Exhibit
10.34





UMBRELLA

LIABILITY QUOTA SHARE

REINSURANCE AGREEMENT

NO. POR327548


EFFECTIVE JANUARY 1, 2006


between


SAFETY INSURANCE COMPANY

SAFETY INDEMNITY INSURANCE COMPANY

both of Boston, Massachusetts


and


SWISS REINSURANCE AMERICA CORPORATION

Armonk, New York















UMBRELLA LIABILITY QUOTA SHARE REINSURANCE AGREEMENT
NO. POR327548


	
  ARTICLE

  	
   

  	
  CONTENTS

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PREAMBLE

  	
   

  	
  1

  
	
  I

  	
   

  	
  BUSINESS COVERED

  	
   

  	
  1

  
	
  II

  	
   

  	
  EFFECTIVE DATE AND TERMINATION

  	
   

  	
  2

  
	
  III

  	
   

  	
  TERRITORY

  	
   

  	
  3

  
	
  IV

  	
   

  	
  DEFINITION OF ULTIMATE NET LIABILITY

  	
   

  	
  3

  
	
  V

  	
   

  	
  EXCESS REINSURANCE

  	
   

  	
  3

  
	
  VI

  	
   

  	
  RETENTION

  	
   

  	
  3

  
	
  VII

  	
   

  	
  DEFINITION OF LOSS OCCURRENCE

  	
   

  	
  3

  
	
  VIII

  	
   

  	
  LOSS IN EXCESS OF POLICY LIMITS

  	
   

  	
  3

  
	
  IX

  	
   

  	
  EXTRA CONTRACTUAL OBLIGATIONS

  	
   

  	
  4

  
	
  X

  	
   

  	
  EXCLUSIONS

  	
   

  	
  5

  
	
  XI

  	
   

  	
  SPECIAL ACCEPTANCE

  	
   

  	
  7

  
	
  XII

  	
   

  	
  UNDERLYING INSURANCE

  	
   

  	
  7

  
	
  XIII

  	
   

  	
  REINSURANCE PREMIUM

  	
   

  	
  8

  
	
  XIV

  	
   

  	
  COMMISSION

  	
   

  	
  8

  
	
  XV 

  	
   

  	
  LOSSES, LOSS ADJUSTMENT EXPENSES AND SALVAGES 

  	
   

  	
  8 

  
	
  XVI

  	
   

  	
  REPORTS AND REMITTANCES

  	
   

  	
  9

  
	
  XVII

  	
   

  	
  CLAIMS

  	
   

  	
  11

  
	
  XVIII

  	
   

  	
  POLICY FORM

  	
   

  	
  12

  
	
  XIX

  	
   

  	
  ACCESS TO RECORDS

  	
   

  	
  12

  
	
  XX

  	
   

  	
  TAXES

  	
   

  	
  12

  
	
  XXI

  	
   

  	
  CURRENCY

  	
   

  	
  12

  
	
  XXII

  	
   

  	
  OFFSET

  	
   

  	
  12

  
	
  XXIII

  	
   

  	
  ERRORS OR OMISSIONS

  	
   

  	
  13

  
	
  XXIV

  	
   

  	
  DISPUTE RESOLUTION

  	
   

  	
  13

  
	
  XXV

  	
   

  	
  INSOLVENCY

  	
   

  	
  15

  
	
  XXVI

  	
   

  	
  SPECIAL TERMINATION

  	
   

  	
  15

  
	
  XXVII

  	
   

  	
  AMENDMENTS

  	
   

  	
  16

  
	
   

  	
   

  	
  SIGNATURES

  	
   

  	
  17

  



 


	
  ATTACHMENTS

  	
   

  	
  POLLUTION
  LIABILITY EXCLUSION CLAUSE - REINSURANCE INSOLVENCY FUNDS EXCLUSION CLAUSE

  
	
   

  	
   

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

  
	
   

  	
   

  	
  NUCLEAR INCIDENT EXCLUSION CLAUSE - LIABILITY -
  REINSURANCE - CANADA 

  
	
   

  	
   

  	
  NUCLEAR INCIDENT EXCLUSION CLAUSE - REINSURANCE -
  NO. 4

  



 
















UMBRELLA

LIABILITY QUOTA SHARE 

REINSURANCE AGREEMENT

NO. POR327548 

(hereinafter referred to as the “Agreement”)


between


SAFETY INSURANCE COMPANY

SAFETY INDEMNITY INSURANCE COMPANY

both of Boston, Massachusetts


and


SWISS REINSURANCE AMERICA CORPORATION

Armonk, New York 

(hereinafter referred to as the “Reinsurer”)


ARTICLE I - BUSINESS COVERED


A.                      By
this Agreement the Company obligates itself to cede to the Reinsurer and the
Reinsurer obligates itself to accept from the Company a 90% Quota Share
participation of the Company’s Ultimate Net Liability for new and renewal
Policies becoming effective on or after January 1, 2006, as respects losses
occurring on or after January 1, 2006. This Quota Share is subject to a maximum
cession limit of $4,500,000 each Policy (90% share of the Company’s Ultimate
Net Liability of $5,000,000).


B                           Notwithstanding
the provisions of paragraph A. above, the Company shall retain an annual
aggregate deductible of $75,000 as respects Ultimate Net Liability otherwise
subject to cession under this Agreement. Thereafter, the cession and limit set
forth in paragraph A. above shall apply.


C                           Any
loss arising under this Agreement with respect to 80% of Extra Contractual
Obligations and 80% of Loss In Excess of Policy Limits as defined herein shall
be recovered in the same proportion as the contractual loss recoverable
hereunder provided such contractual loss plus Extra Contractual Obligations and
Loss In Excess of Policy Limits shall never exceed the maximum cession limit
set forth under paragraph A. above.


