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Exhibit 10.8

WORKERS' COMPENSATION CONSOLIDATED CATASTROPHE
AND TERRORISM EXCESS OF LOSS REINSURANCE CONTRACT

issued to

ZENITH INSURANCE COMPANY
ZNAT INSURANCE COMPANY
Woodland Hills, California

ZENITH STAR INSURANCE COMPANY
Austin, Texas

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WORKERS' COMPENSATION CONSOLIDATED CATASTROPHE
AND TERRORISM EXCESS OF LOSS REINSURANCE CONTRACT

TABLE OF CONTENTS

Article

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  Page

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    Preamble   2 1   Business Reinsured   2 2   Limit and Retention   2 3   Term
  3 4   Territory   3 5   Warranties   3 6   Exclusions   4 7   Premium   6 8  
Reinstatement   6 9   Definitions   7 10   Net Retained Lines   8 11   Liability
of Reinsurer   8 12   Currency   9 13   Illegality   9 14   Loss Reserve Funding
  9 15   Compliance With California SB 2093   10 16   Taxes   10 17   Notice of
Loss and Loss Settlements   10 18   Excess Recovery—Terrorism   11 19   Offset  
11 20   Commutation   11 21   Excess of Policy Limits   12 22   Extra
Contractual Obligations   13 23   Delay, Omission or Error   13 24   Access to
Records   13 25   Arbitration   14 26   Service of Suit   14 27   Insolvency  
15 28   Intermediary   15     Company Signing Block   17

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WORKERS' COMPENSATION CONSOLIDATED CATASTROPHE
AND TERRORISM EXCESS OF LOSS REINSURANCE CONTRACT

        This Contract is made and entered into by and between the ZENITH
INSURANCE COMPANY and ZNAT INSURANCE COMPANY, both of Woodland Hills,
California, and ZENITH STAR INSURANCE COMPANY, Austin, Texas, and any and/or all
of the subsidiary and/or affiliated companies which are or may hereafter be
under the management of the Company (hereinafter together called the "Company")
and the Subscribing Reinsurer specifically identified in the Interests and
Liabilities Agreement attached to and forming part of this Contract (hereinafter
called the "Reinsurer").

        It is understood and agreed that whenever the term "Company" is used in
this Contract such term shall be held to include any and/or all of the
subsidiary and/or affiliated companies which are or may hereafter be under the
management of the Company, provided, however, that prior notice be given to the
Reinsurer of any such subsidiary and/or affiliated companies which may hereafter
come under the management of the Company prior to any risk attaching hereunder,
with full particulars as to how such inclusion is likely to affect this
Contract. In the event of either party maintaining that such inclusion calls for
alteration in existing terms, and an agreement not being arrived at, then the
business of such included Company is covered only for a period of sixty days
after notice to the Company that the Reinsurer does not wish to cover the
business so included.

        It is agreed that the rights and liabilities of the parties hereto shall
be determined as though any existing internal pooling agreements or internal
reinsurance arrangements among the companies included within the definition of
"Company," or as they may be amended from time to time, were non-existent.

ARTICLE 1

BUSINESS REINSURED

        This Contract is to indemnify the Company in respect of the net excess
liability as a result of any loss or losses which may occur during the term of
this Contract under any Policies covering business underwritten and classified
by the Company as Workers' Compensation and/or Employer's Liability, in force at
the inception of this Contract, or written or renewed during the term of this
Contract by or on behalf of the Company, subject to the terms and conditions
herein contained.

        It is understood and agreed that the indemnity afforded by this Contract
shall apply to each and every Loss Occurrence, whether involving any one or any
combination of the classes of business listed in the preceding paragraph,
regardless of the number of Policies under which such loss is payable or the
number of different interests insured.

ARTICLE 2

LIMIT AND RETENTION

        The Reinsurer shall be liable in respect of each and every Loss
Occurrence, for 100% of the Ultimate Net Loss over and above the initial
Ultimate Net Loss Retention(s) as set forth in the

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schedule below, for each and every Loss Occurrence, subject to a limit of
liability to the Reinsurer as set forth in the schedule below, for each and
every Loss Occurrence:

Layer

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  Retention

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  Reinsurer's Limited Liability

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  Ultimate Net Loss
In respect of each and
Every Loss Occurrence

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  In respect of each and
every Loss Occurrence

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Third Excess   $ 10,000,000   $ 10,000,000 Fourth Excess   $ 20,000,000   $
20,000,000 Fifth Excess   $ 40,000,000   $ 35,000,000 Sixth Excess   $
75,000,000   $ 75,000,000

        Notwithstanding the reinstatement provisions herein, it is understood
and agreed that this Contract is subject to a maximum annual recovery, as set
forth in the schedule below, for Loss Occurrences as defined under TRlA of 2002:

 
  Maximum Annual Recovery for TRIA Losses

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Third Excess   $ 10,000,000 Fourth Excess   $ 20,000,000 Fifth Excess   $
35,000,000

        As respects the Fourth, Fifth and Sixth Excess Layers of this Contract,
recoveries from underlying layers will not be deducted when establishing
Ultimate Net Loss for successive layers for purposes of this Article.

ARTICLE 3

TERM

        This Contract shall become effective at 12:01 a.m., Pacific Standard
Time, January 1, 2005, and shall remain in full force and effect for one year,
expiring 12:01 a.m., Pacific Standard Time, January 1, 2006.

        If coverage under this Contract shall terminate while a loss covered
hereunder is in progress, it is agreed that, subject to the other conditions of
this Contract, the Reinsurer shall be liable for its proportion of the entire
loss resulting from such occurrence for which the Company is liable up to the
limit of this Contract.

