Rule 424(b)
                                                              File No. 333-11053

PROSPECTUS

                           MUTUAL RISK MANAGEMENT LTD.

                          36,214 SHARES OF COMMON STOCK

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

All of the Shares of Common Stock offered  hereby (the  "Securities")  are being
sold by the Selling Securityholder.  See "Selling  Securityholder".  The Company
will not  receive any of the  proceeds  from the sales of Shares  being  offered
hereby. The Securities will be offered for sale from time to time on terms to be
determined  at the time of sale by the  Selling  Securityholder.  The  Company's
Common Stock are listed on the New York Stock Exchange under the symbol "MM" and
the closing price of the Common Stock as reported on the New York Composite Tape
on August  20,  1996 was $28 5/8.  The  Company  will pay the  expenses  of this
offering and will not receive any proceeds from the sale of the Securities.  See
"Use of Proceeds."

SEE "RISK FACTORS" ON PAGE 4 FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE
    CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED HEREBY,

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

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

                                                                Proceeds to
                   Price to       Underwriting Discounts          Selling
                    Public         and Commissions(1(2))       Shareholders
Per  Share         $28.625                  $0                  $28.625
Total              $1,036,625.75            $0                  $1,036,625.75

(1). The Company  and the  Selling  Shareholder  have  agreed to  indemnify  the
     Underwriter against certain  liabilities,  including  liabilities under the
     Securities Act of 1933, as amended.
(2)  Before  deducting  expenses  payable by the  Company  estimated  at $5,000.

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

The Selling  Securityholder  directly,  through agents  designated  from time to
time, or through  dealers or  underwriters  also to be designated,  may sell the
Securities  from time to time on terms to be  determined at the time of sale. To
the extent required, the specific Securities to be sold, the purchase price, the
public offering price,  the name of any such agent,  dealer or underwriter,  and
any applicable commission or discount with respect to a particular offer will be
set forth in a  Prospectus  Supplement.  The  aggregate  proceeds to the Selling
Securityholder from the Securities will be the purchase price of such Securities
sold less the aggregate agents' commissions and underwriters' discounts, if any,
and other expenses of issuance and  distribution  not borne by the Company.  Any
such  Prospectus  Supplement  will  also set forth  any  additional  information
regarding  indemnification  by the Company of the Selling  Securityholder or any
underwriter, dealer or agent against certain liabilities,  including liabilities
under the Securities Act of 1933, as amended (the "Securities Act"). The Selling
Securityholder and any  broker-dealers,  agents or underwriters that participate
with the Selling Securityholder in the distribution of any of the Securities may
be deemed to be "underwriters" within the meaning of the Securities Act, and any
commission  received  by them and any  profit on the  resale  of the  Securities
purchased  by them may be deemed to be  underwriting  commissions  or  discounts
under the Securities Act. See "Plan of Distribution".

The date of this Prospectus is September 25, 1996



         NO PERSON IS AUTHORIZED IN CONNECTION  WITH ANY OFFERING MADE HEREBY TO
GIVE ANY INFORMATION OR TO MAKE ANY  REPRESENTATIONS  OTHER THAN AS CONTAINED IN
THIS PROSPECTUS AND IF GIVEN OR MADE, SUCH  INFORMATION OR  REPRESENTATION  MUST
NOT BE  RELIED  UPON AS HAVING  BEEN  AUTHORIZED  BY THE  COMPANY,  ANY  SELLING
SHAREHOLDER OR THE UNDERWRITER.  THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION  OF AN OFFER TO BUY BY ANY PERSON IN ANY  JURISDICTION IN
WHICH IT IS UNLAWFUL  FOR SUCH PERSON TO MAKE SUCH AN OFFERING OR  SOLICITATION.
NEITHER THE DELIVERY OF THIS  PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER
ANY  CIRCUMSTANCE  IMPLY THAT THE  INFORMATION  HEREIN IS CORRECT AS OF ANY DATE
SUBSEQUENT TO THE DATE HEREOF.

