Exhibit 10.30

INTERESTS AND LIABILITIES AGREEMENT

(the “Agreement”)

of

ALTERRA BERMUDA LIMITED

(the “Subscribing Reinsurer”)

with respect to the

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the
ownership,

control or management of Amerisafe, Inc.

(collectively the “Company”)

The Subscribing Reinsurer shall have a 5.00% share in the interests and
liabilities of the “Reinsurer” as set forth in the Contract attached hereto and
executed by the Company.

This Agreement shall commence at 12:01 a.m., Standard Time, January 1, 2011 and
shall continue in force until 12:01 a.m., Standard Time, January 1, 2012.

The share of the Subscribing Reinsurer in the interests and liabilities of the
“Reinsurer” shall be several and not joint with the share of any other
subscribing reinsurer. In no event shall the Subscribing Reinsurer participate
in the interests and liabilities of the other subscribing reinsurers.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized
representative has executed this Agreement as of the date specified below:

Signed this 11 day of JANUARY, 2011.

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INTERESTS AND LIABILITIES AGREEMENT

(the “Agreement”)

of

ARCH REINSURANCE COMPANY

(the “Subscribing Reinsurer”)

with respect to the

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the
ownership,

control or management of Amerisafe, Inc.

(collectively the “Company”)

The Subscribing Reinsurer shall have a 7.50% share in the interests and
liabilities of the “Reinsurer” as set forth in the Contract attached hereto and
executed by the Company.

This Agreement shall commence at 12:01 a.m., Standard Time, January 1,2011 and
shall continue in force until 12:01 a.m., Standard Time, January 1, 2012.

The share of the Subscribing Reinsurer in the interests and liabilities of the
“Reinsurer” shall be several and not joint with the share of any other
subscribing reinsurer. In no event shall the Subscribing Reinsurer participate
in the interests and liabilities of the other subscribing reinsurers.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized
representative has executed this Agreement as of the date specified below:

Signed this 3RD day of FEBRUARY, 2011.

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INTERESTS AND LIABILITIES AGREEMENT

(the “Agreement”)

of

CATLIN UNDERWRITING AGENCIES LTD (#2003)

(the “Subscribing Reinsurer”)

with respect to the

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the
ownership,

control or management of Amerisafe, Inc.

(collectively the “Company”)

The Subscribing Reinsurer shall have a 10.00% share in the interests and
liabilities of the “Reinsurer” as set forth in the Contract attached hereto and
executed by the Company.

This Agreement shall commence at 12:01 a.m., Standard Time, January 1, 2011 and
shall continue in force until 12:01 a.m., Standard Time, January 1, 2012.

The share of the Subscribing Reinsurer in the interests and liabilities of the
“Reinsurer” shall be several and not joint with the share of any other
subscribing reinsurer. In no event shall the Subscribing Reinsurer participate
in the interests and liabilities of the other subscribing reinsurers.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized
representative has executed this Agreement as of the date specified below:

Signed this 11th day of JANUARY, 2011.

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INTERESTS AND LIABILITIES AGREEMENT

(the “Agreement”)

of

HANNOVER RUCKVERSICHERUNG AG

(the “Subscribing Reinsurer”)

with respect to the

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the
ownership,

control or management of Amerisafe, Inc.

(collectively the “Company”)

The Subscribing Reinsurer shall have a 7.50% share in the interests and
liabilities of the “Reinsurer” as set forth in the Contract attached hereto and
executed by the Company.

This Agreement shall commence at 12:01 a.m., Standard Time, January 1, 2011 and
shall continue in force until 12:01 a.m., Standard Time, January 1, 2012.

The share of the Subscribing Reinsurer in the interests and liabilities of the
“Reinsurer” shall be several and not joint with the share of any other
subscribing reinsurer. In no event shall the Subscribing Reinsurer participate
in the interests and liabilities of the other subscribing reinsurers.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized
representative has executed this Agreement as of the date specified below:

Signed this 27th day of January, 2011.

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INTERESTS AND LIABILITIES AGREEMENT

(the “Agreement”)

of

MONTPELIER UNDERWRITING AGENCIES LIMITED (#5151)

(the “Subscribing Reinsurer”)

with respect to the

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the
ownership,

control or management of Amerisafe, Inc.

(collectively the “Company”)

The Subscribing Reinsurer shall have a 5.00% share in the interests and
liabilities of the “Reinsurer” as set forth in the Contract attached hereto and
executed by the Company.

This Agreement shall commence at 12:01 a.m., Standard Time, January 1, 2011 and
shall continue in force until 12:01 a.m., Standard Time, January 1, 2012.

The share of the Subscribing Reinsurer in the interests and liabilities of the
“Reinsurer” shall be several and not joint with the share of any other
subscribing reinsurer. In no event shall the Subscribing Reinsurer participate
in the interests and liabilities of the other subscribing reinsurers.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized
representative has executed this Agreement as of the date specified below:

Signed this 12th day of January, 2011.

. LOGO [g137518g13w32.jpg]

 

     

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INTERESTS AND LIABILITIES AGREEMENT

(the “Agreement”)

of

MUNICH REINSURANCE AMERICA, INC.

(the “Subscribing Reinsurer”)

with respect to the

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the
ownership,

control or management of Amerisafe, Inc.

(collectively the “Company”)

The Subscribing Reinsurer shall have a 10.00% share in the interests and
liabilities of the “Reinsurer” as set forth in the Contract attached hereto and
executed by the Company.

This Agreement shall commence at 12:01 a.m., Standard Time, January 1, 2011 and
shall continue in force until 12:01 a.m., Standard Time, January 1, 2012.

The share of the Subscribing Reinsurer in the interests and liabilities of the
“Reinsurer” shall be several and not joint with the share of any other
subscribing reinsurer. In no event shall the Subscribing Reinsurer participate
in the interests and liabilities of the other subscribing reinsurers.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized
representative has executed this Agreement as of the date specified below:

Signed this 12 day of January, 2011.

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INTERESTS AND LIABILITIES AGREEMENT

(the “Agreement”)

of

TOKIO MILLENNIUM RE LTD.

(the “Subscribing Reinsurer”)

with respect to the

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the
ownership,

control or management of Amerisafe, Inc.

(collectively the “Company”)

The Subscribing Reinsurer shall have a 10.00% share in the interests and
liabilities of the “Reinsurer” as set forth in the Contract attached hereto and
executed by the Company.

This Agreement shall commence at 12:01 a.m., Standard Time, January 1, 2011 and
shall continue in force until 12:01 a.m., Standard Time, January 1, 2012.

The share of the Subscribing Reinsurer in the interests and liabilities of the
“Reinsurer” shall be several and not joint with the share of any other
subscribing reinsurer. In no event shall the Subscribing Reinsurer participate
in the interests and liabilities of the other subscribing reinsurers.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized
representative has executed this Agreement as of the date specified below:

Signed this 26th day of January, 2011.

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Reinsurance Contract No. URX4990

MARKET SUMMARY

 

Order hereon:    45.00%

EFFECTED WITH:

 

   30.00%    Underwriters at Lloyd’s, as per schedule below    10.00%    Aspen
Insurance UK Ltd., London, England      5.00%    Alterra Denmark ApS, branch of
Alterra UK Uwtg Services Ltd on behalf of Synd 1400 at Lloyd’s            45.00%
          

LLOYD’S UNDERWRITERS

 

Signed Line

  

Syndicate Number

  

Pseudonym

  

NAIC Code

10.00%

   4472    LIB    AA-1126006

  7.50%

   435    FDY    AA-1126435

  7.50%

   1955    BAR    AA-1120084

  5.00%

   566    STN    AA-1126566           

30.00%

                   

For and on behalf of

Willis Limited

 

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   LOGO [g137518g13t07.jpg]

Authorised Signatory

   Authorised Signatory

 

Market Summary Page     1     of     1

Willis Limited, a Lloyd’s broker, authorised and regulated by the Financial
Services Authority.

Registered Office: 51 Lime Street, London EC3M 7DQ. Registered Number 181116
England and Wales.

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

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Market Reform Contract – EXEMPT

Client Requirement

 

WILLIS LIMITED       576 WIL Agreement Number    :    URX4990 Reinsured    :   
Amerisafe Insurance Company Type of Risk    :    Casualty Catastrophe Excess of
Loss Reinsurance Contract Period    :   

12 months commencing 1st January 2011

 

The “Risk Details” section represents only a convenient summary of the
Contractual Wording and is not itself contractually binding.

 

CLIENT SHORTNAME

 

WFNA

  

CLIENT REF./ CONTACT

 

93948003-11

PREVIOUS REF.

 

UQX4990

   CONTRACT DOCUMENT DATE   

NO. OF DOCS UNDER SAME UMR

 

One

CLIENT LONGNAME

 

Willis Re Inc.

         

REINSURED LONGNAME

 

  

Amerisafe Insurance Company

 

 

    

BROKERAGE ARRANGEMENTS / SHARING INCLUDING FEES / SPECIAL INSTRUCTIONS

 

15% Brokerage split 10% Willis Re Inc. and 5% Willis London.

 

      ACCOUNT EXECUTIVE    Graeme Meachem    EXTN.    17449

SIGNED

 

       

DATE

 

    

2nd PAIR OF EYES SIGNED

 

       

DATE

 

           LONDON TECHNICIAN    Andrew Yates    EXTN.    17489

RELATED CONTRACTS

 

OP RESP CODE

  08497

  

WORDING

NAR

 

              

 

 

Willis Limited, a Lloyd’s broker, authorised and regulated by the Financial
Services Authority.

Registered office 51 Lime Street, London EC3M 7DQ. Registered number 181116
England and Wales.

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

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UMR

  :    B0576URX4990 (93948003-11)

Reinsured

  :    Amerisafe Insurance Company

Type

  :    Casualty Catastrophe Excess of Loss Reinsurance Contract

RISK DETAILS

 

COMPANY   

American Interstate Insurance Company

Deridder, Louisiana

 

TERM   

This Contract will apply to all losses occurring during the period January 1,
2011, 12:01 a.m. Standard Time (as set forth in the Company’s policies), to
January 1, 2012, 12:01 a.m. Standard Time.

 

TYPE   

Casualty Catastrophe Excess of Loss Reinsurance Contract.

 

TAXES PAYABLE

BY REINSURED

AND ADMINISTERED BY REINSURERS

 

  

 

None.

REINSURER

CONTRACT

DOCUMENTATION

  

 

 

This contract document details the contract terms entered into by the Reinsurers
and constitutes the contract document.

 

The contract change document(s) signed by Reinsurers shall form the evidence of
the changes agreed.

 

Full contractual wording (93948003-11. LOGO [g137518g88i33.jpg]is incorporated.

The “Risk Details” section represents only a convenient summary of the
Contractual Wording and is not itself contractually binding.

 

AY / Date created 20 December 2010

      Risk Details Page 1

Willis Limited, a Lloyd’s broker, authorised and regulated by the Financial
Services Authority.

Registered Office: 51 Lime Street, London EC3M 7DQ. Registered Number 181116
England and Wales.

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

INTERESTS AND LIABILITIES AGREEMENT

(the “Agreement”)

of

ASPEN INSURANCE UK LIMITED

(the “Subscribing Reinsurer”)

with respect to the

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the
ownership,

control or management of Amerisafe, Inc.

(collectively the “Company”)

The Subscribing Reinsurer shall have a 10.00% share in the interests and
liabilities of the “Reinsurer” as set forth in the Contract attached hereto and
executed by the Company.

This Agreement shall commence at 12:01 a.m., Standard Time, January 1, 2011 and
shall continue in force until 12:01 a.m., Standard Time, January 1, 2012.

The share of the Subscribing Reinsurer in the interests and liabilities of the
“Reinsurer” shall be several and not joint with the share of any other
subscribing reinsurer. In no event shall the Subscribing Reinsurer participate
in the interests and liabilities of the other subscribing reinsurers.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized
representative has executed this Agreement as of the date specified below:

Signed this 11TH day of JANUARY, 2011.