        Reinsurance hereunder shall apply only to those losses occurring during
the term of this Contract and which are reported to the Reinsurer prior to
January 1, 2013.

ARTICLE 4

TERRITORY

        This Contract will cover wherever the Company's Policies cover.

ARTICLE 5

WARRANTIES

        A.    As regards the Third Excess Layer only:

        It is warranted for the purposes of this Contract that no claims shall
be paid hereunder in respect of Worker's Compensation or Occupational Disease
losses unless two persons have claims of at least $50,000 each in the same Loss
Occurrence.

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        B.    As regards the Fourth, Fifth and Sixth Excess Layers only:

        It is warranted for the purposes of this Contract that the maximum
amount which any one claimant can contribute to the Ultimate Net Loss from any
one Loss Occurrence is $5,000,000, or so deemed. The maximum any one life is to
be calculated from the "ground up," not within the layer(s).

        C.    As regards the Third, Fourth, Fifth and Sixth Excess Layers:

        It is warranted for the purposes of this Contract, as respects
Employer's Liability, that the Company's maximum Policy limit shall be
$2,000,000, or so deemed.

ARTICLE 6

EXCLUSIONS

        This Contract does not cover:

        A.    Excess insurance.

        B.    Assumed Reinsurance.

        C.    Occupational Disease losses, unless such losses arise out of a
sudden and accidental event not exceeding 48 hours in duration, which event also
involves traumatic injuries and/or death. For the purposes of this Contract,
"sudden" shall mean that the first and last exposure(s) of all individuals that
contribute to the loss to the causative agent(s) shall have occurred within a
single and continuous 48 hour period; provided, however, that no termination of
employment or plant closure shall be considered a sudden event.

        D.    In respect of any Policy issued or reinsured by the Company to
cover the following occupations or employments, except when such occupations or
employments are incidental to and form a minor part of the usual occupation or
employment of the insured:

        1.     Working and navigation of any vessel, other than light craft on
inland waterways and dredging.

        2.     Manufacture, storage, filling, breaking down, or transport of

        a.     Fireworks, ammunition, fuse, cartridges, powder, nitroglycerine
or any explosive.

        b.     Gasses and/or air under pressure in containers (but this
exclusion shall not apply to the storage or distribution of liquid petroleum gas
by wholesale or retail dealers).

        3.     Underground coal mines.

        4.     Manufacture of celluloid and pyroxylin.

        5.     Erection of structural iron and/or steel works, unless in
conjunction with ordinary construction of buildings. Except that this exclusion
shall not apply to insureds engaged in steel work where such steel work erection
is not beyond twelve stories in height.

        6.     Contractors doing building wrecking exclusively.

        7.     Tunneling.

        8.     Tower, steeple and chimney shaft work.

        9.     Operation of dry docks, docks, quays, and wharves. USL&H
exposures are deemed to be incidental so long as USL&H Gross Net Earned Premium
Income (GNEPI) does not exceed 10% of the Company's total subject GNEPI.

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        10.   Construction and maintenance of coffer dams.

        11.   Subaqueous construction and/or other subaqueous work.

        12.   Oil tanks and/or refining works.

        13.   Aviation risks involving flying risks, commercial airlines and
airline crews. This exclusion does not apply to any "ground" personnel.

        14.   Operations involving atomic energy and nuclear fission.

        15.   Operations of a carrier by rail.

        In connection with those occupations or employments enumerated under
Item D. above, if the Company, without the knowledge of and contrary to the
instructions of its head office, is bound or is unknowingly exposed on a risk
falling otherwise within one of the exclusions set forth, such risk is covered
until the Company's head office receives knowledge thereof and, pending
cancellation of such risk by the Company, for a further period of 30 days after
receipt of such knowledge by the head office of the Company.

        Where Policies are issued by the Company through its membership of or
participation in an assigned risk plan or similar facility which involves
occupations or employments prohibited under Item D. above, such Policies are not
excluded under this Contract.

        E.    In no event will this Contract provide coverage for loss, damage,
cost or expense directly or indirectly caused by, contributed to by, resulting
from, or arising out of or in connection with biological, chemical, or nuclear
explosion, pollution, and contamination as a result of terrorism.

        F.     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,
howsoever 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.

        G.    War.

        H.    Nuclear Incident.

        I.     Professional Sports Teams.

        J.     FELA, except incidental.

        K.    Jones Act, except incidental.

        L.    As regards the Sixth Excess layer only:

        Indemnity, damage, costs or expense of whatsoever nature directly or
indirectly caused by, contributed to by, resulting from or arising out of or in
connection with any "Act of Terrorism" as defined in the Terrorism Risk
Insurance Act of 2002 (the "Act"), regardless of any other cause or event
contributing concurrently or in any other sequence to the loss.

