Exhibit 10(g)

 
MANAGING GENERAL AGENCY AGREEMENT

Protective Insurance Company, an Indiana corporation, with main administrative
offices located at 1099 North Meridian Street, Indianapolis, IN 46204,
hereinafter referred to as “the Company” and Paladin Catastrophe Management LLC,
a New Jersey corporation, located at 51 Grove Street, Suite 3, Chester, NJ,
07930 (“Manager”) agree as follows:

Section 1 – SCOPE OF APPOINTMENT; DUTIES
 
 
1.1
The Company appoints Paladin Catastrophe Management LLC as a Managing General
Agent (“Manager”) for production of assumed reinsurance business.

 
 
1.2
The effective date of this Agreement will be July 2, 2007 and shall remain in
effect until cancelled, as provided in Section 9 of this Agreement.

 
 
1.3
The Company shall have a first right of refusal relating to any insurance or
reinsurance business produced and/or underwritten by the Manager while this
Agreement is in force.  The Manager will present the business to the Company in
a manner that allows for the full and complete analysis by the Company of all
aspects of the business.

 
 
1.4
The Company shall have a reasonable period of time in which to analyze any
business presented by the Manager.  Should the Company choose to accept the
business, or any portion thereof, the Company shall have the exclusive right to
such accepted business produced and/or underwritten by the Manager.

 
 
1.5
Each type of business produced shall be subject to a separate agreement covering
the specific terms and limitations related to that business.  The Company and
the Manager shall mutually agree upon what constitutes a separate type of
business (i.e. property catastrophe reinsurance assumed).  Each separate
agreement will be bound by the provisions of this Managing General Agency
Agreement in addition to the provisions of the separate agreements.  Each such
separate agreement shall be listed in Exhibit A attached hereto.

 
 
1.6
If the Company declines to accept business presented to it by the Manager, the
Manager may seek other markets for such business only after formal written
rejection by the Company.  The Company shall provide such written rejection on a
timely basis after it has completed its evaluation of the business.

 
 
1.7
This appointment of Manager is not exclusive.  The Company is free to solicit
other intermediaries for business.

 
 
1.8
The Manager’s appointment is limited to the authority necessary and reasonably
required for the Manager to perform its duties and discharge its
responsibilities as described in this agreement.

 
 
1.9
The Manager will at all times obey all underwriting guidelines and directives as
the Company may from time to time promulgate for production of the business, as
specified in the separate contracts listed in Exhibit A.  The Manager agrees not
to bind coverage or sign contracts of reinsurance in the name of the Company in
contravention of any such guidelines, rules, instructions, or directives without
specific written approval by the Company.  The Manager further agrees not to
bind retrocessions on behalf of the Company, unless specifically authorized by
the Company in writing, or commit the Company to participate in any insurance or
reinsurance syndicate.

 
 
1.10
The Manager agrees not to issue any advertising or promotional material bearing
the Company’s name(s) or logo(s) without first obtaining the written approval of
the Company.

 
 
1.11
The Manager will disclose to the Company any relationship it has with any
insurer or broker, including any relationships resulting from the Company
declining product submissions by the Manager.

 
 
1.12
The Manager will provide annually a review, in the form prescribed by Statement
on Accounting Standards 70, from an independent certified public accountant that
the Manager’s accounting for premiums and losses provided to the Company have
been made on a timely and accurate basis.

 
 
1.13
The Company may, at any time with five business days notice, conduct an onsite
review of the underwriting and claims processing operations of the Manager. The
Manager is prohibited from appointing any producer or sub-reinsurance
intermediary manager.  All Contracts will be underwritten directly by the
Manager and will be

 
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accepted from Licensed Reinsurance Brokers and Intermediaries in an open market
forum.  In no way will the Manager give its underwriting authority to any other
entity or assume any risk without the Company’s express written approval of each
individual contract.

 
 
1.14
The Manager must maintain an office and staff capable of handling all business
written by the Manager, including business placed with other markets as the
result of Company declinations.  This shall include, but not be limited to the
maintenance of Catastrophe model(s), computers, telephones and other systems
necessary to write and service business written by the Manager.