D                          This
Agreement is solely between the Company and the Reinsurer, and nothing
contained in this Agreement shall create any obligations or establish any
rights against the Reinsurer in favor of any person or entity not a party
hereto.













E.                         The
performance of obligations by both parties under this Agreement shall be in
accordance with a fiduciary standard of good faith and fair dealing.


F                            The
term “Policies” shall mean each of the Company’s binders, policies and
contracts of insurance on the business covered hereunder.


G                           Under
this Agreement, the indemnity for reinsured loss applies only to Personal and
Commercial Umbrella Liability Policies, except as excluded under Article X -
Exclusions of this Agreement.


ARTICLE II -
EFFECTIVE DATE AND TERMINATION


A.                      This
Agreement shall become effective 12:01 a.m., Eastern Standard Time on January
1, 2006, and shall remain in force until terminated. This Agreement may be
terminated at the close of any calendar quarter by either party giving to the
other not less than 90 days prior written notice by certified mail of its
intention to do so.


B                           During
the running of such notice as stipulated in Paragraph A. above, the Reinsurer
shall participate in business coming within the terms of this Agreement until
the date of termination of this Agreement.


C                           In
the event of termination of this Agreement, the Company shall have the option
of continuing or terminating the liability in force at the date of termination
as set forth below. The Company may exercise such option provided written
notice of the Company’s election is given by certified mail to the Reinsurer
prior to the date of termination. If the Company does not choose to exercise
its option prior to the date of termination, such option shall revert to the
Reinsurer.


The Reinsurer shall be liable for losses occurring
subsequent to the date of termination for all policies covered hereunder and in
force at the date of termination of this Agreement until their natural expiry,
cancellation or next anniversary of such business, whichever first occurs; but
in no case shall this reinsurance be extended for longer than 12 months, after
the termination date. At such time, the Reinsurer shall return to the Company
the unearned premiums, less commissions applicable, for the unexpired periods.


2                            All
reinsurance hereunder shall be automatically cancelled as of the date of
termination and the Reinsurer shall be released of all liability as respects
losses occurring subsequent to the date of termination. The Reinsurer shall
return to the Company the unearned premiums on the business in force hereunder
at the date of termination, less the commission allowed thereon.



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ARTICLE III - TERRITORY


This Agreement applies to Policies issued by the
Company within the United States of America, its territories and possessions,
and Canada and shall apply to losses covered hereunder wherever occurring.


ARTICLE IV -
DEFINITION OF ULTIMATE NET LIABILITY


The term “Ultimate Net Liability” shall mean the
remaining portion of the Company’s gross liability on each Policy reinsured
under this Agreement after deducting recoveries from all other reinsurance,
whether specific or general and whether collectible or not, other than the
reinsurance provided in Article VI - Excess Reinsurance.


ARTICLE V - EXCESS
REINSURANCE


The Company has the right to maintain excess
reinsurance as provided for in the Casualty Excess of Loss Reinsurance
Agreement No. POR327454 on that portion of its Ultimate Net Liability which it
retains net for its own account and recoveries under such excess reinsurance
shall inure solely to the benefit of the Company.


ARTICLE VI -
RETENTION


The Company warrants that it shall retain net for its
own account and not reinsure in any way 10% of its Ultimate Net Liability.


ARTICLE VII -
DEFINITION OF LOSS OCCURRENCE


A                         The
term “Loss Occurrence” as used herein shall be the definition of ‘occurrence’
as set forth in the Company’s Policy, provided, however, in the event said term
is not defined in any Policy covered hereunder, then as respects such Policy the
term “each Loss  Occurrence” as
used herein shall be understood to mean each accident or occurrence or series
of accidents or occurrences arising out of one event and happening within the
term and scope of this Agreement.


B.                        If
the date of loss, accident or occurrence cannot be specifically determined, the
date of loss, accident or occurrence shall be the inception date of the
original Policy (i.e., the Policy reinsured hereunder), such Policy period
shall be deemed not to exceed 12 calendar months.


ARTICLE VIII -
LOSS IN EXCESS OF POLICY LIMITS


A                         “Loss
in Excess of Policy Limits” is defined as loss in excess of the limit of the
original Policy, such loss in excess of the limit



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having been incurred because of failure by the Company
to settle within the Policy limit or by reason of alleged or actual negligence,
fraud or bad faith in rejecting an offer of settlement or in the preparation of
the defense or in the trial of any action against its insured or in the
preparation or prosecution of an appeal consequent upon such action.


B                           However,
this Article shall not apply where the loss has been incurred due to fraud by a
member of the Board of Directors or a corporate officer 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.


C                           For
the purposes of this Article, the word “loss” shall mean any amounts which the
Company would have been contractually liable to pay had it not been for the
limit of the original Policy.


D                          With
respect to coverage provided under this Article, recoveries from any insurance
or reinsurance other than this Agreement, whether collectible or not, shall be
deducted to arrive at the amount of the Company’s Ultimate Net Loss.


ARTICLE IX - EXTRA
CONTRACTUAL OBLIGATIONS


A                         “Extra
Contractual Obligations” are defined as those liabilities not covered under any
other provision of this Agreement and which arise from the handling of any claim
on business covered hereunder, such liabilities arising because of, but not
limited to, the following: failure by the Company to settle within the Policy
limit, or by reason of alleged or actual negligence, fraud or bad faith in
rejecting an offer of settlement or in the preparation of the defense or in the
trial of any action against its insured or in the preparation or prosecution of
an appeal consequent upon such action.


B.                        The
date on which an Extra Contractual Obligation is incurred by the Company shall
be deemed, in all circumstances, to be the date of the original accident,
casualty, disaster or loss occurrence.


