<PAGE>

                                                                   EXHIBIT 10.55

                            SCPIE INDEMNITY COMPANY
                AMERICAN HEALTHCARE SPECIALTY INSURANCE COMPANY
                     AMERICAN HEALTHCARE INDEMNITY COMPANY


                         FIRST CASUALTY EXCESS OF LOSS
                             REINSURANCE AGREEMENT

                          EFFECTIVE: January 1, 1999

   ARTICLE                         SUBJECT                          PAGE(S)
-------------    ----------------------------------------------   -----------
                   Preamble                                            1
      1            Business Reinsured                                  1
      2            Cover                                               1
      3            Term                                                1
      4            Territory                                           2
      5            Exclusions                                          2
      6            Premium and Reports                                 2
      7            Reinstatement                                       3
      8            Profit Commission                                   3
      9            Definitions                                         4
      10           Net Retained Lines                                  5
      11           Currency                                            5
      12           Loss Funding                                        5
      13           Special Funding                                     6
      14           Taxes                                               7
      15           Notice of Loss and Loss Settlements                 7
      16           Excess of Policy Limits                             8
      17           Extra Contractual Obligations                       8
      18           Delay, Omission or Error                            9
      19           Inspection                                          9
      20           Arbitration                                         9
      21           Service Of Suit                                     9
      22           Insolvency                                          9
      23           Confidentiality                                    10
      24           Commutation                                        10
      25           Intermediary                                       10
      26           Participation                                      11
<PAGE>

              FIRST CASUALTY EXCESS OF LOSS REINSURANCE AGREEMENT


This Agreement is made and entered into by and between SCPIE INDEMNITY COMPANY,
AMERICAN HEALTHCARE SPECIALTY INSURANCE COMPANY, AMERICAN HEALTHCARE INDEMNITY
COMPANY, for themselves and on behalf of each member and affiliated insurance
company of THE SCPIE COMPANIES, Los Angeles, California, that now or in the
future underwrites and/or assumes business covered by this Agreement
(hereinafter together called the "Company") and the Reinsurer specifically
identified on the signature page of this Agreement (hereinafter called the
"Reinsurer").


                                   ARTICLE 1
                                   ---------

BUSINESS REINSURED
------------------

A.   This Agreement is to indemnify the Company in respect of the net excess
     liability as a result of any loss or losses as described in paragraph B, of
     this article, under any Policies classified by the Company as Physicians
     and Surgeons Comprehensive Professional Liability and Personal Umbrella
     business in force, written or renewed during the term of this Agreement by
     Poe & Brown, Inc., Tampa, Florida, subject to the terms and conditions
     herein contained.

B.   For purposes of determining the attachment of the Reinsurer's liability
     hereunder as respects any one Loss Occurrence, 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
     circumstances is notified to the Company during the term of this Agreement
     shall be covered hereunder.  The date of a loss hereunder shall be the
     earliest date within the term of this Agreement, that the Company has
     received first notice of claim or circumstance.


                                   ARTICLE 2
                                   ---------

COVER
-----

The Reinsurer will be liable in respect of each and every Loss Occurrence,
irrespective of the number and kinds of Policies involved, for the Ultimate Net
Loss over and above an initial Ultimate Net Loss of $1,000,000 each and every
Loss Occurrence, subject to a limit of liability to the Reinsurer of $1,000,000
each and every Loss Occurrence.


                                   ARTICLE 3
                                   ---------

TERM
----

This Agreement shall become effective at 12:01 a.m., Eastern Standard Time,
January 1, 1999, and shall remain in full force and effect for 12 months,
expiring 12:01 a.m., Eastern Standard Time, January 1, 2000.

Upon expiration of this Agreement, at the option of the Company, the Reinsurer
will continue to cover all Policies coming within the scope of this Agreement,
until the natural expiration of such Policies, but in no event longer than 12
months from the date of expiration of this Agreement, subject to an additional
reinsurance premium equal to 50% of the reinsurance premium for the term of this
Agreement.

                                                                          Page 1
<PAGE>

                                   ARTICLE 4
                                   ---------

TERRITORY
---------

This Agreement will cover wherever the Company's Policies cover.


                                   ARTICLE 5
                                   ---------

EXCLUSIONS
----------

This Agreement does not cover:

1.   Business excluded by the attached Nuclear Incident Exclusion Clauses:

     a.   Nuclear Incident Exclusion Clause - Liability - Reinsurance - U.S.A.,
          No. 08-31.1.

     b.   Nuclear Incident Exclusion Clause - Liability - Reinsurance - Canada,
          No. 08-32.1.

2.   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 guarantee fund,
     insolvency 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.

3.   Pools, associations and syndicates.


                                   ARTICLE 6
                                   ---------

PREMIUM AND REPORTS
-------------------

Within 60 days following the end of each calendar quarter, the Company will
report to the Reinsurer the Gross Net Earned Premium Income hereunder for the
quarter.  With such report the Company will remit the reinsurance premium for
this Agreement, calculated at a rate of 7.25% multiplied by the Company's Gross
Net Earned Premium Income.  However, the first quarterly payment is due no later
than June 30, 1999.