 
 
1.15
The Manager and its officers agree to devote substantially all of their full
efforts and time to (1) the business covered by this managing general agency
agreement, (2) services as investment advisor to Baldwin & Lyons Capital
Management LLC ILS Fund covered under a separate terms sheet, and (3) those
services covered under Section 1.16.

 
 
1.16
In addition to underwriting for other markets for business first offered to, but
declined by, the Company, the Manager will be permitted to provide services to
other customers relating to modeling catastrophe risk for take-out insurance
companies, each of which shall be disclosed to the Company.  No tools, including
but not limited to modeling software, purchased or funded by the Company with
respect to business produced by the Manager for Company may be utilized in
conducting any business for other customers, without the express written
approval of the company.  Should the Company approve the use of such tools by
the Manager for other business, any cost of such tools will be shared on a basis
to be agreed by the Company and the Manager on a case by case basis.

Section 2 –MANAGER’S EXPENSES
 
2.1
Unless otherwise designated in the separate agreements listed in Exhibit A, the
Manager will pay its own expenses incurred in producing and servicing the
business.  The Manager will not charge the Company, or commit the Company to
pay, any expense, debt, or obligation in connection with production of the
business unless prior written approval is obtained from the Company.

 
2.2
The Manager will pay for its own data processing hardware and software.   The
Manager further will be responsible for fees for data processing and
communication software and technology including, but not limited to, necessary
line charges.  Manager will also maintain all necessary hardware and software
licenses.

 
2.3
The Manager will indemnify the Company for any fees, penalties and/or fines
relating to special examinations conducted by the local regulatory authority
having jurisdiction over the Company arising from the business produced
hereunder to the extent that the fees, penalties, fines and/or examinations in
question arise from the acts of the Manager.  Any fees, penalties or
examinations that are the result of normal business activity outlined in this
contract will be payable by the Company.

 
2.4
The Manager will pay all audit fees for examinations specified in Section 1.12.

 
Section 3 – PREMIUMS AND DEPOSITS

 
3.1
Unless otherwise designated in the separate agreements listed in Exhibit A, the
Manager will direct the insured, the primary insurer or their designated agent
or broker or intermediary to remit all deposits and premiums on contracts of
reinsurance written pursuant to this agreement, net of brokerage commission or
any offsets allowed per the terms of each contract of reinsurance, directly to
the Company.

 
3.2
Unless otherwise designated in the separate agreements listed in Exhibit A, it
is hereby agreed and understood that the Manager is responsible for, and
guarantees to the Company, payment of all premium on contracts of insurance or
reinsurance bound by the Manager on behalf of the Company even if not collected
by the Manager.  The Manager agrees it will be responsible for all bad debts and
will promptly pay Company upon demand.  The Manager agrees to bear any expense,
including reasonable attorneys’ fees and costs expended by the Company, to
enforce collection from the Manager.

 
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Section 4  – COMPENSATION

 
Each separate agreement listed in Exhibit A will specify the Manager’s
compensation for the business covered by that particular agreement.  No
compensation will be paid to the Manger for the initiation of, maintenance of or
termination of this Managing General Agency Agreement.

Section 5 – LOSS NOTICES AND
SETTLEMENTS                                                                                     Unless
otherwise designated in the separate agreements listed in Exhibit A:
 
5.1
The Manager will issue notice to the Company immediately upon receiving notice
of an event that has or may cause a loss to the program. The Manager will verify
the validity and applicability of the claim in relation to coverage provided
under the related contract and make its best assessment of the ultimate
liability of each reinsured based on the information on hand and transmit such
information to the Company.

 
5.2
The Company shall have sole authority to remit payments in partial or full
settlement of claims arising from contracts of insurance under this
Agreement.  Such payments will be made directly to the insured or the insured’s
broker, as applicable.  The Company will endeavor to settle claims promptly upon
receipt of sufficient information from the Manager and/or the insured; however,
the Company shall have the authority to withhold payment pending receipt of
additional information, as it deems necessary to properly evaluate the
claim.  In the event that the contract of reinsurance carries a Cash Call
provision, the Company will remit payment in accordance with the Cash Call
provision.

