<PAGE>   1
                                                                   EXHIBIT 10.22

[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:                    THIRD 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.

                         In respect of recoveries made under Section A.1:

                         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.



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TERM:
(Continued)              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.

                         In respect of recoveries made under Section A.2:

                         The term "claims made" shall mean claims first reported
                         to the Reinsured during the period January 1, 1986 to
                         December 31, 1991 and first reported to Reinsurers
                         during the term of this Agreement.

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

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

LIMIT AND
RETENTION:               A.1.   $5,000,000 each and every loss in excess of
                                $5,000,000 each and every loss.

                         A.2.   $5,000,000 each and every loss in excess of
                                $5,000,000 each and every loss covering losses
                                which were first reported to the Company during
                                the period January 1, 1987 to December 31, 1991
                                and are first reported to the Reinsurers during
                                the term of this Agreement. The coverage
                                provided hereunder shall be no narrower nor
                                broader in scope than that which was provided to
                                the Company under their Third Excess of Loss
                                Reinsurance Agreement in force for the same
                                period (see attached Cover Note Nos. 01-87-0022,
                                01-88-0022, 01-89-0022, 01-90-0022, 01-91-0022).

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.



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<PAGE>   3

WARRANTY:
(Continued)              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:                 .333% of G.N.E.P.I.
(Eff. 1/1/97)
                         Deposit Premium:  $400,000, payable $100,000 quarterly.

                         Minimum - $400,000.

REINSTATEMENT(S):        A.1.   One in all at the option of the Company computed
                                Pro Rata as to amount 100% as respects 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.

                                                    PLUS

                         A.2.    In the event of a paid loss arising under this
                                 Section, additional to the reinstatement
                                 premium payable above, a further reinstatement
                                 premium shall be payable to be calculated at
                                 pro rata as respects amount/100% as respects
                                 premium based on annual premium of $125,000.

                                 It is understood and agreed that the payment of
                                 reinstatement premiums arising from losses
                                 recoverable under Section A.2. above shall be
                                 mandatory and not at the option of the Company.

                         Maximum Annual Aggregate Amount Recoverable under (A.)
                         1 and 2 combined is $10,000,000 in all.

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 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.

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<PAGE>   4

ATTACHMENT OF
LIABILITY:
(Continued)           (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>
<S>                    <C>                                           <C>  
REINSURERS
HEREON:                Domestic:
                       Transatlantic Reinsurance Company               7.50%
                       Travelers Indemnity Company                     5.00%
                                                                       ---- 
                                                  Domestic Total      12.50%
                     
                       Australia:
                       Through Australian Independent Reinsurance
                       Services:
                         GIO Insurance Ltd.
                           trading as:
                           GIO Reinsurance                             7.50%
                                                                       ---- 
                                                  Australia Total      7.50%
                     
                       Germany:
                       Hannover Ruckversicherungs AG                   7.50%
                                                                       ---- 
                                                  Germany Total        7.50%
</TABLE>



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<PAGE>   5

<TABLE>
<CAPTION>
REINSURERS
HEREON:
(Continued)    United Kingdom:
               Through Willcox Johnson & Higgins Reinsurance Brokers, Ltd.
                 London, England
               Underwriters at Lloyd's
               <S>     <C>           <C>                     <C>   
                 SVH    1007                                  6.716%
                 DPM    435                                   6.716%
                 JHV    376           67.89%
                        2376          32.11%                  2.578%
                 ROS    227           83.00%
                        2227          17.00%                  1.163%
                 BFC    780                                   1.940%
                 BHB    1215                                  3.000%
                 SJB    1212                                  4.728%
                 GNR    570                                   2.328%
                 DJN    1096                                  1.164%
                 HGJ    205                                   5.478%
                 WEH    362                                   5.623%
                 RAE    219                                   4.656%
                 MFN    1027          55.64%
                        2027          44.36%                  1.552%
                 GSC    958                                    .775%
                 ANT    51                                     .776%
                 CFP    314                                   1.552%
                 AEG    991                                   1.702%
                 SAM    727                                   2.328%
                 HLM    529                                   2.039%
               CNA International Reinsurance Co., Ltd.        4.478%
               Sphere Drake Insurance PLC                     2.328%
               Unionamerica Insurance Company, Ltd.           8.880%
                                                             ------ 
                                   United Kingdom Total       72.50%

                                    Domestic Total            12.50%
                                    Foreign Total             87.50%
                                                             ------ 
                                    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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<PAGE>   7
                         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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