Within 60 days following expiration of this Agreement, the Company will report
to the Reinsurer any other information which the Reinsurer may require to
prepare its Annual Statement that is reasonably available to the Company.


                                   ARTICLE 7
                                   ---------

REINSTATEMENT
-------------

Loss payments under this Agreement will reduce the limit of coverage afforded by
the amounts paid, but the limit of coverage will be reinstated from the time of
the occurrence of the loss as follows:

                                                                          Page 2
<PAGE>

A.   As respects reinstatement of the first $1,000,000 in limit, the
     reinstatement shall be free.

B.   As respects reinstatement of the second, third, fourth and fifth $1,000,000
     in limit, the Company agrees to pay an additional premium calculated at pro
     rata of 25% of the Reinsurer's premium for the term of this Agreement,
     being pro rata only as to the fraction of the face value of this Agreement
     (i.e., the fraction of $1,000,000) so reinstated.

C.   As respects reinstatement of the sixth, seventh, eighth, ninth, tenth,
     eleventh and twelfth $1,000,000 in limit, the reinstatement shall be free.

Nevertheless, the Reinsurer's liability hereunder shall never exceed $1,000,000
in respect of any one Loss Occurrence and, subject to the limit in respect of
any one Loss Occurrence, shall be further limited to $13,000,000 during the term
of this Agreement by reason of any and all claims arising hereunder.


                                   ARTICLE 8
                                   ---------

PROFIT COMMISSION
-----------------

A profit commission calculation will be prepared by the Company in accordance
with the following, and a profit commission, if any, paid to the Company by the
Reinsurer.

A.   Income
     ------

     The Reinsurer's earned premium for the term of this Agreement.

B.   Outgo
     -----

     1.   Losses and loss adjustment expense paid by the Reinsurer on Claims
          Made during the term of this Agreement; plus

     2.   The outstanding reserve of the Reinsurer on Claims Made during the
          term of this Agreement; plus

     3.   The Reinsurer's expense allowance of 25% of premium as in A. above;
          plus

     4.   The Reinsurer's deficit, if any, from the previous profit commission
          statement.

The profit commission will be 50.0% of the amount by which Income exceeds Outgo.

Should Outgo exceed Income, the difference will be considered as the Reinsurer's
deficit and carried into ensuing years' calculations.

The first adjustment of Profit Commission shall be as of December 31, 2001 and
adjusted annually thereafter until all losses are adjusted or commuted.

                                                                          Page 3
<PAGE>

                                   ARTICLE 9
                                   ---------

DEFINITIONS
-----------

A.   The term "Ultimate Net Loss" as used in this Agreement shall mean the
     actual loss (including 80% of any Extra Contractual Obligation and 100% of
     any loss in excess of Policy limits as defined in the EXTRA CONTRACTUAL
     OBLIGATIONS ARTICLE and the EXCESS OF POLICY LIMITS ARTICLE herein) paid by
     the Company or for which the Company becomes liable to pay (such loss to
     include any expenses that are included within the Policy limit and interest
     accrued prior to judgment when such interest is made part of the judgment,
     but to exclude all other interest and expenses which will be pro rated in
     accordance with the NOTICE OF LOSS AND LOSS SETTLEMENTS ARTICLE), but
     salvages and all recoveries, including recoveries under all reinsurances
     which inure to the benefit of this Agreement (whether recovered or not),
     shall be first deducted from such loss to arrive at the amount of liability
     attaching hereunder.

     All salvages, recoveries or payments recovered or received subsequent to
     loss settlement hereunder shall be applied as if recovered or received
     prior to the aforesaid settlement, and all necessary adjustments shall be
     made by the parties hereto.

     For purposes of this definition, the phrase "becomes liable to pay" shall
     mean the existence of a judgment which the Company does not intend to
     appeal, or a release has been obtained by the Company, or the Company has
     accepted a proof of loss.

     Nothing in this clause shall be construed to mean that losses are not
     recoverable hereunder until the Company's Ultimate Net Loss has been
     ascertained.

B.   The term "Loss Occurrence" as used in this Agreement shall mean any one
     disaster or casualty or accident or loss or series of disasters or
     casualties or accidents or losses arising out of or caused by one event.

     The parties to this Agreement recognize that a Loss Occurrence, as defined
     herein, may involve multiple Policies and that by reason of the manner in
     which losses are ascribed, such as losses occurring during, Claims Made,
     and Losses Discovered, a portion of the Loss Occurrence may be ascribed to
     this Agreement and to other reinsurances covering on substantially the same
     basis.

     In such event, but only when this Agreement does not specifically prescribe
     another method of handling, the Company's retention and the Reinsurer's
     limit of liability for the Loss Occurrence shall be proportionate, with the
     amount of Ultimate Net Loss to be retained by the Company under this
     Agreement being reduced to that percentage which the Company's settled
     losses attaching to this Agreement bear to the total of all the Company's
     settled losses contributing to the same Loss Occurrence.  The Reinsurer's
     liability shall be arrived at in the same manner.

