ex1054to10k03581_12312007.htm


    Exhibit
10.54

     

     

    Excess
Workers’ Compensation

    Reinsurance
Contract

    Effective:  January
1, 2008

    


    issued
to

    


    AmCOMP
Preferred Insurance Company

    North
Palm Beach, Florida

    AmCOMP
Assurance Corporation

    North
Palm Beach, Florida

    and

    any and
all insurance companies which are now or

    hereafter
come under the same ownership or management as the

    AmCOMP
Group

    North
Palm Beach, Florida

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        Table of Contents

      

    

     

    Table of Contents

     

     

      


      
        	Article 	 	 	Page 
	 	 	 	 
	
                I

              	  	
                Classes of Business
Reinsured

              	
                1

              
	
                II

              	  	
                Commencement and Termination

              	
                1

              
	
                III

              	  	
                Special Termination

              	
                2

              
	
                IV

              	  	
                Territory (BRMA 51A)

              	
                3

              
	
                V

              	  	
                Exclusions

              	
                3

              
	
                VI

              	  	
                Retention and Limit

              	
                7

              
	
                VII

              	  	
                Reinstatement

              	
                8

              
	
                VIII

              	  	
                Definitions

              	
                9

              
	
                IX

              	  	
                Other Reinsurance

              	
                12

              
	
                X

              	  	
                Federal Terrorism Recovery

              	
                12

              
	
                XI

              	  	
                Annuities at Company’s Option

              	
                13

              
	
                XII

              	  	
                Claims

              	
                13

              
	
                XIII

              	  	
                Sunset

              	
                14

              
	
                XIV

              	  	
                Special Commutation

              	
                14

              
	
                XV

              	  	
                Salvage and Subrogation

              	
                16

              
	
                XVI

              	  	
                Premium

              	
                17

              
	
                XVII

              	  	
                Late Payments

              	
                18

              
	
                XVIII

              	  	
                Offset

              	
                19

              
	
                XIX

              	  	
                Access to Records (BRMA 1D)

              	
                19

              
	
                XX

              	  	
                Liability of the Reinsurer

              	
                19

              
	
                XXI

              	  	
                Net Retained Lines (BRMA 32E)

              	
                19

              
	
                XXII

              	  	
                Errors and Omissions (BRMA
    14F)

              	
                20

              
	
                XXIII

              	  	
                Currency (BRMA 12A)

              	
                20

              
	
                XXIV

              	  	
                Taxes (BRMA 50B)

              	
                20

              
	
                XXV

              	  	
                Federal Excise Tax (BRMA 17D)

              	
                20

              
	
                XXVI

              	  	
                Reserves

              	
                21

              
	
                XXVII

              	  	
                Insolvency

              	
                22

              
	
                XXVIII

              	  	
                Arbitration

              	
                23

              
	
                XXIX

              	  	
                Service of Suit (BRMA 49C)

              	
                24

              
	
                XXX

              	  	
                Agency Agreement (BRMA 73A)

              	
                24

              
	
                XXXI

              	  	
                Governing Law (BRMA 71B)

              	
                24

              
	
                XXXII

              	  	
                Intermediary (BRMA 23A)

              	
                25

              
	 
      	 
      	
                Schedule A

              	 
      


      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        Table of Contents

      

    

     

    Excess
Workers’ Compensation

    Reinsurance
Contract

    Effective:  January
1, 2008

    


    issued
to

    


    AmCOMP
Preferred Insurance Company

    North
Palm Beach, Florida

    AmCOMP
Assurance Corporation

    North
Palm Beach, Florida

    and

    any and
all insurance companies which are now or

    hereafter
come under the same ownership or management as the

    AmCOMP
Group

    North
Palm Beach, Florida

    (hereinafter referred to collectively
as the “Company”)

    


    by

    


    The
Subscribing Reinsurer(s) Executing the

    Interests
and Liabilities Agreement(s)

    Attached
Hereto

    (hereinafter referred to as the
“Reinsurer”)

    


    


    


    Article
I - Classes of Business Reinsured

     

    By this
Contract the Reinsurer agrees to reinsure the excess liability which may accrue
to the Company under its policies, contracts and binders of insurance or
reinsurance (hereinafter called “policies”) in force at the effective date
hereof or issued or renewed on or after that date, and classified by the Company
as Workers’ Compensation and Employers Liability business, subject to the terms,
conditions and limitations set forth herein and in Schedule A attached to and
forming part of this Contract.

     

    Article
II - Commencement and Termination

     

    
      	
              A.

            	
              This
      Contract shall become effective at 12:01 a.m., Local Standard Time where
      the occurrence commences, January 1, 2008, with respect to losses
      arising out of occurrences commencing at or after that time and date, and
      shall continue in force thereafter until
  terminated.

            


    

     

    
      	
              B.

            	
              Either
      party may terminate this Contract at 12:01 a.m., Local Standard Time
      where the occurrence commences, on any January 1 by giving the other
      party not less than 90 days prior notice by certified
      mail.

            


    

     

    
      	
              C.

            	
              Unless
      the Company elects that the Reinsurer have no liability for losses arising
      out of occurrences commencing at or after the effective time and date of
      termination, and so notifies the Reinsurer prior to or as promptly as
      possible after the effective date of termination, reinsurance hereunder on
      business in force at the effective time and date of termination shall
      remain in full force and effect until expiration, cancellation or next
      premium anniversary of such business, whichever first occurs, but in no
      event beyond 12 months, plus odd time (not to exceed 18 months
      in all), following the effective time and date of
    termination.

            


    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
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              D.

            	
              Notwithstanding
      the provisions above, in the event that any policy subject to this
      Contract is required by statute, regulation or by order of an insurance
      department to be continued in force, the Reinsurer agrees to extend
      reinsurance coverage hereunder following the termination of this Contract
      with respect to such policy until the first date that the Company may
      lawfully non-renew, cancel or terminate such policy, whether or not the
      Company actually does non-renew, cancel or terminate such
      policy.  However, under no circumstances shall runoff coverage
      under this paragraph exceed
23 months.

            


    

     

    
      	
              E.

            	
              “Contract
      year” as used herein shall mean the period from 12:01 a.m., Local
      Standard Time where the occurrence commences, January 1, 2008, to
      12:01 a.m., Local Standard Time where the occurrence commences,
      January 1, 2009, and each subsequent 12-month period (or portion
      thereof) thereafter that this Contract continues in force shall be a
      separate contract year.  If this Contract is terminated on a
      “runoff” basis, the period from the effective date of termination through
      the end of the “runoff” period shall be a separate contract year and
      referred to as the “runoff contract
year.”

            


    

     

    Article
III - Special Termination

     

    
      	
              A.

            	
              Notwithstanding
      the provisions of paragraph B of the Commencement and Termination
      Article, either party may terminate this Contract at any time by giving
      the other party not less than 30 days prior written notice in the
      event any of the following circumstances occur (if terminated by either
      party, said termination shall be on a “runoff” basis unless the Company
      elects to have such termination on a “cutoff”
  basis):

            


    

     

    
      	
               
      

            	
              1.

            	
              The
      other party’s policyholders’ surplus (or its equivalent under the
      Subscribing Reinsurer’s accounting system) at the beginning of any
      contract year has been reduced by more than 30.0% of the amount of surplus
      (or the applicable equivalent) 12 months prior to that date;
      or

            


    

     

    
      	
               
      

            	
              2.

            	
              The
      other party’s policyholders’ surplus (or its equivalent under the
      Subscribing Reinsurer’s accounting system) at any time during the contract
      year has been reduced by more than 30.0% of the amount of surplus (or the
      applicable equivalent) at the date of the other party’s most recent
      financial statement filed with regulatory authorities and available to the
      public as of the beginning of the contract year;
  or

            


    

     

    
      	
               
      

            	
              3.

            	
              The
      other party has become merged with, acquired by or controlled by any other
      entity or individual(s) not controlling the other party’s operations
      previously; however, this subparagraph shall not apply to the sale of
      stock to a non-acquiring entity or where the acquiring company,
      corporation or individual(s) has an A.M. Best’s rating higher than the
      rating held by the other party at the beginning of the contract year;
      or

            


    

     

     

    
      
        
        

      

      
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              4.

            	
              The
      State Insurance Department or other legal authority in the other party’s
      state of domicile has ordered the other party to cease writing business;
      or

            


    

     

    
      	
               
      

            	
              5.

            	
              The
      other party has become insolvent or has been placed into liquidation or
      receivership (whether voluntary or involuntary) or proceedings have been
      instituted against the other party for the appointment of a receiver,
      liquidator, rehabilitator, conservator or trustee in bankruptcy, or other
      agent known by whatever name, to take possession of its assets or control
      of its operations; or

            


    

     

    
      	
               
      

            	
              6.

            	
              The
      other party has ceased writing new and renewal property and casualty
      business.

            


    

     

    
      	
              B.

            	
              Notwithstanding
      the provisions of paragraph B of the Commencement and Termination
      Article, the Company may terminate a Subscribing Reinsurer’s percentage
      share in this Contract by giving not less than 30 days prior written
      notice to the Subscribing Reinsurer in the event the Subscribing
      Reinsurer’s A.M. Best’s rating has been assigned or downgraded below A-
      (includes any “Not Rated” rating) and/or Standard & Poor’s rating
      has been assigned or downgraded below BBB+ (includes any “NR”
      rating).

            


    

     

    
      	
              C.

            	
              Notwithstanding
      the provisions of paragraph B of the Commencement and Termination
      Article, a Subscribing Reinsurer may terminate its percentage share in
      this Contract by giving the Company not less than 30 days prior
      written notice in the event any of the following circumstances occur (said
      termination shall be on a “runoff” basis unless the Company elects to have
      such termination on a “cutoff” basis; however, termination shall be on a
      “cutoff” basis if the Subscribing Reinsurer terminates because the Company
      has failed to pay premium):

            


    

     

    
      	
               
      

            	
              1.

            	
              51.0%
      or more of the Company or its portfolio is purchased or sold;
      or

            


    

     

    
      	
               
      

            	
              2.

            	
              The
      Company has failed to pay reinsurance premiums in accordance with this
      Contract; or

            


    

     

    
      	
               
      

            	
              3.

            	
              A
      material change has occurred in any two of the Company’s three senior
      officers (i.e., the Chief Executive Officer, the President, or the
      Chief Financial Officer).

