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                                                                   EXHIBIT 10.63

                     EXCESS CATASTROPHE REINSURANCE CONTRACT
                             EFFECTIVE: JUNE 1, 2003

                                    issued to

                         Philadelphia Insurance Company
                            Bala Cynwyd, Pennsylvania
                    Philadelphia Indemnity Insurance Company
                            Bala Cynwyd, Pennsylvania
                          Mobile USA Insurance Company
                             Pinellas Park, Florida
                       Liberty American Insurance Company
                             Pinellas Park, Florida
                                       and
                    any and all other companies which are now
                   or may hereafter become member companies of
                        Philadelphia Insurance Companies

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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
ARTICLE                                                          PAGE
<S>                                                              <C>
     I         Classes of Business Reinsured                       1
    II         Term                                                1
   III         Territory (BRMA 51A)                                2
    IV         Exclusions                                          2
     V         Retention and Limit                                 4
    VI         Definitions                                         6
   VII         Other Reinsurance                                   7
  VIII         Loss Occurrence (BRMA 27C)                          7
    IX         Loss Notices and Settlements                        8
     X         Salvage and Subrogation                             9
    XI         Florida Hurricane Catastrophe Fund                  9
   XII         Reinsurance Premium                                 9
  XIII         Coverage Renewal                                   10
   XIV         Exit Charge and Non Renewal Charge                 11
    XV         Experience Account                                 11
   XVI         Investment Income                                  12
  XVII         Commutation                                        12
 XVIII         Late Payments                                      12
   XIX         Security                                           13
    XX         Offset (BRMA 36D)                                  14
   XXI         Access to Records (BRMA 1D)                        14
  XXII         Liability of the Reinsurer                         14
 XXIII         Net Retained Lines (BRMA 32B)                      14
  XXIV         Errors and Omissions (BRMA 14F)                    14
   XXV         Currency (BRMA 12A)                                15
  XXVI         Taxes (BRMA 50C)                                   15
 XXVII         Federal Excise Tax (BRMA 17A)                      15
XXVIII         Reserve Requirements                               15
  XXIX         Insolvency                                         17
   XXX         Arbitration                                        17
  XXXI         Service of Suit                                    18
 XXXII         Agency Agreement                                   19
XXXIII         Governing Law                                      19
 XXXIV         Confidentiality                                    19
  XXXV         Severability                                       20
 XXXVI         Intermediary (BRMA 23A)                            20
</TABLE>

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                     EXCESS CATASTROPHE REINSURANCE CONTRACT
                             EFFECTIVE: JUNE 1, 2003

                                    issued to

                         Philadelphia Insurance Company
                            Bala Cynwyd, Pennsylvania
                    Philadelphia Indemnity Insurance Company
                            Bala Cynwyd, Pennsylvania
                          Mobile USA Insurance Company
                             Pinellas Park, Florida
                       Liberty American Insurance Company
                             Pinellas Park, Florida
                                       and
                    any and all other companies which are now
                   or may hereafter become member companies of
                        Philadelphia Insurance Companies
             (hereinafter referred to collectively as the "Company")

                                       by

                   The Subscribing Reinsurer(s) Executing the
                     Interests and Liabilities Agreement(s)
                                 Attached Hereto
                  (hereinafter referred to as the "Reinsurer")

ARTICLE I - CLASSES OF BUSINESS REINSURED

By this Contract the Reinsurer agrees to reinsure the excess liability which may
accrue to the Company under its policies, contracts and binders of insurance or
reinsurance (hereinafter called "policies") in force at the effective date
hereof or issued or renewed on or after that date, and classified by the Company
as Property business, subject to the terms, conditions and limitations
hereinafter set forth.

ARTICLE II - TERM

A.       This Contract shall become effective on June 1, 2003, with respect to
         losses arising out of loss occurrences commencing on or after that
         date, and shall remain in force until May 31, 2004, both days
         inclusive.

B.       If this Contract expires while a loss occurrence covered hereunder is
         in progress, the Reinsurer's liability hereunder shall, subject to the
         other terms and conditions of this Contract, be determined as if the
         entire loss occurrence had occurred prior to the expiration of this
         Contract, provided that no part of such loss occurrence is claimed
         against any renewal or replacement of this Contract.

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ARTICLE III - TERRITORY (BRMA 51A)

The territorial limits of this Contract shall be identical with those of the
Company's policies.

ARTICLE IV - EXCLUSIONS

This Contract does not apply to and specifically excludes the following:

         1.       Financial guarantee and insolvency.

         2.       Nuclear risks as defined in the "Nuclear Incident Exclusion
                  Clause - Physical Damage - Reinsurance (U.S.A.)" and the
                  "Nuclear Incident Exclusion Clause - Physical Damage -
                  Reinsurance (Canada)" attached to and forming part of this
                  Contract.

         3.       Loss or damage caused by or resulting from war, invasion,
                  hostilities, acts of foreign enemies, civil war, rebellion,
                  insurrection, military or usurped power, or martial law or
                  confiscation by order of any government or public authority,
                  but this exclusion shall not apply to loss or damage covered
                  under a standard policy with a standard War Exclusion Clause.

         4.       Loss or liability excluded under the provisions of the "Pools,
                  Associations and Syndicates Exclusion Clause" attached to and
                  forming part of this Contract.

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

         6.       Losses in respect of overhead transmission and distribution
                  lines and their supporting structures, other than those on or
                  within 300 meters (or 1,000 feet) of the insured premises. It
                  is understood and agreed that public utilities extension
                  and/or suppliers extension and/or contingent business
                  interruption coverages are not subject to this exclusion,
                  provided that these are not part of a transmitters' or
                  distributors' policy.

         7.       Accident and Health, Casualty, Fidelity and/or Surety
                  business.

         8.       Pollution and seepage coverages excluded under the provisions
                  of the "Pollution and Seepage Exclusion Clause (BRMA 39A)"
                  attached to and forming part of this Contract.

         9.       Notwithstanding any other provision to the contrary within
                  this Contract or any amendment thereto, any loss, damage, cost
                  or expense directly or indirectly caused by, contributed to
                  by, resulting from, or arising out of or in connection with
                  any act of

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                  terrorism, as defined herein, regardless of any other cause or
                  event contributing concurrently or in any other sequence to
                  the loss.

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

                  a.       Involves violence against one or more persons; or

                  b.       Involves damage to property; or

                  c.       Endangers life other than that of the person
                           committing the action; or

                  d.       Creates a risk to health or safety of the public or a
                           section of the public; or

                  e.       Is designed to interfere with or to disrupt an
                           electronic system.

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

                  Notwithstanding the above and subject otherwise to the terms,
                  conditions and limitations of this Contract, in respect only
                  of Personal Lines, this Contract will pay actual loss or
                  damage (but not related cost or expense) caused by any act of
                  terrorism, provided such act is not directly or indirectly
                  caused by, contributed to by, resulting from, or arising out
                  of or in connection with biological, chemical or nuclear
                  pollution or contamination.

         10.      Loss or liability in any way or to any extent arising out of
                  the actual or alleged presence or actual, alleged or
                  threatened presence of fungi including, but not limited to,
                  mold, mildew, mycotoxins, microbial volatile organic compounds
                  or other "microbial contaminations." This includes:

                  a.       Any supervision, instruction, recommendations,
                           warnings or advice given or which should have been
                           given in connection with the above; and

                  b.       Any obligation to share damages with or repay someone
                           else who must pay damages because of such injury or
                           damage.