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INTERESTS AND LIABILITIES AGREEMENT

(the “Agreement”)

of

UNDERWRITERS AT LLOYD’S, LONDON

AS SET FORTH IN THE SIGNING PAGE(S) ATTACHED HERETO

(the “Subscribing Reinsurer”)

with respect to the

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC. DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the
ownership,

control or management of Amerisafe, Inc.

(the “Company”)

The Subscribing Reinsurer shall have a share in the interests and liabilities of
the “Reinsurer” as set forth in the Contract attached hereto and executed by the
Company. The Subscribing Reinsurer’s percentage share shall equal the sum of the
final signed lines percentage share(s) as executed on the attached signing
page(s) for Lloyd’s Underwriters.

This Agreement shall commence at 12:01 a.m., Standard Time, January 1, 2011 and
shall continue in force until 12:01 a.m., Standard Time, January 1, 2012.

The share of the Subscribing Reinsurer in the interests and liabilities of the
“Reinsurer” shall be several and not joint with the share of any other
subscribing reinsurer. In no event shall the Subscribing Reinsurer participate
in the interests and liabilities of the other subscribing reinsurers.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized
representative has executed this Agreement per the attached signing page(s).

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UMR   :    B0576URX4990 (93948003-11) Reinsured   :    Amerisafe Insurance
Company Type   :    Casualty Catastrophe Excess of Loss Reinsurance Contract

 

INFORMATION

THIS INFORMATION SECTION LISTS INFORMATION MADE AVAILABLE TO REINSURERS FOR
ASSESSMENT OF THE RISK. IT DOES NOT INCLUDE CONTRACTUAL TERMS AND CONDITIONS.

ESTIMATED

PREMIUM INCOME     $227,000,000 ($226,790,767, as presented in the submission)

 

AY / Date created 20 December 2010

   Information Page 1

Willis Limited, a Lloyd’s broker, authorised and regulated by the Financial
Services Authority.

Registered Office: 51 Lime Street, London EC3M 7DQ. Registered Number 181116
England and Wales.

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

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UMR   :    B0576URX4990 (93948003-11) Reinsured   :    Amerisafe Insurance
Company Type   :    Casualty Catastrophe Excess of Loss Reinsurance Contract

 

 

SECURITY DETAILS

 

     

REINSURERS

LIABILITY

 

Reinsurers Liability Clause LMA3333  

Reinsurers’ liability several not joint.

 

The liability of a Reinsurer under this contract is several and not joint with
other Reinsurers party to this contract. A Reinsurer is liable only for the
proportion of liability it has underwritten. A Reinsurer is not jointly liable
for the proportion of liability underwritten by any other Reinsurer. Nor is a
Reinsurer otherwise responsible for any liability of any other Reinsurer that
may underwrite this contract.

 

The proportion of liability under this contract underwritten by a Reinsurer (or,
in the case of a Lloyd’s syndicate, the total of the proportions underwritten by
all the members of the syndicate taken together) is shown next to its stamp.
This is subject always to the provision concerning “signing” below.

 

In the case of a Lloyd’s syndicate, each member of the syndicate (rather than
the syndicate itself) is a Reinsurer. Each member has underwritten a proportion
of the total shown for the syndicate (that total itself being the total of the
proportions underwritten by all the members of the syndicate taken together).
The liability of each member of the syndicate is several and not joint with
other members. A member is liable only for that member’s proportion. A member is
not jointly liable for any other member’s proportion. Nor is any member
otherwise responsible for any liability of any other Reinsurer that may
underwrite this contract. The business address of each member is Lloyd’s, One
Lime Street, London EC3M 7HA. The identity of each member of a Lloyd’s syndicate
and their respective proportion may be obtained by writing to Market Services,
Lloyd’s, at the above address.

 

Proportion of liability

 

Unless there is “signing” (see below), the proportion of liability under this
contract underwritten by each Reinsurer (or, in the case of a Lloyd’s syndicate,
the total of the proportions underwritten by all the members of the syndicate
taken together) is shown next to its stamp and is referred to as its “written
line”.

 

Where this contract permits, written lines, or certain written lines, may be
adjusted (“signed”). In that case a schedule is to be appended to this contract
to show the definitive proportion of liability under this contract underwritten
by each Reinsurer (or, in the case of a Lloyd’s syndicate, the total of the
proportions underwritten by all the members of the syndicate taken together). A
definitive proportion (or, in the case of a Lloyd’s syndicate, the total of the
proportions underwritten by all the members of a Lloyd’s

 

AY / Date created 20 December 2010

   Security Details Page 1

Willis Limited, a Lloyd’s broker, authorised and regulated by the Financial
Services Authority.

Registered Office: 51 Lime Street, London EC3M 7DQ. Registered Number 181116
England and Wales.

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

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UMR   :    B0576URX4990 (93948003-11) Reinsured   :    Amerisafe Insurance
Company Type   :    Casualty Catastrophe Excess of Loss Reinsurance Contract

 

 

syndicate taken together) is referred to as a “signed line”. The signed lines
shown in the schedule will prevail over the written lines unless a proven error
in calculation has occurred.

 

Although reference is made at various points in this clause to “this contract”
in the singular, where the circumstances so require this should be read as a
reference to contracts in the plural.

ORDER HEREON   45%

BASIS OF

WRITTEN LINES

 

Percentage of Whole SIGNING
PROVISIONS  

In the event that the placement of this Reinsurance is not completed by the
commencement date of the period of Reinsurance then all lines written by that
date, at the Reinsured’s option, may be signed in full. If such written lines
hereon exceed 100% of the order, all lines written will be signed down in equal
proportions so that the aggregate signed lines are equal to 100% of the order.

 

Whether before or after inception of the period of Reinsurance, the Reinsured
may elect for the disproportionate signing of Reinsurer’s lines without further
specific agreement of Reinsurers.

LINE CONDITIONS   None unless specified individually by Reinsurers hereon under
their written participations.

MODE OF

EXECUTION

 

This contract and any changes to it may be executed by:

 

a)      an original written ink signature of paper documents (or a true
representation of a signature, such as a rubber-stamp);

 

b)      an exchange of facsimile/scanned copies showing the original written ink
signature of paper documents;

 

c)      electronic signature technology employing computer software and a
digital signature or digitiser pen pad to capture a person’s handwritten
signature in such a manner that the signature is unique to the person signing,
is under the sole control of the person signing, is capable of verification to
authenticate the signature and is linked to the document signed in such a manner
that if the data is changed, such signature is invalidated;

 

AY / Date created 20 December 2010

   Security Details Page 2

Willis Limited, a Lloyd’s broker, authorised and regulated by the Financial
Services Authority.

Registered Office: 51 Lime Street, London EC3M 7DQ. Registered Number 181116
England and Wales.

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

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UMR   :    B0576URX4990 (93948003-11) Reinsured   :    Amerisafe Insurance
Company Type   :    Casualty Catastrophe Excess of Loss Reinsurance Contract

 

 

d)      a unique authorisation provided via a secure electronic trading
platform;

 

e)      a timed and dated authorisation provided via an electronic
message/system.

 

The use of any one or a combination of these methods of execution shall
constitute a legally binding and valid signing of this contract. This contract
may be executed in one or more of the above counterparts, each of which, when
duly executed, shall be deemed an original.

 

AY / Date created 20 December 2010

   Security Details Page 3

Willis Limited, a Lloyd’s broker, authorised and regulated by the Financial
Services Authority.

Registered Office: 51 Lime Street, London EC3M 7DQ. Registered Number 181116
England and Wales.

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

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UMR   :    B0576URX4990 (93948003-11) Reinsured   :    Amerisafe Insurance
Company Type   :    Casualty Catastrophe Excess of Loss Reinsurance Contract

 

WRITTEN LINES

B.I.P.A.R. Statement

In a co-reinsurance placement, following reinsurers may, but are not obliged to,
follow the premium charged by the lead reinsurer.

Reinsurers may not seek to guarantee for themselves terms as favourable as those
which others subsequently achieve during the placement.

 

Reinsurer and Reference:         

 

LOGO [g137518g04q73.jpg]

 

Written Line:        %    Ref.:    Final Signed Line:    10.00%       Line
Conditions:          Dated:         

 

Written Lines Page          of    

Willis Limited, a Lloyd’s broker, authorised and regulated by the Financial
Services Authority.

Registered Office: 51 Lime Street, London EC3M 7DQ. Registered Number 181116
England and Wales.

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

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UMR   :    B0576URX4990 (93948003-11) Reinsured   :    Amerisafe Insurance
Company Type   :    Casualty Catastrophe Excess of Loss Reinsurance Contract

 

WRITTEN LINES

B.I.P.A.R. Statement

In a co-reinsurance placement, following reinsurers may, but are not obliged to,
follow the premium charged by the lead reinsurer.

Reinsurers may not seek to guarantee for themselves terms as favourable as those
which others subsequently achieve during the placement.

 

Reinsurer and

Reference:

        

 

LOGO [g137518g83p56.jpg]

 

Written Line:        %    Ref.:    Final Signed Line:    10.00%       Line
Conditions:          Dated:         

 

Written Lines Page          of    

Willis Limited, a Lloyd’s broker, authorised and regulated by the Financial
Services Authority.

Registered Office: 51 Lime Street, London EC3M 7DQ. Registered Number 181116
England and Wales.

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

LOGO [g137518g70b54.jpg]

UMR   :    B0576URX4990 (93948003-11) Reinsured   :    Amerisafe Insurance
Company Type   :    Casualty Catastrophe Excess of Loss Reinsurance Contract

 

WRITTEN LINES

B.I.P.A.R. Statement

In a co-reinsurance placement, following reinsurers may, but are not obliged to,
follow the premium charged by the lead reinsurer.

Reinsurers may not seek to guarantee for themselves terms as favourable as those
which others subsequently achieve during the placement.

 

Reinsurer and Reference:         

 

LOGO [g137518g59h12.jpg]

 

Written Line:    12 1/2%    Ref.:    BA543VIIA000 Final Signed Line:    7.50%   
   Line Conditions:          Dated:         

 

Written Lines Page          of    

Willis Limited, a Lloyd’s broker, authorised and regulated by the Financial
Services Authority.

Registered Office: 51 Lime Street, London EC3M 7DQ. Registered Number 181116
England and Wales.

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

LOGO [g137518g70b54.jpg]

UMR   :    B0576URX4990 (93948003-11) Reinsured   :    Amerisafe Insurance
Company Type   :    Casualty Catastrophe Excess of Loss Reinsurance Contract

 

WRITTEN LINES

B.I.P.A.R. Statement

In a co-reinsurance placement, following reinsurers may, but are not obliged to,
follow the premium charged by the lead reinsurer.

Reinsurers may not seek to guarantee for themselves terms as favourable as those
which others subsequently achieve during the placement.

 

Reinsurer and Reference:         

 

LOGO [g137518g73i87.jpg]

 

Written Line:    7 1/2%    Ref.:    Final Signed Line:    7.50%       Line
Conditions:          Dated:         

 

Written Lines Page          of    

Willis Limited, a Lloyd’s broker, authorised and regulated by the Financial
Services Authority.

Registered Office: 51 Lime Street, London EC3M 7DQ. Registered Number 181116
England and Wales.

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

LOGO [g137518g70b54.jpg]

UMR   :    B0576URX4990 (93948003-11) Reinsured   :    Amerisafe Insurance
Company Type   :    Casualty Catastrophe Excess of Loss Reinsurance Contract

 

WRITTEN LINES

B.I.P.A.R. Statement

In a co-reinsurance placement, following reinsurers may, but are not obliged to,
follow the premium charged by the lead reinsurer.

Reinsurers may not seek to guarantee for themselves terms as favourable as those
which others subsequently achieve during the placement.

