Exhibit 10.10
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Philadelphia Insurance Company
Bala Cynwyd, Pennsylvania
Philadelphia Indemnity Insurance Company
Bala Cynwyd, Pennsylvania
and
any and all other companies which are now
or may hereafter become member companies of
Philadelphia Insurance Companies
Hereinafter referred to as the “Company”
Excess Catastrophe Reinsurance Contract
Effective: June 1, 2005
Reinsurance Confirmation
Business Reinsured
Business classified by the Company as Property business. In force, new and
renewal business.
Commencement and Termination
Effective June 1, 2005, with respect to losses arising out of loss occurrences
commencing on or after that date, through May 31, 2006 both days inclusive.
Extended expiration in the event a loss occurrence is in progress at termination
or expiration.
The Company may terminate a Subscribing Reinsurer’s percentage share in this
Contract by giving written notice to the Subscribing Reinsurer in the event any
of the following circumstances occur as clarified by public announcement for
subparagraphs 1 through 7 below and upon discovery for subparagraph 8 below:

  1.   The Subscribing Reinsurer’s policyholders’ surplus after the date lines
are bound for this Contract has been reduced by more than 20.0% of the amount of
surplus 12 months prior to that date; or     2.   The Subscribing Reinsurer’s
policyholders’ surplus at any time between the date lines are bound and the date
of termination of this Contract has been reduced by more than 20.0% of the
amount of surplus at the date of the Subscribing Reinsurer’s most recent
financial statement filed with regulatory authorities and available to the
public as of the date lines are bound for this Contract; or     3.   The
Subscribing Reinsurer’s A.M. Best’s rating has been assigned or downgraded below
A- (inclusive of “Not Rated” ratings) and/or Standard & Poor’s rating has been
assigned or downgraded below BBB+ at any time between the date lines are bound
and the date of termination of this Contract; or     4.   The Subscribing
Reinsurer has become merged with, acquired by or controlled by any other
company, corporation or individual(s) not controlling the Subscribing
Reinsurer’s operations previously; or     5.   A State Insurance Department or
other legal authority has ordered the Subscribing Reinsurer to cease writing
business; or

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  6.   The Subscribing Reinsurer has become insolvent or has been placed into
liquidation or receivership (whether voluntary or involuntary) or proceedings
have been instituted against the Subscribing Reinsurer for the appointment of a
receiver, liquidator, rehabilitator, conservator or trustee in bankruptcy, or
other agent known by whatever name, to take possession of its assets or control
of its operations; or     7.   The Subscribing Reinsurer has reinsured its
entire liability under this Contract without the Company’s prior written
consent; or     8.   The Subscribing Reinsurer has ceased assuming new or
renewal property or casualty treaty reinsurance business.

The Reinsurer shall have no liability hereunder with respect to losses arising
out of loss occurrences commencing after the effective date of termination.
Territory (BRMA 51A)
The territorial limits of this Contract shall be identical with those of the
Company’s policies.
Exclusions
See attached.
Retention and Limit
Based on the Company’s ultimate net loss each loss occurrence. Layers,
retentions and limits as set forth in the attached Schedule A.
No claim shall be made under any excess layer of coverage provided by this
Contract in any one loss occurrence unless at least two risks insured or
reinsured by the Company are involved in such loss occurrence. For purposes
hereof, the Company shall be the sole judge of what constitutes one risk.
Florida Hurricane Catastrophe Fund
Any loss reimbursement paid or payable to the Company under the Florida
Hurricane Catastrophe Fund (FHCF) as a result of loss occurrences commencing
during the term of this Contract shall inure to the benefit of this Contract.
Prior to the determination of the Company’s FHCF retention and payout, if any,
under the reimbursement contract between the Company and the State Board of
Administration of the State of Florida, the Reinsurer’s liability hereunder will
be determined provisionally based on the projected payout, determined in
accordance with the provisions of the reimbursement contract. Following
determination of the payout under the reimbursement contract, the ultimate net
loss under this Contract will be recalculated. If, as a result of such
calculation, the loss to the Reinsurer under any excess layer of this Contract
in any one loss occurrence is less than the amount previously paid by the
Reinsurer under that excess layer, the Company shall promptly remit the
difference to the Reinsurer. If the loss to the Reinsurer under any excess layer
in any one loss occurrence is greater than the amount previously paid by the
Reinsurer, the Reinsurer shall promptly remit the difference to the Company.
If an FHCF reimbursement amount is based on the Company’s losses in more than
one loss occurrence commencing during the term of this Contract, the total FHCF
reimbursement received by the Company shall be allocated to individual loss
occurrences in chronological order of the dates such loss occurrences
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commence, beginning with the first such loss occurrence commencing during the
term of this Contract, provided that:

  1.   The portion of the total FHCF reimbursement amount to be allocated by the
Company to any individual loss occurrence shall be equal to the lesser of
(a) the amount of FHCF reimbursement to which the Company would be entitled for
that loss occurrence alone, or (b) the remaining FHCF reimbursement which has
not been allocated by the Company to prior loss occurrences; and     2.   The
total amount allocated by the Company to all such loss occurrences shall be
equal to the total FHCF reimbursement received by the Company for such loss
occurrences.