C                           However,
coverage hereunder as respects Extra Contractual Obligations shall not apply
where the loss has been incurred due to the fraud of a member of the Board of
Directors or a corporate officer 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.


D                          Extra
Contractual Obligations shall not include loss arising out of engineering or
other services or any other non-claims related activity provided to the insured
by the Company.



 4
 









E                            Recoveries,
collectibles or retention from any other form of insurance or reinsurance
including deductibles or self-insured retention which protect the Company
against Extra Contractual Obligations, whether collectible or not, shall inure
to the benefit of the Reinsurer and shall be deducted from the total amount of
Extra Contractual Obligations for purposes of determining the loss hereunder.


F                            The
provisions of this Article shall apply only if the Company also writes the
underlying primary Policy.


G                           If
any provision of this Article shall be rendered illegal or unenforceable by the
laws, regulations or public policy of any state, such provision shall be
considered void in such state, but this shall not affect the validity or
enforceability of any other provision of this Article or the enforceability of such
provision in any other jurisdiction.


ARTICLE X - EXCLUSIONS


THIS AGREEMENT DOES NOT COVER:


A.                      THE
FOLLOWING GENERAL CATEGORIES


1.                         All
business not specifically classified and covered as set forth under Article I -
Business Covered.


2                            Ex-gratia
payments


3.                         Risks
subject to a deductible or a self-insured retention excess of $25,000.


4.                         Loss
or damage caused directly or indirectly by: (a) enemy attack by armed forces
including action taken by military, naval or air forces in resisting an actual
or an immediately impending enemy attack; (b) invasion; (c) insurrection; (d)
rebellion; (e) revolution; (f) intervention; (g) civil war; and (h) usurped
power.


5.                         Reinsurance
assumed by the Company.


6                            Business
derived from any Pool, Association, including Joint Underwriting Association,
Syndicate, Exchange, Plan, Fund or other facility directly as a member,
subscriber or participant, or indirectly by way of reinsurance or assessments;
provided this exclusion shall not apply to Automobile or Workers Compensation
assigned risks which may be currently or subsequently covered hereunder.


Pollution Liability as per the attached Pollution
Liability Exclusion Clause - Reinsurance



 5
 









8                            Insolvency
Funds as per the attached Insolvency Funds Exclusion Clause.


9                            Nuclear
Incident Exclusion Clauses which are attached and made part of this Agreement:


a.                  Nuclear
Incident Exclusion Clause - Liability - Reinsurance - U.S.A.


b.                 Nuclear
Incident Exclusion Clause - Liability - Reinsurance - Canada.


c.                  Nuclear
Incident Exclusion Clause - Reinsurance - No. 4.


10                      Any
actual or alleged liability whatsoever for any claim or claims in respect of
loss or losses, directly or indirectly arising out of, resulting from, or in
consequence of asbestos, in whatever form or quantity.


B                           THE
FOLLOWING INSURANCE COVERAGES


1                            Fiduciary
Liability


2                            Fidelity
and Surety


3                            Credit
and Financial Guarantee


4                            Securities
and Exchange Liability.


5.                         Retroactive
coverage.


6.                         Malpractice
or Professional Liability except incidental Malpractice Liability.


7                            Directors’
and Officers’ Liability and Errors and Omissions Liability, except with respect
to volunteer non-remunerative work in church, school and civil organizations.


8.                         Advertisers’,
Broadcasters’ and Telecasters Liability as respects Personal Injury Liability


9                            Liquor
Law Liability except Host Liquor Law Liability


10.                   Kidnap,
Extortion and Ransom Liability


11.                   Boiler
and Machinery Insurance


12                      Protection
and Indemnity (Ocean Marine).


C                           THE
FOLLOWING RISKS


1.                         Politicians,
labor leaders or law-enforcement officials



 6
 









2                            Newspapers
or magazine reporters editors, columnists or publishers


3                            Authors
journalists or writers


4                            Radio
and television broadcasters


5                            Public
lecturers


6                            Celebrities
and professional entertainers including athletes actors or other individuals
who maintain a high public profile.


7                            Any
person who represents a moral hazard or who has been sued for libel or slander.


8                            Automobile
drivers:


a.                          In
Assigned Risk, Excess Market or Non-Standard Plans


b.                         With
more than one moving violation or chargeable accident within the last 36
months.


c                             With
any convictions for reckless driving or driving while intoxicated.


D                          Business
specifically excluded by the Company’s Personal and Commercial Umbrella
Liability Policy.


E.                         In
the event the Company is inadvertently bound on any risk which is excluded
under Sections C. or D. above, the reinsurance provided under this Agreement
shall apply to such risk until discovery by the Company within its Home Office
of the existence of such risk and for 30 days thereafter, and shall then cease
unless within the 30 day period, the Company has received from the Reinsurer
written notice of its approval of such risk.


ARTICLE XI - SPECIAL ACCEPTANCE


Policies which are beyond the terms, conditions or
limitations of this Agreement may be submitted to the Reinsurer for special
acceptance hereunder; and such Policies, if accepted in writing by the
Reinsurer, shall be subject to all of the terms, conditions and limitations of
this Agreement, except as modified by the special acceptance. Premiums and
losses derived from any special acceptance shall be included with other data
for rating purposes under this Agreement.



 7
 









ARTICLE XII - UNDERLYING INSURANCE


A                         It
is understood that underlying limits hereunder is required and shall be
maintained in accordance with the Company’s Agent Procedures for Personal
Umbrella dated September 15, 2003 and Commercial Umbrella Agent Procedures
dated June 1, 2004, on file with the Reinsurer.


B                           Other
underlying limits may be required for certain classes of risks and shall be so
stated in the Company’s Umbrella Underwriting Guidelines.