 
5.3
The Manager will provide the Company with all information on each claim
necessary for the Company to record and evaluate the loss and shall send a copy
of the claim file to the Company upon their request.

 
5.4
All claims files will be the joint property of the Company and the
Manager.  However, upon an order of liquidation of the Company, the Manager will
simultaneously and immediately provide the liquidator with copies of all the
claim files.  With respect to claim files pertaining solely to a Company in
liquidation, the Manager will have reasonable access to and the right to copy
the files on a timely basis.

 
Section 6 – REGULATORY COMPLIANCE

 
6.1
The Manager is authorized to accept submissions on behalf of the Company from
insurance and reinsurance intermediaries.  It is the sole responsibility of the
Manager to ensure the intermediaries selected by the Manager are licensed by the
appropriate regulatory authorities.

 
6.2
The Manager represents and warrants (a) it has all necessary licenses and
authorizations from regulatory authorities necessary to produce the business;
(b) it will maintain its licenses and authorizations in good standing; (c) will
comply with all other state and federal laws and regulations governing the
Company and the Manager and (d) will provide copies of all such licenses and
authorizations to the Company.

 
6.3
The Manager will comply with the rules, laws and regulations in all states in
which business under this agreement will be produced.

 
6.4
The Manager will defend, indemnify and hold Company harmless for any claim,
investigation, fine or other action arising from Manager’s failure to fully
comply with Section 6 of this agreement.

 
6.5
In the event that Manager receives a request to disclose all or any part of the
information in its possession concerning Company under the terms of a subpoena
or order issued by a court of competent jurisdiction or by a governmental body,
it agrees to (i) promptly notify Company of the existence, terms, and
circumstances surrounding such a request so that it may take action to seek an
appropriate protective order and/or waive compliance with the provisions of this
Agreement, and (ii) if disclosure of all or a part of such requested information
is required in the opinion of Manager's counsel, exercise reasonable efforts to
assist Company to obtain an  order or other reliable assurance that confidential
treatment will be accorded to that portion of the requested information that is
required to be disclosed.  The parties agree, however, that all costs and
expenses including, but not limited to attorneys’ fees, incurred in obtaining
such an order or other reliable assurances regarding the confidential treatment
of the information in possession of the Manager is the sole responsibility of
Company."

 
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6.6
Manager warrants and represents that its services and software used to carry out
its obligations under this Agreement do not and will not violate or infringe
upon any copyright, trademark, patent, trade secret or other proprietary right
of any third party.  Manager shall, at its own expense, defend, indemnify and
hold harmless Company against and from any action, claim, suit, or proceeding
brought against Company by a third party arising out of Company's violation or
infringement of any copyright, trademark, patent, trade secret or other
proprietary right to the extent based on Company's authorized use or possession
of Manager’s services and software; provided that Company notifies Manager
promptly of any such claims or suits. Manager shall have the right to conduct
the defense of any such claim, suit, proceeding, or action and all negotiations
for settlement or compromise, unless otherwise mutually agreed to in writing by
the parties hereto.  However, Company, at its own expense, shall have the right
to participate in the defense of any such claim, suit, proceeding, or action
through counsel of its choosing.

 

 
 

 
Section 7 – MAINTENANCE OF RECORDS; COMPANY ACCESS

 
7.1
The Manager will maintain true and complete records of all material transactions
involving contracts of reinsurance written under this agreement.  Furthermore,
the Manager will maintain its records for such period of time as will comply
with applicable laws and regulations governing retention of records.  As often
as the Company may reasonably request, during the term of this agreement and for
as long after termination as the Company deems necessary to protect its
interests, the Manager will permit the Company and its authorized
representatives to inspect and examine the Manager’s records of all transactions
involving the business.  The Manager agrees to cooperate and render assistance
in any inspection or examination and will make copies of any books and records
and furnish them to the Company or its representatives.

 
7.2
When transactions involving the business are recorded on the Manager's data
processing system(s), the Manager will, on a monthly basis, back up records of
all transactions and will maintain backup records at a location other than the
location where original records are maintained.