                  For purposes of this exclusion, "microbial contamination"
                  means any contamination, either airborne or surface, which
                  arises out of or is related to the presence of fungi, mold,
                  mildew, mycotoxins, microbial volatile organic compounds or
                  spores, including, without limitation, Penicillium,
                  Aspergillus, Fusarium, Aspergillus Flavus and Stachybotrys
                  chartarum.

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                  Losses resulting from the above causes do not in and of
                  themselves constitute an event unless arising out of one or
                  more of the following perils, in which case this exclusion
                  does not apply:

                           Fire, lightning, explosion, aircraft or vehicle
                           impact, falling objects, windstorm, hail, tornado,
                           cyclone, hurricane, earthquake, volcano, tsunami,
                           flood, freeze or weight of snow.

                  Notice of any claims for mold-related losses must be given by
                  the Company to the Reinsurer, in writing, within 24 months
                  after the commencement date of the loss occurrence to which
                  such claims relate.

         11.      Loss or liability excluded under the provisions of the
                  "Electronic Data Endorsement B" (N.M.A 2915) attached to and
                  forming part of this Contract.

ARTICLE V - RETENTION AND LIMIT

A.       SECTION 1:

         The Company shall retain and be liable for the first $4,000,000 of
         ultimate net loss arising out of each loss occurrence. The Reinsurer
         shall then be liable (subject to the provisions of paragraphs C and D
         below) for the amount by which such ultimate net loss exceeds the
         Company's retention, but the liability of the Reinsurer under Section 1
         shall not exceed any of the following:

         1.       $6,000,000 as respects any one loss occurrence;

         2.       $12,000,000 in all as respects loss occurrences commencing
                  during any one contract year;

         3.       $12,000,000 in all for loss occurrences arising out of perils
                  other than hurricanes and earthquakes commencing during all
                  contract years ending on or before May 31, 2007.

B.       SECTION 2:

         1.       FLORIDA FIRST LAYER: As respects Property business located
                  inside the State of Florida, the Company shall retain and be
                  liable for the first $10,000,000 of ultimate net loss arising
                  out of each loss occurrence. The Reinsurer shall then be
                  liable (subject to the provisions of subparagraph 5 of this
                  paragraph and of paragraphs C and D below) for 25.50% of the
                  amount by which such ultimate net loss exceeds the Company's
                  retention, but the liability of the Reinsurer shall not exceed
                  25.50% of $16,500,000 (being $4,207,500) as respects any one
                  loss occurrence, nor shall it exceed 25.5% of $16,500,000
                  (being $4,207,500) in all as respects loss occurrences
                  commencing during any one contract year.

         2.       FLORIDA SECOND LAYER: As respects Property business located
                  inside the State of Florida, the Company shall retain and be
                  liable for the first $26,500,000 of ultimate net loss arising
                  out of each loss occurrence. The Reinsurer shall then be
                  liable (subject to the provisions of subparagraph 5 of this
                  paragraph and of paragraphs C and D below) for 17.00% of the
                  amount by which such ultimate net loss exceeds the Company's

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                  retention, but the liability of the Reinsurer shall not exceed
                  17.00% of $17,700,000 (being $3,009,000) as respects any one
                  loss occurrence, nor shall it exceed 17.00% of $17,700,000
                  (being $3,009,000) in all as respects loss occurrences
                  commencing during any one contract year.

         3.       NON FLORIDA FIRST LAYER: As respects Property business located
                  outside of the State of Florida, the Company shall retain and
                  be liable for the first $10,000,000 of ultimate net loss
                  arising out of each loss occurrence. The Reinsurer shall then
                  be liable (subject to the provisions of subparagraph 5 of this
                  paragraph and of paragraphs C and D below) for 9.50% of the
                  amount by which such ultimate net loss exceeds the Company's
                  retention, but the liability of the Reinsurer shall not exceed
                  9.50% of $10,000,000 (being $950,000) as respects any one loss
                  occurrence, nor shall it exceed 9.50% of $10,000,000 (being
                  $950,000) in all as respects loss occurrences commencing
                  during any one contract year.

         4.       NON FLORIDA SECOND LAYER: As respects Property business
                  located outside of the State of Florida, the Company shall
                  retain and be liable for the first $20,000,000 of ultimate net
                  loss arising out of each loss occurrence. The Reinsurer shall
                  then be liable (subject to the provisions of subparagraph 5 of
                  this paragraph and of paragraphs C and D below) for 4.3333% of
                  the amount by which such ultimate net loss exceeds the
                  Company's retention, but the liability of the Reinsurer shall
                  not exceed 4.3333% of $30,000,000 (being $1,299,000) as
                  respects any one loss occurrence, nor shall it exceed 4.3333%
                  of $30,000,000 (being $1,299,000) in all as respects loss
                  occurrences commencing during any one contract year.

         5.       Notwithstanding the provisions of subparagraphs 1, 2, 3 and 4
                  above, the liability of the Reinsurer under Section 2 shall
                  not exceed $9,466,500 in all as respects loss occurrences
                  commencing during any one contract year. Further, the
                  liability of the Reinsurer under each Layer of Section 2 in
                  all as respects loss occurrences commencing during any one
                  contract year shall not exceed the actual amount of
                  reinstatement premium paid by the Company under the Company's
                  Property treaty reinsurance covering that Layer for the same
                  contract year.

C.       SECTION 3:

         The Company shall retain and be liable for the first $145,200,000 of
         ultimate net loss arising out of each loss occurrence. The Reinsurer
         shall then be liable (subject to the provisions of paragraphs C and D
         below) for the amount by which such ultimate net loss exceeds the
         Company's retention, but the liability of the Reinsurer under Section 3
         shall not exceed $25,000,000 as respects any one loss occurrence, nor
         shall it exceed $25,000,000 in all as respects loss occurrences
         commencing during any one contract year.

D.       CONTRACT YEAR LIMIT: Notwithstanding the provisions of paragraphs A, B
         and C above, the liability of the Reinsurer shall not exceed
         $40,467,000 in all as respects loss occurrences commencing during any
         one contract year, regardless of the number of Sections involved.

E.       No claim shall be made under any Layer of coverage provided by this
         Contract in any one loss occurrence unless at least two risks insured
         or reinsured by the Company are involved in such loss occurrence. For
         purposes hereof, the Company shall be the sole judge of what
         constitutes one risk.

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ARTICLE VI - DEFINITIONS

A.       "Ultimate net loss" as used herein is defined as the sum or sums
         (including extra contractual obligations, limited to 100% of the
         original policy limits, loss in excess of policy limits, also limited
         to 100% of the original policy limits, and any loss adjustment expense,
         as hereinafter defined) paid or payable by the Company in settlement of
         claims and in satisfaction of judgments rendered on account of such
         claims, after deduction of all salvage, all recoveries and all claims
         on inuring insurance or reinsurance, whether collectible or not.
         Nothing herein shall be construed to mean that losses under this
         Contract are not recoverable until the Company's ultimate net loss has
         been ascertained.

B.       "Loss in excess of policy limits" and "extra contractual obligations"
         as used herein shall be defined as follows:

         1.       "Loss in excess of policy limits" shall mean any amount paid
                  or payable by the Company in excess of its policy limits, but
                  otherwise within the terms of its policy, such loss in excess
                  of the Company's policy limits having been incurred because
                  of, but not limited to, failure by the Company to settle
                  within the policy limits or by reason of the Company's 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 an action against its insured or reinsured or in the
                  preparation or prosecution of an appeal consequent upon such
                  an action.

