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Second and Third Event Excess Catastrophe Reinsurance Contract Effective: July
1, 2019 FedNat Insurance Company Sunrise, Florida and Monarch National Insurance
Company Sunrise, Florida _______________________ Certain identified information
has been omitted from this exhibit because it is not material and would be
competitively harmful if publicly disclosed. Redactions are indicated by [***].
19\F7V1101

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Table of Contents Article Page 1 Classes of Business Reinsured 1 2 Commencement
and Termination 1 3 Territory 3 4 Exclusions 3 5 Retention and Limit 4 6 Florida
Hurricane Catastrophe Fund 5 7 Other Reinsurance 5 8 Definitions 5 9 Loss
Occurrence 6 10 Loss Notices and Settlements 8 11 Cash Call 9 12 Salvage and
Subrogation 9 13 Reinsurance Premium 9 14 Sanctions 9 15 Late Payments 10 16
Offset 11 17 Severability of Interests and Obligations 11 18 Access to Records
12 19 Liability of the Reinsurer 12 20 Net Retained Lines (BRMA 32E) 12 21
Errors and Omissions (BRMA 14F) 12 22 Currency (BRMA 12A) 13 23 Taxes (BRMA 50B)
13 24 Federal Excise Tax (BRMA 17D) 13 25 Foreign Account Tax Compliance Act 13
26 Reserves 14 27 Insolvency 15 28 Arbitration 16 29 Service of Suit (BRMA 49C)
16 30 Severability (BRMA 72E) 17 31 Governing Law (BRMA 71B) 17 32
Confidentiality 17 33 Non-Waiver 18 34 Agency Agreement (BRMA 73A) 18 35 Notices
and Contract Execution 19 36 Intermediary 19 19\F7V1101

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Second and Third Event Excess Catastrophe Reinsurance Contract Effective: July
1, 2019 entered into by and between FedNat Insurance Company Sunrise, Florida
and Monarch National Insurance Company Sunrise, Florida (hereinafter
collectively referred to as the "Company" except to the extent individually
referred to) and The Subscribing Reinsurer(s) Executing the Interests and
Liabilities Agreement(s) Attached Hereto (hereinafter referred to as the
"Reinsurer") Article 1 - Classes of Business Reinsured By this Contract the
Reinsurer agrees to reinsure the excess liability which may accrue to the
Company under its policies in force at the effective time and date hereof or
issued or renewed at or after that time and date, and classified by the Company
as Property business, including but not limited to, Dwelling Fire, Inland
Marine, Mobile Home, Commercial and Homeowners business (including any business
assumed from Citizens Property Insurance Corporation), subject to the terms,
conditions and limitations set forth herein. Article 2 - Commencement and
Termination A. This Contract shall become effective at 12:01 a.m., Eastern
Standard Time, July 1, 2019, with respect to losses arising out of loss
occurrences commencing at or after that time and date, and shall remain in force
until 12:01 a.m., Eastern Standard Time, July 1, 2020. B. Notwithstanding the
provisions of paragraph A above, the Company may terminate a Subscribing
Reinsurer's percentage share in this Contract at any time by giving written
notice to the Subscribing Reinsurer in the event any of the following
circumstances occur: 1. The Subscribing Reinsurer's policyholders' surplus (or
its equivalent under the Subscribing Reinsurer's accounting system) at the
inception of this Contract has been reduced by 20.0% or more of the amount of
surplus (or the applicable equivalent) 12 months prior to that date; or 2. The
Subscribing Reinsurer's policyholders' surplus (or its equivalent under the
Subscribing Reinsurer's accounting system) at any time during the term of this
19\F7V1101 Page 1

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Contract has been reduced by 20.0% or more of the amount of surplus (or the
applicable equivalent) at the date of the Subscribing Reinsurer's most recent
financial statement filed with regulatory authorities and available to the
public as of the inception of this Contract; or 3. The Subscribing Reinsurer's
A.M. Best's rating has been assigned or downgraded below A- and/or Standard &
Poor's rating has been assigned or downgraded below BBB+; or 4. The Subscribing
Reinsurer has become, or has announced its intention to become, merged with,
acquired by or controlled by any other entity 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 6. The Subscribing Reinsurer has become insolvent or
has been placed into liquidation, receivership, supervision, administration,
winding-up or under a scheme of arrangement, or similar proceedings (whether
voluntary or involuntary) or proceedings have been instituted against the
Subscribing Reinsurer for the appointment of a receiver, liquidator,
rehabilitator, supervisor, administrator, 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; or 9. The Subscribing
Reinsurer has hired an unaffiliated runoff claims manager that is compensated on
a contingent basis or is otherwise provided with financial incentives based on
the quantum of claims paid; or 10. The Subscribing Reinsurer has failed to
comply with the funding requirements set forth in the Reserves Article. C. The
"term of this Contract" as used herein shall mean the period from 12:01 a.m.,
Eastern Standard Time, July 1, 2019 to 12:01 a.m., Eastern Standard Time, July
1, 2020. However, if this Contract is terminated, the "term of this Contract" as
used herein shall mean the period from 12:01 a.m., Eastern Standard Time, July
1, 2019 to the effective time and date of termination. D. If this Contract is
terminated or expires while a loss occurrence covered hereunder is in progress,
the Reinsurer's liability hereunder shall, subject to the other terms and
conditions of this Contract, be determined as if the entire loss occurrence had
occurred prior to the termination or expiration of this Contract, provided that
no part of such loss occurrence is claimed against any renewal or replacement of
this Contract. 19\F7V1101 Page 2

