<PAGE>

                                                                   EXHIBIT 10.21

                            GENERAL AGENCY AGREEMENT

      THIS AGREEMENT, made this 1st DAY OF August, 1996, between North Pointe
Insurance Company, referred to as the "COMPANY," and MS General Agency, Inc.,
hereinafter referred to as the "GENERAL AGENCY".

      For consideration received and pursuant to GENERAL AGENCY'S request that
the underwriting facilities of COMPANY be made available to GENERAL AGENCY, it
is agreed that:

1.    APPOINTMENT.

      The COMPANY appoints GENERAL AGENCY with the authority and the power to
      solicit, receive, accept, bind, decline, countersign, and endorse
      insurance on such classes of risk as the COMPANY from time to time may
      authorize by letter of instruction, underwriting bulletin or underwriting
      guide, which shall become a part of this contract, collect premiums, and
      generally with all powers and authority necessary to conduct a general
      agency for the COMPANY in the state(s) listed in the attached Appointment
      and Commission Addendum, incorporated herein by reference. This authority
      shall not be delegated by GENERAL AGENCY to any one person or persons
      except as is expressly authorized in writing by an offices of the COMPANY.
      This appointment is not exclusive and the COMPANY may appoint others in
      the same state(s).

2.    ACCEPTANCE OF APPOINTMENT.

      GENERAL AGENCY accepts the appointment, agreeing to perform faithfully the
      duties thereof to the best of its knowledge, skill, judgment.

3.    REPORTING.

      GENERAL AGENCY agrees to make prompt reports to COMPANY in such manner as
      may be required by COMPANY of risks written, including renewals and/or
      endorsements, to make full and prompt reports of all losses incurred, as
      well as of all other details relating to the business and affairs of
      COMPANY; and to allow personal examination and audit by a representative
      of COMPANY
<PAGE>
            of all papers, records, and accounts referring thereto.

4.    COMMISSIONS.

      (a)   As full compensation for insurance placed with COMPANY, COMPANY will
            pay commissions in accordance with the attached General Agent
            Commission Schedule (Addendum 1) (hereinafter referred to as
            "Commissions").

      (b)   GENERAL AGENCY agrees, either during the continuance of this
            Agreement or after its cancellation to refund unearned Commissions
            caused by policy cancellations or reductions, in each case at the
            same rate at which such Commissions were retained by or paid to
            GENERAL AGENCY.

      (c)   COMPANY reserves the unilateral right to revise the rates of
            Commissions by giving not less than sixty (60) days written notice
            to GENERAL AGENCY. Such change shall not affect Commissions on
            Premiums written before the effective date stated in the written
            notice.

      (d)   Uncollectible premiums arising from additional amounts due on
            particular policies as a result of adjustable exposures or audits
            may be turned back to COMPANY for direct collection and GENERAL
            AGENCY shall not be responsible for such premium provided:

            (1)   GENERAL AGENCY has made every reasonable effort to obtain and
                  retain an adequate deposit premium; and

            (2)   GENERAL AGENCY has billed for and made at least three attempts
                  (including original billing) to collect the additional
                  premium; and

            (3)   Notifies COMPANY no less than forty-five (45) days and no more
                  than sixty (60) days after the month in which GENERAL AGENCY
                  issued the Audit Endorsement and provides to COMPANY proof of
                  its three attempts to collect along with proof

                                       2
<PAGE>
                  of two attempts by its subproducer to collect the additional
                  premium due.

      (e)   No Commission will be paid on items turned over to COMPANY for
            collection, unless subsequently collected by GENERAL AGENCY.

5.    PREMIUMS AND ACCOUNTING.

      The following provisions are applicable to all insurance placed by GENERAL
      AGENCY with COMPANY:

      (a)   GENERAL AGENCY guarantees payment of all monies due COMPANY on
            business written under this Agreement, whether or not collected by
            GENERAL AGENCY. There shall be no flat cancellations of policies or
            coverage bound or issued unless specifically authorized in writing
            by COMPANY.

      (b)   Premium accounts, as shown in COMPANY'S monthly statements, are due
            and payable to COMPANY as rendered. Payment is due in COMPANY'S
            office forty-five (45) days from the end of the statement month and
            in no event shall credit for the payment of premiums so reflected be
            extended for longer than 45 days from the end of the month for which
            the monthly statement applies. Requirement for payment "as rendered"
            can only be waived by the COMPANY.