 

Reinsurer and Reference:         

 

LOGO [g137518g37u35.jpg]

 

Written Line:    7 1/2%    Ref.:    11SU202901HA Final Signed Line:    5.00%   
   Line Conditions:          Dated:         

 

Written Lines Page          of    

Willis Limited, a Lloyd’s broker, authorised and regulated by the Financial
Services Authority.

Registered Office: 51 Lime Street, London EC3M 7DQ. Registered Number 181116
England and Wales.

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

LOGO [g137518g70b54.jpg]

UMR   :    B0576URX4990 (93948003-11) Reinsured   :    Amerisafe Insurance
Company Type   :    Casualty Catastrophe Excess of Loss Reinsurance Contract

 

WRITTEN LINES

B.I.P.A.R. Statement

In a co-reinsurance placement, following reinsurers may, but are not obliged to,
follow the premium charged by the lead reinsurer.

Reinsurers may not seek to guarantee for themselves terms as favourable as those
which others subsequently achieve during the placement.

 

Reinsurer and

Reference:

        

LOGO [g137518g67x74.jpg]

 

Written Line:

   20%    Ref.:    CAHX2056111A

Final Signed Line:

   5%      

Line Conditions:

        

Dated:

   31/12/2010      

 

Written Lines Page          of    

Willis Limited, a Lloyd’s broker, authorised and regulated by the Financial
Services Authority.

Registered Office: 51 Lime Street, London EC3M 7DQ. Registered Number 181116
England and Wales.

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

LOGO [g137518g70b54.jpg]

UMR   :    B0576URX4990 (93948003-11) Reinsured   :    Amerisafe Insurance
Company Type   :    Casualty Catastrophe Excess of Loss Reinsurance Contract

 

WRITTEN LINES

B.I.P.A.R. Statement

In a co-reinsurance placement, following reinsurers may, but are not obliged to,
follow the premium charged by the lead reinsurer.

Reinsurers may not seek to guarantee for themselves terms as favourable as those
which others subsequently achieve during the placement.

 

Reinsurer and

Reference:

        

 

 

Written Line:        %    Ref.:    Final Signed Line:        %       Line
Conditions:          Dated:         

 

Written Lines Page          of    

Willis Limited, a Lloyd’s broker, authorised and regulated by the Financial
Services Authority.

Registered Office: 51 Lime Street, London EC3M 7DQ. Registered Number 181116
England and Wales.

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

LOGO [g137518g70b54.jpg]

UMR   :    B0576URX4990 (93948003-11) Reinsured   :    Amerisafe Insurance
Company Type   :    Casualty Catastrophe Excess of Loss Reinsurance Contract

 

 

CONTRACT ADMINISTRATION AND ADVISORY SECTIONS

SUBSCRIPTION AGREEMENT

 

SLIP LEADER

   ASPEN Re

 

BASIS OF

AGREEMENT TO

CONTRACT

CHANGES

  

 

Reinsurers hereon authorise the Slip Leader to be the sole judge in determining
whether any future alterations to this Reinsurance Agreement should be by
agreement of the Slip Leader only and copied to other Reinsurers, or by
agreement of all Reinsurers.

 

BASIS OF CLAIMS

AGREEMENT

  

 

Claims review, as required by Slip Leader for the benefit of and at the cost to
current Reinsurers hereon. Settlement of fees will be by the parties authorising
the claims review. In the event of cancellation of the Treaty, fees to be borne
by final contract year.

  

 

Lloyd’s Underwriters

  

 

Claims to be managed in accordance with the Lloyd’s 2006 Claims Scheme or as
amended.

  

 

IUA Company Underwriters

  

 

Claims to be managed in accordance with IUA Claims Agreement practices.

  

 

Non-Bureaux Underwriters

  

 

All claims to be agreed by each Reinsurer according to their own practices.

 

CLAIMS

AGREEMENT

PARTIES

  

 

Lloyd’s Underwriters

  

 

In respect of the Lloyd’s 2006 Claims Scheme: The Leading Lloyd’s Underwriter
and XCS for the following Lloyd’s syndicates.

  

 

In respect of the 2010 Pilot Scheme: The Leading Lloyd’s Underwriter only for
Category 3 claims. The Leading Lloyd’s Underwriter and the Second Lloyd’s
Underwriter for Category 1 and 2 claims.

 

AY / Date created 20 December 2010   Subscription Agreement Page 1

Willis Limited, a Lloyd’s broker, authorised and regulated by the Financial
Services Authority.

Registered Office: 51 Lime Street, London EC3M 7DQ. Registered Number 181116
England and Wales.

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

LOGO [g137518g70b54.jpg]

UMR   :    B0576URX4990 (93948003-11) Reinsured   :    Amerisafe Insurance
Company Type   :    Casualty Catastrophe Excess of Loss Reinsurance Contract

 

 

   IUA Company and Non-Bureaux Underwriters   

 

All claims to be agreed by each Reinsurer in respect of their own participation.

 

CLAIMS

ADMINISTRATION

  

 

Lloyd’s Underwriters

  

 

Willis Limited and Reinsurers agree that any claims hereunder (including any
claims related costs/fees) that are in scope and supported by Electronic Claims
File (ECF) may be notified and administered via the Electronic Claims File (ECF)
system with any payment(s) processed via CLASS.

  

 

Lloyd’s Underwriters authorise Xchanging Claims Services to waive the deferred
settlement system in the event of presentation of settlement request with first
advice.

  

 

IUA Company Underwriters

  

 

All IUA Company Underwriters agree to respond to claims via CLASS.

  

 

Willis Limited and Reinsurers agree that any claims hereunder (including any
claims related costs/fees) that are in scope and supported by Electronic Claims
File (ECF) may be notified and administered via the Electronic Claims File (ECF)
system with any payment(s) processed via CLASS.

  

 

Non-Bureaux Underwriters

  

Agree to receive all claims via Broker visit, email, repositories, facsimile or
letter.

 

RULES AND EXTENT

OF ANY OTHER

DELEGATED CLAIMS

AUTHORITY

  

 

None unless otherwise specified.

 

AY / Date created 20 December 2010   Subscription Agreement Page 2

Willis Limited, a Lloyd’s broker, authorised and regulated by the Financial
Services Authority.

Registered Office: 51 Lime Street, London EC3M 7DQ. Registered Number 181116
England and Wales.

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

LOGO [g137518g70b54.jpg]

UMR   :    B0576URX4990 (93948003-11) Reinsured   :    Amerisafe Insurance
Company Type   :    Casualty Catastrophe Excess of Loss Reinsurance Contract

 

 

SETTLEMENT

DUE DATE

  

 

28 Feb 2011

INSTALMENT

PREMIUM

PERIOD OF CREDIT

  

 

30 days.

 

ADJUSTMENT

PREMIUM PERIOD

OF CREDIT

  

 

60 days                                         
                                         
                                                                LOGO
[g137518g39y59.jpg]

 

BUREAUX

ARRANGEMENTS

  

 

Presentation of premium documentation to XIS by the Settlement Due Date(s) is
deemed to be in compliance with the payment provisions.

  

 

If the Settlement Due Date falls on a Saturday, a Sunday or a Bank Holiday, it
is agreed that the Settlement Due Date shall be changed to the first following
working day.

  

 

XIS are authorised to sign policies in multiple copies

  

 

Processing Documents:

 

XIS are authorised to accept Additional Premium or Return Premium or Premium
Adjustment or Profit Commission figures, where applicable, without certification
or production of letters or other documents and enter in accordance with the
figures shown thereon, without Reinsurers agreement.

  

 

Reinsurers agree to the use of a copy (including a photocopy) or duplicate of
the applicable Slip or Wording for the collection and taking down of Additional
Premium(s) or Return Premium(s) or Premium Adjustments) or Profit Commission(s).

  

 

Reinsurers agree that the Intermediary may settle Premiums for this Reinsurance
Contract at different times.

  

 

Premium Processing Clause - LSW 3003 (14/12/09)

  

 

Where the premium is to be paid through Xchanging Ins-sure Services (XIS),
payment to Reinsurers will be deemed to occur on the day that a delinked premium
is released for settlement by the Appointed Broker or in the case of
non-delinked premiums, on the day that the error-free Premium Advice Note (PAN)
is submitted to XIS.

  

 

Where premiums are to be paid by instalments under the Deferred Account Scheme,
and the Appointed Broker does not receive the premium in time to comply with the
agreed settlement date for the second or subsequent instalment, the Appointed
Broker, if electing to suspend the automatic

 

 

AY / Date created 20 December 2010

 

 

Subscription Agreement Page 3

Willis Limited, a Lloyd’s broker, authorised and regulated by the Financial
Services Authority.

Registered Office: 51 Lime Street, London EC3M 7DQ. Registered Number 181116
England and Wales.

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

LOGO [g137518g70b54.jpg]

UMR   :    B0576URX4990 (93948003-11) Reinsured   :    Amerisafe Insurance
Company Type   :    Casualty Catastrophe Excess of Loss Reinsurance Contract

 

debiting of the relevant deferred instalment, shall advise the Slip Leader in
writing and instruct XIS accordingly. XIS shall then notify Reinsurers. Payment
to any entity within the same group of companies as the Appointed Broker will be
deemed to be payment to the Appointed Broker.

 

Nothing in this clause shall be construed to override the terms of any Premium
Payment Warranty or Clause or any Termination or Cancellation provision
contained in this contract. Furthermore, any amendment to the Settlement Due
Date of a premium instalment as a result of the operation of this Premium
Processing Clause shall not amend the date that such instalment is deemed to be
due for the purposes of such Premium Payment Warranty or Clause or Termination
or Cancellation provision unless (Re)Insurers expressly agree otherwise.

 

Appointed Broker: Willis Limited.

 

AY / Date created 20 December 2010   Subscription Agreement Page 4

Willis Limited, a Lloyd’s broker, authorised and regulated by the Financial
Services Authority.

Registered Office: 51 Lime Street, London EC3M 7DQ. Registered Number 181116
England and Wales.

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

LOGO [g137518g70b54.jpg]

UMR   :    B0576URX4990 (93948003-11) Reinsured   :    Amerisafe Insurance
Company Type   :    Casualty Catastrophe Excess of Loss Reinsurance Contract

 

 

FISCAL AND REGULATORY

 

TAX PAYABLE BY

REINSURERS

  

 

1% Federal Excise Tax where applicable or as statutorily required.

 

COUNTRY OF

ORIGIN

   USA.

 

OVERSEAS

BROKER

  

 

 

Willis Re Inc.,

15305 North Dallas Parkway

Suite 1100

Colonnade III

Addison, Texas 75001

USA

 

U.S.

CLASSIFICATION

   U.S. Reinsurance.

 

N.A.I.C. CODES

   NAIC number: 31895; 26869; 06807.

 

ALLOCATION OF

PREMIUM TO

CODING

  

100% W6        

                                LOGO [g137518g80s15.jpg]

FSA CLIENT

CLASSIFICATION

   Reinsurance.

 

AY / Date created 20 December 2010   Fiscal and Regulatory Page 1

Willis Limited, a Lloyd’s broker, authorised and regulated by the Financial
Services Authority.

Registered Office: 51 Lime Street, London EC3M 7DQ. Registered Number 181116
England and Wales.

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

LOGO [g137518g70b54.jpg]

UMR   :    B0576URX4990 (93948003-11) Reinsured   :    Amerisafe Insurance
Company Type   :    Casualty Catastrophe Excess of Loss Reinsurance Contract

 

BROKER REMUNERATION AND DEDUCTIONS

 

FEE PAYABLE BY CLIENT?    No. TOTAL BROKERAGE    15% (Nil on Reinstatement).
OTHER DEDUCTIONS FROM PREMIUM    None.

 

 

AY / Date created 20 December 2010   Broker Remuneration and Deductions Page 1

Willis Limited, a Lloyd’s broker, authorised and regulated by the Financial
Services Authority.