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Article 3 - Territory The territorial limits of this Contract shall be identical
with those of the Company's policies, but is limited to risks located within the
State of Florida. Article 4 - Exclusions A. This Contract does not apply to and
specifically excludes the following: 1. Reinsurance assumed by the Company under
obligatory reinsurance agreements, except business assumed by the Company from
Citizens Property Insurance Corporation. 2. Hail damage to growing or standing
crops. 3. Business rated, coded or classified as Flood insurance or which should
have been rated, coded or classified as such. 4. Business rated, coded or
classified as Mortgage Impairment and Difference in Conditions insurance or
which should have been rated, coded or classified as such. 5. Title insurance
and all forms of Financial Guarantee, Credit and Insolvency. 6. Aviation, Ocean
Marine, Boiler and Machinery, Fidelity and Surety, Accident and Health, Animal
Mortality and Workers Compensation and Employers Liability. 7. Errors and
Omissions, Malpractice and any other type of Professional Liability insurance.
8. Loss and/or damage and/or costs and/or expenses arising from seepage and/or
pollution and/or contamination, other than contamination from smoke.
Nevertheless, this exclusion does not preclude payment of the cost of removing
debris of property damaged by a loss otherwise covered hereunder, subject always
to a limit of 25.0% of the Company's property loss under the applicable original
policy. 9. Loss or liability as excluded under the provisions of the "War
Exclusion Clause" attached to and forming part of this Contract. 10. Nuclear
risks as defined in the "Nuclear Incident Exclusion Clause - Physical Damage -
Reinsurance (U.S.A.)" attached to and forming part of this Contract. 11. Loss or
liability excluded by the Pools, Associations and Syndicates Exclusion Clause
(Catastrophe) attached to and forming part of this Contract and any assessment
or similar demand for payment related to the FHCF or Citizens Property Insurance
Corporation. 12. Loss or 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, 19\F7V1101 Page 3

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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. 13. Losses
in the respect of overhead transmission and distribution lines other than those
on or within 150 meters (or 500 feet) of the insured premises. 14. Mold, unless
resulting from a peril otherwise covered under the policy involved. 15. Loss or
liability as excluded under the provisions of the "Terrorism Exclusion" attached
to and forming part of this Contract. 16. All property loss, damage,
destruction, erasure, corruption or alteration of Electronic Data from any cause
whatsoever (including, but not limited to, Computer Virus) or loss of use,
reduction in functionality, cost, expense or whatsoever nature resulting
therefrom, unless resulting from a peril otherwise covered under the policy
involved. "Electronic Data" as used herein means facts, concepts and information
converted to a form usable for communications, interpretation or processing by
electronic and electromechanical data processing or electronically-controlled
equipment and includes programs, software and other coded instructions for the
processing and manipulation of data or the direction and manipulation of such
equipment. "Computer Virus" as used herein means a set of corrupting, harmful or
otherwise unauthorized instructions or code, including a set of
maliciously-introduced, unauthorized instructions or code, that propagate
themselves through a computer system network of whatsoever nature. However, in
the event that a peril otherwise covered under the policy results from any of
the matters described above, this Contract, subject to all other terms and
conditions, will cover physical damage directly caused by such listed peril.
Article 5 - Retention and Limit A. The Company shall retain and be liable for
the first $10,000,000 of ultimate net loss arising out of each loss occurrence.
The Reinsurer shall then be liable for the amount by which such ultimate net
loss exceeds the Company's retention (subject to the provisions of paragraph B
below), but the liability of the Reinsurer shall not exceed $12,000,000 of
ultimate net loss, as respects any one loss occurrence, nor shall it exceed
$24,000,000, in all during the term of this Contract. B. Notwithstanding the
provisions of paragraph A above, no claim shall be made hereunder unless and
until the Company's subject excess ultimate net loss arising out of loss
occurrences commencing during the term of this Contract exceeds $12,000,000 in
the aggregate. "Subject excess ultimate net loss" as used herein shall mean the
amount, if any, by which the Company's ultimate net loss arising out of any one
loss occurrence 19\F7V1101 Page 4