      (c)   In the event of a dispute regarding to the dollar amount owed to
            COMPANY for an individual policy or in total for a monthly account
            statement, GENERAL AGENCY agrees to pay the full amount stated by
            COMPANY. COMPANY and GENERAL AGENCY shall cooperatively investigate
            and attempt to resolve any such discrepancies as quickly as
            reasonably possible. If COMPANY and GENERAL AGENCY are unable to
            amicably resolve the discrepancy, the dispute may be submitted to
            arbitration in accordance with the terms of this Agreement.

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<PAGE>

      (d)   All premiums are the property of COMPANY and shall be held by
            GENERAL AGENCY in a fiduciary capacity in trust for COMPANY until
            delivered to COMPANY. The keeping of an account with GENERAL AGENCY
            on COMPANY'S behalf, as a creditor and debtor account, is declared a
            record memorandum of business transacted, and neither such keeping
            of account nor alteration in commission amount, nor failure to
            enforce prompt remittance, compromise, settlement, declaration of
            balance of account nor suspension or cancellation of this General
            Agency Agreement shall be held to waive assertion of the fiduciary
            relationship as to Premiums collected by GENERAL AGENCY.

      (e)   The right of GENERAL AGENCY or any other person to receive
            Commissions shall at all times be subordinate to the right of
            COMPANY to offset or apply Commissions, including Profit Sharing
            Commissions, against any indebtedness of GENERAL AGENCY to COMPANY.
            This right of offset shall also apply against any liability incurred
            by COMPANY to any person(s) by reason of any negligent or
            unauthorized acts committed by GENERAL AGENCY.

      (f)   All accounting and underwriting records of GENERAL AGENCY pertaining
            to Contracts written through COMPANY shall be subject to inspection
            by COMPANY at any reasonable time during the continuance of this
            Agreement and for three years after the termination hereof

6.    INDEPENDENT CONTRACTOR STATUS.

      COMPANY and GENERAL AGENCY agree that this General Agency Agreement is
      best served when GENERAL AGENCY is an Independent Contractor for all
      purposes. As an independent contractor, GENERAL AGENCY has the right to
      exercise independent judgment as to time, place and manner of soliciting
      insurance applications, servicing policyholders, and otherwise carrying
      out

                                       4
<PAGE>
      the provisions of the Agreement. Furthermore, GENERAL AGENCY will pay all
      expenses in connection with its GENERAL AGENCY and has no authority to
      incur any indebtedness on behalf of COMPANY.

      GENERAL AGENCY'S authority hereby conferred does not extend to the
      adjustment, compromise or settlement of claims or the waiver of any policy
      condition in relation thereto except upon specific authority in writing
      from COMPANY.

7.    NOTIFICATION TO THE COMPANY.

      GENERAL AGENCY agrees to forward to COMPANY copies of all binders,
      policies, certificates and endorsements issued by GENERAL AGENCY, or to
      otherwise notify COMPANY of all liability accepted within thirty (30) days
      following the effective date of such liability. However, any risk which
      GENERAL AGENCY submitted to COMPANY for approval because GENERAL AGENCY
      was not given authority to quote that particular risk by COMPANY'S
      Underwriting Guide or underwriting program and which was approved for
      quote by COMPANY must be reported to COMPANY the same day that GENERAL
      AGENCY binds that risk.

      Losses reported to GENERAL AGENCY shall be reported to COMPANY the same
      day as received by GENERAL AGENCY.

8.    OWNERSHIP OF EXPIRATIONS.

      If, upon cancellation of this Agreement, GENERAL AGENCY has promptly
      accounted for and paid to COMPANY all Premiums and other monies and
      securities collected or held for or on behalf of COMPANY for which GENERAL
      AGENCY may be liable; the records of GENERAL AGENCY and the use and
      control of expirations shall remain the property of GENERAL AGENCY;
      otherwise, the right and title to the records and the use and control of
      ownership of expirations shall be vested in COMPANY for sale, use or
      disposal as it deems fit to reduce

                                       5
<PAGE>
      the amount of indebtedness.

      Regardless of who owns control of the expiration dates, COMPANY and
      GENERAL AGENCY recognize that the policyholder, who pays the premium,
      ultimately decides who services and underwrites their insurance.
      Therefore, despite the language regarding the property rights and the
      expiration dates of policies, the decision of the policyholder reflects
      the ultimate proprietary interest of expirations.

