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                                                                   EXHIBIT 10.53


                            FREMONT INDEMNITY COMPANY

                                   QUOTA SHARE
                              REINSURANCE AGREEMENT

                                     between

                            FREMONT INDEMNITY COMPANY

                                   ("Company")

                                       and

                            SCPIE INDEMNITY COMPANY

                                  ("Reinsurer")









Effective:  January 1, 1998





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                       QUOTA SHARE REINSURANCE AGREEMENT


                  THIS QUOTA SHARE REINSURANCE AGREEMENT (this "Agreement") is
made and entered into as of this 1st day of January, 1998 (the "Closing Date"),
by and between FREMONT INDEMNITY COMPANY, a California domiciled insurance
company ("Company"), and SCPIE Indemnity Company, a California domiciled
insurance company ("Reinsurer").

                                    AGREEMENT

ARTICLE 1.  DEFINITIONS

         A. "Allocated Loss Expense" means all expenses (except for salaries,
benefits and traveling expenses of Company's directors, officers, or employees
office expenses, overhead or other fixed expenses of Company) relating to the
adjustment of claims on business covered including appellate expenses,
monitoring expenses, and expenses and fees associated with policy coverage and
declaratory judgment actions, prejudgment and postjudgment interest, and legal
expenses and costs associated with extra-contractual obligations and Loss in
Excess of Limits.

         B. "Business Covered" means all liability insurance policies (including
all binders contracts, endorsements, supplements, riders and ancillary
agreements thereto) which (i) were issued by Company for medical malpractice,
healthcare provider and healthcare facility liability insurance policies (the
"Coverages") for inception or renewal in the jurisdictions listed on Schedule 1
attached hereto (the "Covered States") prior to 12:01 a.m. on the Closing Date
and (ii) are issued by Company for the Coverages through SCPIE Management
Company and SCPIE Insurance Services, Inc. (collectively, the "Manager"),
pursuant to that certain Program Manager Agreement between SCPIE Management
Company, SCPIE Insurance Services, Inc. and Company of even date herewith (the
"Program Manager Agreement") for inception or renewal in the Covered States on
or after 12:01 a.m. on the Closing Date. The Subject Policies (as hereinafter
defined) reinsured hereunder shall, upon satisfaction of all applicable legal
and regulatory requirements, be assumed by Reinsurer pursuant to the terms of
that certain Assumption Reinsurance Agreement of even date herewith between
Company and American Healthcare Indemnity Company ("AHIC," and such agreement,
the "Assumption Reinsurance Agreement").  

         C. "Extra contractual obligations" means any punitive, exemplary,
compensatory or consequential damages, other than Loss in Excess of Limits,
together with any legal costs and expenses incurred in connection therewith,
paid or payable by the Company as a result of an action against it by its
insured, its insured's assignee, or a third party claimant, which action alleges
negligence or bad faith on the part of the Company in handling a claim under the
policy insured. an Extra-Contractual obligation shall be deemed to have occurred
on the same date as the loss covered or alleged to be covered under the policy
that gives rise to the Extra-Contractual obligation.

         D. "Gross Net Written Premium" means gross written premiums received by
Company on Subject Policies, less returns and refunds thereon, less premiums
paid on Reinsurance Agreements (as defined in Article VII).


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         E. "Loss in Excess of Limits" means any amount of loss, together with
any legal costs and expenses incurred in connection therewith, paid or payable
by the company in excess of its policy limits, but otherwise within the coverage
terms of the policy, as a result of an action against it by its insured or its
insured's assignee to recover damages the insured is legally obligated to pay to
a third party claimant because of the Company's alleged or actual negligence or
bad faith in rejecting a settlement within the policy limits, or in discharging
its duty to defend or prepare the defense in the trial of an action against its
insured, or in discharging its duty to prepare and prosecute an appeal
consequent upon such an action.

         F. "SAP" means Statutory Accounting Principles permitted or prescribed 
by the California Department of Insurance.

         G. "Subject Policy" or "Subject Policies" means any policy that is 
Business Covered.

         H. "Ultimate Net Loss" means 100% of the amounts paid or payable in 
defense and/or settlement of loss or liability under the Subject Policies, 
including all Allocated Loss Adjustment Expense, Unallocated Loss Adjustment 
Expense, Loss in Excess of Limits and Extra-Contractual Obligations.

         I. "Unallocated Loss Adjustment Expense" means the unallocated loss 
adjustment expenses as calculated for purposes of SAP and in accordance with 
Schedule 2, if applicable.

ARTICLE II.  REINSURANCE COVERAGE

         With respect to Business Covered, Company shall cede and Reinsurer
shall accept 100% of Company's Ultimate Net Loss each and every loss on each and
every Subject Policy.


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         Except as expressly provided otherwise in this Agreement, the
reinsurance coverage of this Agreement shall be subject to the same terms,
limits, conditions, and endorsements of the Subject Policies and to all
interpretations, modifications, waivers, and alterations thereto.

ARTICLE III. EXCLUSIONS

         This Agreement does not apply to (i) any workers' compensation or other
insurance issued by Company to any account other than the Business Covered, or
(ii) any liability of Company for Loss in Excess of Limits, Extra-Contractual
Obligations and associated Allocated Loss Adjustment Expense arising out of or
related to acts, omissions or occurrences prior to the Closing, with respect to
medical malpractice and related liability policies, contracts and binders of
insurance included in the Business Covered.




