<PAGE>   1
                                                                   EXHIBIT 10.27
                        QUOTA SHARE REINSURANCE AGREEMENT

                  (hereinafter referred to as the "Agreement")

                           entered into by and between

                SOUTHERN CALIFORNIA PHYSICIANS INSURANCE EXCHANGE
                       and/or S.C.P.I.E. INDEMNITY COMPANY
                      and/or S.C.P.I.E. MANAGEMENT COMPANY
                  and/or AMERICAN HEALTHCARE INDEMNITY COMPANY,
                           and/or FG CASUALTY COMPANY,
                   and/or S.C.P.I.E. INSURANCE SERVICES. INC.,
                   and/or S.C.P.I.E. MANAGEMENT SERVICES, INC.
                            Beverly Hills, California

             (hereinafter collectively referred to as the "Company")

                                       and

                   The Subscribing Reinsurer(s) executing the
                      Interests and Liabilities Contract(s)
                         attached to and forming a part
                                of this Agreement

                  (hereinafter referred to as the "Reinsurer")


WITNESSETH:

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

                                   ARTICLE I.

BUSINESS COVERED:

A. The Company shall cede to the Reinsurer and the Reinsurer shall accept from
the Company an 80% quota share participation of the net retained insurance
liability of the Company on each risk insured under new and renewal policies
becoming effective on and after January 1, 1997, as respects losses occurring on
and after said date, covering business classified by the Company as:

        1.      Directors and Officers Liability for the following type(s) of
                Original Insureds:

                a.     Physician Groups and/or Clinics.
                b.     Managed Care Organizations.
                c.     Association of California Hospital Districts - Program
                       Beta.

                                                                    Page 1 of 12

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       2. Errors and Omissions Liability for the following type(s) of Original
Insureds:

              Managed Care Organizations.

B. The term "policies" means the Company's binders, policies and contracts
providing insurance on the business covered under this Agreement.

                                   ARTICLE II.

EXCLUSIONS:

       This Agreement specifically excludes:

        1.      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, plan, pool, association, fund
                or other arrangement, howsoever 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.

        2.      Loss or Liability excluded by the provisions of the attached
                "Nuclear Incident Exclusion Clause - Liability - Reinsurance".

        3.      All Assumed Reinsurance.

        4.      As per the Company's original policies.

                                  ARTICLE III.

TERRITORY:

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

                                   ARTICLE IV.

TERM:

A. This Agreement shall apply to claims made and first reported on risks
attaching during the twelve (12) month period from January 1, 1997 through
December 31, 1997, both days inclusive.

B. If any law or regulation of the Federal, State or Local Government or any
jurisdiction in which the Company is doing business shall render illegal the
arrangements made herein, this Agreement can be terminated immediately insofar
as it applies to such jurisdiction by the Company giving notice to the Reinsurer
to such effect.

                                                                   Page 2 of 12

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

                                   ARTICLE V.

LIMITS OF COVER:

A.     With respect to business classified as Directors and Officers Liability:

       The liability of the Reinsurer shall not exceed $4,000,000 per policy in
       the aggregate and/or coverage part (i.e., 80% of $5,000,000).

B.     With respect to business classified as Errors and Omissions Liability:

       The liability of the Reinsurer shall not exceed $800,000 per policy in
       the aggregate and/or coverage part (i.e., 80% of $1,000,000).

C. This Agreement is extended to protect the Company for loss in Excess of
Original Policy Limits and 80% of any Extra Contractual Obligations as defined
in the Articles of that title herein; provided, however, the contractual loss
and the Excess of Original Policy Limits and Extra Contractual Obligations
loss(es) combined shall not exceed the limits in paragraphs A. and B. above.

                                   ARTICLE VI.

COMPANY RETENTION:

       The Company shall retain net for its own account the remaining 20% of its
net retained insurance liability on each risk reinsured under this Agreement.

                                  ARTICLE VII.

DEFINITIONS:

A. The term "net retained insurance liability" as used herein means the
remaining portion of the Company's gross liability on each risk reinsured under
this Agreement after deducting recoveries from all reinsurance, other than the
reinsurance provided.

B. The term "original gross premiums" as used herein means gross premiums and
additional premiums.


                                                                   Page 3 of 12

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                                  ARTICLE VIII.

