<PAGE>   1
                                                                   EXHIBIT 10.76

                         CHARTWELL REINSURANCE COMPANY

                WORKERS COMPENSATION QUOTA SHARE RETROCESSIONAL
                                TREATY AGREEMENT

                          EFFECTIVE: September 1, 1995



                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
         ARTICLE                    SUBJECT                    PAGE(S)
         -------                    -------                    -------
          <S>               <C>                                   <C>
                            Preamble                              1
           1                Application of Agreement              1
           2                Cover                                 1-2
           3                Commencement and Termination          2-3
           4                Exclusions                            3-4
           5                Territory                             4
           6                Definitions                           5-6
           7                Reinsurance Premium and Commissions   6-7
           8                Profit Commission                     7
           9                Reports and Remittances               7
          10                Other Reinsurance                     8
          11                Losses and Loss Adjustment Expenses   8-9
          12                Extra Contractual Obligations         9-10
          13                Excess Limits Liability               10
          14                Insolvency                            10-11
          15                Offset                                11
          16                Currency                              11
          17                Errors and Omissions                  11
          18                Salvage and Subrogation               12
          19                Amendments                            12
          20                Access to Records                     12
          21                Arbitration                           12-14
          22                Reserves and Taxes                    14
          23                Commutation                           14
          24                Headings                              14
          25                Loss Funding                          14-15
          26                Intermediary                          15
</TABLE>
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             WORKERS COMPENSATION QUOTA SHARE RETROCESSIONAL TREATY
                                   AGREEMENT

This Agreement is made and entered into by and between CHARTWELL REINSURANCE
COMPANY, (hereinafter referred to as the "Retrocedant") in respect of original
business underwritten by RISCORP Management Services (hereinafter referred to
as the "Underwriting Manager") on behalf of VIRGINIA SURETY COMPANY INC.
(hereinafter referred to as the "Original Company"), and RISCORP INSURANCE
COMPANY, Sarasota, Florida (hereinafter referred to as the "Retrocessionaire").

WITNESSETH:

The Retrocessionaire hereby reinsures the Retrocedant to the extent and on the
terms and conditions and subject to the exceptions, exclusions and limitations
hereinafter set forth and nothing hereinafter shall in any manner create any
obligations or establish any rights against the Retrocessionaire in favor of
any third parties or any persons not parties to this Agreement.

                                   ARTICLE I

APPLICATION OF AGREEMENT

A.   This Agreement applies only to Workers Compensation and Employers
     Liability insurance business, except as excluded under Article 4 of this
     Agreement, which is produced, underwritten, issued and serviced on behalf
     of the Original Company by RISCORP Management Services, Inc., Sarasota,
     Florida (hereinafter referred to as the "Underwriting Manager") pursuant
     to Underwriting Management Agreement No. VSC 1995-4 (hereinafter referred
     to as the "Underwriting Management Agreement") between the Original
     Company and the Underwriting Manager, and reinsured by the Retrocedant.

B.   The Original Company has agreed to keep a copy of the Underwriting
     Management Agreement (or successor agreement) on file with the Retrocedant
     and Retrocessionaire, and the Original Company shall provide written
     notice to and obtain the prior approval of the Retrocedant and
     Retrocessionaire of any change in the Underwriting Management Agreement no
     later than 45 days prior to the intended date of implementation.

                                   ARTICLE 2

COVER

A.   The Retrocedant is obligated, to cede to the Retrocessionaire, and the
     Retrocessionaire is obligated to accept as reinsurance from the
     Retrocedant (in respect of the Original Quota Reinsurance Agreement,
     hereinafter referred to as



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<PAGE>   3

     the "Original Reinsurance Agreement", between Virginia Surety Company and
     Chartwell Reinsurance Company), 50% of the liability hereunder as respects
     original policies ceded under the Original Reinsurance Agreement.

B.   The Retrocessionaire agrees to pay all losses and loss adjustment expense
     in respect to the business retained by the Retrocedant in excess of a pure
     loss ratio of 105%, calculated by dividing Paid Loss and Loss Adjustment
     Expense by Gross Net Earned Premium.

C.   The Retrocessionaire agrees to pay to the Retrocedant 100% of all ceding
     commission costs greater than 30% under the Original Reinsurance
     Agreement.  Ceding Commission items shall include agent's commissions,
     taxes, assessments, residual market loads, etal. plus 6% of all premiums
     ceded under the Original Reinsurance Agreement which the Retrocedant is
     obligated to pay to the Original Company.

