<PAGE>

                                                                   EXHIBIT 10.21

                          FIRST CASUALTY EXCESS OF LOSS
                              REINSURANCE CONTRACT
                           EFFECTIVE: JANUARY 1, 2007

                                    issued to

                      American Interstate Insurance Company
                               DeRidder, Louisiana
                 American Interstate Insurance Company of Texas
                                  Austin, Texas
                            Silver Oak Casualty, Inc.
                               DeRidder, Louisiana
                                       and
                 any other insurance companies which are now or
          hereafter come under the ownership, control or management of
                            Amerisafe Insurance Group

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
ARTICLE                                                                     PAGE
-------                                                                     ----
<S>                                                                         <C>
      I   Classes of Business Reinsured                                       1
     II   Commencement and Termination                                        1
    III   Territory (BRMA 51A)                                                3
     IV   Exclusions                                                          3
      V   Special Acceptances                                                 7
     VI   Retention and Limit                                                 7
    VII   Definitions                                                         8
   VIII   Annuities at Company's Option                                      10
     IX   Claims                                                             11
      X   Commutation                                                        11
     XI   Special Commutation                                                12
    XII   Salvage and Subrogation                                            14
   XIII   Reinsurance Premium                                                14
    XIV   Late Payments                                                      14
     XV   Offset (BRMA 36A)                                                  16
    XVI   Access to Records (BRMA 1D)                                        16
   XVII   Liability of the Reinsurer                                         16
  XVIII   Net Retained Lines (BRMA 32E)                                      16
    XIX   Errors and Omissions (BRMA 14F)                                    16
     XX   Currency (BRMA 12A)                                                17
    XXI   Taxes (BRMA 50B)                                                   17
   XXII   Federal Excise Tax                                                 17
  XXIII   Reserves and Letters of Credit                                     17
   XXIV   Insolvency                                                         19
    XXV   Arbitration (BRMA 6J)                                              20
   XXVI   Service of Suit (BRMA 49C)                                         21
  XXVII   Entire Agreement                                                   21
 XXVIII   Governing Law (BRMA 71B)                                           21
   XXIX   Agency Agreement                                                   21
    XXX   Intermediary (BRMA 23A)                                            21
</TABLE>

                                                                 (BENFIELD LOGO)
<PAGE>

                          FIRST CASUALTY EXCESS OF LOSS
                              REINSURANCE CONTRACT
                           EFFECTIVE: JANUARY 1, 2007

                                    issued to

                      American Interstate Insurance Company
                               DeRidder, Louisiana
                 American Interstate Insurance Company of Texas
                                  Austin, Texas
                            Silver Oak Casualty, Inc.
                               DeRidder, Louisiana
                                       and
                 any other insurance companies which are now or
          hereafter come under the ownership, control or management of
                            Amerisafe Insurance Group
             (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 Workers' Compensation, Employers Liability, including coverage provided under
the U.S. Longshore and Harbor Workers' Compensation Act and the Jones Act, and
General Liability business, subject to the terms, conditions and limitations
hereinafter set forth.

ARTICLE II - COMMENCEMENT AND TERMINATION

A.   This Contract shall become effective at 12:01 a.m., Local Standard Time,
     January 1, 2007, with respect to losses arising out of occurrences
     commencing at or after that time and date, and shall continue in force
     thereafter until terminated.

B.   Either party may terminate this Contract at 12:01 a.m., Local Standard
     Time, on any January 1 by giving the other party not less than 90 days
     prior notice by certified or registered mail.


                                     Page 1

<PAGE>

C.   Notwithstanding the provisions of paragraph B above, the Company may
     terminate a Subscribing Reinsurer's percentage share in this Contract in
     the event any of the following circumstances occur as clarified by public
     announcement for subparagraphs 1 through 6 below and upon discovery for
     subparagraphs 7 and 8 below. The Company has 120 days from the date of
     applicable public announcement or discovery to exercise the option to
     terminate a Subscribing Reinsurer's percentage share in this Contract. The
     effective date of special termination shall not be sooner than one day
     after the Company provides the Subscribing Reinsurer notice of its election
     to specially terminate, unless mutually agreed otherwise:

     1.   The Subscribing Reinsurer's policyholders' surplus at the beginning of
          any contract year has been reduced by more than 20.0% of the amount of
          surplus 12 months prior to that date; or

     2.   The Subscribing Reinsurer's policyholders' surplus at any time during
          any contract year has been reduced by more than 20.0% of the amount of
          surplus at the date of the Subscribing Reinsurer's most recent
          financial statement filed with regulatory authorities and available to
          the public as of the beginning of the contract year; 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+ (inclusive
          of "Not Rated" ratings); or

     4.   The Subscribing Reinsurer has become merged with, acquired by or
          controlled by any other company, corporation or 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; or

     8.   The Subscribing Reinsurer has ceased assuming new and renewal treaty
          reinsurance business.

D.   Unless the Company elects that the Reinsurer have no liability for losses
     arising out of occurrences commencing after the effective date of
     termination, and so notifies the Reinsurer prior to or as promptly as
     possible after the effective date of termination, reinsurance hereunder on
     business in force on the effective date of termination shall remain in full
     force and effect until expiration, cancellation or next premium anniversary
     of such business, whichever first occurs, but in no event beyond 12 months
     plus odd time (not exceeding 18 months in all) following the effective date
     of termination.


