EXHIBIT 10.22


 


Amendment No. 1


 


To


 


Traditional Program Business


Amended and Restated


Quota Share Reinsurance
Agreement


 


This is Amendment Number 1 (this “Amendment”), dated as of the date set
forth below, to the Amended and Restated Traditional Program Business Quota
Share Reinsurance Agreement (“Agreement”), dated August 30, 2006, by and
among Tower Insurance Company of New York, and Tower National Insurance Company
(collectively the “Company”) and CastlePoint Reinsurance Company, Ltd. (“Reinsurer”),
effective as of April 1, 2006.


 


RECITALS


 


A.                                   The
parties entered into the Agreement effective as of April 1, 2006, whereby
the Reinsurer agreed to reinsure Traditional Program Business written by the
Company subject to the terms and conditions as set forth in the Agreement.


 


B.                                     The
parties now desire to further amend the Agreement in accordance with paragraph
B of Article XXIV of the Agreement.


 


Now therefore, in consideration of the foregoing, of the mutual
covenants and undertakings as set forth below, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereby agree as follows:


 


1.               Amendment


 


A.            Effective April 1, 2006, Article V,
Exclusions, paragraph K is revised to read as follows:


 


“Pollution loss or liability excluded by the
provisions of the applicable ISO Pollution Exclusionary language drafted by the
Company in use at the time the policy involved is written or renewed and where
available per filed rule and not precluded by regulatory constraint. 
Further, the Reinsurer agrees that this exclusion shall not apply in any case
where the Company has included such language in an original policy and/or as an
endorsement to an original policy but has sustained a loss as a result of such
exclusionary language being declared invalid or inapplicable by a court of law.”


 


B.            Effective July 1, 2006 Article VI,
Reinsurance Coverage, paragraph A is revised to read as follows:


 


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“Upon the contribution of capital to the
Reinsurer by its parent in the amount of at least $156 million, the Company
shall automatically and obligatorily cede to the Reinsurer, and the Reinsurer
shall be obligated to accept as assumed reinsurance, a 50% quota share portion
of the Net Liabilities with respect to such Policies, subject to adjustment as
set forth below. The Company may, in its sole discretion, change the quota
share participation of the Reinsurer from time to time as of any six month
anniversary date of the effective date of this Agreement upon not less than thirty
(30) days prior written notice to the Reinsurer, unless such notice is waived
by the Reinsurer, and provided, however, that the Company and the Reinsurer may
agree to change the Reinsurer’s quota share participation as of any calendar
quarter with all such changes being affixed to the Agreement; provided further,
however that the quota share participation of the Reinsurer shall at all
times during the term of this Agreement be a minimum of 50% and a maximum of 75%;
and provided further that the Reinsurer’s quota share participation does not
exceed $50 million of gross written premium for the 12 month period ended March 31,
2007, with such maximum amount subject to a 25% growth factor per 12 month
period thereafter.  If the Reinsurer’s
quota share participation maximum of $50 million (subject to growth factor) is
attained in any twelve month period ended March 31, then the quota share
participation percentage, which shall apply to all premiums and losses on a
pro-rated basis for such period, shall be decreased for that 12 month period
even if such participation is below 50%. Each such change shall apply to
Policies issued or renewed after the effective date of such change.
Notwithstanding the foregoing, if the Company writes business of the type that
it has historically not written or writes more than 25% of its gross written
premiums outside the state of New York in any 12 month period ending on the
anniversary date of this Agreement, then the Reinsurer has the right to refuse
to reinsure such business that the Company has not historically written and
such excess business written outside the State of New York.


 


The quota share participation of the
Reinsurer effective July 1, 2006 shall apply to new and renewal business
written by the Company after July 1, 2006.”


 


C.            Effective
July 1, 2006, Article VII, Reinsurance Premium, is revised to read as
follows:


 


“As premium for the reinsurance provided by this Agreement, the Company
shall cede to the Reinsurer an amount equal to the Reinsurer’s quota share
assumption of the Net Written Premium of the Company for the Business Covered
by this Agreement. If, after allowance for the ceding commission as set forth
below in Article VIII, the reinsurance premium is insufficient to cover
losses (including loss adjustment expenses) attributable to the Business
Covered under this Agreement, the Company shall make an additional premium
payment to the Reinsurer in an amount that is equal to the product of the Reinsurer’s
assumed share times the excess of losses over the reinsurance premium paid. To
the extent that the reinsurance premium paid to Reinsurer is in excess of
losses paid attributable to the Business Covered under this Agreement, the
Reinsurer shall return to the Company an amount that is equal to the product of
the reinsurance premium paid less losses paid times the Company’s retained
cession.”


 


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D.            Effective
July 1, 2006, Article VIII, Ceding Commission, is revised to read as
follows:


 


“ARTICLE VIII  CEDING
COMMISSION


 


The Reinsurer shall allow the
Company a ceding commission on all premiums ceded hereunder which shall be an
amount equal to the product of Company’s retained quota share percentage, as
determined pursuant to Article VI for the current period, times actual
commissions paid to agents or brokers, premium taxes, guarantee fund
assessments, fees and assessments for boards, bureaus and associations, fees
and assessments for industry and residual markets, and other similar expenses
incurred by the Company on all premiums ceded hereunder but after deduction of
ceding commissions or expense reimbursement amounts recovered under Existing
Reinsurance. Ceding commissions also will include an additional amount of Other
Underwriting Expenses equal to direct charges incurred by the company for
travel, underwriting, and other expenses directly incurred by the Company to
underwrite Traditional Programs.  These
Other Underwriting Expenses will be reimbursable by the Reinsurer and included
as part of ceding commissions only after an accounting of these Other
Underwriting Expenses for each Traditional Program is provided and approved by the
Reinsurer.”


 


E.             Effective January 1, 2007, Tower
National Insurance Company shall be neither a party nor a company within the
definition of Company and shall not cede any premiums or losses directly to the
Reinsurer.


 


F.             The first sentence of Article III,
paragraph A, shall read “This Agreement is effective 12:01 a.m., Eastern
Standard Time, April 1, 2006 (the Effective Date”) and shall have a term
of four (4) years.


 


2.               Miscellaneous


 


A.            Except as specifically set forth in
this Amendment, the Agreement shall remain in full force and effect without
modification thereto.


 


B.            This Amendment may be executed by
the parties hereto in any number of counterparts, and by each of the parties
hereto in separate counterparts, each of which counterparts, when so executed
and delivered, shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.


 


C.            This Amendment and all actions
arising out of or in connection with this Amendment shall be governed by and
construed according to the laws of the State of New York, exclusive of the rules with
respect to conflict of laws.


 


[Signature Page Follows]


 


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IN
WITNESS WHEREOF, the Company and the Reinsurer have
caused this Amendment to be executed.


 


 


	
   

  	
  TOWER INSURANCE COMPANY OF NEW YORK

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Francis M. Colalucci

  	
   

  
	
   

  	
  Name:

  	
   

  	
    Francis M.
  Colalucci

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TOWER NATIONAL INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Francis M. Colalucci

  	
   

  
	
   

  	
  Name:

  	
   

  	
    Francis M.
  Colalucci

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CASTLEPOINT REINSURANCE COMPANY, LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Joel S. Weiner

  	
   

  
	
   

  	
  Name:

  	
   

  	
  Joel S. Weiner

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
						



 


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