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ARTICLE 7

PREMIUM

        A.    The premium to be paid to the Reinsurer shall be calculated at the
rates set out below multiplied by the Gross Net Earned Premium Income (as
defined herein) of the Company for the term of this Contract, subject to the
annual minimum and deposit premiums stated hereunder:

PREMIUM SCHEDULE

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Layer

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  Rate

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  Deposit Premium

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  Minimum Premium

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Third Excess   0.286 % $ 3,000,000   $ 2,400,000 Fourth Excess   0.352 % $
3,700,000   $ 2,960,000 Fifth Excess   0.367 % $ 3,850,000   $ 3,080,000 Sixth
Excess   0.357 % $ 3,750,000   $ 3,000,000

        The annual deposit premiums shall be payable to the Reinsurer by the
Company in installments as follows:

INSTALLMENT SCHEDULE

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Layer

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  January 1, 2005

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  April 1, 2005

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  July 1, 2005

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  October 1, 2005

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Third Excess   $ 750,000   $ 750,000   $ 750,000   $ 750,000 Fourth Excess   $
925,000   $ 925,000   $ 925,000   $ 925,000 Fifth Excess   $ 962,500   $ 962,500
  $ 962,500   $ 962,500 Sixth Excess   $ 937,500   $ 937,500   $ 937,500   $
937,500

        B.    As soon as practicable following the expiration of this Contract,
the Company shall forward to the Reinsurer a statement of its Gross Net Earned
Premium Income for the term of the Contract. The earned premium due to the
Reinsurer shall be calculated for each Layer by multiplying the rates specified
in the Premium Schedule above by the Company's Gross Net Earned Premium Income.

        Should the premium so calculated exceed the deposit premium paid in
accordance with Paragraph A. above, the Company will immediately pay the
Reinsurer the difference. Should the premium so calculated be less than the
deposit premium paid in accordance with Paragraph A. above, the Reinsurer will
immediately refund to the Company the difference, subject to the minimum premium
specified in the Premium Schedule.

        The term "Gross Net Earned Premium Income" as used in this Contract
shall mean the gross earned premium income of the Company for the business
covered by this Contract, less premiums paid for reinsurances, recoveries under
which would inure to the benefit of this Contract.

ARTICLE 8

REINSTATEMENT

        Loss payments under this Contract will reduce the limit of coverage
afforded by the amounts paid, but the limit of coverage will be reinstated from
the time of the occurrence of the loss, and for each amount so reinstated, the
Company agrees to pay, simultaneously with the Reinsurer's loss payment, an
additional premium calculated at pro rata of the Reinsurer's premium for the
term of this Contract, being pro rata only as to the fraction of the face value
of this Contract (i.e., the fraction of the Reinsurer's limit of liability
outlined in the LIMIT AND RETENTION ARTICLE) so reinstated. Nevertheless, the
Reinsurer's liability hereunder shall never exceed the Reinsurer's limit of
liability outlined in the LIMIT AND RETENTION ARTICLE in respect of any one Loss
Occurrence and,

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subject to the limit in respect of any one Loss Occurrence, shall be further
limited to the following amount(s) during the term of the Contract by reason of
any and all claims arising hereunder:

Layer

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  Reinsurer's limits of liability in respect of any and all
claims arising hereunder

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Third Excess   $ 20,000,000 Fourth Excess   $ 40,000,000 Fifth Excess   $
70,000,000 Sixth Excess   $ 150,000,000

        If at the time of a loss settlement hereon the reinsurance premium, as
calculated in accordance with the PREMIUM ARTICLE, is unknown, the above
calculation of reinstatement premium shall be based upon the deposit premium,
subject to adjustment when the reinsurance premium is finally established.

ARTICLE 9

DEFINITIONS

        A.    The term "Loss Occurrence" as used in this Contract shall mean any
one disaster or casualty or accident or loss or series of disasters or
casualties or accidents or losses arising out of or caused by one event.

        Occupational Disease or cumulative trauma shall not be covered under
this Contract unless as a result of a sudden and accidental event not exceeding
48 hours duration, and which event also involves traumatic injuries and/or
death. All resulting occupational disease or cumulative trauma losses shall be
considered as one Loss Occurrence or may be combined with losses classified as
other than occupational disease or cumulative trauma which arise out of the same
event and the combination of such losses shall be considered as one Loss
Occurrence with the meaning hereof.

        Loss Occurrence shall also include:

        1.     Indemnity, damage, costs or expense of whatsoever nature directly
or indirectly caused by, contributed to by, resulting from or arising out of or
in connection with any "Act of Terrorism" as defined in the Terrorism Risk
Insurance Act of 2002 (the "Act"), regardless of any other cause or event
contributing concurrently or in any other sequence to the loss. (Note: This
coverage to be excluded from Sixth Excess layer-see Exclusion L.)

        2.     Actual loss or damage caused by any act of terrorism which does
not meet the definition of "Act of Terrorism" set forth in the Terrorism Risk
Insurance Act of 2002.

        B.    The term "Ultimate Net Loss" as used in this Contract shall mean
the actual loss paid by the Company or for which the Company becomes liable to
pay, such loss to include 90% of any Extra Contractual Obligation (and expense)
as defined in the EXTRA CONTRACTUAL OBLIGATIONS ARTICLE, 90% of any Excess of
Policy Limit as defined in the EXCESS OF POLICY LIMITS ARTICLE, expenses of
litigation and interest, claim-specific declaratory judgment expenses, and all
other loss expense of the Company including subrogation, salvage, and recovery
expenses (office expenses and salaries of officials and employees not classified
as loss adjusters are not chargeable as expenses for purposes of this
paragraph), but salvages and all recoveries, including recoveries under all
reinsurances which inure to the benefit of this Contract (whether recovered or
not), shall be first deducted from such loss to arrive at the amount of
liability attaching hereunder.

        All salvages, recoveries or payments recovered or received subsequent to
loss settlement hereunder shall be applied as if recovered or received prior to
the aforesaid settlement, and all necessary adjustments shall be made by the
parties hereto.

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        The Company is permitted to carry underlying quota share and excess of
loss reinsurance, recoveries under which shall inure to the Company's sole
benefit and shall be disregarded for all purposes hereof.