         2.       "Extra contractual obligations" shall mean any punitive,
                  exemplary, compensatory or consequential damages paid or
                  payable by the Company, not covered by any other provision of
                  this Contract and which arise from the handling of any claim
                  on business subject to this Contract, such liabilities arising
                  because of, but not limited to, failure by the Company to
                  settle within the policy limits or by reason of the Company's
                  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 reinsured or
                  in the preparation or prosecution of an appeal consequent upon
                  such an action. An extra contractual obligation shall be
                  deemed, in all circumstances, to have occurred on the same
                  date as the loss covered or alleged to be covered under the
                  policy.

         Notwithstanding anything stated herein, this Contract shall not apply
         to any loss in excess of policy limits or any extra contractual
         obligation incurred by the Company as a result of any fraudulent and/or
         criminal act by any officer or director of the Company acting
         individually or collectively or in collusion with any individual or
         corporation or any other organization or party involved in the
         presentation, defense or settlement of any claim covered hereunder.

         If any provision of this paragraph B shall be rendered illegal or
         unenforceable by the laws, regulations or public policy of any state,
         such provision shall be considered void in such state, but this shall
         not affect the validity or enforceability of any other provision of
         this Contract or the enforceability of such provision in any other
         jurisdiction.

         Savings Clause (Applicable only if the Subscribing Reinsurer is
         domiciled in the State of New York): In no event shall coverage be
         provided to the extent that such coverage is not permitted under New
         York law.

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C.       "Loss adjustment expense" as used herein shall mean expenses assignable
         to the investigation, appraisal, adjustment, settlement, litigation,
         defense and/or appeal of specific claims, regardless of how such
         expenses are classified for statutory reporting purposes. Loss
         adjustment expense shall include, but not be limited to, declaratory
         judgments, interest on judgments, expenses of outside adjusters, and a
         pro rata share of the salaries and expenses of the Company's field
         employees according to the time occupied adjusting such losses and
         expenses of the Company's officials incurred in connection with the
         losses, but shall not include office expenses or salaries of the
         Company's regular employees.

D.       "Net earned premium" as used herein is defined as gross earned premium
         of the Company for the classes of business reinsured hereunder, less
         the earned portion of premiums ceded by the Company for reinsurance
         which inures to the benefit of this Contract. Net earned premium will
         not include the Company's earned premium for Homeowners, Manufactured
         Homeowners and Condominium policies that include a "No Wind/No Water"
         exclusion, although coverage is provided for these polices. It is
         understood that net earned premium shall include catastrophe fees, but
         shall exclude Managing General Agent fees, DRST fees and policy
         surcharges to recoup residual market deficit assessments.

E.       "Contract year" as used herein shall mean the period from June 1, 2003
         to May 31, 2004, both days inclusive, and each respective 12-month
         period thereafter that this Contract is renewed as provided in Article
         XIII.

ARTICLE VII - OTHER REINSURANCE

The Company shall be permitted to carry Commercial Property excess reinsurance,
recoveries under which shall inure to the benefit of this Contract.

ARTICLE VIII - LOSS OCCURRENCE (BRMA 27C)

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

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

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

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                  respect of individual losses which occur beyond such 72
                  consecutive hours during the continued occupation of an
                  assured's premises by strikers, provided such occupation
                  commenced during the aforesaid period.

         3.       As regards earthquake (the epicenter of which need not
                  necessarily be within the territorial confines referred to in
                  the introductory portion of this paragraph) and fire following
                  directly occasioned by the earthquake, only those individual
                  fire losses which commence during the period of 168
                  consecutive hours may be included in the Company's "loss
                  occurrence."

         4.       As regards "freeze," only individual losses directly
                  occasioned by collapse, breakage of glass and water damage
                  (caused by bursting frozen pipes and tanks and melting snow)
                  may be included in the Company's "loss occurrence."

B.       Except for those "loss occurrences" referred to in subparagraphs 1 and
         2 of paragraph A above, the Company may choose the date and time when
         any such period of consecutive hours commences, provided that it is not
         earlier than the date and time of the occurrence of the first recorded
         individual loss sustained by the Company arising out of that disaster,
         accident or loss, and provided that only one such period of 168
         consecutive hours shall apply with respect to one event.

C.       However, as respects those "loss occurrences" referred to in
         subparagraphs 1 and 2 of paragraph A above, if the disaster, accident
         or loss occasioned by the event is of greater duration than 72
         consecutive hours, then the Company may divide that disaster, accident
         or loss into two or more "loss occurrences," provided that no two
         periods overlap and no individual loss is included in more than one
         such period, and provided that no period commences earlier than the
         date and time of the occurrence of the first recorded individual loss
         sustained by the Company arising out of that disaster, accident or
         loss.

D.       It is understood that losses arising from a combination of two or more
         perils as a result of the same event shall be considered as having
         arisen from one "loss occurrence." Notwithstanding the foregoing, the
         hourly limitations as stated in paragraphs A, B and C shall not be
         exceeded as respects the applicable perils and no single "loss
         occurrence" shall encompass a time period greater than 168 consecutive
         hours.

ARTICLE IX - LOSS NOTICES AND SETTLEMENTS

A.       Whenever losses sustained by the Company appear likely to result in a
         claim hereunder, the Company shall notify the Reinsurer, and the
         Reinsurer shall have the right to participate in the adjustment of such
         losses at its own expense.

B.       All loss settlements made by the Company, provided they are within the
         terms of this Contract, shall be binding upon the Reinsurer, and the
         Reinsurer agrees to pay all amounts for which it may be liable upon
         receipt of reasonable evidence of the amount paid (or scheduled to be
         paid) by the Company.

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ARTICLE X - SALVAGE AND SUBROGATION

The Reinsurer shall be credited with salvage (i.e., reimbursement obtained or
recovery made by the Company, less the actual cost, excluding salaries of
officials and employees of the Company and sums paid to attorneys as retainer,
of obtaining such reimbursement or making such recovery) on account of claims
and settlements involving reinsurance hereunder. Salvage thereon shall always be
used to reimburse the excess carriers in the reverse order of their priority
according to their participation before being used in any way to reimburse the
Company for its primary loss. The Company hereby agrees to enforce its rights to
salvage or subrogation relating to any loss, a part of which loss was sustained
by the Reinsurer, and to prosecute all claims arising out of such rights.

ARTICLE XI - FLORIDA HURRICANE CATASTROPHE FUND

A.       Any loss reimbursement paid or payable to the Company under the Florida
         Hurricane Catastrophe Fund (FHCF) as a result of loss occurrences
         commencing during the term of this Contract shall inure to the benefit
         of this Contract. Further, any FHCF loss reimbursement shall be deemed
         to be paid to the Company in accordance with the reimbursement contract
         between the Company and the State Board of Administration of the State
         of Florida at the full payout level set forth therein and will be
         deemed not to be reduced by any reduction or exhaustion of the FHCF's
         claims paying capacity.

B.       Prior to the determination of the Company's FHCF retention and payout,
         if any, under the reimbursement contract, the Reinsurer's liability
         hereunder will be determined provisionally based on the projected
         payout, determined in accordance with the provisions of the
         reimbursement contract. Following determination of the payout under the
         reimbursement contract, the ultimate net loss under this Contract will
         be recalculated. If, as a result of such calculation, the loss to the
         Reinsurer under any excess layer of this Contract in any one loss
         occurrence is less than the amount previously paid by the Reinsurer
         under that excess layer, the Company shall promptly remit the
         difference to the Reinsurer. If the loss to the Reinsurer under any
         excess layer in any one loss occurrence is greater than the amount
         previously paid by the Reinsurer, the Reinsurer shall promptly remit
         the difference to the Company.