            


    

     

    Article
IV - Territory (BRMA 51A)

     

    The
territorial limits of this Contract shall be identical with those of the
Company’s policies.

     

    Article
V - Exclusions

     

    
      	
              A.

            	
              This
      Contract does not apply to and specifically excludes the
      following:

            


    

     

    
      	
               
      

            	
              1.

            	
              Reinsurance
      assumed by the Company under obligatory reinsurance agreements,
      except:

            


    

     

    
      	
               
      

            	
              a.

            	
              Agency
      reinsurance where the policies involved are to be reunderwritten in
      accordance with the underwriting standards of the Company and reissued as
      Company policies at the next anniversary or expiration
    date;

            


    

     

     

    
      
        
        

      

      
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              b.

            	
              Intercompany
      reinsurance between any of the reinsured companies under this
      Contract.

            


    

     

    
      	
               
      

            	
              2.

            	
              Ex-gratia
      payments.

            


    

     

    
      	
               
      

            	
              3.

            	
              Risks
      subject to a deductible in excess of $25,000, or a self-insured retention
      excess of $25,000, unless such deductible or self-insured retention is
      otherwise mandated by statute or regulatory
  authority.

            


    

     

    
      	
               
      

            	
              4.

            	
              Nuclear
      risks as defined in the “Nuclear Incident Exclusion Clause -
      Liability - Reinsurance (U.S.A.)” and loss or liability defined in
      the “Nuclear Incident Exclusion Clause - Reinsurance - No. 4”
      attached to and forming part of this
Contract.

            


    

     

    
      	
               
      

            	
              5.

            	
              Pollution
      liability coverages excluded under the provisions of the “Pollution
      Exclusion Clause - General Liability - Reinsurance (BRMA 39C)”
      attached to and forming part of this
Contract.

            


    

     

    
      	
               
      

            	
              6.

            	
              Liability
      as a member, subscriber or reinsurer of any Pool, Syndicate or
      Association, but this exclusion shall not apply to Assigned Risk Plans or
      similar state-mandated plans.

            


    

     

    
      	
               
      

            	
              7.

            	
              All
      liability of the Company arising by contract, operation of law, or
      otherwise, from its participation or membership, whether voluntary or
      involuntary, in any insolvency fund.  “Insolvency fund” includes
      any guaranty fund, insolvency fund, plan, pool, association, fund or other
      arrangement, however 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.

            


    

     

    
      	
               
      

            	
              8.

            	
              Loss
      or liability as excluded in the “War Risk Exclusion Clause (Reinsurance)”
      attached to and forming part of this Contract.  However, this
      exclusion shall not apply to an act of terrorism that is certified by the
      Secretary of Treasury, in concurrence with the Secretary of State and the
      Attorney General of the United
States.

            


    

     

    
      	
               
      

            	
              9.

            	
              Operation
      under the jurisdiction of the United States Longshore and Harbor Workers’
      Compensation Act or the Jones Act, except for incidental exposures (i.e.,
      10.0% or less of the insured’s estimated payroll when the account is
      quoted).

            


    

     

    
      


      
        	
                 
      

              	
                10.

              	
                Operations
      employing the process of nuclear fission or fusion or handling of
      radioactive material, which operations include but are not limited
      to:

              


      

      


      
        	
                 
      

              	
                a.

              	 	
                The
      use of nuclear reactors such as atomic piles, particle accelerators or
      generators; or

              


      

      


      
        	
                 
      

              	
                b.

              	 	
                The
      use, handling or transportation of radioactive materials, or the use,
      handling or transportation of any weapon of war or explosive device
      employing nuclear fission or
fusion.

              


      

       

       

      
        
          
          

        

        
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                However,
      subparagraphs a and b above shall not apply
to:

              


      

      


      
        	
                 
      

              	
                i.

              	
                The
      exclusive use of particle accelerators incidental to ordinary industrial
      or education research pursuits, or

              


      

      


      
        	
                 
      

              	
                ii.

              	
                The
      exclusive use, handling or transportation of radioisotopes for medical or
      industrial use, or to radium or radium
  compounds.

              


      

      


      
        	
                 
      

              	
                11.

              	
                Operation
      of docks or wharves as related to port
  authorities.

              


      

      


      
        	
                 
      

              	
                12.

              	
                The
      manufacturing, mining, refining, processing, distribution, installation,
      removal or encapsulment of
asbestos.

              


      

      


      
        	
                 
      

              	
                13.

              	
                Risks
      involving known exposure to the following
  substances:

              


      

      


      
        	
                 
      

              	
                a.

              	 	
                Dioxin;

              


      

      


      
        	
                 
      

              	
                b.

              	 	
                Polychlorinated
      biphenols;

              


      

      


      
        	
                 
      

              	
                c.

              	 	
                Asbestos.

              


      

      


      
        	
                 
      

              	
                14.

              	
                All
      railway operations except sidetrack
agreements.

              


      

      


      
        	
                 
      

              	
                15.

              	
                Amusement
      parks, carnivals or circuses.  This exclusion shall not apply to
      miniature golf courses or driving range
  operations.

              


      

      


      
        	
                 
      

              	
                16.

              	
                Subaquaeous
      operations.

              


      

      


      
        	
                 
      

              	
                17.

              	
                Underground
      mining; however, this exclusion shall not be construed to apply to
      open-pit quarrying or “surface mining”
  operations.

              


      

      


      
        	
                 
      

              	
                18.

              	
                Blasting
      operations, except for incidental exposures (i.e., 10.0% or less of the
      insured’s estimated payroll when the account is
  quoted).

              


      

      


      
        	
                 
      

              	
                19.

              	
                Demolition
      of buildings or structures in excess of five
  stories.

              


      

      


      
        	
                 
      

              	
                20.

              	
                Shoring
      and moving of buildings or structures, or underpinning that involves pier
      and beam construction, commercial buildings with more than three stories
      or hillside building reinforcements.  However, this exclusion
      shall not apply to foundation repair risks for which neither the insured
      nor its employees are in tunnels or are otherwise working under
      buildings.

              


      

      


      
        	
                 
      

              	
                21.

              	
                Erection
      or repair of scaffolds if 10.0% or more of the insured’s annual
      remuneration is attributed to NCCI Class Code 9534 or
  9529.

              


      

      


      
        	
                 
      

              	
                22.

              	
                Construction
      of tunnels or dams.

              


      

       

       

      
        
          
          

        

        
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                23.

              	
                Fireworks,
      fuses, or any explosive substance (as defined below) as
      follows:

              


      

      


      
        	
                 
      

              	
                a.

              	 	
                Manufacturers
      or importers of such items;

              


      

      


      
        	
                 
      

              	
                b.

              	 	
                Loading
      of such items into containers for use as explosive objects, propellant
      charges or detonation devices and the storage thereof (except as
      previously provided for, on an incidental basis, in
      exclusion 18);

              


      

      


      
        	
                 
      

              	
                c.

              	 	
                Manufacturers
      or importers of any product in which such items are an
      ingredient;

              


      

      


      
        	
                 
      

              	
                d.

              	 	
                Handling,
      storage, transportation or use of such items (except as previously
      provided for, on an incidental basis, in
    exclusion 18).

              


      

      


      
        	
                 
      

              	
                “Explosive
      substance” is defined as any substance manufactured for the express
      purpose of exploding as differentiated from commodities used industrially
      and which are only incidentally
explosive.

              


      

      


      
        	
                 
      

              	
                24.

              	
                Onshore
      and offshore gas and oil drilling
operations.

              


      

      


      
        	
                 
      

              	
                25.

              	
                Operations
      where principal business includes the use of any owned or unowned
      aircraft, or any device or machine intended for and/or aiding in the
      achievement of atmospheric flight, projection or orbit, and/or the
      ownership or operation of any airport.  This exclusion shall not
      apply where exposure is incidental (i.e., constitutes 10.0% or less
      of the insured’s payroll) to the principal business operations and the
      aircraft contains eight seats or
fewer.

              


      

      


      
        	
                 
      

              	
                26.

              	
                Municipal
      law enforcement organizations and municipal fire fighting organizations,
      whether professional or voluntary.  This exclusion shall not
      apply to off-duty law enforcement officers when employed by an entity
      other than a municipality for duties performed within the scope of the job
      for which they were hired.

              


      

      


      
        	
                 
      

              	
                27.

              	
                Logging
      or forestry operations.

              


      

      


      
        	
                 
      

              	
                28.

              	
                Professional
      employment organizations (PEOs).

              


      

      


      
        	
                 
      

              	
                29.

              	
                Professional
      sports teams.

              


      

      


      
        	
                 
      

              	
                30.

              	
                Operations
      where the principal business of the risk is manufacturing, production,
      distribution, refining or storage of natural or artificial fuel, gas,
      butane, propane, liquefied petroleum gases or gasoline.  This
      exclusion shall not apply to any risk whose principal business operations
      are any of the following:

              


      

      


      
        	
                 
      

              	
                a.

              	 	
                Retail
      gasoline service station, either full or self service, or retail gasoline
      marina;

              


      

      


      
        	
                 
      

              	
                b.

              	 	
                Convenience
      store with gasoline sales with its petroleum gas and/or storage tanks
      located below ground.

              


      

      


      
        	
                 
      

              	
                31.

              	
                Acts
      of terrorism, as defined in paragraph G of the Definitions Article,
      that:

              


      

      


      
        	
                 
      

              	
                a.

              	 	
                Involve
      the use, release or escape of nuclear materials;
  or

              


      

       

       

      
        
          
          

        

        
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                b.

              	 	
                Directly
      or indirectly result in nuclear reaction or radiation or radioactive
      contamination; or

              


      

      


      
        	
                 
      

              	
                c.

              	 	
                Are
      carried out by means of the dispersal or application of pathogenic or
      poisonous biological or chemical materials where it appears that one
      purpose of the act of terrorism was to release such
    materials.

              


      

      


      
        	
                 
      

              	
                32.

              	
                Business
      reinsured by the Minnesota Workers’ Compensation Reinsurance Association,
      whether contractually assumed or imposed by law, including, but not
      limited to, direct or indirect loss, damage, liability, cost or
      expense.  However, this exclusion shall not apply
      to:

              


      

      


      
        	
                 
      

              	
                a.

              	 	
                Losses
      paid within the Company’s net retention;
or

              


      

      


      
        	
                 
      

              	
                b.