 

Section 8 – INSURANCE AND BOND
 
8.1
The Manager agrees to secure and maintain bonds as required under the terms of
its licenses from an admitted surety.

 
8.2
At its sole expense, the Manager agrees to maintain in full force and effect
during the term of this agreement policy(ies) of errors and omissions insurance
(a) in the minimum amount of $5,000,000 with a deductible not to exceed $50,000;
and (b) issued by an insurer acceptable to the Company.  Prior to signing this
agreement and at each subsequent renewal of the policy(ies), the Manager agrees
to have the Company named as an additional insured on the policy(ies) and will
furnish the Company a certificate of insurance.  The Manager will notify the
Company 30 days prior to normal expiration or anniversary, or immediately upon
notification that coverage will be canceled.  The Manager will instruct its
errors and omissions insurer to furnish the Company with any notice of
cancellation, non-renewal, or other lapse in the policy(ies).  Upon termination
of this agreement, the Manager will, at its sole expense, purchase extended
reporting coverage until all contracts of reinsurance in force at the time of
termination have reached their natural expiration.

 
8.3
The Company may, at its sole expense, request that the Manager maintain in full
force and effect during the term of this agreement policy(ies) of employee theft
insurance covering the Manager  and its employees (a) in the minimum amount of
$300,000, with a deductible not to exceed $50,000; and (b) issued by an insurer
acceptable to the Company.  Prior to signing this agreement and at each
subsequent renewal of the policy(ies), the Manager agrees to have the Company
named as an additional insured on the policy(ies) and will furnish the Company a
certificate of insurance.  The Manager will notify the Company 30 days prior to
normal expiration or anniversary, or immediately upon notification that coverage
will be canceled.  The Manager will instruct its employee theft insurer(s) to
furnish the Company with any notice of cancellation, non-renewal, or other lapse
in the policy(ies).  In the event of a loss payable by the Manager’s insurer(s),
the Manager agrees to pay the deductible directly to the Company.

 
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Section 9 – TERMINATION

 
 
This Managing General Agency Agreement can be terminated only as follows:

 
9.1
The Company can cancel this agreement for any reason, upon written notice
delivered to the Manager.

 
 
a.
Business in-force on the date of notice of cancellation of this agreement shall
run-off under the terms of the separate agreements, listed in Exhibit A, in
place on that date, including profit commission calculations and separate
termination clauses, without change because of the termination of the managing
general agency agreement.

 
 
b.
The Manager and its officers and employees each agree not to solicit business
from any account/insured inforce on the date of agreement cancellation notice
(In-force Business), unless specifically requested to do so by The Company or
upon receipt of written notification from The Company of its intention not to
solicit or renew any of the In-force Business.

 
 
c.
The Manager and its officers and employees will engage in no action which would
cause The Company to be unable to solicit and renew any In-force Business during
the Agreement Termination Period and the Company will be considered the owner of
all In-force Business unless the Company provides to The Manger written
notification of the Company’s intention not to solicit or renew any of the
In-force Business.

 
 
d.
The Manager will deliver to the Company, upon request at any time during the
Agreement Termination Period, all marketing and underwriting information
regarding In-force Business on the date of cancellation of this treaty.

 
 
e.
If The Company shall continue to solicit and renew any In-force Business,
compensation to The Manager shall be in the form of a flat commission on any
such inforce business renewed by The Company or its affiliates during the
Agreement Termination Period.  A contract will be considered a renewal if any
portion of the reinsured is covered on an on-going basis by the Company.  The
Manager shall be paid the greater of a commission rate of 3.0%, applied to all
audited original premium earned for the entire policy terms on business renewed
during the Agreement Termination Period, specifically excluding any and all
reinstatement premium, or $300,000 per underwriting year.  The commission rate
shall apply to all premium other than reinstatement premium.

 
9.2
The Manager may cancel this Managing General Agency Agreement, upon 15 days
written notice delivered to the Company, only for the following reasons:

 
 
a.
In the event of a down-grade of Company’s rating from A.M. Best to lower than
A-.

 
 
b.
In the event that The Company’s statutory surplus is reduced by 25% accompanied
by a down-grade of The Company’s rating from A.M. Best to A- or lower.

