than a quorum, or (2) by a committee of such
     directors designated by majority vote of such directors, even though less
     than a quorum, or (3) if there are no such directors, or if such directors
     so direct, by independent legal counsel in a written opinion, or (4) by the
     stockholders.

            (e) Expenses (including attorneys' fees) incurred by an officer or
     director in defending any civil, criminal, administrative or investigative
     action, suit or proceeding may be paid by the corporation in advance of the
     final disposition of such action, suit or proceeding upon receipt of an
     undertaking by or on behalf of such director or officer to repay such
     amount if it shall ultimately be determined that such person is not
     entitled to be indemnified by the corporation as authorized in this
     section. Such expenses (including attorneys' fees) incurred by former
     directors and officers or other employees and agents may be so paid upon
     such terms and conditions, if any, as the corporation deems appropriate.

            (f) The indemnification and advancement of expenses provided by, or
     granted pursuant to, the other subsections of this section shall not be
     deemed exclusive of any other rights to which those seeking indemnification
     or advancement of expenses may be entitled under any by law, agreement,
     vote of stockholders or disinterested directors or otherwise, both as to
     action in such person's official capacity and as to action in another
     capacity while holding such office.

            (g) A corporation shall have power to purchase and maintain
     insurance on behalf of any person who is or was a director, officer,
     employee or agent of the corporation, or is or was serving at the request
     of the corporation as a director, officer, employee or agent of another
     corporation, partnership, joint venture, trust or other enterprise against
     any liability asserted against such person and incurred by such person in
     any such capacity, or arising out of such person's status as such, whether
     or not the corporation would have the power to indemnify such person
     against such liability under this section.

            (h) For purposes of this section, references to "the corporation"
     shall include, in addition to the resulting corporation, any constituent
     corporation (including any constituent of a constituent) absorbed in a
     consolidation or merger which, if its separate existence had continued,
     would have had power and

                                      II-2
authority to indemnify its directors, officers, and employees or agents, so
     that any person who is or was a director, officer, employee or agent of
     such constituent corporation, or is or was serving at the request of such
     constituent corporation as a director, officer, employee or agent of
     another corporation, partnership, joint venture, trust or other enterprise,
     shall stand in the same position under this section with respect to the
     resulting or surviving corporation as such person would have with respect
     to such constituent corporation if its separate existence had continued.

            (i) For purposes of this section, references to "other enterprises"
     shall include employee benefit plans; references to "fines" shall include
     any excise taxes assessed on a person with respect to any employee benefit
     plan; and references to "serving at the request of the corporation" shall

     include any service as a director, officer, employee or agent of the
     corporation which imposes duties on, or involves services by, such
     director, officer, employee or agent with respect to an employee benefit
     plan, its participants or beneficiaries; and a person who acted in good
     faith and in a manner such person reasonably believed to be in the interest
     of the participants and beneficiaries of an employee benefit plan shall be
     deemed to have acted in a manner "not opposed to the best interests of the
     corporation" as referred to in this section.

            (j) The indemnification and advancement of expenses provided by, or
     granted pursuant to, this section shall, unless otherwise provided when
     authorized or ratified, continue as to a person who has ceased to be a
     director, officer, employee or agent and shall inure to the benefit of the
     heirs, executors and administrators of such a person.

            (k) The Court of Chancery is hereby vested with exclusive
     jurisdiction to hear and determine all actions for advancement of expenses
     or indemnification brought under this section or under any by-law,
     agreement, vote of stockholders or disinterested directors, or otherwise.
     The Court of Chancery may summarily determine a corporation's obligation to
     advance expenses (including attorneys' fees).

     The indemnification provisions contained in Article V of the By-Laws of
A.I. Receivables Corp. provide:

            The Corporation, to the full extent permitted, and in the manner
     required by the laws of the State of Delaware as in effect at the time of
     the adoption of this Article V or as the same may be amended from time to
     time, shall (i) indemnify any person (and the heirs and legal
     representatives of such person) who is made or is threatened to be made a
     party to any threatened, pending, or completed action, suit or proceeding,
     whether in nature civil, criminal, administrative or investigative, by
     reason of the fact that he or she is or was a director, officer, employee
     or agent of the Corporation or of any constituent Corporation absorbed into
     the Corporation by consolidation or merger or served or served with another
     Corporation, partnership, joint venture, trust or other enterprise at the
     request of the Corporation or of any such constituent Corporation and (ii)
     provide to any such person (and the heirs and legal representatives of such
     person) advances for expenses incurred in defending any such action, suit
     or proceeding, upon receipt of an undertaking by or on behalf of such
     person (and the heirs and legal representatives of such person) to repay
     such advances unless it is ultimately determined that he or she is entitled
     to indemnification by the Corporation.

