exv10w8



 





Exhibit 10.8




Florida Only Excess Catastrophe Reinsurance Contract

Effective: June 1, 2007




issued to




Liberty American Insurance Company

Pinellas Park, Florida

Liberty American Select Insurance Company

Pinellas Park, Florida

and

any and all other companies which are now

or may hereafter become member companies of

Liberty American Insurance Group, Inc.




	 	 	 
	07\M2U1138

	 	






 









 






Table of Contents




	 	 	 	 	 	 	 
	Article	 	 	 	Page
	I

	 	Classes of Business Reinsured
	 	 	1	 
	II

	 	Commencement and Termination
	 	 	1	 
	III

	 	Special Commutation
	 	 	3	 
	IV

	 	Territory (BRMA 51A)
	 	 	5	 
	V

	 	Exclusions
	 	 	5	 
	VI

	 	Retention and Limit
	 	 	7	 
	VII

	 	Reinstatement
	 	 	8	 
	VIII

	 	Premium
	 	 	8	 
	IX

	 	Definitions
	 	 	10	 
	X

	 	Loss Occurrence
	 	 	11	 
	XI

	 	Loss Notices and Settlements
	 	 	12	 
	XII

	 	Salvage and Subrogation
	 	 	12	 
	XIII

	 	Florida Hurricane Catastrophe Fund
	 	 	13	 
	XIV

	 	Late Payments
	 	 	14	 
	XV

	 	Offset (BRMA 36D)
	 	 	15	 
	XVI

	 	Access to Records (BRMA 1D)
	 	 	15	 
	XVII

	 	Liability of the Reinsurer
	 	 	15	 
	XVIII

	 	Net Retained Lines (BRMA 32B)
	 	 	15	 
	XIX

	 	Errors and Omissions (BRMA 14F)
	 	 	16	 
	XX

	 	Currency (BRMA 12A)
	 	 	16	 
	XXI

	 	Taxes (BRMA 50B)
	 	 	16	 
	XXII

	 	Federal Excise Tax
	 	 	16	 
	XXIII

	 	Funding Requirements
	 	 	16	 
	XXIV

	 	Insolvency
	 	 	18	 
	XXV

	 	Arbitration
	 	 	19	 
	XXVI

	 	Service of Suit
	 	 	20	 
	XXVII

	 	Agency Agreement
	 	 	20	 
	XXVIII

	 	Governing Law
	 	 	20	 
	XXIX

	 	Confidentiality
	 	 	20	 
	XXX

	 	Severability
	 	 	21	 
	XXXI

	 	Intermediary (BRMA 23A)
	 	 	21	 
	 

	 	Schedule A	 	 	 	 






	 	 	 
	07\M2U1138

	 	






 









 






Florida Only Excess Catastrophe Reinsurance Contract

Effective: June 1, 2007




issued to




Liberty American Insurance Company

Pinellas Park, Florida

Liberty American Select Insurance Company

Pinellas Park, Florida

and

any and all other companies which are now

or may hereafter become member companies of

Liberty American Insurance Group, Inc.

(hereinafter referred to collectively as the “Company”)




by




The Subscribing Reinsurer(s) Executing the

Interests and Liabilities Agreement(s)

Attached Hereto

(hereinafter referred to as the “Reinsurer")




Article I — Classes of Business Reinsured



By this Contract the Reinsurer agrees to reinsure the excess liability which may accrue to the
Company under its policies, contracts and binders of insurance or reinsurance (hereinafter called
“policies”) in force at the effective date hereof or issued or renewed on or after that date, and
classified by the Company as Property business, subject to the terms, conditions and limitations
set forth herein and in Schedule A attached to and forming part of this Contract.




Article II — Commencement and Termination





	A.	 	This Contract shall become effective at 12:01 a.m., Local Standard Time at the location where
the loss occurrence commences, June 1, 2007, with respect to losses arising out of loss
occurrences commencing at or after that time and date, and shall remain in force until 12:01
a.m., Local Standard Time at the location where the loss occurrence commences, June 1, 2008.
	 
	B.	 	Notwithstanding the provisions of paragraph A above, if any of the following events occur on
or after the date lines are bound and, with the timing exceptions as qualified by
subparagraphs 1 and 2 below, before the termination of the Contract, the Company may terminate
a Subscribing Reinsurer’s percentage share in this Contract:






	 	1.	 	The Subscribing Reinsurer’s surplus as regards policyholders or the foreign
equivalent thereto after the date lines are bound for this Contract has been reduced by
more than 25.0% of the amount of surplus or foreign equivalent 12 months prior to that
date; or





	 	 	 
	07\M2U1138

Page 1

	 	






 









 







	 	2.	 	The Subscribing Reinsurer’s surplus as regards policyholders or the foreign
equivalent thereto at any time between the date lines are bound and the date of
termination of this Contract has been reduced by more than 25.0% of the amount of surplus
or foreign equivalent at the date of the Subscribing Reinsurer’s most recent financial
statement filed with regulatory authorities and available to the public as of the date
lines are bound for this Contract; or
	 
	 	3.	 	The Subscribing Reinsurer’s A.M. Best’s rating has been assigned or downgraded
below A- (inclusive of “Not Rated” ratings) and/or Standard & Poor’s rating has been
assigned or downgraded below BBB+; or
	 
	 	4.	 	The Subscribing Reinsurer has become merged with, acquired by or controlled by any
other company, corporation or unaffiliated individual(s) not controlling the Subscribing
Reinsurer’s operations previously; or
	 
	 	5.	 	A State Insurance Department or other legal authority has ordered the Subscribing
Reinsurer to cease writing business; or
	 
	 	6.	 	The Subscribing Reinsurer has become insolvent or has been placed into liquidation
or receivership (whether voluntary or involuntary) or proceedings have been instituted
against the Subscribing Reinsurer 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
	 
	 	7.	 	The Subscribing Reinsurer has reinsured its entire liability under this Contract
without the Company’s prior written consent (except for inter-company pooling
arrangements); or
	 
	 	8.	 	The Subscribing Reinsurer has ceased assuming new or renewal property or casualty
treaty reinsurance business.






The Company has 30 days from the date of public announcement or discovery to exercise the
option to terminate a Subscribing Reinsurer’s percentage share in this Contract. To terminate
a Subscribing Reinsurer’s percentage share in this Contract, the Company must provide the
Subscribing Reinsurer with formal notice. Such notice, which shall be postmarked no later than
the last day of the aforementioned 30-day period, shall include the effective date of
termination. The effective date of termination shall be as selected by the Company and shall
be one of the following:




	 	a.	 	The last day of the month prior to the date of any public announcement or
discovery; or
	 
	 	b.	 	The date of any public announcement or discovery; or
	 
	 	c.	 	The last day of any month after the date of any public announcement or
discovery; or
	 
	 	d.	 	The date of the Company’s written notice to the Subscribing Reinsurer
advising of the termination; or
	 
	 	e.	 	The date of notice provided by the Subscribing Reinsurer (should the
Subscribing Reinsurer elect to provide one).





	 	 	 
	07\M2U1138

Page 2

	 	






 









 







	C.	 	If this Contract is terminated or 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
termination or 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 Commutation





	A.	 	In the event a Subscribing Reinsurer meets one or both of the following criteria, the Company
may require a commutation of that portion of any excess loss hereunder represented by any
outstanding claim or claims, including any related loss adjustment expense.






	 	1.	 	The Subscribing Reinsurer’s A.M. Best’s rating is assigned or downgraded below A-
(inclusive of “Not Rated” ratings) and/or Standard & Poor’s rating is assigned or
downgraded below BBB+; or
	 
	 	2.	 	The Subscribing Reinsurer ceases assuming new or renewal property treaty
reinsurance business.






Notwithstanding the foregoing, the provisions of this Article shall not apply to Subscribing
Reinsurers that (at the inception hereof) are rated A+ or higher by A.M. Best and have a
policyholders’ surplus (or the foreign equivalent thereto) of $2,000,000,000 or more.




“Outstanding claim or claims” shall be defined as known or unknown claims, including any billed
yet unpaid claims.




	B.	 	If the Company elects to require commutation as provided in paragraph A above, the Company
shall submit a Statement of Valuation of the outstanding claim or claims as of the last day of
the month immediately preceding the month in which the Company elects to require commutation,
as determined by the Company. Such Statement of Valuation shall include the elements
considered reasonable to establish the excess loss, including, but not limited to, paid
losses, paid loss adjustment expenses, outstanding losses, outstanding loss adjustment
expenses, incurred but not reported loss reserves established by the Company’s internal
division or the appropriate actuarial firm under external contract to the Company, salvage and
subrogation, and unearned reinsurance deposits, if any, and shall set forth or attach the
information relied upon by the Company and the methodology, including, but not limited to, the
present value calculation employed to calculate the excess loss. The Subscribing Reinsurer
shall then pay the amount requested within 30 calendar days of receipt of such Statement of
Valuation, unless the Subscribing Reinsurer needs additional information from the Company to
assess the Company’s Statement of Valuation or contests such amount.






	C.	 	If the Subscribing Reinsurer needs additional information from the Company to assess the
Company’s Statement of Valuation or contests the amount requested, the Subscribing Reinsurer
shall so notify the Company within 15 calendar days of receipt of the Company’s Statement of
Valuation. The Company shall supply any reasonably requested information to the Subscribing
Reinsurer within 15 calendar days of receipt of the notification. Within 30 calendar days of
the date of the notification or of the receipt of the information, whichever is later, the
Subscribing Reinsurer shall provide the Company with its Statement





	 	 	 
	07\M2U1138

Page 3

	 	






 









 







of Valuation of the outstanding claim or claims as of the last day of the month immediately preceding the
month in which the Company elects to require commutation, as determined by the Subscribing
Reinsurer. Such Statement of Valuation shall include the elements considered reasonable to
establish the excess loss, including, but not limited to, paid losses, paid loss adjustment
expenses, outstanding losses, outstanding loss adjustment expenses, incurred but not reported
loss reserves established by the Subscribing Reinsurer’s internal division or the appropriate
actuarial firm under external contract to the Subscribing Reinsurer, salvage and subrogation,
and unearned reinsurance deposits, if any, and shall set forth or attach the information relied
upon by the Subscribing Reinsurer and the methodology, including, but not limited to, the
present value calculation employed to calculate the excess loss.




	D.	 	In the event the Subscribing Reinsurer’s Statement of Valuation of the outstanding claim or
claims is viewed as unacceptable to the Company, the Company may either abandon the
commutation effort, or may seek to settle any difference by using an independent actuary
agreed to by the parties.