Any reimbursement premiums or emergency assessment paid by the Company under the
FHCF shall be deemed to be premiums paid for inuring reinsurance.
Other Reinsurance
Company shall be permitted to carry excess per risk reinsurance, recoveries
under which shall inure to the benefit of this Contract.
Company shall be permitted to carry net quota share reinsurance recoveries under
which shall inure solely to the benefit of the Company.
Definitions
UNL includes LAE (See attached).
Loss Occurrence
No reinstatement same wind event. 96 hours as respects hurricane and tropical
storm. (See attached).
Reinstatement
Number of full reinstatement(s) for each layer as set forth in Schedule A, with
additional premium calculated 100% as to time and pro rata as to amount.
If this Contract is terminated, any reinstatement premium paid or otherwise due
the Reinsurer for losses arising out of loss occurrences commencing on or prior
to the date of termination shall be considered fully earned, however, the
Reinsurer shall pay the loss prior to receiving the reinstatement premium.
Loss Notices and Settlements
Individual loss notices and settlements.
Premium
Rates based on gross earned premium (GEP). Annual deposit premium and annual
minimum premium as set forth in the attached Schedule A.
Annual deposit premium for each layer payable in four equal installments on
June 1, 2005, September 1, 2005, December 1, 2005 and March 1, 2006. Adjusted
within 45 days after the end of the contract term.
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If this Contract is terminated, the Reinsurer shall return the unearned portion
of any reinsurance premium paid hereunder and the minimum premium provision
shall be waived.
“Gross earned premium” as used herein is defined as earned premium of the
Company for the classes of business reinsured hereunder, before the deduction of
any premiums ceded by the Company for reinsurance which inures to the benefit of
this Contract.
Late Payments
See attached. Interest penalty based on 6-month United States Treasury Bill
Rate. Interest penalty of less than $100 shall be waived.
Subject Premium
Estimated subject gross earned premium for June 1, 2005 through May 31, 2006 is
$262,872,000.
Brokerage: 10% of gross reinsurance premium, 5% of reinstatement premium.
Other Provisions
Salvage and Subrogation
Offset (BRMA 36D)
Access to Records (BRMA 1D)
Liability of the Reinsurer
Net Retained Lines (BRMA 32E)
Errors and Omissions (BRMA 14F)
Currency (BRMA 12A)
Taxes (BRMA 50C)
Federal Excise Tax
Reserves
Insolvency
Arbitration
Service of Suit
Agency Agreement
Governing Law (State of Pennsylvania)
Confidentiality
Severability
Intermediary (BRMA 23A)
Allocation of Final Shares
The Company shall have the right to review all authorizations and the full
authority to allocate final shares. Such decisions will be at the sole
discretion of the Company and may result in other than a “proportional signdown”
of authorizations. As respects signdowns within the London marketplace, the
final allocation of shares to individual companies or syndicates may not be
proportionate to the original authorizations.
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Exclusions
This Contract does not apply to and specifically excludes the following:

  1.   Financial Guarantee and Insolvency;     2.   Mortgage Impairment
insurances and similar kinds of insurances, however styled.     3.   Nuclear
risks as defined in the “Nuclear Incident Exclusion Clause — Physical Damage –
Reinsurance – U.S.A.” and the “Nuclear Incident Exclusion Clause — Physical
Damage - Reinsurance — Canada,” attached to and forming part of this Contract.  
  4.   Loss or damage caused by or resulting from war, invasion, hostilities,
acts of foreign enemies, civil war, rebellion, insurrection, military or usurped
power, or martial law or confiscation by order of any government or public
authority, but this exclusion shall not apply to loss or damage covered under a
standard policy with a standard War Exclusion Clause;     5.   Loss or liability
excluded under the provisions of the “Pools, Associations and Syndicates
Exclusion Clause” attached to and forming part of this Contract;     6.   All
liability of the Company arising by contract, operation of law, or otherwise,
from its participation or membership, whether voluntary or involuntary, in any
insolvency fund. “Insolvency fund” includes any guaranty fund, insolvency fund,
plan, pool, association, fund or other arrangement, however denominated,
established or governed, which provides for any assessment of or payment or
assumption by the Company of part or all of any claim, debt, charge, fee or
other obligation of an insurer, or its successors or assigns, which has been
declared by any competent authority to be insolvent, or which is otherwise
deemed unable to meet any claim, debt, charge, fee or other obligation in whole
or in part;     7.   Losses in respect of overhead transmission and distribution
lines and their supporting structures, other than those on or within 1,000 feet
of the insured premises. It is understood and agreed that public utilities
extension and/or suppliers extension and/or contingent business interruption
coverages are not subject to this exclusion, provided that these are not part of
a transmitters’ or distributors’ Policy;     8.   Accident and Health, Casualty,
Fidelity and/or Surety business;     9.   Pollution and seepage coverages
excluded under the provisions of the “Pollution and Seepage Exclusion Clause
(BRMA 39A)” attached to and forming part of this Contract;     10.  
Notwithstanding any provision to the contrary within this Contract or any
addendum thereto, loss, damage, cost, or expense directly or indirectly caused
by, contributed to by, resulting from, or arising out of or in connection with
any act of terrorism, as defined herein, regardless of any other cause or event
contributing concurrently or in any other sequence to the loss.