ARTICLE XIII - REINSURANCE PREMIUM


A                         The
Company shall cede to the Reinsurer that portion of the Company’s Net Premiums
Written applicable to the Policies reinsured hereunder which corresponds to the
Reinsurer’s Quota Share participation in such Policies.


B                           The
term “Net Premiums Written” shall mean gross and additional premiums less
return premiums and less premiums ceded on all other reinsurance.


ARTICLE XIV - COMMISSION


A                         The
Reinsurer shall make a commission allowance of 31.5% to the Company’s Net
Premiums Written ceded hereunder. The Company shall debit the Reinsurer with
the commission allowance in the monthly accounts.


B                           Such
commission allowance includes provision for all brokerage and commission, premium
taxes of all kinds, all board, bureau and exchange assessments and any other
expenses whatsoever except Loss Adjustment Expenses.


ARTICLE XV - LOSSES, LOSS ADJUSTMENT
EXPENSES AND SALVAGES


A.                      The
Reinsurer shall pay its pro rata share of losses including prejudgment interest
paid by the Company arising under Policies covered under this Agreement, and
the Reinsurer shall benefit proportionately in all recoveries, including
salvage and subrogation.


B.                        The
Reinsurer shall pay its pro rata share of Loss Adjustment Expenses paid by the
Company in connection with the investigation, settlement, defense or litigation
including court costs and postjudgment interest of any claim or loss which is
the subject matter of Policies covered under this Agreement. The term “Loss
Adjustment Expenses” shall include all claim or loss expenses including
Declaratory Judgment Expenses, but shall exclude the



 8
 









salaries and expenses of Company employees, office expenses and other
overhead expenses


C                           Declaratory
Judgment Expenses are defined below and the Reinsurer shall be liable for such
expenses in accordance with the following:


1                            The
term “Declaratory Judgment Expenses” shall mean all legal expenses, incurred in
the representation of the Company in litigation brought to determine the
Company’s defense and/or indemnification obligations, that are allocable to any
specific claim or loss applicable to Policies subject to this Agreement. In
addition, the Company shall promptly notify the Reinsurer of any Declaratory
Judgment Expenses subject to this Agreement.


2                            Declaratory
Judgment Expenses shall be recovered in accordance with the provisions set
forth in Paragraph B. of this Article, provided such Declaratory Judgment
Expense shall be limited to no more than $2,700,000, each applicable Policy in
any one Loss Occurrence.


D                          The
Company shall promptly notify the Reinsurer of each claim which may involve the
reinsurance provided hereunder and of all subsequent developments relating
thereto.


E                            The
Company shall have the responsibility to investigate, defend or negotiate
settlements of all claims and lawsuits related to Policies written by the
Company and reinsured under this Agreement. The Reinsurer, at its own expense,
may associate with the Company in the defense or control of any claim, suit or
other proceeding which involves or is likely to involve the reinsurance
provided under this Agreement, and the Company shall cooperate in every respect
in the defense of any such claim, suit or proceeding.


ARTICLE XVI - REPORTS AND REMITTANCES


A                         The
Company shall provide the Reinsurer with a quarterly account as well as
quarterly and annual reports in accordance with the provisions set forth in
Paragraphs C., E. and F. below.


B                           Quarterly
Account - Within 30 days after the close of each quarter the Company shall
forward a quarterly account summarizing the following transactions under this
Agreement during such quarter:


1                            Net
Premiums Written ceded segregated by Line of Business


2                            Commissions


Loss and Loss Adjustment Expenses paid less
recoveries, including salvage and subrogation, segregated by Line of Business,
by year of loss.



 9
 









The balance due either party shall be paid within 60
days after the close of each quarter for the transactions during each quarter.


C.                        In
respect of Paragraph B. above:


1.                         All
Monthly Account Statements shall be sent to the Reinsurer at:


a                         E-Mail/XML
or KDI Formats: reaccount_armonk@swissre.com, or


b                        Standard
Mail


Swiss Reinsurance America Corporation 

Accounting Department 

175 King Street 

Armonk, NY 10504 

Telephone: 914-828-8000 

Facsimile: 914-828-5919


2                            All
checks and supporting documentation shall be sent to the Reinsurer through one
of the options set forth below:


a                         WIRE
TRANSFER


(i)                             All
wires should be sent to:


The Bank of New York

l Wall Street

New York, NY 10286

Account Name: Swiss Reinsurance America Corporation

Account Number: 8900489197

ABA Number: 021000018 (SWIFT: IRVTUS3N)


(ii)                          All
supporting documentation should be sent to


Swiss Reinsurance America Corporation 

Accounting Department 

175 King Street 

Armonk, NY 10504


b                    LOCK
BOX


Both checks and supporting documentation shall be sent to:


Swiss Reinsurance America Corporation

P.O. Box 7247-7281

Philadelphia, PA 19170-7281



 10
 









D                          The
Company may make a request for immediate payment by the Reinsurer for any
individual gross loss covered hereunder in excess of $90,000 (i.e., 90% of
$100,000, and the Reinsurer will be credited with amounts so paid in the
subsequent monthly account.


E.                         Quarterly
Report - The Company shall furnish the Reinsurer within 60 days after the close
of each calendar quarter the following information as respects the business
ceded hereunder:


1                            Unearned
premium reserves segregated by Line of Business at the end of the calendar
quarter and calculated on the actual daily basis or in accordance with the Company’s
methodology, as agreed.


2                            Estimated
loss and Loss Adjustment Expense reserves outstanding at the end of the
calendar quarter segregated by Line of Business, by year of loss.


