EXHIBIT 10.9

Reinsurance Commutation and Release Agreement

This Reinsurance Commutation and Release Agreement (hereinafter referred to as
the “Agreement”), is entered into by and between Philadelphia Insurance Company,
Philadelphia Indemnity Insurance Company, both of Bala Cynwyd, Pennsylvania,
Mobile USA Insurance Company, Liberty American Insurance Company, both of
Pinellas Park, Florida, and any and all other companies which are now or may
hereafter become member companies of Philadelphia Consolidated Holding
Corporation (hereinafter referred to collectively as the “Company”) and Federal
Insurance Company, Warren, New Jersey, through Chubb Re, Inc., Bernardsville,
New Jersey (hereinafter referred to as “Chubb Re”). The Company and Chubb Re are
sometimes referred to individually as a “Party” and collectively as the
“Parties.”

WHEREAS, the Company and Chubb Re entered into the Whole Account Net Quota Share
Reinsurance Contract, effective April 1, 2003 and Addendum No. 1 thereto,
effective January 1, 2004 (hereinafter referred to collectively as the
“Treaty”);

WHEREAS, the Company ceded and Chubb Re assumed a 45.0% share in the terms and
conditions under the Treaty for the period April 1, 2003 through December 31,
2003 (the “2003 Contract Year”);

WHEREAS, the Company and Chubb Re have agreed to cancel and commute the 2003
Contract Year as of January 1, 2005, fully and finally settle, commute and
discharge any and all of their respective obligations and liabilities under the
2003 Contract Year, and enter into mutual releases relating thereto;

NOW THEREFORE, in consideration of the covenants, assumptions, promises,
payments, agreements and other good and valuable consideration recited as set
forth herein, the sufficiency of which is acknowledged, the Parties agree to the
following:

Article I — Consideration

In consideration for commuting the 2003 Contract Year, the Company shall receive
a commutation profit commission of $34,545,668.40 which shall be deemed to equal
45.0% of the balance of the Funds Withheld Account associated with the 2003
Contract Year under the provisions of the Treaty. Chubb Re shall retain 45.0% of
the Reinsurer’s Expense Allowance paid under the 2003 Contract Year (being 45.0%
of 4.0% of the 2003 Contract Year Ceded Net Written Premium). Such amounts shall
be deemed to be fully earned by Chubb Re. Further, the Company acknowledges that
receipt of such commutation profit commission constitutes a full and final
settlement of all obligations of Chubb Re to the Company under the 2003 Contract
Year, and that no further amounts are or will be owed to the Company by Chubb Re
for the 2003 Contract Year.

Article II — Mutual Release

Each Party hereto, on behalf of itself and its predecessors, successors,
assigns, affiliates and subsidiaries, and their past, present and future
officers, directors, shareholders, employees, agents, receivers, trustees,
attorneys, and legal representatives hereby releases, acquits, and

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forever discharges the other Party, its predecessors, successors, assigns,
affiliates and subsidiaries, and their past, present and future officers,
directors, shareholders, employees, agents, receivers, trustees, attorneys, and
legal representatives from any and all claims, loss debts, demands, causes of
action, liabilities, obligations, costs, disbursements, fees, attorneys’ fees,
expenses, damages, and injuries of every kind, nature and description based on,
relating to, or arising out of the 2003 Contract Year, whether grounded in law
or in equity, in contract or in tort, including, but not limited to, any
common-law or statutory claims for fraud and misrepresentation, or statutory
RICO claims, whether or not now known, suspected, reported, or claimed whether
fixed or contingent, currently existing or arising in the future.

Article III — Representations and Warranties

Both Parties to this Agreement hereby represent and warrant that:

1.   All judicial, statutory, regulatory, administrative, and/or ministerial
actions necessary for the execution, delivery, and performance of this Agreement
by each Party have been or will be duly taken, and that no further action,
consent or approval of any person, entity, court or other governmental authority
is required by either Party for the lawful execution or delivery of this
Agreement or the lawful performance and consummation of the transactions
contemplated herein, nor will such transactions violate any provision of any law
or conflict with any order, writ, injunction, or decree of any court or other
governmental authority.

