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                                                                   EXHIBIT 10.12

                       GRANITE REINSURANCE COMPANY LIMITED
                  /ACCEPTANCE CROP HAIL RETROCESSION AGREEMENT

      THIS RETROCESSION AGREEMENT ("Crop Hail Agreement") is made and entered
into as of May 23, 2001 by and between Acceptance Insurance Company, a Nebraska
domestic insurance company ("Acceptance") and Granite Reinsurance Company
Limited, a Barbados insurance company ("Granite").

                             W I T N E S S E T H :

      WHEREAS, affiliates of Acceptance and others have entered into a certain
Asset Purchase Agreement (the "Asset Purchase Agreement") dated as of May 23,
2001; and

      WHEREAS, in conjunction with the Asset Purchase Agreement, Acceptance and
others entered into a certain IGF/Acceptance Retrocession Agreement and an
IGF/Acceptance Quota Share Reinsurance Agreement, both dated as of May 23, 2001
and attached hereto ("Acceptance's Assumption Agreements"); and

      WHEREAS, subject to the terms and conditions set forth in this Crop Hail
Agreement, Acceptance desires to cede to Granite and desires to accept from
Acceptance and to reinsure 100% of all risks reinsured by Acceptance under
Acceptance's Assumption Agreements except MPCI risks reinsured by the Federal
Crop Insurance Corporation and located within the United States ("Reinsured
Contracts").

      NOW, THEREFORE, in consideration of the premises and the mutual promises
of the parties hereto, they hereby covenant and agree as follows:

                                   ARTICLE I

                                 EFFECTIVE TIME

      This Crop Hail Agreement shall be effective as of 12:01 a.m. Eastern
Standard Time ("Effective Time") on the date of the Closing as defined in the
Asset Purchase Agreement. If the Asset Purchase Agreement is terminated pursuant
to its terms and conditions, this Retrocession Agreement shall terminate
concurrently with the Asset Purchase Agreement and never shall be effective.

                                   ARTICLE II

                REINSURED OBLIGATIONS; REPRESENTATIONS OF PARTIES

      SECTION 2.01. DESCRIPTION OF REINSURED OBLIGATIONS. Subject to the
provisions of this Crop Hail Agreement, Acceptance hereby assigns, transfers,
sets over, cedes and reinsures to Granite, and Granite hereby reinsures on a
100% quota share basis from Acceptance, all liabilities and obligations for
losses associated with the Reinsured Obligations.

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      SECTION 2.02. REPRESENTATIONS. Granite represents, to the best of its
knowledge and belief, that as of the Effective Time:

            (a) Granite is a corporation duly organized and validly existing in
      good standing under the laws of Barbados. Granite has the corporate power
      and authority to carry on their business substantially as it is now being
      conducted.

            (b) Granite has the requisite corporate power and authority to take,
      and has taken, all corporate action necessary to execute and deliver this
      Crop Hail Agreement, and to consummate the transactions contemplated
      hereby. This Crop Hail Agreement has been validly executed and delivered
      by Granite, and is a valid and binding agreement, enforceable against
      Granite in accordance with its terms.

      SECTION 2.03. REPRESENTATIONS. Acceptance represents, to the best of its
knowledge and belief, that as of the Effective Time:

            (a) Acceptance is a corporation duly organized and validly existing
      in good standing under the laws of the State of Nebraska and is an
      authorized insurer in Nebraska and has the corporate power and authority
      to carry on its business substantially as it is now being conducted.

            (b) Acceptance has the requisite corporate power and authority and
      has taken all corporate action necessary to execute and deliver this
      Agreement and to consummate the transactions contemplated hereby. This
      Agreement has been validly executed and delivered and is a valid and
      binding agreement of Acceptance, enforceable against Acceptance in
      accordance with its terms.

      SECTION 2.04. QUOTA SHARE BASIS. The parties acknowledge and agree that
the reinsurance provided herein is on a 100% quota share basis. Granite agrees
to assume all obligations and liabilities of Acceptance under the Reinsured
Contracts, subject, however, to the same rights, offsets, counterclaims,
cross-actions and defenses that are or may be possessed by the parties. It is
expressly understood that no such offsets, counterclaims, cross-actions or
defenses are or shall be waived, but that the same are expressly preserved and
that the parties shall be duly subrogated thereto, whether the same be known to
exist or are hereafter discovered.

                                  ARTICLE III

                                   INSOLVENCY

      SECTION 3.01. INSOLVENCY.

