Exhibit
10.33





PROPERTY CATASTROPHE
EXCESS OF LOSS

REINSURANCE AGREEMENT

NO. POR327524


EFFECTIVE: JANUARY 01,
2006


between


SAFETY INSURANCE COMPANY

SAFETY INDEMNITY INSURANCE COMPANY

both of Boston, Massachusetts


and


SWISS REINSURANCE AMERICA
CORPORATION 

Armonk, New York















PROPERTY CATASTROPHE
EXCESS OF LOSS REINSURANCE AGREEMENT NO POR327524


	
  ARTICLE

  	
   

  	
  CONTENTS

  	
   

  	
  PAGE

  
	
  PREAMBLE

  	
   

  	
   

  	
   

  	
  1

  
	
  ARTICLE I. - BUSINESS COVERED

  	
   

  	
   

  	
   

  	
  1

  
	
  ARTICLE II. - EFFECTIVE DATE AND TERMINATION

  	
   

  	
   

  	
   

  	
  2

  
	
  ARTICLE III. - TERRITORY

  	
   

  	
   

  	
   

  	
  2

  
	
  ARTICLE IV. - LIMIT AND RETENTION

  	
   

  	
   

  	
   

  	
  2

  
	
  ARTICLE V. - REINSTATEMENT

  	
   

  	
   

  	
   

  	
  3

  
	
  ARTICLE VI. - ULTIMATE NET LOSS

  	
   

  	
   

  	
   

  	
  4

  
	
  ARTICLE VII. - LOSS IN EXCESS OF POLICY LIMITS

  	
   

  	
   

  	
   

  	
  4

  
	
  ARTICLE VIII. - EXTRA CONTRACTUAL OBLIGATIONS

  	
   

  	
   

  	
   

  	
  5

  
	
  ARTICLE IX. - EXCLUSIONS

  	
   

  	
   

  	
   

  	
  6

  
	
  ARTICLE X. - SPECIAL ACCEPTANCE

  	
   

  	
   

  	
   

  	
  8

  
	
  ARTICLE XI. - LOSS OCCURRENCE

  	
   

  	
   

  	
   

  	
  8

  
	
  ARTICLE XII. - TERRORISM EXCESS RECOVERY

  	
   

  	
   

  	
   

  	
  10

  
	
  ARTICLE XIII. - REINSURANCE PREMIUM

  	
   

  	
   

  	
   

  	
  11

  
	
  ARTICLE XIV. - CLAIMS

  	
   

  	
   

  	
   

  	
  13

  
	
  ARTICLE XV. - SALVAGE AND SUBROGATION

  	
   

  	
   

  	
   

  	
  13

  
	
  ARTICLE XVI. - ACCESS TO RECORDS

  	
   

  	
   

  	
   

  	
  13

  
	
  ARTICLE XVII. - TAXES

  	
   

  	
   

  	
   

  	
  14

  
	
  ARTICLE XVIII. - CURRENCY

  	
   

  	
   

  	
   

  	
  14

  
	
  ARTICLE XIX. - OFFSET

  	
   

  	
   

  	
   

  	
  14

  
	
  ARTICLE XX. - ERRORS OR OMISSIONS

  	
   

  	
   

  	
   

  	
  14

  
	
  ARTICLE XXI. - DISPUTE RESOLUTION

  	
   

  	
   

  	
   

  	
  14

  
	
  ARTICLE XXII. - INSOLVENCY

  	
   

  	
   

  	
   

  	
  16

  
	
  ARTICLE XXIII. - AMENDMENTS

  	
   

  	
   

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SIGNATURES

  	
   

  	
   

  	
   

  	
  18

  
							



 


	
  ATTACHMENTS

  	
   

  	
  INSOLVENCY FUNDS EXCLUSION CLAUSE

  
	
   

  	
   

  	
  POOLS, ASSOCIATIONS AND SYNDICATES EXCLUSION CLAUSE

  
	
   

  	
   

  	
  TOTAL INSURED VALUE EXCLUSION CLAUSE

  
	
   

  	
   

  	
  POLLUTION AND SEEPAGE EXCLUSION CLAUSE

  
	
   

  	
   

  	
  NUCLEAR INCIDENT
  EXCLUSION CLAUSE - PHYSICAL DAMAGE REINSURANCE - U.S.A.

  
	
   

  	
   

  	
  NUCLEAR INCIDENT
  EXCLUSION CLAUSE - PHYSICAL DAMAGE - REINSURANCE - CANADA

  
	
   

  	
   

  	
  NUCLEAR INCIDENT
  EXCLUSION CLAUSE - REINSURANCE - NO. 4

  



 
















PROPERTY CATASTROPHE
EXCESS OF LOSS 

REINSURANCE AGREEMENT

NO. POR327524 

(hereinafter referred to as the “Agreement”)


between


SAFETY INSURANCE COMPANY

SAFETY INDEMNITY INSURANCE COMPANY

both of Boston, Massachusetts

(hereinafter referred to as the “Company”)


and


SWISS REINSURANCE AMERICA
CORPORATION

Armonk, New York 

(hereinafter referred to as the “Reinsurer”)


ARTICLE I. - BUSINESS COVERED


A                         The
Reinsurer shall indemnify the Company on an excess of loss basis in respect of
the Company’s Ultimate Net Loss paid by the Company as a result of losses
occurring during the term of this Agreement, for Policies in force as of
January 01, 2006, and new and renewal Policies becoming effective on or after
said date, subject to the terms and conditions contained herein.