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exceeds $10,000,000, but said amount shall not exceed $12,000,000 in excess of
$10,000,000 as respects any one loss occurrence. C. Notwithstanding the
provisions above, no claim shall be made as respects losses arising out of loss
occurrences commencing during the term of this Contract 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." Article 6 - Florida Hurricane Catastrophe Fund As respects FedNat
Insurance Company and Monarch National Insurance Company, the Company has
purchased 75.0% of the FHCF mandatory layer of coverage and shall be deemed to
inure to the benefit of this Contract. Further, any FHCF loss reimbursement
shall be deemed to be paid to the Company in accordance with the FHCF
reimbursement contract at the full payout level set forth therein and will be
deemed not to be reduced by any reduction or exhaustion of the FHCF's
claims-paying capacity as respects the mandatory FHCF coverage. Article 7 -
Other Reinsurance A. The Company shall be permitted to carry other reinsurance,
recoveries under which shall inure solely to the benefit of the Company and be
entirely disregarded in applying all of the provisions of this Contract. B. Any
loss reimbursement received under the Company's FHCF Supplement Layer
Reinsurance Contract (19\F7V1085), which shall be deemed to be placed at 15.0%,
shall be deemed to inure to the benefit of this Contract. Article 8 -
Definitions A. "Loss adjustment expense," regardless of how such expenses are
classified for statutory reporting purposes, as used in this Contract shall mean
all costs and expenses allocable to a specific claim that are incurred by the
Company in the investigation, appraisal, adjustment, settlement, litigation,
defense or appeal of a specific claim, including court costs and costs of
supersedeas and appeal bonds, and including a) pre-judgment interest, unless
included as part of the award or judgment; b) post-judgment interest; c) legal
expenses and costs incurred in connection with coverage questions and legal
actions connected thereto, including Declaratory Judgment Expense; and d)
expenses and a pro rata share of salaries of the Company field employees, and
expenses of other Company employees who have been temporarily diverted from
their normal and customary duties and assigned to the field adjustment of losses
covered by this Contract. Loss adjustment expense as defined above does not
include unallocated loss adjustment expense. Unallocated loss adjustment expense
includes, but is not limited to, salaries and expenses of employees, other than
in (d) above, and office and other overhead expenses. 19\F7V1101 Page 5

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B. "Loss in excess of policy limits" and "extra contractual obligations" as used
in this Contract shall mean: 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 an action
against its insured or reinsured or in the preparation or prosecution of an
appeal consequent upon such an action. Any loss in excess of policy limits that
is made in connection with this Contract shall not exceed 25.0% of the actual
catastrophe loss. 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 an 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. Any extra contractual obligations that are made
in connection with this Contract shall not exceed 25.0% of the actual
catastrophe loss. 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. C. "Policies" as used in this Contract shall mean all
policies, contracts and binders of insurance or reinsurance. D. "Ultimate net
loss" as used in this Contract shall mean the sum or sums (including loss in
excess of policy limits, extra contractual obligations and loss adjustment
expense, as defined herein) 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. Article 9 - 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 19\F7V1101 Page 6

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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 a named storm, all individual losses sustained by the Company
occurring during any period (a) from and after 12:00 a.m. Eastern Standard Time
on the date a watch, warning, advisory, or other bulletin (whether for wind,
flood or otherwise) for such named storm is first issued by the National
Hurricane Center ("NHC") or its successor or any other division of the National
Weather Service ("NWS"), (b) continuing for a time period thereafter during
which such named storm continues, regardless of its category rating or lack
thereof and regardless of whether the watch, warning, or advisory or other
bulletin remains in effect for such named storm and (c) ending 96 hours
following the issuance of the last watch, warning or advisory or other bulletin
for such named storm or related to such named storm by the NHC or its successor
or any other division of the NWS. "Named storm" shall mean any storm or storm
system that has been declared by the NHC or its successor or any other division
of the NWS to be a named storm at any time, which may include, by way of example
and not limitation, hurricane, wind, gusts, typhoon, tropical storm, hail, rain,
tornados, cyclones, ensuing flood, storm surge, water damage, fire following,
sprinkler leakage, riots, vandalism, and collapse, and all losses and perils
(including, by way of example and not limitation, those mentioned previously in
this sentence) in each case arising out of, caused by, occurring during,
occasioned by or resulting from such storm or storm system, including by way of
example and not limitation the merging of one or more separate storm(s) or storm
system(s) into a combined storm surge event. However, the named storm need not
be limited to one state or province or states or provinces contiguous thereto.
2. As regards storm or storm systems that are not a named storm, including, by
way of example and not limitation, ensuing wind, gusts, typhoon, tropical storm,
hail, rain, tornados, cyclones, ensuing flood, storm surge, fire following,
sprinkler leakage, riots, vandalism, collapse and water damage, all individual
losses sustained by the Company occurring during any period of 144 consecutive
hours arising out of, caused by, occurring during, occasioned by or resulting
from 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 96
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 96 consecutive hours may
be extended in respect of individual losses which occur beyond such 96
consecutive hours during the continued occupation of an assured'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 19\F7V1101 Page 7

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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), all
individual losses sustained by the Company which commence during any period of
168 consecutive hours within the area of one state of the United States or
province of Canada and states or provinces contiguous thereto and to one another
may be included in the Company's loss occurrence. B. For all loss occurrences
hereunder, the Company may choose the date and time when any such period of
consecutive hours commences, 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 or series of
disasters, accidents, or losses. Furthermore: 1. For all loss occurrences other
than those referred to in subparagraphs A.1., A.2., and A.3. above, only one
such period of 168 consecutive hours shall apply with respect to one event. 2.
As regards those loss occurrences referred to in subparagraphs A.1. and A.2.,
only one such period of consecutive hours (as set forth therein) shall apply
with respect to one event, regardless of the duration of the event. 3. As
regards those loss occurrences referred to in subparagraph A.3. above, if the
disaster, accident, or loss or series of disasters, accidents, or losses
occasioned by the event is of greater duration than 96 consecutive hours, then
the Company may divide that disaster, accident, or loss or series of disasters,
accidents, or losses into two or more loss occurrences, provided that no two
periods overlap and no individual loss is included in more than one such period.
C. It is understood that losses arising from a combination of two or more perils
as a result of the same event may be considered as having arisen from one loss
occurrence. Notwithstanding the foregoing, the hourly limitations as stated
above shall not be exceeded as respects the applicable perils, and no single
loss occurrence shall encompass a time period greater than 168 consecutive
hours, except as regards those loss occurrences referred to in subparagraphs
A.1., A.4. and A.6. above. Article 10 - Loss Notices and Settlements A. Whenever
losses sustained by the Company are reserved by the Company for an amount
greater than 50.0% of the Company's respective retention hereunder and/or appear
likely to result in a claim, the Company shall notify the Subscribing Reinsurers
and shall provide updates related to development of such losses. The Reinsurer
shall have the right to participate in the adjustment of such losses at its own
expense. 19\F7V1101 Page 8