     The Underwriting Agreement will also provide for indemnification in certain
instances by the Registrant of the Underwriters, their officers and controlled
persons.

Item 15.    Recent Sales Of Unregistered Securities

     None.

                                      II-3
Item 16.    Exhibits And Financial Statement Schedules

     (a) Exhibits

1.1          - Form of Underwriting Agreement with respect to the Series 1998-1
               Class A Certificates and the Series 1998-1 Class B 
               Certificates. *
3.1          - Articles of Incorporation of A.I. Receivables Corp.
3.2          - By-Laws of A.I. Receivables Corp.
4.1          - Form of Master Amended & Restated Pooling and Servicing Agreement
               between the Registrant, A.I. Credit Corp., AICCO, Inc. and the
               Trustee.
4.2          - Form of Series Supplement (including forms of Series 1998-1 Class
               A and Series 1998-1 Class B Certificates). *
5.1          - Form of Opinion of Weil, Gotshal & Manges LLP with respect to
               legality.
8.1          - Opinion of Weil, Gotshal & Manges LLP with respect to tax 
               matters.
10.1         - Form of Receivables Sale Agreement among the Registrant, A.I.
               Credit Corp. and AICCO, Inc. 
10.2         - Form of Support Agreement between the Registrant and American
               International Group, Inc.*
23.1         - Consent of Weil, Gotshal & Manges LLP (included in its opinions 
               filed as Exhibits 5.1 and 8.1).
----------
*    To be filed by Amendment.

     (b)  Financial Statement Schedules

     All financial statements, schedules and historical financial information
have been omitted as they are not applicable.

Item 17.    Undertakings

     The undersigned Registrant hereby undertakes as follows:

     (a) To provide to the Underwriters at the closing specified in the
Underwriting Agreement certificates in such denominations and registered in such
names as required by the Underwriters to permit prompt delivery to each
purchaser.

     (b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions described under Item 14 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the

Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the questions whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

     (c) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of the
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act of 1933 shall be deemed to be part of this Registration
Statement as of the time it was declared effective.

     (d) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

                                      II-4
SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 21st day of January, 1998.

                                      A.I. RECEIVABLES CORP.

                                      By: /s/ Gerald V. Vitkauskas
                                          ------------------------
                                          Gerald V. Vitkauskas
                                          President

     Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE                                   TITLE                                 DATE
         ---------                                   -----                                 ----
/s/ Gerald V. Vitkauskas                   President and Director                   January 21, 1998
------------------------
Gerald V. Vitkauskas                       (Principal executive officer)

/s/ Michael D. Vogen                       Treasurer and Director                   January 21, 1998
------------------------
Michael D. Vogen                           (Principal financial officer and
                                           accounting officer)
II-5
EXHIBIT INDEX
EXHIBIT                                                                             SEQUENTIALLY
   NO.       DESCRIPTION                                                            NUMBERED PAGE
1.1          - Form of Underwriting Agreement with respect to the Series 1998-1 
               Class A Certificates and the Series 1998-1 Class B Certificates. *
3.1          - Articles of Incorporation of A.I. Receivables Corp.
3.2          - By-Laws of A.I. Receivables Corp.
4.1          - Form of Master Amended & Restated Pooling and Servicing Agreement
               between the Registrant, A.I. Credit Corp., AICCO, Inc. and the
               Trustee.
4.2          - Form of Series Supplement (including forms of Series 1998-1 Class
               A and Series 1998-1 Class B Certificates). *
5.1          - Form of Opinion of Weil, Gotshal & Manges LLP with respect to
               legality.
8.1          - Opinion of Weil, Gotshal & Manges LLP with respect to tax matters.
10.1         - Form of Receivables Sale Agreement among the Registrant, A.I.
               Credit Corp. and AICCO, Inc.
10.2         - Form of Support Agreement between the Registrant and American
               International Group, Inc. *
23.1         - Consent of Weil, Gotshal & Manges LLP (included in its opinions
               filed as Exhibits 5.1 and 8.1).
----------
*  To be filed by Amendment.

                                      II-6