Registered Office: 51 Lime Street, London EC3M 7DQ. Registered Number 181116
England and Wales.

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

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the
ownership,

control or management of Amerisafe, Inc.

CASUALTY CATASTROPHE EXCESS OF LOSS REINSURANCE CONTRACT

 

93948003-11 (1-1-11)

      12-30-10

Casualty Catastrophe XOL Contract

     

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

TABLE OF CONTENTS

 

ARTICLE

        PAGE  

I

   BUSINESS COVERED      1   

II

   TERM      2   

III

   SPECIAL TERMINATION      2   

IV

   DEFINITIONS      4      

Act of Terrorism

     4      

Declaratory Judgment Expense

     4      

Extra Contractual Obligations/Loss in Excess of Policy Limits

     4      

Loss Adjustment Expense

     5      

Loss Occurrence

     5      

Net Earned Premium

     6      

Policy

     6   

V

   TERRITORY      6   

VI

   EXCLUSIONS      6   

VII

   TERRORISM ACT RECOVERIES      9   

VIII

   COVERAGE      9   

IX

   REINSTATEMENT      10   

X

   SPECIAL ACCEPTANCE      10   

XI

   ACCOUNTING BASIS      11   

XII

   REINSURANCE PREMIUM      11   

XIII

   NOTICE OF LOSS AND LOSS SETTLEMENTS      11   

XIV

   LIABILITY OF REINSURERS      12   

XV

   LATE PAYMENTS      13   

XVI

   ANNUITIES AT THE COMPANY’S OPTION      14   

XVII

   AGENCY AGREEMENT      14   

XVIII

   SUBROGATION      14   

XIX

   ERRORS AND OMISSIONS      14   

XX

   OFFSET      15   

XXI

   CURRENCY      15   

XXII

   TAXES      15   

XXIII

   FEDERAL EXCISE TAX      15   

XXIV

   RESERVES AND FUNDING      16   

XXV

   NET RETAINED LINES      17   

XXVI

   THIRD PARTY RIGHTS      18   

XXVII

   SEVERABILITY      18   

 

93948003-11 (1-1-11)

     

Casualty Catastrophe XOL Contract

      12-30-10

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

XXVIII

   GOVERNING LAW      18   

XXIX

   INSPECTION OF RECORDS      18   

XXX

   CONFIDENTIALITY      19   

XXXI

   SUNSET AND COMMUTATION      20   

XXXII

   INSOLVENCY      21   

XXXIII

   ARBITRATION      22   

XXXIV

   SERVICE OF SUIT      23   

XXXV

   ENTIRE AGREEMENT      25   

XXXVI

   MODE OF EXECUTION      25   

XXXVII

   INTERMEDIARY      25       Nuclear Incident Exclusion Clause - Liability -
Reinsurance - U.S.A.   

 

93948003-11 (1-1-11)

     

Casualty Catastrophe XOL Contract

      12-30-10

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

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

between

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the
ownership,

control or management of Amerisafe, Inc.

(collectively the “Company”)

and

THE SUBSCRIBING REINSURER(S) EXECUTING THE

INTERESTS AND LIABILITIES AGREEMENT(S)

ATTACHED HERETO

(the “Reinsurer”)

ARTICLE I

BUSINESS COVERED

 

A. By this Contract the Reinsurer agrees to reinsure the excess liability of the
Company under its Policies that are 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 Workers’ Compensation, Employers Liability, including but not
limited to coverage provided under the U.S. Longshore and Harbor Workers’
Compensation Act, Jones Act, Outer Continental Shelf Lands Act and any other
Federal Coverage extensions and General Liability business, subject to the
terms, conditions and limitations hereafter set forth.

 

B. The Reinsurer further agrees to reinsure the excess liability of the Company
under Policies issued by Cooperative Mutual Insurance Company that are 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 Workers’ Compensation, Employers
Liability, including but not limited to coverage provided under the U.S.
Longshore and Harbor Workers’ Compensation Act, Jones Act, Outer Continental
Shelf Lands Act and any other Federal Coverage extensions and General Liability
business, subject to the terms, conditions and limitations hereafter set forth.

 

93948003-11 (1-1-11)

     

Casualty Catastrophe XOL Contract

   1    12-30-10

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

ARTICLE II

TERM

 

A. This Contract will apply to all losses occurring during the period January 1,
2011, 12:01 a.m. Standard Time (as set forth in the Company’s policies), to
January 1, 2012, 12:01 a.m. Standard Time.

 

B. Upon the expiration or termination of this Contract, the entire liability of
the Reinsurer for losses occurring subsequent to the date of expiration shall
cease concurrently with the date of expiration of this Contract.

 

C. Notwithstanding the above, upon expiration or termination of this Contract,
the Company shall have the option of requiring that the Reinsurer shall remain
liable for losses occurring under Policies in force on the expiration or
termination date of this Contract until the next renewal, termination, or
natural expiration date of such Policies or until 12 months (plus “odd time,”
not to exceed 18 months in all) following the date of expiration (whichever
occurs first).

 

D. If this Contract 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 expiration of this Contract, provided that no part of
such Loss Occurrence is claimed against any renewal or replacement of this
Contract.

ARTICLE III

SPECIAL TERMINATION

 

A. The Company may terminate a subscribing reinsurer’s share in this Contract by
giving written notice to the subscribing reinsurer upon the happening of any one
of the following circumstances:

 

  1. A State Insurance Department or other legal authority orders the
subscribing reinsurer to cease writing business, or

 

  2. The subscribing reinsurer has become insolvent or has been placed into
liquidation or receivership (whether voluntary or involuntary), or there has
been instituted against it proceedings for the appointment of a receiver,
liquidator, rehabilitator, conservator, or trustee in bankruptcy, or other agent
known by whatever name, to take possession of its assets or control of its
operations, or

 

  3. For any period not exceeding 12 months which commences no earlier than 12
months prior to the inception of this Contract, the subscribing reinsurer’s
policyholders’ surplus, as reported in the financial statements of the
subscribing reinsurer, has been reduced by 20.0% or more, or

 

93948003-11 (1-1-11)

      12-30-10

Casualty Catastrophe XOL Contract

   2   

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

  4. The subscribing reinsurer has become merged with, acquired or controlled by
any company, corporation, or individual(s) not controlling the subscribing
reinsurer’s operations previously, or

 

  5. The subscribing reinsurer has reinsured its entire liability under this
Contract without the Company’s prior written consent, or

 

  6. The subscribing reinsurer receives an A. M. Best rating of lower than A-,
or an S&P financial strength rating of lower than A-, or

 

  7. The subscribing reinsurer has ceased writing new and renewal reinsurance
for the lines of business covered hereunder.

 

B. In the event of such termination, the liability of the subscribing reinsurer
shall be terminated, at the Company’s option, either in accordance with the
cutoff provisions of paragraph B of the TERM ARTICLE or in accordance with the
runoff provisions of paragraph C of the TERM ARTICLE, and such termination shall
be effective as of the date the subscribing reinsurer receives written notice of
termination pursuant to paragraph A above.

 

C. In the event the Company terminates a subscribing reinsurer’s share in this
Contract under the provisions of this Article, the Company shall have the option
to commute the excess liabilities of the subscribing reinsurer. If this
commutation option is exercised, the provisions of the paragraphs B through G of
the SUNSET AND COMMUTATION ARTICLE shall apply.

 

D. In the event the Company terminates a subscribing reinsurer’s share in this
Contract under the provision of this Article, the Company shall have the option
to require the subscribing reinsurer to fund its share of ceded unearned
premium, outstanding loss and Loss Adjustment Expense reserves, reserves for
losses and Loss Adjustment Expense incurred but not reported to the Company
(IBNR as determined by the Company) and any other balances or financial
obligations. Within 30 days of the Company’s written request to fund, the
subscribing reinsurer shall provide to the Company a clean, unconditional,
evergreen, irrevocable letter of credit or a trust agreement which establishes a
trust account for the benefit of the Company. The method of funding must be
acceptable to the Company, shall be established with a financial institution
suitable to the Company, shall comply with any applicable state or federal laws
or regulations involving the Company’s ability to recognize these agreements as
assets or offsets to liabilities in such jurisdictions and shall be at the sole
expense of the subscribing reinsurer. The Company and the subscribing reinsurer
may mutually agree on alternative methods of funding or the use of a combination
of methods. This option is available to the Company at any time there remains
any outstanding liabilities of the subscribing reinsurer. Notwithstanding the
foregoing, the Company shall not require funding in accordance with this
subparagraph in the event the subscribing reinsurer has otherwise fully funded
its obligations under this Contract in a manner acceptable to the Company.

 

93948003-11 (1-1-11)

     

Casualty Catastrophe XOL Contract

   3    12-30-10

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

ARTICLE IV

DEFINITIONS

 

A. Act of Terrorism

“Act of Terrorism” as used herein shall follow the definition provided under the
Terrorism Risk Insurance Act of 2002 (TRIA) and as amended by the Terrorism Risk
Insurance Extension Act of 2005 (TRIEA) and the Terrorism Risk Insurance Program
Reauthorization Act of 2007 (TRIPRA), together and including any extensions or
replacement thereof, the “Terrorism Act.”

 

B. Declaratory Judgment Expense

“Declaratory Judgment Expense” as used herein shall mean all expenses incurred
by the Company in connection with a declaratory judgment action brought to
determine the Company’s defense and/or indemnification obligations that are
allocable to a specific claim subject to this Contract. Declaratory Judgment
Expense shall be deemed to have been incurred on the date of the original loss
(if any) giving rise to the declaratory judgment action.

 

C. Extra Contractual Obligations/Loss in Excess of Policy Limits

 

  1. Extra Contractual Obligations

This Contract shall protect the Company for any “Extra Contractual Obligations”
which as used herein shall mean any punitive, exemplary, compensatory or
consequential damages, other than Loss in Excess of Policy Limits, paid or
payable by the Company as a result of an action against it by its insured, its
insured’s assignee or a third party claimant, by reason of alleged or actual
negligence, fraud or bad faith on the part of the Company in handling a claim
under a Policy subject to this Contract.

An Extra Contractual Obligation shall be deemed to have occurred on the same
date as the loss covered or alleged to be covered under the Policy.

 

  2. Loss in Excess of Policy Limits

This Contract shall protect the Company for any “Loss in Excess of Policy
Limits” which as used herein shall mean an amount that the Company would have
been contractually liable to pay had it not been for the limit of the original
Policy as a result of an action against it by its insured, its insured’s
assignee or a third party claimant. Such loss in excess of the limit shall have
been incurred because of failure by the Company to settle within the Policy
limit, or by reason of 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 any action against its insured or in the preparation or prosecution of
an appeal consequent upon such action.

 

  3.

This paragraph C shall not apply where an Extra Contractual Obligation and/or
Loss in Excess of Policy Limits has been incurred due to an adjudicated finding
of fraud

 

93948003-11 (1-1-11)

     

Casualty Catastrophe XOL Contract

   4    12-30-10

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

 

committed by a member of the Board of Directors or a corporate officer of the
Company acting individually or collectively or in collusion with a member of the
Board of Directors or a corporate officer or a partner of any other corporation
or partnership.

 

D. Loss Adjustment Expense

“Loss Adjustment Expense” as used herein 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 1) pre-judgment interest, unless included as part of the
award or judgment; 2) post-judgment interest; 3) legal expenses and costs
incurred in connection with coverage questions and legal actions connected
thereto, including Declaratory Judgment Expense; and 4) a pro rata share of
salaries and expenses of 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 does not include unallocated loss adjustment expense.
Unallocated loss adjustment expense includes, but is not limited to, salaries
and expenses of employees, other than (4) above, and office and other overhead
expenses.

 

E. Loss Occurrence

“Loss Occurrence” as used in this Contract shall mean any one disaster or
casualty or accident or loss or series of disasters or casualties or accidents
or losses arising out of or caused by one event. The Company shall be the sole
judge of what constitutes one event as outlined herein and in the original
Policy.