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B. All loss settlements made by the Company, provided they are within the terms
of this Contract and the terms of the original policy (with the exception of
loss in excess of policy limits or extra contractual obligations coverage, if
any, under 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 by the Company. Article 11 - Cash Call
Notwithstanding the provisions of the Loss Notices and Settlements Article, upon
the request of the Company, the Reinsurer shall pay any amount with regard to a
loss settlement or settlements that are scheduled to be made (including any
payments projected to be made) within the next 20 days by the Company, subject
to receipt by the Reinsurer of a satisfactory proof of loss. Such agreed payment
shall be made within 10 days from the date the demand for payment was
transmitted to the Reinsurer. Article 12 - 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, if, in the
Company's opinion, it is economically reasonable to do so. Article 13 -
Reinsurance Premium As premium for the reinsurance coverage provided by this
Contract, the Company shall pay the Reinsurer a reinsurance premium of $[***],
in four equal installments of $[***] on July 1 and October 1 of 2019, and on
January 1 and April 1 of 2020. However, in the event this Contract is
terminated, there shall be no premium installments due after the effective date
of termination, and the Reinsurer shall immediately return the unearned portion
of any premium paid hereunder. Article 14 - Sanctions Neither the Company nor
any Subscribing Reinsurer shall be liable for premium or loss under this
Contract if it would result in a violation of any mandatory sanction,
prohibition or restriction under United Nations resolutions or the trade or
economic sanctions, laws or regulations of the European Union, United Kingdom or
United States of America that are applicable to either party. 19\F7V1101 Page 9

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Article 15 - 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 in the Intermediary Article
(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
charge 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 charges 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 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 was
transmitted to the Reinsurer. 3. As respects a "cash call" made in accordance
with the Cash Call Article, payment shall be deemed due 10 days after the demand
for payment is transmitted to the Reinsurer. If such loss or claim payment is
not received within the 10 days, interest shall accrue on the payment or amount
overdue in accordance with paragraph B above, from the date the demand for
payment was transmitted to the Reinsurer. 4. As respects any payment, adjustment
or return due either party not otherwise provided for in subparagraphs 1, 2, and
3 of this paragraph C, 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 days following transmittal of written
notification that the provisions of this Article have been invoked. 19\F7V1101
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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 charges due hereunder on the amount in
dispute shall be null and void. If the debtor party loses in such proceeding,
then the interest charge 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. E. Interest charges arising out of the application of this Article
that are $1,000 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. Article 16 - Offset The Company and the Reinsurer may offset
any balance or amount due from one party to the other under this Contract or any
other contract heretofore or hereafter entered into between the Company and the
Reinsurer, whether acting as assuming reinsurer or ceding company. The
provisions of this Article shall not be affected by the insolvency of either
party. Article 17 - Severability of Interests and Obligations The rights, duties
and obligations set forth below shall apply as if this Contract were a separate
contract between the Subscribing Reinsurers and each named reinsured company: A.
Balances payable by any Subscribing Reinsurer to or from any reinsured party
under the Contract shall not serve to offset any balances recoverable to, or
from, any other reinsured party to the Contract and balances payable shall be
separated by named reinsured company and paid directly to the appropriate named
reinsured company's bank account. B. Balances recoverable by any Subscribing
Reinsurer to or from any reinsured party under the Contract shall not serve to
offset any balances payable to, or from, any other reinsured party to the
Contract. C. Reports and remittances made to the Reinsurer in accordance with
the applicable articles of the Contract are to be in sufficient detail to
identify both the Reinsurer's loss obligations due to each named reinsured
company and each named reinsured company's premium remittance under the report.
D. In the event of the insolvency of any of the parties to the Contract, offset
shall be only allowed in accordance with the laws of the insolvent party's state
of domicile. 19\F7V1101 Page 11

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E. Nothing in this Article shall be construed to provide a separate retention,
Reinsurer's limit of liability any one loss occurrence or Reinsurer's annual
limit of liability for each named reinsured company. Article 18 - Access to
Records The Reinsurer or its designated representatives shall have access at any
reasonable time to all records of the Company which pertain in any way to this
reinsurance, provided the Reinsurer gives the Company at least 15 days prior
notice of request for such access. However, a Subscribing Reinsurer or its
designated representatives shall not have any right of access to the records of
the Company if it is not current in all undisputed payments due the Company.
"Undisputed" as used herein shall mean any amount that the Subscribing Reinsurer
has not contested in writing to the Company specifying the reason(s) why the
payments are disputed. Article 19 - 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. Article 20 - Net Retained Lines (BRMA 32E) A. This Contract applies
only to that portion of any policy which the Company retains net for its own
account (prior to deduction of any underlying reinsurance specifically permitted
in this Contract), and in calculating the amount of any loss hereunder and also
in computing the amount or amounts in excess of which this Contract attaches,
only loss or losses in respect of that portion of any policy which the Company
retains net for its own account shall be included. B. 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
reinsurer(s), whether specific or general, any amounts which may have become due
from such reinsurer(s), whether such inability arises from the insolvency of
such other reinsurer(s) or otherwise. Article 21 - Errors and Omissions (BRMA
14F) Inadvertent delays, errors or omissions made in connection with this
Contract or any transaction hereunder shall not relieve either party from any
liability which would have attached had such 19\F7V1101 Page 12