            (a) In the event of the insolvency of Acceptance, it is agreed that
      the liquidator, receiver, conservator or statutory successor of Acceptance
      shall give written notice to Granite of the pendency of a claim against
      Acceptance indicating the policy reinsured which claim would involve a
      possible liability on the part of Granite within a reasonable time after
      such claim is filed in the conservation or liquidation proceeding or in
      the receivership, and that during the pendency of such claim, Granite may
      investigate such claim and interpose, at its own expense, in the
      proceeding where such claim is to be

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      adjudicated, any defense or defenses that it may deem available to
      Acceptance or its liquidator, receiver, conservator or statutory
      successor. The expense thus incurred by Granite shall be chargeable,
      subject to the approval of the Court, against Acceptance as part of the
      expense of conservation or liquidation to the extent of a pro rata share
      of the benefit which may accrue to Acceptance solely as a result of the
      defense undertaken by Granite.

            (b) It is further understood and agreed that, in the event of the
      insolvency of Acceptance, the reinsurance under this Agreement shall be
      payable directly by Granite to Acceptance or to its liquidator, receiver
      or statutory successor, except (1) where this Agreement specifically
      provides another payee of such reinsurance in the event of the insolvency
      of Acceptance or (2) where Granite with the consent of the direct insured
      or insureds has assumed such policy obligations of Acceptance as direct
      obligations of Granite to the payees under such policies and in
      substitution for the obligations of Acceptance to such payees.

                                   ARTICLE IV

                    CONSIDERATION FOR RETROCESSION CONTRACTS

      SECTION 4.01. CONSIDERATION. For and in consideration for this
Retrocession Agreement Acceptance will remit to Granite all gross written
premium with respect to the Reinsured Contracts, and Acceptance shall be deemed
to have a fiduciary responsibility to Granite with respect to all such premium.
Written premium with respect to the Reinsured Contracts paid to Acceptance
before the Effective Time will be remitted to Granite on the date of the
Closing. All gross written premiums with respect to the Reinsured Contracts paid
to Acceptance after Closing will be remitted to Granite not less often than once
each month.

      SECTION 4.02. COMMISSION AND TAXES. Acceptance's Assumption Agreements
contain clauses that recover for companies ceding to Acceptance under such
agreements all commissions due independent agents, premium tax paid or due and
payable and all amounts due for bureau, boards and fees to associations. To the
same extent that these amounts are deducted or paid then the net premium payable
under this Crop Hail Agreement will be reduced accordingly.

      SECTION 4.03. LOSS ADJUSTMENT AND CLAIMS SETTLEMENT COSTS. Acceptance will
manage and administrate the claims handling on behalf of companies ceding to
Acceptance under Acceptance's Assumption Agreements. The cost associated thereto
as per the Management and Service Agreement entered into as of May 23, 2001 by
and between Acceptance and IGF Insurance Company.

                                   ARTICLE V

                                    LIABILITY

      SECTION 5.01. PAYMENT OF CLAIMS AND BENEFITS. From and after the Effective
Time, Granite shall be responsible for (a) paying all losses due under the
Reinsured Contracts in accordance with the terms of thereof; (b) paying all
premium refunds with respect to premiums received under the Reinsured Contracts;
and (c) paying all expenses in connection with the

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investigations, adjustment, appraisal or settlement of all claims under the
Reinsured Contracts on or after the Effective Time.

      SECTION 5.02. ACTIONS ON OR AFTER EFFECTIVE TIME. If any legal or
regulatory actions are threatened or filed in connection with any of the
Reinsured Contracts on or after the Effective Time, the parties agree to provide
each other with prompt notice thereof, within such time period as would allow
the appropriate party the opportunity to answer, appear or to take any action
necessary or to avoid a default judgment. The parties agree to cooperate with
each other with respect to any such legal or regulatory actions, whether
threatened or actual.

      SECTION 5.03. TAXES. Acceptance shall retain full responsibility for any
tax liability relating to the Reinsured Contracts for all taxable periods or
portions thereof.

                                   ARTICLE VI

                              ERRORS AND OVERSIGHTS

      Each party to this Retrocession Agreement will act reasonably to comply
with its terms. Clerical errors and oversights occasioned in good faith in
carrying out this Retrocession Agreement will not prejudice either party and
will be rectified promptly on an equitable basis.

                                  ARTICLE VII

                                   ARBITRATION

      SECTION 7.1 COMPULSORY ARBITRATION.