9.    SUSPENSION.

      COMPANY may immediately suspend all or any part of the authority given the
      GENERAL AGENCY under this Agreement:

      (a)   If COMPANY ceases to write Insurance in the GENERAL AGENCY'S
            state(s), or

      (b)   If GENERAL AGENCY fails to satisfy any obligation under this
            Agreement, or

      (c)   If any public authority cancels, suspends or declines to renew
            GENERAL AGENCY'S license or certificate of authority, or

      (d)   On the effective date of sale, transfer, or merger of GENERAL
            AGENCY'S business, or

      (e)   Upon attachment of GENERAL AGENCY'S business, records or accounts
            pursuant to any order of court. Notice of suspension shall be given
            in writing to GENERAL AGENCY and GENERAL AGENCY shall thereupon
            immediately cease exercising the authority, as referenced in the
            Notice of Suspension, until GENERAL AGENCY receives notice in
            writing from COMPANY that the suspension is no longer applicable.
            The provisions of this section shall in no way diminish the right of
            COMPANY to cancel this Agreement, nor is suspension a required
            pre-requisite to cancellation.

10.   CANCELLATION.

      This Agreement may be canceled:



                                       6
<PAGE>

      (a)   At any time by mutual agreement, or

      (b)   Automatically if any public authority cancels, suspends or declines
            to renew GENERAL AGENCY'S license or certificate of authority, or

      (c)   Automatically on the effective date of sale, transfer, or merger of
            GENERAL AGENCY'S business; or

      (d)   Automatically upon attachment of GENERAL AGENCY'S business, records
            or accounts pursuant to any order of court or regulatory official.

      (e)   By either party upon sixty (60) days written notice to the other (or
            such longer period as may be required by the agent cancellation law
            of GENERAL AGENCY'S state of domicile).

      Any unused policies, certificates, endorsements or binders, and other
      unused supplies containing COMPANY'S name and/or logo trademarks shall be
      the property of COMPANY and shall be accounted for and surrendered by
      GENERAL AGENCY to COMPANY on demand.

11.   GENERAL AGENCY'S OBLIGATIONS AFTER TERMINATION.

      If upon cancellation of this Agreement GENERAL AGENCY is entitled to the
      ownership, use and control of expirations, COMPANY at GENERAL AGENCY'S
      election will continue outstanding insurance in force until the normal
      expirations of such insurance subject to the following:

      (a)   COMPANY reserves all of its rights to cancel policies continued in
            force for non-payment of Premium or for underwriting reasons.

      (b)   GENERAL AGENCY shall continue to service the outstanding policies,
            process non-renewal notices and endorse the policies.

      (c)   With respect only to the servicing of policies continued in force
            after the termination of this Agreement, GENERAL AGENCY shall
            continue to be the recognized representative of COMPANY, subject to
            all of the provisions of this Agreement, except that GENERAL

                                       7
<PAGE>

            AGENCY shall not, without the prior approval of COMPANY, increase or
            extend the term or condition of any policies.

      (d)   All Premium are promptly accounted for and paid to COMPANY by
            GENERAL AGENCY.

      (e)   The policyholder has the ultimate right to decide who writes their
            insurance.

12.   INDEMNIFICATION.

      (a)   COMPANY will defend and indemnify GENERAL AGENCY against liability,
            including the cost of defense and settlements, imposed by law for
            damages sustained by policyholders and caused by acts or omissions
            of COMPANY, provided GENERAL AGENCY has not caused or contributed to
            such liability by any act or omission. GENERAL AGENCY agrees to
            notify COMPANY promptly of any claim or suit against GENERAL AGENCY
            and to cooperate and participate with COMPANY in any investigation,
            settlement or defense of the claim or suit.

      (b)   GENERAL AGENCY agrees to indemnify and hold COMPANY harmless for any
            damages resulting directly or indirectly from GENERAL AGENCY'S
            negligence, acts or omissions, any violations of any insurance law
            or insurance department regulation and/or breach of GENERAL AGENCY'S
            obligations under this Agreement.

      (c)   GENERAL AGENCY agrees to maintain the following kinds of insurance
            in at least the amount indicated and provide proof of such coverage
            upon request by COMPANY:

<TABLE>
<S>                                            <C>
COMPREHENSIVE GENERAL LIABILITY                $ 500,000/OCCURRENCE
PROFESSIONAL ERRORS AND OMISSIONS              $1,000,000/EACH CLAIM AND IN THE
                                               AGGREGATE
</TABLE>

13.   GENERAL PROVISIONS:

      (a)   COMPANY shall not be responsible for expenses incurred by GENERAL
            AGENCY,

                                       8
<PAGE>

            whether on GENERAL AGENCY or COMPANY'S behalf, unless previously
            authorized by COMPANY in writing.