	E.	 	If the parties cannot agree on an acceptable independent actuary within 15 calendar days of
the date of the Subscribing Reinsurer’s Statement of Valuation, then each party shall appoint
an actuary as party arbitrators for the limited and sole purpose of selecting an independent
actuary. If the actuaries cannot agree on an acceptable independent actuary within 15
calendar days of the date of the Subscribing Reinsurer’s Statement of Valuation, the Company
shall supply the Subscribing Reinsurer with a list of at least three proposed independent
actuaries, and the Subscribing Reinsurer shall select the independent actuary from that list.






	F.	 	Upon selection of the independent actuary, both parties shall present their respective
written submissions to the independent actuary. The independent actuary may, at his or her
discretion, request additional information. The independent actuary shall issue his or her
decision within 45 calendar days after the written submissions have been filed and any
additional information has been provided.






	G.	 	The decision of the independent actuary shall be final and binding. The expense of the
independent actuary shall be equally divided between the two parties. For the purposes of
this Article, unless mutually agreed otherwise, an “independent actuary” shall be an actuary
who satisfies each of the following criteria:






	 	1.	 	Is regularly engaged in the valuation of claims resulting from lines of business
subject to this Contract; and
	 
	 	2.	 	Is either a Fellow of the Casualty Actuarial Society or of the American Academy of
Actuaries; and
	 
	 	3.	 	Is disinterested and impartial regarding this commutation.






	H.	 	Notwithstanding paragraphs A, B and C above, in the event that the Subscribing Reinsurer no
longer meets the criteria set forth in subparagraphs 1 and 2 of paragraph A above, this
commutation may continue on a mutually agreed basis.






	I.	 	Payment by the Subscribing Reinsurer of the amount requested in accordance with paragraph B,
C or F above, shall release the Subscribing Reinsurer from all further liability for any
outstanding claim or claims, known or unknown, under this Contract and shall





	 	 	 
	07\M2U1138

Page 4

	 	






 









 







release the Company from all further liability for payments of salvage or subrogation amounts,
known or unknown, to the Subscribing Reinsurer under this Contract.




	J.	 	In the event of any conflict between this Article and any other Article of this Contract, the
terms of this Article shall control.






	K.	 	This Article shall survive the termination or expiration of this Contract.





Article IV — Territory (BRMA 51A)



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




Article V — Exclusions



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





	 	1.	 	Assumed reinsurance. However, this exclusion shall not apply to the Company’s
25.0% quota share assumed from USIC of Florida, Inc. as respects Florida Homeowners
business produced by the Company, it being understood that recoveries, if any, from the
purchased common account catastrophe program and/or the Florida Hurricane Catastrophe
Fund (FHCF) will inure to the benefit of said quota share reinsurance, whether
collectible or not, and will be deemed not to be reduced by any reduction or exhaustion
of the FHCF’s claims paying capacity.
	 
	 	2.	 	Financial guarantee and insolvency.
	 
	 	3.	 	Mortgage Impairment insurances and similar kinds of insurances, however styled.
	 
	 	4.	 	Nuclear risks as defined in the “Nuclear Incident Exclusion Clause — Physical
Damage — Reinsurance” attached to and forming part of this Contract.
	 
	 	5.	 	Loss or damage caused by or resulting from war, invasion, hostilities, acts of
foreign enemies, civil war, rebellion, insurrection, military or usurped power, or
martial law or confiscation by order of any government or public authority.
	 
	 	6.	 	Loss or liability from any Pool, Association or Syndicate and any assessment or
similar demand for payment related to the FHCF or Citizens Property Insurance
Corporation.
	 
	 	7.	 	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.





	 	 	 
	07\M2U1138

Page 5

	 	






 









 







	 	8.	 	Losses in respect of overhead transmission and distribution lines and their
supporting structures other than those on or within 1,000 feet of the insured premises.
It is understood and agreed that public utilities extension and/or suppliers extension
and/or contingent business interruption coverages are not subject to this exclusion,
provided that these are not part of a transmitters’ or distributors’ policy.
	 
	 	9.	 	Accident and Health, Casualty, Fidelity and/or Surety business.
	 
	 	10.	 	Loss, damage, cost or expense arising from seepage and/or pollution and/or
contamination, other than contamination from smoke. Nevertheless, this exclusion does not
preclude payment of the cost of removing debris of property damaged by a loss otherwise
covered hereunder, subject always to a limit of 25.0% of the Company’s property loss under
the applicable original policy.
	 
	 	11.	 	Notwithstanding any other provision to the contrary within this Contract or any
amendment thereto, loss, damage, cost or expense directly or indirectly caused by,
contributed to by, resulting from, or arising out of or in connection with any act of
terrorism, as defined herein, regardless of any other cause or event contributing
concurrently or in any other sequence to the loss.






An “act of terrorism” includes any act, or preparation in respect of action, or threat of
action, designed to influence the government de jure or de facto of any nation or any
political division thereof, or in pursuit of political, religious, ideological or similar
purposes to intimidate the public or a section of the public of any nation by any person
or group(s) of persons whether acting alone or on behalf of or in connection with any
organization(s) or government(s) de jure or de facto, and which:




	 	a.	 	Involves violence against one or more persons; or
	 
	 	b.	 	Involves damage to property; or
	 
	 	c.	 	Endangers life other than that of the person committing the action; or
	 
	 	d.	 	Creates a risk to health or safety of the public or a section of the public; or
	 
	 	e.	 	Is designed to interfere with or to disrupt an electronic system.






Loss, damage, cost or expense directly or indirectly caused by, contributed to by,
resulting from, or arising out of or in connection with any action in controlling,
preventing, suppressing, retaliating against, or responding to any act of terrorism.




Notwithstanding the above and subject otherwise to the terms, conditions and limitations
of this Contract, in respect only of personal lines this Contract will pay actual loss or
damage (but not related cost or expense) caused by any act of terrorism provided such act
is not directly or indirectly caused by, contributed to by, resulting from, or arising
out of or in connection with biological, chemical, radioactive, or nuclear pollution or
contamination or explosion.



	 	 	 
	07\M2U1138

Page 6

	 	






 









 







	 	12.	 	Loss or liability in any way or to any extent arising out of the actual or alleged
presence or actual, alleged or threatened presence of fungi including, but not limited to,
mold, mildew, mycotoxins, microbial volatile organic compounds or other “microbial
contamination.” This includes:






	 	a.	 	Any supervision, instruction, recommendations, warnings, or advice given
or which should have been given in connection with the above; and
	 
	 	b.	 	Any obligation to share damages with or repay someone else who must pay
damages because of such injury or damage.






For purposes of this exclusion, “microbial contamination” means any contamination, either
airborne or surface, which arises out of or is related to the presence of fungi, mold,
mildew, mycotoxins, microbial volatile organic compounds or spores, including, without
limitation, Penicillium, Aspergillus, Fusarium, Aspergillus Flavus and Stachybotrys
chartarum.




Losses resulting from the above causes do not in and of themselves constitute an event
unless arising out of one or more of the following perils, in which case this exclusion
does not apply:




Fire, lightning, explosion, aircraft or vehicle impact, falling objects, windstorm,
hail, tornado, cyclone, hurricane, earthquake, volcano, tsunami, flood, freeze or
weight of snow.




Notice of any claims for mold-related losses must be given by the Company to the
Reinsurer, in writing, within 24 months after the commencement date of the loss
occurrence to which such claims relate.




	 	13.	 	Loss or liability excluded under the provisions of the “Electronic Data Endorsement B
(NMA 2915)” attached to and forming part of this Contract.





Article VI — Retention and Limit





	A.	 	As respects each excess layer of reinsurance coverage provided by this Contract, the Company
shall retain and be liable for the first amount of ultimate net loss, shown as “Company’s
Retention” for that excess layer in Schedule A attached hereto, arising out of each loss
occurrence. The Reinsurer shall then be liable, as respects each excess layer, for the amount
by which such ultimate net loss exceeds the Company’s applicable retention, but the liability
of the Reinsurer under each excess layer shall not exceed the amount, shown as “Reinsurer’s
Per Occurrence Limit” for that excess layer in Schedule A attached hereto, as respects any one
loss occurrence.






	B.	 	No claim shall be made under any excess layer of reinsurance coverage provided by this
Contract as respects any one loss occurrence unless at least two risks insured or reinsured by
the Company are involved in such loss occurrence. For purposes of this Contract, the Company
shall be the sole judge of what constitutes one risk.





	 	 	 
	07\M2U1138

Page 7

	 	






 









 






Article VII — Reinstatement





	A.	 	In the event all or any portion of the reinsurance under any excess layer of reinsurance
coverage provided by this Contract is exhausted by loss, the amount so exhausted shall be
reinstated immediately from the time the loss occurrence commences hereon. For each amount so
reinstated, the Company agrees to pay additional premium in accordance with the provisions of
the Premium Article.






	B.	 	Notwithstanding anything stated herein, the liability of the Reinsurer under any excess layer
of reinsurance coverage provided by this Contract shall not exceed either of the following:






	 	1.	 	The amount, shown as “Reinsurer’s Per Occurrence Limit” for that excess layer in
Schedule A attached hereto, as respects loss or losses arising out of any one loss
occurrence; or
	 
	 	2.	 	The amount, shown as “Reinsurer’s Term Limit” for that excess layer in Schedule A
attached hereto, in all during the term of this Contract.





Article VIII — Premium





	A.	 	As premium for each excess layer of reinsurance coverage provided by this Contract, the
Company shall pay the Reinsurer the greater of the following:






	 	1.	 	The amount shown as “Minimum Premium” for that excess layer in Schedule A attached
hereto; or
	 
	 	2.	 	The sum of the Company’s aggregate total insured value and 25.0% of USIC of
Florida, Inc.’s aggregate total insured value for policies that include wind coverage in
force on September 30, 2007, multiplied by the percentage shown as “Adjustment Rate” for
that excess layer in Schedule A attached hereto.






	B.	 	The Company shall pay the Reinsurer a deposit premium for each excess layer of the amount,
shown as “Deposit Premium” for that excess layer in Schedule A attached hereto, in four equal
installments of the amount, shown as “Quarterly Deposit Premium” for that excess layer in
Schedule A attached hereto, on June 1, September 1 and December 1 of 2007 and March 1, 2008.






	C.	 	Within 45 days after the expiration of this Contract, the Company shall provide a report to
the Reinsurer setting forth the premium due hereunder for each excess layer, computed in
accordance with paragraph A above, and any additional premium due the Reinsurer or return
premium due the Company for each such excess layer shall be remitted promptly.






	D.	 	For each amount of limit reinstated for each excess layer in accordance with the
Reinstatement Article, the Company agrees to pay additional premium equal to the product of
the following:






	 	1.	 	The percentage of the occurrence limit for the excess layer reinstated (based
on the loss paid by the Reinsurer under that excess layer); times





	 	 	 
	07\M2U1138

Page 8

	 	






 









 







	 	2.	 	The final adjusted reinsurance premium, as calculated in accordance with
paragraph A above, for the excess layer reinstated for the term of this Contract
(exclusive of reinstatement premium).