              	 	
                Losses
      paid in excess of the benefits allowed under Minnesota Workers’
      Compensation law.

              


      

    

     

    
      	
              B.

            	
              In
      the event the Company is inadvertently bound on any risk which is excluded
      under subparagraph 9 or subparagraphs 14 through 30 of paragraph A above,
      the reinsurance provided under this Contract shall apply on such risk
      until discovery by the Company of the existence of such risk and for 30
      days thereafter, or for a period of time specific to the applicable state
      cancellation requirements, not to exceed 120 days.  This
      limitation shall not apply as respects Arizona.  Coverage shall
      cease after such time or at policy anniversary as respects Arizona
      policies, unless the Company has received from the Reinsurer written
      notice of its approval of such risk within
  30 days.

            


    

     

    
      	
              C.

            	
              Notwithstanding
      the foregoing, any reinsurance falling within the scope of one or more of
      the exclusions set forth above that is specially accepted by the Reinsurer
      from the Company shall be covered under this Contract and subject to all
      of the terms and conditions hereof, except as such terms are modified by
      the special acceptance.  In the event a reinsurer becomes a
      party to this Contract subsequent to one or more special acceptances
      hereunder, the new reinsurer shall automatically accept such special
      acceptance(s) as being covered hereunder.  Further, if one or
      more reinsurers under this Contract agreed to special acceptance(s) under
      the contract replaced by this Contract, such special acceptance(s) shall
      be automatically covered hereunder with respect to the interests and
      liabilities of such reinsurer(s), except for special acceptance(s) on
      risks that have experienced a material change in exposure (i.e., more than
      a 10.0% change in payroll or a new operation that would require a special
      acceptance on its own merits).

            


    

     

    Article
VI - Retention and Limit

     

    
      	
              A.

            	
              As
      respects all losses subject hereto, except losses arising out of an
      occurrence of an act of terrorism, as respects each excess layer of
      reinsurance coverage provided by this Contract, the Company shall retain
      and be liable for the first amount of ultimate net loss (whether involving
      any one or any combination of the classes of business covered hereunder,
      regardless of the number of policies under which such loss is payable or
      the number of different interests insured), shown as “Company’s Retention”
      for that excess layer in Schedule A attached hereto, arising out of each
      occurrence.  The Reinsurer shall then be liable, as respects
      each excess layer, for the amount by which such ultimate net loss exceeds
      the Company’s retention, but the liability of the Reinsurer shall not
      exceed the amount, shown as “Reinsurer’s Per Occurrence Limit” for that
      excess layer in Schedule A attached hereto, as respects any one
      occurrence.

            


    

     

     

    
      
        
        

      

      
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              B.

            	
              As
      respects losses arising out of an occurrence of an act of terrorism, as
      respects each excess layer of reinsurance coverage provided hereunder, the
      Company shall retain and be liable for the first amount of ultimate net
      loss, shown as “Company’s Retention” for that excess layer in Schedule A
      attached hereto, arising out of each occurrence.  The Reinsurer
      shall then be liable, as respects each excess layer, for the amount by
      which such ultimate net loss exceeds the Company’s retention, but the
      liability of the Reinsurer shall not exceed the amount shown as
      “Reinsurer’s Terrorism Per Occurrence Limit” for that excess layer in
      Schedule A attached hereto as respects any one occurrence of an act
      of terrorism, nor shall it exceed the amount shown as “Reinsurer’s
      Contract Year Terrorism Limit” for that excess layer in Schedule A
      attached hereto as respects loss or losses arising out of all occurrences
      of acts of terrorism during any one contract
  year.

            


    

     

    
      	
              C.

            	
              The
      Company deems that the maximum Employers Liability policy limits subject
      hereto shall not exceed $2,000,000.  Policy limits in excess of
      $2,000,000 may be submitted by special acceptance to the Reinsurer for
      coverage hereunder, subject to the provisions of paragraph C of the
      Exclusions Article.

            


    

     

    Article
VII - Reinstatement

     

    
      	
              A.

            	
              In
      the event all or any portion of the reinsurance under any excess layer of
      reinsurance coverage provided by paragraph A of the Retention and
      Limit Article of this Contract is exhausted by loss, the amount so
      exhausted shall be reinstated immediately from the time the occurrence
      commences hereon.

            


    

     

    
      	
               
      

            	
              1.

            	
              As
      respects each amount so reinstated under the first excess layer, the
      Company shall pay no additional
premium.

            


    

     

    
      	
               
      

            	
              2.

            	
              As
      respects each amount so reinstated under the second excess layer, the
      Company agrees to pay additional premium equal to the product of the
      following:

            


    

     

    
      	
               
      

            	
              a.

            	
              The
      percentage of the occurrence limit for the second excess layer reinstated
      (based on the loss paid by the Reinsurer under that excess layer);
      times

            


    

     

    
      	
               
      

            	
              b.

            	
              The
      earned reinsurance premium for the second excess layer for the contract
      year (exclusive of reinstatement
premium).

            


    

     

    
      	
              B.

            	
              Whenever
      the Company requests payment by the Reinsurer of any loss under the second
      excess layer that triggers additional reinstatement premium to be paid
      hereunder, the Company shall submit a statement to the Reinsurer of
      reinstatement premium due the Reinsurer for that excess
      layer.  If the earned reinsurance premium for the second excess
      layer for the contract year has not been finally determined as of the date
      of any such statement, the calculation of reinstatement premium due for
      that excess layer shall be based on the annual deposit premium for that
      excess layer and shall be readjusted when the earned reinsurance premium
      for that excess layer for the contract year has been finally
      determined.  Any reinstatement premium shown to be due the
      Reinsurer for the second excess layer as reflected by any such statement
      (less prior payments, if any, for that excess layer) shall be payable by
      the Company concurrently with payment by the Reinsurer of the requested
      loss for that excess layer.  Any return reinstatement premium
      shown to be due the Company shall be remitted by the Reinsurer as promptly
      as possible after receipt and verification of the Company’s
      statement.

            


    

     

     

    
      
        
        

      

      
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              C.

            	
              Notwithstanding
      anything stated herein, the liability of the Reinsurer under each excess
      layer of reinsurance coverage provided by this Contract shall not exceed
      any of the following:

            


    

     

    
      	
               
      

            	
              1.

            	
              The
      amount, shown as “Reinsurer’s Per Occurrence Limit” for that excess layer
      in Schedule A attached hereto, as respects loss or losses arising out
      of any one occurrence which is not an act of
  terrorism;

            


    

     

    
      	
               
      

            	
              2.

            	
              The
      amount, shown as “Reinsurer’s Terrorism Per Occurrence Limit” for that
      excess layer in Schedule A attached hereto, as respects loss or
      losses arising out of any one occurrence of an act of
      terrorism;

            


    

     

    
      	
               
      

            	
              3.

            	
              The
      amount, shown as “Reinsurer’s Contract Year Limit” for that excess layer
      in Schedule A attached hereto as respects loss or losses arising out
      of all occurrences commencing during any one contract year;
    or

            


    

     

    
      	
               
      

            	
              4.

            	
              The
      amount, shown as “Reinsurer’s Contract Year Terrorism Limit” for that
      excess layer in Schedule A attached hereto, as respects loss or
      losses arising out of all occurrences of acts of terrorism commencing
      during any one contract year.

            


    

     

    Article
VIII - Definitions

     

    
      	
              A.

            	
              “Ultimate
      net loss” as used herein is defined as the sum or sums (including loss in
      excess of policy limits, extra contractual obligations and any loss
      adjustment expense, as hereinafter defined) paid or payable by the Company
      in settlement of claims and in satisfaction of judgments rendered on
      account of such claims, after deduction of all recoveries from
      subrogation, all recoveries, and all claims on inuring insurance or
      reinsurance, whether collectible or not.  Nothing herein shall
      be construed to mean that losses under this Contract are not recoverable
      until the Company’s ultimate net loss has been
  ascertained.

            


    

     

    
      	
              B.

            	
              “Loss
      in excess of policy limits” and “extra contractual obligations” as used
      herein shall be defined as follows:

            


    

     

    
      	
               
      

            	
              1.

            	
              “Loss
      in excess of policy limits” shall mean 90.0% of any amount paid or payable
      by the Company in excess of its policy limits, but otherwise within the
      terms of its policy, such loss in excess of the Company’s policy limits
      having been incurred because of, but not limited to, failure by the
      Company to settle within the policy limits or by reason of the Company’s
      alleged or actual negligence or bad faith in rejecting an offer of
      settlement or in the preparation of the defense or in the trial of an
      action against its insured or reinsured or in the preparation or
      prosecution of an appeal consequent upon such an
  action.

            


    

     

     

    
      
        
        

      

      
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              2.

            	
              “Extra
      contractual obligations” shall mean 90.0% of any punitive, exemplary,
      compensatory or consequential damages paid or payable by the Company, not
      covered by any other provision of this Contract and which arise from the
      handling of any claim on business subject to this Contract, such
      liabilities arising because of, but not limited to, failure by the Company
      to settle within the policy limits or by reason of the Company’s alleged
      or actual negligence or bad faith in rejecting an offer of settlement or
      in the preparation of the defense or in the trial of an action against its
      insured or reinsured or in the preparation or prosecution of an appeal
      consequent upon such an action.  An extra contractual obligation
      shall be deemed, in all circumstances, to have occurred on the same date
      as the loss covered or alleged to be covered under the
    policy.

            


    

     

    Notwithstanding
anything stated herein, this Contract shall not apply to any loss in excess of
policy limits or any extra contractual obligation incurred by the Company as a
result of any fraudulent and/or criminal act by any officer or director 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.

     

    If any
provision of this paragraph B shall be rendered illegal or unenforceable by the
laws, regulations or public policy of any state, such provision shall be
considered void in such state, but this shall not affect the validity or
enforceability of any other provision of this Contract or the enforceability of
such provision in any other jurisdiction.

     

    
      	
              C.

            	
              “Occurrence”
      as used herein is defined as an accident or occurrence or a series of
      accidents or occurrences arising out of or caused by one event, whether
      involving one or more of the Company’s policies, except
    that:

            


    

     

    
      	
               
      

            	
              1.

            	
              As
      respects Workers’ Compensation policies, each occupational or industrial
      disease or cumulative injury case contracted by an employee of an insured
      shall be deemed to have been caused by a separate occurrence commencing
      on:

            


    

     

    
      	
               
      

            	
              a.