C.       If an FHCF reimbursement amount is based on the Company's losses in
         more than one loss occurrence and the FHCF does not designate the
         amount allocable to each loss occurrence, the FHCF reimbursement amount
         shall be prorated in the proportion that the Company's losses in each
         loss occurrence bear to the Company's total losses arising out of all
         loss occurrences to which the FHCF reimbursement applies.

D.       Any reimbursement premiums or emergency assessment paid by the Company
         under the FHCF shall be deemed to be premiums paid for inuring
         reinsurance.

ARTICLE XII - REINSURANCE PREMIUM

The Company shall pay the Reinsurer an annual premium of $10,000,000 in four
installments of $2,500,000 each on June 1, 2003, September 1, 2003, December 1,
2003 and March 1, 2004.

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ARTICLE XIII - COVERAGE RENEWAL

A.       At the expiration of this Contract and annually thereafter if
         applicable, the Reinsurer may, but is not obligated to, offer to renew
         this Contract at the expiring terms and conditions for a renewal
         premium equal to the previous year's annual premium plus an additional
         premium of 10.0% of the deficit in the Experience Account at the
         expiration of this Contract, payable in three equal installments due on
         June 1, September 1 and December 1 of the renewal year.

B.       Should the Company elect to decline the Reinsurer's offer for renewal
         as described above and the Experience Account is negative, the Company
         will pay the Reinsurer a non- renewal charge calculated in accordance
         with Article XIV, payable within 90 days of expiration. Should the
         Company elect to decline the Reinsurer's offer for renewal as described
         above and the Experience Account is positive, the Reinsurer will pay
         the Company a profit commission equal to the positive balance of the
         Experience Account within 90 days of expiration. If the offer of
         renewal is accepted and this Contract enters a second year, the Company
         can not decline any further offers to renew this Contract prior to May
         31, 2007 if the Experience Account has a negative balance.

C.       Further, should the Company elect to decline the Reinsurer's offer for
         renewal as described above, this Contract and all previous contracts
         for this coverage will be terminated.

D.       Should the Reinsurer elect to decline to offer renewal terms as
         described above, the Reinsurer shall forfeit the non-renewal charge and
         shall pay the Company a profit commission equal to any positive balance
         in the Experience Account in return for a full and final release of all
         its obligations under this Contract.

E.       If, pursuant to the terms of this Article, this Contract is renewed and
         losses greater than $10,000,000 have been ceded, the terms of this
         provision will not apply to contract years entered into after May 31,
         2007. The maximum recovery in the aggregate over all contract years
         shall be $161,866,000.

F.       Any provisional notices to renew or to not offer renewal terms, and
         responses to such offers, are provisional only, and subject to change
         based on loss development or loss occurrences between the date of the
         provisional notices or responses, and the actual expiration date of
         coverage.

G.       If the coverage is renewed, it is intended that the coverage granted
         under this Contract in years subsequent to the 2003 contract year
         should be comparable in risk exposure to the 2003 contract year. If the
         Reinsurer believes there has been significant change to such risk
         exposure the retentions and limits will be adjusted as set forth in
         paragraphs H, I and J below, unless the parties mutually agree to
         alternative adjustments.

H.       The Company agrees to continue to use RMS for catastrophe modeling,
         unless mutually agreed otherwise, using software at least as advanced
         as used in the preparation of the loss curves and analysis for this
         program.

I.       For Section 1 and Section 2: If there is an exposure increase, a
         coinsurance clause will be added so the expected loss for Section 1 and
         each layer of Section 2, as measured using RMS output, is comparable to
         the expected loss in the first contract year.

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J.       For Section 3: The attachment will be reset to the comparable risk
         level as it was at the inception of this Contract.


ARTICLE XIV - EXIT CHARGE AND NON RENEWAL CHARGE

A.       Upon declination of the Reinsurer's offer of renewal per the terms of
         Article XIII, a non-renewal charge shall be payable to the Reinsurer by
         the Company for 40.0% of the absolute value of the negative balance in
         the Experience Account (before the calculation and payment of this
         non-renewal charge) for the absolute value of the first $7,500,000 of
         the negative balance and 95.0% of the absolute value of the negative
         balance in excess of $7,500,000 (before the calculation and payment of
         this non-renewal charge). Upon the expiration of coverage for the year
         ended May 31, 2007, an exit charge shall be payable to the Reinsurer by
         the Company for 75.0% of the absolute value of the negative balance in
         the Experience Account (before the calculation and payment of this exit
         charge).

B.       Since the exit charge and non-renewal charge are based on the negative
         balance in the Experience Account, which includes outstanding losses,
         if agreement to commute is not reached concurrent with the exit or
         non-renewal charge calculation, then the exit or non-renewal charge
         will adjust quarterly based on loss development, until commutation.

ARTICLE XV - EXPERIENCE ACCOUNT

A.       The Reinsurer shall maintain an Experience Account, the balance of
         which shall be calculated as follows:

         1.       87.5% of the cumulative annual reinsurance premium paid or
                  payable by the Company from the inception of this Contract;
                  less

         2.       100% of cumulative incurred losses from the inception of this
                  Contract; plus

         3.       75.0% of cumulative additional premium, if any, paid or
                  payable by the Company in accordance with Article XIII from
                  the inception of this Contract; plus

         4.       Cumulative interest credited on positive Experience Account
                  cash balances as provided in Article XVI from the inception of
                  this Contract.

B.       The cash balance in the Experience Account shall be the balance in the
         Experience Account, as defined above, plus 100% of outstanding losses,
         inclusive of IBNR, under the contract, and plus investment income as
         defined in Article XIV.

C.       The balance in the Experience Account and the cash balance in the
         Experience Account shall be calculated no less than quarterly.

D.       "Reinsurer's incurred loss" as used herein shall mean ceded losses and
         loss adjustment expense paid as of the effective date of calculation,
         plus the ceded reserves for losses and loss adjustment expense
         outstanding as of the same date, all as respects losses arising out of
         loss occurrences commencing during the period under consideration.

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ARTICLE XVI - INVESTMENT INCOME

Beginning with the first renewal of this Contract, any positive cash balance in
the Experience Account shall be credited with interest by the Reinsurer
quarterly using 25.0% of the one-year Treasury Bill rate in effect at the
beginning of the quarter.

ARTICLE XVII - COMMUTATION

The Company and the Reinsurer may mutually agree to commute this Contract at any
time on or after May 31, 2004 or any May 31 thereafter if coverage is extended.
Upon commutation, if the present value of the Reinsurer's share of outstanding
ultimate net loss is less than the positive cash balance in the Experience
Account, the Reinsurer shall pay the positive cash balance in the Experience
Account to the Company. If the present value of the Reinsurer's share of
outstanding ultimate net loss is greater than the positive cash balance in the
Experience Account, then, upon mutual agreement of the Company and the Reinsurer
only, the Reinsurer shall pay such excess to the Company, net of any non renewal
or exit charge. In either event, the Reinsurer shall be released in respect of
all its obligations under this Contract.

ARTICLE XVIII - LATE PAYMENTS

A.       The provisions of this Article shall not be implemented unless
         specifically invoked, in writing, by one of the parties to this
         Contract.