                                      Page 2

<PAGE>

ARTICLE III - TERRITORY (BRMA 51A)

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

ARTICLE IV - EXCLUSIONS

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

     1.   Lines of business not identified in the Classes of Business Reinsured
          Article.

     2.   All excess of loss reinsurance assumed by the Company.

     3.   Reinsurance assumed by the Company under obligatory reinsurance
          agreements, except:

          a.   Agency reinsurance where the policies involved are to be
               reunderwritten in accordance with the underwriting standards of
               the Company and reissued as Company policies at the next
               anniversary or expiration date; and

          b.   Intercompany reinsurance between any of the reinsured companies
               under this Contract.

     4.   Business written by the Company on a co-indemnity basis where the
          Company is not the controlling carrier.

     5.   Business written to apply in excess of a deductible of more than
          $25,000, and business issued to apply specifically in excess over
          underlying insurance. However, if the Company is required, by any
          state regulation, to provide a deductible of more than $25,000, this
          exclusion shall not apply.

     6.   Nuclear risks as defined in the "Nuclear Incident Exclusion Clause -
          Liability - Reinsurance (U.S.A.)" attached to and forming part of this
          Contract.

     7.   As regards interests which at time of loss or damage are on shore, no
          liability shall attach hereto in respect of any loss or damage which
          is occasioned by 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. This War Exclusion Clause shall not, however, apply to
          interests which at time of loss or damage are within the territorial
          limits of the United States of America (comprising the Fifty States of
          the Union, the District of Columbia, and including bridges between the
          United States of America and Mexico provided they are under United
          States ownership), Canada, St. Pierre and Miquelon, provided such
          interests are insured under policies containing a standard war or
          hostilities or warlike operations exclusion clause.

     8.   Liability as a member, subscriber or reinsurer of any Pool, Syndicate
          or Association, but this exclusion shall not apply to Assigned Risk
          Plans or similar plans.


                                     Page 3

<PAGE>

     9.   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.

     10.  Workers' Compensation where the principal exposures, as defined by the
          governing class code, include:

          a.   Operation of aircraft, but only if the annual estimated policy
               premium is $250,000 or more;

          b.   Railroad, subway or street railway operations;

          c.   Operation or navigation of vessels or barges;

          d.   Manufacture, production or refining of gas, natural or artificial
               fuel, or other liquefied petroleum fuel, but only if the annual
               estimated policy premium is $250,000 or more;

          e.   Manufacturing, assembly, packing or processing of fireworks,
               fuses, nitroglycerine, magnesium, pyroxylin, ammunition or
               explosives. This exclusion does not apply to the assembly,
               packing or processing of explosives when the estimated annual
               premium is under $250,000;

          f.   Wrecking or demolition of structures, but only if the annual
               estimated policy premium is $250,000 or more;

          g.   Underground mining.

     11.  As respects Workers' Compensation and Employers Liability only, unless
          otherwise excluded as set forth above, the reinsurance provided under
          this Contract shall not apply to any loss, cost or expense arising out
          of or related to, either directly or indirectly, any "terrorist
          activity," as defined herein, but this exclusion shall only apply when
          the activity includes, involves or is associated with the use of any
          biological, chemical, radioactive or nuclear agent, material, device
          or weapon, or when the predominant business of the policyholder, as
          defined by the governing class code, is:

          a.   The operation of: airports and aircraft; flight schools; bridges,
               dams, tunnels or locks; department stores; shopping malls; chain
               retail stores; casinos and casino hotels; cruise lines;
               railroads; ports/public transit authorities; security services;
               stadiums; convention/exhibition centers; or theme/amusement
               parks;

          b.   The manufacture and distribution of: automobiles; chemicals,
               petrochemicals or pharmaceuticals; utilities (electric, gas,
               water and sewer); major defense/aerospace products; or high-tech
               equipment, but only if the policyholder


                                     Page 4

<PAGE>

               employs more than 20 personnel at the location of a terrorist
               activity at the time of its occurrence;

          c.   The management or operation of the following type of structures,
               but only if greater than 25 stories in height:
               apartments/condominiums/co-ops; hotels/motels; or office
               buildings;

          d.   Businesses primarily engaged in the entertainment, media or
               transportation industry limited to the following: major media
               providers (NBC, FOX, ABC, CBS, etc.); television and motion
               picture studios; Broadway theaters; major internet companies
               (AOL, Yahoo, etc.); professional sports teams; major
               telecommunications companies (AT&T, WorldCom/MCI, etc.); national
               truck rental companies (Ryder, Penske, U-Haul, etc.); or major
               national motor freight common carriers (J.B. Hunt, Red Arrow,
               etc.);

          e.   Policyholders primarily located in, or predominantly doing
               business as: hospitals; universities; nuclear facilities;
               financial institutions; or governmental buildings and national
               landmarks.

          "Terrorist activity" shall mean any deliberate, unlawful act that:

          a.   Is declared by any authorized government official to be or to
               involve terrorism, terrorist activity or acts of terrorism; or

          b.   Includes, involves, or is associated with the use or threatened
               use of force, violence or harm against any person, tangible or
               intangible property, the environment, or any natural resources,
               where the act or threatened act is intended, in whole or in part,
               to:

               i.   Promote or further any political, ideological,
                    philosophical, racial, ethnic, social or religious cause or
                    objective of the perpetrator or any organization,
                    association or group affiliated with the perpetrator; or

               ii.  Influence, disrupt or interfere with any government related
                    operations, activities or policies; or

               iii. Intimidate, coerce or frighten the general public or any
                    segment of the general public; or

               iv.  Disrupt or interfere with a national economy or any segment
                    of a national economy; or

          c.   Includes, involves, or is associated with, in whole or in part,
               any of the following activities, or the threat thereof:

               i.   Hijacking or sabotage of any form of transportation or
                    conveyance, including but not limited to spacecraft,
                    satellite, aircraft, train, vessel or motor vehicle;

               ii.  Hostage taking or kidnapping;

               iii. The use of any bomb, incendiary device, explosive or
                    firearm;


