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                                                                   EXHIBIT 10.25

                 PER POLICY EXCESS OF LOSS REINSURANCE 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:

       The Reinsurer agrees to reimburse the Company, on an excess of loss
basis, for the amount of ultimate net loss which the Company may pay as the
result of claims made during the term of this Agreement under the Southern
California Physician's Insurance Exchange's Physicians and Surgeons
Comprehensive Professional and Business Liability policies, including Clinical
Laboratories, which are in force or may hereinafter come into force during the
term of this Agreement, except as excluded under the Exclusions Article subject
to the limitations set forth in the Limits of Cover Article.


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                                   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 Nuclear
                Incident Exclusion Clause - Liability - Reinsurance, as per
                clause attached hereto.

        3.      All Assumed Reinsurance.

                                  ARTICLE III.

TERM:

A. Except as provided in paragraph B. below, this Agreement shall apply to
claims made, on policies in force, issued or renewed, during the thirty-six (36)
month period beginning January 1, 1997 and ending December 31, 1999.

B. It is understood and agreed that if the Reinsurers loss ratio (i.e. the ratio
of the Reinsurers losses and loss adjustment expenses incurred to the Company's
reinsurance premiums earned net of ceding commission) exceeds 115%, subject to
one hundred twenty (120) days notice to any December 31, the terms and
conditions can be amended subject to mutual agreement between the parties
hereto.

C. It is further understood and agreed that the Company shall declare to the
Reinsurers hereunder all policies issued providing limits greater than
$5,000,000/$5,000,000 per physician, per occurrence. Upon review of such
policies should the Reinsurers deem the exposure under this Agreement to be
measurably altered then the terms and conditions hereunder can be amended
subject to mutual agreement between the parties hereto.

D. It is specially agreed that in such case the Company will refrain from ceding
any new policies for limits greater than $5,000,000/$5,000,000 per physician,
per occurrence until such mutual agreement has been attained.

E. 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.

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                                   ARTICLE IV.

LIMITS OF COVER:

A. The Company shall retain for its own account the first $2,000,000 ultimate
net loss, each and every loss occurrence each policy and the Reinsurer agrees to
reimburse the Company for the amount of ultimate net loss paid in excess of
$2,000,000, each and every loss occurrence each policy, but the Reinsurer's
maximum liability shall not exceed $8,000,000 resulting from each and every loss
occurrence each policy.

B. In addition to the limits set forth above, the Reinsurer's maximum liability
from all occurrences under this Agreement shall be $8,000,000 during each twelve
(12) months period and 175% of Reinsurance Premiums Earned hereunder or
$10,000,000 (losses plus loss adjustment expenses), whichever is the greater, in
all during the Agreement term.

                                   ARTICLE V.

DEFINITIONS:

A. The term "loss occurrence" shall mean the happening of one or a series of
related acts, errors, or omissions to act, accidents or occurrences arising out
of one event.

B. The term "losses and loss adjustment expense incurred" shall mean the total
of losses and loss adjustment expense paid by the Reinsurer under this Agreement
as respects claims made during the term of the Agreement plus a reserve for
outstanding losses and loss adjustment expenses thereon which claims were made
during the period of this Agreement.

C. The term "Company's Reinsurance Premium Earned" shall mean the total of the
net premiums written (i.e., gross premiums, deposits plus additions less
premiums ceded for reinsurance which inures to the benefit of the Reinsurer) by
the Company on the business covered hereunder during the period for which the
calculation is being made.

                                   ARTICLE VI.

NET RETAINED LINES:

A. This Agreement applies to only that portion of any insurance or any Extra
Contractual Obligations 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 Agreement attaches, only loss or losses in
respect of that portion of any insurance or any Extra Contractual Obligations
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 underwriters, whether specific or general, any amount
which may become due from them, whether such inability arises from the
insolvency of such other underwriters or otherwise.


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                                  ARTICLE VII.