        For purposes of this definition, the phrase "becomes liable to pay"
shall mean the existence of a judgment which the Company does not intend to
appeal, or a release has been obtained by the Company, or the Company has
accepted a proof of loss.

        The phrase "claim-specific declaratory judgment expenses," as used in
this Contract will mean all expenses incurred by the Company in connection with
declaratory judgment actions brought to determine the Company's defense and/or
indemnification obligations that are allocable to specific Policies and claims
subject to this Contract. Declaratory judgment expenses will be deemed to have
been incurred by the Company on the date of the original loss (if any) giving
rise to the declaratory judgment action.

        Nothing in this clause shall be construed to mean that losses are not
recoverable hereunder until the Company's Ultimate Net Loss has been
ascertained.

        C.    The term "Policy" as used in this Contract shall mean any binder,
policy or contract of insurance issued, accepted or held covered provisionally
or otherwise, by or on behalf of the Company.

ARTICLE 10

NET RETAINED LINES

        This Contract applies only to that portion of any insurance which the
Company retains net for its own account and in calculating the amount of any
loss hereunder and also in computing the amount or amounts excess of which this
Contract attaches, only loss or losses in respect of that portion of any
insurance which the Company retains net for its own account shall be included.

        The amount of the Reinsurer's liability hereunder in respect of any loss
or losses shall not be increased by reason of the inability of the Company to
collect from any other reinsurers, whether specific or general, any amounts
which may have become due from them whether such inability arises from the
insolvency of such other Reinsurers or otherwise.

ARTICLE 11

LIABILITY OF REINSURER

        The liability of the Reinsurer shall follow that of the Company in every
case and shall be subject in all respects to all the general and special
stipulations, clauses, waivers and modifications of the Company's Policy or
Policies and any endorsements thereon.

        The Company shall be the sole judge as to what shall constitute a claim
or loss covered under the Company's original Policy and as to the Company's
liability thereunder and as to the amount or amounts which it shall be proper
for the Company to pay thereunder; and the Reinsurer shall be bound by the
judgment of the Company as to the liability and obligation of the Company under
its original Policies.

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

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ARTICLE 12

CURRENCY

        The currency to be used for all purposes of this Contract shall be
United States of America currency.

ARTICLE 13

ILLEGALITY

        If any law or regulation of the Federal or State or Local Government of
any jurisdiction in which the Company is doing business shall render illegal the
arrangements made in this Contract, the Contract can be terminated immediately,
insofar as it applies to such jurisdiction, by the Company giving notice to the
Reinsurer to such effect.

ARTICLE 14

LOSS RESERVE FUNDING

        This Article is only applicable to those Reinsurers who cannot qualify
for credit by the State having jurisdiction over the Company's loss reserves.

        As regards Policies or bonds issued by the Company coming within the
scope of this Contract, the Company agrees that when it shall file with the
insurance department or set up on its books reserves for losses covered
hereunder which it shall be required to set up by law it will forward to the
Reinsurer a statement showing the proportion of such loss reserves which is
applicable to them.

        The Reinsurer hereby agrees that it will apply for and secure delivery
to the Company a clean irrevocable and unconditional Letter of Credit issued by
a bank chosen by the Reinsurer and acceptable to the appropriate insurance
authorities, in an amount equal to the Reinsurer's proportion of the loss
reserves in respect of known outstanding losses that have been reported to the
Reinsurer, allocated loss expenses relating thereto and Incurred But Not
Reported loss and loss expense as shown in the statement prepared by the
Company.

        The Letter of Credit shall be "Evergreen" and shall be issued for a
period of not less than one year, and shall be automatically extended for one
year from its date of expiration or any future expiration date unless 30 days
prior to any expiration date, the bank shall notify the Company by certified or
registered mail that it elects not to consider the Letter of Credit extended for
any additional period.

        The bank chosen for the issuance of the Letter of Credit shall have no
responsibility whatsoever in connection with the propriety of withdrawals made
by the Company or the disposition of funds withdrawn, except to ensure that
withdrawals are made only upon the order of properly authorized representatives
of the Company.

        At annual intervals, or more frequently as agreed but never more
frequently than semiannually, the Company shall prepare a specific statement,
for the sole purpose of amending the Letter of Credit, of the Reinsurer's share
of known and reported outstanding losses and allocated expenses relating
thereto. If the statement shows that the Reinsurer's share of such losses and
allocated loss expenses, and Incurred But Not Reported loss and loss expense,
exceeds the balance of credit as of the statement date, the Reinsurer shall,
within 30 days after receipt of notice of such excess, secure delivery to the
Company of an amendment of the Letter of Credit increasing the amount of credit
by the amount of such difference. If, however, the statement shows that the
Reinsurer's share of known and reported outstanding losses plus allocated loss
expenses, and Incurred But Not Reported loss and loss expense, relating thereto
is less than the balance of credit as of the statement date, the Company shall,
within

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30 days after receipt of written request from the Reinsurer, release such excess
credit by agreeing to secure an amendment to the Letter of Credit reducing the
amount of credit available by the amount of such excess credit.