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


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


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


E                            Under
this Agreement, the indemnity for reinsured loss applies to those Policies
issued by the Company with respect to the following Lines of Business as
classified in the Company’s Annual Statement, subject to the exclusions set
forth in Article IX. - Exclusions













 


	
  NAIC

  	
   

  	
   

  
	
  CODE

  	
   

  	
  LINE OF BUSINESS

  
	
  5.1

  	
   

  	
  Commercial Multiple Peril - Property

  
	
  03

  	
   

  	
  Allied Lines

  
	
  04

  	
   

  	
  Homeowners -Multiple Peril - Property

  
	
  21.1

  	
   

  	
  Automobile Physical Damage - Private Passenger

  
	
  21.02

  	
   

  	
  Automobile Fire And Theft - Commercial

  
	
  01

  	
   

  	
  Fire

  



 


ARTICLE II - EFFECTIVE
DATE AND TERMINATION


A                       This
Agreement shall apply to losses occurring within the period commencing 12:01
a.m., Eastern Standard Time, January 01, 2006, and ending 12:01 a.m., Eastern
Standard Time, January 1, 2007.


B                         Upon
termination of this Agreement, the Reinsurer shall be liable for losses
occurring prior to the date of termination; however, the Reinsurer shall have
no liability for losses occurring subsequent to the termination of this
Agreement.


C                         If
this Agreement shall terminate while a Loss Occurrence covered hereunder is in
progress, it is agreed that, subject to the other conditions of this Agreement,
the Reinsurer shall indemnify the Company as if the entire Loss Occurrence had
occurred during the time this Agreement is in force provided such Loss
Occurrence covered hereunder started before the date of termination.


ARTICLE III. - TERRITORY


This Agreement applies to risks located solely in the
Commonwealth of Massachusetts except that with respect to Multiple Peril
Policies covered hereunder, the territorial limits of this Agreement shall be
those of the original Policies when such Policies are written to cover risks
primarily located in the Commonwealth of Massachusetts.


ARTICLE IV. - LIMIT AND
RETENTION


A                       As
respects one or more than one Line of Business covered under this Agreement,
the Company shall retain the first $15,000,000 of Ultimate Net Loss as respects
each risk. The Reinsurer shall then be liable for the amount by which the
Company’s Ultimate Net Loss exceeds the Company’s retention of $15,000,000, but
the liability of the Reinsurer shall never exceed $13,500,000 (i.e., 90% of
$15,000,000) each risk, nor shall the Reinsurer’s liability exceed $27,000,000
(i.e., 90% of $30,000,000) in all during the term of this Agreement.
Notwithstanding the foregoing, as respects the event of terrorism, Reinsurer’s
liability shall be further limited to $13,500,000 in all, during the term of
this Agreement.



 2
 









B                         Reinsurance
of the Company’s retention, set forth above, shall not be deducted in arriving
at the Company’s Ultimate Net Loss herein.


C                         It
is warranted by the Company that the reinsurance provided under this Agreement
shall attach only when two or more risks are involved in the same Loss
Occurrence. The Company shall be the sole judge of what constitutes one risk
provided, however, that:


1                          A
risk shall never be less than all insurable values within exterior walls and
under one roof regardless of fire divisions, the number of Policies involved,
and whether there is a single, multiple or unrelated named insureds involved in
such risk.


2.                         When
two or more buildings are situated at the same general location, the Company
shall identify on its records at the time of acceptance by the Company, those
individual buildings and all insurable values contained therein that are
considered to constitute each risk. If such identification is not made, each
building and all insurable values contained therein shall be considered to be a
separate risk.


3                          A
risk shall be determined from the standpoint of the predominant peril and such
peril shall be noted in the Company’s records.


D                        It
is warranted by the Company that it shall retain at its own risk and not
reinsured in any way, 10% of Ultimate Net Loss, each Loss Occurrence as set
forth above.


ARTICLE V. -
REINSTATEMENT


A                       Each
claim hereunder reduces the amount of indemnity from the time of occurrence of
the loss by the sum paid, but any amount so exhausted is hereby reinstated from
the time the Loss Occurrence commences hereon.


B                         For
each subsequent reinstatement, the Company agrees to pay an additional premium
calculated at pro rata of the annual premium hereon, being pro rata both as to
the fraction of the limit of liability of this Agreement (i.e., the fraction of
$15,000,000) so reinstated and as to the fraction of unexpired annual term at
the time of the Loss Occurrence.


C                         Nevertheless,
the Reinsurer’s liability hereunder shall never exceed $13,500,000 (i.e., 90%
of $15,000,000) in respect of any one Loss Occurrence and shall be further
limited in all during the term of the Agreement to $27,000,000 (i.e., 90% of
$30,000,000).