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delay, error or omission not occurred, provided always that such error or
omission is rectified as soon as possible after discovery. Article 22 - Currency
(BRMA 12A) A. Whenever the word "Dollars" or the "$" sign appears in this
Contract, they shall be construed to mean United States Dollars and all
transactions under this Contract shall be in United States Dollars. B. Amounts
paid or received by the Company in any other currency shall be converted to
United States Dollars at the rate of exchange at the date such transaction is
entered on the books of the Company. Article 23 - Taxes (BRMA 50B) In
consideration of the terms under which this Contract is issued, the Company will
not claim a deduction in respect of the premium hereon when making tax returns,
other than income or profits tax returns, to any state or territory of the
United States of America or the District of Columbia. Article 24 - Federal
Excise Tax (BRMA 17D) 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. 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. Article 25 - Foreign Account Tax Compliance Act A. To the extent the
Reinsurer is subject to the deduction and withholding of premium payable hereon
as set forth in the Foreign Account Tax Compliance Act (Sections 1471-1474 of
the Internal Revenue Code), the Reinsurer shall allow such deduction and
withholding from the premium payable under this Contract. B. In the event of any
return of premium becoming due hereunder, the return premium shall be determined
and paid in full without regard to any amounts deducted or withheld under
paragraph A of this Article. In the event the Company or its agent recovers such
premium deductions and withholdings on the return premium from the United States
Government, the Company or its agent shall reimburse the Reinsurer for such
amounts. 19\F7V1101 Page 13

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[exhibit103-19xf7v1101xre016.jpg]
Article 26 - Reserves A. The Reinsurer agrees to fund its share of amounts,
including but not limited to, the Company's ceded unearned premium and
outstanding loss and loss adjustment expense reserves (including all case
reserves plus any reasonable amount estimated to be unreported from known loss
occurrences) (hereinafter referred to as "Reinsurer's Obligations") 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: 1. 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 it is required to file with the insurance regulatory
authorities involved; or 2. Has an A.M. Best Company's rating equal to or below
B++ at the inception of this Contract. The Reinsurer, at its sole option, may
fund in other than cash if its method and form of funding are acceptable to the
insurance regulatory authorities involved. B. 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 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 unearned premiums returned to
insureds on account of policy cancellations, unless paid in cash by the
Reinsurer; 2. 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; 3. To reimburse itself for the Reinsurer's
share of any other amounts claimed to be due hereunder, unless paid in cash by
the Reinsurer; 19\F7V1101 Page 14

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4. To fund a cash account in an amount equal to the Reinsurer's share of
amounts, including but not limited to, the Reinsurer's Obligations as set forth
above, 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; 5. To refund to the Reinsurer any sum in
excess of the actual amount required to fund the Reinsurer's share of amounts,
including but not limited to, the Reinsurer's Obligations as set forth above, if
so requested by the Reinsurer. In the event the amount drawn by the Company on
any letter of credit is in excess of the actual amount required for B(1), B(2)
or B(4), or in the case of B(3), the actual amount determined to be due, the
Company shall promptly return to the Reinsurer the excess amount so drawn.
Article 27 - Insolvency A. In the event of the insolvency of the Company, 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. B. Where two or more Subscribing 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 the Company, 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.
19\F7V1101 Page 15

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Article 28 - Arbitration A. As a condition precedent to any right of action
hereunder, in the event of any dispute or difference of opinion hereafter
arising with respect to this Contract, it is hereby mutually agreed that such
dispute or difference of opinion shall be submitted to arbitration. One Arbiter
shall be chosen by the Company, the other by the Reinsurer, and an Umpire shall
be chosen by the two Arbiters before they enter upon arbitration, all of whom
shall be active or retired disinterested executive officers of insurance or
reinsurance companies or Lloyd's London Underwriters. In the event that either
party should fail to choose an Arbiter within 30 days following a written
request by the other party to do so, the requesting party may choose two
Arbiters who shall in turn choose an Umpire before entering upon arbitration. If
the two Arbiters fail to agree upon the selection of an Umpire within 30 days
following their appointment, each Arbiter shall nominate three candidates within
10 days thereafter, two of whom the other shall decline, and the decision shall
be made by drawing lots. B. Each party shall present its case to the Arbiters
within 30 days following the date of appointment of the Umpire. The Arbiters
shall consider this Contract as an honorable engagement rather than merely as a
legal obligation and they are relieved of all judicial formalities and may
abstain from following the strict rules of law. The decision of the Arbiters
shall be final and binding on both parties; but failing to agree, they shall
call in the Umpire and the decision of the majority shall be final and binding
upon both parties. Judgment upon the final decision of the Arbiters may be
entered in any court of competent jurisdiction. C. If more than one Subscribing
Reinsurer is involved in the same dispute, all such Subscribing Reinsurers
shall, at the option of the Company, constitute and act as one party for
purposes of this Article and communications shall be made by the Company to each
of the Subscribing Reinsurers constituting one party, provided, however, that
nothing herein shall impair the rights of such Subscribing Reinsurers to assert
several, rather than joint, defenses or claims, nor be construed as changing the
liability of the Subscribing Reinsurers participating under the terms of this
Contract from several to joint. D. Each party shall bear the expense of its own
Arbiter, and shall jointly and equally bear with the other the expense of the
Umpire and of the arbitration. In the event that the two Arbiters are chosen by
one party, as above provided, the expense of the Arbiters, the Umpire and the
arbitration shall be equally divided between the two parties. E. Any arbitration
proceedings shall take place at a location mutually agreed upon by the parties
to this Contract, but notwithstanding the location of the arbitration, all
proceedings pursuant hereto shall be governed by the law of the state in which
the Company has its principal office. Article 29 - Service of Suit (BRMA 49C)
(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)
19\F7V1101 Page 16