ORIGINAL CONDITIONS:

       All reinsurance coming within the terms of this Agreement shall be
subject to the same terms, rates, conditions and waivers and to the same
modifications and alterations as the respective policies of the Company, except
as modified by the terms of this Agreement.

                                   ARTICLE IX.

EXCESS OF ORIGINAL POLICY LIMITS:

A. This Agreement shall protect the Company, within the limits hereof, in
connection with loss in excess of the limit of its original policy, such loss in
excess of the limit having been incurred because of failure by it to settle
within the policy limit or by reason of alleged or actual negligence, fraud, or
bad faith in rejecting an offer of settlement or in the preparation of the
defense or in the trial of any action against its insured or reinsured or in the
preparation or prosecution of an appeal consequent upon such action.

B. However, this Article shall not apply where the loss has been incurred due to
fraud by a member of the Board of Directors or a corporate officer 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.

C. For the purpose of this Article, the word "loss" shall mean any amounts for
which the Company would have been contractually liable to pay had it not been
for the limit of the original policy.

                                   ARTICLE X.

EXTRA CONTRACTUAL OBLIGATIONS:

A. This Agreement shall protect the Company for any Extra Contractual
Obligations within the limits hereof. The term "Extra Contractual Obligations"
is defined as those liabilities not covered under any other provision of this
Agreement and which arise from the handling of any claim on business covered
hereunder, such liabilities arising because of, but not limited to, the
following: failure by the Company to settle within the policy limit, or by
reason of alleged or actual negligence, fraud, or bad faith in rejecting an
offer of settlement or in the preparation of the defense or in the trial of any
action against its insured or reinsured or in the preparation or prosecution of
an appeal consequent upon such action.

B. The date on which any Extra Contractual Obligation is incurred by the Company
shall be deemed, in all circumstances, to be the date of the original disaster
and/or casualty.

C. However, this Article shall not apply where the loss has been incurred due to
fraud by a member of the Board of Directors or a corporate officer 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.

                                                                  Page 4 of 12

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                                   ARTICLE XI.

LOSSES, LOSS ADJUSTMENT EXPENSES AND SALVAGES:

A. The Company shall settle all loss claims under its policies and the Reinsurer
shall pay to the Company its pro rata share of such loss claims as payable by
the Company.

B. The Reinsurer shall also bear its pro rata share of loss adjustment expenses
incurred by the Company under policies subject hereto, such loss adjustment
expenses being within the limit of the Company's original policies.

C. The Reinsurer shall benefit pro rata in all salvages, discounts and other
recoveries.

D. The term "loss adjustment expense" as used herein shall follow the
definitions contained in the Company's original policies.

                                  ARTICLE XII.

REINSURANCE PREMIUM:

       The Company shall pay to the Reinsurer 80% of the Company's original
gross premiums received by the Company on business covered hereunder.

                                  ARTICLE XIII.

COMMISSION:

       The Reinsurer shall make a commission allowance equal to the original
acquisition cost plus 15% not to exceed 25% in all to the Company on the
premiums ceded under this Agreement. On all return premiums the Company shall
return to the Reinsurer the commission allowed thereon.

                                  ARTICLE XIV.

REPORTS AND REMITTANCES:

A. The Company will provide the Reinsurer with all necessary data respecting
premiums and losses, including reserves thereon, as at dates and on forms
mutually acceptable to the Company and the Reinsurer.

B. The Company shall render a quarterly account within forty-five (45) days
after the end of each quarter summarizing the following information relating to
reinsurance covered under this Agreement during the said quarter:

       1.     Statement of premiums;

       2.     Statement of losses and loss expenses paid and salvages recovered;


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       3.     Account Current summarizing premiums, commissions, losses and loss
              expenses paid and salvages recovered;

and any balance due the Reinsurer from the Company, as indicated by the
aforesaid Account Current, shall be remitted to the Reinsurer with the quarterly
account. Any balance due the Company from the Reinsurer shall be remitted to the
Company within sixty (60) days after the close of said quarterly account.

                                   ARTICLE XV.

COMMUTATION CLAUSE:

       The Company or the Reinsurer may, at any time express their desire to the
other party to commute all losses which are applicable to any Agreement year and
which are still unsettled. In such event the Company and the Reinsurer shall
mutually determine and evaluate such losses and the payment by the Reinsurer of
their proportion of the amount so ascertained and mutually agreed to be the
value of such losses shall relieve them of all further liability, in respect of
that Agreement year both in respect of known or unknown losses.