D.   The Retrocessionaire's liability will begin obligatorily and
     simultaneously with that of the Retrocedant and all reinsurance ceded
     hereunder will be subject to the same terms, rates, conditions,
     interpretations, waivers, modifications, alterations and cancellations as
     the respective policies of the Original Company insofar as they relate to
     the business in the Original Reinsurance Agreement and covered hereunder.
     The liability of the Retrocessionaire will extend to any policy coverage
     required of the Retrocedant by any legislative, regulatory or judicial
     body or arbitration proceedings

                                   ARTICLE 3

COMMENCEMENT AND TERMINATION

A.   This Agreement shall take effect as of 12:01 A.M. Standard Time (as
     defined in the Original Company's policies), September 1, 1995 and will
     remain in force and effect for one year, expiring at 12:01 A.M. Standard
     Time, September 1, 1996 unless terminated before that as hereinafter
     provided.

B.   Either party may terminate this Agreement at any time by giving at least
     90 days notice in writing, stating therein the date on which termination
     shall become effective.  During any such period of notice, the
     Retrocessionaire will remain bound by the terms of the Agreement.  In the
     event of termination prior to the end of a calendar month, the last
     partial month shall be added to the last complete month and considered one
     month for the purposes of this Agreement.

C.   Upon the expiration or termination of this Agreement, the
     Retrocessionaire will remain liable for all policies in force under the
     Original Reinsurance Agreement until their natural expiration or renewal
     dates, whichever comes first.  Alternatively, at the expiration or
     termination of the Agreement the Original



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     Company may elect to terminate the Retrocedant's liability on a cut-off
     basis as of the date of expiration or termination, and termination
     hereunder shall follow the Original Reinsurance Agreement in like manner. 
     If cut-off basis is elected, the Retrocessionaire will have no further
     liability hereunder for losses occurring subsequent to the expiration or
     termination of this Agreement, in consideration of which the
     Retrocessionaire shall return to the Retrocedant the unearned premium
     (calculated on the monthly pro rata basis) as of the expiration or
     termination date, less commission previously allowed thereon.

D.   Every notice of termination shall be given by certified letter addressed
     to the intended recipient as set forth in the Preamble of this Agreement.
     In determining whether the requisite number of days' notice has been given
     in any case, the date of termination shall be counted but the date of
     mailing shall not.

E.   Notwithstanding the expiration or termination of this Agreement as herein
     above provided, the provisions of this Agreement shall continue to apply
     to all unfinished business hereunder to the end that all obligations and
     liabilities incurred by each party hereunder prior to such expiration or
     termination shall be fully performed and discharged.

                                   ARTICLE 4

EXCLUSIONS

A.   The reinsurance provided under this Agreement is subject to the exclusions
     set forth below and shall not cover said excluded risks, hazards and
     coverages unless individually submitted by the Retrocedant to the
     Retrocessionaire for inclusion hereunder, and, if specially accepted by
     the Retrocessionaire, such business shall then be covered under the terms
     of this Agreement, except as such terms shall be modified by such
     acceptance.

B.   The reinsurance provided under this Agreement does not apply to:

     1.       All reinsurance assumed by the Retrocedant except for that
              reinsurance assumed under the Original Agreement.

     2.       Risks involving a nuclear facility or nuclear material, spent
              fuel or waste as defined in the Nuclear Incident Exclusion
              Clause, except for the use of radioactive isotopes.

     3.       Liability of the Original Company arising by contract from its
              voluntary participation or membership in any insolvency fund.
              "Insolvency Fund" includes any guarantee fund, insolvency fund,
              plan, pool, association, fund or other facility which provides
              for the assessment of, payment by, or assumption by the
              Retrocedant of a part or the whole of any claim, debt,



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              charge, fee or other obligations of an insurer, or its successors
              or assigns, which has been declared insolvent by any authority
              having jurisdiction.  This exclusion shall not apply to
              assessments arising by operations of law or involuntary
              membership or participation in any insolvency fund.

     4.       Business voluntarily derived from any Pool, Association,
              including Joint Underwriting Association, Syndicate, Exchange,
              Plan, Fund, or any other facility directly as a member,
              subscriber, or participant, or indirectly by way of reinsurance.
              This exclusion shall not apply to Worker's Compensation assigned
              risks which may be currently or subsequently covered hereunder or
              any involuntary assessments from any Pool Association, Joint
              Underwriting Association, Syndicate, Exchange, Plan or Fund.