ARTICLE 15

COMPLIANCE WITH CALIFORNIA SB 2093

        Any Subscribing Reinsurer that has gained admission to transact Workers
Compensation reinsurance business in the State of California, or that is
reinsuring the injury, disablement, or death portions of Policies of Workers
Compensation insurance in the State of California under the class of disability
insurance, shall comply with all applicable provisions of California Insurance
Code §§11690-11703, revised. In the event of a delinquency proceeding,
receivership or insolvency of the Company, the Insurance Commissioner of the
State of California (the "Commissioner") shall have the right to draw on any
sums from the Subscribing Reinsurer's deposit that are necessary for the
Commissioner to pay those reinsured claims and obligations, or to ensure their
payment by the California Insurance Guarantee Association, deemed by the
Commissioner due under this Contract, upon failure of the Subscribing Reinsurer
for any reason to make payments under this Contract. The Commissioner shall give
30 days' notice prior to drawing upon these funds of an intent to do so.
Notwithstanding the Commissioner's right to draw on these funds, the Subscribing
Reinsurer shall otherwise retain its right to determine the validity of those
claims and obligations and to contest their payment under this Contract. Prior
to a Subscribing Reinsurer's deposit being drawn upon, in whole or in part, the
Insurance Department of the State of California (the "Department") shall provide
the Subscribing Reinsurer with an explanation of procedures that the Subscribing
Reinsurer may use to explain to the Department why the use of the Subscribing
Reinsurer's deposit may not be appropriate under this Contract.

ARTICLE 16

TAXES

        A.    In consideration of the terms under which this Contract is issued,
the Company undertakes not to claim any deduction of the premium hereon when
making Canadian tax returns or when making tax returns, other than Income or
Profits Tax returns, to any state or territory of the United States of America
or to the District of Columbia.

        B.    1.    The Reinsurer has agreed to allow for the purpose of paying
the Federal Excise Tax, 1% of the premium payable hereon to the extent such
premium is subject to Federal Excise Tax.

        2.     In the event of any return of premium becoming due hereunder, the
Reinsurer shall deduct 1% from the amount of the return, and the Company or its
agent should take steps to recover the Tax from the U.S. Government.

ARTICLE 17

NOTICE OF LOSS AND LOSS SETTLEMENTS

        The Company will advise the Reinsurer promptly of all claims which in
the opinion of the Company may involve the Reinsurer and of all subsequent
developments on these claims which may materially affect the position of the
Reinsurer.

        The Reinsurer agrees to abide by the loss settlements of the Company,
provided that retroactive extension of Policy terms or coverages made
voluntarily by the Company and not in response to court decisions (whether such
court decision is against the Company or other companies affording the same or
similar coverages) will not be covered under this Contract.

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        When so requested the Company will afford the Reinsurer an opportunity
to be associated with the Company, at the expense of the Reinsurer, in the
defense of any claim or suit or proceeding involving this Contract and the
Company will cooperate in every respect in the defense of such claim, suit or
proceeding.

        The Reinsurer will pay its share of loss settlements immediately upon
receipt of proof of loss from the Company.

ARTICLE 18

EXCESS RECOVERY—TERRORISM

        A.    A pro rata share of the amount, if any, by which financial
assistance paid to the Insurer under the Terrorism Risk Insurance Act of 2002
("TRIA") for Acts of Terrorism occurring during any one Program Year, combined
with the Insurer's total private-sector reinsurance recoveries for such Acts of
Terrorism, exceeds the amount of Insured Losses paid by the Insurer for such
Acts of Terrorism, shall be reimbursed by the Company to the Reinsurer. Such pro
rata share shall be calculated by dividing:

        1.     the Reinsurer's payment under this Contract of Insured Losses for
the Program Year; by

        2.     the Insurer's total private-sector reinsurance recoveries arising
from all Act(s) of Terrorism covered under TRIA during the Program Year.

        B.    Payment shall be made as promptly as possible after the Company's
receipt of any recovery in excess of its Insured Losses. The Company shall
provide the Reinsurer with all the necessary data respecting the transactions
covered under this Article.

        C.    Such payment to the Reinsurer shall apply unless disallowed by the
U.S. Department of the Treasury.

        D.    "Insurer" means the insurance group of which the Company is a
subsidiary or affiliate for purposes of TRIA. "Act of Terrorism," "Insured
Losses" and "Program Year" shall follow the definitions provided in TRIA.

ARTICLE 19

OFFSET

        Each party hereto shall have, and may exercise at any time and from time
to time, the right to offset any balance or balances under this Contract,
whether on account of premiums or on account of losses or otherwise, due from
each party to the other (or, if more than one, any other) party hereto. However,
that in the event of the insolvency of a party hereto, offsets shall only be
allowed in accordance with the provisions of Section 7427 of the insurance Law
of the State of New York and the insurance Law of the State of California.

ARTICLE 20

COMMUTATION

        A.    Either the Reinsurer or the Company may request commutation of
that portion of any excess loss hereunder represented by any outstanding claim
or claims after 84 months from the date of an occurrence. If both parties desire
to commute a claim or claims, then within 60 days after such agreement, the
Company shall submit a statement of valuation of the outstanding claim or claims
showing the elements considered reasonable to establish the ultimate net loss
and the Reinsurer shall pay the amount requested.

11

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        B.    If agreement, as outlined in the paragraph above, cannot be
reached, the effort can be abandoned or alternately the Company and the
Reinsurer may mutually appoint an actuary or appraiser to investigate, determine
and capitalize such claim or claims. If both parties then agree, the Reinsurer
shall pay its proportion of the amount so determined to be the capitalized value
of such claim or claims.

        C.    If the parties, as outlined in the paragraphs above, fail to
agree, they may abandon the effort or they may agree to settle any difference
using a panel of three actuaries, one to be chosen by each party and the third
by the two so chosen. If either party refuses or neglects to appoint an actuary
within 30 days, the other party may appoint two actuaries. If the two actuaries
fail to agree on the selection of a third actuary within 30 days of their
appointment, each of them shall name two, of whom the other shall decline one
and the decision shall be made by drawing lots. All the actuaries shall be
regularly engaged in the valuation of Workers' Compensation claims and shall be
Fellows of the Casualty Actuarial Society or of the American Academy of
Actuaries. None of the actuaries shall be under the control of either party to
this Contract.