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ARTICLE IV.  TERM AND TERMINATION

        This Agreement shall commence at 12.01 a.m. Pacific Standard Time on the
Closing Date at the location of the risk and shall continue until THE EARLIER TO
OCCUR OF (i) with respect to a jurisdiction, the date all "Required Approvals"
and "Required Licenses" (as such terms are defined in Section 1.2 of the
Assumption Reinsurance Agreement) have been obtained by AHIC, or (ii)
December 31, 1998. 

        In the event of termination, reinsurance coverage shall remain in force
and Reinsurer shall remain liable to Company for all losses, including losses
with a date of loss after the date of termination of this Agreement, on all
Subject Policies in force at the date of termination until their natural
expiration plus odd time and/or any run-off provision or any extended reporting
period option or any discovery period contained in the subject original
policies.

         However, should any of the Subject Policies to which this Agreement
applies be extended, continued or renewed due to regulatory, or other legal
restrictions, this Agreement shall automatically continue to provide reinsurance
coverage until that Business Covered is actually terminated by Company.

         Alternatively, if mutually agreed between Company and Reinsurer,
coverage under this Agreement may be terminated by "cut-off" as respects
Business Covered in force as of the date of termination and in that event
Reinsurer shall not be responsible to Company for losses or any portion thereof
with a date of loss on or after the termination date and Reinsurer will return,
within thirty (30) days of Company's notice, the unearned reinsurance premium
reserve in respect of the Business Covered in U. S. currency in that amount net
of any applicable ceding commission thereon. In the event this clause is
applicable and a loss covered under this Agreement has commenced, the entire
loss covered under the policy to which this Agreement originally attached shall
be covered under this Agreement regardless of the number of dates of loss that
may be involved with that occurrence/accident resulting in said loss; provided 
however, that notwithstanding the foregoing provisions of this Article IV, as 
to any policy assumed by AHIC pursuant to the Assumption Reinsurance Agreement, 
this reinsurance shall automatically terminate on a cut-off basis and all SAP 
reserves with respect to such policy (the "Assumed Policy SPA Reserve") shall 
be paid to Company by Reinsurer. 

ARTICLE V.  REINSURANCE PREMIUM

        As reinsurance premium, Company shall pay Reinsurer 100% of Company's
Gross Net Written Premium actually received by Company on Business Covered on 
premiums written on or after the closing date (the "Reinsurance Premium").

ARTICLE VI. LOSS PORTFOLIO TRANSFER

        Company shall transfer to Reinsurer on the business day before the 
Closing Date cash and/or U.S. Treasuries with a fair market value equal to the 
reserves for the losses, Allocated Loss Adjustment Expenses, Unallocated Loss 
Adjustment Expenses, unearned premium, contingent commissions, contingent 
reinsurance premiums and retrospective premiums and any other reserves for 
liabilities under the Subject Policies issued prior to 12:01 a.m. Pacific 
Standard Time on the Closing Date (the "Reserves"), all as identified in 
Schedule 2 and determined in accordance with the actuarial methods and 
directions set forth in such schedule (the "Transfer Amount").

        Prior to January 1, 1998, Company shall prepare an estimate of the 
Transfer Amount based on reserve summaries and policy information expected as of
the Closing Date (the "Estimated Transfer Amount"). Company shall then remit to 
Reinsurer, on the business day preceding the Closing Date, cash or U.S. 
Treasuries in an amount equal to the Estimated Transfer Amount, together with a 
schedule of the Subject Policies (Schedule 3). In consideration of the 
transactions under the Agreement, Reinsurer shall concurrently pay to Company 
on the business day preceding the Closing Date a cash commission in accordance 
with Section 2.5 of that certain Asset Purchase Agreement dated as of December 
18, 1997, between Company and American Healthcare Indemnity Company (the 
"Asset Purchase Agreement").

         On or about January 31, 1998, or as soon thereafter as practicable,
Company shall prepare a final schedule of Subject Policies (Schedule 3) and a
final schedule of reserves and related liabilities, along with a final
determination of the Transfer Amount, all calculated as of the Closing Date (the
"Final Transfer Amount"). If the Final Transfer Amount is greater than the
Estimated Transfer Amount, Company shall then remit to Reinsurer cash equal to
the difference between the Final Transfer Amount and the Estimated Transfer
Amount. If the Final Transfer Amount is less than the Estimated Transfer Amount,
Reinsurer shall then remit to Company cash equal to the difference between the
Estimated Transfer Amount and the Final Transfer Amount. Any dispute which may
arise between Company and Reinsurer as to the Final Transfer Amount calculation
shall be resolved in the following manner:

          (a)   Reinsurer, if it disputes the Final Transfer Amount 
calculation, shall notify Company shall notify Company in writing within 
fifteen days (15) days after its receipt thereof that Reinsurer disputes such 
calculation; such notice shall specify in reasonable detail the nature of 
the dispute;

          (b)   during the fifteen (15) day period following the date of such 
notice, Company and Reinsurer shall attempt to resolve such dispute and to 
determine the appropriateness of the Final Transfer Amount calculation; and

          (c)   if at the end of the fifteen (15) day period specified in
subsection (b) above, Company and Reinsurer shall have failed to reach a written
agreement with respect to such dispute, the matter shall be referred to an
independent certified public accountant (the "Arbitrator") to be mutually agreed
upon by Company and Reinsurer, who shall act as an arbitrator and shall issue
its report as to the Final Transfer Amount calculation within sixty (60) days 
after such dispute is referred to the Arbitrator. The Arbitrator shall be 
permitted access to all books and records necessary to resolve any such 
dispute. Each of the parties hereto shall bear all costs and expenses incurred 
by it in connection with such arbitration, except that the fees and expenses of 
the Arbitrator hereunder shall be borne equally by Company and Reinsurer. This 
provision for arbitration shall be specifically enforceable by the parties and 
the decision of the Arbitrator in accordance with the provisions hereof shall 
be final and binding and there shall be no right of appeal therefrom.