                              AVAILABLE INFORMATION

         The  Company  is  subject  to  the  informational  requirements  of the
Securities  Exchange  Act of 1934,  as  amended  (the  "Exchange  Act"),  and in
accordance therewith files reports and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements and other
information  concerning  the Company can be  inspected  and copied at the public
reference facilities  maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Room 1024, Washington,  D.C. 20549, and at Regional Offices of the
Commission located at Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661 and at 7 World Trade Center, 13th Floor, New York,
New York  10048.  Copies  of such  material  can be  obtained  from  the  Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington,  D.C.
20549, at prescribed rates. Such reports, proxy statements and other information
may also be inspected at the offices of the New York Stock  Exchange,  Inc.,  20
Broad Street, New York, New York 10004.


                     INCORPORATION OF DOCUMENTS BY REFERENCE

         The following  documents  have been filed with the  Commission  and are
incorporated herein by reference:

          (a)  The  Company's  Annual  Report  on Form  10-K for the year  ended
               December 31, 1995;

          (b)  The Company's  Quarterly Reports on Form 10-Q for the three month
               periods ended March 31, 1996 and June 30, 1996;

          (c)  The Company's definitive Proxy Statement dated March 25, 1996 for
               the Company's  Annual Meeting of  Stockholders  to be held on May
               15, 1996; and

          (d)  The  description of the Company's  Common Stock  contained in the
               Company's  Registration  Statement on Form 8-A dated May 14, 1991
               as declared effective by the Commission on June 25, 1991.

         All documents  filed by the Company  pursuant to Section 13 (a), 13(c),
14 or 15(d) of the  Exchange  Act  after  the date of this  Prospectus  shall be
deemed to be  incorporated by reference and to be a part of this Prospectus from
the respective dates of filing of those documents.  Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be

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deemed to be modified or  superseded  for  purposes  of this  Prospectus  to the
extent  that a statement  contained  herein or in any other  subsequently  filed
document  which  also is or is deemed to be  incorporated  by  reference  herein
modifies or supersedes such  statement.  Any statement so modified or superseded
shall not be deemed,  except as so modified or superseded,  to constitute a part
of this Prospectus.

         The Company hereby  undertakes to provide without charge to each person
to whom a copy of this Prospectus is delivered, upon the written or oral request
of such person,  a copy of any or all of the  documents  referred to above which
have been  incorporated in this Prospectus by reference,  other than exhibits to
such documents (unless such exhibits are specifically  incorporated by reference
into such  documents).  Written or telephone  requests for such copies should be
directed  to the  Secretary,  Mutual Risk  Management  Ltd.,  44 Church  Street,
Hamilton HM 12, Bermuda (441) 295-5688.

                        ENFORCEMENT OF CIVIL LIABILITIES

         The Company is organized pursuant to the laws of Bermuda and certain of
the Company's  directors and officers,  certain of the Selling  Shareholders and
certain of the  experts  named  herein  reside  outside  of the  United  States.
Moreover,  a substantial  portion of the assets of the Company and of certain of
the Selling Shareholders is located outside the United States. Consequently,  it
may not be  possible  to effect  service of process on such  persons or entities
within the United States or to enforce  against any of them  judgments of courts
in the United  States  predicated  upon the civil  liability  provisions  of the
federal  securities laws of the United States.  The Company has been informed by
Conyers,  Dill & Pearman,  its legal advisor in Bermuda,  that the United States
and  Bermuda  do not have a treaty  providing  for  reciprocal  recognition  and
enforcement  of judgments in civil and  commercial  matters and a final judgment
for the  payment of money  rendered  by any federal or state court in the United
States  based on civil  liability,  whether or not  predicated  solely  upon the
federal securities laws, would, therefore,  not be automatically  enforceable in
Bermuda.  A  Bermuda  court may  impose  civil  liability  on the  Company,  its
directors  or officers or the  Selling  Shareholders  who reside in Bermuda in a
suit brought in The Supreme Court of Bermuda against the Company or such persons
with respect to a violation of federal  securities law,  provided that the facts
surrounding  such violation  would  constitute or give rise to a cause of action
under Bermuda law.

