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                                                                    Exhibit 10.2

                       FLOATING RATE SENIOR DEBT SECURITY

                                    DUE 2033

     THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY OR ANY INTEREST
OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY
BE, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN PRIOR TO THE DATE WHICH IS THE LATER OF (I) TWO YEARS (OR
SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(K) OF THE SECURITIES ACT)
AFTER THE LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF AND (Z) THE LAST
DATE ON WHICH THE COMPANY OR ANY AFFILIATE (AS DEFINED IN RULE 405 UNDER THE
SECURITIES ACT) OF THE COMPANY WAS THE HOLDER OF THIS SECURITY OR SUCH INTEREST
OR PARTICIPATION (OR ANY PREDECESSOR THERETO) AND (II) SUCH LATER DATE, IF ANY,
AS MAY BE REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW, ONLY (A) TO THE
COMPANY, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A
PERSON THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER", AS
DEFINED IN RULE 144A, THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN "ACCREDITED INVESTOR"
WITHIN THE MEANING OF SUBPARAGRAPH (A) (1), (2), (3), (7) OR (8) OF RULE 501
UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY OR SUCH INTEREST OR
PARTICIPATION FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN ACCREDITED
INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE
IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (D)
PURSUANT TO OFFERS AND SALES TO NON-US PERSONS THAT OCCUR OUTSIDE THE UNITED
STATES PURSUANT TO REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSE (C), (D) OR (E) ABOVE TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT IN
ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY.
THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION

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HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, AGREES THAT IT
WILL COMPLY WITH THE FOREGOING RESTRICTIONS.

     THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS
ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, ALSO AGREES, REPRESENTS AND
WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR
OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH A "PLAN"), OR AN ENTITY
WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S INVESTMENT
IN THE ENTITY AND NO PERSON INVESTING "PLAN ASSETS" OF ANY PLAN MAY ACQUIRE OR
HOLD THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, UNLESS SUCH
PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S.
DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38,
90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF
THIS SECURITY OR SUCH INTEREST OR PARTICIPATION IS NOT PROHIBITED BY SECTION 406
OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING.
ANY PURCHASER OR HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN
WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING HEREOF OR
THEREOF, AS THE CASE MAY BE, THAT EITHER (I) IT IS NOT AN EMPLOYEE BENEFIT PLAN
WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF
THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN
EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF
ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (II) SUCH
PURCHASE AND HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION
406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO APPLICABLE
STATUTORY OR ADMINISTRATIVE EXEMPTION.

     IN CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY WILL DELIVER
TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
MAY BE REQUIRED BY THE INDENTURE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE
FOREGOING RESTRICTIONS.

     THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM
DENOMINATIONS OF $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY
ATTEMPTED TRANSFER OF THIS SECURITY IN DENOMINATIONS OF LESS THAN $100,000 SHALL
BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED
TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS SECURITY OR ANY INTEREST
OR PARTICIPATION HEREIN FOR ANY PURPOSE, INCLUDING, BUT

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NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS SECURITY OR SUCH INTEREST
OR PARTICIPATION, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO
INTEREST WHATSOEVER IN THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN.

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                   Floating Rate Senior Debt Security due 2033

                                       of

                      Embarcadero Insurance Holdings, Inc.

     Embarcadero Insurance Holdings, Inc., an insurance holding company
incorporated in California (the "Company", which term includes any successor
permitted under the Indenture (as defined herein)), for value received, promises
to pay to JPMorgan Chase Bank, as Trustee for the benefit of the Noteholders of
InCapS Funding I, Ltd. or registered assigns, the principal amount of Eight
Million Dollars ($8,000,000) on May 23, 2033 (the "Maturity Date") (or any
Optional Redemption Date, as defined herein, or any earlier date of acceleration
of the maturity of this Debt Security), and to pay interest on the outstanding
principal amount of this Debt Security from May 22, 2003, or from the most
recent Interest Payment Date (as defined below) to which interest has been paid
or duly provided for, quarterly in arrears on February 23rd May 23rd, August
23rd and November 23rd of each year, commencing on August 23, 2003 (each, an
"Interest Payment Date"), at a floating rate per annum, which, with respect to
any Interest Period (as defined in the Indenture), will be equal to LIBOR (as
defined in the Indenture), as determined on the LIBOR Determination Date as
defined in the Indenture) for such Interest Period, plus 4.20% (the "Interest
Rate") (provided that the Interest Rate for any Interest Period prior to the
Interest Period commencing on the Interest Payment Date in May, 2008 may not
exceed 12.5% per annum; and provided, further, that the Interest Rate for any
Interest Period may not exceed the highest rate permitted by New York law, as
the same may be modified by United States law of general application) until the
principal hereof shall have been paid or duly provided for, and on any overdue
principal and (without duplication and to the extent that payment of such
interest is enforceable under applicable law) on any overdue installment of
interest at an annual rate equal to the then applicable Interest Rate,
compounded quarterly. The amount of interest payable for any Interest Period
shall be computed on the basis of a 360-day year and the actual number of days
elapsed in such Interest Period.