                                     Page 5

<PAGE>

               iv.  The interference with or disruption of basic public or
                    commercial services and systems, including but not limited
                    to the following services or systems: electricity, natural
                    gas, power, postal, communications, telecommunications,
                    information, public transportation, water, fuel, sewer or
                    waste disposal;

               v.   The injuring or assassination of any elected or appointed
                    government official or any government employee;

               vi.  The seizure, blockage, interference with, disruption of, or
                    damage to any government buildings, institutions, functions,
                    events, tangible or intangible property or other assets; or

               vii. The seizure, blockage, interference with, disruption of, or
                    damage to tunnels, roads, streets, highways, or other places
                    of public transportation or conveyance.

          d.   Any of the activities listed in subparagraph c, above, shall be
               considered terrorist activity, except where the Company can
               demonstrate to the Reinsurer that the foregoing activities or
               threats thereof were motivated solely by personal objectives of
               the perpetrator that are unrelated, in whole or in part, to any
               intention to:

               i.   Promote or further any political, ideological,
                    philosophical, racial, ethnic, social or religious cause or
                    objective of the perpetrator or any organization,
                    association or group affiliated with the perpetrator;

               ii.  Influence, disrupt or interfere with any government-related
                    operations, activities or policies;

               iii. Intimidate, coerce or frighten the general public or any
                    segment of the general public; or

               iv.  Disrupt or interfere with a national economy or any segment
                    of a national economy.

     12.  As respects General Liability policies, exposures, other than those
          identified below, as included in the General Liability section of the
          Company's Commercial Lines Manual:

          a.   Class 97111 - Logging;

          b.   Class 58873 - Sawmill;

          c.   Class 59984 - Woodyard and Drivers;

          d.   Class 95410 - Grading of Land;

          e.   Class 45819 - Lumber Yard;

          f.   Class 10073 - Repair Shops and Drivers;


                                     Page 6

<PAGE>

          g.   Class 43822 - Timber Cruiser;

          h.   Class 99793 - Truckmen Not Otherwise Classified;

          i.   Class 91591 - Contractors - Subcontracted Work Other Than
               Construction;

          j.   Class 49452 - Vacant Land.

B.   Any exclusion set forth in subparagraphs 10 and/or 12 of paragraph A shall
     be waived automatically when, in the opinion of the Company, the exposure
     excluded therein is incidental to the principal exposure on the risk in
     question.

C.   If the Company is bound, without the knowledge and contrary to the
     instructions of the Company's supervisory underwriting personnel, on any
     business falling within the scope of one or more of the exclusions set
     forth in subparagraphs 10 and/or 12 of paragraph A, the exclusion shall be
     suspended with respect to such business until the Company has the first
     opportunity to cancel the policy in compliance with governmental
     requirements.

D.   If the Company is required to accept an assigned risk which conflicts with
     one or more of the exclusions set forth in subparagraph 10 of paragraph A,
     reinsurance shall apply, but only for the difference between the Company's
     retention and the minimum limit required by the applicable state statute,
     and in no event shall the Reinsurer's liability exceed the limit set forth
     in the Retention and Limit Article.

ARTICLE V - SPECIAL ACCEPTANCES

From time to time the Company may request a special acceptance of reinsurance
falling outside the scope of the provisions set forth in this Contract. If each
Subscribing Reinsurer whose share in the interests and liabilities of the
Reinsurer is 20.0% or greater agrees to a special acceptance, such special
acceptance shall be binding on all Subscribing Reinsurers with respect to their
respective shares. If such agreement is not achieved, such special acceptance
shall be made to this Contract only with respect to the interests and
liabilities of each Subscribing Reinsurer who agrees to the special acceptance.
In the event a reinsurer becomes a party to this Contract subsequent to one or
more special acceptances hereunder, the new reinsurer shall automatically accept
such special acceptance(s) as being covered hereunder.

ARTICLE VI - RETENTION AND LIMIT

A.   The Company shall retain and be liable for the first $2,000,000 of ultimate
     net loss arising out of each occurrence. The Reinsurer shall then be liable
     (subject to the provisions of paragraph B below) for the amount by which
     such ultimate net loss exceeds the Company's retention, but the liability
     of the Reinsurer shall not exceed $3,000,000 as respects any one
     occurrence, nor shall the liability of the Reinsurer exceed $51,000,000 in
     all for the contract year.

B.   Notwithstanding the provisions of paragraph A above, no claim shall be made
     under this Contract during any contract year unless and until cumulative
     subject excess losses paid from losses arising out of occurrences
     commencing during the contract year (being losses which would be
     recoverable from the Reinsurer under paragraph A above were it not for the


                                     Page 7

<PAGE>

     provisions of this paragraph) exceed an annual aggregate retention of 1.8%
     of net earned premium. The Company shall retain and be liable for such
     annual aggregate retention in addition to its initial loss retention
     stipulated in paragraph A above.

C.   As respects any loss or losses arising out of terrorist activity, the
     liability of the Reinsurer shall not exceed $3,000,000 each contract year.
     Terrorism losses that apply to the annual aggregate deductible shall not
     reduce the liability of the Reinsurer as respects the aggregate terrorism
     limit.

D.   The Company shall be permitted to carry quota share and excess reinsurance,
     recoveries under which shall inure solely to the benefit of the Company and
     be entirely disregarded in applying all of the provisions of this Contract.