      (b)   GENERAL AGENCY shall not broadcast, publish or distribute any
            advertising materials or other matters, including marks or logos,
            referring to COMPANY or to COMPANY'S Contracts of Insurance, without
            first securing written approval from an officer of COMPANY.

      (c)   Upon suspension of GENERAL AGENCY'S authority or cancellation of
            this Agreement COMPANY may, at its sole discretion, seek to collect
            premiums directly from any producing agency or from the insured.

      (d)   This Agreement shall not inure to the benefit of any successor in
            interest of GENERAL AGENCY nor may any interest under this Agreement
            be assigned by GENERAL AGENCY without the prior written consent of
            an officer of COMPANY.

      (e)   If COMPANY shall find it necessary to perform any duty otherwise
            imposed on GENERAL AGENCY under this Agreement, or by course of
            conduct to continue to service the outstanding Contracts of
            Insurance, GENERAL AGENCY shall be liable for all reasonable costs,
            including attorney's fees, incident thereto.

      (f)   It is further understood and agreed that the individual stockholders
            of GENERAL AGENCY, who are officers of GENERAL AGENCY, shall
            guarantee that all conditions of the Agreement and any supplement,
            amendment, extensions or renewals thereof shall be binding upon them
            severally and jointly in the same manner as upon GENERAL AGENCY.

      (g)   It is expressly understood and agreed that there are no promises,
            agreements, or understandings other than those contained in this
            written General Agency Agreement; that all prior General Agency
            Agreements with COMPANY, whether written or oral, are hereby

                                       9
<PAGE>

            superseded; and that no general agency, employee or other
            representative of COMPANY has any authority to obligate COMPANY by
            any terms, stipulations, or conditions not herein expressed unless
            the same be in writing from an officer of COMPANY and attached to
            and made a part of this Agreement.

      (h)   Notices under this Agreement shall be given by delivering or mailing
            a copy to the party entitled to notice. Notice by mail shall be
            deemed sufficiently given when mailed by certified mail, postage
            prepaid, addressed to COMPANY, or to GENERAL AGENCY at the last
            known address of GENERAL AGENCY according to COMPANY'S records.

      (i)   GENERAL AGENCY shall comply with all applicable laws or regulations
            of the state(s) in which it may operate with respect to the
            procurement and placement of insurance and shall provide the
            appointing authority in each state with all required filings,
            affidavits, and reports; and agrees to collect and to pay all
            premium taxes or other required taxes or fees that may become due
            any taxing authority within the boundaries of any state or
            commonwealth.

      (j)   GENERAL AGENCY agrees to assist COMPANY in the prompt reporting of
            losses on business written and in a reasonable amount of subsequent
            investigation as may be required by COMPANY; but GENERAL AGENCY'S
            authority is limited to ascertaining and reporting facts to COMPANY.
            GENERAL AGENCY has no authority to bind COMPANY on any matter
            relating to the acknowledgment or acceptance, or compromising or
            payment of any losses, unless directed to do so in writing by
            COMPANY. No action or inaction of COMPANY shall serve as a waiver of
            this limitation.

      (k)   If any dispute or disagreement shall arise in connection with any
            interpretation of this Agreement, its performance or nonperformance,
            or the figures or calculations used, the parties shall make every
            effort to meet informally and settle such dispute in good faith.


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<PAGE>

            However, if this fails to resolve the dispute, then it is agreed
            that such differences shall be submitted for arbitration to three
            disinterested executive officers of casualty insurance companies
            incorporated in the United States, one to be chosen by COMPANY, one
            by GENERAL AGENCY, and the third by the two so chosen; and a
            decision of the majority of the three shall in each case be final.
            The arbitrators shall be required to decide matters submitted to
            them upon the customs and usages of the business in a spirit of
            equity rather than of technicalities or legal requirements. Each
            party shall pay the expense of its own arbitrator and a pro rata
            portion of the expense of the third arbitrator. Unless otherwise
            agreed by the parties hereto, the seat of arbitration shall be
            Southfield, Michigan. No arbitration is required with respect to
            Premiums due COMPANY and COMPANY can proceed with Civil action
            without arbitration.

      (l)   If a conflict exists as to which General Agency is authorized to
            represent an existing or prospective policyholder with respect to a
            contract, the policyholder's written statement designating their
            agent and COMPANY'S general agency shall control.

      (m)   COMPANY reserves the right to directly cancel any policy or binder
            at any time. In the event of cancellation, COMPANY shall notify
            GENERAL AGENCY of such cancellation.