            	
              The
      date of disability for which compensation is payable if the case is
      compensable under the Workers’ Compensation
Law;

            


    

     

    
      	
               
      

            	
              b.

            	
              The
      date disability due to the disease actually began if the case is not
      compensable under the Workers’ Compensation Law;
  or

            


    

     

    
      	
               
      

            	
              c.

            	
              The
      date of cessation of employment if claim is made after employment has
      ceased.

            


    

     

    
      	
               
      

            	
              2.

            	
              Notwithstanding
      the provisions of subparagraph 1 above, as respects losses resulting from
      occupational or industrial disease and cumulative injury suffered by
      employees of an insured for which the employer is liable as a result of a
      sudden and accidental event not exceeding 72 hours in duration, all
      such losses shall be considered one occurrence and may be combined with
      losses not classified as occupational or industrial disease or cumulative
      injury which arise out of the same event and the combination of such
      losses shall be considered as one occurrence within the meaning
      hereof.

            


    

     

     

    
      
        
        

      

      
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              3.

            	
              Notwithstanding
      the foregoing, the following shall apply to occurrences involving natural
      disasters:

            


    

     

    
      	
               
      

            	
              a.

            	
              An
      occurrence shall be limited to damage, injury or loss arising out of a
      natural disaster during any continuous 168 hour
  period.

            


    

     

    
      	
               
      

            	
              b.

            	
              The
      Company may choose the date and time when such 168 hour period commences
      and if the occurrence is of greater duration than 168 hours, the Company
      may divide such occurrence into two or more occurrences, provided no two
      periods overlap and provided no period commences earlier than the date and
      time of the first loss to the Company in such
  occurrence.

            


    

     

    
      	
               
      

            	
              c.

            	
              “Natural
      disaster” shall mean loss caused by the perils of tornado, cyclone,
      windstorm, hurricane and hail arising from the same atmospheric
      disturbance; earthquake, including ensuing fire, landslide, mudslide,
      flood, tidal wave; volcanic eruptions; flood; tides; tidal wave;
      landslide/mudslide; and meteors.

            


    

     

    
      	
              D.

            	
              “Occupational
      or industrial disease” shall mean any abnormal condition that fulfills all
      of the following conditions:

            


    

     

    
      	
               
      

            	
              1.

            	
              It
      is not traceable to a definite compensable accident occurring during the
      employee’s present or past employment;
and

            


    

     

    
      	
               
      

            	
              2.

            	
              It
      has been caused by exposure to a disease producing agent or agents present
      in the workers’ occupational environment;
and

            


    

     

    
      	
               
      

            	
              3.

            	
              It
      has resulted in a disability or
death.

            


    

     

    
      	
              E.

            	
              “Cumulative
      injury” is any injury that fulfills all of the following
      conditions:

            


    

     

    
      	
               
      

            	
              1.

            	
              It
      is not traceable to a definite compensable accident occurring during the
      employee’s present or past employment;
and

            


    

     

    
      	
               
      

            	
              2.

            	
              It
      has occurred from, and has been aggravated by, a repetitive
      employment-related activity; and

            


    

     

    
      	
               
      

            	
              3.

            	
              It
      has resulted in a disability or
death.

            


    

     

    
      	
              F.

            	
              “Loss
      adjustment expense” as used herein shall mean expenses assignable to the
      investigation, appraisal, adjustment, settlement, litigation, defense
      and/or appeal of specific claims, regardless of how such expenses are
      classified for statutory reporting purposes.  Loss adjustment
      expense shall include, but not be limited to, interest on judgments,
      expenses of outside adjusters and claim-specific declaratory judgment
      expenses or other legal expenses and costs incurred in connection with
      coverage questions and legal actions connected thereto, but shall not
      include office expenses or salaries of the Company’s regular employees
      other than medical management personnel whose cost the Company will bill
      to specific cases on a time and expense
basis.

            


    

     

     

    
      
        
        

      

      
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              G.

            	
              “Act
      of terrorism” as used herein shall include all loss, cost or expense,
      including fire following, related directly or indirectly from
      either:

            


    

     

    
      	
               
      

            	
              1.

            	
              Any
      act of any person or persons either acting on behalf of or in connection
      with any organization or group with activities directed towards
      overthrowing, intimidating, coercing or influencing any government de jure or de facto or its
      populace or its economic, political or social systems, by force, violence,
      weapons of mass destruction, disruption or subversion of communication and
      information system infrastructures and/or its content thereof, or
      sabotage, and/or threat therefrom;
or

            


    

     

    
      	
               
      

            	
              2.

            	
              An
      act of terrorism that is certified by the Secretary of Treasury, in
      concurrence with the Secretary of State and the Attorney General of the
      United States.

            


    

     

    Terrorism
losses also include all actual or alleged losses, liabilities, damages,
injuries, defense costs, and costs or expenses directly or indirectly arising
out of, contributed by, caused by, resulting from, or in connection with any
action taken in controlling, preventing, suppressing, retaliating against, or
responding to such acts.

     

    Notwithstanding
the above, in the event of an occurrence which arises out of an act of workplace
violence and is not consistent with the provisions of subparagraphs 1
and 2 of this paragraph G, such loss shall be covered hereunder,
subject to the provisions of the Exclusions Article and all other provisions of
this Contract and shall not be considered an act of
terrorism.  Further, any occurrence which is not or cannot be
determined, classified or certified in accordance with the provisions of
subparagraphs 1 and 2 of this paragraph G shall be covered
hereunder and not considered an act of terrorism.

     

    
      	
              H.

            	
              “Declaratory
      judgment expenses” as used herein shall 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 assignable to specific policies and claims subject to this
      Contract.  Declaratory judgment expenses shall 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.  In the event
      there is no loss other than declaratory judgment expenses with respect to
      any claim hereunder, such expenses shall be deemed loss for purposes of
      this Contract.

            


    

     

    Article
IX - Other Reinsurance

     

    
      	
              A.

            	
              The
      Company shall be permitted to carry facultative reinsurance, recoveries
      under which shall inure to the benefit of this
  Contract.

            


    

     

    
      	
              B.

            	
              The
      Company shall be permitted to carry underlying quota share reinsurance and
      underlying excess reinsurance, recoveries under which shall inure solely
      to the benefit of the Company and be entirely disregarded in applying all
      of the provisions of this Contract.

            


    

     

    Article
X - Federal Terrorism Recovery

     

    
      	
              A.

            	
              Any
      loss reimbursement the Company receives from the United States Government
      under the Terrorism Risk Insurance Act of 2002, as amended by the
      Terrorism Risk Insurance Extension Act of 2005 and any subsequent
      amendments or extensions thereof (together the “Terrorism Act”) as a
      result of occurrences commencing during each contract year shall inure to
      the benefit of this Contract in the proportion that the Company’s insured
      losses (as defined in the Terrorism Act) in that occurrence under policies
      reinsured under this Contract bear to the Company’s total insured losses
      in that occurrence.

            


    

     

     

    
      
        
        

      

      
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              B.

            	
              If
      a loss reimbursement received by the Company under the Terrorism Act is
      based on the Company’s insured losses in more than one occurrence and the
      United States Government does not designate the amount allocable to each
      occurrence, the reimbursement shall be prorated in the proportion that the
      Company’s insured losses in each occurrence bear to the Company’s total
      insured losses arising out of all occurrences to which the recovery
      applies.

            


    

     

    Article
XI - Annuities at Company’s Option

     

    
      	
              A.

            	
              Whenever
      the Company is required, or elects, to purchase an annuity or to negotiate
      a structured settlement in excess of the retention of this Contract,
      either in satisfaction of a judgment or in an out-of-court settlement or
      otherwise, the cost of the annuity or the structured settlement, as the
      case may be, shall be deemed part of the Company’s ultimate net loss,
      provided such annuity or structured settlement terms grant the Company
      full and final release as respects the indemnity portion of the
      settlement.  Additionally, it is the Company’s intent to place
      all annuities or structured settlements with a carrier whose
      A.M. Best’s rating is “A” or
better.

            


    

     

    
      	
              B.

            	
              The
      terms “annuity” or “structured settlement” shall be understood to mean any
      insurance policy, lump sum payment, agreement or device of whatever nature
      resulting in the payment of a lump sum by the Company in settlement of any
      or all future liabilities which may attach to it as a result of an
      occurrence.

            


    

     

    
      	
              C.

            	
              In
      the event the Company purchases an annuity which inures in whole or in
      part to the benefit of the Reinsurer, it is understood that the liability
      of the Reinsurer is not released thereby. In the event the Company is
      required to provide benefits not provided by the annuity for whatever
      reason, the Reinsurer shall pay its share of any
  loss.

            


    

     

    Article
XII - Claims

     

    
      	
              A.

            	
              Whenever
      a claim or settlement by the Company hereunder is for an amount greater
      than $500,000 and/or whenever a claim appears likely to result in a claim
      under this Contract, the Company shall notify the
      Reinsurer.  Further, the Company shall notify the Reinsurer
      whenever a claim involves a fatality, amputation, spinal cord damage,
      brain damage, blindness or extensive burns, regardless of liability,
      including all subsequent developments.  The Reinsurer shall have
      the right to participate, at its own expense, in the defense of any claim
      or suit or proceeding involving this reinsurance.  The Company
      shall also provide any additional information that from time to time may
      be reasonably required by the Reinsurer to ascertain liability under this
      Contract.

            


    

     

    
      	
              B.

            	
              All
      claim settlements made by the Company, provided such settlements are
      within the terms of this Contract, shall be binding upon the Reinsurer,
      and the Reinsurer agrees to pay all amounts for which it is liable upon
      receipt of reasonable evidence of the amount paid by the
      Company.

            


    

     

     

    
      
        
        

      

      
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    Article
XIII - Sunset

     

    
      	
              A.

            	
              Notwithstanding
      anything herein to the contrary, coverage shall apply only to claims
      otherwise covered hereunder which also satisfy the following criteria
      within seven years of the termination date of this
    Contract:

            


    

     

    
      	
               
      

            	
              1.

            	
              The
      Company has received formal notification from its insured which satisfies
      the reporting provisions under the Company’s policy;
  and

            


    

     

    
      	
               
      

            	
              2.

            	
              The
      Company has made entry into its claim records of such claim as stipulated
      hereunder; and

            


    

     

    
      	
               
      

            	
              3.