     The interest installment so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the Indenture, be paid to
the Person in whose name this Debt Security (or one or more Predecessor
Securities, as defined in the Indenture) is registered at the close of business
on the "regular record date" for such interest installment, which shall be the
fifteenth day prior to such Interest Payment Date, whether or not such day is a
Business Day (as defined herein). Any such interest installment not punctually
paid or duly provided for shall forthwith cease to be payable to the holders on
such regular record date and may be paid to the Person in whose name this Debt
Security (or one or more Predecessor Securities) is registered at the close of
business on a special record date to be fixed by the Trustee for the payment of
such defaulted interest, notice whereof shall be given to the holders of the
Debt Securities not less than 10 days prior to such special record date, all as
more fully provided in the Indenture.

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     Payment of the principal of and premium, if any, and interest on this Debt
Security due on the Maturity Date or any Optional Redemption Date, as the case
may be, shall be made in immediately available funds against presentation and
surrender of this Debt Security at the office or agency of the Trustee
maintained for that purpose in Wilmington, Delaware or at the office or agency
of any other Paying Agent appointed by the Company maintained for that purpose
in Wilmington, Delaware or San Francisco, California. Payment of interest on
this Debt Security due on any Interest Payment Date other than the Maturity Date
or any Optional Redemption Date, as the case may be, shall be made at the option
of the Company by check mailed to the holder thereof at such address as shall
appear in the Debt Security Register or by wire transfer of immediately
available funds to an account appropriately designated by the holder hereof.
Notwithstanding the foregoing, so long as the holder of this Debt Security is
InCapS Funding I, Ltd. or a trustee thereof, payment of the principal of and
premium, if any, and interest on this Debt Security shall be made in immediately
available funds when due at such place and to such account as may be designated
by InCapS Funding I, Ltd. or a trustee thereof. All payments in respect of this
Debt Security shall be payable in any coin or currency of the United States of
America that at the time of payment is legal tender for payment of public and
private debts.

     Notwithstanding anything to the contrary contained herein, if any Interest
Payment Date, other than the Maturity Date or any Optional Redemption Date,
falls on a day that is not a Business Day, then any interest payable will be
paid on, and such Interest Payment Date will be moved to, the next succeeding
Business Day, and additional interest will accrue for each day that such payment
is delayed as a result thereof. If the Maturity Date or any Optional Redemption
Date falls on a day that is not a Business Day, then the principal, premium, if
any, and/or interest payable on such date will be paid on the next succeeding
Business Day, and no additional interest will accrue in respect of such payment
made on such next succeeding Business Day.

     The Company waives diligence, presentment, demand for payment, notice of
nonpayment, notice of protest, and all other demands and notices.

     This Debt Security shall not be entitled to any benefit under the Indenture
and shall not be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been signed by or on behalf of
the Trustee.

     The provisions of this Debt Security are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.

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     IN WITNESS WHEREOF, the Company has duly executed this certificate.

                                        EMBARCADERO INSURANCE HOLDINGS, INC.


                                        By: /s/ John Sullivan
                                            ------------------------------------
                                            John Sullivan
                                            Chief Executive Officer

Dated: May 22, 2003

                          CERTIFICATE OF AUTHENTICATION

     This is one of the Debt Securities referred to in the within-mentioned
Indenture.

                                        WILMINGTON TRUST COMPANY,
                                        not in its individual capacity but
                                        solely as the Trustee


                                        By: /s/ Janel R. Havrilla
                                            ------------------------------------
                                            Authorized Officer

Dated: May 22, 2003

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     This Debt Security is one of a duly authorized series of debt securities of
the Company (collectively, the "Debt Securities"), all issued or to be issued
pursuant to an Indenture (the "Indenture"), dated as of May 22, 2003, duly
executed and delivered between the Company and Wilmington Trust Company, as
Trustee (the "Trustee"), to which Indenture and all indentures supplemental
thereto reference is hereby made for a description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the Trustee, the
Company and the holders of the Debt Securities of which this Debt Security is a
part.

     The Company shall have the right to redeem this Debt Security at its
option, in whole or (provided that all accrued and unpaid interest has been paid
on all Debt Securities for all Interest Periods terminating on or prior to such
date) from time to time in part, on any Interest Payment Date on or after May
23, 2008 (each, an "Optional Redemption Date"), at the Optional Redemption Price
(as defined herein).

     Any redemption pursuant to the preceding paragraph will be made upon not
less than 30 days' nor more than 60 days' prior written notice. If the Debt
Securities are only partially redeemed by the Company, the Debt Securities will
be redeemed pro rata or by any other method utilized by the Trustee. In the
event of redemption of this Debt Security in part only, a new Debt Security or
Debt Securities for the unredeemed portion hereof will be issued in the name of
the holder hereof upon the cancellation hereof.