An “act of terrorism” includes any act, or preparation in respect of action, or
threat of action designed to influence the government de jure or de facto of any
nation or any political division thereof, or in pursuit of political, religious,
ideological, or similar purposes to intimidate the public or a section of the
public of any nation by any person or group(s) of persons whether acting alone
or on behalf of or in connection with any organization(s) or government(s) de
jure or de facto, and which:

  a.   Involves violence against one or more persons; or     b.   Involves
damage to property; or

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  c.   Endangers life other than that of the person committing the action; or  
  d.   Creates a risk to health or safety of the public or a section of the
public; or     e.   Is designed to interfere with or to disrupt an electronic
system.

Loss, damage, cost, or expense directly or indirectly caused by, contributed to
by, resulting from, or arising out of or in connection with any action in
controlling, preventing, suppressing, retaliating against, or responding to any
act of terrorism.
Notwithstanding the above and subject otherwise to the terms, conditions, and
limitations of this Contract, in respect only of personal lines, this Contract
will pay actual loss or damage (but not related cost or expense) caused by any
act of terrorism provided such act is not directly or indirectly caused by,
contributed to by, resulting from, or arising out of or in connection with
biological, chemical, radioactive, or nuclear pollution or contamination or
explosion.

  11.   Loss or liability in any way or to any extent arising out of the actual
or alleged presence or actual, alleged or threatened presence of fungi
including, but not limited to, mold, mildew, mycotoxins, microbial volatile
organic compounds or other “microbial contamination”. This includes:

  a.   Any supervision, instruction, recommendations, warnings, or advice given
or which should have been given in connection with the above; and     b.   Any
obligation to share damages with or repay someone else who must pay damages
because of such injury or damage.

For purposes of this exclusion, “microbial contamination” means any
contamination, either airborne or surface, which arises out of or is related to
the presence of fungi, mold, mildew, mycotoxins, microbial volatile organic
compounds or spores, including, without limitation, Penicillium, Aspergillus,
Fusarium, Aspergillus Flavus and Stachybotrys chartarum.
Losses resulting from the above causes do not in and of themselves constitute an
event unless arising out of one or more of the following perils, in which case
this exclusion does not apply.
Fire, lightning, explosion, aircraft or vehicle impact, falling objects,
windstorm, hail, tornado, cyclone, hurricane, earthquake, volcano, tsunami,
flood, freeze or weight of snow.
Notice of any claims for mold-related losses must be given by the Company to the
Reinsurer, in writing, within 24 months after the commencement date of the loss
occurrence to which such claims relate.

  12.   Loss or liability excluded under the provisions of the “Electronic Data
Endorsement B” (NMA 2915) attached to and forming part of this Contract.

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Definitions

A.   “Ultimate net loss” as used herein is defined as the sum or sums (including
loss in excess of policy limits, extra contractual obligations and loss
adjustment expense, as hereinafter defined) paid or payable by the Company in
settlement of claims and in satisfaction of judgments rendered on account of
such claims, after deduction of all salvage, all recoveries and all claims on
inuring insurance or reinsurance, whether collectible or not. Nothing herein
shall be construed to mean that losses under this Contract are not recoverable
until the Company’s ultimate net loss has been ascertained.

B.   “Loss in excess of policy limits” and “extra contractual obligations” as
used herein shall be defined as follows:

  1.   “Loss in excess of policy limits” shall mean 90.0% of any amount paid or
payable by the Company in excess of its policy limits, but otherwise within the
terms of its policy, such loss in excess of the Company’s policy limits having
been incurred because of, but not limited to, failure by the Company to settle
within the policy limits or by reason of the Company’s alleged or actual
negligence, fraud or bad faith in rejecting an offer of settlement or in the
preparation of the defense or in the trial of any action against its insured or
reinsured or in the preparation or prosecution of an appeal consequent upon such
an action.     2.   “Extra contractual obligations” shall mean 90.0% of any
punitive, exemplary, compensatory or consequential damages paid or payable by
the Company, not covered by any other provision of this Contract and which arise
from the handling of any claim on business subject to this Contract, such
liabilities arising because of, but not limited to, failure by the Company to
settle within the policy limits or by reason of the Company’s alleged or actual
negligence, fraud or bad faith in rejecting an offer of settlement or in the
preparation of the defense or in the trial of any action against its insured or
reinsured or in the preparation or prosecution of an appeal consequent upon such
an action. An extra contractual obligation shall be deemed, in all
circumstances, to have occurred on the same date as the loss covered or alleged
to be covered under the policy.