        D.    Each party shall submit its case to its actuary within 30 days of
the appointment of the third actuary. The decision in writing of any two
actuaries, when filed with the parties hereto, shall be final and binding on
both parties. The expense of the actuaries and of the commutation shall be
equally divided between the two parties. Said commutation shall take place in
Woodland Hills, California, unless some other place is mutually agreed upon by
the Company and the Reinsurer.

        E.    Payment by the Reinsurer of their proportion of the amount or
amounts, so mutually agreed, shall constitute a complete and final release of
the Reinsurer of all claims, both reported and unreported.

ARTICLE 21

EXCESS OF POLICY LIMITS

        In the event the Ultimate Net Loss includes an amount in excess of the
Company's Policy limit, when loss in excess of the limit has been incurred
because of, but not limited to its failure to settle within the Policy limit or
by reason of 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 in the preparation or prosecution of an appeal
consequent upon such action, such amount, as provided for in the definition of
Ultimate Net Loss, in excess of the Company's Policy limit shall be added to the
amount of the Company's Policy limit, and the sum thereof shall he covered
hereunder, subject to the Reinsurer's limit of liability appearing in the LIMIT
AND RETENTION ARTICLE of this Contract.

        However, this Article shall not apply where the loss has been incurred
due to the fraud of a member of the Board of Directors or a corporate officer 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.

        For the purpose of this Article, the word "loss" shall mean any amounts
for which the Company would have been contractually liable to pay had it not
been for the limit of the original Policy.

        If any provision of this Article 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 Article or the
enforceability of such provision in any other jurisdiction.

12

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ARTICLE 22

EXTRA CONTRACTUAL OBLIGATIONS

        This Contract shall protect the Company, subject to the Reinsurer's
limit of liability appearing in the LIMIT AND RETENTION ARTICLE of this
Contract, where the Loss Occurrence includes any Extra Contractual Obligations
as provided for in the definition of Ultimate Net Loss. "Extra Contractual
Obligations" are defined as those liabilities not covered under any other
provision of this Contract and which arise from handling of any claim on
business covered hereunder, such liabilities arising because of, but not limited
to, the following: failure by the Company to settle within the Policy limit, or
by reason of 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 in the preparation or prosecution of an appeal
consequent upon such action.

        The date on which any Extra Contractual Obligation is incurred by the
Company shall be deemed, in all circumstances, to be the date of the original
Loss Occurrence.

        However, this Article shall not apply where the Loss Occurrence has been
incurred due to the fraud of a member of the Board of Directors or a corporate
officer 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.

        For the purposes of Extra Contractual Obligations coverage, there shall
also be recovery hereunder as respects all liability of the Company arising from
the handling of any claim under self-insurance of Workers' Compensation and/or
Employer's Liability or under Policies issued to itself or any of the Company's
subsidiary and/or affiliated companies.

        If any provision of this Article 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 Article or the
enforceability of such provision in any other jurisdiction.

ARTICLE 23

DELAY, OMISSION OR ERROR

        Any inadvertent delay, omission or error shall not be held to relieve
either party hereto from any liability which would attach to it hereunder if
such delay, omission or error had not been made, providing such delay, omission
or error is rectified upon discovery.

        In the case of exposures not within the terms and conditions hereof, the
obligation of the Reinsurer shall be limited to return of any premium paid
hereon for such exposure.

        Nevertheless, this Article shall not apply with respect to loss reports
rendered to the Reinsurer beyond the period required to afford coverage in
accordance with the TERM ARTICLE.

ARTICLE 24

ACCESS TO RECORDS

        Provided that the Reinsurer shall give prior written notice of their
desire to obtain information, the Company shall place at the disposal of the
Reinsurer, and the Reinsurer, or its authorized representative, shall have the
right to inspect, at all reasonable times during the currency of this Contract
and thereafter, the books, records and papers of the Company pertaining to the
reinsurance provided hereunder.

13

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ARTICLE 25

ARBITRATION

        As a precedent to any right of action hereunder, if any dispute shall
arise between the Company and the Reinsurer with reference to the interpretation
of this Contract including its formation and validity or their rights with
respect to any transaction involved, whether such dispute arises before or after
termination of this Contract, such dispute, upon the written request of either
party, shall be submitted to three arbitrators, one to be chosen by each party,
and the third by the two so chosen. If either party refuses or neglects to
appoint an arbitrator within 30 days after the receipt of written notice from
the other party requesting it to do so, the requesting party may appoint two
arbitrators. If the two arbitrators fail to agree in the selection of a third
arbitrator within 30 days of their appointment, each of them shall name two, of
whom the other shall decline one and the decision shall be made by drawing lots.
All arbitrators shall be executive officers of insurance or reinsurance
companies or Underwriters at Lloyd's, London not under the control of either
party to this Contract.

        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, and they
shall make their award with a view to effecting the general purpose of this
Contract in a reasonable manner rather than in accordance with a literal
interpretation of the language. Each party shall submit its case to its
arbitrator within 30 days of the appointment of the third arbitrator.

        The decision in writing of any two arbitrators, when filed with the
parties hereto, shall be final and binding on both parties. Judgment may be
entered upon the final decision of the arbitrators in any court having
jurisdiction. Each party shall bear the expense of its own arbitrator and shall
jointly and equally bear with the other party the expense of the third
arbitrator and of the arbitration. Said arbitration shall take place in the city
in which the Company's head office is located unless some other place is
mutually agreed upon by the Company and the Reinsurer.