ARTICLE VII. ASSIGNMENT OF CEDED REINSURANCE AGREEMENTS

     As of the Closing Date, Company hereby transfers, sets over, assigns and 
conveys all of its right and obligations of any nature whatsoever under any 
reinsurance cover note, binder, slip, contract, agreement, treaty or 
certificate, retrocession agreement, stop loss agreement or other instrument of 
reinsurance ceded by Company in respect of any of the Subject Policies, 
including without limitation, the reinsurance arrangements set forth on 
Schedule 4 hereof (such reinsurance agreements being hereinafter collectively 
referred to as the "Reinsurance Agreements"). Reinsurer hereby accepts such 
conveyance, transfer and assignment of Company's rights under the Reinsurance 
Agreements and assumes all of Company's obligations under the Reinsurance 
Agreements arising after the date hereof. As soon as practicable after the 
Closing Date, Company shall use commercially reasonable efforts to cause all of 
the Reinsurance Agreements to be endorsed to substitute Reinsurer for Company 
as the cedent, effective as of the Closing Date.

     The assignment and assumption of the Reinsurance Agreements effected by 
this Article VII shall be effective only if and to the extent that such 
assignment and assumption shall preserve fully the obligations of the 
reinsurers thereunder in respect of the Subject Policies. To the extent that 
less than all of Company's rights and obligations under the Reinsurance 
Agreements are so assigned to and assumed by Reinsurer pursuant to the 
foregoing sentence, (i) after the Closing Date Reinsurer shall be responsible 
for the payment of all premiums and other considerations required to be paid by 
Company in respect of any of the Reinsurance Agreements, whether or not fully 
assigned and assumed pursuant to the terms of this Article VII; (ii) all 
reinsurance recoveries attributable to any of the Subject Policies with the 
exception of reinsurance recoveries attributable to that claim described in 
Schedule 5 attached hereto (the "Gillespie Claim") ceded hereunder are assigned 
and shall accrue to the benefit of Reinsurer hereunder by operation of this 
Article VII and shall, upon receipt thereof by Company, be paid promptly 
thereby to Reinsurer upon and in accordance with its direction; and (iii) such 
assignment and assumption shall be effective at such times as the assignment 
and assumption may be effected while preserving fully the obligations of the 
reinsurer under the respective Reinsurance Agreement.

     Company shall forward to Reinsurer any funds collected from reinsurers 
with respect to any Reinsurance Agreements except for any such amounts 
pertaining to the Gillespie Claim; provided however, that Reinsurer assumes all 
risk of non-payment of such amounts.

     To the extent necessary to effect transfer of any Reinsurance Agreement, 
Company hereby appoints Reinsurer as attorney-in-fact for Company to act for 
and on behalf of Company with respect to letters of credit, trust funds and 
other security mechanisms outstanding for the benefit of Company under the 
Reinsurance Agreements. Each of Company and Reinsurer shall use commercially 
reasonable efforts, to the extent deemed reasonably necessary by Reinsurer, to 
cause the reinsurers under the Reinsurance Agreements to provide replacement 
letters of credit, trust funds or other security mechanisms, as applicable, 
naming Reinsurer as the beneficiary thereof in amounts and with terms 
substantially similar to those currently provided by such reinsurers for the 
benefit of the Company.

ARTICLE VIII. CEDING COMMISSION

     Reinsurer shall allow Company a ceding commission on gross premiums 
written on the Business Covered on or after 12:01 a.m. Pacific Standard Time on 
the Closing Date equal to premium taxes plus (i) 100% of assessments from 
guarantee funds, insolvency funds and any other type of assessment imposed on 
Company associated with such premiums and (ii) broker commissions and all other 
expenses due Manager on Company business under Article VII of the Program 
Manager Agreement.  
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ARTICLE IX.  REPORTS AND REMITTANCES

         Company shall furnish a quarterly bordereau to Reinsurer within
fifteen (15) days after the end of each quarter on formats mutually acceptable
to Company and Reinsurer indicating as respects each subject policy:

           a)     Insured's name;
           b)     Policy number;
           c)     Effective date and term;
           d)     Limit of liability;
           e)     Policy premium;
           f)     Premium applicable to this reinsurance including additional
                  and return or refund premiums; and

an account summarizing Reinsurance Premium ceded under this Agreement, return
and refund premium, ceding commission allowed pursuant to Article VIII hereof,
paid Ultimate Net Loss, and the net balance. The parties hereto agree and
acknowledge that the responsibility for preparation of the bordereau is with
Manager pursuant to the Program Manager Agreement. Company shall make a
good-faith effort to furnish the quarterly bordereau to Reinsurer upon receipt.

The balance due either party as indicated by the aforesaid net balance, shall 
be remitted to the other party within fifteen (15) days following Reinsurer's 
receipt of the quarterly bordereau.