C.   The term "Gross Net Earned Premium Income" as used in this Agreement shall
     mean gross earned premium income on business the subject of this Agreement
     less earned premium income paid for reinsurances, recoveries under which
     would inure to the benefit of this Agreement.

D.   The term "Policy" as used in this Agreement shall mean any binder, policy,
     or contract of insurance or reinsurance issued, accepted or held covered
     provisionally or otherwise, by or on behalf of the Company.

                                                                          Page 4
<PAGE>

                                  ARTICLE 10
                                  ----------

NET RETAINED LINES
------------------

This Agreement applies only to that portion of any insurances or reinsurances
covered by this Agreement which the Company retains net for its own account, and
in calculating the amount of any loss hereunder and also in computing the amount
in excess of which this Agreement attaches, only loss or losses in respect of
that portion of any insurances or reinsurances which the Company retains net for
its own account shall be included, it being understood and agreed that 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 reinsurers, whether specific or general, any amounts which may have
become due from them whether such inability arises from the insolvency of such
other reinsurers or otherwise.


                                  ARTICLE 11
                                  ----------

CURRENCY
--------

The currency to be used for all purposes of this Agreement shall be United
States of America currency.


                                  ARTICLE 12
                                  ----------

LOSS FUNDING
------------

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

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 to set up by law it will forward to the Reinsurer a statement
showing the proportion of such loss reserves which is applicable to them.

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 chosen by the Reinsurer and acceptable to the appropriate insurance
authorities, in an amount equal to the Reinsurer's proportion of the loss
reserves in respect of known outstanding losses that have been reported to the
Reinsurer, allocated loss expenses relating thereto and Incurred But Not
Reported loss and loss expense as shown in the statement prepared by the
Company.

The Letter of Credit shall be "evergreen" and shall be issued for a period of
not less than one year, and shall be automatically extended for one year from
its date of expiration or any future expiration date unless thirty (30) days
prior to any expiration date, the bank shall notify the Company by certified or
registered mail that it elects not to consider the Letter of Credit extended for
any additional period.

The bank chosen for the issuance of the Letter of Credit 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 5
<PAGE>

At annual intervals, or more frequently as agreed but never more frequently than
semiannually, 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.  If the
statement shows that the Reinsurer's share of such losses and allocated loss
expenses, and Incurred But Not Reported loss and loss expense, 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, and Incurred But Not Reported loss and loss expense, relating thereto
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.

With regard to Incurred But Not Reported losses, after consultation with their
outside Actuaries, Tillinghast, Nelson & Warren Inc., the Company intends to use
the following IBNR factors applied to gross reinsurance premiums hereunder for
purposes of this article:

               Period                                       IBNR Factor
               --------------------------------------------------------
               Current Year                                     97.0%
               First Development Year                           40.0%
               Second Development Year                          17.0%
               Third Development Year                            7.0%
               Fourth Development Year & Subsequent Years        2.0%

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 maximum loss
reserve, being the sum of case reserves plus IBNR, for which the Reinsurer is
required to provide funding pursuant to this article.


                                  ARTICLE 13
                                  ----------

SPECIAL FUNDING
---------------

(This article is only applicable to those Reinsurers who are not subject to the
LOSS FUNDING ARTICLE).

A.   If during the period of this Agreement or thereafter, should the Reinsurer
     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 related thereto within 30 days from the date of receipt
     by the Reinsurer of written demand by the Company to so fund.  Such demand
     shall not be made unless balances are 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 LOSS
     FUNDING ARTICLE in respect of Letters of Credit shall apply.

C.   The phrase "any loss payable" as used in paragraph A., above shall mean any
     loss subject to recovery under this Agreement, if the Reinsurer has not
     disputed said loss in writing prior to

                                                                          Page 6
<PAGE>

     the due date for payment, i.e., (1) the Reinsurer has not denied the
     validity of coverage or (2) the litigation or arbitration between the
     Reinsurer and the Company related to the loss has not commenced.

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, then the payment due date as defined in this
     Agreement 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 an acceptable manner.


                                  ARTICLE 14
                                  ----------

TAXES
-----

The Company will be liable for taxes (except Federal Excise Tax) on premiums
reported to the Reinsurer hereunder.

Federal Excise Tax applies only to those Reinsurers, excepting Underwriters at
Lloyd's, London and other Reinsurers exempt from the Federal Excise Tax, who are
domiciled outside the United States of America.

The Reinsurer has agreed to allow for the purpose of paying the Federal Excise
Tax 1% of the premium payable hereon to the extent such premium is subject to
Federal Excise Tax.

In the event of any return of premium becoming due hereunder, the Reinsurer will
deduct 1% from the amount of the return, and the Company or its agent should
take steps to recover the Tax from the U.S. Government.


                                  ARTICLE 15
                                  ----------

NOTICE OF LOSS AND LOSS SETTLEMENTS
-----------------------------------

The Company will advise the Reinsurer promptly of all claims which in the
opinion of the Company may involve the Reinsurer and of all subsequent
developments on these claims which may materially affect the position of the
Reinsurer.