ULTIMATE NET LOSS:

A. The term "ultimate net loss" as used herein shall be understood to mean the
sum actually paid by the Company in settlement of losses for which it is held
liable, including interest accrued prior to judgment, 80% of Extra Contractual
Obligations and 100% of loss in Excess of Original Policy Limits as provided in
the respectively captioned Articles, after making proper deductions for all
recoveries, salvages, and claims upon other reinsurances and insurances which
inure to the benefit of the Reinsurer under this Agreement, whether collectible
or not, and shall exclude all loss adjustment expenses (which shall be
separately allocated and paid as provided in paragraph B. below); provided,
however, that in the event of the insolvency of the Company, "ultimate net loss"
shall mean the amount of loss which the Company has incurred or for which it is
liable, and payment by the Reinsurer shall be made to the liquidator, receiver
or statutory successor of the Company in accordance with the provisions of the
Insolvency Article in this Agreement. Nothing in this clause, however, shall be
construed to mean that losses under this Agreement are not recoverable until the
ultimate net loss of the Company has been ascertained.

B. All loss adjustment expenses incurred in investigation, adjustment and
litigation, defense and settlement of claims made against the Company under its
original policies reinsured hereunder, shall be apportioned in proportion to the
respective interests of the parties hereto in the ultimate net loss.

C. In the event a verdict or judgment is reduced by an appeal or a settlement,
subsequent to the entry of a judgment, resulting in an ultimate saving on such
verdict or judgment, or a judgment is reversed outright, the expense incurred in
securing such final reduction or reversal shall (1) be prorated between the
Reinsurer and the Company in proportion that each benefits from such reduction
or reversal and the expense incurred up to the time of the original verdict or
judgment shall be prorated in proportion to each party's interest in such
verdict or judgment; or (2) when the terms and conditions of the Company's
original policies reinsured hereunder include expenses as part of the policy
limit, be added to the Company's ultimate net loss.

                                  ARTICLE VIII.

EXCESS OF ORIGINAL POLICY LIMITS:

A. This Agreement shall protect the Company, within the limits hereof, in
connection with any 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.


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B. However, this Article shall not apply where the loss has been incurred due to
the fraud of 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 purposes 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 IX.

EXTRA CONTRACTUAL OBLIGATIONS CLAUSE:

A. This Agreement shall protect the Company within the limits hereof, where the
ultimate net loss includes Extra Contractual Obligations. "Extra Contractual
Obligations" are defined as those liabilities not covered under any other
provision of this Agreement and which arise from 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 an Extra Contractual Obligation is incurred by the Company
shall be deemed, in all circumstances, to be the date of the original accident,
casualty, disaster or loss occurrence and furthermore, for the purposes hereof
be deemed to follow the Claims Made provisions of this Agreement, subject always
to the provisions of the Term Article.

C. However, this Article shall not apply where the loss has been incurred due to
the fraud of 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.

                                   ARTICLE X.

CLAIMS:

A. In the event of a claim arising hereunder which either results in or appears
to be of serious enough nature as probably to result in a loss involving this
Agreement, the Company shall give notice as soon as reasonably practicable to
Reinsurers and the Company shall keep the Reinsurer advised of all subsequent
developments in connection therewith.

B. All loss settlements made by the Company provided they are within the terms
of the Company's original policies and of this Agreement, shall be
unconditionally binding upon Reinsurer and amounts falling to the share of the
Reinsurer shall be payable upon reasonable evidence of the amount paid being
given by the Company in accordance with provisions set forth in the Reports and
Remittances Article


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                                   ARTICLE XI.

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 XII.

PREMIUM:

A. The Company shall pay to the Reinsurer an annual minimum and deposit premium
of $950,000 payable in installments of $237,500 as of each January 1st, April
1st, July 1st and October 1st, during the term of this Agreement, subject to
adjustment at each December 31st.

B. Within sixty (60) days after each December 31st, the Company shall calculate
the actual original gross premium charged by the Company for policy limits in
excess of $2,000,000, as respects policies issued or renewed during each twelve
(12) months period January 1st to December 31st during the term of this
Agreement. If the premium calculation is greater than the minimum and deposit
premium paid during the twelve (12) months period, the Company shall promptly
remit the difference to the Reinsurer.