     5.       Construction and maintenance of Caisson or Coffer Dams (except
              earth filled Dams).

     6.       Manufacturing, packing, handling or shipping of explosives,
              explosive substances intended for use as an explosive,
              ammunition, fuses, arms or fireworks.

     7.       Manufacturing, Production and Refining Petroleum or its products.

     8.       Professional Sports Teams.

     9.       Railroad Operations.

     10.      Oil and Gas drilling, refining, production or manufacturing.

     11.      Underground Mining.

     12.      Tunneling Operations involving tunnels over 100 feet.

     13.      Wrecking or Demolition of buildings, structures or vessels over 5
              stories in height.

     14.      Asbestos, Lead Paint or other toxic substance abatement, when
              written as such.

     15.      Maritime or Jones Act (except for USL&H)

                                   ARTICLE 5

TERRITORY

This Agreement covers original policies wherever issued in the United States of
America, and reinsured under the Original Reinsurance Agreement by the
Retrocedant.



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<PAGE>   6


                                   ARTICLE 6

DEFINITIONS

A.   "Policy" or "policies" means all original policies, contracts, binders,
     certificates or agreements of insurance whether written or oral, issued by
     the Original Company and reinsured 100% by the Retrocedant.

B.   "Gross Net Written Premium" means the Gross Net Written Premium assumed by
     the Retrocedant under the Original Agreement, being Gross Written Premium
     less return premiums and dividends paid on policies that are written
     subject to a loss sensitive dividend plan. (For original business that is
     written subject to an installment billing plan, the premium shall be
     considered written thirty (30) days after the day which they became due to
     the original Company.) Additionally, the Retrocedant's proportionate share
     of reinsurance premium due for the Reinsurance protection excess of
     $500,000 each loss (as detailed under Article 10 - OTHER REINSURANCE)
     shall be deducted from the Retrocedant's retained Gross Net Written
     Premium.

     "Gross Net Earned Premium" means the Earned portion of the Gross Net
     Written Premium as defined above, calculated by applying the incoming
     Unearned Premium if any at the beginning of the period plus the Gross Net
     Written Premium less the Unearned if any at the end of the Agreement.

C.   "Loss" means the amount paid by the Retrocedant or for which the
     Retrocedant has become liable to pay under the Original Reinsurance
     Agreement and in turn covered under this retrocession (including, but not
     limited to, amounts in settlement of claims and suits and in satisfaction
     of judgments, and interest accrued prior to final judgment if such
     interest is included as part of loss under the policies).  All salvages
     and subrogations will be deducted from the amount of loss.  Loss will not
     include loss expense unless loss expense is included within the limit of
     liability of policies reinsured under the Original Reinsurance Agreement.

D.   "Loss expense" means all expenses incurred by the Retrocedant as respects
     the investigation, appraisal, adjustment, settlement, litigation, appeal,
     and/or defense of claims under the policies reinsured under the Original
     Agreement (including, but not limited to, attorneys' fees; court costs;
     interest accrued prior to final judgment if it is included as part of loss
     expense under the policies; interest accrued after final judgment; and
     salaries and expenses of employees of the Original Company who have been
     diverted from their normal and customary duties and assigned to the
     field adjustment of losses under this Agreement).  Loss expense will also
     include coverage dispute expense and monitoring expense.  The
     Retrocessionaire will bear its proportionate share of all loss expense in
     addition to its liability hereunder unless such loss expense is included
     as part of loss under the policies



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<PAGE>   7



     and will benefit accordingly in all salvages, subrogation, discounts, and
     other recoveries.  Loss expense excludes unallocated loss expense, (i.e.
     internal office expenses, salaries, per diem, and other remuneration of
     Original Company employees who have not been diverted from their normal
     and customary duties and assigned to the field adjustment of losses under
     this Agreement).

E.   "Coverage dispute expense" means all expenses (including, but not limited
     to, attorneys' fees, arbitration costs, and court costs) the Original
     Company has paid, or has become liable to pay, in connection with any
     coverage disputes regarding the policies reinsured under the Original
     Agreement, including, but not limited to, declaratory judgment actions and
     arbitration proceedings brought to determine the defense and/or
     indemnification obligations attributable to such policies.  Coverage
     dispute expense will be deemed to have been incurred by the Original
     Company on the date the loss was suffered, or allegedly suffered, under
     the policy.