 
 
c.
A change in the majority ownership of the Company and/or Baldwin & Lyons, Inc.
or, in the event that the following individuals are no longer employed by the
Company: Gary W. Miller, Joseph J. DeVito, G. Patrick Corydon and John E.
Mitchell.  Cancellation for this reason shall require three months notice to the
Company and will be subject to the same general conditions enumerated above for
cancellation notice by the Company, with the twenty-four month Agreement
Termination Period being replaced by a three month Agreement Termination Period.

 
Business in-force on the date of notice of cancellation of this agreement from
the Manager shall run-off under the terms of the agreements in place on that
date, including profit commission calculations and separate termination clauses,
without change because of the termination of the managing general agency
agreement.
 
9.3
In the event that provisions of this section 9 are in conflict with terminations
provisions in the separate agreements listed in Exhibit A, the provisions of the
separate agreements will apply to the specific business covered by that
agreement.

 
9.4
Upon termination of this agreement the Manager promptly will provide the
Company, at the Manager’s expense, copies of all claims and contract files
pertaining to the business.  These files will include, but will not be limited
to, submissions for contracts of insurance and reinsurance, all underwriting and
rating files, copies of the contracts, endorsements, loss notices, and all
correspondence related to each contract of reinsurance assumed by the Manager.

 
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Section 10 – SPECIAL TERMINATION
 
10.1
The Manager may cancel the Company’s participation hereon at any time with
respect to premium earned and losses occurring on or after the date of
cancellation by giving 15 days written notice, upon occurrence of any of the
following:

 
 
i.
The Company becomes insolvent or is placed in conservation or has a receiver
appointed; or

 
 
ii.
The Company has been ordered by a regulatory authority to cease doing business.

 
 
10.2     In the event the Company’s participation is cancelled in accordance
with Section 10.1, the Company will, subject to limitations imposed by a
bankruptcy court or other regulatory authority having jurisdiction, return to
the Manager any unearned premium (less ceding commission thereon) applicable to
subject business in force at the effective date of cancellation.  The Company
will remain liable for losses occurring and continue to benefit from premiums
collected or losses reduced prior to this date.

Section 11 – INDEMNIFICATION; REIMBURSEMENT
 
11.1
The Company agrees to defend, indemnify, and hold the Manager harmless from any
claim or loss arising out of any act, or omission to act, of the Company in
performance of this agreement.  Claim or loss includes, but is not limited to,
attorney fees, court costs, interest payments, and expenses of investigation,
defense, or settlement.  This indemnification does not apply to the acts or
omissions of the Manager which caused or contributed to claim or loss.

 
11.2
The Manager agrees to defend, indemnify, and hold the Company harmless from any
claim or loss arising out of any act or omission to act of the Manager in
performance of this agreement.  Claim or loss includes, but is not limited to,
attorney fees, court costs, interest payments, and expenses of investigation,
defense, or settlement.  This indemnification does not apply to the acts or
omissions of the Company which caused or contributed to claim or loss

 
11.3
The Manager further agrees to defend, indemnify, hold the Company harmless from,
and reimburse the Company for, any fines, penalties, or administrative action
imposed by legal or regulatory authorities which arose out of the Manager’s
failure to comply with this agreement, including, but not limited to the
provisions of Section 6.

 
11.4
If the Company and the Manager are sued in relation to business pursuant
hereunder, in the sole discretion of the Company, the Company and the Manager
may hire common defense counsel and waive conflicts.  If they do not hire common
counsel and must hire their own attorneys, they agree that the Company will
direct the defense.

Section 12 – INDEPENDENT CONTRACTOR STATUS
 
The Manager agrees it is an independent contractor.  It further agrees the
Company has no authority or right to control the Manager’s method of performance
of its duties and responsibilities under this Agreement.  No officers,
directors, employees, or agents of the Manager will be regarded as employees of
the Company.

Section 13 – OFFSET
 
The Company and the Manager have the right to offset any balance or amounts due
from one party to the other under the terms of this Agreement.  The party
asserting the right of offset may exercise such right any time whether the
balances due are on account of premiums, losses, expenses or otherwise.