      (n)   It is GENERAL AGENCY'S sole responsibility to notify the insured of
            policy expiration and send notice of non-renewal when such notice is
            required by law.

      (o)   Upon request by COMPANY, GENERAL AGENCY shall submit to GENERAL
            AGENCY a financial statement of condition.

      (p)   Upon request by COMPANY for due cause, GENERAL AGENCY shall sign a
            UCC Security Agreement and filing forms regarding expirations.

      IN WITNESS WHEREOF, COMPANY has signed this Agreement by its authorized
official and

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<PAGE>

GENERAL AGENCY has signed this Agreement to be effective as of the day, month
and year first above written.

                                     COMPANY

ATTEST: /s/ Stephen C. June              BY: /s/ James G. Petcoff
        ---------------------                ------------------------------

DATED:10-17-96                           DATED: 10-17-96

                                 GENERAL AGENCY

ATTEST: /s/ Kim Smith                    BY: /s/ Greg Cox, Pres.
        ----------------------               ------------------------------

DATED: 10-04-96                          DATED: 10/4/96

                                       12
<PAGE>

                                   ADDENDUM 1

                        GENERAL AGENT COMMISSION SCHEDULE

I.    Applies to business developed via MS General Agency, excluding North
      Pointe Insurance Company direct agents.

<TABLE>

<S>                              <C>
General Agency issued policies:  22.5%
Company issued policies:         17.5%
</TABLE>

II.   Commission on North Pointe policies produced by other general agents, with
      underwriting and policy issuance performed by MS General Agency shall be
      7.5% over other general agent's commission, not to exceed 28.5% gross the
      commission.

III.  MS General Agency should it produce profitable volume shall be entitled to
      contingency/profit sharing per the attached contingent commission
      schedule, (Exhibit 1).

                                     COMPANY

ATTEST: /s/ Stephen C. June              BY: /s/ James G. Petcoff
       -------------------                   ----------------------------

DATED: 10-17-96                          DATED: 10-17-96

                                 GENERAL AGENCY

ATTEST: /s/ Kim Smith                    BY: /s/ Greg Cox, Pres.
       -------------------                   ----------------------------

DATED: 10-4-96                           DATED: 10-04-96

<PAGE>

                                    EXHIBIT 1

                  AGENCY PROFIT SHARING / CONTINGENCY SCHEDULE

                           GENERAL AGENCY CONTINGENCY

Applies to business developed by MS General Agency, excluding North Pointe
direct agent production.

1.    Total North Pointe direct written premium less returns and cancellations.

2.    Loss ratio % is calculated by using paid commercial policy claims and
      reserves on claims reported but not yet paid, divided by direct premium
      earned less returns and cancellations.

3.    Eligibility: Minimum volume required is $250,000 for the calendar year,
      commencing in 1997. For premiums written in 1996, the minimum volume shall
      be $100,000.

4.    Calculation of contingency is based upon calendar year.

5.    MS General Agency's Contingency Bonus is calculated, as follows:

<TABLE>
<CAPTION>
AGENCY DIRECT
PREMIUM                   LOSS   CONTINGENT    LOSS    CONTINGENT
WRITTEN VOLUME            RATIO  COMMISSION    RATIO    COMMISSION
--------------            -----  ----------    -----    ----------
<C>                       <C>    <C>           <C>     <C>
$250,000 to $350,000        50%    1.0%         40%        1.5%
$350,001 to $500,000        50%    2.0%         40%        3.0%
$500,001 to $750,000        50%    3.0%         40%        4.0%
$750,001 to $1,000,000      50%    3.5%         40%        4.5%
over $1,000,000             50%    4.0%         40%        5.0%
</TABLE>

Loss ratio on chart refers to a loss ratio of 50% or less, or 40% or less.

On July 1 of each year (commencing July 1, 1998), the Company will calculate the
loss ratio on premiums earned through December 31 of the year ending 18 months
prior, on a cumulative basis (based upon premiums earned the three (3) years
prior to said December 31).

Changes or termination of this Agreement may be made by mutual agreement of MS
General Agency and North Pointe Insurance Company.

                                     COMPANY

ATTEST: /s/ Stephen C. June              BY: /s/ James G. Petcoff
        ---------------------                ------------------------

DATED: 10-17-96                          DATED: 10-17-96

                                 GENERAL AGENCY

ATTEST: /s/ Kim Smith                    BY: /s/ Greg Cox, Pres.
       -------------------                   ------------------------

DATED:10-4-96                            DATED: 10-04-96