                                  ARTICLE XVI.

OFFSET:

       The Company and the Reinsurer shall have the right to offset any balance
or amounts due from one party to the other under the terms of this Agreement.
The party asserting the right of offset may exercise such right any time whether
the balances due are on account of premiums or losses or otherwise.

                                  ARTICLE XVII.

CONFIDENTIALITY CLAUSE:

A. This Agreement and the pre Agreement documentation may contain confidential
or proprietary information of either party to this Agreement. All parties shall
maintain the confidentiality of this information and shall not disclose these to
any third party without both parties approval.

B. Notwithstanding the above, any party may disclose such information without
further approval from the other party in answer to interrogations, subpoenas or
other legal/arbitration process as well as to the Company's reinsurance
intermediary hereon, the Reinsurer's retrocessionaires or in response to
requests by governmental and regulatory agencies. In addition the parties may
disclose such information to their accountants and outside legal counsel as may
be necessary.


                                                                  Page 6 of 12

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                                 ARTICLE XVIII.

CURRENCY:

       Premiums shall be payable by the Company and losses shall be paid to the
Company in United States currency.

                                  ARTICLE XIX.

FEDERAL EXCISE TAX:

(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 Service 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 aforesaid 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 XX.

ERRORS AND OMISSIONS:

       Any inadvertent delay, omission or error shall not be held to relieve
either party hereto from any liability which would attach to it hereunder if
such delay, omission or error had not been made, provided such delay, omission
or error is rectified immediately upon discovery; provided, however, this
Article is not to override retroactive dates specified in the Term Article.

                                  ARTICLE XXI.

ACCESS TO RECORDS:

A. The Company shall place at the disposal of the Reinsurer at all reasonable
times, and the Reinsurer shall have the right to inspect, through its authorized
representatives, all books, records and papers of the Company in connection with
this reinsurance hereunder or the subject matter thereof.

B. The Reinsurer shall be afforded the opportunity, at its own expense to
appoint an attorney of its own choice to assess the Company's claims procedures
who shall report to the Reinsurer the results of such.


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                                  ARTICLE XXII.

FUNDING:

(This clause is only applicable to those Reinsurer(s) who cannot qualify for
credit by the State having jurisdiction over the Company's loss reserves.)

A. As regards policies or bonds issued by the Company coming within the scope of
this Agreement, the Company agrees that, when it shall file with the Insurance
Department or set up on its books reserves for losses covered hereunder which it
shall be required by law to set up, it will forward to the Reinsurer a statement
showing the proportion of such loss reserves which is applicable to the
Reinsurer. The Reinsurer hereby agrees that it will apply for and secure
delivery to the Company of a clean, irrevocable and unconditional Letter of
Credit, issued by a bank which is acceptable to the regulatory authority(ies)
having jurisdiction over the Company's loss reserves in an amount equal to the
Reinsurer's proportion of reserves in respect of known outstanding losses that
have been reported to the Reinsurer and allocated loss expenses relating
thereto, plus reserves for losses incurred but not reported, as shown in the
statement prepared by the Company.

B. The Letter of Credit shall be issued for a period of not less than one (1)
year, and shall be automatically extended for one (1) year from its date of
expiration or any future expiration date unless thirty (30) days prior to any
expiration date the issuing bank shall notify the Company by registered mail
that the bank elects not to consider the Letter of Credit extended for any
additional period. An issuing bank, not a member of the Federal Reserve System
or not chartered in New York State shall provide sixty (60) days notice to the
Company prior to any expiration in the event of non-extension.

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

        1.    To pay the Reinsurer's share or to reimburse the Company for the
              Reinsurer's share of any loss reinsured by this Agreement, the
              payment of which has been agreed by the Reinsurer and which has
              not been otherwise paid.

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

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

D. The issuing bank shall have no responsibility whatsoever in connection with
the propriety of withdrawals made by the Company or the disposition of funds
withdrawn, except to ensure that withdrawals are made only upon the order of
properly authorized representatives of the Company.