                                TABLE OF CONTENTS

Available Information..........................................................3
Enforcement of Civil Liabilities...............................................4
The Company....................................................................5
Risk Factors...................................................................5
Selling Securityholder/Use of Proceeds.........................................8
Plan of Distribution...........................................................8
Legal Matters..................................................................8
Experts........................................................................9

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                                   THE COMPANY

         Mutual  Risk  Management  Ltd.  provides  risk  management  services to
clients seeking alternatives to traditional  commercial insurance for certain of
their  risk  exposures,   especially  workers'   compensation,   which  in  1995
represented  approximately  71% of the  Company's  fee income.  Risk  management
involves a process of analyzing  loss  exposures and  developing  risk financing
methods to reduce exposure to loss and to control  associated  costs. The use of
such loss financing  methods in place of traditional  insurance has become known
as the alternative market and involves clients self-funding a significant amount
of their loss exposure and transferring  only the  unpredictable  excess risk to
insurers.  The benefits of such alternative market techniques  typically include
lower and more stable costs,  greater  control over the client's risk management
program and an  increased  emphasis  within the  client's  organization  on loss
prevention and loss control.

         The  Company's  principal  source of profits is fees  received  for the
various services provided to clients in connection with the Company's  programs.
In a typical  program,  these fees  total  between  11% and 13% of the  client's
premium. The structure of the Company's programs places most of the underwriting
risk with the Company's client. For regulatory and other reasons,  however,  the
Company is required  to assume a limited  amount of risk.  The Company  seeks to
limit  this  risk  to  the  minimum  level  feasible.   This  approach  to  risk
distinguishes the Company from typical property/casualty  companies which assume
significant  levels of underwriting risk as part of their business.  The Company
does not seek to earn income from  underwriting  risk,  but rather from fees for
services  provided.  The Company  markets  its  services  exclusively  to retail
insurance brokers and consultants representing clients.

         The Company was incorporated in 1977 and has participated in the growth
of the  alternative  market since 1980 when it  established  its  rent-a-captive
program known as the Insurance  Profit Center Program (the "IPC  Program").  The
Company is incorporated and based in Bermuda, the leading worldwide domicile for
captive insurance  companies.  The Company operates through  subsidiaries in the
United States,  Bermuda,  Barbados, the Cayman Islands and Europe. The Company's
principal  executive  offices are located at 44 Church  Street,  Hamilton HM 12,
Bermuda (441) 295-5688.

                                  RISK FACTORS

         A prospective investor should carefully consider all of the information
contained in this Prospectus in deciding  whether to purchase the Shares and, in
particular, the following:

         Dependence on Key Personnel.  The Company is dependent upon the ability
and experience of its executive  officers and other key  employees.  The loss of
the services of one or more of the  Company's  executive  officers  could have a
material  adverse  impact  on  the  business  of  the  Company  and  its  future
operations.

         Competition.  The  Company's  products and services  compete with other
products both in the  alternative and the traditional  insurance  markets.  Such
competitive  products  include  captive  insurance  companies,  rent-a-captives,
self-insurance plans and cash flow insurance products. Many

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of these  competitive  products  are  offered by  companies  with  significantly
greater resources than the Company. The Company's competitive position is based,
among other factors, on the quality of its services,  its capital position,  its
independence from any major insurance  company or broker and effective  pricing.
There  can be no  assurance  that  the  Company  will be able  to  maintain  its
competitive position.

         Beginning  in 1993,  competition  increased  significantly  in  certain
important workers' compensation markets,  particularly  California,  due to open
ratings and other legislative  reforms, and this heightened level of competition
has persisted through the current period. This increased competition has lowered
premium  rates  and  this in turn  reduces  the fee  revenue  generated  by each
individual  program.  Increased  competition  also makes  sales and  renewals of
programs more  difficult.  A continuation of the current level of competition or
its  extension  into  additional  markets or states  will  adversely  affect the
Company's business.