ARTICLE X.  OFFSET

         All amounts due either Company or Reinsurer, whether by reason of
premium, commission, loss or Ultimate Net Loss or Allocated Loss Adjustment
Expense, or otherwise, under this Agreement or any other Agreement previously,
now or later in force between Reinsurer and Company, whether as ceding company,
reinsurer or otherwise, shall be subject to the right of recoupment and offset
and upon the exercise of the same, only the net balance shall be due. All claims
for amounts of premium, commission, loss or Ultimate Net Loss, whether or not
fixed in amount at the time of the insolvency of any party to this Agreement,
arising from coverage placed in effect under this Agreement prior to the
insolvency of any party to this Agreement shall be deemed pre-liquidation debts
and subject to this Article. In the event of insolvency of Company, offset shall
be in accord with applicable law.





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ARTICLE XI.  NOTICE OF LOSS

        Company shall furnish a quarterly loss bordereau to reinsurer within
fifteen (15) days after the end of each quarter on formats mutually acceptable
to Company and Reinsurer indicating as respects each loss:

         a)       Insured's name;
         b)       Policy number;
         c)       Claimant's name;
         d)       Loss Report Date;
         e)       Outstanding Loss, Allocated Loss Adjustment Expense and 
                  Unallocated Loss Adjustment Expense reserve;
         f)       Paid Loss, Allocated Loss Adjustment Expense and Unallocated 
                  Loss Adjustment Expense;
         g)       Total Incurred Loss, Allocated Loss Adjustment Expense and 
                  Unallocated Loss Adjustment Expense;

         The parties hereto agree and acknowledge that the responsibility for
preparation of loss bordereau is with Manager pursuant to the Program Manager
Agreement. Upon receipt of said loss bordereau, Company shall endeavor to
furnish Reinsurer with a copy as soon as possible. When requested, Company will
afford Reinsurer the opportunity to be associated with Company at the sole
expense of Reinsurer in the defense of any claim or suit or proceeding and
Company and Reinsurer shall cooperate in every respect in the defense of such
claim, suit, or proceeding.

ARTICLE XII.  LOSS SETTLEMENTS

        All loss settlements made by Company or Manager, on its behalf, whether
under the policy terms and conditions or by way of compromise shall be
unconditionally binding upon Reinsurer. Loss settlements shall be payable in 
accordance with Article IX.

ARTICLE XIII.  TAXES

         Company shall not claim any deduction of the Reinsurance Premium under
this Agreement when making tax returns, other than income or profits tax returns
to any state, territory, or possession of the United States or the District of
Columbia.


ARTICLE XIV.  CURRENCY

         All settlements of account between Company and Reinsurer shall be made
in cash or its equivalent. Wherever the word "Dollars" and the sign "$" shall
appear in or in connection with this Agreement, they shall be construed to mean
United States Dollars unless clearly indicated to the contrary.


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ARTICLE XV.  THIRD PARTY BENEFICIARY

         Except as expressly provided for in Article XVI hereof, the provisions
of this Agreement are intended solely for the benefit of Company and Reinsurer.
Nothing in this Agreement shall in any manner create or be construed to create
any obligations to or establish any rights against any party to this Agreement
in favor of any other persons not party to this Agreement.

ARTICLE XVI.  ERRORS AND OMISSIONS

        Any inadvertent act, neglect, delay, omission, or error by either party
to this Agreement, or by its representatives shall not be held to relieve either
party to this Agreement from any liability that would attach to it under this
Agreement if that act, neglect, delay, omission, or error had not been made,
providing that act, neglect, delay, omission, or error is sought to be rectified
after discovery.

ARTICLE XVII.  ACCESS TO RECORDS

         Reinsurer shall have the right at any reasonable time upon five (5)
working days prior notice during or at any time after the expiration of this
Agreement, and as frequently as deemed reasonably necessary by Reinsurer, to
visit the offices of Company to inspect, examine, audit, and verify any of the
policy or claim files ("records") relating to the business reinsured under this
Agreement. Reinsurer shall have the right to make copies, at its own expense, or
extracts of any records. Notwithstanding the above, Reinsurer shall not have any
right of access to the records of Company if it is not current in all payments
due to Company and Company shall have no right to reimbursement under this
Agreement if it fails or refuses to provide the access required by this section
other than by reason of Reinsurer's failure to pay. Reinsurer shall keep
confidential all information and reports derived from the records of Company to
which it has received access and shall not publish or communicate that
information or report(s) to any other person or reinsurer without Company's
express prior written consent. Reinsurer shall promptly upon Company's request
deliver a complete copy of any report(s) concerning the records and information
to which it has received access.

ARTICLE XVIII.  INSOLVENCY




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         In the event of the insolvency of Company, any sums due from 
Reinsurer hereunder shall be payable immediately upon demand directly to the
insolvent Company, or to its liquidator, receiver, conservator or statutory
successor without diminution because of the insolvency of Company or because the
liquidator, receiver, conservator or statutory successor of that Company has
failed to pay all or a portion of any claim.

         The liquidator, receiver, conservator or statutory successor of Company
shall give written notice to the Reinsurer of the pendency of a claim against
Company indicating the policy or bond reinsured which claim would involve a
possible liability on the part of 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, 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
to be available to Company or its liquidator, receiver, conservator or statutory
successor. The expense thus incurred by Reinsurer shall be chargeable, subject
to the approval of the court, against Company as part of the expense of
conservation or liquidation to the extent of the benefit which may accrue to
Company solely as a result of the defense undertaken by Reinsurer.