	E.	 	Whenever the Company requests payment by the Reinsurer of any loss under any excess layer
hereunder, the Company shall submit a statement to the Reinsurer of reinstatement premium (if
any) due the Reinsurer for that excess layer. If the final adjusted reinsurance premium for
any excess layer for the term of this Contract has not been determined as of the date of any
such statement, the calculation of reinstatement premium due for that excess layer shall be
based on the annual deposit premium for that excess layer and shall be readjusted when the
final adjusted reinsurance premium for that excess layer for the term of this Contract has
been determined. Any reinstatement premium shown to be due the Reinsurer for any excess layer
as reflected by any such statement (less prior payments, if any, for that excess layer) shall
be payable by the Company concurrently with payment by the Reinsurer of the requested loss for
that excess layer. Any return reinstatement premium shown to be due the Company shall be
remitted by the Reinsurer as promptly as possible after receipt and verification of the
Company’s statement.






	F.	 	In the event a Subscribing Reinsurer’s participation in this Contract is terminated under the
provisions of paragraph B of the Commencement and Termination Article, no deposit premium
shall be due after the effective date of termination, the minimum premium shall be waived, and
the reinsurance premium and reinstatement premium, if applicable, will be calculated in
accordance with the following formulas:






	 	1.	 	Reinsurance premium shall be the number of days the Subscribing Reinsurer
participates on this Contract divided by the number of days of the original term of this
Contract and the quotient thereof shall be multiplied by the Subscribing Reinsurer’s
percentage share of the final adjusted premium reported in accordance with paragraph C
above.
	 
	 	2.	 	Reinstatement premium shall be the product of the percentage determined in
accordance with the provisions of subparagraph 1 of paragraph D above and the amount
determined in accordance with the provisions of subparagraph 1 of this paragraph F.
	 
	 	3.	 	In the event the incurred loss for any excess layer is greater than the sum of the
amounts from subparagraphs 1 and 2 of this paragraph F that are applicable to the same
excess layer, in lieu of the provisions of subparagraphs 1 and 2 of this paragraph F, the
Subscribing Reinsurer will receive premium equal to the lesser of:






	 	a.	 	An amount equal to the Subscribing Reinsurer’s percentage share of the
full reinsurance premium calculated in accordance with paragraph A (without regard
to the termination of the Subscribing Reinsurer’s share in accordance with the
provisions of paragraph B of the Commencement and Termination Article) plus any
reinstatement premium calculated in accordance with subparagraph 2 of this paragraph
F; or
	 
	 	b.	 	The Subscribing Reinsurer’s percentage share of the incurred loss for the
same excess layer.






	G.	 	“Incurred loss” as used herein shall mean the Company’s ceded ultimate net loss plus the
Company’s ceded outstanding loss and loss adjustment expense reserves (including





	 	 	 
	07\M2U1138

Page 9

	 	






 









 







incurred but not reported loss reserves for known loss occurrences established by the Company).



Article IX — Definitions





	A.	 	“Ultimate net loss” as used herein is defined as the sum or sums (including loss in excess of
policy limits, extra contractual obligations and loss adjustment expense, as hereinafter
defined) paid or payable by the Company in settlement of claims and in satisfaction of
judgments rendered on account of such claims, after deduction of all salvage, all recoveries
and all claims on inuring insurance or reinsurance, whether collectible or not. 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.






	B.	 	“Loss in excess of policy limits” and “extra contractual obligations” as used herein shall be
defined as follows:






	 	1.	 	“Loss in excess of policy limits” shall mean 90.0% of any amount paid or payable by
the Company in excess of its policy limits, but otherwise within the terms of its policy,
such loss in excess of the Company’s policy limits having been incurred because of, but
not limited to, failure by the Company to settle within the policy limits or by reason of
the Company’s 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 reinsured or in the preparation or prosecution of an appeal consequent upon
such an action.
	 
	 	2.	 	“Extra contractual obligations” shall mean 90.0% of any punitive, exemplary,
compensatory or consequential damages paid or payable by the Company, not covered by any
other provision of this Contract and which arise from the handling of any claim on
business subject to this Contract, such liabilities arising because of, but not limited
to, failure by the Company to settle within the policy limits or by reason of the
Company’s 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 reinsured or in the preparation or prosecution of an appeal consequent upon
such an action. An extra contractual obligation shall be deemed, in all circumstances,
to have occurred on the same date as the loss covered or alleged to be covered under the
policy.






Notwithstanding anything stated herein, the amount included in the ultimate net loss for any
one loss occurrence as respects loss in excess of policy limits and extra contractual
obligations shall not exceed 25.0% of the Company’s indemnity loss hereunder arising out of
that loss occurrence.




Notwithstanding anything stated herein, this Contract shall not apply to any loss in excess of
policy limits or any extra contractual obligation incurred by the Company as a result of any
fraudulent and/or criminal act by any officer or director of the Company acting individually or
collectively or in collusion with any individual or corporation or any other organization or
party involved in the presentation, defense or settlement of any claim covered hereunder.




Savings Clause (Applicable only if the Subscribing Reinsurer is domiciled in the State of New
York): In no event shall coverage be provided to the extent that such coverage is not



	 	 	 
	07\M2U1138

Page 10

	 	






 









 







permitted under New York law.




	C.	 	“Loss adjustment expense” as used herein shall mean expenses assignable to the investigation,
appraisal, adjustment, settlement, litigation, defense and/or appeal of specific claims,
regardless of how such expenses are classified for statutory reporting purposes. Loss
adjustment expense shall include, but not be limited to, declaratory judgments, interest on
judgments, expenses of outside adjusters, and a pro rata share of the salaries and expenses of
the Company’s field employees according to the time occupied adjusting such losses and
expenses of the Company’s officials incurred in connection with the losses, but shall not
include office expenses or salaries of the Company’s regular employees.





Article X — Loss Occurrence





	A.	 	The term “loss occurrence” shall mean the sum of all individual losses directly occasioned by
any one disaster, accident or loss or series of disasters, accidents or losses arising out of
one event which occurs within the area of one state of the United States and states contiguous
thereto and to one another. However, the duration and extent of any one “loss occurrence”
shall be limited to all individual losses sustained by the Company occurring during any period
of 168 consecutive hours arising out of and directly occasioned by the same event, except that
the term “loss occurrence” shall be further defined as follows:






	 	1.	 	As regards windstorm, hail, tornado, hurricane, cyclone, including ensuing collapse
and water damage, all individual losses sustained by the Company occurring during any
period of 72 consecutive hours arising out of and directly occasioned by the same event.
However, the event need not be limited to one state or states contiguous thereto.
	 
	 	2.	 	As regards riot, riot attending a strike, civil commotion, vandalism and malicious
mischief, all individual losses sustained by the Company occurring during any period of
72 consecutive hours within the area of one municipality or county and the municipalities
or counties contiguous thereto arising out of and directly occasioned by the same event.
The maximum duration of 72 consecutive hours may be extended in respect of individual
losses which occur beyond such 72 consecutive hours during the continued occupation of an
insured’s premises by strikers, provided such occupation commenced during the aforesaid
period.
	 
	 	3.	 	As regards earthquake (the epicenter of which need not necessarily be within the
territorial confines referred to in the introductory portion of this paragraph A) and
fire following directly occasioned by the earthquake, only those individual fire losses
which commence during the period of 168 consecutive hours may be included in the
Company’s “loss occurrence.”
	 
	 	4.	 	As regards “freeze,” only individual losses directly occasioned by collapse,
breakage of glass and water damage (caused by bursting frozen pipes and tanks) may be
included in the Company’s “loss occurrence.”
	 
	 	5.	 	As regards firestorms, brush fires, and any other fires or series of fires,
irrespective of origin (except as provided in subparagraphs 2 and 3 above), which spread
through trees, grassland or other vegetation, all individual losses sustained by the
Company which occur during any period of 168 consecutive hours within a 100-mile radius
of any fixed point selected by the Company may be included in the Company’s “loss





	 	 	 
	07\M2U1138

Page 11

	 	






 









 







occurrence.” However, an individual loss subject to this subparagraph cannot be included
in more than one “loss occurrence.”




	B.	 	For all those “loss occurrences,” other than those referred to in subparagraph 2 of paragraph
A above, the Company may choose the date and time when any such period of consecutive hours
commences, provided that it is not earlier than the date and time of the occurrence of the
first recorded individual loss sustained by the Company arising out of that disaster, accident
or loss, and provided that only one such period of 168 consecutive hours shall apply with
respect to one event, except for any “loss occurrence” referred to in subparagraph 1 of
paragraph A above where only one such period of 72 consecutive hours shall apply with respect
to one event, regardless of the duration of the event.






	C.	 	As respects those “loss occurrences” referred to in subparagraph 2 of paragraph A above, if
the disaster, accident or loss occasioned by the event is of greater duration than 72
consecutive hours, then the Company may divide that disaster, accident or loss into two or
more “loss occurrences,” provided no two periods overlap and no individual loss is included in
more than one such period and provided that no period commences earlier than the date and time
of the occurrence of the first recorded individual loss sustained by the Company arising out
of that disaster, accident or loss.






	D.	 	No individual losses occasioned by an event that would be covered by 72 hours clauses may be
included in any “loss occurrence” claimed under the 168 hours provision.





Article XI — Loss Notices and Settlements





	A.	 	Whenever losses sustained by the Company appear likely to result in a claim hereunder, the
Company shall notify the Reinsurer, and the Reinsurer shall have the right to participate in
the adjustment of such losses at its own expense.






	B.	 	All loss settlements made by the Company, provided they are within the terms of this Contract
and the terms of the Company’s policies (except as respects loss in excess of policy limits
and extra contractual obligations), shall be binding upon the Reinsurer, and the Reinsurer
agrees to pay all amounts for which it may be liable upon receipt of reasonable evidence of
the amount paid (or scheduled to be paid within 14 days) by the Company.





Article XII — Salvage and Subrogation



The Reinsurer shall be credited with salvage (i.e., reimbursement obtained or recovery made by the
Company, less the actual cost, excluding salaries of officials and employees of the Company and
sums paid to attorneys as retainer, of obtaining such reimbursement or making such recovery) on
account of claims and settlements involving reinsurance hereunder. Salvage 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 hereby agrees to enforce its rights to salvage or subrogation relating to any loss, a part
of which loss was sustained by the Reinsurer, and to prosecute all claims arising out of such
rights.