E.    The Company shall purchase or be deemed to have purchased inuring excess
      facultative reinsurance to limit its ultimate net loss under any one
      coverage, any one policy (exclusive of loss in excess of policy limits or
      extra contractual obligations) to $2,000,000 each occurrence as respects
      General Liability and Employers Liability business subject hereto.

F.    The Company shall be permitted to carry excess of loss reinsurance
      applying to Workers' Compensation risks in the State of Minnesota,
      recoveries under which shall inure to the benefit of this Contract.

      Such coverage shall be provided through the Minnesota Workers'
      Compensation Reinsurance Association. It is understood that the liability
      of the Reinsurer for Minnesota Workers' Compensation risks is not
      released.

      In the event the Company accrues liability that is not provided by any
      inuring reinsurance, for whatever reason, the Reinsurer agrees to reinsure
      such excess liability.

ARTICLE VII - 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 any 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 an action against its insured or
          reinsured or in the preparation or prosecution of an appeal consequent
          upon such an action.


                                     Page 8

<PAGE>

     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.

     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 Contract or the
     enforceability of such provision in any other jurisdiction.

     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.

C.   "Occurrence" as used herein is defined as an accident or occurrence or a
     series of accidents or occurrences arising out of or caused by one event,
     except that:

     1.   As respects General Liability policies where the Company's limit of
          liability for Products and Completed Operations coverages is
          determined on the basis of the insured's aggregate losses during a
          policy period, all such losses proceeding from or traceable to the
          same causative agency shall, at the Company's option, be deemed to
          have been caused by one occurrence commencing at the beginning of the
          policy period, it being understood and agreed that each renewal or
          annual anniversary date of the policy involved shall be deemed the
          beginning of a new policy period;

     2.   Each occupational or industrial disease case or cumulative trauma case
          contracted by an employee of an insured shall be deemed to have been
          caused by a separate occurrence, commencing on:

          a.   The date of disability for which compensation is payable if the
               case is compensable under the Workers' Compensation Law;

          b.   The date disability due to the disease actually began if the case
               is not compensable under the Workers' Compensation Law;

          c.   The date of cessation of employment if claim is made after
               employment has ceased.

     3.   Notwithstanding the provisions of subparagraph 2 above, as respects
          losses resulting from occupational or industrial disease or cumulative
          trauma suffered by employees of


                                     Page 9

<PAGE>

          an insured for which the employer is liable, as a result of a sudden
          and accidental event not exceeding 72 hours in duration, all such
          losses shall be considered one occurrence and may be combined with
          losses classified as other than occupational or industrial disease or
          cumulative trauma which arise out of the same event and the
          combination of such losses shall be considered as one occurrence
          within the meaning hereof.

D.   "Occupational or industrial disease" is any abnormal condition that
     fulfills all of the following conditions:

     1.   It is not traceable to a definite compensable accident occurring
          during the employee's past or present employment.

     2.   It has been caused by exposure to a disease producing agent or agents
          present in the worker's occupational environment.

     3.   It has resulted in disability or death.

E.   "Cumulative trauma" is an injury that fulfills all of the following
     conditions:

     1.   It is not traceable to a definite compensable accident occurring
          during the employee's past or present employment.

     2.   It has occurred from and has been aggravated by a repetitive
          employment related activity.

     3.   It has resulted in disability or death.

F.   "Loss adjustment expense" as used herein shall mean expenses allocable to
     the investigation, defense and/or settlement of specific claims, including
     litigation expenses, interest on judgments, declaratory judgment expenses
     or other legal expenses and costs incurred in connection with coverage
     questions and legal actions connected thereto, and salaries and expenses of
     salaried adjusters associated with claims covered under policies of the
     Company reinsured hereunder but not including office expenses or salaries
     of the Company's regular employees.

G.   "Contract year" as used in this Contract shall mean the period from 12:01
     a.m., Local Standard Time, January 1, 2007 to 12:01 a.m., Local Standard
     Time, January 1, 2008, and each respective 12-month period thereafter that
     this Contract continues in force. However, if this Contract is terminated,
     the final contract year shall be from the beginning of the then current
     contract year through the date of termination if this Contract is
     terminated on a "cutoff" basis, or the end of the runoff period if this
     Contract is terminated on a "runoff" basis.

ARTICLE VIII - ANNUITIES AT COMPANY'S OPTION

A.   Whenever the Company is required, or elects, to purchase an annuity or to
     negotiate a structured settlement, either in satisfaction of a judgment or
     in an out-of-court settlement or otherwise, the cost of the annuity or the
     structured settlement, as the case may be, shall be deemed part of the
     Company's ultimate net loss.


                                     Page 10

<PAGE>

B.   The terms "annuity" or "structured settlement" shall be understood to mean
     any insurance policy, lump sum payment, agreement or device of whatever
     nature resulting in the payment of a lump sum by the Company in settlement
     of any or all future liabilities which may attach to it as a result of an
     occurrence.

C.   In the event the Company purchases an annuity which inures in whole or in
     part to the benefit of the Reinsurer, it is understood that the liability
     of the Reinsurer is not released thereby. In the event the Company is
     required to provide benefits not provided by the annuity for whatever
     reason, the Reinsurer shall pay its share of any loss.

ARTICLE IX - CLAIMS

A.   Whenever a claim is reserved by the Company for an amount greater than
     50.0% of its retention hereunder and/or whenever a claim appears likely to
     result in a claim under this Contract, the Company shall notify the
     Reinsurer. Further, the Company shall notify the Reinsurer whenever a claim
     involves a fatality, major limb amputation, spinal cord damage, brain
     damage, blindness or extensive burns, regardless of liability, if the
     policy limits or statutory benefits applicable to the claim are greater
     than the Company's retention hereunder. The Reinsurer shall have the right
     to participate, at its own expense, in the defense of any claim or suit or
     proceeding involving this reinsurance.