         Business Risks. A significant  feature of the Company's programs is the
utilization of reinsurance,  including aggregate excess reinsurance, to transfer
all or a portion of risk not  retained by the  insured.  The  Company  currently
obtains such reinsurance from a small number of reinsurance companies.  Changing
market  conditions  or other factors  beyond the  Company's  control may, in the
future,  reduce or eliminate the  availability  of this  reinsurance.  A lack of
available  reinsurance  could  adversely  affect the  marketing of the Company's
programs or force the  Company to retain all or a part of the risk which  cannot
be reinsured.

         The Company has in the normal course of operating  its programs  placed
significant  amounts of reinsurance  for risks in excess of the client's  chosen
retention with a variety of reinsurance companies.  Failure of a reinsurer could
result in significant  losses as the Company would remain  ultimately liable for
the losses not covered by such a reinsurer. The client's chosen retention, which
is  ceded  by  Legion  Insurance  Company  ("Legion"),  the  Company's  licensed
insurance  subsidiary,  either  to  one  of  the  Company's  non-U.S.  insurance
subsidiaries (the "IPC Companies") or to the client's captive insurance company,
is  generally  also  supported by letters of credit.  In  addition,  the Company
relies  extensively  on letters  of credit to secure a portion  of the  client's
obligation  to reimburse  the Company for losses on a program.  The failure of a
bank to honor its  letter of  credit or the  inability  of a client to honor its
uncollaterlized reimbursement obligation could adversely affect the Company.

         It is the  Company's  policy that its  insurance  company  subsidiaries
avoid taking  significant  insurance  underwriting risk.  However,  some risk is
assumed by these companies in connection with their limited participation in the
Company's excess reinsurance programs. Such subsidiaries could also incur losses
if claims on a policy exceeded the amount of reinsurance  coverage.  The Company
believes  that  adequate  reserves and  reinsurance  have been provided on risks
assumed to date.  However,  the actual liability may be greater or less than the
amount  provided for. Any such liability will be recorded in the period in which
it arises.

         Tax Matters Affecting  Participants in the IPC Program. The competitive
position of the Company's  IPC Program  could be materially  affected by the tax
treatment of the program and competing programs. Such tax treatment has not been
clear in recent years and varies  significantly  with the  circumstances of each
IPC Program participant as is true for competing products.  A

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determination that a significant portion of the IPC Program participants are not
entitled  to deduct the  premiums  paid  without a similar  determination  as to
competing  products could adversely affect the marketability of the IPC Program.
Amendments  have been  proposed to the United  States  Internal  Revenue Code to
clarify and restrict when premiums which are paid to foreign  captive  insurance
companies by U.S. taxpayers/insureds holding 10% or more of the voting shares of
the foreign  company are properly  deductible by the payors for U.S.  income tax
purposes.  The  Company is not able to  determine  whether  such  proposals,  if
enacted,  would be  applicable  to IPC  Programs or would  adversely  affect the
business of the Company.

         Tax Matters Affecting the Company. Amendments have been proposed to the
United  States  Internal  Revenue  Code to clarify and  restrict  when a foreign
captive insurance company, the voting shares of which are owned to the extent of
10% or more by U.S.  shareholders/  insureds,  will be treated  as an  insurance
company for U.S. income tax purposes. In general, the proposed amendments would,
if enacted, deny any deduction for premiums which are paid by large shareholders
if more than fifty percent of the net written  premium of their captive  insurer
is derived from the  insurance or  reinsurance  of such  shareholders  and their
related persons. The Company is not able to determine whether such proposals, if
enacted,  would be  applicable  to the  Company  or would  adversely  affect the
Company.

        Ownership  Considerations.  In the event that the Company were deemed to
be a "Passive Foreign Investment Company" (a "PFIC"), the U.S. income tax due in
the year a United  States  person that owns any Common  Stock  receives  certain
distributions with respect to, or disposes of, Common Stock will be increased by
an  interest  charge.  Additionally,  if the  Company is  classified  or becomes
classified  as a "Controlled  Foreign  Corporation"  (a "CFC"),  a United States
person that owns  directly or  indirectly  10% or more of the  Company's  voting
shares  will be  required  to include in his gross  income his pro rata share of
certain  income  of  the  Company,  whether  or  not  such  income  is  actually
distributed to such United States shareholder. See 'Tax Matters".