 3
 









ARTICLE VI. - ULTIMATE
NET LOSS


A                         The
term “Ultimate Net Loss” shall mean the actual sum paid by the Company in
settlement of losses or liability after making deductions for all recoveries,
including subrogation, salvages, and claims upon other reinsurances, whether
collectible or not, which inure to the benefit of the Reinsurer under this
Agreement, and shall include Loss Adjustment Expenses incurred by the Company;
provided, however, that in the event of the insolvency of the Company, Ultimate
Net Loss shall mean the amount of loss and Loss Adjustment Expenses for which
the Company is liable, and payment by the Reinsurer shall be made to the
liquidator, receiver, conservator or statutory successor of the Company in
accordance with the provisions of Article XXII. -Insolvency of this Agreement.


B                           The
term “Ultimate Net Loss” shall include 100% of Loss In Excess of Policy Limits
and 100% of Extra Contractual Obligations, as defined herein, but only as
respects business covered under this Agreement.


C                           The
term “Loss Adjustment Expenses” shall mean all expenses incurred by the Company
in connection with the investigation, settlement, defense or litigation of any
claim or loss covered by the Policies reinsured under this Agreement, but shall
exclude the salaries and expenses of Company employees, office expenses and
other overhead expenses.


D                          All
recoveries, salvages or payments recovered or received subsequent to a loss
settlement under this Agreement shall be applied as if recovered or received
prior to the aforesaid settlement and all necessary adjustments to the loss
settlement shall be made by the parties hereto.


E                            Nothing
in this Article shall be construed to mean that losses are not recoverable
hereunder until the Ultimate Net Loss of the Company has been ascertained.


ARTICLE VII. - LOSS IN
EXCESS OF POLICY LIMITS


                               “Loss in Excess of Policy
Limits” is defined as loss in excess of the limit of the original Policy, such
loss in excess of the limit having been incurred because of failure by the
Company to settle within the Policy limit or by reason of alleged or actual
negligence, fraud or bad faith in rejecting an offer of settlement or in the
preparation of the defense or in the trial of any action against its insured or
in the preparation or prosecution of an appeal consequent upon such action.


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



 4
 









corporate officer of the
Company acting individually or collectively or in collusion with any individual
or corporation or any other organization or party involved in the presentation,
defense or settlement of any claim covered hereunder.


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


D.                       With
respect to coverage provided under this Article, recoveries from any insurance
or reinsurance other than this Agreement shall be deducted to arrive at the
amount of the Company’s Ultimate Net Loss.


ARTICLE VIII. - EXTRA CONTRACTUAL OBLIGATIONS


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


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


C                         However,
coverage hereunder as respects Extra Contractual Obligations shall not apply
where the loss has been incurred due to the fraud of a member of the Board of
Directors or a corporate officer of the Company acting individually or collectively
or in collusion with any individual or corporation or any other organization or
party involved in the presentation, defense or settlement of any claim covered
hereunder.


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



 5
 









E                          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.


ARTICLE IX. -
EXCLUSIONS


THIS AGREEMENT DOES NOT COVER


A        THE FOLLOWING GENERAL
CATEGORIES


1.                         All
Lines of Business not specifically listed in Article I Business Covered.


2.                         Policies
issued with a deductible of $100,000 or more; provided this exclusion shall not
apply to Policies which customarily provide a percentage deductible on the
perils of earthquake or windstorm.


3.                         Reinsurance
assumed, except pro rata local agency reinsurance on specific risks.


4.                         Ex-gratia
Payments


5.                         Loss
or damage occasioned by war, invasion, revolution, bombardment, hostilities,
acts of foreign enemies, civil war, rebellion, insurrection, military or
usurped power, martial law, or confiscation by order of any government or
public authority, but not excluding loss or damage which would be covered under
a standard form of Policy containing a standard war exclusion clause.


6.                         Insolvency
Funds as per the attached Insolvency Funds Exclusion Clause, which is made part
of this Agreement.


7.                         Pool,
Syndicate and Association business as per the attached Pools, Associations and
Syndicates Exclusion Clause, which is made part of this Agreement.


8.                         Risks
where the Total Insured Value, per risk, exceeds the figure specified as per
the attached Total Insured Value Exclusion Clause, which is made part of this
Agreement.



 6
 









9.                         Loss  resulting from damage to overhead
transmission and distribution lines, including supporting structures and
anything attached thereto, of any public or private utility company, cable
television or telecommunication company of any kind. This exclusion shall not
apply to such overhead transmission and distribution lines, including
supporting structures and anything attached thereto located on the premises of
any policyholder or within 1,000 feet thereof. Nor shall this exclusion apply
to utility service interruption or contingent business interruption losses for
any policyholder, unless such policyholder is a public or private utility
company, cable television or telecommunication company of any kind.


B.        THE FOLLOWING CLASSES OF
BUSINESS AND TYPES OF RISKS


1.                         Theft
Insurance


2.                         Insurance
of wrongful conversion, embezzlement, and secretion


3.                         Cargo
Liability


4.                         Mobile
Homes


Manufacturer’s stock


Dealers Open Lot


C.        THE FOLLOWING PERILS


Flood and/or Earthquake when written as such


Difference in Conditions, however styled


Pollution and Seepage as per the attached Pollution and
Seepage Exclusion Clause, which is made part of this Agreement.


