<PAGE>   1
                                                                   EXHIBIT 10.23

[WILLCOX INCORPORATED LETTERHEAD]


REINSURED:         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

TYPE:              FOURTH EXCESS OF LOSS REINSURANCE

BUSINESS
COVERED:           Physicians and Surgeons Comprehensive Professional and
                   Business Liability Policies, including Clinics and
                   Clinical Laboratories, Professional and Business Liability
                   Policies for Hospitals and Errors and Omissions Liability
                   Policies for Managed Care Organizations.

TERM:              January 1, 1997 to December 31, 1997 as respects claims
(Eff. 1/1/97)      made during the calendar year 1997.

                   Retroactive date January 1, 1976, except for Extra
                   Contractual Obligations which is January 1, 1979.

                   The term "claims made" as used herein shall mean (A) In
                   respect of Claims Made Policies, claims first notified to
                   the Company during the term of this Agreement on any
                   inforce policy or reporting endorsement arising out of
                   incidents subsequent to the retroactive date of said
                   policy as the result of the rendering of or failure to
                   render a professional service or the reporting of losses
                   which arise from the insured premises and operations
                   incidental to the practice of a physician, hospital or
                   managed care organization and/or (B) In respect of
                   Occurrence Policies, claims or losses first notified to
                   the Company during the term of this Agreement.

                   In the event of cancellation, and at the option of the
                   Reinsured, Reinsurers agree to run-off policies in force
                   until natural expiration not to exceed 12 months from the
                   expiration date hereon, subject to a Premium equal to 50%
                   of the Actual Earned Reinsurance Premium.

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TERRITORY:         As per the Company's original policies, contracts, or
                   binders.

EXCLUSIONS:        1.      Insolvency Funds.
                   2.      Nuclear Incident - Liability - Reinsurance.

LIMIT AND
RETENTION:         To pay $10,000,000 each and every loss in excess of
                   $10,000,000 each and every loss.

WARRANTY:          1.      In respect of Physicians and Surgeons Comprehensive
                           Professional and Business Liability Policies,
                           including Clinics and Clinical Laboratories, the
                           Maximum Original Policy Limit is $10,000,000, subject
                           to inuring protection of $8,000,000 in excess of
                           $2,000,000 or so deemed.

                   2.      As respects Professional and Business Liability
                           Policies for Hospitals written on or after January 1,
                           1996, Policy Limits greater than $500,000 reinsured
                           elsewhere on an Excess of Loss basis or so deemed.

                   3.      As respects Professional and Business Liability
                           Policies for Hospitals written prior to January 1,
                           1996, Policy Limits greater than $5,000,000 reinsured
                           elsewhere on an Excess of Loss basis or so deemed.

                   4.      In respect of Errors and Omissions Liability Policies
                           for Managed Care Organizations, Maximum Original
                           Policy Limit $5,000,000.

PREMIUM:           .445% of G.N.E.P.I.
(Eff. 1/1/97)
                   Deposit Premium:  $500,000, payable $125,000 quarterly.

                   Minimum - $500,000.

REINSTATEMENT(S):  One in all at the option of the Company computed Pro Rata as
                   to amount 100% as to premium.

                   All calculations of reinstatement premiums shall be based on
                   paid losses only. The decision of the Company to exercise its
                   reinstatement option must be relayed to Reinsurers within
                   three (3) months from the time any reserve invades this
                   Contract.

ATTACHMENT OF
LIABILITY:         (A)     For purposes of determining the attachment of the
                           Reinsurer's liability hereunder as respects any one
                           loss, all losses (including Discovery Period Losses)
                           involving one or more Original Insureds, arising from
                           the same medical incident, and in



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ATTACHMENT OF
LIABILITY:
(Continued)            which First Notice of Claim or Circumstance is notified
                       to the Company during the term of this Agreement shall be
                       covered hereunder. Where first notice falls in Agreement
                       Years incepting prior to January 1, 1992 the
                       "Interlocking Clause" to apply hereon for Physicians and
                       Surgeons Comprehensive Professional Liability Policies
                       only.

                       (B)   The date of a loss hereunder shall be the earliest
                             date, within the term of this Contract, that the
                             company has received First Notice of Claim or
                             Circumstance.

GENERAL
CONDITIONS:            Loss Adjustment Expenses to be Pro-Rated.
                       Excess of Original Policy Limits Clause.
                       80% Extra Contractual Obligations Clause.
                       Ultimate Net Loss Clause.
                       Net Retained Lines Clause.
                       Notice of Loss Clause.
                       Loss Funding Clause - Including IBNR (See Attached).
                       Special Funding Clause.
                       Confidentiality Clause.
                       Commutation Clause
                       Federal Excise Tax Clause.
                       Errors and Omissions Clause.
                       Insolvency Clause.
                       Service of Suit Clause.
                       Arbitration Clause.
                       Access to Records Clause.
                       Willcox Incorporated Intermediary Clause.