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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 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.
B. Further, pursuant to any statute of any state, territory or district of the
United States which makes provision therefor, 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 in any action, suit or proceeding instituted by or on behalf
of the Company or any beneficiary hereunder arising out of this Contract.
Article 30 - Severability (BRMA 72E) If any provision of this Contract 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.
Article 31 - Governing Law (BRMA 71B) This Contract shall be governed by and
construed in accordance with the laws of the State of Florida. Article 32 -
Confidentiality A. The Reinsurer hereby acknowledges that the documents,
information and data provided to it by the Company, whether directly or through
an authorized agent, in connection with the placement and execution of this
Contract, including all information obtained through any audits and any claims
information between the Company and the Reinsurer, and any submission or other
materials relating to any renewal (hereinafter referred to as "Confidential
Information") are proprietary and confidential to the Company. B. Except as
provided for in paragraph C below, the Reinsurer shall not disclose any
Confidential Information to any third parties, including but not limited to the
Reinsurer's subsidiaries and affiliates, other insurance companies and their
subsidiaries and affiliates, underwriting agencies, research organizations, any
unaffiliated entity engaged in modeling insurance or reinsurance data, and
statistical rating organizations. C. Confidential Information may be used by the
Reinsurer only in connection with the performance of its obligations or
enforcement of its rights under this Contract and will only be disclosed when
required by (1) retrocessionaires subject to the business ceded to this
Contract, (2) regulators performing an audit of the Reinsurer's records and/or
financial 19\F7V1101 Page 17

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[exhibit103-19xf7v1101xre020.jpg]
condition, (3) external auditors performing an audit of the Reinsurer's records
in the normal course of business, or (4) the Reinsurer's legal counsel; provided
that the Reinsurer advises such parties of the confidential nature of the
Confidential Information and their obligation to maintain its confidentiality.
The Company may require that any third-party representatives of the Reinsurer
agree, in writing, to be bound by this Confidentiality Article or by a separate
written confidentiality agreement, containing terms no less stringent than those
set forth in this Article. If a third-party representative of the Reinsurer is
not bound, in writing, by this Confidentiality Article or by a separate written
confidentiality agreement, the Reinsurer shall be responsible for any breach of
this provision by such third-party representative of the Reinsurer. D.
Notwithstanding the above, in the event that the Reinsurer is required by court
order, other legal process or any regulatory authority to release or disclose
any or all of the Confidential Information, the Reinsurer agrees to provide the
Company with written notice of same at least 10 days prior to such release or
disclosure, to the extent legally permissible, and to use its best efforts to
assist the Company in maintaining the confidentiality provided for in this
Article. E. Any disclosure of Non-Public Personally Identifiable Information
shall comply with all state and federal statutes and regulations governing the
disclosure of Non-Public Personally Identifiable Information. "Non-Public
Personally Identifiable Information" shall be defined as this term or a similar
term is defined in any applicable state, provincial, territory, or federal law.
Disclosing or using this information for any purpose not authorized by
applicable law is expressly forbidden without the prior consent of the Company.
F. The parties agree that any information subject to privilege, including the
attorney-client privilege or attorney work product doctrine (collectively
"Privilege") shall not be disclosed to the Reinsurer until, in the Company's
opinion, such Privilege is deemed to be waived or otherwise compromised by
virtue of its disclosure pursuant to this Contract. Furthermore, the Reinsurer
shall not assert that any Privilege otherwise applicable to the Confidential
Information has been waived or otherwise compromised by virtue of its disclosure
pursuant to this Contract. G. The provisions of this Article shall extend to the
officers, directors and employees of the Reinsurer and its affiliates, and shall
be binding upon their successors and assigns. Article 33 - Non-Waiver The
failure of the Company or Reinsurer to insist on compliance with this Contract
or to exercise any right, remedy or option hereunder shall not: (1) constitute a
waiver of any rights contained in this Contract, (2) prevent the Company or
Reinsurer from thereafter demanding full and complete compliance, (3) prevent
the Company or Reinsurer from exercising such remedy in the future, nor (4)
affect the validity of this Contract or any part thereof. Article 34 - Agency
Agreement (BRMA 73A) 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 19\F7V1101 Page 18