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


a                             Nuclear
Incident Exclusion Clause - Physical Damage Reinsurance - U.S.A.


b                            Nuclear
Incident Exclusion Clause - Physical Damage Reinsurance - Canada.


c                             Nuclear
Incident Exclusion Clause - Reinsurance - No. 4


5                            a          Loss, damage or expense
of whatsoever nature caused directly or indirectly by any of the following,
regardless of any other cause or event contributing concurrently or in any
other sequence to the loss: nuclear reaction or radiation, or radioactive
contamination, however caused.



 7
 









b.                         However,
if nuclear reaction or radiation, or radioactive contamination results in fire
it is specifically agreed herewith that this Agreement will pay for such fire
loss or damage subject to all of the terms, conditions and limitations of this
Agreement.


c.                          This
exclusion shall not apply to loss, damage or expense originating from and
occurring at risks using radioactive isotopes in any form where the nuclear
exposure is not considered by the Company to be the primary hazard.


ARTICLE X. - SPECIAL
ACCEPTANCE


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


ARTICLE XI. - LOSS
OCCURRENCE


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


As regards windstorm, hail, tornado, hurricane,
cyclone, including ensuing collapse and water damage, all individual losses
sustained by the Company occurring during any period of 72 consecutive hours
arising out of and directly occasioned by the same event. However, the event
need not be limited to one state or province or states or provinces contiguous
thereto.


2                            As
regards riot, riot attending a strike, civil commotion, vandalism and malicious
mischief, all individual losses sustained by the Company, occurring during any
period of 72 consecutive hours within the area of one municipality or county
and the municipalities or counties contiguous thereto arising out of and
directly occasioned by the same event. The maximum duration of 72 consecutive
hours may be extended in respect of individual losses which occur beyond such
72 consecutive hours



 8
 









during the continued occupation of an assured’s
premises by strikers, provided such occupation commenced during the aforesaid
period.


3                            As
regards earthquake (the epicentre of which need not necessarily be within the
territorial confines referred to in the opening paragraph of this Article) and
fire following directly occasioned by the earthquake, only those individual
fire losses which commence during the period of 168 consecutive hours may be
included in the Company’s Loss Occurrence.


4                            As
regards Freeze, only individual losses directly occasioned by collapse,
breakage of glass and water damage (caused by bursting of frozen pipes and
tanks) may be included in the Company’s Loss Occurrence.


As regards Terrorism, all individual losses sustained
by the Company occurring during any period of 72 consecutive hours arising out
of and directly occasioned by the same event. Should such an event of Terrorism
give rise to other perils which, in an unbroken chain of causation, have
occasioned the losses, the cause of the losses is understood to be that event
of Terrorism.


a                             “Terrorism,”
for purposes of this Agreement, shall mean any actual or threatened violent act
or act harmful to human life, tangible or intangible property or infrastructure
directed towards or having the effect of (i) influencing or protesting against
any de jure or de facto government or policy thereof, (ii) intimidating,
coercing or putting in fear a civilian population or section thereof for the
purpose of establishing or advancing a specific ideological, religious or
political system of thought, perpetrated by a specific individual or group
directly or indirectly through agents acting on behalf of said individual or
group or (iii) retaliating against any country for direct or vicarious support
by that country of any other government or political system.


b                            Any
act declared pursuant to the Terrorism Risk Insurance Act of 2002, as amended,
shall also be considered “Terrorism” for purposes of this Agreement.


B                           For
all Loss Occurrences the Company may choose the date and time when any such
period of consecutive hours commences provided that it is not earlier than the
date and time of the occurrence of the first recorded individual loss  sustained by the Company arising out of
that disaster, accident or loss and provided that only one such period of 168
consecutive hours shall apply with respect to one event except for those Loss
Occurrences referred to in 1., 2., and 5. above, where only one such period of
72 consecutive hours shall



 9
 









apply with respect to one event regardless of the
duration of the event.


C                           No
individual losses occasioned by an event that would be covered by 72 hours
clauses may be included in any Loss Occurrence claimed under the 168 hours
provision.


ARTICLE XII. - TERRORISM
EXCESS RECOVERY


A                         For
purposes of this Article:


“Act” shall mean the Terrorism Risk Insurance Act of
2002, any amendments thereto and any regulations promulgated thereunder.


2                            “Affiliate,”
“Insured Losses,” and “Program Year” shall have the meanings provided in the
Act.


3                            “Company”
shall include the Company and all affiliates


B                           This
reinsurance shall not apply to any fines civil penalties or surcharges assessed
pursuant to the Act.


C                           To
the extent that the Company allocates Insured Losses and/or federal assistance
under the Act among affiliates, claims, contracts or otherwise in any manner
which impacts the reinsurance provided hereunder, the Company shall apply a reasonable
allocation method acceptable to the Reinsurer.


D                          To
the extent that an Insured Loss is otherwise payable hereunder, the reinsurance
provided by this Agreement shall apply only to the portion of liability, loss,
cost and/or expense retained by the Company net of any federal assistance
pursuant to the Act. For each Program Year, the liability of the Reinsurer for
Insured Losses under this Agreement shall be reduced by the ratio that the
financial assistance under the Act allocated to Policies subject to this
Agreement bears to the Company’s total Insured Losses subject to this
Agreement. If the Company does not make such allocation, the liability of the
Reinsurer for Insured Losses in any Program Year under this Agreement shall be
reduced by the ratio that the financial assistance available to the Company
under the Act for that Program Year bears to the Company’s total Insured Losses
for the same Program Year.