        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 the reinsurance agreements as
though such expense had been incurred by the Company.

        The reinsurance shall be payable by Reinsurer to Company or to its
liquidator, receiver, conservator or statutory successor, except as provided by
applicable Insurance Law, or except where Reinsurer with the consent of the
direct insured or insureds have assumed such policy obligations of Company as
direct obligations of Reinsurer to the payees under such policies and in
substitution for the obligations of Company to such payees.






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ARTICLE XVII.  SECURITY AND UNAUTHORIZED REINSURANCE

         A. If Reinsurer is unauthorized or otherwise unqualified in any state
or other United States jurisdiction, and if, without such security, a financial
penalty to Company would result on any statement or report it is required to
make or file with regulatory authorities, for reasons of Company's financial
security and condition, Reinsurer will secure, at the inception hereof and
within thirty (30) days after the end of each calendar quarter (but no later
than December 31 of each year as respects the fourth quarter), its share of
"obligations" under this Agreement in a manner, form and amount acceptable to
Company and to all applicable regulatory authorities by either:

         1.       In accordance with applicable law, including but not limited
                  to, California Insurance Code Section 922.5(b) and California
                  Insurance Bulletin 97-5 (the "Bulletin"), clean, irrevocable,
                  and unconditional evergreen letter(s) of credit issued and
                  confirmed, if confirmation is required by the applicable
                  insurance regulatory authorities, by a bank or banks meeting
                  the NAIC Securities Valuation Office credit standards for
                  issuers of letters of credit and acceptable to Company and
                  those insurance regulatory authorities; or

         2.       In accordance with applicable law, including but not limited
                  to, California Insurance Code Section 922.5(a) and the
                  Bulletin, cash advances or funds withheld or a combination of
                  both ("deposit of funds").

        The initial amount of this security shall be delivered to Company no
later than the closing date of this Agreement. If Reinsurer fails to provide
the security as required by this paragraph by the first December 15 following
the closing date of this Agreement, or any anniversary thereof, Reinsurer will
secure its obligations under this Agreement at a time, in a manner and form from
among the above three options, and in an amount, all as designated by and
acceptable to Company in its sole discretion and to insurance regulatory
authorities.

         B. The "obligations" referred to herein shall mean the then current (as
of the end of each calendar quarter) sum of:

         1.       The amount of ceded unearned premium for which Reinsurer is
                  responsible;

         2.       The amount of paid losses and allocated loss adjustment
                  expenses paid by Company for which Reinsurer is responsible
                  but not yet recovered from the Reinsurer;

         3        The amount of ceded reserves for losses reported and
                  outstanding, as well as for reserves for allocated loss
                  adjustment expenses, for which Reinsurer is responsible;

         4.       The amount of ceded reserves for the development of losses
                  reported and outstanding, as well as for the development of
                  allocated loss adjustment expense for which Reinsurer is
                  responsible;


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         5.       The amount of ceded reserves for incurred but not reported
                  losses for which Reinsurer is responsible; and

         6.       The amount of return and refund premiums for which Reinsurer
                  is responsible but not yet recovered from Reinsurer.

         C. Company, or its successors in interest may draw, at any time and
from time to time upon the:

         1.       established letter of credit (or subsequent cash deposit);

         2.       established trust fund (or subsequent cash deposit); or

         3.       deposit of funds;

without diminution or restriction because of the insolvency of either Company or
Reinsurer for one or more of the following purposes:

         a.       To make payment to and reimburse Company for Reinsurer's share
                  of paid loss and allocated loss adjustment expense paid by
                  Company under its "subject policies" and for which Reinsurer
                  is responsible under this Agreement that is due to Company but
                  unpaid by Reinsurer;

         b.       To make payments to Reinsurer of any amounts held thereby that
                  exceed the amount required to fund Reinsurer's "obligations"
                  under this Agreement provided that if a trust fund is
                  applicable, only the excess of one hundred two (102%) percent
                  of the amount required to fund Reinsurer's "obligations" may
                  be released;

         c.       To make payment to and reimburse Company for other amounts due
                  Company under this Agreement from Reinsurer, including but not
                  limited to, Reinsurer's share of premium refunds and returns;

         d.       To obtain a cash deposit of the entire amount of the remaining
                  balance under the established letter of credit or established
                  trust fund ("cash deposit") in the event that Company:

                    (i) has received notice of non-renewal or expiration of the
                    letter of credit or trust fund;

                    (ii) has not received assurances satisfactory to Company of
                    any required increase in the amount of the trust fund or
                    letter of credit, or its replacement or other continuation
                    of the letter of credit at least thirty (30) days before its
                    stated expiration date;


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                    (iii) has been made aware that others may attempt to attach
                    or otherwise place in jeopardy the security represented by
                    the letter of credit or trust fund; or

                    (iv) has concluded that the trustee or issuing (or
                    confirming) bank's financial condition is such that the
                    security represented by the trust fund or letter of credit
                    may be in jeopardy; and

          e.        any other amounts necessary to secure the credit or
                    reduction from liability for reinsurance taken by company.

and under any of those circumstances where Reinsurer's entire "obligations" or
part thereof, under this Agreement remain unliquidated and undischarged at least
thirty (30) days prior to the stated expiration date or at the time Company
learns of the possible jeopardy to the security represented by the letter of
credit or trust fund.