2.   The individual executing this Agreement on behalf of each Party has the
full legal right, power, and authority to execute and deliver this Agreement on
behalf of such Party.

3.   The Parties represent each to the other that they have not assigned to
third parties any claims intended to be released by this Agreement. The Parties
are not aware of any third party who might assert some interest in any claims
intended to be released hereunder.

4.   The Company and Chubb Re further agree and stipulate that they have
completely read, fully understood, and voluntarily accepted the terms of this
Agreement, and that:

  a.   By entering into this Agreement, neither the Company nor Chubb Re is
making any representations as to any fact or circumstance other than those
contained within this Agreement;     b.   Neither the Company nor Chubb Re is
relying upon the other, nor upon any person, third party, or anything other than
its own independent knowledge and judgment and the advice of its own counsel in
entering into this Agreement; and     c.   Both Parties acknowledge that there
is a risk that subsequent to execution of this Agreement certain facts,
circumstances, or legal decisions may be discovered, established or adjudicated
which were different from, less than, or greater than that believed or known by
one of the Parties hereto at the time of the execution of this Agreement. It is
further understood that the Parties hereby assume such risk and agree that this
Agreement shall apply under any such different, unknown, or unanticipated
conditions.

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Article IV — Confidentiality and Nondisclosure

The Company and Chubb Re hereby expressly agree that the terms and conditions of
this Agreement shall be CONFIDENTIAL between Parties and shall not be disclosed
by either Party without the prior written consent of the other, except to the
broker of record of the Treaty, or where required by Order of a court,
administrative tribunal, regulatory body, arbitration panel or where required by
applicable law or regulation. In the event disclosure is to be made pursuant to
this Article, the disclosing Party shall use its best efforts to preserve the
confidentiality of such information, including giving prior written notice to
the other Party, specifying the information to be disclosed, the manner of
disclosure, and to whom disclosure is to be made. The other, non-disclosing
Party shall be provided a reasonable opportunity to oppose such disclosure.

Article V — General Conditions

A.   This Agreement is binding on and shall inure to the benefit of all Parties
hereto and their representative officers, directors, employees, agents,
attorneys, shareholders, predecessors, parents, affiliates, subsidiaries,
successors and assigns (including without limitation, any receiver, conservator,
rehabilitator, liquidator, provisional liquidator, trustee or other statutory
successor or quasi-statutory successor) upon its execution.

B.   The Parties specifically agree and acknowledge that the consideration for
the commutation is being paid to the Company in good faith and constitutes fair
consideration for the discharge of amounts allegedly owing now or potentially
owing in the future by Chubb Re to the Company for the 2003 Contract Year.

C.   This Agreement constitutes the entire understanding by and between the
Parties hereto, superseding all negotiations, prior discussions,
representations, promises, and understandings, oral or written, expressed or
implied, made prior to or contemporaneous with its execution. This Agreement may
only be modified or amended by written agreement, entered into subsequent to the
date of this commutation and duly executed by the Parties hereto.

D.   The failure of the Parties to enforce any provision of this Agreement shall
not be construed as a waiver of such provision or any other provision of this
Agreement. No waiver of any provision of this Agreement shall be deemed a waiver
of any of its other terms, nor shall such waiver constitute a continuing waiver.

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

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F.   This Agreement shall be interpreted, construed, and enforced in accordance
with the laws of the State of New York (without giving effect to conflicts of
law principles).

In Witness Whereof, the Parties hereto by their respective duly authorized
representatives have executed this Agreement as of the dates undermentioned at:

Bala Cynwyd, Pennsylvania, this ___15th___day of ___February_________in the year
___2005___.

Christopher J. Maguire, Executive Vice President & Chief U/W Officer
Philadelphia Insurance Company
Philadelphia Indemnity Insurance Company
Mobile USA Insurance Company
Liberty American Insurance Company

Bernardsville, New Jersey, this _11th___day of ___February______in the year
2005___.

__Brian Hegarty, Managing Director_____
Chubb Re, Inc. (for and on behalf of Federal Insurance Company)

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