B.   All claim settlements made by the Company, provided they are within the
     terms of this Contract (including but not limited to ex-gratia payments),
     shall be binding upon the Reinsurer, and the Reinsurer agrees to pay all
     amounts for which it may be liable upon receipt of satisfactory evidence of
     the amount paid by the Company.

ARTICLE X - COMMUTATION

A.   Upon mutual agreement, the Company may commute the contract year.

B.   Unless otherwise mutually agreed, the calculation for the commutation shall
     be calculated in accordance with the following formula:

     1.   The net reinsurance premium earned (i.e., the gross reinsurance
          premium earned less the ceding commission allowed) for the contract
          year; less

     2.   The Reinsurer's paid losses and loss adjustment expense on losses
          arising out of occurrences commencing during the contract year; less

     3.   The Reinsurer's margin at 25.0% of the net reinsurance premium earned
          (i.e., the gross reinsurance premium earned less the ceding commission
          allowed) for the contract year; equals

     4.   The commutation balance.

C.   Payment to the Company of the commutation balance will result in a full and
     final commutation of all known and unknown losses and shall constitute a
     complete and final


                                     Page 11

<PAGE>

     release of the Reinsurer and the Company in respect of any and all
     liabilities on business covered under this Contract during the contract
     year commuted.

D.   Should the calculation be zero or negative, no payment shall be made and
     the Company shall have the option to provide a full and final commutation
     of all known and unknown losses, which shall constitute a complete and
     final release of the Reinsurer and the Company with respect to any and all
     liabilities on business covered under this Contract during the contract
     year commuted.

ARTICLE XI - SPECIAL COMMUTATION

A.   In the event a Subscribing Reinsurer meets the following conditions, 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 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+ (inclusive
          of "Not Rated" ratings); or

     2.   The Subscribing Reinsurer has ceased assuming new and renewal treaty
          reinsurance business.

     "Outstanding claim or claims" shall be defined as known or unknown claims,
     including any billed yet unpaid claims. However, unless otherwise mutually
     agreed, this paragraph shall not apply unless the outstanding claim or
     claims is for an amount not less than $5,000.

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 and shall set forth or
     attach the information relied upon by the Company and the methodology
     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 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 and
     shall set forth or attach the information relied upon by the Subscribing
     Reinsurer and the methodology employed to calculate the excess loss.


                                     Page 12

<PAGE>

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 conditions set forth in
     subparagraph 1 or 2 in 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 outstanding claim or claims, known or
     unknown, under this Contract, which shall 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 not apply to a Subscribing Reinsurer which is rated "A+"
     or better by A.M. Best at the beginning of any Contract year.

L.   This Article shall survive the termination of this Contract.


                                     Page 13

<PAGE>

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) or subrogation on
account of claims and settlements involving reinsurance hereunder. Salvage or
subrogation 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 where it is
economically reasonable in the judgment of the Company, relating to any loss, a
part of which loss was sustained by the Reinsurer, and to prosecute all claims
arising out of such rights.

ARTICLE XIII - REINSURANCE PREMIUM

A.   As premium for the reinsurance provided hereunder during each contract
     year, the Company shall pay the Reinsurer 4.929% (3.450% net) of its net
     earned premium.

     The Reinsurer shall allow the Company a 30.0% commission on all premiums
     ceded to the Reinsurer hereunder. The Company shall allow the Reinsurer
     return commission on return premiums at the same rate.

B.   Within 30 days after the end of each month, the Company shall report its
     net earned premium for the month. The premium due the Reinsurer, at the
     rate shown in paragraph A, shall be paid by the Company with its report. In
     the event this Contract is terminated in accordance with paragraph C of the
     Commencement and Termination Article, no payments shall be due as respects
     each Subscribing Reinsurer after the effective date of termination.

C.   Within 60 days after the end of each contract year, the Company shall
     provide a report to the Reinsurer setting forth the premium due hereunder
     for the contract year, computed in accordance with paragraph A, and any
     additional premium due the Reinsurer or return premium due the Company
     shall be remitted promptly.

D.   "Net earned premium" as used herein is defined as the Company's gross
     earned premium collected on the classes of business subject to this
     Contract, less only the earned portion of premiums, if any, ceded by the
     Company for reinsurance which inures to the benefit of this Contract and
     less dividends incurred.

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 whom payment is due, may, by notifying the Intermediary in
     writing, require the debtor party to pay, and the debtor party


                                     Page 14
<PAGE>

     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 sum of 400 basis points plus 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 45 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 45 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 of paragraph C 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 14 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.

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 the 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.


                                     Page 15
<PAGE>

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 36A)

The Company and the Reinsurer may offset any balance or amount due from one
party to the other under this Contract or any other contract heretofore or
hereafter entered into between the Company and the Reinsurer, whether acting as
assuming reinsurer or ceding company. This provision shall not be affected by
the insolvency of either party to this Contract.

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.

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 32E)

A.   This Contract applies only to that portion of any policy which the Company
     retains net for its own account (prior to deduction of any underlying
     reinsurance specifically permitted in this Contract), 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.

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


                                     Page 16

<PAGE>

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 - RESERVES AND LETTERS OF CREDIT

[Applies only to a reinsurer which does not qualify for full credit with any
insurance regulatory authority having jurisdiction over the Company's reserves,
which is or becomes rated "B++" or lower by A.M. Best (inclusive of "Not Rated"
ratings) and/or Standard & Poor's rating is or becomes "BBB+" or lower
(inclusive of "Not Rated" ratings).]

