Form 10-Q



 


Exhibit 10.1



ERIE INSURANCE COMPANY and

ERIE INSURANCE COMPANY OF NEW YORK

Erie, Pennsylvania



AGGREGATE EXCESS OF LOSS REINSURANCE



ADDENDUM NO. 2



Amendment to the REINSURANCE CONTRACT made the first day of January, 1998,
between ERIE INSURANCE EXCHANGE, by and through its Attorney-in-Fact, ERIE
INDEMNITY COMPANY, of Erie, Pennsylvania, (hereafter called the “REINSURER”),
and ERIE INSURANCE COMPANY and its wholly owned subsidiary ERIE INSURANCE
COMPANY OF NEW YORK, both of Erie, Pennsylvania (herein referred to collectively
(or individually as the context requires) as the “COMPANY”).


It is understood and agreed that, effective January 1, 2003, this Contract is
amended by the deletion of Article 12 and by substitution of the following
revised Article 12; and the addition of Articles 23 and 24 as follows:


ARTICLE 12 — Premium



The premium for this reinsurance shall be 1.29% of the subject Net Premiums
earned by the COMPANY during any Annual Period this Reinsurance Contract remains
in force, and shall be subject to a minimum premium of $2,043,000 for each
Annual Period.


The COMPANY shall pay to the REINSURER a deposit premium of $2,300,000 for each
Annual Period which shall be payable in equal installments of $1,150,000 each on
the first days of January and July during the period this Reinsurance Contract
remains in force. Final adjustment of the premium for each Annual Period
hereunder shall be made as soon as may be reasonably practicable after
expiration of that Annual Period.


ARTICLE 23 — Offset



The Company and the Reinsurer, each at its option, may offset any balance or
balances, whether on account of premiums, claims and losses, loss expenses or
salvages due from one party to the other under this Contract or under any other
reinsurance contract heretofore or hereafter entered into between the Company
and the Reinsurer, whether acting as assuming reinsurer or as ceding company;
provided, however, that in the event of the insolvency of a party hereto,
offsets shall only be allowed in accordance with applicable statutes and
regulations.


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ARTICLE 24 — Terrorism Exclusion



Notwithstanding any provision to the contrary within this reinsurance agreement
or any endorsement thereto, it is agreed that this reinsurance agreement
excludes loss, damage, cost, or expense directly or indirectly caused by,
contributed to by, resulting from, or arising out of or in connection with any
act of terrorism, as defined herein, regardless of any other cause or event
contributing concurrently or in any other sequence to the loss.


An act of terrorism includes any act, or preparation in respect of action, or
threat of action designed to influence the government de jure or de facto of any
nation or any political division thereof, or in pursuit of political, religious,
ideological, or similar purposes to intimidate the public or a section of the
public of any nation by any person or group(s) of persons whether acting alone
or on behalf of or in connection with any organization(s) or government(s) de
jure or de facto, and which:



	 	(i)	 	involves violence against one or more persons; or
	 
	 	(ii)	 	involves damage to property; or
	 
	 	(iii)	 	endangers life other than that of the person committing the
action; or
	 
	 	(iv)	 	creates a risk to health or safety of the public or a section
of the public; or
	 
	 	(v)	 	is designed to interfere with or to disrupt an electronic
system.






This reinsurance agreement also excludes loss, damage, cost, or expense directly
or indirectly caused by, contributed to by, resulting from, or arising out of or
in connection with any action in controlling, preventing, suppressing,
retaliating against, or responding to any act of terrorism.



Notwithstanding the above and subject otherwise to the terms, conditions, and
limitations of this reinsurance agreement, in respect of any act of terrorism
not certified under the Terrorism Risk Insurance Act of 2002 (the Act) and any
loss from an act of terrorism outside the definition on “insured loss” under the
Act, this reinsurance agreement will pay actual loss or damage (but not related
cost or expense) caused by the act of terrorism provided such act is not
directly or indirectly caused by, contributed to by, resulting from, or arising
out of or in connection with biological, chemical, radioactive, or nuclear
pollution or contamination or explosion.


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All other terms and conditions remain as heretofore.


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives.


In Erie, Pennsylvania, this 2nd day of April, 2003.



	 	 	 
	 	 	
ERIE INSURANCE COMPANY
	 
	ATTEST:	 	 
	 
	/s/ Jan Van Gorder, Secretary


	 	
/s/ Eugene C. Connell



	 
	 
	 	 	
ERIE INSURANCE COMPANY

OF NEW YORK
	 
	ATTEST:	 	 
	 
	/s/ Jan Van Gorder, Secretary


	 	
/s/ Philip A. Garcia



	 
	 
	 	 	
ERIE INSURANCE EXCHANGE, by

ERIE INDEMNITY COMPANY,

Attorney-in-Fact
	 
	ATTEST:	 	 
	 
	/s/ Pamela D. Carullo


	 	
/s/ M. S. Zavasky






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