ARTICLE 26

SERVICE OF SUIT

        This Article applies 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.

        It is agreed that in the event of the failure of the Reinsurer hereon to
pay any amount claimed to be due hereunder, the Reinsurer hereon, at the request
of the Company, will submit to the jurisdiction of a 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.

        It is further agreed that service of process in such suit may be made
upon Messrs. Mendes & Mount, 725 South Figueroa Street, Los Angeles, California
90017 or in the event the suit is instituted in New York State, Messrs. Mendes &
Mount, 750 Seventh Avenue, New York, New York 10019-6829 and that in any suit
instituted against the Reinsurer upon this Contract, the Reinsurer will abide by
the final decision of such court or of any appellate court in the event of an
appeal.

        The above-named are authorized and directed to accept service of process
on behalf of the Reinsurer in any such suit and/or upon the request of the
Company to give a written undertaking to the Company that they will enter a
general appearance upon the Reinsurer's behalf in the event such a suit shall be
instituted.

14

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        Further, pursuant to any statute of any state, territory or district of
the United States which makes provision therefore, the Reinsurer hereon hereby
designates 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 in any action, suit or proceeding instituted by or on behalf of the
Company or any beneficiary hereunder arising out of this Contract, and hereby
designates the above-named as the person to whom the said officer is authorized
to mail such process or a true copy thereof.

ARTICLE 27

INSOLVENCY

        In the event of the insolvency of any company or companies included in
the designation of "Company," this Article will apply only to the insolvent
company or companies.

        In the event of the insolvency and the appointment of a conservator,
liquidator or statutory successor of the Company, reinsurance under this
Contract shall be payable to such conservator, liquidator or statutory successor
immediately upon demand, with reasonable provision for verification, on the
basis of claims allowed against the insolvent Company by any court of competent
jurisdiction or by any conservator, liquidator or statutory successor of the
Company having authority to allow such claims, without diminution because of
such insolvency or because such conservator, liquidator or statutory successor
has failed to pay all or portion of any claims. Such payments by the Reinsurer
shall be made directly to the Company or its conservator, liquidator or
statutory successor except as provided by Section 4118(a) of the New York
Insurance Law or except when the Contract specifically provides another payee of
such reinsurance in the event of the insolvency of the Company and when 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.

        It is agreed, however, that the conservator, liquidator or statutory
successor of the insolvent Company shall give written notice to the Reinsurer of
the pendency of a claim against the insolvent Company on the Policy or Policies
reinsured within a reasonable time after such claim is filed in the insolvency
proceeding and that during the pendency of such claim, the Reinsurer may
investigate such claim and interpose, at its own expense, in the proceeding when
such claim is to be adjudicated, any defense or defenses which it may deem
available to the Company or its conservator or liquidator or statutory
successor. The expense thus incurred by the Reinsurer shall be chargeable,
subject to court approval, against the insolvent Company as part of the expense
of liquidation to the extent of a proportionate share of the benefit which may
accrue to the Company solely as a result of the defense undertaken by the
Reinsurer.

        When 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 insolvent Company.

ARTICLE 28

INTERMEDIARY

        Guy Carpenter & Company, Inc. is hereby recognized as the Intermediary
negotiating this Contract for all business hereunder. All communications,
including notices, premiums, return premiums, commissions, taxes, losses, loss
adjustment expenses, salvages and loss settlements relating thereto shall be
transmitted to the Reinsurer or the Company through Guy Carpenter &
Company, Inc., One Convention Place, 701 Pike Street, Suite 2000, Seattle,
Washington 98101. Payments by the Company to the Intermediary shall be deemed to
constitute payment to the Reinsurer. Payments by the Reinsurer to the
Intermediary shall be deemed only to constitute payment to the Company to the
extent that such payments are actually received by the Company.

15

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        IN WITNESS WHEREOF, the Company has caused this Contract to be executed
by its duly authorized representative(s) this 21st day of March, in the year of
2005.

/s/ John J. Tickner

ZENITH INSURANCE COMPANY
ZNAT INSURANCE COMPANY
ZENITH STAR INSURANCE COMPANY

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WORKERS' COMPENSATION CONSOLIDATED CATASTROPHE
AND TERRORISM EXCESS OF LOSS REINSURANCE CONTRACT

16

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SCHEDULE OF REINSURERS

ZENITH INSURANCE COMPANY

WORKERS' COMPENSATION CONSOLIDATED CATASTROPHE
AND TERRORISM EXCESS OF LOSS REINSURANCE CONTRACT

CONTRACT EFFECTIVE: January 1, 2005

Reinsurer

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  Reference #

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  FEIN #

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  NAIC #

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  Signed %

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  Excess of Loss—Third Layer                   Willis Corroon Group Services
Ltd.                     Lloyd's Underwriter Syndicate No. 2987 BRT          
AA-1128987   10.714 %   Lloyd's Underwriter Syndicate No. 2000 HAR          
AA-1128000   7.143 %   Lloyd's Underwriter Syndicate No. 4472 LIB          
AA-1126006   3.571 %   Lloyd's Underwriter Syndicate No. 1084 CSL          
AA-1127084   2.143 %   Lloyd's Underwriter Syndicate No. 0435 FDY          
AA-1126435   1.429 %   Lloyd's Underwriter Syndicate No. 0727 SAM          
AA-1126727   5.357 %   Aspen Insurance UK Limited PSAC W4006          
AA-1120337   7.143 % Arch Reinsurance Company       06-1430254   10348   10.00 %
Endurance Specialty Insurance Limited           AA-3194130   12.50 % Hannover
Rüversicherung-AG           AA-1340125   18.00 % Odyssey America Reinsurance
Corporation       47-0698507   23680   7.50 % XL Reinsurance America
Incorporated       13-1290712   20583   14.50 %                