E                            The
parties recognize that, for any Program Year, the Reinsurer may without waiver
of the foregoing Paragraphs make payments for Insured Losses which, together
with available financial assistance under the Act and the Company retentions
and/or deductibles hereunder, exceed the Company’s Insured Losses. In such
event, the Reinsurer’s proportional share of all such excess recovery
(hereafter “Reinsurer’s Excess Share”) shall inure to the benefit of the



 10
 









Reinsurer. All excess recovery
described in this Paragraph shall be allocated to the Reinsurer and the Company
in proportion to the respective liability of each for Insured Losses, net of
federal assistance under the Act, salvage, subrogation and other similar
recoveries, as applicable.


F                            In the event of a Reinsurer’s Excess Share, the
Company shall


1.                         Promptly pay the Reinsurer’s Excess Share to the
Reinsurer; or


2                            Upon request of the Reinsurer at any time and
at the Reinsurer’s sole discretion, instead assign to the Reinsurer its rights
to recover directly from the federal government any portion of Reinsurer’s
Excess Share not already paid to the Reinsurer. The Company shall cooperate
with and assist the Reinsurer, at its own expense, to the extent reasonably
necessary for the Reinsurer to exercise those rights. If the Reinsurer is
unable, for any reason, to exercise any right assigned to it by the Company
pursuant to this Article, the Company shall pay the Reinsurer’s Excess Share to
the Reinsurer as if no assignment had taken place to the extent that the
Company has not been deemed to have forfeited the right to financial assistance
under the Act by virtue of the attempted assignment.


G                           In the event of an Insured Loss, the Company
shall provide the Reinsurer with a monthly report detailing claim settlement
activities and financial assistance under the Act. Calculations for each
Program Year shall continue to be made until the settlement of all Insured
Losses covered hereunder.


ARTICLE
XIII. - REINSURANCE PREMIUM


A                         The Company shall pay to the Reinsurer a
premium for the reinsurance provided under this Agreement at a rate of 1.2117%.
Such rate shall be applied to the Company’s Subject Earned Premium for the
Agreement Year being reported subject to an annual deposit premium of
$1,347,470 payable in four equal installments of $336,868 at the beginning of
each calendar quarter.


Swiss Reinsurance Corporation
shall have a 90% share in the minimum and deposit premiums set forth above.


B.                        As promptly as possible after the expiration of
this Agreement, the Company shall render a statement to the Reinsurer showing
the actual reinsurance premium due hereunder. If such premium calculations
differ from the deposit previously paid, the debtor party shall pay the
outstanding balance as soon as practicable, However, in no event shall the
annual adjusted premium be less than a minimum of $1,077,976.



 11
 









C                           The term “Subject Earned Premium” as used
herein is equal to the sum of the Net Premiums Written on the business covered
hereunder during the period under consideration, plus the unearned premium
reserve as respects premiums in force at the beginning of such period, less the
unearned premium reserve as respects premiums in force at the end of the
period, said unearned premium is to be calculated on an actual daily basis or
in accordance with the Company’s methodology, as agreed.


D                          The term “Net Premiums Written” shall mean gross
premiums written less returns, allowances and reinsurances which inure to the
benefit of the Reinsurer.


E                            The following percentages of the Company’s
premium shall be allocated to the business covered under this Agreement: 90%
Homeowners


F                            In respect of Paragraph B. above


1                            All account statements shall be sent to


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


b                            Standard Mail


Swiss Reinsurance America
Corporation

Accounting Department

175 King Street

Armonk, NY 10504

Telephone:   914-828-8000

Facsimile:    914-828-5919


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


a                             WIRE TRANSFER


(i                           All wires should be sent to:


The Bank of New York

1 Wall street

New York, NY 10286

Account Name:  Swiss Reinsurance America
Corporation

Account Number:

ABA Number:


(ii                        All supporting documentation should be sent to


Swiss Reinsurance America
Corporation

Accounting Department

175 King street

Armonk, NY 10504



 12
 









ARTICLE
XIV. - CLAIMS


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


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


ARTICLE
XV - SALVAGE AND SUBROGATION


A                         In the event of the payment of any indemnity by
the Reinsurer under this Agreement, the Reinsurer shall be subrogated, to the
extent of such payment, to all of the rights of the Company against any person
or entity legally responsible for damages of the loss. The Company agrees to
enforce such rights; but, in case the Company refuses or neglects to do so, the
Reinsurer is hereby authorized and empowered to bring any appropriate action in
the name of the Company or their policyholders or otherwise to enforce such
rights.


B                           From any amount recovered by subrogation,
salvage or other means, there shall first be deducted the expenses incurred in
effecting the recovery. The balance shall then be used to reimburse the excess
carriers in the inverse order to that in which their respective liabilities
attached, before being used to reimburse the Company for its primary loss.


ARTICLE
XVI. - ACCESS TO RECORDS


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



 13
 









ARTICLE XVII. - TAXES


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


ARTICLE XVIII - CURRENCY


Wherever the word “dollars” or the “$” symbol is used
in this Agreement, it shall mean dollars of the United States of America.