The Reinsurer agrees to abide by the loss settlements of the Company, provided
that retroactive extension of Policy terms or coverages made voluntarily by the
Company and not in response to court decisions (whether such court decision is
against the Company or other companies affording the same or similar coverages)
will not be covered under this Agreement.

When so requested the Company will afford the Reinsurer an opportunity to be
associated with the Company, at the expense of the Reinsurer, in the defense of
any claim or suit or proceeding involving this reinsurance and the Company will
cooperate in every respect in the defense of such claim, suit or proceeding.

The Reinsurer will pay its share of loss settlements immediately upon receipt of
proof of loss from the Company.

                                                                          Page 7
<PAGE>

Unless otherwise provided for in the definition of Ultimate Net Loss, all
investigation, adjustment, legal expense, (including interest other than
interest accrued prior to judgment which is made part of the judgment), and
claim-specific declaratory judgment expenses, incurred by the Company (except
office expenses and salaries of officials and employees not classified as loss
adjusters) will be divided between the Company and the Reinsurer in proportion
to their respective shares of the Ultimate Net Loss.  Such expenses will be in
addition to the limits stated in the COVER ARTICLE.  However, if a verdict,
judgment or award is reversed or reduced the Company and the Reinsurer will
share expenses incurred in securing such reversal or reduction in the proportion
that each benefits from the reversal or reduction.  Expenses incurred up to the
time of the original verdict, judgment or award will be shared in proportion to
what would have been each party's share.

The phrase "claim-specific declaratory judgment expenses," as used in this
Agreement will mean all expenses incurred by the Company in connection with
declaratory judgment actions brought to determine the Company's defense and/or
indemnification obligations that are allocable to specific Policies and claims
subject to this Agreement.  Declaratory judgment expenses will be deemed to have
been incurred by the Company on the date of the original loss (if any) giving
rise to the declaratory judgment action.


                                  ARTICLE 16
                                  ----------

EXCESS OF POLICY LIMITS
-----------------------

In the event the Ultimate Net Loss includes an amount in excess of the Company's
Policy limit, such amount, as provided for in the definition of Ultimate Net
Loss, in excess of the Company's Policy limit shall be added to the amount of
the Company's Policy limit, and the sum thereof shall be covered hereunder,
subject to the Reinsurer's limit of liability appearing in the COVER ARTICLE of
this Agreement.

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.

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 17
                                  ----------

EXTRA CONTRACTUAL OBLIGATIONS
-----------------------------

This Agreement shall protect the Company, subject to the Reinsurer's limit of
liability appearing in the COVER ARTICLE of this Agreement, where the loss
includes any Extra Contractual Obligations as provided for in the definition of
Ultimate Net Loss.  "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 in the
preparation or prosecution of an appeal consequent upon such action.

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 loss.

                                                                          Page 8
<PAGE>

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 18
                                  ----------

DELAY, OMISSION OR ERROR
------------------------

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, providing such delay, omission or
error is rectified upon discovery.


                                  ARTICLE 19
                                  ----------

INSPECTION
----------

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
any reinsurance hereunder or claims in connection herewith.


                                  ARTICLE 20
                                  ----------

ARBITRATION
-----------

Any irreconcilable dispute between the parties to this Agreement will be
arbitrated in Los Angeles, California, in accordance with the attached
Arbitration Clause No. 22-01.1.


                                  ARTICLE 21
                                  ----------

SERVICE OF SUIT
---------------

The attached Service of Suit Clause No. 20-03.6 - California will apply to this
Agreement.


                                  ARTICLE 22
                                  ----------

INSOLVENCY
----------

In the event of the insolvency of the Company, the attached Insolvency Clause
No. 21-05.2 California 8/93 will apply.

In the event of the insolvency of any company or companies included in the
designation of "Company," this clause will apply only to the insolvent company
or companies.

                                                                          Page 9
<PAGE>

                                  ARTICLE 23
                                  ----------

CONFIDENTIALITY
---------------

All claim information communicated between the Company and the Reinsurer is
intended to further the joint interests of the Company and the Reinsurer in the
business covered by and related claims under this Agreement and will be
considered and will be treated by both the Company and the Reinsurer as
privileged and confidential.  Claim information will not be disclosed to any
other party other than (i) counsel retained by the Company in the defense of a
claim, (ii) retrocessionaire(s) of the Reinsurer whose interest likewise may be
affected by the claim or claims, (iii) as directed by a lawful court order, (iv)
counsel retained by the Reinsurer, or (v) external accounting or compliance
auditors.  The Company and the Reinsurer will take all lawful measures necessary
or required to preserve the confidentiality of claim information received from
the Company.


                                  ARTICLE 24
                                  ----------

COMMUTATION
-----------

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


                                  ARTICLE 25
                                  ----------

INTERMEDIARY
------------

Sedgwick Re, Inc. is hereby recognized as the Intermediary negotiating this
Agreement for all business hereunder.  All communications, including notices,
premiums, return premiums, commissions, taxes, losses, loss adjustment expenses,
salvages and loss settlements relating thereto shall be transmitted to the
Reinsurer or the Company through Sedgwick Re, Inc., 1501 Fourth Avenue, Suite
1400, Seattle, Washington 98101.  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 only to constitute payment to the
Company to the extent that such payments are actually received by the Company.