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[exhibit103-19xf7v1101xre021.jpg]
or receiving notices required by the terms and conditions of this Contract, and
for purposes of remitting or receiving any monies due any party. Article 35 -
Notices and Contract Execution A. Whenever a notice, statement, report or any
other written communication is required by this Contract, unless otherwise
specified, such notice, statement, report or other written communication may be
transmitted by certified or registered mail, nationally or internationally
recognized express delivery service, personal delivery, electronic mail, or
facsimile. With the exception of notices of termination, first class mail is
also acceptable. B. The use of any of the following shall constitute a valid
execution of this Contract or any amendments thereto: 1. Paper documents with an
original ink signature; 2. Facsimile or electronic copies of paper documents
showing an original ink signature; and/or 3. Electronic records with an
electronic signature made via an electronic agent. For the purposes of this
Contract, the terms "electronic record," "electronic signature" and "electronic
agent" shall have the meanings set forth in the Electronic Signatures in Global
and National Commerce Act of 2000 or any amendments thereto. C. This Contract
may be executed in one or more counterparts, each of which, when duly executed,
shall be deemed an original. Article 36 - Intermediary Aon Benfield Inc., or one
of its affiliated corporations duly licensed as a reinsurance intermediary, is
hereby recognized as the Intermediary negotiating this Contract for all business
hereunder. All communications (including but not limited to notices, statements,
premiums, return premiums, commissions, taxes, losses, loss adjustment expense,
salvages and loss settlements) relating to this Contract will be transmitted to
the Company or the Reinsurer through the Intermediary. Payments by the Company
to the Intermediary will be deemed payment to the Reinsurer. Payments by the
Reinsurer to the Intermediary will be deemed payment to the Company only to the
extent that such payments are actually received by the Company. 19\F7V1101 Page
19

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[exhibit103-19xf7v1101xre022.jpg]
In Witness Whereof, the Company by its duly authorized representatives has
executed this Contract as of the dates specified below: This _10_____________
day of _September__________________ in the year _2019_______. FedNat Insurance
Company /s/ Michael Braun_______________________________________________________
This _10_____________ day of _September__________________ in the year
_2019_______. Monarch National Insurance Company /s/ Michael
Braun_______________________________________________________ 19\F7V1101 Page 20

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[exhibit103-19xf7v1101xre023.jpg]
War Exclusion Clause As regards interests which at time of loss or damage are on
shore, no liability shall attach hereto in respect of any loss or damage which
is occasioned by 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. 19\F7V1101

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[exhibit103-19xf7v1101xre024.jpg]
Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance (U.S.A.) 1.
This Reinsurance does not cover any loss or liability accruing to the Reassured,
directly or indirectly and whether as Insurer or Reinsurer, from any Pool of
Insurers or Reinsurers formed for the purpose of covering Atomic or Nuclear
Energy risks. 2. Without in any way restricting the operation of paragraph (1)
of this Clause, this Reinsurance does not cover any loss or liability accruing
to the Reassured, directly or indirectly and whether as Insurer or Reinsurer,
from any insurance against Physical Damage (including business interruption or
consequential loss arising out of such Physical Damage) to: I. Nuclear reactor
power plants including all auxiliary property on the site, or II. Any other
nuclear reactor installation, including laboratories handling radioactive
materials in connection with reactor installations, and "critical facilities" as
such, or III. Installations for fabricating complete fuel elements or for
processing substantial quantities of "special nuclear material," and for
reprocessing, salvaging, chemically separating, storing or disposing of "spent"
nuclear fuel or waste materials, or IV. Installations other than those listed in
paragraph (2) III above using substantial quantities of radioactive isotopes or
other products of nuclear fission. 3. Without in any way restricting the
operations of paragraphs (1) and (2) hereof, this Reinsurance does not cover any
loss or liability by radioactive contamination accruing to the Reassured,
directly or indirectly, and whether as Insurer or Reinsurer, from any insurance
on property which is on the same site as a nuclear reactor power plant or other
nuclear installation and which normally would be insured therewith except that
this paragraph (3) shall not operate (a) where Reassured does not have knowledge
of such nuclear reactor power plant or nuclear installation, or (b) where said
insurance contains a provision excluding coverage for damage to property caused
by or resulting from radioactive contamination, however caused. However on and
after 1st January 1960 this sub-paragraph (b) shall only apply provided the said
radioactive contamination exclusion provision has been approved by the
Governmental Authority having jurisdiction thereof. 4. Without in any way
restricting the operations of paragraphs (1), (2) and (3) hereof, this
Reinsurance does not cover any loss or liability by radioactive contamination
accruing to the Reassured, directly or indirectly, and whether as Insurer or
Reinsurer, when such radioactive contamination is a named hazard specifically
insured against. 5. It is understood and agreed that this Clause shall not
extend to risks using radioactive isotopes in any form where the nuclear
exposure is not considered by the Reassured to be the primary hazard. 6. The
term "special nuclear material" shall have the meaning given it in the Atomic
Energy Act of 1954 or by any law amendatory thereof. 7. Reassured to be sole
judge of what constitutes: (a) substantial quantities, and (b) the extent of
installation, plant or site. Note.-Without in any way restricting the operation
of paragraph (1) hereof, it is understood and agreed that (a) all policies
issued by the Reassured on or before 31st December 1957 shall be free from the
application of the other provisions of this Clause until expiry date or 31st
December 1960 whichever first occurs whereupon all the provisions of this Clause
shall apply. (b) with respect to any risk located in Canada policies issued by
the Reassured on or before 31st December 1958 shall be free from the application
of the other provisions of this Clause until expiry date or 31st December 1960
whichever first occurs whereupon all the provisions of this Clause shall apply.
12/12/57 N.M.A. 1119 BRMA 35B 19\F7V1101