ARTICLE XIX. - OFFSET


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


ARTICLE XX - ERRORS OR OMISSIONS


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


ARTICLE_XXI. - DISPUTE RESOLUTION


Part I - Choice Of Law And Forum


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



 14
 









Part II - Mediation


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


Part III - Arbitration


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


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


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


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



 15
 









E.                         Submission
of Dispute to Panel - Within 30 days after the notice of appointment of all
arbitrators, the panel shall meet, and determine a timely period of discovery,
discovery procedures and schedules for hearings.


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


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


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


ARTICLE XXII. - INSOLVENCY


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


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



 16
 









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


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


ARTICLE XXIII -
AMENDMENTS


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



 17
 









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


In Boston, Massachusetts this 21st day of March, 2006


	
  ATTEST:

  	
   

  	
   

  	
   

  	
  SAFETY INSURANCE COMPANY

  SAFETY INDEMNITY INSURANCE COMPANY

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Glenn Hiltpold, F.C.A.S.

  	
   

  	
   

  	
   

  	
  /s/ Edward N.
  Patrick Jr.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Glenn Hiltpold

  	
   

  	
   

  	
   

  	
  Edward N.
  Patrick Jr.

  
	
  Name

  	
   

  	
   

  	
   

  	
  Name

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DIRECTOR-ACTUARIAL SERVICES

  	
   

  	
   

  	
   

  	
  VP Underwriting

  
	
  Title

  	
   

  	
   

  	
   

  	
  Title

  



 


And in Armonk New York, this 10th day of March, 2006.


	
  ATTEST

  	
   

  	
   

  	
   

  	
  SWISS REINSURANCE AMERICA CORPORATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ James Bronneck

  	
   

  	
   

  	
   

  	
  /s/ Jeffrey
  Illegible

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  James Bronneck

  	
   

  	
   

  	
   

  	
  Jeffrey
  Illegible

  
	
  Name

  	
   

  	
   

  	
   

  	
  Name

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vice President 

  Member of Management

  	
   

  	
   

  	
   

  	
  Senior Vice
  President

  Member of Senior Management

  
	
  Title

  	
   

  	
   

  	
   

  	
  Title

  



 



 18














SUPPLEMENT TO THE
ATTACHMENTS


DEFINITION OF
IDENTIFICATION TERMS USED WITHIN THE ATTACHMENTS


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


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


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











INSOLVENCY FUNDS
EXCLUSION CLAUSE


This Agreement excludes all liability of the Company
arising by contract, operation of law, or otherwise from its participation or
membership, whether voluntary or involuntary, in any insolvency fund or from
reimbursement of any person for any such liability. “Insolvency fund” includes
any guaranty fund, insolvency fund, plan, pool, association, fund or other
arrangement, howsoever denominated, established or governed, which provides for
any assessment of or payment or assumption by any person of part or all of any
claim, debt, charge, fee, or other obligation of an insurer, or its successors
or assigns, which has been declared by any competent authority to be insolvent
or which is otherwise deemed unable to meet any claim, debt, charge, fee or
other obligation in whole or in part.
















POOLS, ASSOCIATIONS AND
SYNDICATES EXCLUSION CLAUSE


SECTION A


Excluding:


(a)                     All
Business derived directly or indirectly from any Pool, Association or Syndicate
which maintains its own reinsurance facilities.


(b)                    Any
Pool or Scheme (whether voluntary or mandatory) formed after March 1, 1968, for
the purpose of insuring Property whether on a country-wide basis or in respect
of designated areas. This Exclusion shall not apply to so-called Automobile
Insurance Plans or other Pools formed to provide coverage for Automobile
Physical Damage.


SECTION B


It is agreed that business, written by the Company for
the same perils, which is known at the time to be insured by or in excess of
underlying amounts placed in the following Pools, Associations or Syndicates,
whether by way of insurance or reinsurance is excluded hereunder:


Industrial Risk Insurers (successor to Factory
Insurance Association and Oil Insurance Association); Associated Factory
Mutuals; Improved Risk Mutuals.


Any Pool, Association or Syndicate formed for the
purpose of writing oil, Gas or Petro-Chemical Plants and/or Oil or Gas Drilling
Rigs.


United States Aircraft Insurance Group, Canadian
Aircraft Insurance Group, Associated Aviation Underwriters, American Aviation
Underwriters.


SECTION B does not apply


(a)                     Where
the Total Insured Value over all interests of the risk in question is less than
$350,000,000.


(b)                    To
interests traditionally underwritten as Inland Marine or Stock and/or contents
written on a Blanket basis.


(c)                     To
Contingent Business Interruption, except when the Company is aware that the key
location is known at the time to be insured in any Pool, Association or
Syndicate named above.


(d)                    To
risks as follows: Offices, Hotels, Apartments, Hospitals, Educational
Establishments, Public Utilities (other than Railroad Schedules) and Builders
Risks on the classes of risks specified in this subsection (d) only.