                                                                         Page 10
<PAGE>

                                  ARTICLE 26
                                  ----------

PARTICIPATION:  FIRST CASUALTY EXCESS OF LOSS REINSURANCE AGREEMENT
-------------
                EFFECTIVE: January 1, 1999

This Agreement obligates the Reinsurer for _______% of the interests and
liabilities set forth under this Agreement.

The participation of the Reinsurer in the interests and liabilities of this
Agreement shall be separate and apart from the participations of other
reinsurers and shall not be joint with those of other reinsurers, and the
Reinsurer shall in no event participate in the interests and liabilities of
other reinsurers.

IN WITNESS WHEREOF, the parties hereto, by their authorized representatives,
have executed this Agreement as of the following dates:


                           PARTICIPATING REINISURERS
     J&H Marsh & McLennan (Services) Ltd.
       Lloyd's, London
          Syndicate No. 1007 RCV                                        8.7500%
          Syndicate No. 1003 SJC                                        1.9250%
          Syndicate No. 2003 SJC                                        6.8250%
          Syndicate No. 0435 DPM                                        4.9342%
          Syndicate No. 0205 HGJ                                        1.9737%
          Syndicate No. 0376 JHV                                        2.3684%
          Syndicate No. 1212 SJB                                        1.9737%
          Syndicate No. 1223 MEL                                        1.3816%
          Syndicate No. 1241 CAR                                        2.9605%
       CNA International Reinsurance Company Limited                    0.9868%
       Odyssey Re (London) Limited                                      1.9737%
       Unionamerica Insurance Company Ltd.                              3.9474%
     J&H Marsh & McLennan (Services) Ltd.
       GIO Insurance Ltd., Trading as GIO Reinsurance                   5.0000%
     Hannover Re                                                       16.5000%
     Kemper Reinsurance Company                                         7.0000%
     Odyssey Reinsurance Corporation                                    5.0000%
     PMA Reinsurance Corporation                                        7.0000%
     Reliance Reinsurance Corporation
       Reliance Insurance Company                                       7.0000%
     Toa-Re Insurance Company of America                                5.0000%
     Zurich Reinsurance (North America), Inc.                           7.5000%
                                                                        -------

      TOTAL:                                                             100.00%

Upon completion of Reinsurers' signing, fully executed signature pages will be
forwarded to you for the completion of your file.

                                                                         Page 11
<PAGE>

and in Los Angeles, California, this  day of             , 2000.

                              SCPIE INDEMNITY COMPANY,
                              AMERICAN HEALTHCARE SPECIALTY INSURANCE COMPANY,
                              AMERICAN HEALTHCARE INDEMNITY COMPANY,
                              for themselves and on behalf of each member
                              and affiliated insurance company of
                              THE SCPIE COMPANIES


                              By_________________________________________
                                               (signature)

                              ___________________________________________
                                                  (name)

                              ___________________________________________
                                                 (title)


              FIRST CASUALTY EXCESS OF LOSS REINSURANCE AGREEMENT

                                   issued to

                            SCPIE INDEMNITY COMPANY
                AMERICAN HEALTHCARE SPECIALTY INSURANCE COMPANY
                     AMERICAN HEALTHCARE INDEMNITY COMPANY

                                                                         Page 12
<PAGE>

      NUCLEAR INCIDENT EXCLUSION CLAUSE - LIABILITY - REINSURANCE - U.S.A.

(Wherever the word "Reassured" appears in this clause, it shall be deemed to
read "Reassured," "Reinsured," "Company," or whatever other word is employed
throughout the text of the reinsurance agreement to which this clause is
attached to designate the company or companies reinsured.)

   (1)  This reinsurance does not cover any loss or liability accruing to the
Reassured as a member of, or subscriber to, any association of insurers or
reinsurers formed for the purpose of covering nuclear energy risks or as a
direct or indirect reinsurer of any such member, subscriber or association.

   (2)  Without in any way restricting the operation of paragraph (1) of this
Clause it is understood and agreed that for all purposes of this reinsurance all
the original policies of the Reassured (new, renewal and replacement) of the
classes specified in Clause II of this paragraph (2) from the time specified in
Clause III in this paragraph (2) shall be deemed to include the following
provision (specified as the Limited Exclusion Provision):

 Limited Exclusion Provision.*

   I.   It is agreed that the policy does not apply under any liability
        coverage,

<TABLE>
        <S>                                                    <C>
             injury, sickness, disease, death or destruction
        to {                                                   with respect to which an insured under the policy is
             bodily injury or property damage                  also an insured under a nuclear
</TABLE>

        energy liability policy issued by Nuclear Energy Liability Insurance
        Association, Mutual Atomic Energy Liability Underwriters or Nuclear
        Insurance Association of Canada, or would be an insured under any such
        policy but for its termination upon exhaustion of its limit of
        liability.

   II.  Family Automobile Policies (liability only), Special Automobile Policies
        (private passenger automobiles, liability only), Farmers Comprehensive
        Personal Liability Policies (liability only), Comprehensive Personal
        Liability Policies (liability only) or policies of a similar nature; and
        the liability portion of combination forms related to the four classes
        of policies stated above, such as the Comprehensive Dwelling Policy and
        the applicable types of Homeowners Policies.