B.       In the event any premium, loss or other payment due either party is not
         received by the intermediary named herein (hereinafter referred to as
         the "Intermediary") by the payment due date, the party to whom payment
         is due may, by notifying the Intermediary in writing, require the
         debtor party to pay, and the debtor party agrees to pay, an interest
         penalty on the amount past due calculated for each such payment on the
         last business day of each month as follows:

         1.       The number of full days which have expired since the due date
                  or the last monthly calculation, whichever the lesser, times

         2.       1/365ths of the six-month United States Treasury Bill Rate as
                  quoted in The Wall Street Journal on the first business day of
                  the month for which the calculation is made; times

         3.       The amount past due, including accrued interest.

         It is agreed that interest shall accumulate until payment of the
         original amount due plus interest penalties have been received by the
         Intermediary.

C.       The establishment of the due date shall, for purposes of this Article,
         be determined as follows:

         1.       As respects the payment of routine deposits and premiums due
                  the Reinsurer, the due date shall be as provided for in the
                  applicable section of this Contract. In the event a due date
                  is not specifically stated for a given payment, it shall be
                  deemed due 30 days

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                  after the date of transmittal by the Intermediary of the
                  initial billing for each such payment.

         2.       Any claim or loss payment due the Company hereunder shall be
                  deemed due 10 business days after the proof of loss or demand
                  for payment is transmitted to the Reinsurer. If such loss or
                  claim payment is not received within the 10 days, interest
                  will accrue on the payment or amount overdue in accordance
                  with paragraph B above, from the date the proof of loss or
                  demand for payment in accordance with the provisions of
                  Article IX, was transmitted to the Reinsurer.

         3.       As respects any payment, adjustment or return due either party
                  not otherwise provided for in subparagraphs 1 and 2 of
                  paragraph C above, the due date shall be as provided for in
                  the applicable section of this Contract. In the event a due
                  date is not specifically stated for a given payment, it shall
                  be deemed due 10 business days following transmittal of
                  written notification that the provisions of this Article have
                  been invoked.

         For purposes of interest calculations only, amounts due hereunder shall
         be deemed paid upon receipt by the Intermediary.

D.       Nothing herein shall be construed as limiting or prohibiting a
         subscribing reinsurer from contesting the validity of any claim, or
         from participating in the defense of any claim or suit, or prohibiting
         either party from contesting the validity of any payment or from
         initiating any arbitration or other proceeding in accordance with the
         provisions of this Contract. If the debtor party prevails in an
         arbitration or other proceeding, then any interest penalties due
         hereunder on the amount in dispute shall be null and void. If the
         debtor party loses in such proceeding, then the interest penalty on the
         amount determined to be due hereunder shall be calculated in accordance
         with the provisions set forth above unless otherwise determined by such
         proceedings. If a debtor party advances payment of any amount it is
         contesting, and proves to be correct in its contestation, either in
         whole or in part, the other party shall reimburse the debtor party for
         any such excess payment made plus interest on the excess amount
         calculated in accordance with this Article.

E.       Interest penalties arising out of the application of this Article that
         are $100 or less from any party shall be waived unless there is a
         pattern of late payments consisting of three or more items over the
         course of any 12-month period.

ARTICLE XIX - SECURITY

A.       It is a condition precedent to claims payments hereunder that would
         result in a negative cash balance in the Experience Account greater
         than $7,500,000, that if the Reinsurer gives notice of its intent to
         renew, the Company must provide a letter of credit or other security
         acceptable to the Reinsurer for the amount of any future premium due,
         including non renewal or exit fees, assuming no future losses, up to a
         maximum of the absolute value of any negative cash balance in the
         Experience Account, less $7,500,000.

B.       The provisions of this Article can be waived or modified upon mutual
         agreement.

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ARTICLE XX - OFFSET (BRMA 36D)

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

ARTICLE XXI - ACCESS TO RECORDS (BRMA 1D)

The Reinsurer or its designated representatives shall have access at any
reasonable time to all records of the Company which pertain in any way to this
reinsurance.

ARTICLE XXII - LIABILITY OF THE REINSURER

A.       The liability of the Reinsurer shall follow that of the Company in
         every case and be subject in all respects to all the general and
         specific stipulations, clauses, waivers and modifications of the
         Company's policies and any endorsements thereon. However, in no event
         shall this be construed in any way to provide coverage outside the
         terms and conditions set forth in this Contract.

B.       Nothing herein shall in any manner create any obligations or establish
         any rights against the Reinsurer in favor of any third party or any
         persons not parties to this Contract.

ARTICLE XXIII - NET RETAINED LINES (BRMA 32B)

A.       This Contract applies only to that portion of any policy which the
         Company retains net for its own account, and in calculating the amount
         of any loss hereunder and also in computing the amount or amounts in
         excess of which this Contract attaches, only loss or losses in respect
         of that portion of any policy which the Company retains net for its own
         account shall be included.

B.       The amount of the Reinsurer's liability hereunder in respect of any
         loss or losses shall not be increased by reason of the inability of the
         Company to collect from any other reinsurer(s), whether specific or
         general, any amounts which may have become due from such reinsurer(s),
         whether such inability arises from the insolvency of such other
         reinsurer(s) or otherwise.

ARTICLE XXIV - ERRORS AND OMISSIONS (BRMA 14F)

Inadvertent delays, errors or omissions made in connection with this Contract or
any transaction hereunder shall not relieve either party from any liability
which would have attached had such delay, error or omission not occurred,
provided always that such error or omission is rectified as soon as possible
after discovery.

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ARTICLE XXV - CURRENCY (BRMA 12A)

A.       Whenever the word "Dollars" or the "$" sign appears in this Contract,
         they shall be construed to mean United States Dollars and all
         transactions under this Contract shall be in United States Dollars.

B.       Amounts paid or received by the Company in any other currency shall be
         converted to United States Dollars at the rate of exchange at the date
         such transaction is entered on the books of the Company.

ARTICLE XXVI - TAXES (BRMA 50C)

In consideration of the terms under which this Contract is issued, the Company
will not claim a deduction in respect of the premium hereon when making tax
returns, other than income or profits tax returns, to any state or territory of
the United States of America, the District of Columbia or Canada.

ARTICLE XXVII - FEDERAL EXCISE TAX (BRMA 17A)

(Applicable to those reinsurers, excepting Underwriters at Lloyd's London and
other reinsurers exempt from Federal Excise Tax, who are domiciled outside the
United States of America.)

A.       The Reinsurer has agreed to allow for the purpose of paying the Federal
         Excise Tax the applicable percentage of the premium payable hereon as
         imposed under Section 4371 of the Internal Revenue Code to the extent
         such premium is subject to the Federal Excise Tax.

B.       In the event of any return of premium becoming due hereunder the
         Reinsurer will deduct the applicable percentage from the return premium
         payable hereon and the Company or its agent should take steps to
         recover the tax from the United States Government.

ARTICLE XXVIII - RESERVE REQUIREMENTS

(Applies only to a reinsurer which does not qualify for full credit with any
insurance regulatory authority having jurisdiction over the Company's reserves,
or which is or becomes rated "B++" or lower by A.M. Best.)

A.       If the Reinsurer is unauthorized in any state of the United States of
         America or the District of Columbia or is rated B++ or lower by A.M.
         Best, the Reinsurer agrees to fund its share of the Company's ceded
         United States outstanding loss and loss adjustment expense reserves
         (including incurred but not reported loss reserves) by:

         1.       Clean, irrevocable and unconditional letters of credit issued
                  and confirmed, if confirmation is required by the insurance
                  regulatory authorities involved, by a bank or banks meeting
                  the NAIC Securities Valuation Office credit standards for
                  issuers of letters of credit and acceptable to said insurance
                  regulatory authorities; and/or

         2.       Escrow accounts for the benefit of the Company; and/or

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         3.       Cash advances;

         if, without such funding as regards an unauthorized Reinsurer, a
         penalty would accrue to the Company on any financial statement it is
         required to file with the insurance regulatory authorities involved.
         The Reinsurer, at its sole option, may fund in other than cash if its
         method and form of funding are acceptable to the insurance regulatory
         authorities involved.