F.   "Monitoring expense" means all expenses the Original Company has paid in
     connection with claims under this Agreement, including, but not limited
     to, attorneys' fees and all other legal expenses, when such expenses were
     incurred by directly assisting in the handling of claims or by acting in a
     supervisory, reviewing, or advisory capacity.  Monitoring expense will be
     deemed to have been incurred by the Original Company on the date the loss
     was suffered, or allegedly suffered, under the policy.

                                   ARTICLE 7

REINSURANCE PREMIUM AND COMMISSION

A.   The Retrocedant, either directly or through the Underwriting Manager, will
     remit to the Retrocessionaire its proportionate share of the Gross Net
     Written Premium on all policies inforce, written or renewed under the
     Original Reinsurance Agreement with an effective date on or after the
     inception of this Agreement, for sections A-C as described in Article
     2-Cover.

B.   The Retrocessionaire shall allow the Retrocedant a commission equal to 30%
     of all Gross Net Written Premiums ceded hereunder (before cost of inuring
     Excess of Loss Reinsurance).  Such commission shall include reimbursement
     for acquisition costs, premium taxes and fees.  Assessments and residual
     market loads shall be paid for the 100% portfolio of business by the
     Retrocessionaire to the Retrocedant separately and in addition to
     commission for reimbursement to the Original Company as detailed in
     Paragraph C of Article 2-Cover.  The Retrocedant shall allow the same 30%
     return commission on return premiums.

C.   It is understood that the amount of the commission in excess of the 30%
     allowance paid to the Retrocedant for reimbursement to the Original
     Company, pursuant to



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     Article 7(B), will be adjusted annually, utilizing the December 31
     figures, based on the figures provided by the Original Company.

                                   ARTICLE 8

PROFIT COMMISSION

The Retrocedant shall pay the Retrocessionaire a profit commission (as respects
the Retrocedant's retained 50% portion after cession hereunder) equal to 75% of
the Retrocedant's profit (being gross net earned premium, as defined in Article
6, Paragraph B, less ceding commission less incurred losses and loss adjustment
expense) less 6% of Gross Net Earned Premium for the Retrocedant's reinsurance
management expenses.  The profit commission calculation shall take place 48
months after the inception of this Agreement, (being September 1, 1999) and
shall be recalculated and adjusted annually thereafter until all losses are
settled.

                                   ARTICLE 9

REPORTS AND REMITTANCES.

A.   Within 30 days after the end of each month, the Retrocedant, either
     directly or through the Underwriting Manager, will furnish the
     Retrocessionaire with a report summarizing the following information for
     business transacted during the month:

     1.       Gross Net Written Premium; less
     2.       Commission allowance to the Retrocedant; less
     3.       Paid losses and loss expense; less
     4.       Amounts paid in respect of extra contractual obligations and/or 
              excess limits liability; plus
     5.       Monies recovered;
     6.       Balance (items 1-2-3-4+5 above) due to the Retrocessionaire (or, 
              if negative balance, to the Retrocedant).

B.   Amounts due the Retrocessionaire will be remitted with the report.
     Amounts due the Retrocedant will be remitted within 10 days following the
     Retrocessionaire's receipt and verification of the report.

C.   In addition, the Retrocedant, either directly or through the Underwriting
     Manager, will furnish the Retrocessionaire a monthly statement showing the
     unearned premium, the total reserves for outstanding losses including loss
     adjustment expense and such other information as may be required by the
     Retrocessionaire for completion of its NAIC annual statements.



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                                   ARTICLE 10

OTHER REINSURANCE

A.   Excess of Loss Reinsurance Coverage for 100% of loss excess of $500,000
     each and every occurrence is deemed to be in place and shall inure to the
     benefit of both the Retrocedant and Retrocessionaire.  Premium for such
     cover shall be paid by the Retrocedant and Retrocessionaire in proportion
     to their interests, being 50% each.  This Excess of Loss Reinsurance
     Coverage shall be liable for 100% of the amount by which such 100% subject
     loss exceeds $500,000, but the liability shall not exceed statutory limits
     for Workers' Compensation or $2,000,000 for Employers' Liability as
     respects any one occurrence.  In the event this Excess of Loss Reinsurance
     Coverage is not kept in place, the Retrocessionaire shall assume 100% of
     all losses in excess of $500,000 from the Retrocedant including any
     differences in conditions which might fall outside this contract excess
     $500,000.