A.   As regards policies or bonds issued by the Company coming within the scope
     of this Contract, the Company agrees that when it shall file with the
     insurance regulatory authority or set up on its books reserves for losses
     covered hereunder which it shall be required by law to set up, it will
     forward to the Reinsurer a statement showing the proportion of such
     reserves which is applicable to the Reinsurer. The Reinsurer hereby agrees
     to fund such reserves in respect of known outstanding losses that have been
     reported to the Reinsurer and allocated loss adjustment expense relating
     thereto, losses and allocated loss adjustment expense paid by the Company
     but not recovered from the Reinsurer, plus reserves for losses incurred but
     not reported, as shown in the statement prepared by the


                                     Page 17

<PAGE>

     Company (hereinafter referred to as "Reinsurer's Obligations") by funds
     withheld, cash advances or a Letter of Credit. The Reinsurer shall have the
     option of determining the method of funding provided it is acceptable to
     the insurance regulatory authorities having jurisdiction over the Company's
     reserves with regards to unauthorized reinsurers; or, should the Reinsurer
     be downgraded, the method of funding shall be mutually agreed.

B.   When funding by a Letter of Credit, the Reinsurer agrees to apply for and
     secure timely delivery to the Company of a clean, irrevocable and
     unconditional Letter of Credit issued by a bank meeting the NAIC Securities
     Valuation Office credit standards for issuers of Letters of Credit and
     containing provisions acceptable to the insurance regulatory authorities
     having jurisdiction over the Company's reserves in an amount equal to the
     Reinsurer's proportion of said reserves. Such Letter of Credit shall be
     issued for a period of not less than one year, and shall contain an
     "evergreen" clause, which automatically extends the term for one year from
     its date of expiration or any future expiration date unless 30 days (60
     days where required by insurance regulatory authorities) prior to any
     expiration date the issuing bank shall notify the Company by certified or
     registered mail that the issuing bank elects not to consider the Letter of
     Credit extended for any additional period.

C.   The Reinsurer and Company agree that the Letters of Credit provided by the
     Reinsurer pursuant to the provisions of this Contract may be drawn upon at
     any time, notwithstanding any other provision of this Contract, and be
     utilized by the Company or any successor, by operation of law, of the
     Company including, without limitation, any liquidator, rehabilitator,
     receiver or conservator of the Company for the following purposes, unless
     otherwise provided for in a separate Trust Agreement:

     1.   To reimburse the Company for the Reinsurer's Obligations, the payment
          of which is due under the terms of this Contract and which has not
          been otherwise paid;

     2.   To make refund of any sum which is in excess of the actual amount
          required to pay the Reinsurer's Obligations under this Contract, if so
          requested by the Reinsurer;

     3.   To fund an account with the Company for the Reinsurer's Obligations.
          Such cash deposit shall be held in an interest bearing account
          separate from the Company's other assets, and interest thereon not in
          excess of the prime rate shall accrue to the benefit of the Reinsurer;

     4.   To pay the Reinsurer's share of any other amounts the Company claims
          are due under this Contract.

     In the event the amount drawn by the Company on any Letter of Credit is in
     excess of the actual amount required for subparagraphs 1 or 3, or in the
     case of subparagraph 4, the actual amount determined to be due, the Company
     shall promptly return to the Reinsurer the excess amount so drawn. All of
     the foregoing shall be applied without diminution because of insolvency on
     the part of the Company or the Reinsurer.

D.   The issuing bank shall have no responsibility whatsoever in connection with
     the propriety of withdrawals made by the Company or the disposition of
     funds withdrawn, except to ensure that withdrawals are made only upon the
     order of properly authorized representatives of the Company.


                                     Page 18

<PAGE>

E.   At annual intervals, or more frequently as agreed but never more frequently
     than quarterly, the Company shall prepare a specific statement of the
     Reinsurer's Obligations, for the sole purpose of amending the Letter of
     Credit, in the following manner:

     1.   If the statement shows that the Reinsurer's Obligations exceed the
          balance of credit as of the statement date, the Reinsurer shall,
          within 30 days after receipt of notice of such excess, secure delivery
          to the Company of an amendment to the Letter of Credit increasing the
          amount of credit by the amount of such difference.

     2.   If, however, the statement shows that the Reinsurer's Obligations are
          less than the balance of credit as of the statement date, the Company
          shall, within 30 days after receipt of written request from the
          Reinsurer, release such excess credit by agreeing to secure an
          amendment to the Letter of Credit reducing the amount of credit
          available by the amount of such excess credit.

F.   This Article shall not apply to a reinsurer which satisfies both of the
     following conditions:

     1.   Qualifies for full credit with any insurance regulatory authority
          having jurisdiction over the Company's reserves; and

     2.   Is rated "A+" or better by A.M. Best at the beginning of any contract
          year.

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


                                     Page 19

<PAGE>

     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 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 (BRMA 6J)

A.   As a condition precedent to any right of action hereunder, in the event of
     any dispute or difference of opinion hereafter arising with respect to this
     Contract, it is hereby mutually agreed that such dispute or difference of
     opinion shall be submitted to arbitration. One Arbiter shall be chosen by
     the Company, the other by the Reinsurer, and an Umpire shall be chosen by
     the two Arbiters before they enter upon arbitration, all of whom shall be
     active or retired disinterested executive officers of insurance or
     reinsurance companies or Lloyd's London Underwriters. In the event that
     either party should fail to choose an Arbiter within 30 days following a
     written request by the other party to do so, the requesting party may
     choose two Arbiters who shall in turn choose an Umpire before entering upon
     arbitration. If the two Arbiters fail to agree upon the selection of an
     Umpire within 30 days following their appointment, each Arbiter shall
     nominate three candidates within 10 days thereafter, two of whom the other
     shall decline, and the decision shall be made by drawing lots.