            (a) The parties intend this article to be enforceable in accordance
      with the Federal Arbitration Act (9 U.S.C. Section 1, et seq.), including
      any amendments to that Act which are subsequently adopted, notwithstanding
      any other choice of law provision set forth in this Agreement. In the
      event that either party refuses to submit to arbitration as required
      herein, the other party may request a United States Federal District Court
      to compel arbitration in accordance with the Federal Arbitration Act. Both
      parties consent to the jurisdiction of such court to enforce this article
      and to confirm and enforce the performance of any award of the
      arbitrators.

            (b) Any dispute or other matter in question between Granite and
      Acceptance arising out of or relating to the formation, interpretation,
      performance, or breach of this Agreement, whether such dispute arises
      before or after termination of this Agreement, shall be resolved by
      arbitration if the parties are unable to resolve the dispute through
      negotiation. Arbitration shall be initiated by the delivery of a written
      demand for arbitration by one party to the other.

      SECTION 7.2. PROCEDURE.

            (a) Each party shall appoint an individual as arbitrator and the two
      so appointed shall then appoint an umpire. If either party refuses or
      neglects to appoint an arbitrator within forty-five (45) days after the
      initial delivery of the demand for

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      arbitration, the other party may appoint the second arbitrator. If the two
      arbitrators do not agree on an umpire within forty-five (45) days of their
      appointment, the parties shall petition the American Arbitration
      Association to appoint an umpire with the qualifications set forth below.
      The arbitrators shall be active or retired officers of insurance or
      reinsurance companies or Lloyd's of London Underwriters or reinsurance
      brokers; the arbitrators shall not have a personal or financial interest
      in the result of the arbitration.

            (b) The arbitration hearing shall be held in Omaha, Nebraska or such
      other place as may be mutually agreed. Each party shall submit its case to
      the arbitrators within forty-five (45) days of the selection of the umpire
      or within such longer period as may be agreed by the arbitrators. The
      arbitrators shall not be obliged to follow judicial formalities or the
      rules of evidence except to the extent required by law of the state of New
      York; they shall make their decisions according to the practice of the
      reinsurance business. The decision rendered by a majority of the
      arbitrators shall be final and binding on both parties. Such decision
      shall be a condition precedent to any right of legal action arising out of
      the arbitrated dispute which either party may have against the other.
      Judgment upon the award rendered may be entered in any court having
      jurisdiction thereof. Both parties shall abide by the final decision of
      such Court or of any appellate court in the event of an appeal.

            (c) Except as provided above, arbitration shall be based, insofar as
      applicable, upon the Commercial Arbitration Rules of the American
      Arbitration Association.

      SECTION 7.3. COSTS. Each party shall bear its own costs in connection with
any such arbitration including, without limitation, (i) all legal, accounting,
and any other professional fees and expenses, (ii) the fees and expenses of its
own arbitrator, and (iii) all other costs and expenses each party incurs to
prepare for such arbitration. Other than set forth above, each side shall pay
(iv) one-half of the fee and expenses of the umpire, and (v) one-half of the
other expenses that the parties jointly incur directly related to the
arbitration proceeding.

                                  ARTICLE VIII

                                   TERMINATION

      SECTION 8.01. TERMINATION DATE. This Agreement can only be terminated by
mutual consent.

      SECTION 8.02. APPROVALS. If the approval of any state insurance department
is necessary for the effectiveness of this Retrocession Agreement, the parties
will cooperate and use their best efforts to obtain such approvals.

      SECTION 8.03. COSTS OF TERMINATION. If this Retrocession Agreement is
terminated pursuant to Section 8.01, neither party shall be liable to the other
for any costs, expenses, causes of actions, fees or claims of any type due with
respect to such termination.


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                                   ARTICLE IX

                       REGULATORY COMPLIANCE AND APPROVALS

      SECTION 9.01. COMPLIANCE. The parties agree to comply with all laws,
regulations or directions of appropriate state insurance departments with regard
to (a) any notification to policyholders under the Reinsured Contracts
(including without limitation all content, description, timing or other
requirements), (b) this Retrocession Agreement and (c) all service requirements
to policyholders under the Reinsured Contracts.

      SECTION 9.02. REGULATORY APPROVALS. The parties agree that where formal
approval is required by any state insurance regulatory agency, this Retrocession
Agreement shall not be effective as to any and all Reinsured Contracts in effect
in such state until such approval is obtained.