	 	 	 
	07\M2U1138

Page 12

	 	







 









 








Article XIII — Florida Hurricane Catastrophe Fund





	A.	 	The Company shall provisionally purchase from the Florida Hurricane Catastrophe Fund (FHCF)
the following limit and retention:






	 	1.	 	As respects Liberty American Insurance Company, 90.0% of $5,521,302 excess of
$1,086,017; and
	 
	 	2.	 	As respects Liberty American Select Insurance Company, 90.0% of $75,752,188 excess
of $14,900,133.






The provisional limits and retentions detailed above may increase or decrease depending on the
Company’s actual written premium subject to the FHCF reimbursement coverage during the term of
this Contract. The Company and the Reinsurer agree to accept and be bound by the final
determination of the FHCF.




	B.	 	Any loss reimbursement paid or payable to the Company under the coverage layers provided by
the FHCF as a result of loss occurrences commencing during the term of this Contract shall
inure to the benefit of this Contract. Further, any FHCF loss reimbursement shall be deemed
to be paid to the Company in accordance with the reimbursement contract between the Company
and the State Board of Administration of the State of Florida at the full payout level set
forth therein and will be deemed not to be reduced by any reduction or exhaustion of the
FHCF’s claims paying capacity.






	C.	 	Prior to the determination of the Company’s FHCF retention and payout, if any, under the
coverage layer provided by the reimbursement contract between the Company and the State Board
of Administration of the State of Florida, the Reinsurer’s liability hereunder will be
determined provisionally based on the projected payout, determined in accordance with the
provisions of the reimbursement contract. Following the FHCF’s final determination of the
payout under the coverage layer provided by the reimbursement contract, the ultimate net loss
under this Contract will be recalculated. If, as a result of such calculation, the loss to
the Reinsurer under any excess layer of this Contract in any one loss occurrence is less than
the amount previously paid by the Reinsurer under that excess layer, the Company shall
promptly remit the difference to the Reinsurer. If the loss to the Reinsurer under any excess
layer in any one loss occurrence is greater than the amount previously paid by the Reinsurer,
the Reinsurer shall promptly remit the difference to the Company.






	D.	 	If an FHCF reimbursement amount is based on the Company’s losses in more than one loss
occurrence commencing during the term of this Contract, the total such FHCF reimbursement
received by the Company shall be allocated to individual loss occurrences in chronological
order of the dates such loss occurrences commence, beginning with the first such loss
occurrence commencing during the term of this Contract, provided that:






	 	1.	 	The portion of the total FHCF reimbursement amount to be allocated by the Company
to any individual loss occurrence shall be equal to the lesser of (a) the amount of such
FHCF reimbursement to which the Company would be entitled for that loss occurrence alone,
or (b) the remaining such FHCF reimbursement which has not been allocated by the Company
to prior loss occurrences; and
	 
	 	2.	 	The total amount allocated by the Company to all such loss occurrences shall be
equal to the total FHCF reimbursement received by the Company for such loss occurrences.





	 	 	 
	07\M2U1138

Page 13

	 	






 









 






Article XIV — Late Payments





	A.	 	The provisions of this Article shall not be implemented unless specifically invoked, in
writing, by one of the parties to this Contract.






	B.	 	In the event any premium, loss or other payment due either party is not received by the
intermediary named in the Intermediary Article (BRMA 23A) (hereinafter referred to as the
“Intermediary”) by the payment due date, the party to which 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.	 	1/365ths of the six-month United States Treasury Bill rate, as quoted in The Wall
Street Journal on the first business day of the month for which the calculation is made;
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.




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






	 	1.	 	As respects the payment of routine deposits and premiums due the Reinsurer, the due
date shall be as provided for in the applicable section of this Contract. In the event a
due date is not specifically stated for a given payment, it shall be deemed due 30 days
after the date of transmittal by the Intermediary of the initial billing for each such
payment.
	 
	 	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 paragraph B 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 above, the due date shall be as provided for in the
applicable section of this Contract. In the event a due date is not specifically stated
for a given payment, it shall be deemed due 10 business days following transmittal of
written notification that the provisions of this Article have been invoked.






For purposes of interest calculations only, amounts due hereunder shall be deemed paid upon
receipt by the Intermediary.



	 	 	 
	07\M2U1138

Page 14

	 	






 









 






	D.	 	Nothing herein shall be construed as limiting or prohibiting a Subscribing Reinsurer from
contesting the validity of any claim, or from participating in the defense of any claim or
suit, or prohibiting either party from contesting the validity of any payment or from
initiating any arbitration or other proceeding in accordance with the provisions of this
Contract. If the debtor party prevails in an arbitration or other proceeding, then any
interest penalties due hereunder on the amount in dispute shall be null and void. If the
debtor party loses in such proceeding, then the interest penalty on the amount determined to
be due hereunder shall be calculated in accordance with the provisions set forth above unless
otherwise determined by such proceedings. If a debtor party advances payment of any amount it
is contesting, and proves to be correct in its contestation, either in whole or in part, the
other party shall reimburse the debtor party for any such excess payment made plus interest on
the excess amount calculated in accordance with this Article.






	E.	 	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.





Article XV — Offset (BRMA 36D)



The Company and the Reinsurer, each at its option, may offset any balance or balances, whether on
account of premiums, claims and losses, loss expenses or salvages due from one party to the other
under this Contract; provided, however, that in the event of the insolvency of a party hereto,
offsets shall only be allowed in accordance with applicable statutes and regulations.




Article XVI — Access to Records (BRMA 1D)



The Reinsurer or its designated representatives shall have access at any reasonable time to all
records of the Company which pertain in any way to this reinsurance.




Article XVII — Liability of the Reinsurer





	A.	 	The liability of the Reinsurer shall follow that of the Company in every case and be subject
in all respects to all the general and specific stipulations, clauses, waivers and
modifications of the Company’s policies and any endorsements thereon. However, in no event
shall this be construed in any way to provide coverage outside the terms and conditions set
forth in this Contract.






	B.	 	Nothing herein shall in any manner create any obligations or establish any rights against the
Reinsurer in favor of any third party or any persons not parties to this Contract.





Article XVIII — Net Retained Lines (BRMA 32B)





	A.	 	This Contract applies only to that portion of any policy which the Company retains net for
its own account, 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.





	 	 	 
	07\M2U1138

Page 15

	 	






 









 







	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 XIX — Errors and Omissions (BRMA 14F)



Inadvertent delays, errors or omissions made in connection with this Contract or any transaction
hereunder shall not relieve either party from any liability which would have attached had such
delay, error or omission not occurred, provided always that such error or omission is rectified as
soon as possible after discovery.




Article XX — Currency (BRMA 12A)





	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 XXI — Taxes (BRMA 50B)



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 or the District of Columbia.




Article XXII — Federal Excise Tax





	A.	 	The 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 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.





Article XXIII — Funding Requirements





	A.	 	The Reinsurer agrees to fund, within 30 days of the Company’s request, subject to receipt of
satisfactory information from the Company, its share of the unearned portion of any deposit
premium (determined as of the date that this paragraph A first applies to the





	 	 	 
	07\M2U1138

Page 16

	 	






 









 







Reinsurer according to the provisions of subparagraph (a) and/or (b) below) and the Company’s
ceded outstanding loss and loss adjustment expense reserves (including incurred but not
reported loss reserves for known loss occurrences established by the Company) by:




	 	1.	 	Clean, irrevocable and unconditional letters of credit issued and confirmed, if
confirmation is required by the insurance regulatory authorities involved, by a bank or
banks meeting the NAIC Securities Valuation Office credit standards for issuers of
letters of credit and acceptable to said insurance regulatory authorities; and/or
	 
	 	2.	 	Escrow accounts for the benefit of the Company; and/or
	 
	 	3.	 	Cash advances;






if the Reinsurer:




	 	a.	 	Is unauthorized in any state of the United States of America or the
District of Columbia having jurisdiction over the Company and if, without such
funding, a penalty would accrue to the Company on any financial statement, including
but not limited to quarterly filings, it is required to file with the insurance
regulatory authorities involved; or
	 
	 	b.	 	Has an A.M. Best’s rating below A- (inclusive of “Not Rated” ratings)
and/or a Standard & Poor’s rating below BBB+. However, this funding requirement
will not apply to authorized reinsurers who at inception are rated A or higher by
A.M. Best and have a policyholders’ surplus of $2,000,000,000 or more.






The Reinsurer, at its sole option, may fund in other than cash if its method of funding is
acceptable to the Company and to the insurance regulatory authorities involved.




For the purpose of this Contract, the Lloyd’s U.S. Credit for Reinsurance Trust Fund shall be
considered an acceptable funding instrument.




	B.	 	With regard to funding in whole or in part by letters of credit, it is agreed that each
letter of credit will be in a form acceptable to insurance regulatory authorities involved,
will be issued for a term of at least one year and will include an “evergreen clause,” which
automatically extends the term for at least one additional year at each expiration date unless
written notice of non-renewal is given to the Company not less than 60 days prior to said
expiration date or longer where required by insurance regulatory authorities. The Company and
the Reinsurer further agree, notwithstanding anything to the contrary in this Contract, that
said letters of credit may be drawn upon by the Company or its successors in interest at any
time, without diminution because of the insolvency of the Company or the Reinsurer, but only
for one or more of the following purposes:






	 	1.	 	To reimburse itself for the Reinsurer’s share of losses and/or loss adjustment
expense paid under the terms of policies reinsured hereunder, unless paid in cash by the
Reinsurer;
	 
	 	2.	 	To reimburse itself for the Reinsurer’s share of any other amounts claimed to be
due hereunder, unless paid in cash by the Reinsurer;





	 	 	 
	07\M2U1138

Page 17

	 	






 









 







	 	3.	 	To fund a cash account in an amount equal to the Reinsurer’s portion of the
unearned deposit premium and/or the Reinsurer’s share of ceded outstanding loss and loss
adjustment expense reserves (including incurred but not reported loss reserves for known
loss occurrences established by the Company) funded by means of a letter of credit which
is under non-renewal notice, if said letter of credit has not been renewed or replaced by
the Reinsurer 10 days prior to its expiration date;
	 
	 	4.	 	To refund to the Reinsurer any sum in excess of the actual amount required to fund
the Reinsurer’s portion of the unearned deposit premium and/or the Reinsurer’s share of
the Company’s ceded outstanding loss and loss adjustment expense reserves (including
incurred but not reported loss reserves for known loss occurrences established by the
Company), if so requested by the Reinsurer; and
	 
	 	5.	 	To reimburse itself for the Reinsurer’s portion of the unearned deposit premium
paid to the Reinsurer.






In the event the amount drawn by the Company on any letter of credit is in excess of the actual
amount required for B(1) or B(3), or in the case of B(2), the actual amount determined to be
due, the Company shall promptly return to the Reinsurer the excess amount so drawn.