 1
 









SECTION C


NEVERTHELESS the Reinsurer specifically agrees that
Liability accruing to the Company from its participation in:


(a)                     The
following so-called “Coastal Pools”


ALABAMA INSURANCE
UNDERWRITING ASSOCIATION


FLORIDA WINDSTORM
UNDERWRITING ASSOCIATION


LOUISIANA INSURANCE
UNDERWRITING ASSOCIATION


MISSISSIPPI WINDSTORM
INSURANCE UNDERWRITING ASSOCIATION


NORTH CAROLINA INSURANCE
UNDERWRITING ASSOCIATION


SOUTH CAROLINA WINDSTORM
AND HAIL UNDERWRITING ASSOCIATION


TEXAS CATASTROPHE PROPERTY INSURANCE ASSOCIATION


and


(b)                    All
“Fair Plan” and “Rural Risk Plan” Business


for all perils otherwise protected hereunder will not
be excluded, except however, that this reinsurance does not include any
increase in such liability resulting from:


(1)                    The
inability for any other participant in such “Coastal Pool” and/or “Fair Plan”
and/or “Rural Risk Plan” to meet its liability.


(2)                    Any
Claim against such “Coastal Pool” and/or “Fair Plan” and/or “Rural Risk Plan”
or any participant therein, including the Company, whether by way of
subrogation or otherwise, brought by or on behalf of any insolvency fund (as
defined in the Insolvency Funds Exclusion Clause incorporated in this
agreement) .



 2














TOTAL INSURED VALUE
EXCLUSION CLAUSE


It is the mutual intention of the parties to exclude
risks, other than Offices, Hotels, Apartments, Hospitals, Educational
Establishments, Public Utilities (except Railroad schedules) and Builders Risk
on the above classes where, at the time of the cession, the Total Insured Value
over all interests exceeds $350,000,000. However, the Company shall be
protected hereunder, subject to the other terms and conditions of this
Agreement, if subsequently to cession being made the Company becomes acquainted
with the true facts of the case and discovers that the mutual intention has
been inadvertently breached, the Company shall at the first opportunity, and
certainly by next anniversary of the original policy, exclude the risk in question.


It is agreed that this mutual intention does not apply
to Contingent Business Interruption or to interest traditionally underwritten
as Inland Marine or to Stock and/or Contents written on a blanket basis except
where the Company is aware that the Total Insured Value of $350,000,000 is
already exceeded for buildings, machinery, equipment and direct use and
occupancy at the key location.


It is understood and agreed that this Clause shall not
apply hereunder where the Company writes 100% of the risk.


Notwithstanding anything contained herein to the
contrary, it is the mutual intention of the parties in respect of bridges and
tunnels to exclude such risks where the Total Insured Value over all interests
exceeds $350,000,000.
















POLLUTION AND SEEPAGE
EXCLUSION CLAUSE 


This Reinsurance does not apply to:


Pollution, seepage, contamination or environmental
impairment (hereinafter collectively referred to as “pollution”) insurances,
however styled;


2                            Loss
or damage caused directly or indirectly by pollution, unless said loss or
damage follows as a result of a loss caused directly by a peril covered
hereunder;


Expenses resulting from any governmental direction or
request that material present in or part of or utilized on an insured’s property
be removed or modified, except as provided in 5. below;


4                            Expenses
incurred in testing for and/or monitoring pollutants;


Expenses incurred in removing debris, unless (A) the
debris results from a loss caused directly by a peril covered hereunder, and
(B) the debris to be removed is itself covered hereunder, and (C) the debris is
on the insured’s premises, subject, however, to a limit of $5,000 plus 25% of
(i) the property damage loss, any risk, any one location, any one original
insured, and (ii) any deductible applicable to the loss;


6                            Expenses incurred to
extract pollutants from land or water at the insured’s premises unless (A) the
release, discharge, or dispersal of pollutants results from a loss caused
directly by a peril covered hereunder, and (B) such expenses shall not exceed
$10,000;


Loss of income due to any increased period of time
required to resume operations resulting from enforcement of any law regulating
the prevention, control, repair, clean-up or restoration of environmental
damage;


8.                         Claims
under 5. and/or 6. above, unless notice thereof is given to the Company by the
insured within 180 days after the date of the loss occurrence to which such
claims relate.


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



 1
 









Where no pollution exclusion has been accepted or approved by an
insurance regulatory authority for use in a policy that is subject to this
Agreement or where a pollution exclusion that has been used in a policy is
overturned, either in whole or in part, by a court having jurisdiction, there
shall be no recovery for pollution under this Agreement unless said pollution
loss or damage follows as a result of a loss caused directly by a peril covered
hereunder.


Nothing herein shall be deemed to extend the coverage afforded by this
reinsurance to property or perils specifically excluded or not covered under
the terms and conditions of the original policy involved.



 2















NUCLEAR INCIDENT EXCLUSION CLAUSE - PHYSICAL DAMAGE - REINSURANCE
U.S.A.


N.M.A    1119


1                             This
Reinsurance does not cover any loss or liability accruing to the Reassured,
directly or indirectly, and whether as Insurer or Reinsurer, from any Pool of
Insurers or Reinsurers formed for the purpose of covering Atomic or Nuclear
Energy risks.