                                  ARTICLE XIII.

CEDING COMMISSION:

A. The Reinsurer shall make a commission allowance of 15% to the Company on the
premiums ceded under this Agreement. On all return premiums the Company shall
return to the Reinsurer the commission allowance of 15%.

B. The commission allowance which the Reinsurer makes to the Company on the
business transacted under this Agreement includes provision for all taxes,
assessments and any other expenses whatsoever, except loss adjustment expenses.

                                  ARTICLE XIV.

PROFIT COMMISSION:

A. The Company shall receive a profit commission equal to 80% of the net profit
accruing to the Reinsurers during the term of this Agreement computed as
follows:

       1.     Reinsurance Premiums Earned;


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        2.      Less: Losses and Loss Adjustment Expenses Incurred;

        3.      Less: Ceding Commission of 15% of the Reinsurance Premiums
                Earned as in (1) above;

        4.      Less: Management expenses of 23.5% of Reinsurance Premiums
                Earned as in (1) above;

unlimited deficit carry forward to next Agreement period.

B. The term "Agreement" shall mean the three (3) year period commencing January
1, 1997 and ending December 31, 1999 both days inclusive. It is further agreed
that the first calculation of profit commission shall be computed as of December
31, 1999, and annually thereafter until all losses hereunder are settled or
commuted. No payment of any profit commission shall be made prior to December
31, 2001. The Company agrees that payment of any profit commission shall be
contingent upon complete commutation as respects all losses arising during the
term of this Agreement. Commutation of losses and payment thereof, together with
payment of any profit commission by the Reinsurers shall constitute full and
final release from all further liability under this Agreement.

                                   ARTICLE XV.

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. Payments of minimum deposit premium shall be made within sixty (60) days of
respective due date and in accordance with the provisions of the Premium
Article.

C. Payment by the Reinsurer of its portion of loss and loss expenses paid by the
Company will be made by the Reinsurer to the Company as soon as possible, but
not later than sixty (60) days after proof of payment by the Company is received
by the Reinsurer.

                                  ARTICLE XVI.

CONFIDENTIALITY CLAUSE:

       All terms and conditions of this Agreement and any materials provided in
the course of inspection shall be kept confidential by the Reinsurer as against
third parties, subject to disclosure pursuant to process of law, unless the
Reinsurer has obtained the Company's prior written consent to divulge the
information to third parties who will provide a written confirmation agreeing to
maintain the confidentiality of the materials provided. Said confirmation shall
be subject to the satisfaction of the Company.

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                                  ARTICLE XVII.

CURRENCY:

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

                                 ARTICLE XVIII.

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 XIX.

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.

                                   ARTICLE XX.

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 XXI.

UNAUTHORIZED REINSURANCE:

(Applies only to a Reinsurer who does not qualify for full credit with any
insurance regulatory authority having jurisdiction over the Company's 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
regulatory authority 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 reserves which is
applicable to the Reinsurer. The Reinsurer hereby agrees to fund such reserves
in respect of known outstanding losses that have been reported to the Reinsurer
and allocated loss adjustment expense relating thereto, losses and allocated
loss adjustment expense paid by the Company but not recovered from the
Reinsurer, plus reserves for losses incurred but not reported, as shown in the
statement prepared by the Company (hereinafter referred to as "Reinsurer's
Obligations") by funds withheld, cash advances or a Letter of Credit. The
Reinsurer shall have the option of determining the method of funding provided it
is acceptable to the insurance regulatory authorities having jurisdiction over
the Company's reserves.

B. When funding by a Letter of Credit, the Reinsurer agrees to apply for and
secure timely delivery to the Company of a clean, irrevocable and unconditional
Letter of Credit issued by a bank and containing provisions acceptable to the
insurance regulatory authorities having jurisdiction over the Company's reserves
in an amount equal to the Reinsurer's proportion of said reserves. Such 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 (sixty (60) days where required
by insurance regulatory authorities) prior to any expiration date the issuing
bank shall notify the Company by certified or registered mail that the issuing
bank elects not to consider the Letter of Credit extended for any additional
period.