Article XXIV — Insolvency





	A.	 	In the event of the insolvency of one or more of the reinsured companies, this reinsurance
shall be payable directly to the company or to its liquidator, receiver, conservator or
statutory successor 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 pro rata
share of the benefit which may accrue to the company solely as a result of the defense
undertaken by the Reinsurer.






	B.	 	Where two or more 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 understood and agreed that, in the event of the insolvency of one or more of
the reinsured companies, the reinsurance under this Contract shall be payable directly by the
Reinsurer to the company or to its liquidator, receiver 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





	 	 	 
	07\M2U1138

Page 18

	 	






 









 







or insureds has assumed such policy obligations of the company as direct obligations of the
Reinsurer to the payees under such policies and in substitution for the obligations of the
company to such payees.



Article XXV — Arbitration





	A.	 	As a condition precedent to any right of action hereunder, any dispute or difference between
the Company and any Reinsurer relating to the interpretation or performance of this Contract,
including its formation or validity, or any transaction under this Contract, whether arising
before or after termination, shall be submitted to arbitration.






	B.	 	If more than one reinsurer is involved in the same dispute, all such reinsurers shall
constitute and act as one party for purposes of this Article provided that communication shall
be made by the Company to each of the reinsurers constituting the one party, and provided,
however, that nothing therein shall impair the rights of such reinsurers to assert several,
rather than joint, defenses or claims, nor be construed as changing the liability of the
Reinsurer under the terms of this Contract from several to joint.






	C.	 	Upon written request of any party, each party shall choose an arbitrator and the two chosen
shall select a third arbitrator. If either party refuses or neglects to appoint an arbitrator
within 30 days after receipt of the written request for arbitration, the requesting party may
appoint a second arbitrator. If the two arbitrators fail to agree on the selection of a 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 after it has been requested
to do so, either party may request a justice of a court of general jurisdiction of the state
in which the arbitration is to be held to appoint the third arbitrator. All arbitrators shall
be active or retired officers of insurance or reinsurance companies, or Lloyd’s London
Underwriters, and disinterested in the outcome of the arbitration. Each party shall submit
its case to the arbitrators within 30 days of the appointment of the third arbitrator.






	D.	 	The parties hereby waive all objections to the method of selection of the arbitrators, it
being the intention of both sides that all the arbitrators be chosen from those submitted by
the parties.






	E.	 	The arbitrators shall have the power to determine all procedural rules for the holding of the
arbitration including but not limited to inspection of documents, examination of witnesses and
any other matter relating to the conduct of the arbitration. The arbitrators shall interpret
this Contract as an honorable engagement and not as merely a legal obligation; they are
relieved of all judicial formalities and may abstain from following the strict rules of law.
The arbitrators may award interest and costs. Each party shall bear the expense of its own
arbitrator and shall share equally with the other party the expenses of the third arbitrator
and of the arbitration.






	F.	 	The decision in writing of the majority of the arbitrators shall be final and binding upon
both parties. Judgment may be entered upon the final decision of the arbitrators in any court
having jurisdiction. The arbitration shall take place in Pinellas Park, Florida, unless
otherwise mutually agreed between the Company and the Reinsurer.






	G.	 	This Article shall remain in full force and effect in the event any other provision of this
Contract shall be found invalid or non-binding.





	 	 	 
	07\M2U1138

Page 19

	 	






 









 







	H.	 	All time limitations stated in this Article may be amended by mutual consent of the parties,
and will be amended automatically to the extent made necessary by any circumstances beyond the
control of the parties.





Article XXVI — Service of Suit



(Applicable if the 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 conflict with or override the
parties obligations to arbitrate their disputes in accordance with the Arbitration Article.)





	A.	 	It is agreed that in the event the Reinsurer fails to pay any amount claimed to be due
hereunder, the Reinsurer, at the request of the Company, will 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 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.






	B.	 	Further, pursuant to any statute of any state, territory or district of the United States
which makes provision therefor, the Reinsurer hereby designates the party named in its
Interests and Liabilities Agreement, or if no party is named therein, 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
may be served any lawful process in any action, suit or proceeding instituted by or on behalf
of the Company or any beneficiary hereunder arising out of this Contract.





Article XXVII — Agency Agreement



If more than one reinsured company is named as a party to this Contract, the first named company
shall 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 XXVIII — Governing Law



This Contract shall be governed as to performance, administration and interpretation by the laws of
the State of Florida exclusive of the 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 the states shall
apply.




Article XXIX — Confidentiality



The Reinsurer, except with the express prior written consent of the Company, shall not directly or
indirectly communicate, disclose or divulge to any unaffiliated third party any knowledge or
information that may be acquired either directly or indirectly as a result of the inspection of the
Company’s books, records and papers. The restrictions as outlined in this Article shall not apply




	 	 	 
	07\M2U1138

Page 20

	 	








 









 







to communication or disclosures that the Reinsurer is required to make to its statutory auditors,
retrocessionaires, legal counsel, arbitrators involved in any arbitration procedures under this
Contract or disclosures required upon subpoena or other duly-issued order of a court or other
governmental agency or regulatory authority.




Article XXX — Severability



If any provision of this Contract should be invalid under applicable laws, the latter shall control
but only to the extent of the conflict without affecting the remaining provisions of this Contract.




Article XXXI — Intermediary (BRMA 23A)



Benfield Inc. is hereby recognized as the Intermediary negotiating this Contract for all business
hereunder. All communications (including but not limited to notices, statements, premium, return
premium, commissions, taxes, losses, loss adjustment expense, salvages and loss settlements)
relating thereto shall be transmitted to the Company or the Reinsurer through Benfield Inc.
Payments by the Company to the Intermediary shall be deemed to constitute payment to the Reinsurer.
Payments by the Reinsurer to the Intermediary shall be deemed to constitute payment to the Company
only to the extent that such payments are actually received by the Company.



In Witness Whereof, the Company by its duly authorized representative has executed this Contract as
of the date undermentioned at:



Pinellas Park, Florida, this 16th day of July in the year 2007.




	 	 	 	 	 
	 	 	 
	 	Liberty American Insurance Group, Inc.
 (for and on behalf of the "Company") 

	 
	 	                        /s/ T. Bruce Meyer	 
	 	T. Bruce Meyer, Pres. & CEO 

(Print name and title)

 	 
	 	 	 
	 	 	 
	 	 	 
	 



	 	 	 
	07\M2U1138

Page 21

	 	







 











 





Schedule A




Florida Only Excess Catastrophe Reinsurance Contract

Effective: June 1, 2007




issued to




Liberty American Insurance Company

Pinellas Park, Florida

Liberty American Select Insurance Company

Pinellas Park, Florida

and

any and all other companies which are now

or may hereafter become member companies of

Liberty American Insurance Group, Inc.




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	First	 	Second	 	Third	 	Fourth
	 	 	Excess	 	Excess	 	Excess	 	Excess
	Company’s Retention
	 	$	3,500,000	 	 	$	7,700,000	 	 	$	16,000,000	 	 	$	24,000,000	 
	Reinsurer’s Per
Occurrence Limit
	 	$	4,200,000	 	 	$	8,300,000	 	 	$	8,000,000	 	 	$	30,000,000	 
	Reinsurer’s Term Limit
	 	$	8,400,000	 	 	$	16,600,000	 	 	$	16,000,000	 	 	$	60,000,000	 
	Minimum Premium
	 	$	1,599,360	 	 	$	2,390,400	 	 	$	1,280,000	 	 	$	2,640,000	 
	Adjustment Rate
	 	 	0.031565	%	 	 	0.047178	%	 	 	0.025262	%	 	 	0.052104	%
	Deposit Premium
	 	$	1,999,200	 	 	$	2,988,000	 	 	$	1,600,000	 	 	$	3,300,000	 
	Quarterly Deposit Premium
	 	$	499,800	 	 	$	747,000	 	 	$	400,000	 	 	$	825,000	 





The figures listed above for each excess layer shall apply to each Subscribing Reinsurer in the
percentage share for that excess layer as expressed in its Interests and Liabilities Agreement
attached hereto.




			
	 	 	 
	07\M2U1138

Schedule A
	 	






 









 






Nuclear Incident Exclusion Clause — Physical Damage — Reinsurance (U.S.A.)





	1.	 	This Reinsurance does not cover any loss or liability accruing to the Reassured, directly or
indirectly and whether as Insurer or Reinsurer, from any Pool of Insurers or Reinsurers formed
for the purpose of covering Atomic or Nuclear Energy risks.
	 
	2.	 	Without in any way restricting the operation of paragraph (1) of this Clause, this
Reinsurance does not cover any loss or liability accruing to the Reassured, directly or
indirectly and whether as Insurer or Reinsurer, from any insurance against Physical Damage
(including business interruption or consequential loss arising out of such Physical Damage)
to:






	 	I.	 	Nuclear reactor power plants including all auxiliary property on the site, or
	 
	 	II.	 	Any other nuclear reactor installation, including laboratories
handling radioactive materials in connection with reactor
installations, and “critical facilities” as such, or
	 
	 	III.	 	Installations for fabricating complete fuel elements or for
processing substantial quantities of “special nuclear material,” and
for reprocessing, salvaging, chemically separating, storing or
disposing of “spent” nuclear fuel or waste materials, or
	 
	 	IV.	 	Installations other than those listed in paragraph (2) III above
using substantial quantities of radioactive isotopes or other
products of nuclear fission.






	3.	 	Without in any way restricting the operations of paragraphs (1) and (2) hereof, this
Reinsurance does not cover any loss or liability by radioactive contamination accruing to the
Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any insurance on
property which is on the same site as a nuclear reactor power plant or other nuclear
installation and which normally would be insured therewith except that this paragraph (3)
shall not operate






	 	(a)	 	where Reassured does not have knowledge of such nuclear reactor power plant or
nuclear installation, or
	 
	 	(b)	 	where said insurance contains a provision excluding coverage for damage to property
caused by or resulting from radioactive contamination, however caused. However on and
after 1st January 1960 this sub-paragraph (b) shall only apply provided the said
radioactive contamination exclusion provision has been approved by the Governmental
Authority having jurisdiction thereof.






	4.	 	Without in any way restricting the operations of paragraphs (1), (2) and (3) hereof, this
Reinsurance does not cover any loss or liability by radioactive contamination accruing to the
Reassured, directly or indirectly, and whether as Insurer or Reinsurer, when such radioactive
contamination is a named hazard specifically insured against.
	 
	5.	 	It is understood and agreed that this Clause shall not extend to risks using radioactive
isotopes in any form where the nuclear exposure is not considered by the Reassured to be the
primary hazard.
	 
	6.	 	The term “special nuclear material” shall have the meaning given it in the Atomic Energy Act
of 1954 or by any law amendatory thereof.
	 
	7.	 	Reassured to be sole judge of what constitutes:






	 	(a)	 	substantial quantities, and
	 
	 	(b)	 	the extent of installation, plant or site.