                                                                 Page 8 of 12

<PAGE>   9
E. At annual intervals, or more frequently as agreed but never more frequently
than quarterly, the Company shall prepare a specific statement, for the sole
purpose of amending the Letter of Credit, of the Reinsurer's share of known and
reported outstanding losses and allocated expenses relating thereto, plus
reserves for losses incurred but not reported. If the statement shows that
Reinsurer's share of such losses and allocated loss expenses exceeds the balance
of credit as of the statement date, the Reinsurer shall, within thirty (30) days
after receipt of notice of such excess, secure delivery to the Company of an
amendment of the Letter of Credit increasing the amount of credit by the amount
of such difference. If, however, the statement shows that the Reinsurer's share
of known and reported outstanding losses plus allocated loss expenses relating
thereto, plus reserves for losses incurred but not reported is less than the
balance of credit as of the statement date, the Company shall, within thirty
(30) days after receipt of written request from the Reinsurer, release such
excess credit by agreeing to secure an amendment to the Letter of Credit
reducing the amount of credit available by the amount of such excess credit.

                                 ARTICLE XXIII.

SPECIAL FUNDING CLAUSE:

A. If, during the period of this Agreement and thereafter, as respects any
outstanding liabilities hereunder, the Reinsurer shall fail to pay any loss
payable hereunder within the time prescribed, the Reinsurer agrees that it will
fund uncollected paid losses and loss adjustment expenses within thirty (30)
days from the date of written demand by the Company to so fund. Such demand
shall not be made unless balances are sixty (60) days or more past the due date
of payment specified in this Agreement.

B. The Reinsurer shall have the sole option of determining the method of funding
referred to above, provided it is acceptable to the insurance regulatory
authorities involved. If the Reinsurer elects to fund the aforesaid loss by a
Letter of Credit, the procedures set forth in the Funding Article in respect of
Letters of Credit shall apply. If the Reinsurer has already funded obligations
hereunder in accordance with the Funding Article in this Agreement, it agrees
that such funds as are required to pay overdue losses may immediately be drawn
down by the Company.

C. The phrase "any loss payable" as used in paragraph A. above shall mean any
net loss subject to recovery under this Agreement wherein the Reinsurer has not
disputed said loss in writing within the due date for payment.

D. The Company will provide the Reinsurer with a reinsurance proof of loss and
such other substantive loss material reflecting the nature of the settlement
(i.e., applicable Proofs of Loss, Releases, adjuster's reports, etc.). If,
subsequent to receipt of this material, the information supplied is insufficient
or not in accordance with the contractual conditions, then the payment due date
as defined in the Reports and Remittances Article, will be deemed to be the date
upon which the Reinsurer received such additional substantive material necessary
to approve payment of the claim, or the date the claim is presented in a manner
acceptable to the Reinsurer.


                                                                  Page 9 of 12

<PAGE>   10
                                  ARTICLE XXIV.

ARBITRATION:

A. As a condition precedent to any right of action hereunder, any dispute
arising out of the interpretation, performance or breach of this Agreement,
including the formation or validity thereof, shall be submitted for decision to
a panel of three arbitrators. Notice requesting arbitration will be in writing
and sent certified or registered mail, return receipt requested.

B. One arbitrator shall be chosen by each party and the two arbitrators shall,
before instituting the hearing, choose an impartial third arbitrator who shall
preside at the hearing. If either party fails to appoint its arbitrator within
thirty (30) days after being requested to do so by the other party, the latter,
after ten (10) days notice by certified or registered mail of its intention to
do so, may appoint the second arbitrator.

C. If the two arbitrators are unable to agree upon the third arbitrator within
thirty (30) days of their appointment, the deficiency shall be supplied on the
application of the party requesting arbitration by an appointment made by the
American Arbitration Association. Notwithstanding the appointment of any third
Arbitrator by the American Arbitration Association, the arbitration proceedings
shall not be governed by the American Arbitration Association's commercial
arbitration rules.

D. All arbitrators shall be disinterested active or former executive officers of
insurance or reinsurance companies or Underwriters at Lloyd's, London.

E. Within thirty (30) days after notice of appointment of all arbitrators, the
panel shall meet and determine timely periods for briefs, discovery procedures
and schedules for hearings.

F. The panel shall be relieved of all judicial formality and shall not be bound
by the strict rules of procedure and evidence. Unless the panel agrees
otherwise, arbitration shall take place in Beverly Hills, California, but the
venue may be changed when deemed by the panel to be in the best interest of the
arbitration proceeding. Insofar as the arbitration panel looks to substantive
law, it shall consider the law of the State of California. The decision of any
two arbitrators when rendered in writing shall be final and binding. The panel
is empowered to grant interim relief as it may deem appropriate.