B.   Each party shall present its case to the Arbiters within 30 days following
     the date of appointment of the Umpire. The Arbiters shall consider this
     Contract as an honorable engagement rather than merely as a legal
     obligation and they are relieved of all judicial formalities and may
     abstain from following the strict rules of law. The decision of the
     Arbiters shall be final and binding on both parties; but failing to agree,
     they shall call in the Umpire and the decision of the majority shall be
     final and binding upon both parties. Judgment upon the final decision of
     the Arbiters may be entered in any court of competent jurisdiction.

C.   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 and communications shall be made by the Company to each of the
     reinsurers constituting one party, provided, however, that nothing herein
     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 reinsurers participating under the terms of this Contract from several
     to joint.

D.   Each party shall bear the expense of its own Arbiter, and shall jointly and
     equally bear with the other the expense of the Umpire and of the
     arbitration. In the event that the two Arbiters are chosen by one party, as
     above provided, the expense of the Arbiters, the Umpire and the arbitration
     shall be equally divided between the two parties.

E.   Any arbitration proceedings shall take place at a location mutually agreed
     upon by the parties to this Contract, but notwithstanding the location of
     the arbitration, all proceedings pursuant hereto shall be governed by the
     law of the state in which the Company has its principal office.


                                     Page 20

<PAGE>

ARTICLE XXVI - SERVICE OF SUIT (BRMA 49C)

(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)

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 - ENTIRE AGREEMENT

This written Contract constitutes the entire agreement between the parties
hereto with respect to the business being reinsured hereunder, and there are no
understandings between the parties hereto other than as expressed in this
Contract. Any change or modification to this Contract will be made by amendment
to this Contract and signed by the parties.

ARTICLE XXVIII - GOVERNING LAW (BRMA 71B)

This Contract shall be governed by and construed in accordance with the laws of
the State of Louisiana.

ARTICLE XXIX - 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 XXX - 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


                                     Page 21

<PAGE>

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:

DeRidder, Louisiana, this ________ day of ________________ in the year ________.

                          ______________________________________________________
                          American Interstate Insurance Company
                          American Interstate Insurance Company of Texas
                          Silver Oak Casualty, Inc.


                                     Page 22

<PAGE>

      NUCLEAR INCIDENT EXCLUSION CLAUSE - LIABILITY - REINSURANCE (U.S.A.)
       (Approved by Lloyd's Underwriters' Fire and Non-Marine Association)

(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 of 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 Liability 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

          (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 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; or

          (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.

<PAGE>

     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 operation 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.

     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 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,"

                    ("property damage" includes all forms of radioactive
                    contamination of property,

                    (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

               (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 operation 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 italics 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.

21/9/67 N.M.A. 1590
<PAGE>

                          FIRST CASUALTY EXCESS OF LOSS
                              REINSURANCE CONTRACT
                           EFFECTIVE: JANUARY 1, 2007

                                    issued to

                      American Interstate Insurance Company
                               DeRidder, Louisiana
                 American Interstate Insurance Company of Texas
                                  Austin, Texas
                            Silver Oak Casualty, Inc.
                               DeRidder, Louisiana
                                       and
                 any other insurance companies which are now or
          hereafter come under the ownership, control or management of
                            Amerisafe Insurance Group

<TABLE>
<CAPTION>
                  REINSURERS                    PARTICIPATIONS
                  ----------                    --------------
<S>                                             <C>
AXIS Reinsurance Company                             10.0%
Hannover Ruckversicherungs-Aktiengesellschaft        22.5
Partner Reinsurance Company of the U.S.              25.0

THROUGH BENFIELD LIMITED (PLACEMENT ONLY)
AXA RE                                               10.0

THROUGH BENFIELD LIMITED
Lloyd's Underwriters and Companies Per
   Signing Schedule(s)                               22.5
                                                    -----
TOTAL                                               100.0%
                                                    =====
</TABLE>
<PAGE>

                       INTERESTS AND LIABILITIES AGREEMENT

                                       of

                            AXIS Reinsurance Company
                               New York, New York
            (hereinafter referred to as the "Subscribing Reinsurer")

                               with respect to the

                          FIRST CASUALTY EXCESS OF LOSS
                              REINSURANCE CONTRACT
                           EFFECTIVE: JANUARY 1, 2007

                         issued to and duly executed by

                      American Interstate Insurance Company
                               DeRidder, Louisiana
                 American Interstate Insurance Company of Texas
                                  Austin, Texas
                            Silver Oak Casualty, Inc.
                               DeRidder, Louisiana
                                       and
                 any other insurance companies which are now or
          hereafter come under the ownership, control or management of
                            Amerisafe Insurance Group

The Subscribing Reinsurer hereby accepts a 10.0% share in the interests and
liabilities of the "Reinsurer" as set forth in the attached Contract captioned
above.

This Agreement shall become effective at 12:01 a.m., Local Standard Time,
January 1, 2007, and shall continue in force until 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 _______ day of __________________ in the year ________.