B.   "Occurrence" as used in the Excess of Loss Reinsurance Agreement, unless
     otherwise defined in the original policies reinsured thereunder, will mean
     each and every accident, disaster, occurrence or casualty or series of
     accidents, disasters, occurrences or casualties arising out of one event.
     Occupational disease sustained by each employee shall be deemed to be one
     separate occurrence and the occurrence shall be deemed to take place on
     the date upon which the employee is last exposed to work conditions
     allegedly causing such occupational disease.

                                   ARTICLE 11

LOSSES AND LOSS ADJUSTMENT EXPENSES

A.   The Retrocessionaire shall pay to the Retrocedant, either directly or
     through the Underwriting Manager, its proportionate share of all loss and
     loss expense (including coverage dispute expense and monitoring expense),
     as defined in Article 6 of this Agreement.

B.   The Retrocessionaire agrees to abide by all disposition of claims,
     including exgratia settlements, directed by the Retrocedant and/or the
     Original Company and/or the Underwriting Manager as the Original Company's
     agent, or as directed or amended by enactment or interpretation by any
     legislative, regulatory, or judicial body, provided that: (i) the Original
     Company and/or the Underwriting Manager, as applicable, shall settle all
     claims in accordance with the underlying policies and applicable law, and
     (ii) the Original Company and/or the Underwriting Manager shall comply
     with all provisions of this Article.

C.   The Retrocedant, either directly or through the Underwriting Manager as
     its agent, shall report promptly to the Retrocessionaire, as in the
     Original Reinsurance



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     Agreement, each claim or loss for which the Retrocedant's estimated amount
     of gross loss exceeds $100,000 or more.

D.   When so requested, and as applicable, the Retrocedant will afford the
     Retrocessionaire, at its own expense, an opportunity to be associated with
     the Retrocedant in the defense of any claim, suit, or proceeding involving
     this Agreement, and the Retrocedant and the Retrocessionaire will
     cooperate in every respect in such defense.

E.   The Retrocessionaire shall benefit pro rata in all salvages, discounts and
     other recoveries.

                                   ARTICLE 12

EXTRA CONTRACTUAL OBLIGATIONS

A.   This Agreement will cover 100% of any extra contractual obligations, as
     defined in this Article, and is intended to follow that contained in the
     Original Reinsurance Agreement.

B.   "Extra contractual obligations" are defined as those liabilities not
     covered under any other provision of this Agreement 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
     Original 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.

C.   The date on which an extra contractual obligation is incurred by the
     Original Company shall be deemed, in all circumstances, to be the date of
     the original accident, casualty, disaster or loss occurrence.

D.   However, this Article 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 Original 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.

E.   Recoveries from any form of insurance or reinsurance which protects the
     Original Company against claims the subject matter of this Article will
     inure to the benefit of the Retrocedant under the Original Reinsurance
     Agreement, and the Retrocessionaire under this Agreement and shall be
     deducted to arrive at the amount of the Retrocessionaire's liability under
     this Article.



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F.   Should any Extra Contractual Obligations arise between the Original
     Company and the Retrocedant, any such liabilities shall be shared
     proportionately between the Retrocedant and Retrocessionaire.

                                   ARTICLE 13

EXCESS LIMITS LIABILITY

A.   In the event a third party claimant is awarded an amount in excess of the
     Original Company's policy limit and as a result of the Original Company's
     alleged or actual tortious conduct in the handling of the investigation,
     defense or settlement of the claim made against the Original Company's
     insured an action is taken by the insured or assignee and a judgment
     rendered against the Original Company for an amount in excess of the
     Original Company's policy limit, 100% of only that portion of the award
     made to the third party claimant which is in excess of the Original
     Company's policy limit shall be added to the amount of the Original
     Company's policy limit and the sum thereof shall be considered one loss
     under the Original Reinsurance Agreement and under this Agreement, subject
     to the provision in (B) below and other provisions, exclusions and
     limitations set forth in this Agreement.

B.   Recoveries from any form of insurance or reinsurance which protects the
     Original Company against claims the subject matter of this Article will
     inure to the benefit of the Retrocedant under the Original Reinsurance
     Agreement and the Retrocessionaire under this Agreement, and shall be
     deducted to arrive at the amount of the Retrocessionaire's liability under
     this Article.