        D. If Company draws on the letter of credit or trust fund to obtain a
cash deposit, Company shall hold the amount of the cash deposit so obtained in
the name of Company in any solvent United States Bank or Trust Company that is a
member of the Federal Reserve System and insured by the Federal Deposit
Insurance Corporation in trust solely to secure the "obligations" referred to
above and for the use and purposes enumerated above and to return any balance
thereof to Reinsurer:

         (1)      upon the complete and final liquidation and discharge of all
                  of Reinsurer's obligations to Company under this Agreement; or

         (2)      in the event Reinsurer subsequently provides alternate or
                  replacement security consistent with the terms hereof and
                  acceptable to Company.

        E. Company will prepare and forward at least quarterly to Reinsurer a
statement for the purposes of this Article, showing Reinsurer's share of
"obligations" as set forth above. If Reinsurer's share thereof exceeds the then
existing balance of the security provided, Reinsurer shall, within fifteen (15)
days of receipt of Company's statement, but never later than December 31 of any
year, increase the amount of the deposit of funds, the trust fund, the letter of
credit, or the cash deposit to the required amount of Reinsurer's share of
"obligations" set forth in Company's statement.

        Subject to the one hundred two percent (102%) restraints with respect to
trust funds, if Reinsurer's share thereof is less than the then existing balance
of the deposit of funds, trust account, letter of credit, or cash deposit as
provided for above, Company will release the excess thereof to Reinsurer upon
Reinsurer's written request.


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         F. Reinsurer shall not attempt to prevent Company from holding the
deposit of funds, drawing on the letter of credit or trust fund or holding the
cash deposit so long as Company is acting in accordance with this Article.

         G. The assets deposited in the trust fund shall be valued according to
their current fair market value and shall consist only of cash (U.S. legal
tender), certificates of deposit issued by a United States Bank and payable in
cash, and investments of the types permissible for such deposits under the
California Insurance Law. Investments issued by the parent, subsidiary, or
affiliate of either Company or Reinsurer shall not be eligible investments. All
assets so deposited shall be accompanied by all necessary assignments,
endorsements in blank, or transfer of legal title to the trustee in order that
Company may negotiate any such assets without the requirement of consent or
signature from Reinsurer or any other entity.

         H. All settlements of account between Company and Reinsurer shall be
made in cash or its equivalent.

         I. Company's "successors in interest" shall include those by operation
of law, including without limitation, any liquidator, rehabilitator, receiver,
or conservator.

         J. Any income earned and received by the amount held in a trust fund
shall be added to the principal thereof.

         K. Reinsurer will take any other reasonable steps that may be required
for Company to take full credit on its statutory financial statements for the
reinsurance provided by this Agreement.

         L. To the extent that any provisions of this Article XVIII conflict
with the requirements of California law, including the Bulletin, such
conflicting provisions or the appropriate portions thereof shall be superseded
and replaced by such law or the Bulletin, as the case may be, and shall be
incorporated herein by this reference.

ARTICLE XX.  ARBITRATION.

         With the exception of any dispute subject to resolution pursuant to 
Article VI, any and all disputes between Company and Reinsurer arising out of, 
relating to, or concerning this Agreement, whether sounding in contract or tort 
and whether arising during or after termination of this Agreement (hereinafter 
"Disputes"), shall be resolved in accordance with a two-step dispute resolution 
process involving, first, mediation before a mediator mutually acceptable to 
the parties, followed, if necessary, by final and binding arbitration before a 
board of arbitration composed of two arbitrators and an umpire ("Board"), which 
may or may not include the mediator, or if requested by either party, another 
Board. The parties confirm that by agreeing to this dispute resolution process, 
they intend to and do waive their right to have any dispute decided in court by 
a judge or jury. All proceedings pursuant to this Article XX shall take place in
Los Angeles, California.

         In the event any Dispute is not resolved by an informal negotiation 
between the parties within thirty (30) days after either party receives written 
notice from the other party that a Dispute exists, the matter shall be referred 
to the Los Angeles, California offices of the American Arbitration Association 
("AAA") for an informal, non-binding mediation consisting of one or more 
conferences between the parties in which a mediator will seek to guide the 
parties to a resolution of the Disputes. The parties shall select a mutually 
acceptable neutral mediator meeting the qualifications set forth in clause (B) 
below. In the event the parties cannot agree on a mediator, the Administrator 
of AAA will appoint a mediator meeting such qualifications. The mediation 
process shall begin on a date mutually agreed upon by the parties and mediator 
or, in the event the parties cannot agree on a date, the mediator shall select 
a date. The mediation process shall continue until the earliest to occur of the 
following: (i) the Disputes are resolved, (ii) the mediator makes a finding 
that there is no possibility of resolution through mediation, or (iii) thirty 
(30) days have elapsed since the Dispute was first scheduled for mediation.

         Should any disputes remain after the completion of the mediation 
process described above, the parties agree to submit all remaining Disputes to 
final and binding arbitration administered by AAA in accordance with the 
then-existing AAA Commercial Arbitration Rules. Neither party nor the Board 
shall disclose the existence, content or results of any arbitration hereunder 
without the prior written consent of all parties. The arbitration shall be 
conducted under the Federal Arbitration Act and shall proceed as follows:

         (A)      Submission to Arbitration. Within thirty (30) days of the 
termination of mediation proceedings pursuant to this Article XX, each party 
shall notify the other of the name of its appointed arbitrator. Either party 
may appoint the mediator as its appointed arbitrator.
 