<TABLE>
<CAPTION>
REINSURERS
HEREON:                Domestic:
<S>                   <C>                                           <C>  
                       Travelers Indemnity Company                   5.00%
                                                                     -----
                                   Domestic Total                    5.00%
                   
                       Australia:
                       Through Australian Independent Reinsurance
                       Services:
                         GIO Insurance Ltd.
                           trading as:
                           GIO Reinsurance                           10.00%
                                                                     ----- 
                                   Australia Total                   10.00%
                   
                       France:
                       Through Courtage De Reassurances:
                         H. Des Courtis S.A.
                         Paris, France
                       AXA Reassurance                                5.00%
                                                                     ----- 
                                   France Total                       5.00%
</TABLE>
                  
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<TABLE>
<CAPTION>
REINSURERS
HEREON:
(Continued)       Germany:
<S>              <C>                                          <C>  
                  Hannover Ruckversicherungs AG                5.00%
                                                               ---- 
                                 Germany Total                 5.00%
</TABLE>

<TABLE>
<CAPTION>
                  United Kingdom:
                  Through Willcox Johnson & Higgins Reinsurance Brokers, Ltd.
                    London, England
                  Underwriters at Lloyd's
                 <S>     <C>        <C>                    <C>   
                   SVH    1007                                6.568%
                   DFM    435                                10.946%
                   SJC    1003        62.00%
                          2003        38.00%                  4.628%
                   JHV    376         67.89%
                          2376        32.11%                  2.001%
                   FRW    190                                 2.919%
                   ROS    227         83.00%
                          2227        17.00%                   .876%
                   RJH    122                                  .876%
                   BFC    780                                 1.459%
                   SJB    1212                                1.970%
                   GNR    570                                 1.751%
                   DJN    1096                                1.168%
                   HGJ    205                                 3.211%
                   WEH    362                                 7.444%
                   RAE    219                                 4.503%
                   MFN    1027        55.64%
                          2027        44.36%                  1.168%
                   GSC    958                                  .584%
                   ANT    51                                   .876%
                   CFP    314                                  .730%
                   AEG    991                                 1.751%
                   SAM    727                                 1.459%
                   HLM    529                                  .876%
                   AFB    623                                 2.919%
                   BAR    990                                  .438%
                  CNA International Reinsurance Co., Ltd.     4.379%
                  Sphere Drake Insurance PLC                  1.750%
                  Terra Nova Insurance Company Ltd.           3.500%
                  Unionamerica Insurance Company, Ltd.        4.250%
                                                             ------ 
                                  United Kingdom Total       75.00%

                                  Domestic Total              5.00%
                                  Foreign Total              95.00%
                                                             ----- 
                                  Grand Total               100.00%
                                                            ====== 
</TABLE>

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This Cover Note is to confirm the terms and conditions which have been
negotiated between Willcox Incorporated and the participating Reinsurers on your
behalf. We request that you review this Cover Note with regard to the specific
placement details and subscribing Reinsurers listed herein. In the event that
any of these details do not meet with your approval or security of the
subscribing Reinsurers does not meet with your requirements, please notify this
office immediately. If all is found to be in order please sign and return the
enclosed duplicate copy of this Cover Note for completion of our files.



-------------------------------------
Signature


--------------------------------------
Date


                                         Willcox Incorporated


                                         By [SIG]
                                           -------------------------------
                                           Executive Vice President




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                         LOSS FUNDING - INCLUDING IBNR

               THIS IS APPLICABLE TO NON-ADMITTED REINSURERS ONLY


After consultation with their outside Actuaries, Tillinghast, Nelson & Warren
Inc., S.C.P.I.E. intends to use the following IBNR factors applied to Gross
Reinsurance Premiums for 1997 Letter of Credit Funding purposes applicable to
Non-Admitted Reinsurers only:

<TABLE>
<CAPTION>
                                           IBNR
         Period                            Factor
         ------                            ------
         <S>                              <C>
         Current Year                      97.00% 
         First Development Year            40.00%
         Second Development Year           17.00%
         Third Development Year             7.00%
         Fourth Development Year &         
         Subsequent                         2.00%
</TABLE>


The Letter of Credit Funding requirement for IBNR will be net of any Specific
Case Base Loss Reserves. Therefore, the factors outlined above represent the
ceiling for the sum of Specific Case Base Loss Reserves and IBNR. Further, a cap
of five times the Gross Reinsurance Premium will apply as the Lifetime IBNR
Maximum for each Treaty Year.




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