Note.-Without in any way restricting the operation of paragraph (1) hereof, it is understood and
agreed that





	 	(a)	 	all policies issued by the Reassured on or before 31st December 1957 shall be free
from the application of the other provisions of this Clause until expiry date or 31st
December 1960 whichever first occurs whereupon all the provisions of this Clause shall
apply.
	 
	 	(b)	 	with respect to any risk located in Canada policies issued by the Reassured on or
before 31st December 1958 shall be free from the application of the other provisions of
this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all
the provisions of this Clause shall apply.





12/12/57

N.M.A. 1119

BRMA 35B



07\M2U1138





 









 








ELECTRONIC DATA ENDORSEMENT B





	1.	 	Electronic Data Exclusion
	 
	 	 	Notwithstanding any provision to the contrary within the Contract or any endorsement thereto,
it is understood and agreed as follows:-






	 	a)	 	This Contract does not insure loss, damage, destruction, distortion, erasure,
corruption or alteration of ELECTRONIC DATA from any cause whatsoever (including but not
limited to COMPUTER VIRUS) or loss of use, reduction in functionality, cost, expense of
whatsoever nature resulting therefrom, regardless of any other cause or event contributing
concurrently or in any other sequence to the loss.
	 
	 	 	 	ELECTRONIC DATA means facts, concepts and information converted to a form useable for
communications, interpretation or processing by electronic and electromechanical data
processing or electronically controlled equipment and includes programs, software and
other coded instructions for the processing and manipulation of data or the direction and
manipulation of such equipment.
	 
	 	 	 	COMPUTER VIRUS means a set of corrupting, harmful or otherwise unauthorized instructions
or code including a set of maliciously introduced unauthorized instructions or code,
programmatic or otherwise, that propagate themselves through a computer system or network
of whatsoever nature. COMPUTER VIRUS includes but is not limited to “Trojan Horses,”
“worms” and “time or logic bombs.”
	 
	 	b)	 	However, in the event that a peril listed below results from any of the matters
described in paragraph a) above, this Contract, subject to all its terms, conditions and
exclusions, will cover physical damage occurring during the Contract period to property
insured by this Contract directly caused by such listed peril.
	 
	 	 	 	Listed Perils
	 
	 	 	 	Fire

Explosion






	2.	 	Electronic Data Processing Media Valuation
	 
	 	 	Notwithstanding any provision to the contrary within the Contract or any endorsement thereto,
it is understood and agreed as follows:-
	 
	 	 	Should electronic data processing media insured by this Contract suffer physical loss or damage
insured by this Contract, then the basis of valuation shall be the cost of the blank media plus
the costs of copying the ELECTRONIC DATA from back-up or from originals of a previous
generation. These costs will not include research and engineering nor any costs of recreating,
gathering or assembling such ELECTRONIC DATA. If the media is not repaired, replaced or
restored the basis of valuation shall be the cost of the blank media. However this Contract
does not insure any amount pertaining to the value of such ELECTRONIC DATA to the Assured or
any other party, even if such ELECTRONIC DATA cannot be recreated, gathered or assembled.




NMA 2915 (25.1.01)




			
	 	 	 
	07IL\M2U1138

Page 1 of 2
	 	








 









 








Florida Only Excess Catastrophe Reinsurance Contract

Effective: June 1, 2007




issued to




Liberty American Insurance Company

Pinellas Park, Florida

Liberty American Select Insurance Company

Pinellas Park, Florida

and

any and all other companies which are now

or may hereafter become member companies of

Liberty American Insurance Group, Inc.




First Excess Catastrophe Reinsurance




	 	 	 	 	 
	Reinsurers	 	Participations
	 
	 	 	 	 
	Ariel Reinsurance Company Limited
	 	 	10.00	%
	DaVinci Reinsurance Ltd.
	 	 	17.50	 
	Everest Reinsurance Company
	 	 	5.00	 
	Flagstone Reinsurance Limited
	 	 	30.00	 
	New Castle Reinsurance Company Ltd.
	 	 	8.00	 
	Renaissance Reinsurance, Ltd.
	 	 	17.50	 
	Transatlantic Reinsurance Company
	 	 	5.00	 
	 
	 	 	 	 
	Through Benfield Limited
	 	 	 	 
	Lloyd’s Underwriters Per Signing Schedule
	 	 	7.00	 
	 
	 	 	 	 
	Total
	 	 	100.00	%






Second Excess Catastrophe Reinsurance




	 	 	 	 	 
	Reinsurers	 	Participations
	 
	 	 	 	 
	Ariel Reinsurance Company Limited
	 	 	10.00	%
	Catlin Insurance Company Ltd.
	 	 	5.50	 
	DaVinci Reinsurance Ltd.
	 	 	10.00	 
	Flagstone Reinsurance Limited
	 	 	30.00	 
	Harbor Point Re Limited
	 	 	9.00	 
	New Castle Reinsurance Company Ltd.
	 	 	8.00	 
	Renaissance Reinsurance, Ltd.
	 	 	10.00	 
	Swiss Reinsurance America Corporation
	 	 	7.50	 
	Transatlantic Reinsurance Company
	 	 	5.00	 
	 
	 	 	 	 
	Through Benfield Limited
	 	 	 	 
	Lloyd’s Underwriters Per Signing Schedule
	 	 	5.00	 
	 
	 	 	 	 
	Total
	 	 	100.00	%






			
	 	 	 
	07IL\M2U1138

Page 2 of 2
	 	






 









 






Third Excess Catastrophe Reinsurance




	 	 	 	 	 
	Reinsurers	 	Participations
	 
	 	 	 	 
	Ariel Reinsurance Company Limited
	 	 	10.00	%
	Aspen Insurance Limited
	 	 	10.00	 
	Catlin Insurance Company Ltd.
	 	 	5.50	 
	Flagstone Reinsurance Limited
	 	 	25.00	 
	Hannover Re (Bermuda), Ltd.
	 	 	8.00	 
	Harbor Point Re Limited
	 	 	2.50	 
	Montpelier Reinsurance Limited
	 	 	7.50	 
	New Castle Reinsurance Company Ltd.
	 	 	4.00	 
	Swiss Reinsurance America Corporation
	 	 	7.50	 
	 
	 	 	 	 
	Through Benfield Limited
	 	 	 	 
	Lloyd’s Underwriters Per Signing Schedule
	 	 	20.00	 
	 
	 	 	 	 
	Total
	 	 	100.00	%






Fourth Excess Catastrophe Reinsurance




	 	 	 	 	 
	Reinsurers	 	Participations
	 
	 	 	 	 
	Ariel Reinsurance Company Limited
	 	 	7.00	%
	Catlin Insurance Company Ltd.
	 	 	4.50	 
	DaVinci Reinsurance Ltd.
	 	 	12.50	 
	Flagstone Reinsurance Limited
	 	 	7.50	 
	Hannover Re (Bermuda), Ltd.
	 	 	6.35	 
	Harbor Point Re Limited
	 	 	6.50	 
	Montpelier Reinsurance Limited
	 	 	7.50	 
	New Castle Reinsurance Company Ltd.
	 	 	2.00	 
	Renaissance Reinsurance, Ltd.
	 	 	12.50	 
	Swiss Reinsurance America Corporation
	 	 	7.50	 
	Transatlantic Reinsurance Company
	 	 	10.00	 
	XL Re Ltd
	 	 	5.00	 
	 
	 	 	 	 
	Through Benfield Limited
	 	 	 	 
	Lloyd’s Underwriters Per Signing Schedule
	 	 	11.15	 
	 
	 	 	 	 
	Total
	 	 	100.00	%






			
	 	 	 
	07IL\M2U1138

Page 2 of 2
	 	






 









 






Interests and Liabilities Agreement




of




Ariel Reinsurance Company Ltd.

Hamilton, Bermuda

(hereinafter referred to as the “Subscribing Reinsurer”)




with respect to the




Florida Only Excess Catastrophe Reinsurance Contract

Effective: June 1, 2007




issued to and duly executed by




Liberty American Insurance Company

Pinellas Park, Florida

Liberty American Select Insurance Company

Pinellas Park, Florida

and

any and all other companies which are now

or may hereafter become member companies of

Liberty American Insurance Group, Inc.



The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:



10.00% of the First Excess Catastrophe Reinsurance

10.00% of the Second Excess Catastrophe Reinsurance

10.00% of the Third Excess Catastrophe Reinsurance

  7.00% of the Fourth Excess Catastrophe Reinsurance



This Agreement shall become effective at 12:01 a.m., Local Standard Time at the location where the
loss occurrence commences, June 1, 2007, and shall continue in force until 12:01 a.m., Local
Standard Time at the location where the loss occurrence commences, June 1, 2008, unless earlier
terminated in accordance with the provisions of the attached Contract.



The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.



In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed
this Agreement as of the date undermentioned at:



Hamilton, Bermuda, this 17th day of July in the year
2007.




	 	 	 	 	 
	 	Ariel Reinsurance Company Ltd. 	 
	 	 	 
	 	By 	/s/ Stephen Velotti
 	 
	 	 	Stephen Velotti, SVP 	 
	 



			
	 	 	 
	07IL\M2U1138
	 	






 









 






Interests and Liabilities Agreement




of




Aspen Insurance Limited

Hamilton, Bermuda

(hereinafter referred to as the “Subscribing Reinsurer”)




with respect to the




Florida Only Excess Catastrophe Reinsurance Contract

Effective: June 1, 2007




issued to and duly executed by




Liberty American Insurance Company

Pinellas Park, Florida

Liberty American Select Insurance Company

Pinellas Park, Florida

and

any and all other companies which are now

or may hereafter become member companies of

Liberty American Insurance Group, Inc.



The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:



      0% of the First Excess Catastrophe Reinsurance

      0% of the Second Excess Catastrophe Reinsurance

10.00% of the Third Excess Catastrophe Reinsurance

      0% of the Fourth Excess Catastrophe Reinsurance



This Agreement shall become effective at 12:01 a.m., Local Standard Time at the location where the
loss occurrence commences, June 1, 2007, and shall continue in force until 12:01 a.m., Local
Standard Time at the location where the loss occurrence commences, June 1, 2008, unless earlier
terminated in accordance with the provisions of the attached Contract.



The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.



In Witness Whereof, the Subscribing Reinsurer by its duly authorized representat  ive has executed
this Agreement as of the date undermentioned at:



Hamilton, Bermuda, this 17th day of July in the year
2007.




	 	 	 	 	 
	 	Aspen Insurance Limited 

	 
	 	 	 
	 	By 	/s/ RP Vacher
 	 
	 	 	RP Vacher, U/W 	 


 
			
	 	 	 
	07IL\M2U1138


	 	






 









 






	 	 	 	 	 



Interests and Liabilities Agreement




of




Catlin Insurance Company Ltd.