B.       If the Reinsurer is unauthorized in any province or jurisdiction of
         Canada or is rated B++ or lower by A.M. Best, the Reinsurer agrees to
         fund 115% of its share of the Company's ceded Canadian outstanding loss
         and loss adjustment expense reserves (including incurred but not
         reported loss reserves) by:

         1.       A clean, irrevocable and unconditional letter of credit issued
                  and confirmed, if confirmation is required by the insurance
                  regulatory authorities involved, by a Canadian bank or banks
                  meeting the NAIC Securities Valuation Office credit standards
                  for issuers of letters of credit and acceptable to said
                  insurance regulatory authorities, for no more than 15/115ths
                  of the total funding required; and/or

         2.       Cash advances for the remaining balance of the funding
                  required;

         if, without such funding as regards an unauthorized Reinsurer, a
         penalty would accrue to the Company on any financial statement it is
         required to file with the insurance regulatory authorities involved.

C.       With regard to funding in whole or in part by letters of credit, it is
         agreed that each letter of credit will be in a form acceptable to
         insurance regulatory authorities involved, will be issued for a term of
         at least one year and will include an "evergreen clause," which
         automatically extends the term for at least one additional year at each
         expiration date unless written notice of non-renewal is given to the
         Company not less than 30 days prior to said expiration date. The
         Company and the Reinsurer further agree, notwithstanding anything to
         the contrary in this Contract, that said letters of credit may be drawn
         upon by the Company or its successors in interest at any time, without
         diminution because of the insolvency of the Company or the Reinsurer,
         but only for one or more of the following purposes:

         1.       To reimburse itself for the Reinsurer's share of losses and/or
                  loss adjustment expense paid under the terms of policies
                  reinsured hereunder, unless paid in cash by the Reinsurer;

         2.       To reimburse itself for the Reinsurer's share of any other
                  amounts claimed to be due hereunder, unless paid in cash by
                  the Reinsurer;

         3.       To fund a cash account in an amount equal to the Reinsurer's
                  share of any ceded outstanding loss and loss adjustment
                  expense reserves (including incurred but not reported loss
                  reserves) funded by means of a letter of credit which is under
                  non-renewal notice, if said letter of credit has not been
                  renewed or replaced by the Reinsurer 10 days prior to its
                  expiration date;

         4.       To refund to the Reinsurer any sum in excess of the actual
                  amount required to fund the Reinsurer's share of the Company's
                  ceded outstanding loss and loss adjustment

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                  expense reserves (including incurred but not reported loss
                  reserves), if so requested by the Reinsurer.

         In the event the amount drawn by the Company on any letter of credit is
         in excess of the actual amount required for C(1) or C(3), or in the
         case of C(2), the actual amount determined to be due, the Company shall
         promptly return to the Reinsurer the excess amount so drawn.

ARTICLE XXIX - INSOLVENCY

A.       In the event of the insolvency of one or more of the reinsured
         companies, this reinsurance shall be payable directly to the company or
         to its liquidator, receiver, conservator or statutory successor on the
         basis of the liability of the company without diminution because of the
         insolvency of the company or because the liquidator, receiver,
         conservator or statutory successor of the company has failed to pay all
         or a portion of any claim. It is agreed, however, that the liquidator,
         receiver, conservator or statutory successor of the company shall give
         written notice to the Reinsurer of the pendency of a claim against the
         company indicating the policy or bond reinsured which claim would
         involve a possible liability on the part of the Reinsurer within a
         reasonable time after such claim is filed in the conservation or
         liquidation proceeding or in the receivership, and that during the
         pendency of such claim, the Reinsurer may investigate such claim and
         interpose, at its own expense, in the proceeding where such claim is to
         be adjudicated, any defense or defenses that it may deem available to
         the company or its liquidator, receiver, conservator or statutory
         successor. The expense thus incurred by the Reinsurer shall be
         chargeable, subject to the approval of the Court, against the company
         as part of the expense of conservation or liquidation to the extent of
         a pro rata share of the benefit which may accrue to the company solely
         as a result of the defense undertaken by the Reinsurer.

B.       Where two or more reinsurers are involved in the same claim and a
         majority in interest elect to interpose defense to such claim, the
         expense shall be apportioned in accordance with the terms of this
         Contract as though such expense had been incurred by the company.

C.       It is further understood and agreed that, in the event of the
         insolvency of one or more of the reinsured companies, the reinsurance
         under this Contract shall be payable directly by the Reinsurer to the
         company or to its liquidator, receiver or statutory successor, except
         as provided by Section 4118(a) of the New York Insurance Law or except
         (1) where this Contract specifically provides another payee of such
         reinsurance in the event of the insolvency of the company or (2) where
         the Reinsurer with the consent of the direct insured or insureds has
         assumed such policy obligations of the company as direct obligations of
         the Reinsurer to the payees under such policies and in substitution for
         the obligations of the company to such payees.

ARTICLE XXX - ARBITRATION

A.       As a condition precedent to any right of action hereunder, any dispute
         or difference between the Company and any Reinsurer relating to the
         interpretation or performance of this Contract, including its formation
         or validity, or any transaction under this Contract, whether arising
         before or after termination, shall be submitted to arbitration.

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B.       If more than one reinsurer is involved in the same dispute, all such
         reinsurers shall constitute and act as one party for purposes of this
         Article provided that communication shall be made by the Company to
         each of the reinsurers constituting the one party, and provided,
         however, that nothing therein shall impair the rights of such
         reinsurers to assert several, rather than joint, defenses or claims,
         nor be construed as changing the liability of the Reinsurer under the
         terms of this Contract from several to joint.

C.       Upon written request of any party, each party shall choose an
         arbitrator and the two chosen shall select a third arbitrator. If
         either party refuses or neglects to appoint an arbitrator within 30
         days after receipt of the written request for arbitration, the
         requesting party may appoint a second arbitrator. If the two
         arbitrators fail to agree on the selection of a third arbitrator within
         30 days of their appointment, the Company shall petition the American
         Arbitration Association to appoint the third arbitrator. If the
         American Arbitration Association fails to appoint the third arbitrator
         within 30 days after it has been requested to do so, either party may
         request a justice of a court of general jurisdiction of the state in
         which the arbitration is to be held to appoint the third arbitrator.
         All arbitrators shall be active or retired officers of insurance or
         reinsurance companies, or Lloyd's London Underwriters, and
         disinterested in the outcome of the arbitration. Each party shall
         submit its case to the arbitrators within 30 days of the appointment of
         the third arbitrator.

D.       The parties hereby waive all objections to the method of selection of
         the arbitrators, it being the intention of both sides that all the
         arbitrators be chosen from those submitted by the parties.

E.       The arbitrators shall have the power to determine all procedural rules
         for the holding of the arbitration including but not limited to
         inspection of documents, examination of witnesses and any other matter
         relating to the conduct of the arbitration. The arbitrators shall
         interpret this Contract as an honorable engagement and not as merely a
         legal obligation; they are relieved of all judicial formalities and may
         abstain from following the strict rules of law. The arbitrators may
         award interest and costs. Each party shall bear the expense of its own
         arbitrator and shall share equally with the other party the expenses of
         the third arbitrator and of the arbitration.