            	
              The
      Company has paid and/or reserved such claim to 25.0% or more of the
      applicable retention hereunder.

            


    

     

    
      	
              B.

            	
              The
      required entry into the Company’s claim records and the Company’s notice
      to the Reinsurer as required herein shall each include, but shall not be
      limited to:

            


    

     

    
      	
               
      

            	
              1.

            	
              The
      location of the loss;

            


    

     

    
      	
               
      

            	
              2.

            	
              The
      date of loss, as established under this
  Contract;

            


    

     

    
      	
               
      

            	
              3.

            	
              The
      names of all insureds who have been identified as being involved in the
      loss;

            


    

     

    
      	
               
      

            	
              4.

            	
              The
      facts describing how the loss
occurred;

            


    

     

    
      	
               
      

            	
              5.

            	
              A
      description of the damages being claimed against the
    insured;

            


    

     

    
      	
               
      

            	
              6.

            	
              The
      names of all known claimants;

            


    

     

    
      	
               
      

            	
              7.

            	
              A
      schedule of all of the Company’s policies applicable to this loss,
      including policy numbers, policy limits, policy periods, and lines of
      business;

            


    

     

    
      	
               
      

            	
              8.

            	
              Reserves
      and payments for indemnity, medical and expense, if
  any.

            


    

     

    Article
XIV - Special Commutation

     

    
      	
              A.

            	
              In
      the event a Subscribing Reinsurer meets one or more of the following
      conditions, the Company may require a commutation of that portion of any
      excess loss hereunder represented by any outstanding claim or claims,
      including any related loss adjustment
expense:

            


    

     

    
      	
               
      

            	
              1.

            	
              The
      Subscribing Reinsurer’s A.M. Best’s rating has been assigned or downgraded
      below A- (including any “Not Rated” rating) and/or Standard & Poor’s
      rating has been assigned or downgraded below BBB+ (includes any “NR”
      rating); or

            


    

     

     

    
      
        
        

      

      
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              2.

            	
              The
      Subscribing Reinsurer has ceased assuming new and renewal property and
      casualty treaty reinsurance
business.

            


    

     

    “Outstanding
claim or claims” shall be defined as known or unknown claims, including any
billed yet unpaid claims.  However, unless otherwise mutually agreed,
this paragraph A shall not apply unless the outstanding claim or claims is
for an amount not less than $5,000.

     

    
      	
              B.

            	
              If
      the Company elects to require commutation as provided in paragraph A
      above, the Company shall submit a Statement of Valuation of the
      outstanding claim or claims as of the last day of the month immediately
      preceding the month in which the Company elects to require commutation, as
      determined by the Company.  Such Statement of Valuation shall
      include the elements considered reasonable to establish the excess loss
      and shall set forth or attach the information relied upon by the Company
      and the methodology employed to calculate the excess loss.  The
      Subscribing Reinsurer shall then pay the amount requested within 30
      calendar days of receipt of such Statement of Valuation, unless the
      Subscribing Reinsurer needs additional information from the Company to
      assess the Company’s Statement of Valuation or contests such
      amount.

            


    

     

    
      	
              C.

            	
              If
      the Subscribing Reinsurer needs additional information from the Company to
      assess the Company’s Statement of Valuation or contests the amount
      requested, the Subscribing Reinsurer shall so notify the Company within 15
      calendar days of receipt of the Company’s Statement of
      Valuation.  The Company shall supply any reasonably requested
      information to the Subscribing Reinsurer within 15 calendar days of
      receipt of the notification.  Within 30 calendar days of
      the date of the notification or of the receipt of the information,
      whichever is later, the Subscribing Reinsurer shall provide the Company
      with its Statement of Valuation of the outstanding claim or claims as of
      the last day of the month immediately preceding the month in which the
      Company elects to require commutation, as determined by the Subscribing
      Reinsurer.  Such Statement of Valuation shall include the
      elements considered reasonable to establish the excess loss and shall set
      forth or attach the information relied upon by the Subscribing Reinsurer
      and the methodology employed to calculate the excess
  loss.

            


    

     

    
      	
              D.

            	
              If
      agreement, as outlined in paragraphs A, B and C, cannot be reached,
      either party can abandon the commutation effort, or the Company and the
      Subscribing Reinsurer may seek to settle any difference by mutually
      appointing an independent actuary.

            


    

     

    
      	
              E.

            	
              If
      the parties cannot agree on an acceptable independent actuary within 15
      calendar days of the date of the Subscribing Reinsurer’s Statement of
      Valuation, then each party shall appoint an actuary as party arbitrators
      for the limited and sole purpose of selecting an independent
      actuary.  If the actuaries cannot agree on an acceptable
      independent actuary within 15 calendar days of the date of the Subscribing
      Reinsurer’s Statement of Valuation, the Company shall supply the
      Subscribing Reinsurer with a list of at least three proposed independent
      actuaries, and the Subscribing Reinsurer shall select the independent
      actuary from that list.

            


    

     

    
      	
              F.

            	
              Upon
      selection of the independent actuary, both parties shall present their
      respective written submissions to the independent actuary.  The
      independent actuary may, at his or her discretion, request additional
      information.  The independent actuary shall issue his or her
      decision within 45 calendar days after the written submissions have been
      filed and any additional information has been
  provided.

            


    

     

     

     

    
      
        
        

      

      
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              G.

            	
              The
      decision of the independent actuary shall be final and
      binding.  The expense of the independent actuary shall be
      equally divided between the two parties.  For the purposes of
      this Article, unless mutually agreed otherwise, an “independent actuary”
      shall be an actuary who satisfies each of the following
      criteria:

            


    

     

    
      	
               
      

            	
              1.

            	
              Is
      regularly engaged in the valuation of claims resulting from lines of
      business subject to this Contract;
and

            


    

     

    
      	
               
      

            	
              2.

            	
              Is
      either a Fellow of the Casualty Actuarial Society or of the American
      Academy of Actuaries; and

            


    

     

    
      	
               
      

            	
              3.

            	
              Is
      disinterested and impartial regarding this
  commutation.

            


    

     

    
      	
              H.

            	
              Notwithstanding
      paragraphs A, B and C above, in the event that the Subscribing Reinsurer
      no longer meets any of the conditions specified in subparagraph 1 or 2 in
      paragraph A above, this commutation may continue on a mutually agreed
      basis.

            


    

     

    
      	
              I.

            	
              Payment
      by the Subscribing Reinsurer of the amount requested in accordance with
      paragraph B, C or F above, shall release the Subscribing Reinsurer
      from all further liability for outstanding claim or claims, known or
      unknown, under this Contract and shall release the Company from all
      further liability for payments of salvage or subrogation amounts, known or
      unknown, to the Subscribing Reinsurer under this
  Contract.

            


    

     

    
      	
              J.

            	
              In
      the event of any conflict between this Article and any other article of
      this Contract, the terms of this Article shall
  control.

            


    

     

    
      	
              K.

            	
              This
      Article shall survive the termination of this
  Contract.

            


    

     

    Article
XV - Salvage and Subrogation

     

    The
Reinsurer shall be credited with recoveries from salvage (i.e., reimbursement
obtained or recovery made by the Company, less the actual cost, excluding
salaries of officials and employees of the Company and sums paid to attorneys as
retainer, of obtaining such reimbursement or making such recovery) on account of
claims and settlements involving reinsurance hereunder.  Recoveries
therefrom shall always be used to reimburse the excess carriers in the reverse
order of their priority according to their participation before being used in
any way to reimburse the Company for its primary loss.  The Company
hereby agrees to enforce its rights to salvage or subrogation relating to any
loss, a part of which loss was sustained by the Reinsurer, and to prosecute all
claims arising out of such rights if, in the Company’s opinion, it is
economically reasonable to do so.

     

     

    
      
        
        

      

      
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    Article
XVI - Premium

     

    
      	
              A.

            	
              As
      premium for each excess layer of reinsurance coverage provided by this
      Contract, the Company shall pay the Reinsurer the greater of the following
      for each contract year (except the runoff contract year, if
      any):

            


    

     

    
      	
               
      

            	
              1.

            	
              The
      amount (or pro rata portion thereof if this Contract is terminated prior
      to the end of any 12-month contract year in accordance with the provisions
      of the Special Termination Article), shown as “Annual Minimum Premium” for
      that excess layer in Schedule A attached hereto;
  or

            


    

     

    
      	
               
      

            	
              2.

            	
              The
      percentage, shown as “Premium Rate” for that excess layer in
      Schedule A attached hereto, of the Company’s net earned premium for
      the contract year.

            


    

     

    
      	
              B.

            	
              The
      Company shall pay the Reinsurer an annual deposit premium for each excess
      layer of the amount, shown as “Annual Deposit Premium” for that excess
      layer in Schedule A attached hereto, in four equal installments of
      the amount, shown as “Quarterly Deposit Premium” for that excess layer in
      Schedule A attached hereto, on January 1, April 1,
      July 1 and October 1 of each contract year (except the runoff
      contract year, if any).  However, no deposit premium
      installments shall be due after the effective date of
      termination.

            


    

     

    
      	
              C.

            	
              Within
      60 days following the end of each contract year (except the runoff
      contract year, if any), the Company shall provide a report to the
      Reinsurer setting forth the premium due hereunder for each excess layer
      for the contract year, computed in accordance with paragraph A, and
      any additional premium due the Reinsurer for each such excess layer shall
      be remitted by the Company with its report.  If the premium so
      computed for any excess layer is less than the previously paid, but more
      than the minimum premium, for that excess layer, the balance shall be
      returned by the Reinsurer to the Company within 30 days of the
      report.

            


    

     

    
      	
              D.

            	
              In
      the event this Contract is terminated on a “runoff” basis, the Company
      shall pay the Reinsurer premium for each excess layer for the runoff
      contract year equal to the percentage, shown as “Premium Rate” for that
      excess layer in Schedule A attached hereto, of the Company’s net earned
      premium applicable to subject business for that excess layer during the
      runoff contract year.  Within 30 days following the end of
      each three-month period during the runoff contract year, the Company shall
      provide a report to the Reinsurer setting forth the premium due hereunder
      for each excess layer for the applicable three-month period, computed in
      accordance with this paragraph, and such premium shall be remitted by the
      Company with its report.

            


    

     

    
      	
              E.

