Exhibit 10.1

COMMUTATION AND RELEASE AGREEMENT

COMMUTATION AND RELEASE AGREEMENT (the "Agreement") entered into between
Affirmative Insurance Company (the "Company") and Watford Re Ltd. (the
"Reinsurer"), effective the 1st day of April, 2015.

WHEREAS, the Reinsurer entered into Automobile Quota Share Reinsurance Contract
(the "Contract"), effective June 30, 2014 through June 30, 2015, GC Reference
U4VT0008, with the Company, whereby the Reinsurer, in consideration of payment
of premium, reinsured certain risks insured by the Company; and

WHEREAS, the Reinsurer and the Company desire to fully and finally settle and
commute all obligations and liabilities known and unknown of the Reinsurer and
the Company under the Contract; and

WHEREAS, the Reinsurer has offered to pay and the Company has agreed to accept
in full satisfaction of the Reinsurer's present and future liabilities under the
Contract $2,949,154.71, which will be subject to adjustment once the February
and March 2015 accounts are processed and submitted to the Reinsurer;

NOW, THEREFORE, IT IS AGREED BY AND BETWEEN THE REINSURER AND THE COMPANY THAT:

1.The Reinsurer shall pay to the Company the sum of $2,949,154.71, subject to
adjustment as noted above, within 10 days of the execution of this Agreement by
both the Reinsurer and the Company.

2.The Company shall accept the sum set forth in paragraph 1. herein in full and
final settlement of any and all amounts due from the Reinsurer to the Company
under the Contract.

3.In consideration of payment of $2,949,154.71 referred to in paragraph 1.
herein, subject to adjustment as noted above, and effective on the date of such
payment, the Company shall release and discharge the Reinsurer, its
predecessors, parents, affiliates, agents, officers, directors and shareholders
and assigns from any and all present and future payment obligations,
adjustments, executions, offsets, actions, causes of action, suits, debts, sums
of money, accounts, reckonings, bonds, bills, covenants, contracts,
controversies, agreements, promises, damages, judgments, claims, demands,
liabilities and/or losses whatsoever, all whether known or unknown, which the
Company and its successors and assigns ever had, now have, or hereafter may
have, whether grounded in law or equity, in contract or in tort, against the
Reinsurer or any of them by reason of any matter whatsoever arising out of the
Contract, it being the intention of the parties that this release operate as a
full and final settlement of the Reinsurer's current and future liabilities to
the Company under said Contract.

4.Simultaneous with the Company releases as provided for in paragraph 3 above,
the Reinsurer shall release and discharge the Company, its predecessors,
parents, affiliates, agents, officers, directors, shareholders and assigns from
any and all present and future payment obligations, adjustments, executions,
offsets, actions, causes of action, suits, debts, sums of money, accounts,
reckonings, bonds, bills, covenants, contracts, controversies, agreements,
promises, damages, judgments, claims, demands, liabilities and/or losses
whatsoever, all whether known or unknown, which the Reinsurer and its successors
and assigns ever had, now have or hereafter may have, whether grounded in Jaw or
equity, in contract or in tort, against the Company or any of them by reason of
any matter whatsoever arising out

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of the Contract, it being the intention of the parties that this release operate
as a full and final settlement of the Company's current and future liabilities
to the Reinsurer under the Contract.

5.The rights, duties and obligations set forth herein shall inure to the benefit
of and be binding upon any and all predecessors, successors, affiliates,
officers, directors, employees, parents, subsidiaries, stockholders,
liquidators, receivers and assigns of the parties hereto.

6.The parties hereto expressly warrant and represent that they are corporations
in good standing in their respective places of domicile; that the execution of
this Agreement is fully authorized by each of them; that the person or persons
executing this Agreement have the necessary and appropriate authority to do so;
that there are no pending agreements, transactions, or negotiations to which any
of them are a party that would render this Agreement or any part thereof void,
voidable, or unenforceable; and that no authorization, consent or approval of
any government entity is required to make this Agreement valid and binding upon
them.

7.This Agreement shall be interpreted under and governed by the laws of the
State of Illinois witout regard to its conflict of laws rules.

8.The Company and the Reinsurer hereby agree to execute promptly any and all
supplemental agreements, releases, affidavits, waivers and other documents of
any nature or kind that the other party may reasonably require in order to
implement the provisions or objectives of this Agreement.

9.This Agreement may be executed in multiple counterparts, each of which, when
so executed and delivered shall be an original, but such counterparts shall
together constitute one and the same instrument and agreement.

10.This Agreement contains the entire agreement between the parties as respects
its subject matter. All discussions and agreements previously entered into
between the parties concerning the subject matter of the Agreement are merged
into this Agreement. This Agreement may not be modified or amended, nor any of
its provisions waived, except by an instrument in writing, signed by the parties
hereto.

11.If the Company shall be obligated under the laws respecting debtors and
creditors of the United States or of the State of Illinois to repay to the
Reinsurer, or to a rehabilitator, successor, liquidator or trustee of the
Reinsurer, the consideration paid hereunder, then the Company will make such
repayment and, upon such repayment, this Agreement shall be null and void. In
addition, in the event that the consideration paid hereunder shall be a voidable
transfer under applicable law, and any party shall be obligated to repay the
consideration, then the Company will repay such consideration and, upon such
repayment, this Agreement shall be null and void.

 

 

 

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IN WITNESS WHEREOF, the authorized representatives of the parties hereto have
executed this Commutation and Release Agreement in duplicate as of the day and
year first written above.

 

Watford Re Ltd.

 

 

 

 

 

 

 

 

By:

/s/ Watford Re

 

Witness:

/s/ Witness

Title:

Senior Vice President

 

 

 

Date:

3/30/15

 

 

 

 

Affirmative Insurance Company

 

 

 

 

 

 

 

 

By:

/s/ Michael J. McClure

 

Witness:

/s/ John P. Killacky

Title:

Chairman

 

 

 

Date:

4/1/15

 

 

 

 

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