                                   ARTICLE 14

INSOLVENCY

In the event of the insolvency of the Retrocedant and the appointment of a
conservator, liquidator, receiver or statutory successor, the reinsurance
provided by this Agreement shall be payable by the Retrocessionaire directly to
the Retrocedant or its liquidator, receiver or statutory successor on the basis
of the liability of the Retrocedant under the contract or contracts reinsured.
Subject to the right of offset and the verification of coverage, the
Retrocessionaire shall pay its share of the loss without diminution because of
the insolvency of the Retrocedant.  The liquidator, receiver or statutory
successor of the Retrocedant shall give the Retrocessionaire written notice of
the pendency of each claim against the Retrocedant on a policy or bond
reinsured within a reasonable time after such claim is filed in the insolvency
proceeding.  During the pendency of such claim, the Retrocessionaire may, at
its own expense, investigate such claim and interpose in the proceeding where
such claim is to be adjudicated any defense or defenses which it may deem
available to the Retrocedant, its liquidator, receiver or statutory successor.
Subject to court approval, any expense thus incurred by the Retrocessionaire
shall be chargeable



                                       10
<PAGE>   12


against the Retrocedant as part of the expense of liquidation to the extent of
such proportionate share of the benefit as shall accrue to the Retrocedant
solely as a result of the defense undertaken by the Retrocessionaire.  The
reinsurance shall be payable as set forth above except where this Agreement
specifically provides for the payment of reinsurance proceeds to another party
in the event of the insolvency of the Retrocedant.


                                   ARTICLE 15

OFFSET

Each party hereto shall have, and may exercise at any time and from time to
time, the right to offset any balance or balances whether on account of
premiums or on account of losses or otherwise, due from such party to the other
(or, if more than one, any other) party hereto under this Agreement or under
any other reinsurance agreement heretofore or hereafter entered into by and
between them, and may offset the same against any balance or balances due or to
become due to the former from the latter under the same or any other
reinsurance agreement between them; and the party asserting the right of offset
shall have and may exercise such right whether the balance or balances due or
to become due to such party from the other are on account of premiums or on
account of losses or otherwise and regardless of the capacity, whether as
assuming insurer or as ceding insurer, in which each party acted under the
agreement or, if more than one, the different agreements involved, provided,
however, that, in the event of the insolvency of a party hereto, offsets shall
only be allowed in accordance with the laws of the insolvent party's state of
domicile.


                                   ARTICLE 16

CURRENCY

All payments made by either party hereunder will be in United States Dollars.

                                   ARTICLE 17

ERRORS AND OMISSIONS

Inadvertent delays, errors, or omissions made in connection with this Agreement
or any transaction hereunder will not relieve either party from any liability
that would have attached had such delay, error, or omission not occurred;
but the liability of the Retrocessionaire under this Agreement shall in no
event be extended to cover any risks, perils or classes of insurance generally
or specifically excluded therein.



                                       11
<PAGE>   13


                                   ARTICLE 18

SALVAGE AND SUBROGATION

The Retrocessionaire will be credited with its proportionate share of any
salvage or subrogation recoveries (i.e. as under the Original Reinsurance
Agreement, reimbursement obtained or recovery made by the Original Company,
less the actual cost, excluding salaries of officials and employees of the
Original Company, of obtaining such reimbursement or making such recovery) on
account of claims and settlements involving policies reinsured under the
Original Agreement and in turn hereunder. If the recovery expense exceeds the
amount recovered, the amount recovered (if any) will be applied to the
reimbursement of recovery expense and the remaining expense will be borne by
the Retrocessionaire.

                                   ARTICLE 19

ARBITRATION

This Agreement may be altered or amended in any of its terms and conditions by 
mutual consent of the Retrocedant and the Retrocessionaire by addenda hereto or 
by an exchange of letters requesting acceptance of revised pages or special
acceptances.  Such addenda or letters will then constitute a part of this
Agreement.

                                   ARTICLE 20

ACCESS TO RECORDS

The Retrocedant, either directly or through the Underwriting Manager, shall
place at the disposal of the Retrocessionaire and the Retrocessionaire shall
have the right to inspect, through its authorized representatives, at all
reasonable times during the currency of this Agreement and thereafter, the
books, records and papers of the Retrocedant and the Underwriting Manager
pertaining to the reinsurance provided hereunder and all claims made in
connection therewith.

                                 ARTICLE 21
ARBITRATION

A.   If any dispute arises between the Retrocedant and Retrocessionaire with
     reference to the interpretation, performance, or breach of this Agreement
     (whether the dispute arises before or after termination of this
     Agreement), such dispute, if not resolved by the parties must be submitted
     to non binding mediation.  If such dispute is not resolved by non binding
     mediation within sixty (60) days it will then be submitted to final and
     binding arbitration.