H                          Annual
Report - The Company shall furnish the Reinsurer within 60 days after the close
of each calendar year a summary of the business ceded hereunder:


1                            Net
Premiums Written ceded during the year segregated by Line of Business;


2.                         Unearned
premium reserves segregated by Line of Business;


3                            Losses
and Loss Adjustment Expenses paid, less recoveries, including salvage and
subrogation, during the year segregated by Line of Business, by year of loss;


4.                         Losses
and Loss Adjustment Expenses outstanding at the end of the year segregated by
Line of Business, by year of loss.


ARTICLE XVII - CLAIMS


A                         The
Company shall promptly notify the Reinsurer of each claim which may involve the
reinsurance provided hereunder and of all subsequent developments relating
thereto, stating the amount claimed and estimate of the Company’s Ultimate Net
Loss and Allocated Loss Adjustment Expenses. Notwithstanding the provisions set
forth in any other Article herein, prompt notification of loss shall be
considered a condition precedent to liability under this Agreement.


B                           The
Company shall advise the Reinsurer of all claims which


1                            Are
reserved by the Company for an amount in excess of 50% of the underlying Policy
limit;


2                            Originate
from fatal injuries


3                            Originate
from the following kinds of bodily injury:



 11
 









a.                          Brain
injuries resulting in impairment of physical function;


b.                         Spinal
injuries resulting in a partial or total paralysis of upper or lower
extremities;


c.                          Amputation
or permanent loss of use of upper or lower extremities;


d.                         Severe
burn injuries;


e.                          Loss
of sight in one or both eyes


f.                            All
other injuries likely to result in a permanent disability rate of 50% or more.


ARTICLE XVIII - POLICY
FORM


The Company and the Reinsurer have agreed on the
Company’s form as respects the Policies covered under this Agreement and the
Company shall advise the Reinsurer of any change in such Policy form, 90 days
prior to its implementation.


ARTICLE XIX - ACCESS TO RECORDS


The Reinsurer or its duly authorized representatives
shall have the right to examine, at the offices of the Company at a reasonable
time, during the currency of this Agreement or anytime thereafter, all books
and records of the Company relating to business which is the subject of this
Agreement.


ARTICLE XX - TAXES


The Company shall be liable for all taxes on premiums
paid to the Reinsurer under this Agreement, except income or profit taxes of
the Reinsurer, and shall indemnify and hold the Reinsurer harmless for any such
taxes which the Reinsurer may become obligated to pay to any local, state or
federal taxing authority.


ARTICLE XXI - CURRENCY


Wherever the word “dollars” or the “$” symbol in used
in this Agreement, it shall mean dollars of the United States of America,
excepting in those cases where the Policy is issued by the Company in Canadian
dollars, in which case it shall mean dollars of Canada. In the event the
Company is involved in a loss requiring payment in United States and Canadian
currency, the Company’s retention and the limit of liability of the Reinsurer
shall be apportioned between the two currencies in the same proportion as the
amount of net loss in each currency bears to the total amount of net loss paid
by the Company. For the purposes of this



 12
 









Agreement, where the Company receives premiums or pays
losses in currencies other than United States or Canadian currency, such
premiums and losses shall be converted into United States dollars at the actual
rates of exchange at which the premiums and losses are entered in the Company’s
books.


ARTICLE XXII - OFFSET


Each party to this Agreement together with their
successors or assigns shall have and may exercise, at any time, the right to
offset any balance or balances due the other (or, if more than one, any other).
Such offset may include balances due under this Agreement and any other
agreements heretofore or hereafter entered into between the parties regardless
of whether such balances arise from premiums, losses or otherwise, and
regardless of capacity of any party, whether as assuming insurer and/or ceding
insurer, under the various agreements involved, provided however, that in the
event of insolvency of a party hereto, offsets shall only be allowed in
accordance with the provisions of Section 7427 of the Insurance Law of the
State of New York to the extent such statute or any other applicable law,
statute or regulation governing such offset shall apply.


ARTICLE XXIII - ERRORS OR
OMISSIONS


Errors or omissions of an administrative nature on the
part of the Company shall not invalidate the reinsurance under this Agreement,
provided such errors or omissions are corrected promptly after discovery thereof;
but the liability of the Reinsurer under this Agreement or any exhibits,
addenda, or endorsements attached hereto shall in no event exceed the limits
specified herein nor be extended to cover any risks, perils, lines of business
or classes of insurance generally or specifically excluded herein.


ARTICLE XXIV - DISPUTE
RESOLUTION


Part I - Choice of Law And Forum


Any dispute arising under this Agreement shall be
resolved in the State of New York, and the laws of the State of New York shall
govern the interpretation and application of this Agreement.


Part II - Mediation


If a dispute between the Company and the Reinsurer,
arising out of the provisions of this Agreement or concerning its
interpretation or validity and whether arising before or after termination of
this Agreement has not been settled through negotiation, both parties agree to
try in good faith to settle such dispute by nonbinding mediation, before
resorting to arbitration.



 13
 









Part III - Arbitration


A.                      Resolution
of Disputes - As a condition precedent to any right of action arising
hereunder, any dispute not resolved by mediation between the Company and the
Reinsurer arising out of the provisions of this Agreement or concerning its
interpretation or validity, whether arising before or after termination of this
Agreement, shall be submitted to arbitration in the manner hereinafter set
forth.


B                           Composition
of Panel - Unless the parties agree upon a single arbitrator within 15 days
after the receipt of a notice of intention to arbitrate, all disputes shall be
submitted to an arbitration panel composed of two arbitrators and an umpire
chosen in accordance with Paragraph C. hereof.