                         _______________________________________________________
                         AXIS Reinsurance Company

<PAGE>

                       INTERESTS AND LIABILITIES AGREEMENT

                                       of

                                     AXA RE
                                  Paris, France
            (hereinafter referred to as the "Subscribing Reinsurer")

                               with respect to the

                          FIRST CASUALTY EXCESS OF LOSS
                              REINSURANCE CONTRACT
                           EFFECTIVE: JANUARY 1, 2007

                         issued to and duly executed by

                      American Interstate Insurance Company
                               DeRidder, Louisiana
                 American Interstate Insurance Company of Texas
                                  Austin, Texas
                            Silver Oak Casualty, Inc.
                               DeRidder, Louisiana
                                       and
                 any other insurance companies which are now or
          hereafter come under the ownership, control or management of
                            Amerisafe Insurance Group

The Subscribing Reinsurer hereby accepts a 10.0% share in the interests and
liabilities of the "Reinsurer" as set forth in the attached Contract captioned
above.

This Agreement shall become effective at 12:01 a.m., Local Standard Time,
January 1, 2007, and shall continue in force until 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:

Paris, France, this _______ day of _______________________ in the year ________.

                    ____________________________________________________________
                    AXA RE

<PAGE>

                       INTERESTS AND LIABILITIES AGREEMENT

                                       of

                  Hannover Ruckversicherungs-Aktiengesellschaft
                                Hannover, Germany
            (hereinafter referred to as the "Subscribing Reinsurer")

                               with respect to the

                          FIRST CASUALTY EXCESS OF LOSS
                              REINSURANCE CONTRACT
                           EFFECTIVE: JANUARY 1, 2007

                         issued to and duly executed by

                      American Interstate Insurance Company
                               DeRidder, Louisiana
                 American Interstate Insurance Company of Texas
                                  Austin, Texas
                            Silver Oak Casualty, Inc.
                               DeRidder, Louisiana
                                       and
                 any other insurance companies which are now or
          hereafter come under the ownership, control or management of
                            Amerisafe Insurance Group

The Subscribing Reinsurer hereby accepts a 22.5% share in the interests and
liabilities of the "Reinsurer" as set forth in the attached Contract captioned
above.

This Agreement shall become effective at 12:01 a.m., Local Standard Time,
January 1, 2007, and shall continue in force until 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:

Hannover, Germany, this _______ day of ___________________ in the year ________.

                        ________________________________________________________
                        Hannover Ruckversicherungs-Aktiengesellschaft

<PAGE>

                       INTERESTS AND LIABILITIES AGREEMENT

                                       of

                     Partner Reinsurance Company of the U.S.
                               New York, New York
            (hereinafter referred to as the "Subscribing Reinsurer")

                               with respect to the

                          FIRST CASUALTY EXCESS OF LOSS
                              REINSURANCE CONTRACT
                           EFFECTIVE: JANUARY 1, 2007

                         issued to and duly executed by

                      American Interstate Insurance Company
                               DeRidder, Louisiana
                 American Interstate Insurance Company of Texas
                                  Austin, Texas
                            Silver Oak Casualty, Inc.
                               DeRidder, Louisiana
                                       and
                 any other insurance companies which are now or
          hereafter come under the ownership, control or management of
                            Amerisafe Insurance Group

The Subscribing Reinsurer hereby accepts a 25.0% share in the interests and
liabilities of the "Reinsurer" as set forth in the attached Contract captioned
above.

This Agreement shall become effective at 12:01 a.m., Local Standard Time,
January 1, 2007, and shall continue in force until 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:

Greenwich, Connecticut, this _______ day of ______________ in the year ________.

                             ___________________________________________________
                             Partner Reinsurance Company of the U.S.

<PAGE>

                       INTERESTS AND LIABILITIES AGREEMENT

                                       of

                     Certain Underwriting Members of Lloyd's
                  shown in the Signing Schedule attached hereto
            (hereinafter referred to as the "Subscribing Reinsurer")

                               with respect to the

                          FIRST CASUALTY EXCESS OF LOSS
                              REINSURANCE CONTRACT
                           EFFECTIVE: JANUARY 1, 2007

                         issued to and duly executed by

                      American Interstate Insurance Company
                               DeRidder, Louisiana
                 American Interstate Insurance Company of Texas
                                  Austin, Texas
                            Silver Oak Casualty, Inc.
                               DeRidder, Louisiana
                                       and
                 any other insurance companies which are now or
          hereafter come under the ownership, control or management of
                            Amerisafe Insurance Group

The Subscribing Reinsurer hereby accepts a 15.0% share in the interests and
liabilities of the "Reinsurer" as set forth in the attached Contract captioned
above.

This Agreement shall become effective at 12:01 a.m., Local Standard Time,
January 1, 2007, and shall continue in force until 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 Schedule
attached hereto.

<PAGE>

                       INTERESTS AND LIABILITIES AGREEMENT

                                       of

                           Certain Insurance Companies
                shown in the Signing Schedule(s) attached hereto
            (hereinafter referred to as the "Subscribing Reinsurer")

                               with respect to the

                          FIRST CASUALTY EXCESS OF LOSS
                              REINSURANCE CONTRACT
                           EFFECTIVE: JANUARY 1, 2007

                         issued to and duly executed by

                      American Interstate Insurance Company
                               DeRidder, Louisiana
                 American Interstate Insurance Company of Texas
                                  Austin, Texas
                            Silver Oak Casualty, Inc.
                               DeRidder, Louisiana
                                       and
                 any other insurance companies which are now or
          hereafter come under the ownership, control or management of
                            Amerisafe Insurance Group

The Subscribing Reinsurer hereby accepts a 17.5% share in the interests and
liabilities of the "Reinsurer" as set forth in the attached Contract captioned
above.

This Agreement shall become effective at 12:01 a.m., Local Standard Time,
January 1, 2007, and shall continue in force until 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 Schedule(s)
attached hereto.