   III. The inception dates and thereafter of all original policies as described
        in II above, whether new, renewal or replacement, being policies which
        either

        (a)  become effective on or after 1st May, 1960, or

        (b)  become effective before that date and contain the Limited Exclusion
             Provision set out above; provided this paragraph (2) shall not be
             applicable to Family Automobile Policies, Special Automobile
             Policies, or policies or combination policies of a similar nature,
             issued by the Reassured on New York risks, until 90 days following
             approval of the Limited Exclusion Provision by the Governmental
             Authority having jurisdiction thereof.

   (3)  Except for those classes of policies specified in Clause II of paragraph
(2) and without in any way restricting the operation of paragraph (1) of this
Clause, it is understood and agreed that for all purposes of this reinsurance
the original liability policies of the Reassured (new, renewal and replacement)
affording the following coverages:

        Owners, Landlords and Tenants Liability, Contractual Liability, Elevator
        Liability, Owners or Contractors (including railroad) Protective
        Liability, Manufacturers and Contractors Liability, Product Liability,
        Professional and Malpractice Liability, Storekeepers Liability, Garage
        Liability, Automobile Liability (including Massachusetts Motor Vehicle
        or Garage Liability)

shall be deemed to include, with respect to such coverages, from the time
specified in Clause V of this paragraph (3), the following provision (specified
as the Broad Exclusion Provision):

 Broad Exclusion Provision.*

 It is agreed that the policy does not apply:

<TABLE>
<S>                                         <C>
                                            injury, sickness, disease, death or destruction
   I.  Under any Liability Coverage, to  {
                                            bodily injury or property damage
</TABLE>

   (a)  with respect to which an insured under the policy is also an insured
        under a nuclear energy liability policy issued by Nuclear Energy
        Liability Insurance Association, Mutual Atomic Energy Liability
        Underwriters or Nuclear Insurance Association of Canada, or would be an
        insured under any such policy but for its termination upon exhaustion of
        its limit of liability; or

    (b) resulting from the hazardous properties of nuclear material and with
        respect to which (1) any person or organization is required to maintain
        financial protection pursuant to the Atomic Energy Act of 1954, or any
        law amendatory thereof, or (2) the insured is, or had this policy not
        been issued would be, entitled to indemnity from the United States of
        America, or any agency thereof, under any agreement entered into by the
        United States of America, or any agency thereof, with any person or
        organization.

   II.  Under any Medical Payments Coverage, or under any Supplementary Payments
        Provision relating

<TABLE>
        <S>                                          <C>
              Immediate medical or surgical relief
        to  {                                        to expenses incurred with respect
              first aid,
</TABLE>

                                                                          Page 1
<PAGE>

<TABLE>
        <S>                                           <C>
          bodily injury, sickness, disease or death
     to {                                             resulting from the hazardous properties of nuclear material and
          bodily injury
</TABLE>

     arising out of the operation of a nuclear facility by any person or
     organization.

<TABLE>
     <S>                                <C>
                                        injury, sickness, disease, death or destruction
III. Under any Liability Coverage, to {
                                        bodily injury or property damage
</TABLE>

     resulting from the hazardous properties of nuclear material, if

     (a) the nuclear material (1) is at any nuclear facility owned by, or
         operated by or on behalf of, an insured or (2) has been discharged or
         dispersed therefrom;

     (b) the nuclear material is contained in spent fuel or waste at any time
         possessed, handled, used, processed, stored, transported or disposed of
         by or on behalf of an insured; or

<TABLE>
     <S>                                                         <C>
               Injury, sickness, disease, death or destruction
     (c) the {                                                   arises out of the furnishing by an insured of services,
               bodily injury or property damage
</TABLE>

         materials, parts or equipment in connection with the planning,
         construction, maintenance, operation or use of any nuclear facility,
         but if such facility is located within the United States of America,
         its territories or possessions or Canada, this exclusion (c) applies
         only

              Injury to or destruction of property at such nuclear facility.
         to {
              Property damage to such nuclear facility and any property thereat.

   IV.  As used in this endorsement:

        "hazardous properties" include radioactive, toxic or explosive
        properties; "nuclear material" means source material, special nuclear
        material or byproduct material; "source material," "special nuclear
        material," and "byproduct material" have the meanings given them in the
        Atomic Energy Act of 1954 or in any law amendatory thereof; "spent fuel"
        means any fuel element or fuel component, solid or liquid, which has
        been used or exposed to radiation in a nuclear reactor; "waste" means
        any waste material (1) containing byproduct material other than tailings
        or wastes produced by the extraction or concentration of uranium or
        thorium from any ore processed primarily for its source material
        content, and (2) resulting from the operation by any person or
        organization of any nuclear facility included under the first two
        paragraphs of the definition of nuclear facility; "nuclear facility"
        means

   (a)  any nuclear reactor,

   (b)  any equipment or device designed or used for (1) separating the isotopes
        of uranium or plutonium, (2) processing or utilizing spent fuel, or (3)
        handling, processing or packaging waste,