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  TOTAL:               100.00 % Excess of Loss—Fourth Layer                  
Willis Corroon Group Services Ltd.                     Lloyd's Underwriter
Syndicate No. 2987 BRT           AA-1128987   4.375 %   Lloyd's Underwriter
Syndicate No. 2000 HAR           AA-1128000   2.188 %   Lloyd's Underwriter
Syndicate No. 1084 CSL           AA-1127084   1.312 %   Lloyd's Underwriter
Syndicate No. 0435 FDY           AA-1126435   1.75 %   Aspen Insurance UK
Limited PSAC W4006           AA-1120337   4,375 % Ace Tempest Re USA, LLC (US)
o/b/o Ace Property & Casualty Insurance Company       06-0237820   20699   8.50
% Allied World Assurance Company Limited           AA-3194128   8.00 % Arch
Reinsurance Company       06-1430254   10348   8.50 % AXIS Specialty Limited    
  98-0364977   AA-3194139   9.00 % Endurance Specialty Insurance Limited        
  AA-3194130   7.00 % Hannover Rückversicherung-AG           AA-1340125   12.00
% Swiss Re Underwriters Agency, Inc, (US) o/b/o Swiss Reinsurance America
Corporation       13-1675535   25364   12.00 % Liberty Mutual Insurance Company
      04-1543470   23043   4.00 % Odyssey America Reinsurance Corporation      
47-0698507   23680   4.50 % Transatlantic Reinsurance Company       13-5616275  
19453   10.00 % XL Reinsurance America Incorporated       13-1290712   20583  
2.50 %                

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  TOTAL:               100.00 %

1

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Reinsurer

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  Reference #

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  FEIN #

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  NAIC #

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  Signed %

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  Excess of Loss—Fifth Layer                   Willis Corroon Group Services
Ltd.                     Lloyd's Underwriter Syndicate No. 2987 BRT          
AA-1128987   3.805 %   Lloyd's Underwriter Syndicate No. 2000 HAR          
AA-1128000   3.171 %   Lloyd's Underwriter Syndicate No. 1084 CSL          
AA-1127084   1.902 %   Lloyd's Underwriter Syndicate No. 0435 FDY          
AA-1126435   2.537 %   Lloyd's Underwriter Syndicate No. 0727 SAM          
AA-1126727   1.268 %   Lloyd's Underwriter Syndicate No. 0780 ADV          
AA-1126780   0.634 %   Lloyd's Underwriter Syndicate No. 4472 LIB          
AA-1126006   6.341 %   Aspen Insurance UK Limited PSAC W4006          
AA-1120337   6.342 % Ace Tempest Reinsurance Limited           AA-3190770  
10.00 % Allied World Assurance Company Limited           AA-3194128   5.00 %
Arch Reinsurance Company       06-1430254   10348   9.00 % AXIS Specialty
Limited       98-0364977   AA-3194139   9.00 % Endurance Specialty Insurance
Limited           AA-3194130   7.00 % Hannover Rückversicherung-AG          
AA-1340125   9.00 % Liberty Mutual Insurance Company       04-1543470   23043  
4.50 % Odyssey America Reinsurance Corporation       47-0698507   23680   5.00 %
Swiss Re Underwriters Agency, Inc. (US) o/b/o Swiss Reinsurance America
Corporation       13-1675535   25364   10.00 % Transatlantic Reinsurance Company
      13-5616275   19453   4.00 % XL Reinsurance America Incorporated      
13-1290712   20583   1.50 %                

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  TOTAL:               100.00 % Excess of Loss—Sixth Layer                  
Willis Corroon Group Services Ltd.                     Lloyd's Underwriter
Syndicate No. 2987 BRT           AA-1128987   3.39 %   Lloyd's Underwriter
Syndicate No. 2000 HAR           AA-1128000   2.712 %   Lloyd's Underwriter
Syndicate No. 1084 CSL           AA-1127084   0.50 %   Lloyd's Underwriter
Syndicate No. 0727 SAM           AA-1126727   0.50 %   Aspen Insurance UK
Limited PSAC W4006           AA-1120337   7.148 % Ace Tempest Re USA, LLC (US)
o/b/o Ace Property & Casualty Insurance Company       06-0237820   20699   2.50
% Ace Tempest Reinsurance Limited           AA-3190770   13.00 % Arch
Reinsurance Company       06-1430254   10348   3.00 % AXIS Specialty Limited    
  98-0364977   AA-3194139   12.50 % Endurance Specialty Insurance Limited      
    AA-3194130   12.50 % Hannover Re (Bermuda) Limited           AA-3190060  
9.50 % IDA Re (US) o/b/o Catlin Insurance Company Ltd           AA-3194161  
17.75 % Swiss Re Underwriters Agency, Inc. (US) o/b/o Swiss Reinsurance America
Corporation       13-1675535   25364   15.00 %                

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  TOTAL:               100.00 %

2

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WORKERS' COMPENSATION CONSOLIDATED CATASTROPHE AND TERRORISM EXCESS OF LOSS
REINSURANCE CONTRACT issued to ZENITH INSURANCE COMPANY ZNAT INSURANCE COMPANY
Woodland Hills, California ZENITH STAR INSURANCE COMPANY Austin, Texas