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<PAGE>   14



B.   As a condition precedent to any right of action hereunder, any dispute
     arising out of this Agreement shall be submitted to the decision of a
     board of arbitration composed of two arbitrators and an umpire, meeting in
     Stamford, Connecticut unless otherwise agreed.

C.   The members of the board of arbitration shall be active or retired
     disinterested officials of insurance or reinsurance companies.  Each party
     shall appoint its arbitrator and the two arbitrators shall choose an
     umpire before instituting the hearing.  If the respondent fails to appoint
     its arbitrator within four weeks after being requested to do so by the
     claimant, the latter shall also appoint the second arbitrator.  If the two
     arbitrators fail to agree upon the appointment of an umpire within four
     weeks after their nominations, each of them shall name three, of whom the
     other shall decline two and the decision shall be made by drawing lots.
     The arbitrators will not be obliged to follow judicial formalities or
     rules of evidence except to the extent required by the law of the state of
     Minnesota.

D.   The claimant shall submit its initial brief within 20 days from
     appointment of the umpire.  The respondent shall submit its brief within
     20 days after receipt of the claimant's brief and the claimant may submit
     a reply brief within 10 days after receipt of the respondent's brief

E.   The board shall make its decision with regard to the custom and usage of
     the insurance and reinsurance business.  The board shall issue its
     decision in writing based upon a hearing in which evidence may be
     introduced without following strict rules of evidence but in which cross
     examination and rebuttal shall be allowed.  The board shall make its
     decision within 60 days following the termination of the hearings unless
     the parties consent to an extension.  The majority decision of the board
     shall be final and binding upon all parties to the proceeding.  Judgment
     may be entered upon the award of the board in any court having
     jurisdiction thereof.

F.   Each party shall bear the expense of their own arbitrator and will
     jointly and equally bear with the other party the cost of the umpire and
     arbitration.  Additionally, the Retrocessionaire agrees to hold harmless
     and fully indemnify the Retrocedant as respects its obligation to the
     Original Company in respect to all costs and expenses, of whatsoever
     nature incurred or suffered by the Retrocedant in the event arbitration
     proceedings are initiated between the Retrocedant and the Original Company
     and/or its Underwriting Manager.

     The Retrocessionaire agrees to hold harmless and fully indemnify the
     Retrocedant in respect to all costs and expenses, of whatsover nature
     incurred or suffered by the Retrocedant in the event of arbitration
     proceeds are initiated between the Original Company and the Underwriting
     Manager and/or between the Original Company and the Retrocedant.

G.   It is agreed that the jurisdiction of the arbitrators to make or render
     any decision or award shall be limited by the limit of liability expressly
     herein before set forth, and



                                       13
<PAGE>   15


     that the arbitrators shall have no jurisdiction to make any decision or
     render any award exceeding such expressly stated limit of liability of the
     Retrocessionaire under Article 2-Cover, nor do they have the jurisdiction
     to authorize any punitive, exemplary or consequential damage awards
     between the parties hereto.

                                   ARTICLE 22

RESERVES AND TAXES

A.   The Retrocessionaire shall maintain legal reserves with respect to
     unearned premiums and claims hereunder.

B.   The Retrocedant will be liable for all taxes on premiums reported to the
     Retrocessionaire hereunder and will reimburse the Retrocessionaire for
     such premium taxes where the Retrocessionaire is required to pay the same
     directly to the taxing authority.

                                   ARTICLE 23

COMMUTATION

To be agreed.

                                   ARTICLE 24

HEADINGS

The Article headings contained in this Agreement are for reference purposes
only and will not affect in any way the meaning or interpretation of this
Agreement.

                                   ARTICLE 25

LOSS FUNDING

(To apply in the event the Retrocessionaire does not maintain its Admitted
Security status in Minnesota by keeping $50,000,000 in policyholders' surplus
and in such event that the Retrocessionaire does not provide a funds withheld
alternative arrangement agreed by the Retrocedant.)

With respect to losses, funding will be in accordance with the attached Loss
Funding Clause unless the requirements of regulatory authorities in the
jurisdiction involved are not met by this Clause, in which event the
Retrocessionaire will fund in accordance with the requirements of such
regulatory authorities.