Notwithstanding anything stated herein, the amount included in the ultimate net
loss for any one loss occurrence as respects loss in excess of policy limits and
extra contractual obligations shall not exceed 25.0% of the Company’s indemnity
loss hereunder arising out of that loss occurrence.
Notwithstanding anything stated herein, this Contract shall not apply to any
loss in excess of policy limits or any extra contractual obligation incurred by
the Company as a result of any fraudulent and/or criminal act by any officer or
director of the Company acting individually or collectively or in collusion with
any individual or corporation or any other organization or party involved in the
presentation, defense or settlement of any claim covered hereunder.
If any provision of this paragraph B shall be rendered illegal or unenforceable
by the laws, regulations or public policy of any state, such provision shall be
considered void in such state, but this shall not affect the validity or
enforceability of any other provision of this Contract or the enforceability of
such provision in any other jurisdiction.

C.   “Loss adjustment expense” as used herein shall mean expenses assignable to
the investigation, appraisal, adjustment, settlement, litigation, defense and/or
appeal of specific claims, regardless of how such expenses are classified for
statutory reporting purposes. Loss adjustment expense shall include, but not be
limited to, declaratory judgments, interest on judgments, expenses of outside
adjusters, and a pro rata share of the salaries and expenses of the Company’s
field employees according to the time occupied adjusting such losses and
expenses of the Company’s officials incurred in connection with the losses, but
shall not include office expenses or salaries of the Company’s regular
employees.

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Late Payments

A.   The provisions of this Article shall not be implemented unless specifically
invoked, in writing, by one of the parties to this Contract.

B.   In the event any premium, loss or other payment due either party is not
received by the intermediary named herein (hereinafter referred to as the
“Intermediary”) by the payment due date, the party to whom payment is due may,
by notifying the Intermediary in writing, require the debtor party to pay, and
the debtor party agrees to pay, an interest penalty on the amount past due
calculated for each such payment on the last business day of each month as
follows:

  1.   The number of full days which have expired since the due date or the last
monthly calculation, whichever the lesser, times     2.   1/365ths of the
six-month United States Treasury Bill Rate as quoted in The Wall Street Journal
on the first business day of the month for which the calculation is made; times
    3.   The amount past due, including accrued interest.

It is agreed that interest shall accumulate until payment of the original amount
due plus interest penalties have been received by the Intermediary.

C.   The establishment of the due date shall, for purposes of this Article, be
determined as follows:

  1.   As respects the payment of routine deposits and premiums due the
Reinsurer, the due date shall be as provided for in the applicable section of
this Contract. In the event a due date is not specifically stated for a given
payment, it shall be deemed due 30 days after the date of transmittal by the
Intermediary of the initial billing for each such payment.     2.   Any claim or
loss payment due the Company hereunder shall be deemed due 10 business days
after the proof of loss or demand for payment is transmitted to the Reinsurer.
If such loss or claim payment is not received within the 10 days, interest will
accrue on the payment or amount overdue in accordance with paragraph B above,
from the date the proof of loss or demand for payment in accordance with the
provisions of the Loss Notices and Settlements Article, was transmitted to the
Reinsurer.     3.   As respects any payment, adjustment or return due either
party not otherwise provided for in subparagraphs 1 and 2 of paragraph C above,
the due date shall be as provided for in the applicable section of this
Contract. In the event a due date is not specifically stated for a given
payment, it shall be deemed due 10 business days following transmittal of
written notification that the provisions of this Article have been invoked.

For purposes of interest calculations only, amounts due hereunder shall be
deemed paid upon receipt by the Intermediary.

D.   Nothing herein shall be construed as limiting or prohibiting a Subscribing
Reinsurer from contesting the validity of any claim, or from participating in
the defense of any claim or suit, or prohibiting either party from contesting
the validity of any payment or from initiating any arbitration or other
proceeding in accordance with the provisions of this Contract. If the debtor
party prevails in an arbitration or other proceeding, then any interest
penalties due hereunder on the amount in dispute shall be null and void. If the
debtor party loses in such proceeding, then the interest penalty on the amount
determined to be due hereunder shall be calculated in accordance with the
provisions set forth above unless otherwise determined by such proceedings. If a
debtor party advances payment of any amount it is contesting, and proves to be
correct in its contestation, either in whole or in part, the other party shall
reimburse the debtor party for any such excess payment made plus interest on the
excess amount calculated in accordance with this Article.

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E.   Interest penalties arising out of the application of this Article that are
$100 or less from any party shall be waived unless there is a pattern of late
payments consisting of three or more items over the course of any 12-month
period.

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Non BRMA Articles
Loss Occurrence

  A.   The term “loss occurrence” shall mean the sum of all individual losses
directly occasioned by any one disaster, accident or loss or series of
disasters, accidents or losses arising out of one event which occurs within the
area of one state of the United States or province of Canada and states or
provinces contiguous thereto and to one another. However, the duration and
extent of any one “loss occurrence” shall be limited to all individual losses
sustained by the Company occurring during any period of 168 consecutive hours
arising out of and directly occasioned by the same event, except that the term
“loss occurrence” shall be further defined as follows:

  1.   As regards hurricane and tropical storm, including ensuing collapse and
water damage, all individual losses sustained by the Company occurring during
any period of 96 consecutive hours arising out of and directly occasioned by the
same event. However, the event need not be limited to one state or province or
states or provinces contiguous thereto.     2.   As regards windstorm, hail,
tornado, cyclone, including ensuing collapse and water damage, all individual
losses sustained by the Company occurring during any period of 72 consecutive
hours arising out of and directly occasioned by the same event. However, the
event need not be limited to one state or province or states or provinces
contiguous thereto.     3.   As regards riot, riot attending a strike, civil
commotion, vandalism and malicious mischief, all individual losses sustained by
the Company occurring during any period of 72 consecutive hours within the area
of one municipality or county and the municipalities or counties contiguous
thereto arising out of and directly occasioned by the same event. The maximum
duration of 72 consecutive hours may be extended in respect of individual losses
which occur beyond such 72 consecutive hours during the continued occupation of
an insured’s premises by strikers, provided such occupation commenced during the
aforesaid period.     4.   As regards earthquake (the epicenter of which need
not necessarily be within the territorial confines referred to in the
introductory portion of this paragraph) and fire following directly occasioned
by the earthquake, only those individual fire losses which commence during the
period of 168 consecutive hours may be included in the Company’s “loss
occurrence.”     5.   As regards “freeze,” only individual losses directly
occasioned by collapse, breakage of glass and water damage (caused by bursting
frozen pipes and tanks) may be included in the Company’s “loss occurrence.”    
6.   As regards firestorms, brush fires, and any other fires or series of fires,
irrespective of origin (except as provided in subparagraphs 3 and 4 above),
which spread through trees, grassland or other vegetation, all individual losses
sustained by the Company which occur during any period of 168 consecutive hours
within a 100-mile radius of any fixed point selected by the Company may be
included in the Company’s “loss occurrence.” However, an individual loss subject
to this subparagraph cannot be included in more than one “loss occurrence.”

  B.   For all those “loss occurrences,” other than those referred to in
subparagraph 3 of paragraph A above, the Company may choose the date and time
when any such period of consecutive hours commences, provided that it is not
earlier than the date and time of the occurrence of the first recorded
individual loss sustained by the Company arising out of that disaster, accident
or loss, and

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provided that only one such period of 168 consecutive hours shall apply with
respect to one event, except for any “loss occurrence” referred to in
subparagraph 1 of paragraph A above where only one such period of 96 consecutive
hours shall apply with respect to one event, regardless of the duration of the
event and subparagraph 2 of paragraph A above where only one such period of 72
consecutive hours shall apply with respect to one event, regardless of the
duration of the event.

  C.   As respects those “loss occurrences” referred to in subparagraph 3 of
paragraph A above, if the disaster, accident or loss occasioned by the event is
of greater duration than 72 consecutive hours, then the Company may divide that
disaster, accident or loss into two or more “loss occurrences,” provided no two
periods overlap and no individual loss is included in more than one such period
and provided that no period commences earlier than the date and time of the
occurrence of the first recorded individual loss sustained by the Company
arising out of that disaster, accident or loss.     D.   No individual losses
occasioned by an event that would be covered by 72 hours and 96 hours clauses
may be included in any “loss occurrence” claimed under the 168 hours provision.

Loss Notices and Settlements

A.   Whenever losses sustained by the Company appear likely to result in a claim
hereunder, the Company shall notify the Reinsurer, and the Reinsurer shall have
the right to participate in the adjustment of such losses at its own expense.

B.   All loss settlements made by the Company, provided they are within the
terms of this Contract, shall be binding upon the Reinsurer, and the Reinsurer
agrees to pay all amounts for which it may be liable upon receipt of reasonable
evidence of the amount paid (or scheduled to be paid) by the Company.

Salvage and Subrogation
The Reinsurer shall be credited with salvage (i.e., reimbursement obtained or
recovery made by the Company, less the actual cost, excluding salaries of
officials and employees of the Company and sums paid to attorneys as retainer,
of obtaining such reimbursement or making such recovery) on account of claims
and settlements involving reinsurance hereunder. Salvage thereon shall always be
used to reimburse the excess carriers in the reverse order of their priority
according to their participation before being used in any way to reimburse the
Company for its primary loss. The Company hereby agrees to enforce its rights to
salvage or subrogation relating to any loss, a part of which loss was sustained
by the Reinsurer, and to prosecute all claims arising out of such rights.
Liability of the Reinsurer

A.   The liability of the Reinsurer shall follow that of the Company in every
case and be subject in all respects to all the general and specific
stipulations, clauses, waivers and modifications of the Company’s policies and
any endorsements thereon. However, in no event shall this be construed in any
way to provide coverage outside the terms and conditions set forth in this
Contract.

B.   Nothing herein shall in any manner create any obligations or establish any
rights against the Reinsurer in favor of any third party or any persons not
parties to this Contract.

Federal Excise Tax

A.   The Reinsurer has agreed to allow for the purpose of paying the Federal
Excise Tax the applicable percentage of the premium payable hereon (as imposed
under Section 4371 of the Internal Revenue Code) to the extent such premium is
subject to the Federal Excise Tax.

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B.   In the event of any return of premium becoming due hereunder the Reinsurer
will deduct the applicable percentage from the return premium payable hereon and
the Company or its agent should take steps to recover the tax from the United
States Government.

Reserves

A.   The Reinsurer agrees to fund, within 30 days of the Company’s request, its
share of the Company’s ceded United States outstanding loss and loss adjustment
expense reserves (including incurred but not reported loss reserves for known
loss occurrences established by the Company) by:

  1.   Clean, irrevocable and unconditional letters of credit issued and
confirmed, if confirmation is required by the insurance regulatory authorities
involved, by a bank or banks meeting the NAIC Securities Valuation Office credit
standards for issuers of letters of credit and acceptable to said insurance
regulatory authorities; and/or     2.   Escrow accounts for the benefit of the
Company; and/or     3.   Cash advances;

if the Reinsurer is unauthorized in any state of the United States of America or
the District of Columbia having jurisdiction over the Company and if, without
such funding a penalty would accrue to the Company on any financial statement,
including but not limited to quarterly filings, it is required to file with the
insurance regulatory authorities involved.

B.   The Reinsurer agrees to fund, within 30 days of the Company’s request, 115%
of its share of the Company’s Canadian ceded outstanding loss and loss
adjustment expense reserves (including incurred but not reported loss reserves
for known loss occurrences established by the Company) by:

  1.   Clean, irrevocable and unconditional letters of credit issued and
confirmed, if confirmation is required by the insurance regulatory authorities
involved, by a Canadian bank or banks meeting the NAIC Securities Valuation
Office credit standards for issuers of letters of credit and acceptable to said
insurance regulatory authorities, for no more than 15/115ths of the total
funding required; and/or     2.   Cash advances for the remaining balance of the
funding required;

if the Reinsurer is unauthorized in any province or jurisdiction of Canada
having jurisdiction over the Company and if, with such funding, a penalty would
accrue to the Company on any financial statement, including but not limited to
quarterly filings, it is required to file with the insurance regulatory
authorities involved.

C.   The Reinsurer, at its sole option, may fund in other than cash if its
method of funding is acceptable to the Company and to the insurance regulatory
authorities involved.

For the purpose of this Contract, the Lloyd’s U.S. Credit for Reinsurance Trust
Fund shall be considered an acceptable funding instrument.

D.   With regard to funding in whole or in part by letters of credit, it is
agreed that each letter of credit will be in a form acceptable to insurance
regulatory authorities involved, will be issued for a term of at least one year
and will include an “evergreen clause,” which automatically extends the term for
at least one additional year at each expiration date unless written notice of
non-renewal is given to the Company not less than 30 days prior to said
expiration date. The Company and the Reinsurer further agree, notwithstanding
anything to the contrary in this Contract, that said letters of credit may be
drawn upon by the Company or its successors in interest at any time, without
diminution because

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of the insolvency of the Company or the Reinsurer, but only for one or more of
the following purposes:

  1.   To reimburse itself for the Reinsurer’s share of losses and/or loss
adjustment expense paid under the terms of policies reinsured hereunder, unless
paid in cash by the Reinsurer;     2.   To reimburse itself for the Reinsurer’s
share of any other amounts claimed to be due hereunder, unless paid in cash by
the Reinsurer;     3.   To fund a cash account in an amount equal to the
Reinsurer’s portion of the unearned deposit premium and/or the Reinsurer’s share
of ceded outstanding loss and loss adjustment expense reserves (including
incurred but not reported loss reserves for known loss occurrences established
by the Company) funded by means of a letter of credit which is under non-renewal
notice, if said letter of credit has not been renewed or replaced by the
Reinsurer 10 days prior to its expiration date;     4.   To refund to the
Reinsurer any sum in excess of the actual amount required to fund the
Reinsurer’s portion of the unearned deposit premium and/or the Reinsurer’s share
of the Company’s ceded outstanding loss and loss adjustment expense reserves
(including incurred but not reported loss reserves for known loss occurrences
established by the Company), if so requested by the Reinsurer; and     5.   To
reimburse itself for the Reinsurer’s portion of the unearned deposit premium
paid to the Reinsurer.

It is understood and agreed that with respect to subparagraphs 3, 4 and 5 of
this paragraph, the provisions pertaining to reimbursement for unearned deposit
premium apply only in the circumstance of a rating-related obligation of the
Reinsurer to fund the unearned portion of the deposit premium; the remaining
provisions of subparagraphs 3, 4 and 5 of this paragraph, as well as the
provisions of subparagraphs 1 and 2 of this paragraph, apply in any and all
circumstances the Reinsurer is required to provide funding under paragraph A of
this Article.
In the event the amount drawn by the Company on any letter of credit is in
excess of the actual amount required for D(1), D(2) or D(4), or in the case of
D(3), the actual amount determined to be due, the Company shall promptly return
to the Reinsurer the excess amount so drawn.
Insolvency

A.   In the event of the insolvency of one or more of the reinsured companies,
this reinsurance shall be payable directly to the company or to its liquidator,
receiver, conservator or statutory successor on the basis of the liability of
the company without diminution because of the insolvency of the company or
because the liquidator, receiver, conservator or statutory successor of the
company has failed to pay all or a portion of any claim. It is agreed, however,
that the liquidator, receiver, conservator or statutory successor of the company
shall give written notice to the Reinsurer of the pendency of a claim against
the company indicating the policy or bond reinsured which claim would involve a
possible liability on the part of the Reinsurer within a reasonable time after
such claim is filed in the conservation or liquidation proceeding or in the
receivership, and that during the pendency of such claim, the Reinsurer may
investigate such claim and interpose, at its own expense, in the proceeding
where such claim is to be adjudicated, any defense or defenses that it may deem
available to the company or its liquidator, receiver, conservator or statutory
successor. The expense thus incurred by the Reinsurer shall be chargeable,
subject to the approval of the Court, against the company as part of the expense
of conservation or liquidation to the extent of a pro rata share of the benefit
which may accrue to the company solely as a result of the defense undertaken by
the Reinsurer.

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B.   Where two or more reinsurers are involved in the same claim and a majority
in interest elect to interpose defense to such claim, the expense shall be
apportioned in accordance with the terms of this Contract as though such expense
had been incurred by the company.

C.   It is further understood and agreed that, in the event of the insolvency of
one or more of the reinsured companies, the reinsurance under this Contract
shall be payable directly by the Reinsurer to the company or to its liquidator,
receiver or statutory successor, except as provided by Section 4118(a) of the
New York Insurance Law or except (1) where this Contract specifically provides
another payee of such reinsurance in the event of the insolvency of the company
or (2) where the Reinsurer with the consent of the direct insured or insureds
has assumed such policy obligations of the company as direct obligations of the
Reinsurer to the payees under such policies and in substitution for the
obligations of the company to such payees.

Arbitration

A.   As a condition precedent to any right of action hereunder, any dispute or
difference between the Company and any Reinsurer relating to the interpretation
or performance of this Contract, including its formation or validity, or any
transaction under this Contract, whether arising before or after termination,
shall be submitted to arbitration.

B.   If more than one reinsurer is involved in the same dispute, all such
reinsurers shall constitute and act as one party for purposes of this Article
provided that communication shall be made by the Company to each of the
reinsurers constituting the one party, and provided, however, that nothing
therein shall impair the rights of such reinsurers to assert several, rather
than joint, defenses or claims, nor be construed as changing the liability of
the Reinsurer under the terms of this Contract from several to joint.

C.   Upon written request of any party, each party shall choose an arbitrator
and the two chosen shall select a third arbitrator. If either party refuses or
neglects to appoint an arbitrator within 30 days after receipt of the written
request for arbitration, the requesting party may appoint a second arbitrator.
If the two arbitrators fail to agree on the selection of a third arbitrator
within 30 days of their appointment, the Company shall petition the American
Arbitration Association to appoint the third arbitrator. If the American
Arbitration Association fails to appoint the third arbitrator within 30 days
after it has been requested to do so, either party may request a justice of a
court of general jurisdiction of the state in which the arbitration is to be
held to appoint the third arbitrator. All arbitrators shall be active or retired
officers of insurance or reinsurance companies, or Lloyd’s London Underwriters,
and disinterested in the outcome of the arbitration. Each party shall submit its
case to the arbitrators within 30 days of the appointment of the third
arbitrator.

D.   The parties hereby waive all objections to the method of selection of the
arbitrators, it being the intention of both sides that all the arbitrators be
chosen from those submitted by the parties.