            	
              “Net
      earned premium” as used herein is defined as the Company’s gross earned
      premium for the classes of business subject to this Contract (exclusive of
      premium for business covered by the Minnesota Workers’ Compensation
      Reinsurance Association), adjusted for experience modification, discounts,
      credits, surcharges, expense constants and deductible credits, plus or
      minus the Reinsurer’s pro rata share of any premium arising from audit
      adjustments, minus premiums paid for facultative reinsurance which inures
      to the benefit of this Contract.

            


    

     

     

    
      
        
        

      

      
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    Article
XVII - Late Payments

     

    
      	
              A.

            	
              The
      provisions of this Article shall not be implemented unless
      specifically invoked, in writing, by one of the parties to this
      Contract.

            


    

     

    
      	
              B.

            	
              In
      the event any premium, loss or other payment due either party is not
      received by the intermediary named in the Intermediary Article (BRMA 23A)
      (hereinafter referred to as the “Intermediary”) by the payment due date,
      the party to whom payment is due may, by notifying the Intermediary in
      writing, require the debtor party to pay, and the debtor party agrees to
      pay, an interest penalty on the amount past due calculated for each such
      payment on the last business day of each month as
  follows:

            


    

     

    
      	
               
      

            	
              1.

            	
              The
      number of full days which have expired since the due date or the last
      monthly calculation, whichever the lesser;
times

            


    

     

    
      	
               
      

            	
              2.

            	
              1/365ths
      of the six-month United States Treasury Bill rate as quoted in The Wall Street Journal
      on the first business day of the month for which the calculation is
      made; times

            


    

     

    
      	
               
      

            	
              3.

            	
              The
      amount past due, including accrued
interest.

            


    

     

    It is
agreed that interest shall accumulate until payment of the original amount due
plus interest penalties have been received by the Intermediary.

     

    
      	
              C.

            	
              The
      establishment of the due date shall, for purposes of this Article, be
      determined as follows:

            


    

     

    
      	
               
      

            	
              1.

            	
              As
      respects the payment of routine deposits and premiums due the Reinsurer,
      the due date shall be as provided for in the applicable section of this
      Contract.  In the event a due date is not specifically stated
      for a given payment, it shall be deemed due 30 days after the date of
      transmittal by the Intermediary of the initial billing for each such
      payment.

            


    

     

    
      	
               
      

            	
              2.

            	
              Any
      claim or loss payment due the Company hereunder shall be deemed due
      30 days after the proof of loss and demand for payment is transmitted
      to the Reinsurer.  If such loss or claim payment is not received
      within the 30 days, interest will accrue on the payment or amount
      overdue in accordance with paragraph B above, from the date the proof
      of loss and demand for payment was transmitted to the
      Reinsurer.

            


    

     

    
      	
               
      

            	
              3.

            	
              As
      respects any payment, adjustment or return due either party not otherwise
      provided for in subparagraphs 1 and 2 above, the due date shall be as
      provided for in the applicable section of this Contract.  In the
      event a due date is not specifically stated for a given payment, it shall
      be deemed due 30 days following transmittal of written notification
      that the provisions of this Article have been
  invoked.

            


    

     

    For
purposes of interest calculations only, amounts due hereunder shall be deemed
paid upon receipt by the Intermediary.

     

    
      	
              D.

            	
              Nothing
      herein shall be construed as limiting or prohibiting a Subscribing
      Reinsurer from contesting the validity of any claim, or from participating
      in the defense of any claim or suit, or prohibiting either party from
      contesting the validity of any payment or from initiating any arbitration
      or other proceeding in accordance with the provisions of this
      Contract.  If the debtor party prevails in an arbitration or
      other proceeding, then any interest penalties due hereunder on the amount
      in dispute shall be null and void.  If the debtor party loses in
      such proceeding, then the interest penalty on the amount determined to be
      due hereunder shall be calculated in accordance with the provisions set
      forth above unless otherwise determined by such proceedings.  If
      a debtor party advances payment of any amount it is contesting, and proves
      to be correct in its contestation, either in whole or in part, the other
      party shall reimburse the debtor party for any such excess payment made
      plus interest on the excess amount calculated in accordance with this
      Article.

            


    

     

     

    
      
        
        

      

      
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              E.

            	
              Interest
      penalties arising out of the application of this Article that are
      $50,000 or less from any party shall be waived unless there is a pattern
      of late payments consisting of three or more items over the course of any
      12-month period.

            


    

     

    Article
XVIII - Offset

     

    Each
party hereto has the right, which may be exercised at any time, to offset any
amounts, whether on account of premiums or losses or otherwise, due from such
party to another party under this Contract or any other reinsurance contract
heretofore or hereafter entered into between them, against any amounts, whether
on account of premiums or losses or otherwise due from the latter party to the
former party.  The party asserting the right of offset may exercise
this right, whether as assuming or ceding insurer or in both roles in the
relevant agreement or agreements.

     

    Article
XIX - Access to Records (BRMA 1D)

     

    The
Reinsurer or its designated representatives shall have access at any reasonable
time to all records of the Company which pertain in any way to this
reinsurance.

     

    Article
XX - Liability of the Reinsurer

     

    
      	
              A.

            	
              The
      liability of the Reinsurer shall follow that of the Company in every case
      and be subject in all respects to all the general and specific
      stipulations, clauses, waivers and modifications of the Company’s policies
      and any endorsements thereon.  However, in no event shall this
      be construed in any way to provide coverage outside the terms and
      conditions set forth in this
Contract.

            


    

     

    
      	
              B.

            	
              Nothing
      herein shall in any manner create any obligations or establish any rights
      against the Reinsurer in favor of any third party or any persons not
      parties to this Contract.

            


    

     

    Article
XXI - Net Retained Lines (BRMA 32E)

     

    
      	
              A.

            	
              This
      Contract applies only to that portion of any policy which the Company
      retains net for its own account (prior to deduction of any underlying
      reinsurance specifically permitted in this Contract), and in calculating
      the amount of any loss hereunder and also in computing the amount or
      amounts in excess of which this Contract attaches, only loss or losses in
      respect of that portion of any policy which the Company retains net for
      its own account shall be included.

            


    

     

     

    
      
        
        

      

      
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              B.

            	
              The
      amount of the Reinsurer’s liability hereunder in respect of any loss or
      losses shall not be increased by reason of the inability of the Company to
      collect from any other reinsurer(s), whether specific or general, any
      amounts which may have become due from such reinsurer(s), whether such
      inability arises from the insolvency of such other reinsurer(s) or
      otherwise.

            


    

     

    Article
XXII - Errors and Omissions (BRMA
14F)

     

    Inadvertent
delays, errors or omissions made in connection with this Contract or any
transaction hereunder shall not relieve either party from any liability which
would have attached had such delay, error or omission not occurred, provided
always that such error or omission is rectified as soon as possible after
discovery.

     

    Article
XXIII - Currency (BRMA 12A)

     

    
      	
              A.

            	
              Whenever
      the word “Dollars” or the “$” sign appears in this Contract, they shall be
      construed to mean United States Dollars and all transactions under this
      Contract shall be in United States
Dollars.

            


    

     

    
      	
              B.

            	
              Amounts
      paid or received by the Company in any other currency shall be converted
      to United States Dollars at the rate of exchange at the date such
      transaction is entered on the books of the
  Company.

            


    

     

    Article
XXIV - Taxes (BRMA 50B)

     

    In
consideration of the terms under which this Contract is issued, the Company will
not claim a deduction in respect of the premium hereon when making tax returns,
other than income or profits tax returns, to any state or territory of the
United States of America or the District of Columbia.

     

    Article
XXV - Federal Excise Tax (BRMA 17D)

     

    
      	
              A.

            	
              The
      Reinsurer has agreed to allow for the purpose of paying the Federal Excise
      Tax the applicable percentage of the premium payable hereon (as imposed
      under Section 4371 of the Internal Revenue Code) to the extent such
      premium is subject to the Federal Excise
Tax.

            


    

     

    
      	
              B.

            	
              In
      the event of any return of premium becoming due hereunder the Reinsurer
      will deduct the applicable percentage from the return premium payable
      hereon and the Company or its agent should take steps to recover the tax
      from the United States Government.

            


    

     

     

    
      
        
        

      

      
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    Article
XXVI - Reserves

     

    (Applies
only to a reinsurer which (1) does not qualify for full credit with any
insurance regulatory authority having jurisdiction over the Company’s reserves,
or (2) which is or becomes rated “B++” or lower or holds a “Not Rated” rating by
A.M. Best or is or becomes rated “BBB+” or lower or holds an “NR” rating by
Standard & Poor’s, unless the reinsurer has an A.M. Best’s rating of “A” or
better or Standard & Poor’s rating of “A” or better and group policyholders’
surplus equal to or above $2,000,000,000 at the inception of this
Contract)

     

    
      	
              A.

            	
              As
      regards policies or bonds issued by the Company coming within the scope of
      this Contract, the Company agrees that when it shall file with the
      insurance regulatory authority or set up on its books reserves for losses
      covered hereunder which it shall be required by law to set up, it will
      forward to the Reinsurer a statement showing the proportion of such
      reserves which is applicable to the Reinsurer.  The Reinsurer
      hereby agrees to fund such reserves in respect of known outstanding losses
      that have been reported to the Reinsurer and allocated loss adjustment
      expense relating thereto, losses and loss adjustment expense paid by the
      Company but not recovered from the Reinsurer, plus reserves for losses and
      loss adjustment expense incurred but not reported, as shown in the
      statement prepared by the Company (hereinafter referred to as “Reinsurer’s
      Obligations”) by Regulation 114 trust accounts, funds withheld, cash
      advances or a Letter of Credit, or combination thereof.  For
      purposes of this Contract, the Lloyd’s United States Credit for
      Reinsurance Trust Fund and the Hannover Re U.S. Master Trust shall be
      considered acceptable funding instruments.  The Reinsurer shall
      have the option of determining the method of funding provided it is
      acceptable to the insurance regulatory authorities having jurisdiction
      over the Company’s reserves.

            


    

     

    
      	
              B.

