EXHIBIT 10.2
 
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STATE BOARD OF ADMINISTRATION
OF FLORIDA
 
1801 HERMITAGE BOULEVARD
TALLAHASSEE, FLORIDA 32308
(850) 488-4406
 
POST OFFICE BOX 13300
32317-3300
RICK SCOTT
GOVERNOR
AS CHAIRMAN
 
JEFF ATWA'TER
CHIEF FINANCIAL OFFICER
AS TREASURER
 
PAM BONDI
ATTORNEY GENERAL
AS SECRETARY
ASH WILLIAMS
EXECUTIVE DIRECTOR & CIO

 
ATTENTION:
THIS ADDENDUM MUST BE COMPLETED, SIGNED, AND RETURNED BY ALL COMPANIES ELIGIBLE
FOR COVERAGE UNDER THIS ADDENDUM REGARDLESS OF CHOICE TO ACCEPT OR REJECT THIS
OPTIONAL COVERAGE

ADDENDUM NO. 1
to
REIMBURSEMENT CONTRACT
Effective: June 1, 2011
(Contract)

between

FEDERATED NATIONAL INSURANCE COMPANY
Ft. Lauderdale, FL
(Company)

NAIC # 27980 10790

and

THE STATE BOARD OF ADMINISTRATION OF THE STATE OF FLORIDA (SBA) WHICH
ADMINISTERS THE FLORIDA HURRICANE CATASTROPHE FUND (FHCF)
 
It is Hereby Agreed, effective at 12:00:01 a.m., Eastern Time, June 1, 2011,
that this Contract shall be amended as follows:
 
ADDITIONAL COVERAGE OPTION (up to $10 million) PURSUANT TO SECTION
215.555(4)(b)4., FLORIDA STATUTES.
 
Pursuant to Section 215.555(4)(b)4., Florida Statutes, certain Companies may
select additional FHCF reimbursement coverage of up to $10 million dollars. The
additional premium to be charged for this additional reimbursement coverage
shall be 50 percent of the additional reimbursement coverage provided, which
shall include one prepaid full reinstatement. The additional premium shall be
due and payable in three equal installments on August 1, 2011, on October 1,
2011, and on December 1, 2011.

The minimum retention level that must be retained associated with this
additional coverage layer is 30 percent of the insurer's surplus as of December
31, 2010, for each Covered Event. For an insurer which began writing property
insurance in 2011 and did not have a surplus as of December 31, 2010, surplus
shall be deemed to be the surplus reported to the Office of Insurance Regulation
at the time the insurer received its Certificate of Authority. This coverage is
designed to apply a retention that triggers coverage prior to the insurer
reaching its retention under the mandatory coverage level. The SBA will
determine and pay, within 30 days or as soon as practicable after receiving
Proof of Loss Reports, the reimbursement amount due under this optional coverage
based on losses paid by the Company.
 
 
 

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The reimbursement percentage applicable to this additional coverage shall be 100
percent, which includes reimbursement for loss adjustment expense as provided
under the Reimbursement Contract. Once the limit of coverage under this option
is exhausted, the insurer's retention under the mandatory coverage will apply.
 
This additional reimbursement coverage shall be in addition to all other
coverage provided by the SBA under the Company's Reimbursement Contract and
shall be in addition to the claims-paying capacity of the FHCF as defined in
Section 215.555(4)(c)1., Florida Statutes, but only with respect to those
insurers that select the additional coverage option. Coverage provided in this
additional coverage option shall otherwise be consistent with terms and
conditions as relates to the Reimbursement Contract including, but not limited
to, definitions, coverage for Covered Policies as defined, exclusions, loss
reporting, and examination procedures.
 
While this additional coverage shall not reduce, overlap, or duplicate coverage
otherwise provided for in the Reimbursement Contract or offset any co-payments,
the amount of coverage selected herein is irrevocable. Any amount of additional
coverage selected herein that would in effect overlap FHCF coverage otherwise
provided for in the Reimbursement Contract, or any other Addenda to the
Reimbursement Contract, shall be deemed by the FHCF to shift above the highest
level of coverage otherwise provided by the FHCF.
 
The claims-paying capacity with respect to all other participating insurers,
including eligible Companies that do not select the additional coverage option,
shall be limited to their reimbursement premium's proportionate share of the
actual claims-paying capacity as defined in Section 215.555(4)(c)1., Florida
Statutes, and as provided for under the terms of the Reimbursement Contract,
plus any coverage provided under any other Addenda to the Reimbursement
Contract.
 
The optional coverage provided in this Addendum expires on May 31, 2012. To be
eligible for this optional coverage, the Company must return a fully executed
Addendum No. 1 (two originals) no later than 5 p.m., Central Time, March 1,
2011. A Company failing to meet the applicable deadline shall not be eligible
for optional coverage under Addendum No. 1 for the 2011 Contract Year.
Furthermore, there shall be no coverage under this Addendum for any Loss
Occurrence, as defined in Article V of the Contract and under which the Company
would be eligible for reimbursements under the Contract, that occurs prior to
the FHCF receiving the fully executed Addendum No. 1 (original copies).
 
New Participants, as defined in Article V of the Contract, must return a fully
executed Addendum No. 1 (two originals) within thirty days of writing its first
Covered Policy and prior to a Loss Occurrence under which the company would be
eligible for reimbursements under the Contract. A Company failing to meet the
applicable deadline shall not be eligible for optional coverage under Addendum
No. 1 for the 2011 Contract Year.
 
ALL COMPANIES EXECUTING A REIMBURSEMENT CONTRACT AND ELIGIBLE FOR THIS
ADDITIONAL COVERAGE MUST INDICATE BELOW THE AMOUNT OF ADDITIONAL COVERAGE
SELECTED, IF ANY.
 
If your Company does not wish to purchase the additional coverage under this
Addendum, print "No Coverage" on the line below and initial the box.
 

                                       

 
 
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If your Company is eligible for the coverage under this Addendum and elects to
purchase this coverage, indicate the amount of additional coverage up to $10
million (there is no additional coverage available in excess of $10 million) on
the line below:

$ 10 million
 

 
IF THIS ADDENDUM NO. 1 IS RETURNED WITHOUT THE BLANK SPACE IMMEDIATELY ABOVE
FILLED IN WITH A DOLLAR AMOUNT, IT SHALL BE DEEMED BY THE STATE BOARD OF
ADMINISTRATION TO BE A CHOICE TO REJECT THE ADDITIONAL COVERAGE.

/s/ MICHAEL H. BRAUN
 
Federated National Insurance Company
 

By:
Michael H. Braun, President
 
2/25/2011
   
Name/Title
 
Date
 

Approved by:

Florida Hurricane Catastrophe Fund
By: State Board of Administration of the State of Florida

By:
         
Ashbel C. Williams
 
Date
   
Executive Director & CIO
     

Approved as to legality:

By:
         
Gary A. Moreland
 
Date
   
Assistant General Counsel
       
FL Bar ID#0702765
     

 
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