C.                        Appointment
of Arbitrators - The members of the arbitration panel shall be chosen from
disinterested persons with at least 10 years experience in the insurance and
reinsurance business. Unless a single arbitrator is agreed upon, the party
requesting arbitration (hereinafter referred to as the “claimant”) shall
appoint an arbitrator and give written notice thereof by certified mail, to the
other party (hereinafter referred to as the “respondent”) together with its
notice of intention to arbitrate. Within 30 days after receiving such notice,
the respondent shall also appoint an arbitrator and notify the claimant thereof
by certified mail. Before instituting a hearing, the two arbitrators so
appointed shall choose an umpire. If, within 20 days after the appointment of
the arbitrator chosen by the respondent, the two arbitrators fail to agree upon
the appointment of an umpire, each of them shall nominate three individuals to
serve as umpire, of whom the other shall decline two and the umpire shall be
chosen from the remaining two by drawing lots. The name of the individual first
drawn shall be the umpire.


D.                       Failure
of Party to Appoint an Arbitrator - If the respondent fails to appoint an
arbitrator within 30 days after receiving a notice of intention to arbitrate,
the claimant’s arbitrator shall appoint an arbitrator on behalf of the
respondent, such arbitrator shall then, together with the claimant’s
arbitrator, choose an umpire as provided in Paragraph C. of Part III of this
Article.


E                            Submission
of Dispute to Panel - Unless otherwise extended by the arbitration panel or
agreed to by the parties, each party shall submit its case to the panel within
30 days after the selection of the umpire.


F                            Procedure
Governing Arbitration - All proceedings before the panel shall be informal and
the panel shall not be bound by the formal rules of evidence. The panel shall
have the power to fix all procedural rules relating to the arbitration
proceeding. In reaching any decision, the panel shall give due consideration to
the customs and usages of the insurance and reinsurance business.



 14
 









G                           Arbitration
Award - The arbitration panel shall render its decision within 60 days after
termination of the proceeding, which decision shall be in writing, stating the
reasons therefor. The decision of the majority of the panel shall be final and
binding on the parties to the proceeding. In no event, however, will the panel
be authorized to award punitive, exemplary or consequential damages of
whatsoever nature in connection with any arbitration proceeding concerning this
Agreement.


H                          Cost
of Arbitration - Unless otherwise allocated by the panel, each party shall bear
the expense of its own arbitrator and shall jointly and equally bear with the
other parties the expense of the umpire and the arbitration.


ARTICLE XXV - INSOLVENCY


A                         In
the event of insolvency of the Company, the reinsurance provided by this
Agreement shall be payable by the Reinsurer on the basis of the liability of
the Company as respects Policies covered hereunder, without diminution because
of such insolvency, directly to the Company or its liquidator, receiver,
conservator or statutory successor except as provided in Sections 4118(a)(1)(A)
and 1114(c) of the New York Insurance Law.


B.                        The
Reinsurer shall be given written notice of the pendency of each claim or loss
which may involve the reinsurance provided by this Agreement within a
reasonable time after such claim or loss is filed in the insolvency
proceedings. The Reinsurer shall have the right to investigate each such claim
or loss and interpose, at its own expense, in the proceedings where the claim
or loss is to be adjudicated, any defense which it may deem available to the
Company, its liquidator, receiver, conservator or statutory successor. The
expense thus incurred by the Reinsurer shall be chargeable, subject to court
approval, against the insolvent Company as part of the expense of liquidation
to the extent of a proportionate share of the benefit which may accrue to the
Company solely as a result of the defense undertaken by the Reinsurer.


C                           In
addition to the offset provisions set forth in Article XXI - Offset, any debts
or credits, liquidated or unliquidated, in favor of or against either party on
the date of the receivership or liquidation order (except where the obligation
was purchased by or transferred to be used as an offset) are deemed mutual
debts or credits and shall be set off with the balance only to be allowed or
paid. Although such claim on the part of either party against the other may be
unliquidated or undetermined in amount on the date of the entry of the
receivership or liquidation order, such claim will be regarded as being in
existence as of such date and any claims then in existence and held by the
other party may be offset against it.



 15
 









D                          Nothing
contained in this Article is intended to change the relationship or status of
the parties to this Agreement or to enlarge upon the rights or obligations of
either party hereunder except as provided herein.


ARTICLE XXVI - SPECIAL TERMINATION


A                         Notwithstanding
the termination provisions set forth in Article II Effective Date and
Termination, this Agreement shall be:


1.                         Terminated
automatically and simultaneously upon the happening of any of the following
events:


a                             Entry
of an order of liquidation, rehabilitation, receivership or conservatorship
with respect to the Company or the Reinsurer by any court or regulatory
authority;


b                            Assignment
of this Agreement by either party;


c                             Any
transfer of control of either party by change in ownership or otherwise;


d                            General
reinsurance of any portion of the Company’s business it retains net for its own
account, as determined under the provisions of this Agreement without prior
consent of the Reinsurer.


2                            Terminated
in accordance with the provisions set forth in this Paragraph, upon the
discovery of the following event:


A reduction of 50% or more of the Company’s
policyholders surplus during any calendar year. Such reduction shall be
determined by calculating the difference between the Company’s prior year
annual statement and each subsequent quarterly statutory statement within such
current calendar year.


As respects the event set forth in this Paragraph
A.2., the Company shall be obligated to notify the Reinsurer in writing within
30 days after the filing of its quarterly statement. Upon receipt of such
notification the Reinsurer shall have the right to terminate this Agreement, by
giving not less than 30 days notice of its intention to do so.


B                           Any
notice of termination pursuant to provisions set forth in Paragraph A.2. above
shall be sent by certified mail, return receipt requested. Such notice period
shall commence upon the other party’s receipt of the notice of termination.



 16
 









C                           In
the event of termination, the Reinsurer shall not be liable for losses
occurring subsequent to the date of termination and the Reinsurer shall return
to the Company the unearned premiums, if any, on the business in force at the
date of termination, less any commission allowed thereon.


