Exhibit 10.35

ENDORSEMENT NO. 1

to the

PROPERTY CATASTROPHE OVERLYING EXCESS OF LOSS

REINSURANCE CONTRACT

between

STATE AUTOMOBILE MUTUAL INSURANCE COMPANY

MILBANK INSURANCE COMPANY

STATE AUTO NATIONAL INSURANCE COMPANY

STATE AUTO INSURANCE COMPANY OF WISCONSIN

FARMERS CASUALTY INSURANCE COMPANY

STATE AUTO INSURANCE COMPANY OF OHIO

MERIDIAN SECURITY INSURANCE COMPANY

MERIDIAN CITIZENS MUTUAL INSURANCE COMPANY

STATE AUTO FLORIDA INSURANCE COMPANY

BEACON NATIONAL INSURANCE COMPANY

FIRST PREFERRED INSURANCE COMPANY

PETROLIA INSURANCE COMPANY

BEACON LLOYDS INSURANCE COMPANY

(the “Company”)

and

STATE AUTO PROPERTY AND CASUALTY INSURANCE COMPANY

(the Subscribing “Reinsurer”)

IT IS HEREBY AGREED that effective January 1, 2008, the Contract shall be
amended as follows:

 

 

1.

The following are added as reinsured companies, as parties to the Contract and
shall hereinafter be included in the definition of “Company”:

 

 

a.

PATRONS MUTUAL INSURANCE COMPANY OF CONNECTICUT

 

 

b.

LITCHFIELD MUTUAL FIRE INSURANCE COMPANY

 

 

c.

PATRONS FIRE INSURANCE COMPANY OF RHODE ISLAND

 

 

d.

PROVISION STATE INSURANCE COMPANY.

 

 

2.

Exhibit A is revised and attached hereto to reflect premiums for the newly
reinsured companies.

 

 

3.

ARTICLE X – NOTICE OF LOSS AND LOSS SETTLEMENT is deleted in its entirety and
the following substituted therefor:

“The Company shall adjust, settle, or compromise all claims and losses
hereunder.

All loss settlements by the Company which comply with the terms hereof shall be
unconditionally binding upon the Reinsurer.

--------------------------------------------------------------------------------

The Company shall advise the Reinsurer promptly of all claims and any subsequent
developments pertaining thereto, which may, in the Company’s opinion, develop
into losses involving Reinsurance hereunder. Inadvertent omission or oversight
in dispatching such advices shall in no way affect the liability of the
Reinsurer under this Contract provided the Company informs the Reinsurer of such
omission or oversight promptly upon its discovery.

The Company shall submit a proof of loss within 30 days after the end of the
calendar quarter in which it paid a covered loss. The Reinsurer shall tender all
loss payments within 45 days after receipt of satisfactory proof of loss.”

 

 

4.

ARTICLE XI - PREMIUM is deleted in its entirety and the following substituted
therefor:

“The premium to be paid to the Reinsurer, as shown in Exhibit A, is payable in
equal quarterly installments within 45 days after the end of each such calendar
quarter. Each company’s premium will be proportional to its share of subject
premium.”

 

 

5.

Notwithstanding the effective date referenced above, the following parties are
deleted from the definition of “Company” effective December 18, 2007 upon their
dissolution:

 

 

a.

FIRST PREFERRED INSURANCE COMPANY

 

 

b.

PETROLIA INSURANCE COMPANY.

Except as amended herein, the provisions of this Contract shall remain otherwise
unchanged.

IN WITNESS WHEREOF, the parties hereto by their authorized representative have
executed this Endorsement No. 1 as of the date first written above:

 

 

STATE AUTO PROPERTY AND

    CASUALTY INSURANCE COMPANY

 

By

 

 

 

Title

 

Vice President, CFO

STATE AUTOMOBILE MUTUAL INSURANCE COMPANY

MILBANK INSURANCE COMPANY

STATE AUTO NATIONAL INSURANCE COMPANY

STATE AUTO INSURANCE COMPANY OF WISCONSIN

FARMERS CASUALTY INSURANCE COMPANY

STATE AUTO INSURANCE COMPANY OF OHIO

MERIDIAN SECURITY INSURANCE COMPANY

MERIDIAN CITIZENS MUTUAL INSURANCE COMPANY

STATE AUTO FLORIDA INSURANCE COMPANY

BEACON NATIONAL INSURANCE COMPANY

BEACON LLOYDS INSURANCE COMPANY

PATRONS MUTUAL INSURANCE COMPANY OF CONNECTICUT

--------------------------------------------------------------------------------

LITCHFIELD MUTUAL FIRE INSURANCE COMPANY

PATRONS FIRE INSURANCE COMPANY OF RHODE ISLAND

PROVISION STATE INSURANCE COMPANY

 

By

 

 

Title

 