                                   ARTICLE X

                                 CONFIDENTIALITY

      SECTION 10.01. CONFIDENTIAL INFORMATION. During the course of performance
under this Retrocession Agreement, the parties and their respective agents,
employees and representatives will obtain or have access to certain proprietary
or confidential information. The parties undertake and covenant, one to the
other, that they will, and they will cause their respective agents, employees
and representatives to, maintain the confidential information in a confidential
manner in accordance with applicable local, state or federal laws, and in
accordance with this Retrocession Agreement.

                                   ARTICLE XI

                             RELATIONSHIP OF PARTIES

      SECTION 11.01. NO EMPLOYMENT RELATIONSHIP. The relationships between the
parties hereto shall be that of independent contractors. Nothing herein shall be
construed to create the relationship of employer and employee between the
parties or any of their respective agents or employees.

                                  ARTICLE XII

                                OTHER PROVISIONS

      SECTION 12.01. PARAGRAPH HEADINGS. The headings of the provisions of this
Retrocession Agreement are for reference purposes and have no legal force or
effect.

      SECTION 12.02. GOVERNING LAW. This Retrocession Agreement shall be
construed and interpreted according to the laws of the State of Iowa.

      SECTION 12.03. OTHER ACTIONS. The parties will use their best efforts to
cause the reinsurance contemplated under this Retrocession Agreement to be
consummated and approved


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by all necessary regulatory bodies and to do such further acts, matters and
deeds, and execute any and all additional instruments and agreements, that may
be mutually agreed as necessary or reasonably required in order to carry this
Retrocession Agreement into full effect.

      SECTION 12.04. COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. For
purposes of this Agreement, facsimile signatures shall be deemed originals, and
the parties agree to exchange original signatures as promptly as possible.

      SECTION 12.05. SET OFF. Granite and Acceptance shall have the right to
offset any balance or amounts due from one party to the other under the terms of
this Agreement. The party asserting the right of offset may exercise such right
any time whether the balances due are on account of premiums or losses or
otherwise.

      SECTION 12.06. NOTICES. Until otherwise notified, all formal notices,
requests, demands and other communications between the parties shall be directed
to the parties at their respective addresses as follows:

            If to Reinsurer:

                    Acceptance Insurance Company
                    535 West Broadway
                    Council Bluffs, Iowa 51503
                    Attn: President

            If to Ceding Companies:

                    IGF Insurance Company
                    4720 Kingsway Drive
                    Indianapolis, Indiana 46205
                    Attn: President

      SECTION 12.07. ASSIGNMENT. This Retrocession Agreement is not assignable
by either party without prior written consent of the other party and, where
required, the prior approval of any appropriate state insurance department.
Neither party's consent under this Section shall be unreasonably withheld.

      SECTION 12.08. WAIVER. Failure of Reinsurer or Ceding Companies to enforce
any of its rights or remedies under this Retrocession Agreement shall not
constitute a waiver of such rights or remedies exercisable hereunder.

      SECTION 12.09. SEVERABILITY. If any provision of this Retrocession
Agreement should be determined to be invalid or otherwise unenforceable under
law, the remainder of this Retrocession Agreement shall not be affected thereby.

      SECTION 12.10. AGREEMENT BINDING. This Retrocession Agreement is binding
upon the parties hereto, their respective representatives, successors and
assigns.


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      SECTION 12.11. MULTIPLE COPIES. This Retrocession Agreement may be
executed in multiple copies, and each shall have the same force and effect of
the original.

      SECTION 12.11 JOINT AND SEVERAL LIABILITY. All rights and obligations of
the Ceding Companies created under the terms of this Retrocession Agreement
shall be joint and several.

      SECTION 12.12. INTEREST. Interest on the balance due and payable that is
not paid when due, shall, in addition to the amount due, incur and pay interest
on the amount due at 11/2% per month on part thereof.

      IN WITNESS WHEREOF, this Retrocession Agreement has been duly executed.

                                        CEDING COMPANIES:

                                        IGF INSURANCE COMPANY, for itself and
                                        for CONTINENTAL CASUALTY
                                        INSURANCE COMPANY

                                        By: /s/ Alan G. Symons
                                           -------------------------------------
                                        Name: Alan G. Symons
                                             -----------------------------------
                                        Title: Vice Chairman, CEO, President
                                              ----------------------------------


                                        REINSURER:

                                        ACCEPTANCE INSURANCE COMPANY

                                        By: /s/ John E. Martin
                                           -------------------------------------
                                        Name: John E. Martin
                                             -----------------------------------
                                        Title: President
                                              ----------------------------------


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