ARTICLE XXVII -
AMENDMENTS


This Agreement may be amended by mutual consent of the
parties expressed in an addendum; and such addendum, when executed by both
parties, shall be deemed to be an integral part of this Agreement and binding
on the parties hereto.



 17
 









IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed in duplicate, by their
duly authorized representatives as of the following dates:


In Boston, MA, this 5th day of September, 2006.


	
  ATTEST

  	
   

  	
   

  	
   

  	
  SAFETY INSURANCE COMPANY

  SAFETY INDEMNITY INSURANCE COMPANY

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Illegible

  	
   

  	
   

  	
   

  	
  /s/ Illegible

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Illegible

  	
   

  	
   

  	
   

  	
  Illegible

  
	
  Name

  	
   

  	
   

  	
   

  	
  Name

  



 


 


And in Armonk, New York this 2nd day of March 2006


	
  ATTEST 

  	
   

  	
   

  	
   

  	
  SWISS REINSURANCE AMERICA
  CORPORATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Illegible

  	
   

  	
   

  	
   

  	
  /s/ Illegible

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Illegible

  	
   

  	
   

  	
   

  	
  Illegible

  
	
  Name

  	
   

  	
   

  	
   

  	
  Name

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vice President

  Member of Management

  	
   

  	
   

  	
   

  	
  Vice President

  Member of Senior Management

  
	
  Title

  	
   

  	
   

  	
   

  	
  Title

  



 



 18














SUPPLEMENT TO THE
ATTACHMENTS


DEFINITION OF
IDENTIFICATION TERMS USED WITHIN THE ATTACHMENTS


A.                      Wherever
the term “Company” or “Reinsured” or “Reassured” or whatever other term is used
to designate the reinsured company or companies within the various attachments
to the reinsurance agreement, the term shall be understood to mean Company or
Reinsured or Reassured or whatever other term is used in the attached
reinsurance agreement to designate the reinsured company or companies.


B                           Wherever
the term “Agreement” or “Contract” or “Policy” or whatever other term is used
to designate the attached reinsurance agreement within the various attachments
to the reinsurance agreement, the term shall be understood to mean Agreement or
Contract or Policy or whatever other term is used to designate the attached
reinsurance agreement.


C                           Wherever
the term “Reinsurer” or “Reinsurers” or “Underwriters” or whatever other term
is used to designate the reinsurer or reinsurers in the various attachments to
the reinsurance agreement, the term shall be understood to mean Reinsurer or
Reinsurers or Underwriters or whatever other term is used to designate the
reinsuring company or companies.











POLLUTION LIABILITY
EXCLUSION CLAUSE — REINSURANCE


This Reinsurance excludes


(1                        Any
loss occurrence arising out of the actual, alleged or threatened discharge,
dispersal, release or escape of pollutants


a)                         At
or from premises owned, rented or occupied by an original assured; or


b)                        At
or from any site or location used for the handling, storage, disposal,
processing or treatment of waste; or


c)                         Which
are at any time transported, handled, stored, treated, disposed of, or
processed as waste; or


d)                        At
or from any site or location on which any original assured is performing
operations;


(i)                       If
the pollutants are brought on or to the site or location in connection with
such operations; or


(ii                        If
the operations are to test for, monitor, clean up, remove, contain, treat,
detoxify or neutralize the pollutants.


(2)                    Any
liability, loss, cost or expense arising out of any governmental direction or
request to test for, monitor, clean up, remove, contain, treat, detoxify or
neutralize pollutants.


“Pollutants” means any solid, liquid, gaseous or
thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids,
alkalis, chemicals and waste. Waste includes materials to be recycled,
reconditioned or reclaimed.


Subparagraphs a) and d) (i) of paragraph (1) of this
exclusion do not apply to loss occurrences caused by heat, smoke or fumes from
a hostile fire. As used herein, “hostile fire” means one which becomes
uncontrollable or breaks out from where it was intended to be.


“Original assured” as used herein means all insureds
as defined in the policy issued by the Company.











INSOLVENCY FUNDS
EXCLUSION CLAUSE


This Agreement excludes 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 or from
reimbursement of any person for any such liability. “Insolvency fund” includes
any guaranty fund, insolvency fund, plan, pool, association, fund or other
arrangement, howsoever denominated, established or governed, which provides for
any assessment of or payment or assumption by any person 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.
















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


N.M.A 1590


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


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


LIMITED EXCLUSION PROVISION*


I.                            It
is agreed that the policy does not apply under any liability coverage, to
injury, sickness, disease, death or destruction, bodily injury or property
damage with respect to which an insured under the policy is also an insured
under a nuclear energy liability policy issued by Nuclear Energy Liability
Insurance Association, Mutual Atomic Energy Liability Underwriters or Nuclear
Insurance Association of Canada, or would be an insured under any such policy
but for its termination upon exhaustion of its limit of liability.


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


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



 1
 









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


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


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


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


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


BROAD EXCLUSION PROVISION*


It is agreed that the policy does not apply:


I.                            Under
any Liability Coverage to injury, sickness, disease death or destruction,
bodily injury or property damage


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



 2
 









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


II                           Under
any Medical Payments Coverage, or under any Supplementary Payments Provision
relating to immediate medical or surgical relief, first aid, to expenses
incurred with respect to bodily injury, sickness, disease or death, bodily
injury resulting from the hazardous properties of nuclear material and arising
out of the question of a nuclear facility by any person or organization.


III                       Under
any Liability Coverage, to injury, sickness, disease, death or destruction,
bodily injury or property damage resulting from the hazardous properties of
nuclear material, if


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


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


(c)                    the
injury, sickness, disease, death or destruction, bodily injury or property
damage arises out of the furnishing by an insured of services, materials, parts
or equipment in connection with the planning, construction, maintenance,
operation or use of any nuclear facility, but if such facility is located
within the United States of America, its territories, or possessions or Canada,
this exclusion (c) applies only to injury to or destruction of property at such
nuclear facility, property damage to such nuclear facility and any property
thereat.