 

  1. As respects losses resulting from Occupational or Industrial Disease or
Cumulative Trauma, each employee shall be considered a separate Loss Occurrence
subject to the following:

Losses resulting from Occupational or Industrial Disease or Cumulative Trauma
suffered by employees of an insured for which the employer is liable, as a
result of a sudden and accidental event not exceeding 72 hours in duration,
shall be considered one Loss Occurrence and may be combined with losses
classified as other than Occupational or Industrial Disease or Cumulative Trauma
which arise out of the same event and the combination of such losses shall be
considered as one Loss Occurrence within the meaning hereof.

A loss with respect to each employee affected by an Occupational Disease or
Cumulative Trauma shall be deemed to have been sustained by the Company on the
date of the beginning of the disability for which compensation is payable.

The terms “Occupational or Industrial Disease” and “Cumulative Trauma” as used
in this Contract shall be as defined by applicable statutes or regulations.

 

  2.

As respects General Liability policies where the Company’s limit of liability
for Products and Completed Operations coverages is determined on the basis of
the insured’s aggregate losses during a policy period, all such losses
proceeding from or

 

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traceable to the same causative agency shall, at the Company’s option, be deemed
to have been caused by one occurrence commencing at the beginning of the policy
period, it being understood and agreed that each renewal or annual anniversary
date of the policy involved shall be deemed the beginning of a new policy
period.

 

F. Net Earned Premium

“Net Earned Premium” as used herein is defined as gross earned premium of the
Company for the classes of business reinsured hereunder, less the earned portion
of premiums ceded by the Company for reinsurance which inures to the benefit of
this Contract and less dividends paid or accrued.

 

G. Policy

“Policy” or “Policies” as used herein shall mean the Company’s or Cooperative
Mutual Insurance Company’s binders, policies and contracts providing insurance
or reinsurance on the classes of business covered under this Contract.

 

H. Ultimate Net Loss

“Ultimate Net Loss” shall mean the actual loss, including any pre-judgment
interest which is included as part of the award or judgment, “Second Injury
Fund” assessments that can be allocated to specific claims, Loss Adjustment
Expense, 90% of Loss in Excess of Policy Limits, and 90% of Extra Contractual
Obligations, paid or to be paid by the Company on its net retained liability
after making deductions for all recoveries, subrogations and all claims on
inuring reinsurance, whether collectible or not; provided, however, that in the
event of the insolvency of the Company, payment by the Reinsurer shall be made
in accordance with the provisions of the INSOLVENCY ARTICLE. 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.

Notwithstanding the definition of “Ultimate Net Loss” herein, the provisions of
paragraph H of the COVERAGE ARTICLE as respects the Minnesota Workers’
Compensation Reinsurance Association shall apply.

ARTICLE V

TERRITORY

The territorial limits of this Contract shall be identical with those of the
Company’s Policies.

ARTICLE VI

EXCLUSIONS

 

A. This Contract does not apply to and specifically excludes the following:

 

  1. Reinsurance assumed by the Company under obligatory reinsurance agreements,
except:

 

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  a. Agency reinsurance where the policies involved are to be reunderwritten in
accordance with the underwriting standards of the Company and reissued as
Company policies at the next anniversary or expiration date; and

 

  b. Intercompany reinsurance between any of the reinsured companies under this
Contract.

 

  c. Reinsurance assumed through Policies issued by Cooperative Mutual Insurance
Company.

 

  2. Nuclear risks as defined in the “Nuclear Incident Exclusion Clause –
Liability – Reinsurance – U.S.A.” (NMA 1590 21/9/67) attached hereto.

 

  3. Liability as a member, subscriber or reinsurer of any Pool, Syndicate or
Association, including Assigned Risk Plans or similar plans; however, this
exclusion shall not apply to liability under a Policy specifically designated to
the Company from an Assigned Risk Plan or similar plan.

 

  4. All 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, 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.

 

  5. Any “Act of Terrorism” involving the use of nuclear, chemical, biological
or radiological devices.

 

  6. Business written to apply in excess of a deductible of more than $25,000,
and business issued to apply specifically in excess over underlying insurance.
However, if the Company is required, by any state regulation, to provide a
deductible of more than $25,000, this exclusion shall not apply.

 

  7. Workers’ Compensation where the principal exposure, as defined by the
governing class code, is:

 

  a. Operation of aircraft, but only if the annual estimated policy premium is
$250,000 or more;

 

  b. Operation of Railroads, subways or street railways;

 

  c. Manufacturing, assembly, packing or processing of fireworks, fuses,
nitroglycerine, magnesium, pyroxylin, ammunition or explosives. This exclusion
does not apply to the assembly, packing or processing of explosives when the
estimated annual premium is under $250,000 and does not apply to the commercial
use of explosives;

 

  d. Underground mining.

 

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  8. As respects General Liability policies, exposures other than those
identified below, as included in the General Liability section of the Company’s
Commercial Lines Manual:

 

  a. Class 97111 – Logging;

 

  b. Class 58873 – Sawmill;

 

  c. Class 59984 – Woodyard and Drivers;

 

  d. Class 95410 – Grading of Land;

 

  e. Class 45819 – Lumber Yard;

 

  f. Class 10073 – Repair Shops and Drivers;

 

  g. Class 43822 – Timber Cruiser;

 

  h. Class 99793 – Truckmen Not Otherwise Classified;

 

  i. Class 91591 – Contractors – Subcontracted Work Other Than Construction;

 

  j. Class 49452 – Vacant Land.

 

B. Notwithstanding the foregoing, insureds regularly engaged in operations not
excluded under paragraph A above, but whose operations may include one or more
perils excluded therein, shall not be excluded from coverage afforded by this
Contract, provided said operations are incidental to the main operations of the
insured. Notwithstanding the foregoing, coverage extended under this paragraph
for incidental operations of an insured shall not apply to exposures excluded
under subparagraphs 1 though 5 of paragraph A above. The Company shall be the
judge of what constitutes an incidental part of the insured’s operation.

 

C. Except for subparagraphs 1 through 5 of paragraph A above, if the Company is
inadvertently bound or is unknowingly exposed (due to error or automatic
provisions of policy coverage) on a risk otherwise excluded in paragraph A
above, such exclusion shall be waived. The duration of said waiver will not
extend beyond the time that notice of such coverage has been received by a
responsible underwriting authority of the Company and for a period not exceeding
30 days thereafter, or such longer period required to conform with any notice of
cancellation provisions prescribed by regulatory authorities, such period not to
exceed 12 months plus odd time (not exceeding 18 months).

 

D. If the Company is required to accept an assigned risk which conflicts with
one or more of the exclusions set forth in subparagraph 6 of paragraph A,
reinsurance shall apply, but only for the difference between the Company’s
retention and the limit required by the applicable state statute, and in no
event shall the Reinsurer’s liability exceed the limit set forth in the Coverage
Article.

 

E. Notwithstanding the foregoing, any reinsurance falling within the scope of
one or more of the exclusions set forth above that is specially accepted by the
Reinsurer from the Company shall be covered under this Contract and be subject
to the terms hereof.

 

F. Except for subparagraphs 1 through 5 of paragraph A above, should a court of
competent jurisdiction invalidate any exclusion or expand coverage of the
original Policy of the Company, any amount of Loss for which the Company would
not be liable, except for such invalidation or expansion of coverage, shall not
be subject to any of the exclusions, conditions and limitations hereinafter set
forth under this Contract.

 

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ARTICLE VII

TERRORISM ACT RECOVERIES

 

A. Any financial assistance the Company receives under the Terrorism Act, shall
apply as follows:

 

  1. Except as provided in subparagraph 2 below, any such financial assistance
shall inure solely to the benefit of the Company and shall be entirely
disregarded in applying all of the provisions of this Contract.

 

  2. If losses occurring hereunder result in recoveries made by the Company both
under this Contract and under the Terrorism Act, and such recoveries, together
with any other reinsurance recoverables made by the Company applicable to said
losses, exceed the total amount of the Company’s insured losses, any amount in
excess thereof shall reduce the Ultimate Net Loss subject to this Contract for
the losses to which the Terrorism Act assistance applies. These recoveries shall
be returned in proportion to each Reinsurer’s paid share of the loss.

 

B. Nothing herein shall be construed to mean that the losses under this Contract
are not recoverable until the Company has received financial assistance under
the Terrorism Act.

ARTICLE VIII

COVERAGE

 

A. The Reinsurer shall be liable for the Ultimate Net Loss in excess of
$10,000,000 as a result of any one Loss Occurrence. The Reinsurer’s liability in
respect of any one Loss Occurrence shall not exceed $40,000,000.

 

B. The Reinsurer’s liability in respect of Ultimate Net Loss amounts recoverable
hereunder for an Act of Terrorism (as defined in the definition of “Act of
Terrorism”) occurring during the term of this Contract shall not exceed
$40,000,000. This paragraph is not subject the REINSTATEMENT ARTICLE.

 

C. The Reinsurer’s liability in respect of all losses occurring during the term
of this Contract shall not exceed $80,000,000.

 

D. As respects the statutory portion of any Workers’ Compensation Policy, the
Company’s Ultimate Net Loss subject to this Contract shall not exceed
$10,000,000 as respects any one life, each Loss Occurrence

 

E. The Company shall be permitted to purchase (or maintain) other reinsurance
which inures to the benefit of this Contract.

 

F. The Company shall be permitted to carry underlying 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.

 

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G. As respects Employers Liability and General Liability, the maximum net
subject Policy limit (except statutory where required by law) as respects any
one Policy shall be $2,000,000 or the Company shall be deemed to have purchased
inuring excess facultative reinsurance for subject Policy limits in excess of
$2,000,000.

 

H. The Company shall be permitted to carry excess of loss reinsurance applying
to Workers’ Compensation risks in the State of Minnesota, actual recoveries
under which shall inure to the benefit of this Contract. Such coverage shall be
provided through the Minnesota Workers’ Compensation Reinsurance Association.
Notwithstanding the treatment of inuring coverage in the definition of Ultimate
Net Loss, the liability of the Reinsurer for Minnesota Workers’ Compensation
risks is not released.

ARTICLE IX

REINSTATEMENT

 

A. Should all or any part of the Reinsurer’s limit of liability be exhausted as
a result of a Loss Occurrence, the sum so exhausted shall be reinstated from the
date the Loss Occurrence commenced.

 

B. For each amount so reinstated, the Company agrees to pay an additional
premium at the time of the Reinsurer’s payment of the loss calculated in
accordance with the following formula:

 

  1. The percentage of the Reinsurer’s limit of liability exhausted for the Loss
Occurrence; times

 

  2. The Net Earned Premium for the term of this Contract (exclusive of
reinstatement premium).

The dollar amount resulting from the multiplication of subparagraphs 1 and 2
above shall equal the reinstatement premium. If at the time of the Reinsurer’s
payment of a loss hereon, the reinsurance premium as calculated under this
Contract is unknown, the calculation of the reinstatement premium shall be based
upon the deposit premium subject to adjustment when the reinsurance premium is
finally established.

 

C. Nevertheless, the Reinsurer’s liability hereunder shall not exceed
$40,000,000 in respect of any one Loss Occurrence, and shall be further limited
to $80,000,000 in respect of all losses occurring during the term of this
Contract.

ARTICLE X

SPECIAL ACCEPTANCE

From time to time the Company may request a special acceptance applicable to
this Contract. For purposes of this Contract, in the event each subscribing
reinsurer whose share in the interests and liabilities of the Reinsurer is 20%
or greater agree to a special acceptance, such agreement shall be binding on all
subscribing reinsurers. If such agreement is not achieved, such special

 

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acceptance shall be made to this Contract only with respect to the interests and
liabilities of each subscribing reinsurer who agrees to the special acceptance.
Should denial for special acceptance not be received within 10 working days of
said request, the special acceptance shall be deemed automatically agreed. In
the event a reinsurer becomes a party to this Contract subsequent to one or more
special acceptances hereunder, the new reinsurer shall automatically accept such
special acceptance(s) as being covered hereunder.