G. The panel shall interpret this Agreement as if it were an honorable
engagement rather than as merely a legal obligation and shall make its decision
considering the custom and practice of the applicable insurance and reinsurance
business within sixty (60) days following the termination of the hearings.
Judgment upon the award may be entered in any court having jurisdiction thereof.

H. Each party shall bear the expense of its own arbitrator and shall jointly and
equally bear with the other party the cost of the third arbitrator. The
remaining costs of the arbitration shall be allocated by the panel. The panel
may, at its discretion, award such further costs and expenses as it considers
appropriate, including but not limited to attorneys fees, to the extent
permitted by law.

                                                                  Page 10 of 12

<PAGE>   11
                                  ARTICLE XXV.

SERVICE OF SUIT CLAUSE (U.S.A.):

A. It is agreed that in the event of the failure of the Reinsurer hereon to pay
any amount claimed to be due hereunder, the Reinsurer hereon, at the request of
the Company, will submit to the jurisdiction of a Court of competent
jurisdiction within the United States. Nothing in this Clause 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. It is further agreed that service of process in such
suit may be made upon Messrs. Mendes & Mount, 725 South Figueroa, Suite 1990,
Los Angeles, CA 90017, and that in any suit instituted, the Reinsurer will abide
by the final decision of such Court or of any Appellate Court in the event of an
appeal.

B. The above-named are authorized and directed to accept service of process on
behalf of the Reinsurer in any such suit and/or upon the request of the Company
to give written undertaking to the Company that they will enter a general
appearance upon the Reinsurer's behalf in the event such a suit shall be
instituted.

C. Further, pursuant to any statute of any state, territory or district of the
United States which makes provision therefor, the Reinsurer hereon hereby
designates 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 their true and lawful attorney upon whom may be served
any lawful process in action, suit or proceeding instituted by or on behalf of
the Company or any beneficiary hereunder arising out of this Agreement, and
hereby designate the above-named as the person to whom the said officer is
authorized to mail such process or a true copy thereof.

                                  ARTICLE XXVI.

INSOLVENCY:

A. The portion of any risk or obligation assumed by the Reinsurer, when such
portion is ascertained, shall be payable on demand of the Company at the same
time as the Company shall pay its net retained portion of such risk or
obligation, with reasonable provision for verification before payment, and the
reinsurance shall be payable by the Reinsurer, on the basis of the liability of
the Company under the policy or policies reinsured without diminution because of
the insolvency of the Company.

B. In the event of the insolvency of one or more than one of the Companies,
reinsurance under this Agreement shall be payable immediately on demand, with
reasonable provision for verification, on the basis of claims allowed against
the insolvent Company(ies) by any court of competent jurisdiction or by any
liquidator, receiver, or statutory successor of the Company(ies) having
authority to allow such claims, without diminution because of such insolvency or
because such liquidator, receiver, or statutory successor has failed to pay all
or a portion of any claims.

                                                                   Page 11 of 12

<PAGE>   12
Such payments by the Reinsurer shall be made directly to the Company or its
liquidator, receiver or statutory successor, except where the contract of
insurance or reinsurance provides another payee of such reinsurance in the event
of the insolvency of the Company(ies).

C. It is agreed, however, that the liquidator or receiver or statutory successor
of the insolvent Company(ies) will give written notice to the Reinsurer of the
pendency of a claim against the insolvent Company(ies) on the policy or policies
reinsured within a reasonable time after such claim is filed in the insolvency
proceeding 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 which it may deem
available to the Company(ies) or its liquidator or receiver or statutory
successor. The expense thus incurred by the Reinsurer will be chargeable,
subject to court approval, against the insolvent Company(ies) as part of the
expense of liquidation to the extent of a proportionate share of the benefit
which may accrue to the Company(ies) solely as a result of the defense
undertaken by the Reinsurer.

D. 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 will be
apportioned in accordance with the terms of this Agreement as though such
expense had been incurred by the insolvent Company(ies).

                                 ARTICLE XXVII.