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[exhibit103-19xf7v1101xre025.jpg]
Pools, Associations and Syndicates Exclusion Clause (Catastrophe) It is hereby
understood and agreed that: A. This Contract excludes loss or liability arising
from: 1. Business derived directly or indirectly from any pool, association, or
syndicate which maintains its own reinsurance facilities. This subparagraph 1
shall not apply with respect to: a. Residual market mechanisms created by
statute. This Contract shall not extend, however, to afford coverage for
liability arising from the inability of any other participant or member in the
residual market mechanism to meet its obligations, nor shall this Contract
extend to afford coverage for liability arising from any claim against the
residual market mechanism brought by or on behalf of any insolvency fund (as
defined in the Insolvency Fund Exclusion Clause incorporated in this Contract).
For the purposes of this Clause, the California Earthquake Authority shall be
deemed to be a "residual market mechanism." b. Inter-agency or inter-government
joint underwriting or risk purchasing associations (however styled) created by
or permitted by statute or regulation. 2. Those perils insured by the Company
that the Company knows, at the time the risk is bound, to be insured by or in
excess of amounts insured or reinsured by any pool, association or syndicate
formed for the purpose of insuring oil, gas, or petro-chemical plants; oil or
gas drilling rigs; and/or aviation risks. This subparagraph 2 shall not apply:
a. If the total insured value over all interests of the risk is less than
$250,000,000. b. To interests traditionally underwritten as Inland Marine or
Stock or Contents written on a blanket basis. c. To Contingent Business
Interruption liability, except when it is known to the Company, at the time the
risk is bound, that the key location is insured by or through any pool,
association or syndicate formed for the purpose of insuring oil, gas, or
petro-chemical plants; oil or gas drilling rigs; and/or aviation risks; unless
the total insured value over all interests of the risk is less than
$250,000,000. B. With respect to loss or liability arising from the Company's
participation or membership in any residual market mechanism created by statute,
the Company may include in its ultimate net loss only amounts for which the
Company is assessed as a direct consequence of a covered loss occurrence,
subject to the following provisions: 1. Recovery is limited to perils otherwise
protected hereunder. 2. In the event the terms of the Company's participation or
membership in any such residual market mechanism permit the Company to recoup
any such direct 19\F7V1101 Page 1 of 2

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[exhibit103-19xf7v1101xre026.jpg]
assessment attributed to a loss occurrence by way of a specific policy premium
surcharge or similar levy on policyholders, the amount received by the Company
as a result of such premium surcharge or levy shall reduce the Company's
ultimate net loss for such loss occurrence. 3. The result of any rate increase
filing permitted by the terms of the Company's participation or membership in
any such residual market mechanism following any assessment shall have no effect
on the Company's ultimate net loss for any covered loss occurrence. 4. The
result of any premium tax credit filing permitted by the terms of the Company's
participation or membership in any such residual market mechanism following any
assessment shall reduce the Company's ultimate net loss for any covered loss
occurrence. 5. The Company may not include in its ultimate net loss any amount
resulting from an assessment that, pursuant to the terms of the Company's
participation or membership in the residual market mechanism, the Company is
required to pay only after such assessment is collected from the policyholder.
6. The ultimate net loss hereunder shall not include any monies expended to
purchase or retire bonds as a consequence of being a member of a residual market
mechanism nor any fines or penalties imposed on the Company for late payment. 7.
If, however, a residual market mechanism only provides for assessment based on
an aggregate of losses in any one contract or plan year of said mechanism, then
the amount of that assessment to be included in the ultimate net loss for any
one loss occurrence shall be determined by multiplying the Company's share of
the aggregate assessment by a factor derived by dividing the Company's ultimate
net loss (net of the assessment) with respect to the loss occurrence by the
total of all of its ultimate net losses (net of assessments) from all loss
occurrences included by the mechanism in determining the assessment. 8/1/2012
19\F7V1101 Page 2 of 2

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Terrorism Exclusion (Property Treaty Reinsurance) Notwithstanding any provision
to the contrary within this Contract or any amendment thereto, it is agreed that
this Contract excludes 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: 1. Involves violence against one or more persons,
or 2. Involves damage to property; or 3. Endangers life other than the person
committing the action; or 4. Creates a risk to health or safety of the public or
a section of the public; or 5. Is designed to interfere with or disrupt an
electronic system. This Contract also excludes 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 and 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 radiological, biological,
chemical, or nuclear pollution or contamination. 19\F7V1101

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[exhibit103-19xf7v1101xre028.jpg]
The Interests and Liabilities Agreements, constituting 6 pages in total, have
been omitted from this exhibit because such agreements are not material and
would be competitively harmful if publicly disclosed. 19\F7V1101

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