            	
              When
      funding by a Letter of Credit, the Reinsurer agrees to apply for and
      secure timely delivery to the Company of a clean, irrevocable and
      unconditional Letter of Credit issued by a bank meeting the NAIC
      Securities Valuation Office credit standards for issuers of Letters of
      Credit and containing provisions acceptable to the insurance regulatory
      authorities having jurisdiction over the Company’s reserves in an amount
      equal to the Reinsurer’s proportion of said reserves.  Such
      Letter of Credit shall be issued for a period of not less than one year,
      and shall contain an “evergreen” clause, which automatically extends the
      term for one year from its date of expiration or any future expiration
      date unless 30 days (60 days where required by insurance
      regulatory authorities) prior to any expiration date the issuing bank
      shall notify the Company by certified or registered mail that the issuing
      bank elects not to consider the Letter of Credit extended for any
      additional period.

            


    

     

    
      	
              C.

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

            


    

     

    
      	
               
      

            	
              1.

            	
              To
      reimburse the Company for the Reinsurer’s Obligations, the payment of
      which is due under the terms of this Contract and which has not been
      otherwise paid;

            


    

     

    
      	
               
      

            	
              2.

            	
              To
      make refund of any sum which is in excess of the actual amount required to
      pay the Reinsurer’s Obligations under this Contract, if so requested by
      the Reinsurer;

            


    

     

     

    
      
        
        

      

      
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              3.

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

            


    

     

    
      	
               
      

            	
              4.

            	
              To
      pay the Reinsurer’s share of any other amounts the Company claims are due
      under this Contract.

            


    

     

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

     

    
      	
              D.

            	
              The
      issuing bank shall have no responsibility whatsoever in connection with
      the propriety of withdrawals made by the Company or the disposition of
      funds withdrawn, except to ensure that withdrawals are made only upon the
      order of properly authorized representatives of the
    Company.

            


    

     

    
      	
              E.

            	
              At
      quarterly intervals and on an estimated basis 45 days prior to each
      December 31, or more frequently as agreed but never more frequently than
      quarterly, the Company shall prepare a specific statement of the
      Reinsurer’s Obligations, for the sole purpose of amending the Letter of
      Credit, in the following manner:

            


    

     

    
      	
               
      

            	
              1.

            	
              If
      the statement shows that the Reinsurer’s Obligations exceed the balance of
      credit as of the statement date, the Reinsurer shall, within 30 days
      after receipt of notice of such excess, secure delivery to the Company of
      an amendment to the Letter of Credit increasing the amount of credit by
      the amount of such difference.

            


    

     

    
      	
               
      

            	
              2.

            	
              If,
      however, the statement shows that the Reinsurer’s Obligations are less
      than the balance of credit as of the statement date, the Company shall,
      within 30 days after receipt of written request from the Reinsurer,
      release such excess credit by agreeing to secure an amendment to the
      Letter of Credit reducing the amount of credit available by the amount of
      such excess credit.

            


    

     

    Article
XXVII - Insolvency

     

    
      	
              A.

            	
              In
      the event of the insolvency of one or more of the reinsured companies,
      this reinsurance shall be payable directly to the company or to its
      liquidator, receiver, conservator or statutory successor on the basis of
      the liability of the company without diminution because of the insolvency
      of the company or because the liquidator, receiver, conservator or
      statutory successor of the company has failed to pay all or a portion of
      any claim.  It is agreed, however, that the liquidator,
      receiver, conservator or statutory successor of the company shall give
      written notice to the Reinsurer of the pendency of a claim against the
      company indicating the policy or bond reinsured which claim would involve
      a possible liability on the part of the Reinsurer 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, the
      Reinsurer may investigate such claim and interpose, at its own expense, in
      the proceeding where such claim is to be adjudicated, any defense or
      defenses that it may deem available to the company or its liquidator,
      receiver, conservator or statutory successor.  The expense thus
      incurred by the Reinsurer shall be chargeable, subject to the approval of
      the Court, against the company as part of the expense of conservation or
      liquidation to the extent of a pro rata share of the benefit which may
      accrue to the company solely as a result of the defense undertaken by the
      Reinsurer.

            


    

     

     

    
      
        
        

      

      
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              B.

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

            


    

     

    
      	
              C.

            	
              It
      is further understood and agreed that, in the event of the insolvency of
      one or more of the reinsured companies, the reinsurance under this
      Contract shall be payable directly by the Reinsurer to the company or to
      its liquidator, receiver or statutory successor, except as provided by
      Section 4118(a) of the New York Insurance Law or except (1) where this
      Contract specifically provides another payee of such reinsurance in the
      event of the insolvency of the company or (2) where 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.

            


    

     

    Article
XXVIII - Arbitration

     

    
      	
              A.

            	
              As
      a condition precedent to any right of action hereunder, in the event of
      any dispute or difference of opinion hereafter arising with respect to
      this Contract, it is hereby mutually agreed that such dispute or
      difference of opinion shall be submitted to arbitration.  One
      Arbiter shall be chosen by the Company, the other by the Reinsurer, and an
      Umpire shall be chosen by the two Arbiters before they enter upon
      arbitration, all of whom shall be active or retired disinterested
      executive officers of insurance or reinsurance companies or Lloyd’s London
      Underwriters.  In the event that either party should fail to
      choose an Arbiter within 30 days following a written request by the
      other party to do so, the requesting party may choose two Arbiters who
      shall in turn choose an Umpire before entering upon
      arbitration.  If the two Arbiters fail to agree upon the
      selection of an Umpire within 30 days following their appointment,
      the Umpire shall be appointed in accordance with the procedures of the
      American Arbitration Association.

            


    

     

    
      	
              B.

            	
              Each
      party shall present its case to the Arbiters within 30 days following the
      date of appointment of the Umpire.  The Arbiters shall consider
      this Contract as an honorable engagement rather than merely as a legal
      obligation and they are relieved of all judicial formalities and may
      abstain from following the strict rules of law.  The decision of
      the Arbiters shall be final and binding on both parties; but failing to
      agree, they shall call in the Umpire and the decision of the majority
      shall be final and binding upon both parties.  Judgment upon the
      final decision of the Arbiters may be entered in any court of competent
      jurisdiction.

            


    

     

    
      	
              C.

            	
              If
      more than one reinsurer is involved in the same dispute, all such
      reinsurers shall constitute and act as one party for purposes of this
      Article and communications shall be made by the Company to each of the
      reinsurers constituting one party, provided, however, that nothing herein
      shall impair the rights of such reinsurers to assert several, rather than
      joint, defenses or claims, nor be construed as changing the liability of
      the reinsurers participating under the terms of this Contract from several
      to joint.

            


    

     

     

    
      
        
        

      

      
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              D.

            	
              Each
      party shall bear the expense of its own Arbiter, and shall jointly and
      equally bear with the other the expense of the Umpire and of the
      arbitration.  In the event that the two Arbiters are chosen by
      one party, as above provided, the expense of the Arbiters, the Umpire and
      the arbitration shall be equally divided between the two
      parties.

            


    

     

    
      	
              E.

            	
              Any
      arbitration proceedings shall take place at a location mutually agreed
      upon by the parties to this Contract, but notwithstanding the location of
      the arbitration, all proceedings pursuant hereto shall be governed by the
      law of the state in which the Company has its principal
      office.

            


    

     

    Article
XXIX - Service of Suit (BRMA 49C)

     

    (Applicable
if the Reinsurer is not domiciled in the United States of America, and/or is not
authorized in any State, Territory or District of the United States where
authorization is required by insurance regulatory authorities)

     

    
      	
              A.

            	
              It
      is agreed that in the event the Reinsurer fails to pay any amount claimed
      to be due hereunder, the Reinsurer, at the request of the Company, will
      submit to the jurisdiction of a court of competent jurisdiction within the
      United States.  Nothing in this Article 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.

            


    

     

    
      	
              B.

            	
              Further,
      pursuant to any statute of any state, territory or district of the United
      States which makes provision therefor, the Reinsurer hereby designates the
      party named in its Interests and Liabilities Agreement, or if no party is
      named therein, 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 Contract.

            


    

     

    Article
XXX - Agency Agreement (BRMA 73A)

     

    If more
than one reinsured company is named as a party to this Contract, the first named
company shall be deemed the agent of the other reinsured companies (subject to
the provisions of the Insolvency Article) for purposes of sending or receiving
notices required by the terms and conditions of this Contract, and for purposes
of remitting or receiving any monies due any party.

     

    Article
XXXI - Governing Law (BRMA 71B)

     

    This
Contract shall be governed by and construed in accordance with the laws of the
State of Florida.

     

     

    
      
        
        

      

      
        24

        
          

        

      

      
        Table of Contents

      

    

     

    Article
XXXII - Intermediary (BRMA 23A)

     

    Benfield
Inc. is hereby recognized as the Intermediary negotiating this Contract for all
business hereunder.  All communications (including but not limited to
notices, statements, premium, return premium, commissions, taxes, losses, loss
adjustment expense, salvages and loss settlements) relating thereto shall be
transmitted to the Company or the Reinsurer through Benfield
Inc.  Payments by the Company to the Intermediary shall be deemed to
constitute payment to the Reinsurer.  Payments by the Reinsurer to the
Intermediary shall be deemed to constitute payment to the Company only to the
extent that such payments are actually received by the Company.

     

    In Witness Whereof, the
Company by its duly authorized representative has executed this Contract as of
the date undermentioned at:

     

    North
Palm Beach, Florida, this ________ day of ___________________ in the year
________.