C. The Reinsurer and Company agree that the Letters of Credit provided by the
Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any
time, notwithstanding any other provision of this Agreement, and be utilized by
the Company or any successor, by operation of law, of the Company including,
without limitation, any liquidator, rehabilitator, receiver or conservator of
the Company for the following purposes, unless otherwise provided for in a
separate Trust Agreement:

        1.      to reimburse the Company for the Reinsurer's Obligations, the
                payment of which is due under the terms of this Agreement 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 Obligations under this
                Agreement;

        3.      to fund an account with the Company for the Reinsurer's
                Obligations. Such cash deposit shall be held in an interest
                bearing account separate from the Company's other assets, and
                interest thereon not in excess of the prime rate shall accrue to
                the benefit of the Reinsurer;

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<PAGE>   10
       4.     to pay the Reinsurer's share of any other amounts the Company
              claims are due under this Agreement.

D. In the event the amount drawn by the Company on any Letter of Credit is in
excess of the actual amount required for 1. or 3., or in the case of 4., the
actual amount determined to be due, the Company shall promptly return to the
Reinsurer the excess amount so drawn. All of the foregoing shall be applied
without diminution because of insolvency on the part of the Company or the
Reinsurer.

E. 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.

F. At annual intervals, or more frequently as agreed but never more frequently
than quarterly, the Company shall prepare a specific statement of the
Reinsurer's Obligations, for the sole purpose of amending the Letter of Credit,
in the following manner:

       1.     If the statement shows that the Reinsurer's Obligations exceed 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 to the Letter of
              Credit increasing the amount of credit by the amount of such
              difference.

       2.     If, however, the statement shows that the Reinsurer's Obligations
              are 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 XXII.

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.


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C. The phrase "any loss payable" as used in paragraph A. above shall mean any
ultimate 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.

                                 ARTICLE XXIII.

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 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 XXIV.

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

                                                                  Page 11 of 13

<PAGE>   12
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. Such payments by the Reinsurer shall be made
directly to the Company or its liquidator, receiver or statutory successor.

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 XXV.

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 third arbitrator shall be selected
from a list of six individuals (three named by each arbitrator) by a judge of
the federal district court having jurisdiction over the geographical area in
which the arbitration is to take place, or if the federal court declines to act,
the state court having general jurisdiction in such area.

                                                                   Page 12 of 13

<PAGE>   13
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.

                                  ARTICLE XXVI.

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 XXVII.

GOVERNING LAW:

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


                                                                  Page 13 of 13

<PAGE>   14
                       INTERESTS AND LIABILITIES CONTRACT

                   (hereinafter referred to as the "Contract")

                                     to the

                 PER POLICY EXCESS OF LOSS 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


                 HANNOVER RUCKVERSICHERUNGS - AKTIENGESELLSCHAFT


            (hereinafter referred to as the "Subscribing Reinsurer")


that the Subscribing Reinsurer shall have a 100% participation in the Interests
and Liabilities of the Reinsurer as set forth in the Agreement attached hereto
entitled Per Policy Excess of Loss 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 100% of all premiums
due or which may become due the Reinsurer in accordance with the provisions of
the Agreement attached.

       This Contract shall attach at 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>   15
       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.




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


Signed in
this                               day of                             , 199

HANNOVER RUCKVERSICHERUNGS - AKTIENGESELLSCHAFT




By:_________________________________________



                                                                   Page 2 of 2

<PAGE>   16
                              MEMORANDUM OF CHANGES

                                     to the

            SOUTHERN CALIFORNIA PHYSICIANS INSURANCE EXCHANGE, et al

                 PER POLICY EXCESS OF LOSS REINSURANCE AGREEMENT


       The following changes have been effected from the expiring Per Policy
Excess of Loss Reinsurance Agreement Number 01-94-0365:

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

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




                ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.

                                                                     Page 1 of 1