Treasurer

--------------------------------------------------------------------------------

EXHIBIT A - Revised January 1, 2008

State Automobile Mutual Insurance Company

Milbank Insurance Company

State Auto National Insurance Company

State Auto Insurance Company of Wisconsin

Farmers Casualty Insurance Company

State Auto Insurance Company of Ohio

Meridian Security Insurance Company

Meridian Citizens Mutual Insurance Company

State Auto Florida Insurance Company

Beacon National Insurance Company

First Preferred Insurance Company

Petrolia Insurance Company

Beacon Lloyds Insurance Company

Patrons Mutual Insurance Company of Connecticut

Litchfield Mutual Fire Insurance Company

Patrons Fire Insurance Company of Rhode Island

Provision State Insurance Company

PROPERTY CATASTROPHE OVERLYING EXCESS OF LOSS REINSURANCE CONTRACT

FOR THE PERIOD

12:01 A.M., EASTERN TIME, JULY 1, 2007

THROUGH

12:01 A.M., EASTERN TIME, JULY 1, 2008

PREMIUM CALCULATION

Subject Premium Basis - July 1, 2006 through March 31, 2007

 

Annual

Statement Line

  Mutual     Milbank     National     SAIC of
Wisconsin     Farmers     SAIC of
Ohio     Meridian
Security     Meridian
Citizens
Mutual     State Auto
Florida     Beacon*     Sub-Total  

1.0

  @   100%   20,998,619     544,199     0     221,970     263,665     1,230,786
    3,047,547     508,773     465,995     1,231,599     28,513,153  

2.1

  @   100%   13,690,523     402,213     0     126,394     316,637     745,121  
  1,490,907     11,116     726,082     1,728,758     19,237,751  

3.0

  @   65%   0     0     0     0     0     0     0     9,386,287     0    
937,823     10,324,110  

4.0

  @   65%   32,508,920     9,515,041     0     4,081,306     1,217,305    
1,503,788     6,110,275     0     2,112,436     7,965,844     65,014,915  

5.0

  @   50%   9,293,684     854,886     0     0     534,189     0     1,013,931  
  0     1,132,730     1,728,758     14,558,178  

8.0

  @   90%   170,554     220     0     469     1,304     151,158     24,297     0
    55,072     0     403,074  

9.0

  @   100%   9,137,717     982,159     0     403,655     92,445     153,372    
743,400     0     331,882     361,570     12,206,200  

12.0

  @   100%   1,690,139     10,759     0     1,802     10,554     37,270    
460,012     154,826     171     0     2,365,533  

21.1

  @   50%   20,758,665     4,986,626     3,954,261     3,315,035     1,470,715  
  862,218     3,461,294     0     0     2,643,982     41,452,796  

21.2

  @   50%   4,741,875     186,043     0     0     47,237     0     257,323    
305,943     50     485,860     6,024,331                                        
                                      112,990,696     17,482,146     3,954,261  
  8,150,631     3,954,051     4,683,713     16,608,986     10,366,945    
4,824,418     17,084,194     200,100,041  

Percent of

  Total

  56.5 %   8.7 %   2.0 %   4.1 %   2.0 %   2.3 %   8.3 %   5.2 %   2.4 %   8.5 %
  100.0 %  

Annual

  Premium

  2,011,400     309,720     71,200     145,960     71,200     81,880     295,480
    185,120     85,440     302,600     3,560,000  

Quarterly

  Installment

  502,850     77,430     17,800     36,490     17,800     20,470     73,870    
46,280     21,360     75,650     890,000                             Sub-Total  
Annual Premium / Subject Premium:     1.7791%  

 

Annual

Statement Line

   Patrons
Mutual     Litchfield     Patrons
Fire     Provision
State  

  1.0  @  100%

   1,886,945     101,692     0     0  

  2.1  @  100%

   1,276,795     11,299     0     0  

  3.0  @    65%

   666,645     892,626     0     0  

  4.0  @    65%

   10,203,060     11,299     0     0  

  5.0  @    50%

   4,225,852     158,187     0     0  

  8.0  @    90%

   0     0     0     0  

  9.0  @  100%

   463,262     67,794     0     0  

12.0  @  100%

   0     0     0     0  

21.1  @    50%

   1,028,215     0     0     0  

21.2  @    50%

   0     0     0     0                               19,750,774     1,242,897  
  0     0  

Semi-Annual Premium:

   175,694     11,056     0     0  

Quarterly Installment:

   87,847     5,528     0     0        Patrons
Mutual     Litchfield     Patrons
Fire     Provision
State  

Rate as % of Subject Premium:

   1.7791 %   1.7791 %   1.7791 %   1.7791 %

 

*

“Beacon” includes Beacon National, First Preferred, Petrolia and Beacon Lloyds
Insurance Companies.