F.       The decision in writing of the majority of the arbitrators shall be
         final and binding upon both parties. Judgment may be entered upon the
         final decision of the arbitrators in any court having jurisdiction. The
         arbitration shall take place in Bala Cynwyd, Pennsylvania, unless
         otherwise mutually agreed between the Company and the Reinsurer.

G.       This Article shall remain in full force and effect in the event any
         other provision of this Contract shall be found invalid or non-binding.

H.       All time limitations stated in this Article may be amended by mutual
         consent of the parties, and will be amended automatically to the extent
         made necessary by any circumstances beyond the control of the parties.

ARTICLE XXXI - SERVICE OF SUIT

(Applicable if the Reinsurer is not domiciled in the United States of America,
and/or is not authorized in any State, Territory or District of the United
States where authorization is required

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by insurance regulatory authorities. This Article is not intended to conflict
with or override the parties' obligations to arbitrate their disputes in
accordance with the Article XXIX)

A.       It is agreed that in the event the Reinsurer fails to pay any amount
         claimed to be due hereunder, the Reinsurer, at the request of the
         Company, will submit to the jurisdiction of any court of competent
         jurisdiction within the United States. Nothing in this Article
         constitutes or should be understood to constitute a waiver of the
         Reinsurer's rights to commence an action in any court of competent
         jurisdiction in the United States, to remove an action to a United
         States District Court, or to seek a transfer of a case to another court
         as permitted by the laws of the United States or of any state in the
         United States.

B.       Further, pursuant to any statute of any state, territory or district of
         the United States which makes provision therefore, the Reinsurer hereby
         designates the party named in its Interests and Liabilities Agreement,
         or if no party is named therein, the Superintendent, Commissioner or
         Director of Insurance or other officer specified for that purpose in
         the statute, or his successor or successors in office, as its true and
         lawful attorney upon whom may be served any lawful process in any
         action, suit or proceeding instituted by or on behalf of the Company or
         any beneficiary hereunder arising out of this Contract.

ARTICLE XXXII - AGENCY AGREEMENT

If more than one reinsured company is named as a party to this Contract, the
first named company shall be deemed the agent of the other reinsured companies
for purposes of sending or receiving notices required by the terms and
conditions of this Contract, and for purposes of remitting or receiving any
monies due any party.

ARTICLE XXXIII - GOVERNING LAW

This Contract shall be governed as to performance, administration and
interpretation by the laws of the State of Pennsylvania exclusive of the rules
with respect to conflicts of law, except as to rules with respect to credit for
reinsurance in which case the applicable rules of all states shall apply.

ARTICLE XXXIV - CONFIDENTIALITY

The Reinsurer, except with the express prior written consent of the Company,
shall not directly or indirectly, communicate, disclose or divulge to any third
party, any knowledge or information that may be acquired either directly or
indirectly as a result of the inspection of the Company's books, records and
papers. The restrictions as outlined in this Article shall not apply to
communication or disclosures that the Reinsurer is required to make to its
statutory auditors, retrocessionaires, legal counsel, and arbitrators involved
in any arbitration procedures under this Contract or disclosures required upon
subpoena or other dully-issued order of a court or other governmental agency or
regulatory authority.

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ARTICLE XXXV - SEVERABILITY

If any provision of this Contract should be invalid under applicable laws, the
latter shall control but only to the extent of the conflict without affecting
the remaining provisions of this Contract.

ARTICLE XXXVI - INTERMEDIARY (BRMA 23A)

Benfield Inc. is hereby recognized as the Intermediary negotiating this Contract
for all business hereunder. All communications (including but not limited to
notices, statements, premium, return premium, commissions, taxes, losses, loss
adjustment expense, salvages and loss settlements) relating thereto shall be
transmitted to the Company or the Reinsurer through Benfield Inc., 3600 West
80th Street, Minneapolis, Minnesota 55431. Payments by the Company to the
Intermediary shall be deemed to constitute payment to the Reinsurer. Payments by
the Reinsurer to the Intermediary shall be deemed to constitute payment to the
Company only to the extent that such payments are actually received by the
Company.

IN WITNESS WHEREOF, the Company by its duly authorized representative has
executed this Contract as of the date undermentioned at:

Bala Cynwyd, Pennsylvania, this 18th day of August in the year 2003.

           /s/ Christopher Maguire
           -----------------------
           Christopher Maguire, Executive Vice President &
           Chief Underwriting Officer
           Philadelphia Insurance Companies
           (for and on behalf of the "Company")

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

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

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

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

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

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

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

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

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

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

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

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

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

7.       Reassured to be sole judge of what constitutes:

         (a)      substantial quantities, and

         (b)      the extent of installation, plant or site.

Note.-   Without in any way restricting the operation of paragraph (1) hereof,
         it is understood and agreed that

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

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

12/12/57
N.M.A. 1119
BRMA 35B

<PAGE>

   NUCLEAR INCIDENT EXCLUSION CLAUSE - PHYSICAL DAMAGE - REINSURANCE (CANADA)

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

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

         (a)      nuclear reactor power plants including all auxiliary property
                  on the site, or

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

         (c)      installations for fabricating complete fuel elements or for
                  processing substantial quantities of prescribed substances,
                  and for reprocessing, salvaging, chemically separating,
                  storing or disposing of spent nuclear fuel or waste materials,
                  or

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

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

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

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

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

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

6.       The term "prescribed substances" shall have the meaning given to it by
         the Atomic Energy Control Act R.S.C. 1985(c), A-16 or by any law
         amendatory thereof.

7.       Reinsured to be sole judge of what constitutes:

         (a)      substantial quantities, and

         (b)      the extent of installation, plant or site.

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

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

         (2)      by contamination by radioactive material.

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

N.M.A. 1980 (2/19/93)

<PAGE>

               POOLS, ASSOCIATIONS AND SYNDICATES EXCLUSION CLAUSE

SECTION A:

Excluding:

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

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

SECTION B:

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

       Industrial Risk Insurers,
       Associated Factory Mutuals,
       Improved Risk Mutuals,
       Any Pool, Association or Syndicate formed for the purpose of writing
             Oil, Gas or Petro-Chemical Plants and/or Oil or Gas Drilling Rigs,
       United States Aircraft Insurance Group,
       Canadian Aircraft Insurance Group,
       Associated Aviation Underwriters,
       American Aviation Underwriters.

Section B does not apply:

         (a)      Where The Total Insured Value over all interests of the risk
                  in question is less than $250,000,000.

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

         (c)      To Contingent Business Interruption, except when the Company
                  is aware that the key location is known at the time to be
                  insured in any Pool, Association or Syndicate named above,
                  other than as provided for under Section B(a).

         (d)      To risks as follows:

                  Offices, Hotels, Apartments, Hospitals, Educational
                  Establishments, Public Utilities (other than railroad
                  schedules) and builder's risks on the classes of risks
                  specified in this subsection (d) only.

Where this clause attaches to Catastrophe Excesses, the following Section C is
added:

SECTION C:

Nevertheless the Reinsurer specifically agrees that liability accruing to the
Company from its participation in residual market mechanisms including but not
limited to:

         (1)      The following so-called "Coastal Pools":

                  Alabama Insurance Underwriting Association
                  Louisiana Insurance Underwriting Association
                  Mississippi Windstorm Underwriting Association
                  North Carolina Insurance Underwriting Association
                  South Carolina Windstorm and Hail Underwriting Association
                  Texas Windstorm Insurance Association

AND

         (2)      All "Fair Plan" and "Rural Risk Plan" business

Page 1 of 2

<PAGE>

AND

         (3)      Citizens Property Insurance Corporation ("CPIC") and the
                  California Earthquake Authority ("CEA")

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

         (i)      The inability of any other participant in such "Coastal Pool"
                  and/or "Fair Plan" and/or "Rural Risk Plan" and/or Residual
                  Market Mechanisms to meet its liability.