 3
 









IV                       As
used in this endorsement


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


(a)                    any
nuclear reactor


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


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


(d)                   any
structure, basin, excavation, premises or place prepared or used for the
storage or disposal of waste


and includes the site on which any of the foregoing is
located, all operations conducted on such site and all premises used for such
operations; “nuclear reactor” means any apparatus designed or used to sustain
nuclear fission in a self-supporting chain reaction or to contain a critical
mass of fissionable material; with respect to injury to or destruction of property,
the word “injury” or “destruction” includes all forms of radioactive
contamination of property; “property damage” includes all forms of radioactive
contamination of property.


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



 4
 









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


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


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


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






	
  * NOTE:

  	
   

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

  



*



 5















NUCLEAR INCIDENT EXCLUSION CLAUSE -
LIABILITY - RElNSURANCE - CANADA 


N.M.A. 1979a


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


2                             Without
in any way restricting the operation of Paragraph 1. of this Clause, it is
agreed that for all purposes of this Agreement all the original liability
contracts of the Company, whether new, renewal or replacement, of the following
classes, namely,


Personal Liability


Farmers’ Liability


Storekeepers’ Liability


which become effective on or after 3lst December 1992,
shall be deemed to include, from their inception dates and thereafter, the
following provision:


Limited Exclusion Provision


This Policy does not apply to bodily injury or
property damage with respect to which the Insured is also insured under a
contract of nuclear energy liability insurance (whether the Insured is unnamed
in such contract and whether or not it is legally enforceable by the Insured)
issued by the Nuclear Insurance Association of Canada or any other group or
pool of insurers or would be an Insured under any such policy but for its
termination upon exhaustion of its limits of liability.


With respect to property, loss of use of such property shall be deemed
to be property damage


3                             Without
in any way restricting the operation of Paragraph 1. of this Clause, it is agreed
that for all purposes of this Agreement all the original liability contracts of
the Company, whether new, renewal or replacement, of any class whatsoever
(other than Personal Liability, Farmers’ Liability, Storekeepers’ Liability or
Automobile Liability contracts), which become effective on or after 31st
December 1992, shall be deemed to include, from their inception dates and
thereafter, the following provision:



 1
 









Broad Exclusion Provision


It is agreed that this Policy does not apply:


(a)                     to
liability imposed by or arising from any nuclear liability act, law or statute
or any law amendatory thereof; nor


(b)                    to
bodily injury or property damage with respect to which an Insured under this
Policy is also insured under a contract of nuclear energy liability insurance
(whether the Insured is unnamed in such contract and whether or not it is
legally enforceable by the Insured) issued by the Nuclear Insurance Association
of Canada or any other insurer or group or pool of insurers or would be an
Insured under any such policy but for its termination upon exhaustion of its
limit of liability; nor


(c)                     to
bodily injury or property damage resulting directly or indirectly from the
nuclear energy hazard arising from:


(i)                       the
ownership, maintenance, operation or use of a nuclear facility by or on behalf
of an Insured;


(ii)                    the
furnishing by an Insured of services, materials, parts or equipment in
connection with the planning, construction, maintenance, operation or use of
any nuclear facility; and


(iii)                 the possession, consumption, use,
handling, disposal or transportation of fissionable substances, or of other
radioactive material (except radioactive isotopes, away from a nuclear
facility, which have reached the final stage of fabrication so as to be usable
for any scientific, medical, agricultural, commercial or industrial purpose)
used, distributed, handled or sold by an Insured.


As used in this Policy:


(1)                     The
term “nuclear energy hazard” means the radioactive, toxic, explosive, or other
hazardous properties of radioactive material;


(2)                     The
term “radioactive material” means uranium, thorium, plutonium, neptunium, their
respective derivatives and compounds, radioactive isotopes of other elements
and any other substances which may be designated by or pursuant to any law, act
or statute, or law amendatory thereof as being prescribed substances capable of
releasing atomic energy, or as being requisite for the production, use or
application of atomic energy;



 2
 









The term “nuclear facility” means


(a)                     any
apparatus designed or used to sustain nuclear fission in a self-supporting
chain reaction or to contain a critical mass of plutonium, thorium and uranium
or any one or more of them;


(b)                    any
equipment or device designed or used for (i) separating the isotopes of
plutonium, thorium and uranium or any one or more of them, (ii) processing or
utilizing spent fuel, or (iii) handling, processing or packaging waste;


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


(d)                    any
structure, basin, excavation, premises or place prepared or used for the
storage or disposal of waste radioactive material;


and includes the site on which any of the foregoing is
located, together with all operations conducted thereon and all premises used
for such operations.


(4)                    The
term “fissionable substance” means any prescribed substance that is, or from
which can be obtained, a substance capable of releasing atomic energy by
nuclear fission.


(5)                    With
respect to property, loss of use of such property shall be deemed to be
property damage.


April 1, 1996



 3














NUCLEAR INCIDENT
EXCLUSION CLAUSE - REINSURANCE - NO. 4


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


2.                          Without
in any way restricting the operations of Nuclear Incident Exclusion Clauses, -
Liability, - Physical Damage, - Boiler and Machinery and paragraph 1. of this
Clause, it is understood and agreed that for all purposes of the reinsurance
assumed by the Reinsurer from the Reinsured, all original insurance policies or
contracts of the Reinsured (new, renewal and replacement) shall be deemed to
include the applicable existing Nuclear Clause and/or Nuclear Exclusion
Clause(s) in effect at the time and any subsequent revisions thereto as agreed
upon and approved by the Insurance Industry and/or a qualified Advisory or
Rating Bureau.