ARTICLE XI

ACCOUNTING BASIS

All premiums and losses under this Contract shall be reported on an “accident
year” accounting basis. Unless specified otherwise herein, all premiums shall be
credited to the period during which they earn, and all losses shall be charged
to the period during which they occur.

ARTICLE XII

REINSURANCE PREMIUM

 

A. As premium for the reinsurance provided hereunder, the Company shall pay the
Reinsurer 0.5468% times its Net Earned Premium for the term of this Contract
subject to a Minimum Premium of $992,000.

 

B. The Company shall pay the Reinsurer a Deposit Premium of $ 1,240,000 payable
in quarterly installments on January 1, April 1, July 1 and October 1.

 

C. Within 90 days after the expiration of this Contract, the Company shall
provide a report to the Reinsurer setting forth the premium due hereunder,
computed in accordance with paragraph A, and if the premium so computed is
greater than the previously paid Deposit Premium, the balance shall be remitted
by the Company with its report.

 

D. If this Contract expires on a runoff basis, the Company shall pay to the
Reinsurer a premium for the runoff period equal to the expiring rate times its
Net Earned Premium for the runoff period. The runoff premium shall be calculated
and paid within 90 days after the end of each three-month period during the
runoff period. There shall be no minimum premium requirement for the runoff
period.

ARTICLE XIII

NOTICE OF LOSS AND LOSS SETTLEMENTS

 

A. As soon as practicable, the Company shall advise the Reinsurer of all bodily
injury claims or losses involving any of the following:

 

  1. Any claim or loss reserved at 50.0% or more of the Company’s retention
under this Contract.

 

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  2. Any claim involving any of the following injuries where the Company’s
incurred loss is greater than or equal to $500,000:

 

  a. Fatality.

 

  b. Spinal cord injuries (e.g., quadriplegia, paraplegia).

 

  c. Brain damage (e.g., seizure, coma or physical/mental impairment).

 

  d. Severe burn injuries resulting in disfigurement or scarring.

 

  e. Total or partial blindness in one or both eyes.

 

  f. Major organ (e.g., heart, lungs).

 

  g. Amputation of a limb or multiple fractures.

 

B. The Company shall also advise the Reinsurer promptly of all losses which, in
the opinion of the Company, may result in a claim hereunder and of all
subsequent developments thereto which, in the opinion of the Company, may
materially affect the position of the Reinsurer.

 

C. When so requested in writing, the Company shall afford the Reinsurer or its
representatives an opportunity to be associated with the Company, at the expense
of the Reinsurer, in the defense of any claim, suit or proceeding involving this
reinsurance, and the Company and the Reinsurer shall cooperate in every respect
in the defense of such claim, suit or proceeding.

 

D. All loss settlements made by the Company that are within the terms and
conditions of this Contract (including but not limited to ex gratia payments)
shall be binding upon the Reinsurer. Upon receipt of satisfactory proof of loss,
the Reinsurer agrees to promptly pay or allow, as the case may be, its share of
each such settlement in accordance with this Contract.

ARTICLE XIV

LIABILITY OF REINSURERS

All reinsurances for which the Reinsurer shall be liable by virtue of this
Contract shall be subject in all respects to the same rates, terms, conditions,
interpretations and waivers and to the same modifications, alterations, and
cancellations, as the respective policies to which such reinsurances relate, the
true intent of the parties to this Contract being that the Reinsurer shall
follow the fortunes of the Company.

 

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ARTICLE XV

LATE PAYMENTS

 

A. In the event any premium, loss or other payment due either party is not
received by the Intermediary hereunder 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 penalty 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. l/365ths of a rate equal to the 90-day Treasury Bill rate as published in
The Wall Street Journal on the first business day following the date a
remittance becomes due; 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 penalties have been received by the Intermediary.

 

B. The establishment of the due date shall, for purposes of this Article, be
determined as follows:

 

  1. As respects the payment of deposits and premiums due the Reinsurer, the due
date shall be as provided for in the applicable section of this Contract.

 

  2. Any claim or loss payment due the Company hereunder shall be deemed due 10
business 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 the
interest penalty calculation above, from the date the proof of loss or demand
for payment was transmitted to the Reinsurer.

 

  3. As respects any payment, adjustment or return due either party not
otherwise provided for in subparagraphs 1 and 2 of this paragraph, the due date
shall be as provided for in the applicable section of this Contract.

 

C. For purposes of interest calculation only, amounts due hereunder shall be
deemed paid upon receipt by the Intermediary. The validity of any claim or
payment may be contested under the provisions of this Contract. If the debtor
party prevails in an arbitration, or any other proceeding, there shall be no
interest penalty due. Otherwise, any interest will be calculated and due as
outlined above.

 

D. Interest penalties arising out of the application of this Article that are
$100 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.

 

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ARTICLE XVI

ANNUITIES AT THE COMPANY’S OPTION

 

A. Whenever the Company is required, or elects, to purchase an annuity or to
negotiate a structured settlement, either in satisfaction of a judgment or in an
out-of-court settlement or otherwise, the cost of the annuity or the structured
settlement, as the case may be, shall be deemed part of the Company’s Ultimate
Net Loss.

 

B. The terms “annuity” or “structured settlement” shall be understood to mean
any insurance policy, lump sum payment, agreement or device of whatever nature
resulting in the payment of a lump sum by the Company in settlement of any or
all future liabilities which may attach to it as a result of an occurrence.

 

C. In the event the Company purchases an annuity which inures in whole or in
part to the benefit of the Reinsurer, it is understood that the liability of the
Reinsurer is not released thereby. In the event the Company is required to
provide benefits not provided by the annuity for whatever reason, the Reinsurer
shall pay its share of any loss.

ARTICLE XVII

AGENCY AGREEMENT

If more than one reinsured company is named as a party to this Contract, the
first named company will be deemed the agent of the other reinsured companies
for purposes of sending 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 XVIII

SUBROGATION

The Reinsurer shall be credited with subrogation recoveries (i.e., reimbursement
obtained or recovery made by the Company, less Loss Adjustment Expense incurred
in obtaining such reimbursement or making such recovery) on account of claims
and settlements involving reinsurance hereunder. Subrogation recoveries 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, at its sole option and
discretion, may enforce its rights to subrogation relating to any loss, a part
of which loss was sustained by the Reinsurer, and may prosecute all claims
arising out of such rights.

ARTICLE XIX

ERRORS AND OMISSIONS

Any inadvertent delay, omission or error shall not be held to relieve either
party hereto from any liability which would attach to it hereunder if such
delay, omission or error had not been made, provided such omission or error is
rectified upon discovery.

 

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ARTICLE XX

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 party asserting the right of offset
may exercise such right any time whether the balances due are on account of
premiums or losses or otherwise.

ARTICLE XXI

CURRENCY

 

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 XXII

TAXES

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, the District of Columbia or Canada.

ARTICLE XXIII

FEDERAL EXCISE TAX

(Applicable to those subscribing reinsurers who are domiciled outside the United
States of America, excepting subscribing reinsurers exempt from Federal Excise
Tax.)

 

A. The subscribing 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 subscribing
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.

 

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ARTICLE XXIV

RESERVES AND FUNDING

 

A. A subscribing reinsurer will provide funding under the terms of this Article
only if the Company will be denied statutory credit for reinsurance ceded to
that subscribing reinsurer pursuant to the credit for reinsurance law or
regulations in any applicable jurisdiction. In the event any of the provisions
of this Article conflict with or otherwise fail to satisfy the requirements of
the appropriate credit for reinsurance statute or regulation, this Article will
be deemed amended to conform to the appropriate statute or regulation; the
intent of this Article being that the Company will be permitted to realize full
credit for the reinsurance ceded to the Reinsurer under this Contract.

 

B. As regards Policies or bonds issued by the Company coming within the scope of
this Contract, the Company agrees that when it shall file with the insurance
regulatory authority or set up on its books reserves for losses covered
hereunder which it shall be required by law to set up, it will forward to the
subscribing reinsurer a statement showing the proportion of such reserves which
is applicable to the subscribing reinsurer. The subscribing reinsurer hereby
agrees to fund such reserves in respect of known outstanding losses that have
been reported to the subscribing reinsurer and allocated Loss Adjustment Expense
relating thereto, losses and allocated Loss Adjustment Expense paid by the
Company but not recovered from the subscribing reinsurer, plus reserves for
losses incurred but not reported, as shown in the statement prepared by the
Company (hereinafter referred to as “subscribing reinsurer’s obligations”) by
funds withheld, cash advances or a Letter of Credit. The subscribing reinsurer
shall have the option of determining the method of funding provided it is
acceptable to the Company and to the insurance regulatory authorities having
jurisdiction over the Company’s reserves.

 

C. When funding by a Letter of Credit, the subscribing reinsurer agrees to apply
for and secure timely delivery to the Company of a clean, irrevocable and
unconditional Letter of Credit issued by a bank and containing provisions
acceptable to the insurance regulatory authorities having jurisdiction over the
Company’s reserves in an amount equal to the subscribing reinsurer’s proportion
of said reserves. Such Letter of Credit shall be issued for a period of not less
than one year, and shall be automatically extended for one year from its date of
expiration or any future expiration date unless 30 days (60 days where required
by insurance regulatory authorities) prior to any expiration date the issuing
bank shall notify the Company by certified or registered mail that the issuing
bank elects not to consider the Letter of Credit extended for any additional
period.

 

D. The subscribing reinsurer and Company agree that the Letters of Credit
provided by the subscribing reinsurer pursuant to the provisions of this
Contract may be drawn upon at any time, notwithstanding any other provision of
this Contract, and be utilized by the Company or any successor, by operation of
law, of the Company including, without limitation, any liquidator,
rehabilitator, receiver or conservator of the Company for the following
purposes, unless otherwise provided for in a separate Trust Agreement:

 

  1. To reimburse the Company for the subscribing reinsurer’s obligations, the
payment of which is due under the terms of this Contract and which has not been
otherwise paid;

 

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  2. To make refund of any sum which is in excess of the actual amount required
to pay the subscribing reinsurer’s obligations under this Contract;

 

  3. To fund an account with the Company for the subscribing reinsurer’s
obligations. Such cash deposit shall be held in an interest bearing account
separate from the Company’s other assets, and interest thereon not in excess of
the prime rate shall accrue to the benefit of the subscribing reinsurer;

 

  4. To pay the subscribing reinsurer’s share of any other amounts the Company
claims are due under this Contract.

In the event the amount drawn by the Company on any Letter of Credit is in
excess of the actual amount required for subparagraph 1 or 3, or in the case of
subparagraph 4, the actual amount determined to be due, the Company shall
promptly return to the subscribing reinsurer the excess amount so drawn. All of
the foregoing shall be applied without diminution because of insolvency on the
part of the Company or the subscribing reinsurer.

 

E. The issuing bank shall have no responsibility whatsoever in connection with
the propriety of withdrawals made by the Company or the disposition of funds
withdrawn, except to ensure that withdrawals are made only upon the order of
properly authorized representatives of the Company.

 

F. At annual intervals, or more frequently as agreed but never more frequently
than quarterly, the Company shall prepare a specific statement of the
subscribing reinsurer’s obligations, for the sole purpose of amending the Letter
of Credit, in the following manner:

 

  1. If the statement shows that the subscribing reinsurer’s obligations exceed
the balance of credit as of the statement date, the subscribing reinsurer shall,
within 30 days after receipt of notice of such excess, secure delivery to the
Company of an amendment to the Letter of Credit increasing the amount of credit
by the amount of such difference.