Section 14 - MISCELLANEOUS
 
14.1
The authority, duties, and responsibilities of the Manager cannot be assigned.

 
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14.2
This is the entire agreement between the parties with respect to general
managing general agency operations.  Separate agreements listed in Exhibit A may
carry different or more restrictive provisions than those contained in this
agreement and, when in conflict, is it is agreed that the provisions of the
separate agreements will prevail. This agreement can be modified only in writing
signed by the parties.  It may not be modified verbally, nor may it be modified
by any subsequent practice or course of dealing by the parties.

 
14.3
Failure or delay by the Company to enforce any of the provisions of this
agreement will not constitute a waiver of any of its rights or privileges under
this agreement, unless in each instance the Company signs a written waiver.  No
written waiver will modify this agreement or affect the rights of the Company
with respect to any subsequent default or failure of performance by the Manager.

 
14.4
This agreement is an Indiana contract and will be construed in accordance with
the laws of the State of Indiana and that all actions will be handled by the
courts located in Marion County, Indiana.

 
14.5
If any portion of this agreement is deemed invalid or unenforceable, the invalid
or unenforceable portion is considered severed from the agreement and the
remainder of the agreement will remain in full force and effect.

 
14.6
The headings are merely descriptive and provided for ease of reference; they
will not affect interpretation of this agreement.  If any heading is
inconsistent with any provision of the agreement, the provision will control.

 
14.7
This agreement may be signed in counterparts, each of which will constitute an
original.

 
14.8
To the extent the Manager receives nonpublic personal information provided by
the Company, the Manager agrees to maintain the confidentiality of such
information.  Nonpublic personal information means personally identifiable
personal and financial information pertaining to the Company, its employees and
reinsureds.  The Manager agrees not to disclose nonpublic personal information
except as necessary to perform its obligations under this agreement, with the
written authorization of the individual, or as permitted or required by State of
federal law.  The Manager further agrees to maintain physical, electronic and
procedural safeguards to protect this information.  Manager further agrees that,
in having access to non-public information, that it will at all times indemnify
and keep indemnified Company and hold and save it harmless from and against any
and all liability, losses, costs, damages, attorneys’ fees and expenses of
whatever kind which Company may sustain or incur by reason of Manager's sharing
non-public information

 
 
14.9       The Company and the Manager agree that they will not disclose one
another’s trade secrets or proprietary information.

 
 
14.10     Indemnification and privacy provisions contained within this Agreement
shall survive termination.

Section 15 – NOTICES
 
Any notice required or permitted to be given under this agreement must be in
writing.  Notice is deemed given when delivered personally or on the date of
mailing after being sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed as follows:

 
To Company:
To Manager:

Protective Insurance Company
Paladin Catastrophe Management LLC

1099 North Meridian Street
51 Grove Street, Suite 3

Indianapolis, IN 46204
Chester, NJ, 07930

Attn:  G. Patrick Corydon
Attn:  David B. Ingrey, CPCU, ARe

Executive Vice President
Principal

 
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Signed by the parties and effective as of the date set forth in Section 1.2,
above.

PROTECTIVE INSURANCE COMPANY

Dated: September 9,
2009                                                          By: /s/G. Patrick
Corydon
 
      G. Patrick Corydon
      Executive Vice President

PALADIN REINSURANCE MANAGEMENT, LLC

DATED: September 9,
2009                                                       By: /s/David B. Ingry
 
       David B. Ingrey
       Director

DATED: August 13,
2009                                                          By: /s/ Haas
Chaudhry
 
       Haas Chaudhry
       Director

DATED: September 9,
2009                                                       By: /s/ Martha
Atwater
 
       Martha Atwater
       Director

DATED: August 13,
2009                                                          By: /s/ Adam C.
Tyburski
 
       Adam C. Tyburski
       Director

 
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MANAGING GENERAL AGENCY AGREEMENT
EXHIBIT A – LISTING OF SEPARATE AGREEMENTS

 
 
1.
AMENDED AND RESTATED PROPERTY CATASTROPHE REINSURANCE INTERMEDIARY MANAGER
AGREEMENT, effective July 2, 2007.

 
 
2.
CLASH AND WORKERS COMPENSATION CATASTROPHE REINSURANCE INTERMEDIARY MANAGER
AGREEMENT, effective October 1, 2008.

 
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