Hamilton, Bermuda

(hereinafter referred to as the “Subscribing Reinsurer”)




with respect to the




Florida Only Excess Catastrophe Reinsurance Contract

Effective: June 1, 2007




issued to and duly executed by




Liberty American Insurance Company

Pinellas Park, Florida

Liberty American Select Insurance Company

Pinellas Park, Florida

and

any and all other companies which are now

or may hereafter become member companies of

Liberty American Insurance Group, Inc.



The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:



    0% of the First Excess Catastrophe Reinsurance

5.50% of the Second Excess Catastrophe Reinsurance

5.50% of the Third Excess Catastrophe Reinsurance

4.50% of the Fourth Excess Catastrophe Reinsurance



This Agreement shall become effective at 12:01 a.m., Local Standard Time at the location where the
loss occurrence commences, June 1, 2007, and shall continue in force until 12:01 a.m., Local
Standard Time at the location where the loss occurrence commences, June 1, 2008, unless earlier
terminated in accordance with the provisions of the attached Contract.



The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.



In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed
this Agreement as of the date undermentioned at:



Hamilton, Bermuda, this 23rd day of July in the year
2007.




	 	 	 	 	 
	 	Catlin Insurance Company Ltd.
 	 
	 	 	 
	 	By 	/s/ Tom Sperryn-Jones
 	 
	 	 	Tom Sperryn-Jones, Underwriter 	 




 
			
	 	 	 
	07IL\M2U1138


	 	






 









 






	 	 	 	 	 



Interests and Liabilities Agreement




of




DaVinci Reinsurance Ltd.

Hamilton, Bermuda

(hereinafter referred to as the “Subscribing Reinsurer”)




with respect to the




Florida Only Excess Catastrophe Reinsurance Contract

Effective: June 1, 2007




issued to and duly executed by




Liberty American Insurance Company

Pinellas Park, Florida

Liberty American Select Insurance Company

Pinellas Park, Florida

and

any and all other companies which are now

or may hereafter become member companies of

Liberty American Insurance Group, Inc.



The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:



17.50% of the First Excess Catastrophe Reinsurance

10.00% of the Second Excess Catastrophe Reinsurance

      0% of the Third Excess Catastrophe Reinsurance

12.50% of the Fourth Excess Catastrophe Reinsurance



This Agreement shall become effective at 12:01 a.m., Local Standard Time at the location where the
loss occurrence commences, June 1, 2007, and shall continue in force until 12:01 a.m., Local
Standard Time at the location where the loss occurrence commences, June 1, 2008, unless earlier
terminated in accordance with the provisions of the attached Contract.



The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.



In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed
this Agreement as of the date undermentioned at:



Hamilton, Bermuda, this 9th day of August in the year
2007.




	 	 	 	 	 
	 	DaVinci Reinsurance Ltd.
 	 
	 	 	 
	 	By 	/s/ Rebecca Roberts
 	 
	 	 	Rebecca Roberts, AVP 	 
	 




 
			
	 	 	 
	07IL\M2U1138


	 	






 









 








Interests and Liabilities Agreement




of




Everest Reinsurance Company

A Delaware Corporation

(hereinafter referred to as the “Subscribing Reinsurer”)




with respect to the




Florida Only Excess Catastrophe Reinsurance Contract

Effective: June 1, 2007




issued to and duly executed by




Liberty American Insurance Company

Pinellas Park, Florida

Liberty American Select Insurance Company

Pinellas Park, Florida

and

any and all other companies which are now

or may hereafter become member companies of

Liberty American Insurance Group, Inc.



The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:



5.00% of the First Excess Catastrophe Reinsurance

     0% of the Second Excess Catastrophe Reinsurance

     0% of the Third Excess Catastrophe Reinsurance

     0% of the Fourth Excess Catastrophe Reinsurance



This Agreement shall become effective at 12:01 a.m., Local Standard Time at the location where the
loss occurrence commences, June 1, 2007, and shall continue in force until 12:01 a.m., Local
Standard Time at the location where the loss occurrence commences, June 1, 2008, unless earlier
terminated in accordance with the provisions of the attached Contract.



The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.



In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed
this Agreement as of the date undermentioned at:



Liberty Corner, New Jersey, this 8th day of August in the year
2007.




	 	 	 	 	 
	 	Everest Reinsurance Company
 	 
	 	 	 
	 	By 	/s/ Charles Volker
 	 
	 	 	Charles Volker — VP 	 


 
			
	 	 	 
	07IL\M2U1138


	 	







 









 






	 	 	 	 	 



Interests and Liabilities Agreement




of




Flagstone Reinsurance Limited

Hamilton, Bermuda

(hereinafter referred to as the “Subscribing Reinsurer”)




with respect to the




Florida Only Excess Catastrophe Reinsurance Contract

Effective: June 1, 2007




issued to and duly executed by




Liberty American Insurance Company

Pinellas Park, Florida

Liberty American Select Insurance Company

Pinellas Park, Florida

and

any and all other companies which are now

or may hereafter become member companies of

Liberty American Insurance Group, Inc.



The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:



30.00% of the First Excess Catastrophe Reinsurance

30.00% of the Second Excess Catastrophe Reinsurance

25.00% of the Third Excess Catastrophe Reinsurance

  7.50% of the Fourth Excess Catastrophe Reinsurance



This Agreement shall become effective at 12:01 a.m., Local Standard Time at the location where the
loss occurrence commences, June 1, 2007, and shall continue in force until 12:01 a.m., Local
Standard Time at the location where the loss occurrence commences, June 1, 2008, unless earlier
terminated in accordance with the provisions of the attached Contract.



The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.



In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed
this Agreement as of the date undermentioned at:



Hamilton, Bermuda, this 18th day of July in the year
2007.




	 	 	 	 	 
	 	Flagstone Reinsurance Limited
 	 
	 	 	 
	 	By 	/s/ Kevin M. Madigan
 	 
	 	 	Kevin M. Madigan, 
Deputy Underwriting Officer NA 	 


  
			
	 	 	 
	07IL\M2U1138


	 	






 









 






	 	 	 	 	 



Interests and Liabilities Agreement




of




Hannover Re (Bermuda), Ltd.

Hamilton, Bermuda

(hereinafter referred to as the “Subscribing Reinsurer”)




with respect to the




Florida Only Excess Catastrophe Reinsurance Contract

Effective: June 1, 2007




issued to and duly executed by




Liberty American Insurance Company

Pinellas Park, Florida

Liberty American Select Insurance Company

Pinellas Park, Florida

and

any and all other companies which are now

or may hereafter become member companies of

Liberty American Insurance Group, Inc.



The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:



    0% of the First Excess Catastrophe Reinsurance

    0% of the Second Excess Catastrophe Reinsurance

8.00% of the Third Excess Catastrophe Reinsurance

6.35% of the Fourth Excess Catastrophe Reinsurance



This Agreement shall become effective at 12:01 a.m., Local Standard Time at the location where the
loss occurrence commences, June 1, 2007, and shall continue in force until 12:01 a.m., Local
Standard Time at the location where the loss occurrence commences, June 1, 2008, unless earlier
terminated in accordance with the provisions of the attached Contract.



The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.



In any action, suit or proceeding to enforce the Subscribing Reinsurer’s obligations under the
attached Contract, service of process may be made upon Mendes & Mount, 750 Seventh Avenue, New
York, New York 10019.



In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed
this Agreement as of the date undermentioned at:



Hamilton, Bermuda, this 20th day of August in the year
2007.




	 	 	 	 	 
	 	Hannover Re (Bermuda), Ltd.
 	 
	 	 	 
	 	By 	/s/ Schlie
 	 
	 	 	Schlie (VP) 	 
	 	 	 
	 	By 	/s/ Duesterhaus
 	 
	 	 	Duesterhaus (AVP) 	 
	 



 
			
	 	 	 
	07IL\M2U1138


	 	







 









 








Interests and Liabilities Agreement




of




Harbor Point Re Limited

Hamilton, Bermuda

(hereinafter referred to as the “Subscribing Reinsurer”)




with respect to the




Florida Only Excess Catastrophe Reinsurance Contract

Effective: June 1, 2007




issued to and duly executed by




Liberty American Insurance Company

Pinellas Park, Florida

Liberty American Select Insurance Company

Pinellas Park, Florida

and

any and all other companies which are now

or may hereafter become member companies of

Liberty American Insurance Group, Inc.



The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:



     0% of the First Excess Catastrophe Reinsurance

9.00% of the Second Excess Catastrophe Reinsurance

2.50% of the Third Excess Catastrophe Reinsurance

6.50% of the Fourth Excess Catastrophe Reinsurance



This Agreement shall become effective at 12:01 a.m., Local Standard Time at the location where the
loss occurrence commences, June 1, 2007, and shall continue in force until 12:01 a.m., Local
Standard Time at the location where the loss occurrence commences, June 1, 2008, unless earlier
terminated in accordance with the provisions of the attached Contract.



The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.



In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed
this Agreement as of the date undermentioned at:



Hamilton, Bermuda, this 17th day of July in the year
2007.




	 	 	 	 	 
	 	Harbor Point Re Limited
 	 
	 	 	 
	 	By 	/s/ William Maclachlan
 	 
	 	 	William Maclachlan, Managing Director 	 


  
			
	 	 	 
	07IL\M2U1138


	 	






 









 






	 	 	 	 	 



Interests and Liabilities Agreement




of




Montpelier Reinsurance Limited

Hamilton, Bermuda

(hereinafter referred to as the “Subscribing Reinsurer”)




with respect to the




Florida Only Excess Catastrophe Reinsurance Contract

Effective: June 1, 2007




issued to and duly executed by




Liberty American Insurance Company

Pinellas Park, Florida

Liberty American Select Insurance Company

Pinellas Park, Florida

and

any and all other companies which are now

or may hereafter become member companies of

Liberty American Insurance Group, Inc.



The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:



     0% of the First Excess Catastrophe Reinsurance

     0% of the Second Excess Catastrophe Reinsurance

7.50% of the Third Excess Catastrophe Reinsurance

7.50% of the Fourth Excess Catastrophe Reinsurance



This Agreement shall become effective at 12:01 a.m., Local Standard Time at the location where the
loss occurrence commences, June 1, 2007, and shall continue in force until 12:01 a.m., Local
Standard Time at the location where the loss occurrence commences, June 1, 2008, unless earlier
terminated in accordance with the provisions of the attached Contract.



The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.



In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed
this Agreement as of the date undermentioned at:



Hamilton, Bermuda, this 25th day of July in the year
2007.




