Exhibit 10.23

AMENDED AND RESTATED

INVESTMENT MANAGEMENT AGREEMENT

This Amended and Restated Investment Management Agreement (the “Agreement”)
dated this 31st day of December 2007 is by and between Stateco Financial
Services, Inc. (aka Stateco, Inc.) (“Stateco”), 518 East Broad Street, Columbus,
Ohio 43215 and Litchfield Mutual Fire Insurance Company, 769 Hebron Avenue,
Glastonbury, Connecticut 06033 (the “Company”).

Recitals

The Company is engaged in the property-casualty insurance underwriting business.

In the ordinary course of its business it is charged with the responsibility of
managing and investing policyholder premiums.

Stateco, an Ohio-domiciled corporation, is engaged in the business of providing
financial services pertinent to an insurance business including, without
limitation, investment management services.

The Company desires to retain the services of Stateco as the investment manager
for its investable assets, and Stateco is willing to serve in such capacity.

This Agreement is being amended and restated in response to comments received
from the Connecticut Department of Insurance.

Therefore, in consideration of the mutual covenants set forth herein and
INTENDING TO BE LEGALLY BOUND HEREBY, the parties hereto agree as follows:

 

1.

TERM

a. This Agreement shall be for a one year term. It shall automatically renew for
additional twelve month terms unless either party hereto gives written notice of
its intention to terminate this Agreement, which notice must be given at least
ninety days prior to the annual anniversary date of the Agreement.

 

2.

AUTHORITY GRANTED TO STATECO

a. The Company understands and agrees that as its investment manager, Stateco
shall have full discretion as to investment decisions which are consistent with
the investment policy set by the Investment Committee of the Board of Directors
of the Company. The Investment Committee agrees to keep Stateco advised of any
changes to investment policy adopted by the committee.

 

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b. Stateco agrees to attend all Investment Committee meetings to review with the
committee members the investment activities undertaken in the prior quarter, to
respond to questions from committee members and to communicate with the
Investment Committee with respect to investment plans, strategies and policies
to be pursued by Stateco.

c. The Company understands and agrees the discretion granted to Stateco herein
empowers Stateco (within the policy constraints noted) to select investments to
purchase, to allocate investable funds between tax free and taxable investments
and to make decisions with respect to the sale of investments and the timing of
such sale. Stateco is also authorized to give instructions to Company’s
custodian(s), with respect to the purchase, sale, exchange and delivery of
securities for Company’s account and disbursements relating thereto.

d. Stateco is also authorized to place brokerage orders for Company’s account
through such brokerage firms as Stateco, in its sole discretion, may determine.

 

3.

STATECO’S OBLIGATIONS

a. Stateco agrees to maintain records of transactions in which it engages on
Company’s behalf in such form and format as Company requires to comply with
legal requirements applicable to it.

b. Stateco also agrees to act in good faith and exercise due care in carrying
out its responsibilities hereunder. Stateco will not be liable for any error of
judgment with respect to its investment decisions providing Stateco has acted in
good faith and has exercised due care.

c. Stateco agrees to maintain strict confidence with respect to Company’s
financial affairs. Company will maintain confidentiality of investment advice
and investment decisions, except to the extent disclosure is mandated by law or
disclosure is made to an affiliate of Company.

d. In consideration for the foregoing services provided and responsibilities to
be accepted, Company agrees to pay Stateco based on the total investable assets
of Company under its management, as per the Fee Schedule attached as Exhibit A.
The fee will be paid withing forty-five (45) days after the end of each calendar
quarter. It will be reviewed annually and may be amended by mutual agreement,
which shall be confirmed in a revised Fee Schedule to be executed by the
parties.

 

4.

ARBITRATION

a. In the event of a dispute arising out of any party’s performance under this
Agreement, the parties hereby understand and agree that if the dispute cannot be
amicably resolved by the parties, they will arbitrate the dispute in accordance
with the rules and procedures set forth in the Ohio Uniform Arbitration Act,
which is hereby incorporated by reference.

 

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5.

GOVERNING LAW

a. This Agreement shall be governed by Connecticut law.

 

6.

AMENDMENT

This Agreement may be amended by mutual consent of Stateco and the Company.
Except as provided herein, no alteration or variation of the terms of this
Agreement shall be valid unless made in writing and signed by both Stateco and
the Company. Furthermore, no alteration or variation of the terms of this
Agreement shall be valid unless prior approval for such alteration or variation
has been received from the Commissioners of the Ohio and the Connecticut
Departments of Insurance.

 

7.

ASSIGNMENT

This Agreement may not be assigned without the written consent of the other
party and without the prior approval of the Commissioners of the Ohio and the
Connecticut Departments of Insurance.

 

8.

COMPLETE AGREEMENT

This document, together with such amendments hereto as may from time to time be
validly executed in writing by the parties, constitutes the entire agreement
between the parties and supersedes all prior or contemporaneous discussions,
negotiations, representations, or agreements relating to the subject matter of
this Agreement.

 

9.

ACCESS TO RECORDS

The parties shall permit the Ohio and Connecticut Departments of Insurance to
have access to books and records pertaining to the services provided and the
charges billed pursuant to the provisions of this Agreement, as and to the
extent required by law.

 

10.

EFFECTIVENESS

This Agreement shall be effective (the “Effective Date”) as of the Litchfield
Closing Date (as defined in the Amended and Restated Affiliation Agreement by
and among State Automobile Mutual Insurance Company, Patrons Mutual Insurance
Company of Connecticut, and Litchfield Mutual Fire Insurance Company).
Notwithstanding the foregoing, the effectiveness of

 

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this Agreement is subject to the receipt of all regulatory consents required to
implement the terms of this Agreement. Until such time as all such regulatory
consents have been obtained, this Agreement shall not become operative in any
manner whatsoever and shall be of no force or effect.

[SIGNATURE PAGE TO FOLLOW]

 

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Stateco Financial Services, Inc.

By

 

/s/ Robert P Restrepo, Jr.

 

Robert P Restrepo, Jr., President

Litchfield Mutual Fire Insurance Company

By

 

/s/ Robert P Restrepo, Jr.

 

Robert P Restrepo, Jr., President

 

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EXHIBIT A

FEE SCHEDULE

Except as amended or modified by mutual agreement of the parties hereto, Stateco
shall be paid an investment management fee every quarter based on a percentage
of the average asset value of invested assets which average shall be calculated
by adding the market value of invested assets at the beginning of the quarter
and at the end of the quarter, dividing that sum by two.

The annual fee for fixed instruments including bonds, (taxable and tax-free)
invested cash and preferred stock is 40 basis points or .004 times the average
asset value of that category of invested asset.

The annual fee for all common stock portfolios is 50 basis points or .005 times
the average asset value of that category of invested assets.

In addition, as respects the common stock portfolios, Stateco shall be entitled
to a performance bonus based on the performance of the common stock portfolios
determined in the following manner.

In the event the total return on any common stock portfolio exceeds for a
particular quarter the total return for the S&P 500 for the same quarter,
Stateco shall be paid an annual bonus of 10 basis points or .001 times the
portion of the average asset value of the particular portfolio which exceeds the
asset value of the same portfolio calculated based on the actual total
performance of the S&P 500 for the quarter in question.

 

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