EXHIBIT 10.21


 


Amendment No.1


 


To


 


Amended and Restated


Brokerage Business


Quota Share Reinsurance
Agreement


 


This is Amendment Number 1 (this “Amendment”), dated as of the date set
forth below to the Amended and Restated Brokerage 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 Brokerage 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 Reinsurers agree 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 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 40% 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 25% and a maximum of 45%, and provided
further that the quota share participation of the Reinsurer does not exceed
$150 million for the 12 month period ended March 31, 2007, with such
maximum amount subject to a 25% growth factor per year thereafter. If the
Reinsurer’s quota share participation maximum of $150 million (subject to the
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 25%. 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. Furthermore, for
the period beginning April 1, 2007, to the extent that the total amount
ceded to the Reinsurer and pooled with CastlePoint Insurance Company (“CPIC”)
exceeds 43.75% of Company’s Brokerage Business Premiums, the amount of property
catastrophe premiums ceded that will be paid by the Reinsurer shall be 30% or
the total amount, whichever is lesser, of property catastrophe premiums ceded
by the brokerage business pool less the amount paid by CPIC under the Brokerage
Business Pooling Agreement, and, for the period beginning April 1, 2007,
to the extent that the total amount ceded to the Reinsurer and pooled with CPIC
exceeds 43.75% of the Company’s Brokerage Business premiums,  the amount of property catastrophe losses
incurred that will be paid by the Reinsurer shall be 30% or the total amount,
whichever is lesser, of property catastrophe losses actually incurred within
the property catastrophe deductible for the brokerage business pool less the
amount paid by CPIC under the Brokerage Business Pooling Agreement,


 


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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
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.


 


D                                       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.


 


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IN
WITNESS WHEREOF, the Company and the Reinsurer have
caused this Agreement 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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