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<PAGE>   14
         (B) Arbitration Board Membership. Unless otherwise mutually agreed, the
members of the Board shall be impartial and disinterested and shall be active or
retired lawyers, familiar with insurance and reinsurance, or active or retired
officers of property-casualty insurance companies, reinsurance companies, or
Lloyds Underwriters. Company and Reinsurer as aforesaid shall each appoint an
arbitrator and the two (2) arbitrators shall choose an umpire before instituting
the hearing. As time is of the essence, if either party fails to appoint its
arbitrator within thirty (30) day period described above, the other party is
authorized to and shall appoint the second arbitrator. If the two arbitrators
fail to agree upon the appointment of an umpire within thirty (30) days after
notification of the appointment of the second arbitrator, within ten (10) days
thereof, the two (2) arbitrators shall request the AAA to appoint an umpire for
the arbitration with the qualifications set forth above in this Article. If the
AAA fails to name an umpire, either party may apply to the court named below to
appoint an umpire with the above required qualifications, the umpire shall
promptly notify in writing all parties to the arbitration of his selection and
of the scheduled date for the hearing. Upon resignation or death of any member
of the Board, a replacement shall be appointed in the same fashion as the
resigning or deceased member was appointed.

         (C) Submission of Briefs. The claimant and respondent shall each submit
initial briefs to the Board outlining the issues in dispute and the basis,
authority, and reasons for their respective positions within thirty (30) days of
the date of notice of appointment of the umpire. The claimant and the respondent
may submit reply briefs to the Board within ten (10) days after filing of the
initial brief(s). Initial and reply briefs may be amended by the submitting
party at any time, but not later than ten (10) days prior to the date of
commencement of the arbitration hearing. Reasonable responses shall be allowed
at the arbitration hearing to new material contained in any amendments filed to
the briefs but not previously responded to.

         (D) Arbitration Award. The Board shall take such steps as may be
necessary to hold a private hearing within one hundred twenty (120) days of the
submission of the Disputes to arbitration and to conclude such hearing within
three (3) days. The Board shall make a decision and award with regard to the
terms of this Agreement, the original intentions of the parties to the extent
reasonably ascertainable, and the custom and usage of the property and casualty
insurance and reinsurance business which decision and award shall be in writing
and shall state the factual and legal basis for the decision and award. The
decision and award shall be based upon a hearing in which evidence shall be
allowed and in which the formal rules of evidence shall not strictly apply but
in which cross examination and rebuttal shall be allowed. At its own election or
at the request of the Board, either party may submit a post-hearing brief for
consideration of the Board within twenty (20) days of the close of the hearing.
The Board shall make its decision and award within thirty (30) days following
the close of the hearing or the submission of post-hearing briefs, whichever is
later, unless the parties consent to an extension. Every decision by the Board
shall be by a majority of the members of the Board and each decision and award
by the majority of the members of the Board shall be final and binding upon all
parties to the proceeding. Either party may apply to a court of competent
jurisdiction for an order confirming any decision and the award; a judgment of
that court shall thereupon be entered on an decision or award. If such an order
is issued, the attorneys' fees of the party so applying and court costs will be
paid by the party against whom confirmation is sought. The Board may award
interest at a rate of one hundred (100) basis points above the prime rate as
published in the Wall Street Journal on the date of the award of the Board
calculated from the date the Board determines that any amounts due the
prevailing party should have been paid to the prevailing party but may not award
punitive, exemplary, or treble damages.


                                       14
<PAGE>   15
        (E) Arbitration Expense. Each party shall bear the expense of the one
arbitrator appointed by it and shall jointly and equally bear with the other
party the expense of any stenographer requested, and of the umpire. The
remaining costs of the arbitration proceedings shall be finally allocated by the
Board.

        (F) Evidence. Subject to customary and recognized legal rules of
privilege, each party participating in the arbitration shall have the obligation
to produce those documents, and as witnesses to the arbitration those of its
employees, those of its affiliates, and those of any intermediary or
underwriting manager as any other participating party reasonably requests,
providing always that the same witnesses and documents be obtainable and
relevant to the issues before the arbitration and not be unduly burdensome or
excessive. The parties may mutually agree as to pre-hearing discovery prior to
the arbitration hearing and in the absence of agreement, upon the request of any
party, prehearing discovery may be conducted as the umpire shall determine in
his/her sole discretion to be in the interest of fairness, full disclosure, and
a prompt hearing, decision and award by the Board. The umpire shall be the final
judge of the procedures of the Board, the conduct of the arbitration, of the
rules of evidence, the rules of privilege and production and of excessiveness
and relevancy of any witnesses and documents upon the petition of any
participating party. To the extent permitted by law, the Board and the umpire
shall have the authority to issue subpoenas and other orders to enforce their
decisions.

        (G) Equitable Relief. Nothing herein shall be construed to prevent any
participating party from applying to a federal district court of competent
jurisdiction to issue a restraining order or other equitable relief to maintain
the "status quo" of the parties participating in the arbitration pending the
decision and award by the Board or to prevent any party from incurring
irreparable harm or damage at any time prior to the decision and award of the
Board. The Board shall also have the authority to issue interim decisions or
awards in the interest of fairness, full disclosure, and a prompt and orderly
hearing and decision and award by the Board.

        Each of the parties hereto expressly and unequivocally agrees to waive
it right to recover punitive or exemplary damages in connection with any claim
arising out of, in connection with, or in relation to this Agreement.