         (ii)     Any claim against such "Coastal Pool" and/or "Fair Plan"
                  and/or "Rural Risk Plan" and/or Residual Market Mechanisms, or
                  any participant therein, including the Company, whether by way
                  of subrogation or otherwise, brought by or on behalf of any
                  insolvency fund (as defined in the Insolvency Fund Exclusion
                  Clause incorporated in this Contract).

SECTION D:

         (1)      Notwithstanding Section C above, in respect of the CEA, where
                  an assessment is made against the Company by the CEA, the
                  Company may include in its Ultimate Net Loss only that
                  assessment directly attributable to each separate loss
                  occurrence covered hereunder. The Company's initial capital
                  contribution to the CEA shall not be included in the Ultimate
                  Net Loss.

         (2)      Notwithstanding Section C above, in respect of CPIC, where an
                  assessment is made against the Company by CPIC, the maximum
                  loss that the Company may include in the Ultimate Net Loss in
                  respect of any loss occurrence hereunder shall not exceed the
                  lesser of:

                  (a)      The Company's assessment from CPIC for the accounting
                           year in which the loss occurrence commenced, or

                  (b)      The product of the following:

                           (i)      The Company's percentage participation in
                                    CPIC for the accounting year in which the
                                    loss occurrence commenced; and

                           (ii)     CPIC's total losses in such loss occurrence.

Any assessments for accounting years subsequent to that in which the loss
occurrence commenced may not be included in the Ultimate Net Loss hereunder.
Moreover, notwithstanding Section C above, in respect of CPIC, the Ultimate Net
Loss hereunder shall not include any monies expended to purchase or retire bonds
as a consequence of being a member of CPIC. For the purposes of this Contract,
the Company may not include in the Ultimate Net Loss any assessment or any
percentage assessment levied by CPIC to meet the obligations of an insolvent
insurer member or other party, or to meet any obligations arising from the
deferment by CPIC of the collection of monies.

NOTES:     Wherever used herein the terms:

           "Company"       shall be understood to mean "Company," "Reinsured,"
                           "Reassured" or whatever other term is used in the
                           attached reinsurance document to designate the
                           reinsured company or companies.

           "Agreement"     shall be understood to mean "Agreement," "Contract,"
                           "Policy" or whatever other term is used to designate
                           the attached reinsurance document.

           "Reinsurers"    shall be understood to mean "Reinsurers,"
                           "Underwriters" or whatever other term is used in the
                           attached reinsurance document to designate the
                           reinsurer or reinsurers.

Page 2 of 2

<PAGE>

                     POLLUTION AND SEEPAGE EXCLUSION CLAUSE

This Contract excludes loss and/or damage and/or costs and/or expenses arising
from seepage and/or pollution and/or contamination, other than contamination
from smoke. Nevertheless, this exclusion does not preclude payment of the cost
of removing debris of property damaged by a loss otherwise covered hereunder,
subject always to a limit of 25% of the Company's property loss under the
applicable original policy.

BRMA 39A

<PAGE>

                          ELECTRONIC DATA ENDORSEMENT B

1.       ELECTRONIC DATA EXCLUSION

         Notwithstanding any provision to the contrary within the Contract or
         any endorsement thereto, it is understood and agreed as follows:-

         a)       This Contract does not insure loss, damage, destruction,
                  distortion, erasure, corruption or alteration of ELECTRONIC
                  DATA from any cause whatsoever (including but not limited to
                  COMPUTER VIRUS) or loss of use, reduction in functionality,
                  cost, expense of whatsoever nature resulting therefrom,
                  regardless of any other cause or event contributing
                  concurrently or in any other sequence to the loss.

                  ELECTRONIC DATA means facts, concepts and information
                  converted to a form useable for communications, interpretation
                  or processing by electronic and electromechanical data
                  processing or electronically controlled equipment and includes
                  programs, software and other coded instructions for the
                  processing and manipulation of data or the direction and
                  manipulation of such equipment.

                  COMPUTER VIRUS means a set of corrupting, harmful or otherwise
                  unauthorized instructions or code including a set of
                  maliciously introduced unauthorized instructions or code,
                  programmatic or otherwise, that propagate themselves through a
                  computer system or network of whatsoever nature. COMPUTER
                  VIRUS includes but is not limited to "Trojan Horses," "worms"
                  and "time or logic bombs."

         b)       However, in the event that a peril listed below results from
                  any of the matters described in paragraph a) above, this
                  Contract, subject to all its terms, conditions and exclusions,
                  will cover physical damage occurring during the Contract
                  period to property insured by this Contract directly caused by
                  such listed peril.

                  Listed Perils

                  Fire
                  Explosion

2.       ELECTRONIC DATA PROCESSING MEDIA VALUATION

         Notwithstanding any provision to the contrary within the Contract or
         any endorsement thereto, it is understood and agreed as follows:-

         Should electronic data processing media insured by this Contract suffer
         physical loss or damage insured by this Contract, then the basis of
         valuation shall be the cost of the blank media plus the costs of
         copying the ELECTRONIC DATA from back-up or from originals of a
         previous generation. These costs will not include research and
         engineering nor any costs of recreating, gathering or assembling such
         ELECTRONIC DATA. If the media is not repaired, replaced or restored the
         basis of valuation shall be the cost of the blank media. However this
         Contract does not insure any amount pertaining to the value of such
         ELECTRONIC DATA to the Assured or any other party, even if such
         ELECTRONIC DATA cannot be recreated, gathered or assembled.

N.M.A. 2915 (25.1.01)
Form approved by Lloyd's Underwriters' Non-Marine Association Limited
<PAGE>

                       INTERESTS AND LIABILITIES AGREEMENT

                                       of

                            Federal Insurance Company
                               Warren, New Jersey
                                     through
                                 Chubb Re, Inc.
                            Bernardsville, New Jersey
            (hereinafter referred to as the "Subscribing Reinsurer")

                               with respect to the

                     EXCESS CATASTROPHE REINSURANCE CONTRACT
                             EFFECTIVE: JUNE 1, 2003

                         issued to and duly executed by

                         Philadelphia Insurance Company
                            Bala Cynwyd, Pennsylvania
                    Philadelphia Indemnity Insurance Company
                            Bala Cynwyd, Pennsylvania
                          Mobile USA Insurance Company
                             Pinellas Park, Florida
                       Liberty American Insurance Company
                             Pinellas Park, Florida
                                       and
                    any and all other companies which are now
                   or may hereafter become member companies of
                        Philadelphia Insurance Companies

The Subscribing Reinsurer hereby accepts a 100% share in the interests and
liabilities of the "Reinsurer" as set forth in the attached Contract captioned
above.

This Agreement shall become effective on June 1, 2003, and shall continue in
force until May 31, 2004, both days inclusive.

The Subscribing Reinsurer's share in the attached Contract shall be separate and
apart from the shares of the other reinsurers, and shall not be joint with the
shares of the other reinsurers, it being understood that the Subscribing
Reinsurer shall in no event participate in the interests and liabilities of the
other reinsurers.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized
representative has executed this Agreement as of the date undermentioned at:

Bernardsville, New Jersey, this 23 day of December in the year 2003.

                 /s/ Brian Hegarty
                 -----------------
                 Brian Hegarty, Managing Director
                 Chubb Re, Inc. (for and on behalf of Federal Insurance Company)