        Government Regulation. A number of states in which the Company transacts
business,  as well as Bermuda and Barbados,  have various licensing  regulations
applicable to the Company's  business.  These regulations require that insurance
companies maintain adequate capital,  surplus and reserves and limit the ability
of the  Company to  transfer  funds  from,  and to  otherwise  engage in certain
transactions  with,  its licensed  subsidiaries.  State  regulations  also limit
premium rates and require participation in guaranty and assigned risk funds.

        The Company is unable to predict what additional government regulations,
if any,  affecting  its  business may be  promulgated  in the future or how they
might  be  interpreted.  The  promulgation  of new  regulations  or the  adverse
interpretation  of existing  regulations,  particularly in  Pennsylvania,  where
Legion  is  domiciled,  and  California,  which  is one of the  Company's  major
markets, could increase the Company's cost of compliance and otherwise adversely
impact operating results.



                                       7


                     SELLING SECURITYHOLDER\USE OF PROCEEDS

         The Securities  are owned by Mr.  Spottswood P. Dudley of 3510 Overlook
Lane N.W.,  Washington D.C. 20016,  USA. The Company will not receive any of the
proceeds  from  the  sale  of  securities  by the  Selling  Securityholder.  The
Securities  offered by this Prospectus may be offered from time to time in whole
or in part by the Selling  Securityholder.  As of August 23, 1996 the  aggregate
number of Common Shares owned by Mr Dudley was 36,214 Common Shares.

                              PLAN OF DISTRIBUTION

         Any and all of the  Securities  offered hereby may be sold from time to
time to purchasers directly by the Selling  Securityholder.  Alternatively,  the
Selling  Securityholder  may from  time to time  offer  the  Securities  through
brokers,  underwriters,  dealers or agents, who may receive  compensation in the
form of  underwriting  discounts,  concessions or  commissions  from the Selling
Securityholder  and/or the  purchasers  of  Securities  for whom they may act as
agent. The Selling  Securityholder and any such underwriters,  dealers or agents
that  participate  in the  distribution  of the  Securities  may be deemed to be
underwriters,  and  any  profit  on the  sale  of  Securities  by  them  and any
discounts, commissions or concessions received by any such underwriters, dealers
or agents might be deemed to be underwriting discounts and commissions under the
Securities  Act. The Securities may be sold at varying prices  determined at the
time of sale or at  negotiated  prices.  Such prices will be  determined  by the
Selling  Securityholder,  or by agreement between the Selling Securityholder and
underwriters or dealers.

         At the time a particular  offer of  Securities  is made,  to the extent
required,  a  Prospectus  Supplement  will be prepared  by the Company  based on
information  provided  by the  Selling  Securityholder  which will set forth the
number of Securities being offered and the terms of the offering,  including the
name or names of any underwriters, dealers or agents, any discounts, commissions
or concessions  allowed or reallowed or paid to dealers,  including the proposed
selling price to the public.

         In order to comply with certain states' securities laws, if applicable,
the Securities  will be sold in such  jurisdictions  only through  registered or
licensed brokers or dealers.  In addition,  in certain states the Securities may
not be sold unless the Securities  have been registered or qualified for sale in
such state or an exemption from  registration or  qualification is available and
such sale is made in compliance with the exemption.

                                  LEGAL MATTERS

        The  validity of the Common  Stock being  offered  hereby will be passed
upon for the Company by Messrs  Conyers,  Dill & Pearman of  Hamilton,  Bermuda.
David J. Doyle, who is associated with this firm, is a director of the Company.



                                       8



                                     EXPERTS

        The   consolidated   financial   statements   of  the  Company  and  its
subsidiaries  at  December  31,  1995 and for the year  then  ended,  which  are
incorporated  by  reference  herein,   have  been  audited  by  Ernst  &  Young,
independent auditors,  and at December 31, 1994 and for each of the two years in
the period ended December 31, 1994, by KPMG Peat Marwick,  independent auditors,
as set forth in their  respective  reports thereon and incorporated by reference
herein,  and are included in reliance upon such reports given upon the authority
of said firms as experts in accounting and auditing.

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