        The dispute resolution process set forth in this Article XX shall
survive the termination of this Agreement.

        Any and all matters related to the arbitration, including all discovery
and all evidence presented at the arbitration hearing, shall be treated as
strictly confidential by the parties and arbitrator. The award or decision of
the Board shall not be disclosed to any other party, except as may be required
by law or as may be needed to confirm or enforce this award, or upon the written
consent of all parties.

ARTICLE XXI.  SALVAGE AND SUBROGATION

        Reinsurer shall be credited with its proportional share of subrogation
and salvage (i.e., reimbursement obtained or recoveries made by Company, less
the actual cost, excluding salaries of officers and employees of Company and
sums paid to attorneys as retainer, of obtaining such reimbursement or making
such recoveries) on any claims or settlements involving this reinsurance.
Subrogation and salvage shall always be used to reimburse the excess reinsurers
in the reverse


                                       15
<PAGE>   16

order of their priority according to their participation in the loss before
being used in any way to reimburse Company for its portion of the loss under its
retention.

        Company shall reasonably enforce its rights to salvage or subrogation
relating to any loss, a part of which loss was sustained by Reinsurer, and to
reasonably prosecute all claims arising out of those rights. In the event
Company shall unreasonably refuse or neglect to enforce its rights to salvage or
subrogation, Reinsurer is authorized and empowered to bring any appropriate
action in the name of Company or its policyholder or otherwise to enforce those
rights and Company shall cooperate fully with Reinsurer in enforcing those
rights. Company and Reinsurer shall share in the cost and expense of any
unsuccessful salvage or subrogation efforts in the same proportion that Company
and Reinsurer shared the loss giving rise to those salvage or subrogation
efforts.

ARTICLE XXII.  OTHER TERMS AND CONDITIONS

        A. Waiver. The failure of Company or Reinsurer to insist on strict
compliance with this Agreement, or to exercise any right or remedy hereunder,
shall not constitute a waiver of any rights contained herein nor stop the
parties from thereafter demanding full and complete compliance nor prevent the
parties from exercising such a remedy in the future.

        B. Conflict with Law and Severability . If any provisions of this
Agreement 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 Agreement.

       C. Headings. The headings preceding the text of the Articles and
paragraphs of this Agreement are intended and inserted solely for the
convenience of references and shall not affect the meaning, interpretation,
construction or effect of this Agreement.

        D. Assignment. This Agreement shall be binding upon, and inure to the
benefit of, Company and Reinsurer and their respective successors and assigns;
provided, however, that this Agreement may not be assigned by either Company or
Reinsurer without the prior written consent the other.

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

        F. Negotiated Agreement. This Agreement has been negotiated by the
parties and the fact that the initial and final draft shall have been prepared
by Reinsurer shall not give rise to any presumption for or against any party to
this Agreement or be used in any form in the construction or interpretation of
this Agreement or any of its provisions.


                                       16
<PAGE>   17

         G. Notices. Wherever written notice is required under this Agreement,
it shall be in writing and either delivered personally or sent by certified
mail, return receipt requested, to the addresses indicated below. 

To Company:

         Fremont Indemnity Company
         c/o Fremont General Corporation
         2020 Santa Monica Boulevard
         Santa Monica, California 90404
         Attention:      Alan W. Faigin, Esq.
                         Secretary and General Counsel
         FAX: (310) 315-5593

To Reinsurer: 

         SCPIE Indemnity Company
         9441 West Olympic Boulevard
         Beverly Hills, California 90212
         Attention:      Donald J. Zuk
                         President and Chief Executive Officer
         FAX: (310) 551-5924

        All notices and other communications required or permitted under this
Agreement that are addressed as provided in this paragraph will, whether sent by
mail, facsimile, or courier, be deemed given upon the first business day after
actual delivery to the party to whom such notice or other communication is sent
(as evidenced by the return receipt or shipping invoice signed by a
representative of such party or by the facsimile confirmation). Any party from
time to time may change its address for the purpose of notices to that party by
giving a similar notice specifying a new address, but no such notice will be
deemed to have been given until it is actually received by the party sought to
be charged with the contents thereof.

        H. Entire Agreement. Except for that certain Assumption Reinsurance
Agreement and the Claims Service Agreement of even date herewith between Company
and SCPIE Management Services, Inc., this Agreement supersedes and merges with
any and all previous agreements, whether written or oral, between Company and
Reinsurer, or their predecessors with respect to this reinsurance of the Company
by Reinsurer commencing January 1, 1998 and constitutes the full and complete
Agreement between the parties with respect to that reinsurance. No amendment to
this Agreement shall be valid unless in writing and signed by both parties.

        I. Run-off. Notwithstanding anything in this Agreement to the Contrary,
Company retains liability as specified in Section 9.4 of the Asset Purchase
Agreement.


ARTICLE XXI.  INTERMEDIARY CLAUSE

         There is no Intermediary for this Agreement.


                  IN WITNESS WHEREOF, Company and Reinsurer intending to be
bound have caused this Agreement to be executed by their duly authorized
representatives on the dates set forth next to their names below.

COMPANY:

Fremont Indemnity Company

By:  /s/
    ------------------------------------

Title:  V.P. and Asst. Sec.
       ---------------------------------

Date:  12-30-97
      ---------------------------------- 

REINSURER.

American Healthcare Indemnity Company

By:  /s/
    ------------------------------------

Title:  President & CEO
       ---------------------------------

Date:  12-30-97
      ----------------------------------





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