INTERMEDIARY:

       Willcox Incorporated Reinsurance Intermediaries is hereby recognized as
the Intermediary negotiating this Agreement 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 Willcox Incorporated Reinsurance Intermediaries, 180
Maiden Lane, New York, New York 10038-4993. 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.

                                 ARTICLE XXVIII.

GOVERNING LAW:

       This Agreement shall be governed by and interpreted in accordance with
the laws of the State of California, U.S.A.

                                  ARTICLE XXIX.

SEVERAL LIABILITY NOTICE:

       The subscribing reinsurers' obligations under contracts of reinsurance to
which they subscribe are several and not joint and are limited solely to the
extent of their individual subscriptions. The subscribing reinsurers are not
responsible for the subscription of any co-subscribing reinsurer who for any
reason does not satisfy all or part of its obligations.

                                                                   Page 12 of 12

<PAGE>   13
                       INTERESTS AND LIABILITIES CONTRACT

                   (hereinafter referred to as the "Contract")

                                     to the

                        QUOTA SHARE REINSURANCE AGREEMENT

                  (hereinafter referred to as the "Agreement")

                         It is hereby mutually agreed by

                SOUTHERN CALIFORNIA PHYSICIANS INSURANCE EXCHANGE
                       and/or S.C.P.I.E. INDEMNITY COMPANY
                      and/or S.C.P.I.E. MANAGEMENT COMPANY
                  and/or AMERICAN HEALTHCARE INDEMNITY COMPANY,
                           and/or FG CASUALTY COMPANY,
                   and/or S.C.P.I.E. INSURANCE SERVICES. INC.,
                   and/or S.C.P.I.E. MANAGEMENT SERVICES, INC.
                            Beverly Hills, California

             (hereinafter collectively referred to as the "Company")

                                       and






            (hereinafter referred to as the "Subscribing Reinsurer")


that the Subscribing Reinsurer shall have a ___% participation in the Interests
and Liabilities of the Reinsurer as set forth in the Agreement attached hereto
entitled Quota Share Reinsurance Agreement.

       Such participation shall be several and not joint with the participation
of other subscribing reinsurers, and the Subscribing Reinsurer shall under no
circumstances participate in the Interests and Liabilities, if any, of the other
subscribing reinsurers in said Agreement.

       The Company shall pay to the Subscribing Reinsurer ___% of all premiums
due or which may become due the Reinsurer in accordance with the provisions of
the Agreement attached.

       This Contract shall attach on January 1, 1997 and is subject to the
provisions contained in the Term Article of the attached Agreement, which are
hereby incorporated by reference into this Contract and which shall apply as
though they had been specifically provided for herein.

                                                                 Page 1 of 2

<PAGE>   14
       The Agreement to which this Contract is attached and therefore the
Interests and Liabilities of the Subscribing Reinsurer therein, may be changed,
altered and amended as the parties may agree, provided such change, alteration
and amendment is evidenced in writing or by Addendum to this Contract, executed
by the Company and the Subscribing Reinsurer.

       IN WITNESS WHEREOF, the parties hereto have caused this Interests and
Liabilities Contract to be signed in duplicate by their duly authorized
representatives.

Signed in Beverly Hills, California
this                     day of                                  August  , 1997


SOUTHERN CALIFORNIA PHYSICIANS INSURANCE EXCHANGE
and/or S.C.P.I.E. INDEMNITY COMPANY
and/or S.C.P.I.E. MANAGEMENT COMPANY
and/or AMERICAN HEALTHCARE INDEMNITY COMPANY,
and/or FG CASUALTY COMPANY,
and/or S.C.P.I.E. INSURANCE SERVICES. INC.,
and/or S.C.P.I.E. MANAGEMENT SERVICES, INC.
Beverly Hills, California




By: /s/ DONALD J. ZUK
    -----------------------


Signed in
this                     day of                                           , 199


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<PAGE>   15
                              MEMORANDUM OF CHANGES

                                     to the

            SOUTHERN CALIFORNIA PHYSICIANS INSURANCE EXCHANGE, et al

                        QUOTA SHARE REINSURANCE AGREEMENT


       The following changes have been effected from the expiring Quota Share
Reinsurance Agreement Number 01-96-0922:

1.     The list of Companies hereon, collectively referred to as the "Company",
       has been revised per the cover note/placement slip.

2.     Article IV, "Term", the dates have been changed, in this and all other
       applicable Articles, for the current term.




                ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.




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