2                             Without
in any way restricting the operation of paragraph 1. of this Clause, this
Reinsurance does not cover any loss or liability accruing to the Reassured,
directly or indirectly, and whether as Insurer or Reinsurer, from any insurance
against Physical Damage (including business interruption or consequential loss
arising out of such Physical Damage) to:


I                              Nuclear
reactor power plants including all auxiliary property on the site, or


II                          Any
other nuclear reactor installation, including laboratories handling radioactive
materials in connection with reactor installations, and critical facilities as
such, or


III.                   Installations
for fabricating complete fuel elements or for processing substantial quantities
of “special nuclear material,” and for reprocessing, salvaging, chemically
separating, storing or disposing of spent nuclear fuel or waste materials, or


IV                      Installations
other than those listed in paragraph 2. III. above using substantial quantities
of radioactive isotopes or other products of nuclear fission.


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


(a)                     where
the Reassured does not have knowledge of such nuclear reactor power plant or
nuclear installation, or



 1
 









(b)                    where
the said insurance contains a provision excluding coverage for damage to
property caused by or resulting from radioactive contamination, however caused.
However, on and after 1st January, 1960, this sub-paragraph (b) shall only
apply provided the said radioactive contamination exclusion provision has been
approved by the Governmental Authority having jurisdiction thereof.


4                             Without
in any way restricting the operation of paragraphs 1., 2. and 3. of this
Clause, this Reinsurance does not cover any loss or liability by radioactive
contamination accruing to the Reassured, directly or indirectly, and whether as
Insurer or Reinsurer, when such radioactive contamination is a named hazard
specifically insured against.


5                             It
is understood and agreed this Clause shall not extend to risks using
radioactive isotopes in any form where the nuclear exposure is not considered
by the Reassured to be the primary hazard.


6                             The
term “special nuclear material” shall have the meaning given to it by the
Atomic Energy Act of 1954 or by any law amendatory thereof.


7                             Reassured
to be sole judge of what constitutes


(a)                    substantial
quantities, and


(b)                   the
extent of installation, plant or site


NOTE: - Without in any way restricting the operation
of paragraph 1 hereof, it is understood and agreed that


(a)                    all
policies issued by the Reassured on or before 31st December, 1957 shall be free
from the application of the other provisions of this Clause until expiry date
or 31st December, 1960 whichever first occurs whereupon all the provisions of
this Clause shall apply,


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



 2














NUCLEAR INCIDENT EXCLUSION CLAUSE — PHYSICAL DAMAGE —
REINSURANCE CANADA 


N.M.A    1980a


1                             This
Agreement does net cover any loss or liability accruing to the Company directly
or indirectly, and whether as Insurer or Reinsurer, from any Pool of Insurers
or Reinsurers formed for the purpose of covering Atomic or Nuclear Energy
risks.


2                             Without
in any way restricting the operation of paragraph 1. of this clause, this
Agreement does not cover any loss or liability accruing to the Company,
directly or indirectly, and whether as Insurer or Reinsurer, from any insurance
against Physical Damage (including business interruption or consequential loss
arising out of such Physical Damage) to:


a                            Nuclear
reactor power plants including all auxiliary property on the site, or


b                           Any
other nuclear reactor installation, including laboratories handling radioactive
materials in connection with reactor installations, and critical facilities as
such, or


c                            Installations
for fabricating complete fuel elements or for processing substantial quantities
of radioactive materials, and for reprocessing, salvaging, chemically
separating, storing or disposing of spent nuclear fuel or waste materials, or


d                           Installations
other than those listed in c. above using substantial quantities of radioactive
isotopes or other products of nuclear fission.


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


a                            where
the Company does not have knowledge of such nuclear reactor power plant or
nuclear installation, or


b                           where
the said insurance contains a provision excluding coverage for damage to
property caused by or resulting from radioactive contamination, however caused.



 1
 








4                             Without
in any way restricting the operation of paragraphs 1., 2. and 3. of this
clause, this Agreement does not cover any loss or liability by radioactive
contamination accruing to the Company, directly or indirectly, and whether as
Insurer or Reinsurer, when such radioactive contamination is a named hazard
specifically insured against.


5                             This
clause shall not extend to risks using radioactive isotopes in any form where
the nuclear exposure is not considered by the Company to be the primary hazard.


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


7                             Company
to be sole judge of what constitutes


a                            substantial
quantities, and


b                           the
extent of installation, plant or site


8                             Without
in any way restricting the operation of paragraphs 1., 2., 3. and 4. of this
clause, this Agreement does not cover any loss or liability accruing to the
Company, directly or indirectly, and whether as Insurer or Reinsurer, caused:


by any nuclear incident as defined in or pursuant to
the Nuclear Liability Act or any other nuclear liability act, law or statute,
or any law amendatory thereof, or nuclear explosion, except for ensuing loss or
damage which results directly from fire, lightning or explosion of natural,
coal or manufactured gas;


(b)                   by
contamination by radioactive material


NOTE                                    Without
in any way restricting the operation of paragraphs 1., 2., 3. and 4. of this
clause, paragraph 8. of this clause shall only apply to all original contracts
of the Company whether new, renewal or replacement which become effective on or
after December 31, 1992.


April 1, 1996



 2
 








NUCLEAR INCIDENT
EXCLUSION CLAUSE - REINSURANCE - NO. 4


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


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



 3