    


    __________________________________________________________

    AmCOMP
Preferred Insurance Company

    AmCOMP
Assurance Corporation

    any and
all insurance companies which are now or hereafter come under

     the
same ownership or management as the AmCOMP Group

     

     

     

    
      
        
        

      

      
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        Table of Contents

      

    

     

    Schedule A

     

    Excess
Workers’ Compensation

    Reinsurance
Contract

    Effective:  January
1, 2008

    


    issued
to

    


    AmCOMP
Preferred Insurance Company

    North
Palm Beach, Florida

    AmCOMP
Assurance Corporation

    North
Palm Beach, Florida

    and

    any and
all insurance companies which are now or

    hereafter
come under the same ownership or management as the

    AmCOMP
Group

    North
Palm Beach, Florida

    


     

    
      
        	 
      	
                First

                Excess

              	
                Second

                Excess

              
	 	 	 	 	 
	
                Company’s
      Retention

              	
                $2,000,000

              	 	
                $5,000,000

              	 
	 	 	 	 	 
	
                Reinsurer’s
      Per Occurrence Limit

              	
                $3,000,000

              	 	
                $5,000,000

              	 
	 	 	 	 	 
	
                Reinsurer’s
      Terrorism Per Occurrence Limit

              	
                $3,000,000

              	 	
                $5,000,000

              	 
	 	 	 	 	 
	
                Reinsurer’s
      Contract Year Limit

              	
                $21,000,000

              	 	
                $10,000,000

              	 
	 	 	 	 	 
	
                Reinsurer’s
      Contract Year Terrorism Limit

              	
                $3,000,000

              	 	
                $5,000,000

              	 
	 	 	 	 	 
	
                Annual
      Minimum Premium

              	
                $4,054,800

              	 	
                $1,000,000

              	 
	 	 	 	 	 
	
                Premium
      Rate

              	
                2.1800%

              	 	
                0.5376%

              	 
	 	 	 	 	 
	
                Annual
      Deposit Premium

              	
                $5,068,500

              	 	
                $1,250,000

              	 
	 	 	 	 	 
	
                Quarterly
      Deposit Premium

              	
                $1,267,125

              	 	
                $312,500

              	 


      

    

    


    


    The
figures listed above for each excess layer shall apply to each Subscribing
Reinsurer in the percentage share for that excess layer as expressed in its
Interests and Liabilities Agreement attached hereto.

     

     

    
      
        Schedule
A

        
        

      

      
        
        

        
          

        

      

      
        Table of Contents

      

    

     

     

    Nuclear
Incident Exclusion Clause - Liability - Reinsurance (U.S.A.)

    (Approved
by Lloyd’s Underwriters’ Fire and Non-Marine Association)

    


    


    


    
      	
              (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,
      to

            


    

    
      	
               
      

            	
              (injury, sickness, disease,
      death or destruction

            


    

    
      	
               
      

            	
              (bodily
      injury or property damage

            


    

    
      	
               
      

            	
              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.

            


    

    
      	
               
      

            	
              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:

            


    

    
      	
               
      

            	
              I.

            	
              Under
      any Liability Coverage to

            


    

    
      	
               
      

            	
              (injury, sickness, disease,
      death or destruction

            


    

    
      	
               
      

            	
              (bodily
      injury or property damage

            


    

    
      	
               
      

            	
              (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.

            


    

     

     

    
      
        
        

      

      
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              II.

            	
              Under
      any Medical Payments Coverage, or under any Supplementary Payments
      Provision relating to

            


    

    
      	
               
      

            	
              (immediate medical or surgical
      relief

            


    

    
      	
               
      

            	
              (first
      aid,

            


    

    
      	
               
      

            	
              to
      expenses incurred with respect to

            


    

    
      	
               
      

            	
              (bodily injury, sickness,
      disease or death

            


    

    
      	
               
      

            	
              (bodily
      injury

            


    

    
      	
               
      

            	
              resulting
      from the hazardous properties of nuclear material and arising out of the
      operation of a nuclear facility by any person or
    organization.

            


    

    
      	
               
      

            	
              III.

            	
              Under
      any Liability Coverage to

            


    

    
      	
               
      

            	
              (injury, sickness, disease,
      death or destruction

            


    

    
      	
               
      

            	
              (bodily
      injury or property damage

            


    

    
      	
               
      

            	
              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

            


    

    
      	
               
      

            	
              (c)

            	 	
              the

            


    

    
      	
               
      

            	
              (injury, sickness, disease,
      death or destruction

            


    

    
      	
               
      

            	
              (bodily
      injury or property damage

            


    

    
      	
               
      

            	
              arises
      out of 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, but if such facility is located
      within the United States of America, its territories, or possessions or
      Canada, this exclusion (c) applies only
to

            


    

    
      	
               
      

            	
              (injury to or destruction of
      property at such nuclear
facility

            


    

    
      	
               
      

            	
              (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 and (2) resulting from the operation by any person
      or organization of any nuclear facility included within the definition of
      nuclear facility under paragraph (a) or (b) thereof; “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.

            


    

     

     

    
      
        
        

      

      
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2

        
          

        

      

      
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    Nuclear
Incident Exclusion Clause Reinsurance - No. 4

    


    


    


    
      	
              (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 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 operations of Nuclear Incident Exclusion Clause
      No. 1B - Liability, No. 2 - Physical Damage, No. 3 - Boiler and Machinery
      and paragraph (1) of this clause, it is understood and agreed that for all
      purposes as respects the reinsurance assumed by the Reinsurer from the
      Reassured, all original insurance policies or contracts of the Reassured
      (new, renewal and replacement) shall be deemed to include the applicable
      existing Nuclear Clause and/or Nuclear Exclusion Clause(s) in effect at
      the time and any subsequent revisions thereto as agreed upon and approved
      by the Insurance Industry and/or a qualified Advisory or Rating
      Bureau.

            


    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        Table of Contents

      

    

     

    Pollution
Exclusion Clause - General Liability - Reinsurance

     

    


    
      	
              A.

            	
              This
      reinsurance excludes all loss and/or liability accruing to the reinsured
      company as a result of:

            


    

    


    
      	
               
      

            	
              1.

            	
              bodily
      injury or property damage arising out of the actual, alleged or threatened
      discharge, dispersal, release or escape of
  pollutants:

            


    

    


    
      	
               
      

            	
              a.

            	 	
              at
      or from premises owned, rented or occupied by a named
    insured;

            


    

    


    
      	
               
      

            	
              b.

            	 	
              at
      or from any site or location used by or for a named insured or others for
      the handling, storage, disposal, processing or treatment of
      waste;

            


    

    


    
      	
               
      

            	
              c.

            	 	
              which
      are at any time transported, handled, stored, treated, disposed of, or
      processed as waste by or for a named insured or any person or organization
      for whom a named insured may be legally responsible;
  or

            


    

    


    
      	
               
      

            	
              d.

            	 	
              at
      or from any site or location on which a named insured or any contractors
      or subcontractors working directly or indirectly on behalf of a named
      insured are performing operations:

            


    

    


    
      	
               
      

            	
              (i)

            	
              if
      the pollutants are brought on or to the site or location in connection
      with such operations; or

            


    

    


    
      	
               
      

            	
              (ii)

            	
              if
      the operations are to test for, monitor, clean up, remove, contain, treat,
      detoxify or neutralize the
pollutants;

            


    

    


    
      	
               
      

            	
              2.

            	
              any
      governmental direction or request that a named insured test for, monitor,
      clean up, remove, contain, treat, detoxify or neutralize
      pollutants.

            


    

    


    
      	
              B.

            	
              Subparagraphs
      A(1)(a) and A(1)(d)(i) above do not apply to bodily injury or property
      damage caused by heat, smoke or fumes from a hostile
  fire.

            


    

    


    
      	
              C.

            	
              “Hostile
      fire” means a fire which becomes uncontrollable or breaks out from where
      it was intended to be.

            


    

    


    
      	
              D.

            	
              “Pollutants”
      means any solid, liquid, gaseous or thermal irritant or contaminant,
      including smoke, vapor, soot, fumes, acids, alkalis, chemicals and
      waste.  Waste includes material to be recycled, reconditioned or
      reclaimed.

            


    

    


    


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        Table of Contents

      

    

    


    


    War
Risk Exclusion Clause (Reinsurance)

     

    


    As
regards interests which at time of loss or damage are on shore, no liability
shall attach hereto in respect of any loss or damage which is occasioned by war,
invasion, hostilities, acts of foreign enemies, civil war, rebellion,
insurrection, military or usurped power, or martial law or confiscation by order
of any government or public authority.

    


    Nevertheless,
this clause shall not be construed to apply to loss or damage occasioned by
riots, strikes, civil commotion, vandalism or malicious damage.

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        Table of Contents

      

    

     

     

    Excess
Workers’ Compensation

    Reinsurance
Contract

    Effective:  January
1, 2008

    


    issued
to

    


    AmCOMP
Preferred Insurance Company

    North
Palm Beach, Florida

    AmCOMP
Assurance Corporation

    North
Palm Beach, Florida

    and

    any and
all insurance companies which are now or

    hereafter
come under the same ownership or management as the

    AmCOMP
Group

    North
Palm Beach, Florida

    


     

     

     

    
 

    


    First
Excess Workers’ Compensation Reinsurance

    


     

    
      
        	
                Reinsurer

              	 
      	
                Participation

              


      

      
        	 
      	 
      	 	 
      
	
                Munich
      Reinsurance America, Inc.

              	 
      	 	
                25.0%

              
	 
      	 
      	 	 
      
	
                Total

              	 
      	 	
                25.0% part
      of

                100%
      share in

                the
      interests and

                liabilities
      of the

                “Reinsurer”

              


      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        Table of Contents

      

    

     

     

    Interests
and Liabilities Agreement

    


    of

    


    Munich
Reinsurance America, Inc.

    (hereinafter referred to as the
“Subscribing Reinsurer”)

    


    with
respect to the

    


    Excess
Workers’ Compensation

    Reinsurance
Contract

    Effective:  January
1, 2008

    


    issued to
and duly executed by

    


    AmCOMP
Preferred Insurance Company

    North
Palm Beach, Florida

    AmCOMP
Assurance Corporation

    North
Palm Beach, Florida

    and

    any and
all insurance companies which are now or

    hereafter
come under the same ownership or management as the

    AmCOMP
Group

    North
Palm Beach, Florida

    


    


    


    The Subscribing Reinsurer hereby
accepts the following percentage share(s) in the interests and liabilities of
the “Reinsurer” as set forth in the attached Contract captioned
above:

    


                               25.0%of the First Excess Workers’
Compensation Reinsurance

                                   
0%of the Second Excess Workers’
Compensation Reinsurance

    


    This
Agreement shall become effective at 12:01 a.m., Local Standard Time where
the occurrence commences, January 1, 2008, and shall continue in force
until terminated in accordance with the provisions of the attached
Contract.

    


    The Subscribing Reinsurer’s share
in the attached Contract shall be separate and apart from the shares of the
other reinsurers, and shall not be joint with the shares of the other
reinsurers, it being understood that the Subscribing Reinsurer shall
in no event participate in the interests and liabilities of the other
reinsurers.

    


    In Witness Whereof, the Subscribing Reinsurer by its
duly authorized representative has executed this Agreement as of the date
undermentioned at:

    


    Princeton,
New Jersey, this _______ day of ______________________ in the year
________.

    


    __________________________________________________________

    Munich
Reinsurance America, Inc.