   (c)  any equipment or device used for the processing, fabricating or alloying
        of special nuclear material if at any time the total amount of such
        material in the custody of the insured at the premises where such
        equipment or device is located consists of or contains more than 25
        grams of plutonium or uranium 233 or any combination thereof, or more
        than 250 grams of uranium 235,

   (d)  any structure, basin, excavation, premises or place prepared or used for
        the storage or disposal of waste,

   and includes the site on which any of the foregoing is located, all
   operations conducted on such site and all premises used for such operations;
   "nuclear reactor" means any apparatus designed or used to sustain nuclear
   fission in a self-supporting chain reaction or to contain a critical mass of
   fissionable material;

   With respect to injury to or destruction of property, the word "injury" or
   destruction
   "property damage" includes all forms of radioactive contamination of
   property.
   includes all forms of radioactive contamination of property.

V. The inception dates and thereafter of all original policies affording
   coverages specified in this paragraph (3), whether new, renewal or
   replacement, being policies which become effective on or after 1st May, 1960,
   provided this paragraph (3) shall not be applicable to

   (i)  Garage and Automobile Policies issued by the Reassured on New York
        risks, or

   (ii) statutory liability insurance required under Chapter 90, General Laws
        of Massachusetts,

   until 90 days following approval of the Broad Exclusion Provision by the
   Governmental Authority having jurisdiction thereof.

   (4) Without in any way restricting the operation of paragraph (1) of this
Clause, it is understood and agreed that paragraphs (2) and (3) above are not
applicable to original liability policies of the Reassured in Canada and that
with respect to such policies this Clause shall be deemed to include the Nuclear
Energy Liability Exclusion Provisions adopted by the Canadian Underwriters'
Association or the Independent Insurance Conference of Canada.

--------------------------------------------------------------------------------
  * NOTE. The words printed in italics in the Limited Exclusion Provision and in
the Broad Exclusion Provision shall apply only in relation to original liability
policies which include a Limited Exclusion Provision or a Broad Exclusion
Provision containing those words.
--------------------------------------------------------------------------------

                                                                          Page 2
<PAGE>

      NUCLEAR INCIDENT EXCLUSION CLAUSE - LIABILITY - REINSURANCE - CANADA

  1. This Agreement does not cover any loss or liability accruing to the Company
as a member of, or subscriber to, any association of insurers or reinsurers
formed for the purpose of covering nuclear energy risks or as a direct or
indirect reinsurer of any such member, subscriber or association.

  2. Without in any way restricting the operation of paragraph 1 of this clause
it is agreed that for all purposes of this Agreement all the original liability
contracts of the Company, whether new, renewal or replacement, of the following
classes, namely,

               Personal Liability.
               Farmers Liability.
               Storekeepers Liability.
which become effective on or after 31st December 1984, shall be deemed to
include, from their inception dates and thereafter, the following provision:-

  Limited Exclusion Provision.

     This Policy does not apply to bodily injury or property damage with respect
  to which the Insured is also insured under a contract of nuclear energy
  liability insurance (whether the Insured is unnamed in such contract and
  whether or not it is legally enforceable by the Insured) issued by the Nuclear
  Insurance Association of Canada or any other group or pool of insurers or
  would be an Insured under any such policy but for its termination upon
  exhaustion of its limits of liability.

     With respect to property, loss of use of such property shall be deemed to
be property damage.

  3. Without in any way restricting the operation of paragraph 1 of this clause
it is agreed that for all purposes of this Agreement all the original liability
contracts of the Company, whether new, renewal or replacement, of any class
whatsoever (other than Personal Liability, Farmers Liability, Storekeepers
Liability or Automobile Liability contracts), which become effective on or after
31st December 1984, shall be deemed to include, from their inception dates and
thereafter, the following provision of:-

  Broad Exclusion Provision.

     It is agreed that this Policy does not apply:
     (a) to liability imposed by or arising under the Nuclear Liability Act; nor
     (b) to bodily injury or property damage with respect to which an Insured
         under this Policy is also insured under a contract of nuclear energy
         liability insurance (whether the Insured is unnamed in such contract
         and whether or not it is legally enforceable by the Insured) issued by
         the Nuclear Insurance Association of Canada or any other insurer or
         group or pool of insurers or would be an Insured under any such policy
         but for its termination upon exhaustion of its limit of liability; nor
     (c) to bodily injury or property damage resulting directly or indirectly
         from the nuclear energy hazard arising from:
         (i)   the ownership, maintenance, operation or use of a nuclear
               facility by or on behalf of an Insured;
         (ii)  the furnishing by an Insured of services, materials, parts or
               equipment in connection with the planning, construction,
               maintenance, operation or use of any nuclear facility; and
         (iii) the possession, consumption, use, handling, disposal or
               transportation of fissionable substances, or of other radioactive
               material (except radioactive isotopes, away from a nuclear
               facility, which have reached the final stage of fabrication so as
               to be useable for any scientific, medical, agricultural,
               commercial or industrial purpose) used, distributed, handled or
               sold by an Insured.