                                       14
<PAGE>   16



                                   ARTICLE 26

INTERMEDIARY

G.J. Sullivan Company is hereby recognized as the Intermediary negotiating this
Agreement for all business hereunder.  All communications relating thereto
shall be transmitted to the Company and the Reinsurer through G.J. Sullivan
Company, 800 West Sixth Street, Los Angeles, California 90017, except those
relating to payments hereunder.  All payments, and all correspondence relating
to payments hereunder, shall be transmitted directly between the Company and
the Reinsurer.

                                  LOSS FUNDING

(This clause is only applicable to those Retrocessionaire's who cannot qualify
for credit by the regulatory authorities having jurisdiction over the
Retrocedant's loss reserves.)

As regards policies or bonds issued by the Retrocedant coming within the scope
of this Agreement, the Retrocedant agrees that, when it shall file with the
Insurance Department 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
Retrocessionaire a statement showing the proportion of such loss reserves which
is applicable to them.  The Retrocessionaire hereby agrees that it will apply
for and secure delivery to the Retrocedant of a clean, irrevocable and
unconditional Letter of Credit, issued by a bank chosen by the Retrocessionaire
and acceptable to the appropriate insurance authorities, in an amount equal to
the Retrocessionaire's proportion of reserves in respect of known outstanding
losses that have been reported to the Retrocessionaire and allocated loss
expenses relating thereto as shown in the statement prepared by the
Retrocedant.  Under no circumstances shall any amount relating to reserves in
respect of Incurred But Not Reported losses or any application thereto be
included in the amount of the Letter of Credit.

The Letter of Credit shall be issued for a period of not less than one year,
and shall be automatically extended for one year from its date of expiration or
any future expiration date unless thirty (30) days prior to any expiration date
the issuing bank shall notify the Retrocedant by registered mail that the
issuing bank elects not to consider the Letter of Credit extended for any
additional period.

Notwithstanding any other provision of this Agreement, the Retrocedant or its
successors in interest may draw upon such credit at any time without diminution
because of the insolvency of the Retrocedant or of the Retrocessionaire for one
or more of the following purposes only:

     (a)      To pay the Retrocessionaire's share or to reimburse the
              Retrocedant for the Retrocessionaire's share of any loss
              reinsured by this Agreement, the payment of which has been agreed
              by the Retrocessionaire and which has not been otherwise paid.



                                       15
<PAGE>   17




     (b)      To make refund of any sum which is in excess of the actual amount
              required to pay the Retrocessionaire's share of any liability
              reinsured by this Agreement.

     (c)      In the event of expiration of the Letter of Credit as provided
              for above, to establish deposit of the Retrocessionaire's share
              of known and reported outstanding losses and allocated expenses
              relating thereto under this Agreement.  Such cash deposit shall
              be held in an interest bearing account separate from the
              Retrocedant's other assets, and interest thereon shall accrue to
              the benefit of the Retrocessionaire.

The bank chosen for the issuance of the Letter of Credit shall have no
responsibility whatsoever in connection with the propriety of withdrawals made
by the Retrocedant or the disposition of funds withdrawn, except to ensure that
withdrawals are made only under the order of properly authorized
representatives of the Retrocedant.

At annual intervals, or more frequently as agreed but never more frequently
than quarterly, the Retrocedant shall prepare a specific statement, for the
sole purpose of amending the Letter of Credit, of the Retrocessionaire's share
of known and reported outstanding losses and allocated expenses relating
thereto.  If the statement shows that Retrocessionaire's share of such losses
and allocated loss expenses exceeds the balance of credit as of the statement
date, the Retrocessionaire shall, within thirty (30) days after receipt of
notice of such excess, secure delivery to the Retrocedant of an amendment of
the Letter of Credit increasing the amount of credit by the amount of such
difference.  If, however, the statement shows that Retrocessionaire's share of
known and reported outstanding losses plus allocated loss expenses relating
thereto is less than the balance of credit as of the statement date, the
Retrocedant shall, within thirty (30) days after receipt of written request
from the Retrocessionaire, 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.



                                       16
<PAGE>   18



IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed
in duplicate this 10th day of May, 1996, Stamford, Connecticut.




ACCEPTED:
CHARTWELL REINSURANCE COMPANY


-----------------------------

/s/ Allison H. Gooden         
-----------------------------
Attested by:




IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed
in duplicate this 21st day of May, 1996, Sarasota, Florida.



                                                       RISCORP INSURANCE COMPANY


                                                       -------------------------



                                                       -------------------------
                                                       Attested by: