Exhibit 10.89
AMENDED AND RESTATED
QUOTA SHARE REINSURANCE AGREEMENT
     THIS AMENDED AND RESTATED QUOTA SHARE REINSURANCE AGREEMENT, Made and
entered into by and between the ERIE INSURANCE EXCHANGE, a Pennsylvania
reciprocal interinsurance exchange (hereinafter referred to as the “Reinsurer”),
and the ERIE INSURANCE PROPERTY & CASUALTY COMPANY, a Pennsylvania stock
insurance company (hereinafter referred to as the “Company”);
WITNESSETH:
     THAT WHEREAS, the Reinsurer desires to reinsure the Company to the extent
and on the terms and conditions and subject to the exceptions, exclusions and
limitations hereinafter set forth; and
     WHEREAS, the Company desires to be reinsured by the Reinsurer to the extent
and on the terms and conditions and subject to the exceptions, exclusions and
limitations hereinafter set forth; and
     WHEREAS, the parties entered into this Quota Share Reinsurance Agreement as
of June 1, 1993 and now wish to amend and restate that agreement to alter the
provisions governing termination and runoff.
     NOW, THEREFORE, for and in consideration of the mutual covenants and
promises contained herein and intending to be legally bound hereby the parties
agree as follows:
ARTICLE I: COVER
     (a) The Company shall cede to the Reinsurer and the Reinsurer shall accept
from the Company a 100% quota share participation of the Company’s gross
insurance liability on all risks insured under policies becoming effective on
and after June 1, 1993, covering all lines of business written by the Company.
     (b) The term “Policies” means the Company’s binders, policies and contracts
providing insurance and reinsurance.
ARTICLE II: TERRITORY
     This Agreement applies to all risks as covered by the Policies wherever
located.

159

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

 

ARTICLE III: REINSURANCE PREMIUM
     (a) The Company shall pay to the Reinsurer on each amount ceded hereunder
100% of its gross premiums written and gross additional premiums written, if
any, for the period covered, and the Reinsurer shall refund to the Company 100%
of each gross return premium.
     (b) The Reinsurer shall pay to the Company an amount equal to the net bad
debt write-offs incurred in the collection of the Company’s premiums due.
ARTICLE IV: COMMISSION
     (a) The Reinsurer shall make a monthly ceded commission allowance to the
Company on the gross premiums ceded under this Agreement in an amount equal to
the general expenses, service provider’s fee, taxes, licenses and fees incurred
applicable to underwriting and administration, excluding investment expenses and
Federal Income Taxes.
     (b) Any estimated charges included in the monthly ceded commission
allowance shall be
adjusted at the end of each calendar year when the actual amounts have been
determined.
     (c) On all gross return premiums the Company shall refund to the Reinsurer
the commissions allowed thereon.
ARTICLE V: LOSSES, LOSS ADJUSTMENT EXPENSES AND SALVAGES
     (a) The Company shall settle all loss claims under its Policies and the
Reinsurer shall pay to the Company 100% of all such loss claims paid by the
Company.
     (b) The Reinsurer shall bear 100% of all expenses incurred by the Company
in the investigation, adjustment and litigation of all claims under its
Policies. Such expenses will include those of salaried adjusters and claims
related administrative expenses.
     (c) The Reinsurer shall benefit prorata in all salvages, discounts and
other recoveries.
ARTICLE VI: REPORTS AND REMITTANCES
     (a) The Company shall render a monthly account to the Reinsurer summarizing
the premiums ceded, return premiums, commissions on net premiums, losses and
loss adjustment expenses paid, and salvages and other recoveries. The balance
due either party shall be remitted by the other party at the time the accounts
are rendered.
     (b) The Company shall furnish the Reinsurer a report of premiums in force,
unearned premium reserves and outstanding loss reserves as of the end of each
calendar quarter.

160

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

 

ARTICLE VII: RESERVES
     The Reinsurer shall maintain necessary and appropriate reserves with
respect to unearned premiums and claims hereunder for the benefit of the
Company.
ARTICLE VIII: INSOLVENCY CLAUSE
     (a) The reinsurance provided under this Agreement shall be payable by the
Reinsurer directly to the Company or to its liquidator, receiver or statutory
successor on the basis of the liability of the Company under the contract or
contracts reinsured without diminution because of the insolvency of the Company.
     (b) In the event of the Company’s insolvency, the liquidator or receiver or
statutory successor of the Company shall give written notice to the Reinsurer of
each claim against the Company on a policy or bond reinsured within a reasonable
time after such claim is filed in the insolvency proceeding; and 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
defenses which it may deem available to the Company, its liquidator or receiver
or statutory successor. The expense thus incurred by the Reinsurer shall be
chargeable, subject to court approval, against the Company as part of the
expense of liquidation to the extent of such proportionate share of the benefit
as shall accrue to the Company solely as a result of any such defense undertaken
by the Reinsurer.
     (c) In the event of the Company’s insolvency, the reinsurance shall be
payable as described above in this Article, except: (1) where the contract
specifically provides another payee of such reinsurance in the event of the
Company’s insolvency; 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; or (3) where the
contract expressly provides that each party shall have the right to offset any
balances, whether on account of premiums or losses, due from the other party
under the contract, against any balances payable to the other party under the
contract.
ARTICLE IX: COMMENCEMENT AND TERMINATION
     (a) This Agreement originally took effect as of June 1, 1993. It is amended
and restated as of 12:01 a.m. January 1, 2007.
     (b) This Agreement shall continue in force until modified or terminated.
Either party may terminate this Agreement at any time by giving not less than
90 days’ notice in writing to the other party. In determining whether the
requisite number of days’ notice has been given in any case, the effective date
of termination shall be counted, but the date of delivery of the written notice
shall not.
     (c) Upon termination of this Agreement, reinsurance hereunder on Policies
in force on the effective date of termination or expiration shall remain in full
force and effect until expiration, cancellation or next premium anniversary of
such Policies, whichever occurs first, but in no event beyond 12 months plus odd
time (not to exceed 18 months in all) following the effective date of
termination or expiration.

161

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

 

     (d) Notwithstanding the termination of this Agreement as hereinabove
provided, the provisions of this Agreement shall continue to apply to all
unfinished business hereunder to the end that all obligations and liabilities
incurred by each party hereunder prior to such termination shall be fully
performed and discharged.
     IN WITNESS WHEREOF the parties hereto have caused this Amended and Restated
Agreement to be adopted and executed this 29th day of December, 2006.

              ERIE INSURANCE EXCHANGE   ERIE INSURANCE PROPERTY & by Erie
Indemnity Company   CASUALTY COMPANY Attorney-in-Fact        
 
           
By:
  /s/ Jeffrey A. Ludrof   By:   /s/ Jan R. Van Gorder
 
           
 
  Jeffrey A. Ludrof       Jan R. Van Gorder
 
  President & CEO       Senior Executive Vice President,
 
          Secretary & General Counsel

162