E.   The arbitrators shall have the power to determine all procedural rules for
the holding of the arbitration including but not limited to inspection of
documents, examination of witnesses and any other matter relating to the conduct
of the arbitration. The arbitrators shall interpret this Contract as an
honorable engagement and not as merely a legal obligation; they are relieved of
all judicial formalities and may abstain from following the strict rules of law.
The arbitrators may award interest and costs. Each party shall bear the expense
of its own arbitrator and shall share equally with the other party the expenses
of the third arbitrator and of the arbitration.

F.   The decision in writing of the majority of the arbitrators shall be final
and binding upon both parties. Judgment may be entered upon the final decision
of the arbitrators in any court having jurisdiction. The arbitration shall take
place in Bala Cynwyd, Pennsylvania unless otherwise mutually agreed between the
Company and the Reinsurer.

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G.   This Article shall remain in full force and effect in the event any other
provision of this Contract shall be found invalid or non-binding.

H.   All time limitations stated in this Article may be amended by mutual
consent of the parties, and will be amended automatically to the extent made
necessary by any circumstances beyond the control of the parties.

Agency Agreement
If more than one reinsured company is named as a party to this Contract, the
first named company shall be deemed the agent of the other reinsured companies
for purposes of sending or receiving notices required by the terms and
conditions of this Contract, and for purposes of remitting or receiving any
monies due any party.
Governing Law
This Contract shall be governed as to performance, administration and
interpretation by the laws of the State of Pennsylvania exclusive of the rules
with respect to conflicts of law, except as to rules with respect to credit for
reinsurance in which case the applicable rules of all states shall apply.
Confidentiality
The Reinsurer, except with the express prior written consent of the Company,
shall not directly or indirectly, communicate, disclose or divulge to any third
party, any knowledge or information that may be acquired either directly or
indirectly as a result of the inspection of the Company’s books, records and
papers. The restrictions as outlined in this Article shall not apply to
communication or disclosures that the Reinsurer is required to make to its
statutory auditors, retrocessionaires, legal counsel, arbitrators involved in
any arbitration procedures under this Contract or disclosures required upon
subpoena or other dully-issued order of a court or other governmental agency or
regulatory authority.
Severability
If any provision of this Contract should be invalid under applicable laws, the
latter shall control but only to the extent of the conflict without affecting
the remaining provisions of this Contract.
Service of Suit
(Applicable if the Reinsurer is not domiciled in the United States of America,
and/or is not authorized in any State, Territory or District of the United
States where authorization is required by insurance regulatory authorities. This
Article is not intended to conflict with or override the parties’ obligations to
arbitrate their disputes in accordance with the Arbitration Article)

  A.   It is agreed that in the event the Reinsurer fails to pay any amount
claimed to be due hereunder, the Reinsurer, at the request of the Company, will
submit to the jurisdiction of any court of competent jurisdiction within the
United States. Nothing in this Article constitutes or should be understood to
constitute a waiver of the Reinsurer’s rights to commence an action in any court
of competent jurisdiction in the United States, to remove an action to a United
States District Court, or to seek a transfer of a case to another court as
permitted by the laws of the United States or of any state in the United States.
    B.   Further, pursuant to any statute of any state, territory or district of
the United States which makes provision therefore, the Reinsurer hereby
designates the party named in its Interests and Liabilities Agreement, or if no
party is named therein, the Superintendent, Commissioner or Director of
Insurance or other officer specified for that purpose in the statute, or his
successor or successors in office, as its true and lawful attorney upon whom may
be served any lawful process

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in any action, suit or proceeding instituted by or on behalf of the Company or
any beneficiary hereunder arising out of this Contract.
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Schedule A
Excess Catastrophe Reinsurance Contract
Effective: June 1, 2005
issued to
Philadelphia Insurance Companies

                                                                               
      Reinsurer’s           Number of                                     Per  
        Full   Reinsurer’s   Annual           Annual   Quarterly     Coverage  
Occurrence   Company’s   Reinstate-   Annual   Minimum           Deposit  
Deposit Layer   Percent   Limit   Retention   ments   Limit   Premium   Rate  
Premium   Premium
First
    100 %   $ 5,000,000     $ 5,000,000       1     $ 10,000,000     $ 1,200,000
      0.57062 %   $ 1,500,000     $ 375,000  
Second
    100 %   $ 10,000,000     $ 10,000,000       1     $ 20,000,000     $
1,500,000       0.71327 %   $ 1,875,000     $ 468,750  
Third
    100 %   $ 20,000,000     $ 20,000,000       1     $ 40,000,000     $
1,568,000       0.74561 %   $ 1,960,000     $ 490,000  
Fourth
    100 %   $ 60,000,000     $ 40,000,000       1     $ 120,000,000     $
2,280,000       1.08418 %   $ 2,850,000     $ 712,500  

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