 

  2. If, however, the statement shows that the subscribing reinsurer’s
obligations are less than the balance of credit as of the statement date, the
Company shall, within 30 days after receipt of written request from the
subscribing reinsurer, release such excess credit by agreeing to secure an
amendment to the Letter of Credit reducing the amount of credit available by the
amount of such excess credit.

ARTICLE XXV

NET RETAINED LINES

 

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.

 

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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 XXVI

THIRD PARTY RIGHTS

This Contract is solely between the Company and the Reinsurer, and in no
instance shall any other party have any rights under this Contract except as
expressly provided otherwise in the INSOLVENCY ARTICLE.

ARTICLE XXVII

SEVERABILITY

If any provision of this Contract shall be rendered illegal or unenforceable by
the laws or regulations 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 XXVIII

GOVERNING LAW

This Contract shall be governed as to performance, administration and
interpretation by the laws of the State of Louisiana, exclusive of that state’s
rules with respect to conflicts of law, except as to rules with respect to
credit for reinsurance in which case the applicable rules of all states shall
apply.

ARTICLE XXIX

INSPECTION OF RECORDS

 

A. The Reinsurer or its designated representative(s) approved by the Company,
upon providing reasonable advance notice to the Company, shall have access at
the offices of the Company or at a location to be mutually agreed, at a time to
be mutually agreed, to inspect the Company’s underwriting, accounting, or claim
files pertaining to the subject matter of this Contract. The Company shall
determine the manner in which files shall be accessed by the Reinsurer. The
Reinsurer may, at its own expense, reasonably request copies of such files and
agrees to pay the Company’s reasonable costs incurred in procuring such copies.

 

B. If any undisputed amounts are overdue from the Reinsurer to the Company, the
Reinsurer shall have access to such records only upon payment of all such
overdue amounts.

 

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C. If the Reinsurer makes any inspection of the Company’s books and records
involving specific claims under this Contract and, as a result of the inspection
the claim is contested or disputed, the Reinsurer shall provide the Company, at
the Company’s request, a summary of any reports, other than proprietary
information or privileged communications, completed by the Reinsurer’s personnel
or by third parties on behalf of the Reinsurer outlining the reasons for
contesting or disputing the subject claim.

ARTICLE XXX

CONFIDENTIALITY

 

A. The Reinsurer hereby acknowledges that the documents, information, and data
provided to the Reinsurer by the Company, whether directly or through an
authorized agent, in connection with the placement and execution of this
Contract (“Confidential Information”) are proprietary and confidential to the
Company.

 

B. Absent the written consent of the Company, the Reinsurer will not disclose
any Confidential Information to any third parties, except when:

 

  1. The disclosure is to an authorized agent of the Reinsurer performing
underwriting, claim handling, pricing, placement and/or evaluation services for
the Reinsurer; or

 

  2. The Confidential Information is publicly known or has become publicly known
through no unauthorized act of the Reinsurer; or

 

  3. Required by retrocessionaires subject to the business ceded to this
Contract; or

 

  4. Required by state regulators performing an audit of the Reinsurer’s records
and/or financial condition; or

 

  5. Required by auditors performing an audit of the Reinsurer’s records in the
normal course of business.

 

C. Further, the Reinsurer agrees not to use any Confidential Information for any
purpose not permitted by this Contract or not related to the performance of
their obligations or enforcement of their rights under this Contract.

 

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 by written or electronic mail, reasonable advance notice of
same prior to such release or disclosure and to use their reasonable best
efforts to assist the Company in maintaining the confidentiality provided for in
this Article.

 

E. The provisions of this Article will extend to the officers, directors,
shareholders, and employees of the Reinsurer and its affiliates, who have
received Confidential Information in accordance with this Contract and will be
binding upon their successors and assigns.

 

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ARTICLE XXXI

SUNSET AND COMMUTATION

 

A. Ten years after the expiration of this Contract, the Company shall advise the
Reinsurer of any Loss Occurrences attaching to this Contract which have not been
finally settled and which may result in a claim by the Company under this
Contract. No liability shall attach hereunder for any claim or claims not
reported to the Reinsurer within this ten year period. If a loss arising out of
a Loss Occurrence is reported during this period, all losses arising out of the
same Loss Occurrence shall be deemed reported under this paragraph regardless of
when notification of loss is provided.

 

B. If both parties agree to commute the unsettled losses subject to the
Contract, then the Reinsurer’s liability for all such unsettled losses shall
then be commuted.

 

C. It is understood that commutation of all such losses shall be made using
tabular reserving methods. For each loss, the nominal ultimate value of the
Company’s Ultimate Net Loss shall be established by projecting out future
medical and indemnity payments and loss expenses by year based on appropriate
trends and escalations applied to annual cost estimates. The Contract limit and
retention (where applicable) shall then be applied to the nominal ultimate value
of the Company’s Ultimate Net Loss to determine the nominal ultimate Contract
loss. Mortality factors and discount factors shall then be applied by year to
the nominal ultimate Contract loss. The discounted, mortality adjusted projected
annual loss payments shall be summed to determine the present value
(“commutation price”) of the ultimate Contract loss. The medical escalation,
discount and mortality factors are described in paragraph C.

 

D. The following factors shall be utilized in establishing the commutation
price:

 

  1. Medical Escalation Rate

The medical escalation rate shall be a reasonable estimate of future medical
inflation.

 

  2. Discount Rate

The discount rate shall be the annualized 10-year US Treasury Bill rate at the
Valuation Date.

 

  3. Mortality Tables

Mortality factors shall be based on the most recent mortality table at the
Valuation Date from the “Vital Statistics of the United States” as published by
the US Department of Health and Human Services, Center for Disease Control and
Prevention. Factors for extension beyond age 85 shall also be included.

 

  4. Impairment

Impairment factors shall be based on the individual claim characteristics.

 

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Any other method of calculating the commutation price of one or more losses
subject to this Contract may be used as mutually agreed between the Company and
the Reinsurer.

 

E. If the Company and the Reinsurer cannot agree on a commutation value, the
effort can be abandoned. Alternatively, the Company and the Reinsurer may
mutually agree to settle any difference using a panel of three actuaries, one to
be chosen by each party and the third by the two so chosen. If either party
refuses or neglects to appoint an actuary within 30 days, the other party may
appoint two actuaries. If the two actuaries fail to agree on the selection of a
third actuary within 30 days of their appointment, each of them shall name two,
of whom the other shall decline one and the decision shall be made by drawing
lots. All the actuaries shall be regularly engaged in the valuation of Workers’
Compensation claims and shall be Fellows of the Casualty Actuarial Society or
members of the American Academy of Actuaries. All of the actuaries shall be
independent of either party to this Contract.

 

F. The settlement agreed upon by a majority of the panel of actuaries shall be
final and binding on both parties and set forth in a sworn written document
expressing their professional opinion that said value is fair for the complete
mutual release of all liabilities in respect of such reserves.

 

G. The Reinsurer’s commutation payment shall be due within 7 days following the
date the Company and the Reinsurer agree to the commutation price. Such payment
by the Reinsurer shall constitute both a complete release of the Reinsurer of
its liability for all losses, known or unknown, under this Contract, and a
complete release of the Company of its liabilities and obligations, known or
unknown, under this Contract.

 

H. This Article shall survive the expiration of this Contract.

ARTICLE XXXII

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, with reasonable provision for verification, 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
proportionate share of the benefit which may accrue to the Company solely as a
result of the defense undertaken by the Reinsurer.

 

 

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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 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 its liquidator, receiver, conservator, 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 payee under such
Policies and in substitution for the obligations of the Company to such payees.

 

D. In the event of the insolvency of any company or companies listed in the
designation of “Company” under this Contract, this Article shall apply only to
the insolvent company or companies.

ARTICLE XXXIII

ARBITRATION

 

A. As a condition precedent to any right of action hereunder, any irreconcilable
dispute arising out of the interpretation, performance or breach of this
Contract, including the formation or validity thereof, whether arising before or
after the expiry or termination of the Contract, shall be submitted for decision
to a panel of 3 arbitrators. Notice requesting arbitration will be in writing
and sent by certified mail, return receipt requested, or such reputable courier
service as is capable of returning proof of receipt of such notice by the
recipient to the party demanding arbitration.

 

B. The Company shall have the option to either litigate or arbitrate where:

 

  1. The Reinsurer makes any allegation of misrepresentation, non-disclosure,
concealment, fraud or bad faith; or

 

  2. The Reinsurer experiences any of the circumstances set forth in
subparagraphs 1 through 7 of paragraph A of the SPECIAL TERMINATION ARTICLE.

 

C. One arbitrator shall be appointed by each party. If either party fails to
appoint its arbitrator within 30 days after being requested to do so by the
other party, the latter, after 10 days notice by certified mail or reputable
courier as provided above of its intention to do so, may appoint the second
arbitrator.

 

D.

The two arbitrators shall, before instituting the hearing, appoint an impartial
third arbitrator who shall preside at the hearing. If the 2 arbitrators are
unable to agree upon the third arbitrator within 30 days of their appointment,
the Company shall petition the American Arbitration Association to appoint the
third arbitrator. If the American Arbitration Association fails to appoint the
third arbitrator within 30 days of being requested to do so,

 

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  either party may request a district court judge of the federal district court
having jurisdiction over the geographical area in which the arbitration is to
take place, or if the federal court declines to act, the state court having
general jurisdiction in such area to select the third arbitrator from a list of
6 individuals (3 named by each arbitrator previously appointed). All arbitrators
shall be disinterested active or former senior executives of insurance or
reinsurance companies or Underwriters at Lloyd’s, London.

 

E. Within 30 days after notice of appointment of all arbitrators, the panel
shall meet and determine timely periods for briefs, discovery procedures and
schedules for hearings. The panel shall be relieved of all judicial formality
and shall not be bound by the strict rules of procedure and evidence. Unless the
panel agrees otherwise, arbitration shall take place in DeRidder, Louisiana but
the venue may be changed when deemed by the panel to be in the best interest of
the arbitration proceeding. Insofar as the arbitration panel looks to
substantive law, it shall consider the law of the State of Louisiana. The
decision of any 2 arbitrators when rendered in writing shall be final and
binding. The panel is empowered to grant interim relief as it may deem
appropriate.

 

F. In the event an arbitrator is unable to serve due to death, disability or
other incapacity, a replacement arbitrator shall be chosen in accordance with
the procedures set forth in this Article for the original selection of the
arbitrator.

 

G. The panel shall make its decision considering the custom and practice of the
applicable insurance and reinsurance business as promptly as possible following
the termination of the hearings. Judgment upon the award may be entered in any
court having jurisdiction thereof.

 

H. If more than one subscribing reinsurer is involved in arbitration where there
are common questions of law or fact and a possibility of conflicting awards or
inconsistent results, all such subscribing reinsurers shall 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 the one party;
provided, however, that nothing therein 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 under
the terms of this Contract from several to joint.

 

I. Each party shall bear the expense of its own arbitrator and shall jointly and
equally bear with the other party the cost of the third arbitrator. The
remaining costs of the arbitration shall be allocated by the panel. The panel
may, at its discretion, award such further costs and expenses as it considers
appropriate, including but not limited to attorneys fees, to the extent
permitted by law. However, the panel may not award any Exemplary or Punitive
Damages and Enhanced Compensatory Damages.

ARTICLE XXXIV

SERVICE OF SUIT

(This Article is applicable if the subscribing 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. This Article is not intended to

 

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conflict with or override the obligation of the parties to arbitrate their
disputes in accordance with the ARBITRATION ARTICLE.)

 

A. In the event of the failure of the subscribing reinsurer to pay any amount
claimed to be due hereunder, the subscribing reinsurer, at the request of the
Company, shall 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 subscribing 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. The subscribing reinsurer, once the appropriate
court is selected, whether such court is the one originally chosen by the
Company and accepted by subscribing reinsurer or is determined by removal,
transfer, or otherwise, as provided for above, shall comply with all
requirements necessary to give said court jurisdiction and, in any suit
instituted against it upon this Contract, and shall abide by the final decision
of such court or of any appellate court in the event of an appeal.