     As used in this Policy:
     1. The term "nuclear energy hazard" means the radioactive, toxic,
        explosive, or other hazardous properties of radioactive material;
     2. The term "radioactive material" means uranium, thorium, plutonium,
        neptunium, their respective derivatives and compounds, radioactive
        isotopes of other elements and any other substances that the Atomic
        Energy Control Board may, by regulation, designate as being prescribed
        substances capable of releasing atomic energy, or as being requisite for
        the production, use or application of atomic energy;
     3. The term "nuclear facility" means:
        (a) any apparatus designed or used to sustain nuclear fission in a self-
            supporting chain reaction or to contain a critical mass of
            plutonium, thorium and uranium or any one or more of them;
        (b)  any equipment or device designed or used for (i) separating the
             isotopes of plutonium, thorium and uranium or any one or more of
             them, (ii) processing or utilizing spent fuel, or (iii) handling,
             processing or packaging waste;
        (c)  any equipment or device used for the processing, fabricating or
             alloying of plutonium, thorium or uranium enriched in the isotope
             uranium 233 or in the isotope uranium 235, or any one or more of
             them if at any time the total amount of such material in the
             custody of the Insured at the premises where such equipment or
             device is located consists of or contains more than 25 grams of
             plutonium or uranium 233 or any combination thereof, or more than
             250 grams of uranium 235;
        (d)  any structure, basin, excavation, premises or place prepared or
             used for the storage or disposal of waste radioactive material;

        and includes the site on which any of the foregoing is located, together
        with all operations conducted thereon and all premises used for such
        operations.

     4. The term "fissionable substance" means any prescribed substance that is,
        or from which can be obtained, a substance capable of releasing atomic
        energy by nuclear fission.
     5. With respect to property, loss of use of such property shall be deemed
        to be property damage.
<PAGE>

                              ARBITRATION CLAUSE


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 Lloyds, 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>

                                SERVICE OF SUIT


This Clause applies only to a reinsurer domiciled outside the United States of
America or should the Company be authorized to do business in the State of New
York, a reinsurer unauthorized in New York as respects suits instituted in New
York.

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 Street, Los Angeles, California 90017
or in the event the suit is instituted in New York State, Messrs. Mendes &
Mount, Three Park Avenue, New York, New York  10016 and that in any suit
instituted against the Reinsurer upon this Agreement, the Reinsurer will abide
by the final decision of such court or of any appellate court in the event of an
appeal.

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 a 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.

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 its true and lawful attorney upon whom may be served any lawful
process in any action, suit or proceeding instituted by or on behalf of the
Company or any beneficiary hereunder arising out of this Agreement, and hereby
designates the above-named as the person to whom the said officer is authorized
to mail such process or a true copy thereof.


Note:--  Wherever used herein the terms:

     "Company" shall be understood to mean "Company," "Reinsured," "Reassured"
     or whatever other term is used in the attached reinsurance Agreement to
     designate the reinsured company. "Agreement" shall be understood to mean
     "Contract," "Agreement," "Policy" or whatever other term is used to
     designate the attached reinsurance document.
<PAGE>

                               INSOLVENCY CLAUSE


In the event of the insolvency and the appointment of a conservator, liquidator
or statutory successor of the Company, reinsurance under this Agreement shall be
payable to such conservator, liquidator or statutory successor immediately upon
demand, with reasonable provision for verification, on the basis of claims
allowed against the insolvent Company by any court of competent jurisdiction or
by any conservator, liquidator or statutory successor of the Company having
authority to allow such claims, without diminution because of such insolvency or
because such conservator, liquidator 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 conservator, liquidator or statutory successor
except as provided by Section 4118(a) of the New York Insurance Law or except
when the Agreement specifically provides another payee of such reinsurance in
the event of the insolvency of the Company and when the Reinsurer with the
consent of the direct insured or insureds has assumed such Policy obligations of
the Company as direct obligations of the Reinsurer to the payees under such
Policies and in substitution for the obligations of the Company to such payees.

It is agreed, however, that the conservator, liquidator or statutory successor
of the insolvent Company shall give written notice to the Reinsurer of the
pendency of a claim against the insolvent Company 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 when
such claim is to be adjudicated, any defense or defenses which it may deem
available to the Company or its conservator or liquidator or statutory
successor.  The expense thus incurred by the Reinsurer shall be chargeable,
subject to court approval, against the insolvent Company as part of the expense
of liquidation to the extent of a proportionate share of the benefit which may
accrue to the Company solely as a result of the defense undertaken by the
Reinsurer.

When two or more reinsurers are involved in the same claim and a majority in
interest elect to interpose defense to such claim, the expense shall be
apportioned in accordance with the terms of this Agreement as though such
expense had been incurred by the insolvent Company.



Note:--  Wherever used herein the terms:

     "Company" shall be understood to mean "Company," "Reinsured," "Reassured"
     or whatever other term is used in the attached reinsurance Agreement to
     designate the reinsured Company. "Agreement" shall be understood to mean
     "Contract," "Agreement," "Policy" or whatever other term is used to
     designate the attached reinsurance document.