	 	 	 	 	 
	 	Montpelier Reinsurance Limited 	 
	 	 	 
	 	By 	/s/ Paul Hopwood
 	 
	 	 	Paul Hopwood, SVP & NA Treaty Underwriter 	 



 
			
	 	 	 
	07IL\M2U1138


	 	






 









 






	 	 	 	 	 



Interests and Liabilities Agreement




of




New Castle Reinsurance Company Ltd.

Hamilton, Bermuda

(hereinafter referred to as the “Subscribing Reinsurer”)




with respect to the




Florida Only Excess Catastrophe Reinsurance Contract

Effective: June 1, 2007




issued to and duly executed by




Liberty American Insurance Company

Pinellas Park, Florida

Liberty American Select Insurance Company

Pinellas Park, Florida

and

any and all other companies which are now

or may hereafter become member companies of

Liberty American Insurance Group, Inc.



The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:



8.00% of the First Excess Catastrophe Reinsurance

8.00% of the Second Excess Catastrophe Reinsurance

4.00% of the Third Excess Catastrophe Reinsurance

2.00% of the Fourth Excess Catastrophe Reinsurance



This Agreement shall become effective at 12:01 a.m., Local Standard Time at the location where the
loss occurrence commences, June 1, 2007, and shall continue in force until 12:01 a.m., Local
Standard Time at the location where the loss occurrence commences, June 1, 2008, unless earlier
terminated in accordance with the provisions of the attached Contract.



The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.



In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed
this Agreement as of the date undermentioned at:



Hamilton, Bermuda, this 18th day of July in the year
2007.




	 	 	 	 	 
	 	New Castle Reinsurance Company Ltd. 	 
	 	 	 
	 	By 	/s/ Chris McKeown
 	 
	 	 	 Chris McKeown, CEO 	 
	 



  
			
	 	 	 
	07IL\M2U1138


	 	






 









 








Interests and Liabilities Agreement




of




Renaissance Reinsurance, Ltd.

Hamilton, Bermuda

(hereinafter referred to as the “Subscribing Reinsurer”)




with respect to the




Florida Only Excess Catastrophe Reinsurance Contract

Effective: June 1, 2007




issued to and duly executed by




Liberty American Insurance Company

Pinellas Park, Florida

Liberty American Select Insurance Company

Pinellas Park, Florida

and

any and all other companies which are now

or may hereafter become member companies of

Liberty American Insurance Group, Inc.



The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:



17.50% of the First Excess Catastrophe Reinsurance

10.00% of the Second Excess Catastrophe Reinsurance

       0% of the Third Excess Catastrophe Reinsurance

12.50% of the Fourth Excess Catastrophe Reinsurance



This Agreement shall become effective at 12:01 a.m., Local Standard Time at the location where the
loss occurrence commences, June 1, 2007, and shall continue in force until 12:01 a.m., Local
Standard Time at the location where the loss occurrence commences, June 1, 2008, unless earlier
terminated in accordance with the provisions of the attached Contract.



The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.



In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed
this Agreement as of the date undermentioned at:



Hamilton, Bermuda, this 24th day of July in the year
2007.




	 	 	 	 	 
	 	Renaissance Reinsurance, Ltd. 	 
	 	 	 
	 	By 	/s/ Justin O'Keefe
 	 
	 	 	Justin O'Keefe, VP 	 
	 



 
			
	 	 	 
	07IL\M2U1138


	 	







 









 








Interests and Liabilities Agreement




of




Swiss Reinsurance America Corporation

Armonk, New York

(hereinafter referred to as the “Subscribing Reinsurer”)




with respect to the




Florida Only Excess Catastrophe Reinsurance Contract

Effective: June 1, 2007




issued to and duly executed by




Liberty American Insurance Company

Pinellas Park, Florida

Liberty American Select Insurance Company

Pinellas Park, Florida

and

any and all other companies which are now

or may hereafter become member companies of

Liberty American Insurance Group, Inc.

(hereinafter referred to as collectively as the “Company")



It Is Hereby Agreed that the Subscribing Reinsurer shall have the following percentage shares in
the interests and liabilities of the “Reinsurer” as set forth in the attached Contract captioned
above:



    0% of the First Excess Catastrophe Reinsurance

7.50% of the Second Excess Catastrophe Reinsurance

7.50% of the Third Excess Catastrophe Reinsurance

7.50% of the Fourth Excess Catastrophe Reinsurance



It Is Further Agreed that this Agreement shall become effective at 12:01 a.m., Local Standard Time
at the location where the loss occurrence commences, June 1, 2007, and shall continue in force
until 12:01 a.m., Local Standard Time at the location where the loss occurrence commences, June 1,
2008, unless earlier terminated in accordance with the provisions of the attached Contract.



It Is Also Agreed that the Subscribing Reinsurer’s share in the attached Contract shall be separate
and apart from the shares of the other reinsurers, and shall not be joint with the shares of the
other reinsurers, it being understood that the Subscribing Reinsurer shall in no event participate
in the interests and liabilities of the other reinsurers.


 
			
	 	 	 
	07IL\M2U1138

Page 1 of 2
	 	







 









 







It Is Also Agreed that the following Article shall apply to the Subscribing Reinsurer’s
participation share in the attached Contract, in lieu of the provisions of Article XXXI -
Intermediary (BRMA 23A) — of the Contract:






“Article XXXI — Servicing




Benfield Inc. is the Servicing Agent providing services for the Company in connection with this
Contract. There is no Intermediary of record for this Contract. These services shall include
but not be limited to notices, statements, premium, return premium, taxes, losses, loss
adjustment expense, salvages and loss settlements. However, such services shall in no way be
construed as providing Benfield Inc. with the authority to negotiate or otherwise act on behalf
of the Reinsurer.”


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




	 	 	 	 
	Pinellas Park, Florida, this 16th day of July in the year 2007.

	 
	 	 	 
	 

	 	 	 
	 

	 	Liberty American Insurance Group, Inc. (for and on behalf of the “Company”)	 
	 
	 	 	 
	 

	 	T. Bruce Meyer, Pres. & CEO	 
	 

	 	 	 
	 

	 	(Print name and title)	 
	 
	 	 	 
	Armonk, New York,

	 	this 23rd day of October in the year 2007.	 
	 
	 	 	 
	 

	 	M. Joseph Cook, V.P. William J. O’Donnell, Managing Director	 
	 
	 	 	 
	 

	 	Swiss Reinsurance America Corporation	 





 
			
	 	 	 
	07IL\M2U1138

Page 2 of 2
	 	







 









 








Interests and Liabilities Agreement




of




Transatlantic Reinsurance Company

New York, New York

(hereinafter referred to as the “Subscribing Reinsurer”)




with respect to the




Florida Only Excess Catastrophe Reinsurance Contract

Effective: June 1, 2007




issued to and duly executed by




Liberty American Insurance Company

Pinellas Park, Florida

Liberty American Select Insurance Company

Pinellas Park, Florida

and

any and all other companies which are now

or may hereafter become member companies of

Liberty American Insurance Group, Inc.



The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:



  5.00% of the First Excess Catastrophe Reinsurance

  5.00% of the Second Excess Catastrophe Reinsurance

        0% of the Third Excess Catastrophe Reinsurance

 10.00% of the Fourth Excess Catastrophe Reinsurance



This Agreement shall become effective at 12:01 a.m., Local Standard Time at the location where the
loss occurrence commences, June 1, 2007, and shall continue in force until 12:01 a.m., Local
Standard Time at the location where the loss occurrence commences, June 1, 2008, unless earlier
terminated in accordance with the provisions of the attached Contract.



The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.



In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed
this Agreement as of the date undermentioned at:



New York, New York, this 30th day of August in the year
2007.




	 	 	 	 	 
	 	Transatlantic Reinsurance Company
 	 
	 	 	 
	 	By 	/s/ William Orendorf
 	 
	 	 	William Orendorf, Senior Underwriter 	 


  
			
	 	 	 
	07IL\M2U1138


	 	






 









 






	 	 	 	 	 



Interests and Liabilities Agreement




of




XL Re Ltd

Hamilton, Bermuda

(hereinafter referred to as the “Subscribing Reinsurer”)




with respect to the




Florida Only Excess Catastrophe Reinsurance Contract

Effective: June 1, 2007




issued to and duly executed by




Liberty American Insurance Company

Pinellas Park, Florida

Liberty American Select Insurance Company

Pinellas Park, Florida

and

any and all other companies which are now

or may hereafter become member companies of

Liberty American Insurance Group, Inc.



The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:



    0% of the First Excess Catastrophe Reinsurance

    0% of the Second Excess Catastrophe Reinsurance

    0% of the Third Excess Catastrophe Reinsurance

5.00% of the Fourth Excess Catastrophe Reinsurance



This Agreement shall become effective at 12:01 a.m., Local Standard Time at the location where the
loss occurrence commences, June 1, 2007, and shall continue in force until 12:01 a.m., Local
Standard Time at the location where the loss occurrence commences, June 1, 2008, unless earlier
terminated in accordance with the provisions of the attached Contract.



The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.



In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed
this Agreement as of the date undermentioned at:



Hamilton, Bermuda, this 27th day of July in the year
2007.




	 	 	 	 	 
	 	XL Re Ltd 	 
	 	 	 
	 	By 	/s/ Gino Z. Smith
 	 
	 	 	Gino Z. Smith, AVP 	 


  
			
	 	 	 
	07IL\M2U1138


	 	






 









 






	 	 	 	 	 



Interests and Liabilities Agreement




of




Certain Underwriting Members of Lloyd’s

shown in the Signing Schedules attached hereto

(hereinafter referred to as the “Subscribing Reinsurer”)




with respect to the




Florida Only Excess Catastrophe Reinsurance Contract

Effective: June 1, 2007




issued to and duly executed by




Liberty American Insurance Company

Pinellas Park, Florida

Liberty American Select Insurance Company

Pinellas Park, Florida

and

any and all other companies which are now

or may hereafter become member companies of

Liberty American Insurance Group, Inc.



The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:



  7.00% of the First Excess Catastrophe Reinsurance

  5.00% of the Second Excess Catastrophe Reinsurance

20.00% of the Third Excess Catastrophe Reinsurance

11.15% of the Fourth Excess Catastrophe Reinsurance



This Agreement shall become effective at 12:01 a.m., Local Standard Time at the location where the
loss occurrence commences, June 1, 2007, and shall continue in force until 12:01 a.m., Local
Standard Time at the location where the loss occurrence commences, June 1, 2008, unless earlier
terminated in accordance with the provisions of the attached Contract.



The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.



In any action, suit or proceeding to enforce the Subscribing Reinsurer’s obligations under the
attached Contract, service of process may be made upon Mendes & Mount, 750 Seventh Avenue, New
York, New York 10019.



Signed for and on behalf of the Subscribing Reinsurer in the Signing Schedules attached hereto.



Signed by Manager of Lloyds of London





  
			
	 	 	 
	07IL\M2U1138