 

B. Service of process in such suit may be made upon the agent for the service of
process (“agent”) named below, depending on the jurisdiction where the Company
chooses to bring suit:

 

  1.

If the suit is brought in the State of California, the law firm of Mendes and
Mount, 445 South Figueroa Street, 38th Floor, Los Angeles, California 90071
shall be authorized and directed to accept service of process on behalf of the
subscribing reinsurer in any such suit;

 

  2. If the suit is brought in the State of New York, the law firm of Mendes and
Mount, 750 Seventh Avenue, New York, New York 10019 shall be authorized and
directed to accept service of process on behalf of the subscribing reinsurer in
any such suit;

 

  3. If the suit is brought in any state other than California or New York,
either of the agents described in subparagraphs 1 or 2 above shall be authorized
and directed to accept service of process on behalf of the subscribing reinsurer
in any such suit; or

 

  4. If the subscribing reinsurer has designated an agent in the subscribing
reinsurer’s Interests and Liabilities Agreement attached hereto, then that agent
shall be authorized and directed to accept service of process on behalf of the
subscribing reinsurer in any suit. However, if an agent is designated in the
subscribing reinsurer’s Interests and Liabilities Agreement and the agent is not
located in California as respects a suit brought in California or New York as
respects a suit brought in New York, in keeping with the laws of the states of
California and New York which require that service be made on an agent located
in the respective state if a suit is brought in that state, the applicable
office of Mendes and Mount stipulated in subparagraphs 1 and 2 above must be
used for service of suit unless the provisions of paragraph C of this Article
apply.

 

C. Further, pursuant to any statute of any state, territory or district of the
United States that makes provision therefor, the subscribing reinsurer hereby
designates 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

 

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  may be served any lawful process in any action, suit or proceedings instituted
by or on behalf of the Company or any beneficiary hereunder arising out of this
Contract, and hereby designates the above-named as the person to whom the said
officer is authorized to mail such process or a true copy thereof.

ARTICLE XXXV

ENTIRE AGREEMENT

This Contract shall constitute the entire agreement between the parties with
respect to the business being reinsured hereunder. There are no understandings
between the parties other than as expressed in this Contract. Any change or
modification to this Contract shall be null and void unless made by amendment to
this Contract and signed by both parties. This Article shall not be construed as
limiting in any way the admissibility in the context of an arbitration or any
other legal proceeding, evidence regarding the formation, interpretation,
purpose or intent of this Contract.

ARTICLE XXXVI

MODE OF EXECUTION

This Contract may be executed either by an original written ink signature of
paper documents, by an exchange of facsimile copies showing the original written
ink signature of paper documents, or by electronic signature by either party
employing appropriate software technology as to satisfy the parties at the time
of execution that the version of the document agreed to by each party shall
always be capable of authentication and satisfy the same rules of evidence as
written signatures. The use of any one or a combination of these methods of
execution shall constitute a legally binding and valid signing of this Contract.
This Contract may be executed in one or more counterparts, each of which, when
duly executed, shall be deemed an original.

ARTICLE XXXVII

INTERMEDIARY

Willis Re Inc., 15305 North Dallas Parkway, Suite 1100, Colonnade III, Addison,
Texas 75001 is hereby recognized as the intermediary negotiating this Contract
and through whom all communications relating thereto shall be transmitted to the
Company or the Reinsurer. However, all communications concerning accounts, claim
information, funds and inquiries related thereto shall be transmitted to the
Company or the Reinsurer through Willis Re Inc., 5420 Millstream Road, Suite
200, McLeansville, North Carolina 27301. Payments by the Company to Willis Re
Inc. shall be deemed to constitute payment to the Reinsurer and payments by the
Reinsurer to Willis Re Inc. shall be deemed to constitute payment to the Company
only to the extent that such payments are actually received by the Company.

 

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IN WITNESS WHEREOF, the Company by its duly authorized representative has
executed this Contract as of the date specified below:

Signed this 5TH day of January , 2011.

LOGO [g137518g64a13.jpg]

 

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NUCLEAR INCIDENT EXCLUSION CLAUSE - LIABILITY - REINSURANCE - U.S.A.

(1) This reinsurance does not cover any loss or liability accruing to the
Reassured as a member of, or subscriber to, any association of insurers or
reinsurers formed for the purpose of covering nuclear energy risks or as a
direct or indirect reinsurer of any such member, subscriber or association.

(2) Without in any way restricting the operation of paragraph (1) of this Clause
it is understood and agreed that for all purposes of this reinsurance all the
original policies of the Reassured (new, renewal and replacement) of the classes
specified in Clause II of this paragraph (2) from the time specified in Clause
III in this paragraph (2) shall be deemed to include the following provision
(specified as the Limited Exclusion Provision):

Limited Exclusion Provision.*

 

I. It is agreed that the policy does not apply under any liability coverage, to
(injury, sickness, disease, death or destruction

   (bodily injury or property damage

with respect to which an insured under the policy is also an insured under a
nuclear energy liability policy issued by Nuclear Energy Liability Insurance
Association, Mutual Atomic Energy Liability Underwriters or Nuclear Insurance
Association of Canada, or would be an insured under any such policy but for its
termination upon exhaustion of its limit of liability.

 

II. Family Automobile Policies (liability only), Special Automobile Policies
(private passenger automobiles, liability only), Farmers Comprehensive Personal
Liability Policies (liability only), Comprehensive Personal Liability Policies
(liability only) or policies of a similar nature: and the liability portion of
combination forms related to the four classes of policies stated above, such as
the Comprehensive Dwelling Policy and the applicable types of Homeowners
Policies.

 

III. The inception dates and thereafter of all original policies as described in
II above, whether new, renewal or replacement, being policies which either

(a) become effective on or after 1st May, 1960, or

(b) become effective before that date and contain the Limited Exclusion
Provision set out above; provided this paragraph (2) shall not be applicable to
Family Automobile Policies, Special Automobile Policies, or policies or
combination policies of a similar nature, issued by the Reassured on New York
risks, until 90 days following approval of the Limited Exclusion Provision by
the Governmental Authority having jurisdiction thereof.

 

(3) Except for those classes of policies specified in Clause II of paragraph
(2) and without in any way restricting the operation of paragraph (1) of this
Clause, it is understood and agreed that for all purposes of this reinsurance
the original liability policies of the Reassured (new, renewal and replacement)
affording the following coverages:

Owners, Landlords and Tenants Liability, Contractual Liability, Elevator
Liability, Owners or Contractors (including railroad) Protective Liability,
Manufacturers and Contractors Liability, Product Liability, Professional and
Malpractice Liability, Storekeepers Liability, Garage Liability, Automobile
Liability (including Massachusetts Motor Vehicle or Garage Liability)

shall be deemed to include, with respect to such coverages, from the time
specified in Clause V of this paragraph (3), the following provision (specified
as the Broad Exclusion Provision):

Broad Exclusion Provision.*

It is agreed that the policy does not apply:

I. Under any Liability Coverage, to (injury, sickness, disease, death or
destruction

   (bodily injury or property damage

(a) with respect to which an insured under the policy is also an insured under a
nuclear energy liability policy issued by Nuclear Energy Liability Insurance
Association, Mutual Atomic Energy Liability Underwriters or Nuclear Insurance
Association of Canada, or would be an insured under any such policy but for its
termination upon exhaustion of its limit of liability; or

(b) resulting from the hazardous properties of nuclear material and with respect
to which (1) any person or organization is required to maintain financial
protection pursuant to the Atomic Energy Act of 1954, or any law amendatory
thereof, or (2) the insured is, or had this policy not been issued would be,
entitled to indemnity from the United States of America, or any agency thereof,
under any agreement entered into by the United States of America, or any agency
thereof, with any person or organization.

 

II. Under any Medical Payments Coverage, or under any Supplementary Payments
Provision relating to (immediate medical or surgical relief,

(first aid,

to expenses incurred with respect

to    (bodily injury, sickness, disease or death    (bodily injury

resulting from the hazardous properties of nuclear material and arising out of
the operation of a nuclear facility by any person or organization.

 

III. Under any Liability Coverage to (injury, sickness, disease, death or
destruction

(bodily injury or property damage resulting from the hazardous properties of
nuclear material, if

(a) the nuclear material (1) is at any nuclear facility owned by, or operated by
or on behalf of, an insured or (2) has been discharged or dispersed therefrom;

(b) the nuclear material is contained in spent fuel or waste at any time
possessed, handled, used, processed, stored, transported or disposed of by or on
behalf of an insured; or

 

 

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(c)    the    (injury, sickness, disease, death or destruction       (bodily
injury or property damages

arises out of the furnishing by an insured of services, materials, parts or
equipment in connection with the planning, construction, maintenance, operation
or use of any nuclear facility, but if such facility is located within the
United States of America, its territories, or possessions or Canada, this
exclusion (c) applies only to

(injury to or destruction of property at such nuclear facility

(property damage to such nuclear facility and any property threat.

 

IV. As used in this endorsement:

“Hazardous properties” include radioactive, toxic or explosive properties;
“nuclear material” means source material, special nuclear material or byproduct
material; “source material,” “special nuclear material,” and “byproduct
material” have the meanings given them in the Atomic Energy Act of 1954 or in
any law amendatory thereof; “spent fuel” means any fuel element or fuel
component, solid or liquid, which has been used or exposed to radiation in a
nuclear reactor; “waste” means any waste material (1) containing byproduct
material and (2) resulting from the operation by any person or organization of
any nuclear facility included within the definition of nuclear facility under
paragraph (a) or (b) thereof; “nuclear facility” means

(a) any nuclear reactor,

(b) any equipment or device designed or used for (1) separating the isotopes of
uranium or plutonium, (2) processing or utilizing spent fuel, or (3) handling,
processing or packaging waste,

(c) any equipment or device used for the processing, fabricating or alloying of
special nuclear material if at any time the total amount of such material in the
custody of the insured at the premises where such equipment or device is located
consists of or contains more than 25 grams of plutonium or uranium 233 or any
combination thereof, or more than 250 grams of uranium 235,

(d) any structure, basin, excavation, premises or place prepared or used for the
storage or disposal of waste, and includes the site on which any of the
foregoing is located, all operations conducted on such site and all premises
used for such operations; “nuclear reactor” means any apparatus designed or used
to sustain nuclear fission in a self-supporting chain reaction or to contain a
critical mass of fissionable material;

(With respect to injury to or destruction of property, the word “injury” or
“destruction”

(“property damage” includes all forms of radioactive contamination of property
(includes all forms of radioactive contamination of property.

 

V. The inception dates and thereafter of all original policies affording
coverages specified in this paragraph (3), whether new, renewal or replacement,
being policies which become effective on or after 1st May, 1960, provided this
paragraph (3) shall not be applicable to

(i) Garage and Automobile Policies issued by the Reassured on New York risks, or

(ii) statutory liability insurance required under Chapter 90, General Laws of
Massachusetts,

until 90 days following approval of the Broad Exclusion Provision by the
Governmental Authority having jurisdiction thereof.

(4) Without in any way restricting the operation of paragraph (1) of this
Clause, it is understood and agreed that paragraphs (2) and (3) above are not
applicable to original liability policies of the Reassured in Canada and that
with respect to such policies this Clause shall be deemed to include the Nuclear
Energy Liability Exclusion Provisions adopted by the Canadian Underwriters’
Association of the Independent Insurance Conference of Canada.

*NOTE: The words printed in italics in the Limited Exclusion Provision and in
the Broad Exclusion Provision shall apply only in relation to original liability
policies which include a Limited Exclusion Provision or a Broad Exclusion
Provision containing those words.

21/9/67

N.M.A. 1590

BRMA 35A

 

93948003-11 (1-1-11)

     

Casualty Catastrophe XOL Contract

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