     "Optional Redemption Price" means an amount in cash equal to 100% of the
principal amount of this Debt Security being redeemed plus unpaid interest
accrued thereon to the Optional Redemption Date.

     In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debt Securities may be
declared, and, in certain cases, shall ipso facto become, due and payable, and
upon any such declaration of acceleration shall become due and payable, in each
case, in the manner, with the effect and subject to the conditions provided in
the Indenture.

     The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of a majority in aggregate principal amount of
the Debt Securities at the time outstanding affected thereby, as specified in
the Indenture, to execute supplemental indentures for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of any supplemental indenture or of modifying in any manner the
rights of the holders of the Debt Securities; provided, however, that no such
supplemental indenture shall, among other things, without the consent of the
holders of each Debt Security then outstanding and affected thereby (i) change
the Maturity Date of any Debt Security, or reduce the principal amount thereof
or any premium thereon, or reduce the rate (or manner of calculation of the
rate) or extend the time of payment of interest thereon, or reduce (other than
as a result of the maturity or earlier redemption of any such Debt Security in
accordance with the terms of the Indenture and such Debt Security) or increase
the aggregate principal amount of Debt Securities then outstanding, or change
any of the redemption provisions, or make the principal thereof or any interest
or premium thereon payable in any coin or currency other than United States
Dollars, or impair or affect the right of any holder to

<PAGE>

institute suit for payment thereof, or (ii) reduce the aforesaid percentage of
Debt Securities the holders of which are required to consent to any such
supplemental indenture. The Indenture also contains provisions permitting the
holders of a majority in aggregate principal amount of the Debt Securities at
the time outstanding, on behalf of the holders of all the Debt Securities, to
waive any past default in the performance of any of the covenants contained in
the Indenture, or established pursuant to the Indenture, and its consequences,
except (a) a default in payments due in respect of any of the Debt Securities or
(b) in respect of covenants or provisions of the Indenture which cannot be
modified or amended without the consent of the holder of each Debt Security
affected. Any such consent or waiver by the holder of this Debt Security (unless
revoked as provided in the Indenture) shall be conclusive and binding upon such
holder and upon all future holders and owners of this Debt Security and of any
Debt Security issued in exchange herefor or in place hereof (whether by
registration of transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Debt Security.

     No reference herein to the Indenture and no provision of this Debt Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to make all payments due in respect of this Debt
Security at the time and place and at the rate and in the money herein
prescribed.

     As provided in the Indenture and subject to certain limitations herein and
therein set forth, this Debt Security is transferable by the holder hereof on
the Debt Security Register (as defined in the Indenture) of the Company, upon
surrender of this Debt Security for registration of transfer at the office or
agency of the Trustee in Wilmington, Delaware, or at any other office or agency
of the Company in Wilmington, Delaware or San Francisco, California, accompanied
by a written instrument or instruments of transfer in form satisfactory to the
Company or the Trustee duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Debt
Securities of authorized denominations and for the same aggregate principal
amount will be issued to the designated transferee or transferees. No service
charge will be made for any such registration of transfer, but the Company or
the Trustee may require payment of a sum sufficient to cover any tax, fee or
other governmental charge payable in relation thereto as specified in the
Indenture.

     Prior to due presentment for registration of transfer of this Debt
Security, the Company, the Trustee, any Authenticating Agent, any Paying Agent,
any transfer agent and the Debt Security registrar may deem and treat the holder
hereof as the absolute owner hereof (whether or not this Debt Security shall be
overdue and notwithstanding any notice of ownership or writing hereon) for the
purpose of receiving payment of the principal of and premium, if any, and
interest on this Debt Security and for all other purposes, and none of the
Company, the Trustee, any Authenticating Agent, any Paying Agent, any transfer
agent or any Debt Security registrar shall be affected by any notice to the
contrary.

     As provided in the Indenture and subject to certain limitations herein and
therein set forth, Debt Securities are exchangeable for a like aggregate
principal amount of Debt Securities of different authorized denominations, as
requested by the holder surrendering the same.

<PAGE>

     The Debt Securities are issuable only in registered certificated form
without coupons.

     No recourse shall be had for the payment of the principal of or premium, if
any, or interest on this Debt Security, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture, against
any incorporator, stockholder, officer, director, employee or agent, past,
present or future, as such, of the Company or of any predecessor or successor
corporation of the Company, whether by virtue of any constitution, statute or
rule of law, or by the enforcement of any assessment or penalty or otherwise,
all such liability being, by the acceptance hereof and as part of the
consideration for the issuance hereof, expressly waived and released.

     All terms used but not defined in this Debt Security shall have the
meanings assigned to them in the Indenture.

     THIS DEBT SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES
OF SAID STATE OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.