Endorsement No.1 to Prop.Catastrophe Overlying Excess of Loss Reinsurance Contr.



 Exhibit 10.35 
 ENDORSEMENT NO. 1 
 to the 
 PROPERTY CATASTROPHE OVERLYING EXCESS OF LOSS 
 REINSURANCE CONTRACT

 between 
 STATE
AUTOMOBILE MUTUAL INSURANCE COMPANY 
 MILBANK INSURANCE COMPANY 
 STATE AUTO NATIONAL INSURANCE COMPANY 
 STATE AUTO INSURANCE COMPANY OF
WISCONSIN 
 FARMERS CASUALTY INSURANCE COMPANY 
 STATE AUTO INSURANCE COMPANY OF OHIO 
 MERIDIAN SECURITY INSURANCE COMPANY 
 MERIDIAN CITIZENS MUTUAL INSURANCE COMPANY 
 STATE AUTO FLORIDA INSURANCE COMPANY 
 BEACON NATIONAL INSURANCE COMPANY 
 FIRST PREFERRED INSURANCE COMPANY 
 PETROLIA INSURANCE COMPANY 
 BEACON LLOYDS INSURANCE COMPANY 
 (the “Company”) 
 and 
 STATE AUTO PROPERTY AND CASUALTY INSURANCE COMPANY 
 (the Subscribing “Reinsurer”) 
 IT IS HEREBY AGREED that effective January 1,
2008, the Contract shall be amended as follows: 
  

	 	 1.
	 The following are added as reinsured companies, as parties to the Contract and shall hereinafter be included in the definition of “Company”:



  

	 	 a.
	 PATRONS MUTUAL INSURANCE COMPANY OF CONNECTICUT 


  

	 	 b.
	 LITCHFIELD MUTUAL FIRE INSURANCE COMPANY 


  

	 	 c.
	 PATRONS FIRE INSURANCE COMPANY OF RHODE ISLAND 


  

	 	 d.
	 PROVISION STATE INSURANCE COMPANY. 


  

	 	 2.
	 Exhibit A is revised and attached hereto to reflect premiums for the newly reinsured companies. 


  

	 	 3.
	 ARTICLE X – NOTICE OF LOSS AND LOSS SETTLEMENT is deleted in its entirety and the following substituted therefor: 


 “The Company shall adjust, settle, or compromise all claims and losses hereunder. 
 All loss settlements by the Company which comply with the terms hereof shall be unconditionally binding upon the Reinsurer. 







 The Company shall advise the Reinsurer promptly of all claims and any subsequent
developments pertaining thereto, which may, in the Company’s opinion, develop into losses involving Reinsurance hereunder. Inadvertent omission or oversight in dispatching such advices shall in no way affect the liability of the Reinsurer under
this Contract provided the Company informs the Reinsurer of such omission or oversight promptly upon its discovery. 
 The
Company shall submit a proof of loss within 30 days after the end of the calendar quarter in which it paid a covered loss. The Reinsurer shall tender all loss payments within 45 days after receipt of satisfactory
proof of loss.” 
  

	 	 4.
	 ARTICLE XI - PREMIUM is deleted in its entirety and the following substituted therefor: 


 “The premium to be paid to the Reinsurer, as shown in Exhibit A, is payable in equal quarterly installments within 45 days after the
end of each such calendar quarter. Each company’s premium will be proportional to its share of subject premium.” 
  

	 	 5.
	 Notwithstanding the effective date referenced above, the following parties are deleted from the definition of “Company” effective December 18,
2007 upon their dissolution: 


  

	 	 a.
	 FIRST PREFERRED INSURANCE COMPANY 


  

	 	 b.
	 PETROLIA INSURANCE COMPANY. 


 Except as amended herein, the provisions of this Contract shall remain otherwise unchanged. 
 IN WITNESS WHEREOF, the
parties hereto by their authorized representative have executed this Endorsement No. 1 as of the date first written above: 
  

					
		 	 STATE AUTO PROPERTY AND
     CASUALTY INSURANCE COMPANY

			
		 	 By
	 	  

		 	 Title
	 	 Vice President, CFO


 STATE AUTOMOBILE MUTUAL INSURANCE COMPANY 
 MILBANK INSURANCE COMPANY 
 STATE AUTO NATIONAL INSURANCE COMPANY 
 STATE AUTO INSURANCE COMPANY OF WISCONSIN

 FARMERS CASUALTY INSURANCE COMPANY 
 STATE AUTO INSURANCE COMPANY OF OHIO 
 MERIDIAN SECURITY
INSURANCE COMPANY 
 MERIDIAN CITIZENS MUTUAL INSURANCE COMPANY 
 STATE AUTO FLORIDA INSURANCE COMPANY 
 BEACON NATIONAL INSURANCE COMPANY 
 BEACON LLOYDS INSURANCE COMPANY 

PATRONS MUTUAL INSURANCE COMPANY OF CONNECTICUT 







 LITCHFIELD MUTUAL FIRE INSURANCE COMPANY 
 PATRONS FIRE INSURANCE COMPANY OF RHODE ISLAND 
 PROVISION STATE INSURANCE
COMPANY 
  

			
	 By
	 	  

	 Title
	 	 Treasurer









 EXHIBIT A - Revised January 1, 2008 
 State Automobile Mutual Insurance Company 
 Milbank Insurance Company 
 State Auto National Insurance Company 
 State
Auto Insurance Company of Wisconsin 
 Farmers Casualty Insurance Company 
 State Auto Insurance Company of Ohio 
 Meridian Security Insurance Company 
 Meridian Citizens Mutual Insurance Company 
 State Auto Florida Insurance Company 
 Beacon National Insurance Company 
 First Preferred Insurance Company 
 Petrolia Insurance Company 
 Beacon Lloyds Insurance Company 
 Patrons Mutual
Insurance Company of Connecticut 
 Litchfield Mutual Fire Insurance Company 
 Patrons Fire Insurance Company of Rhode Island 
 Provision State Insurance Company

 PROPERTY CATASTROPHE OVERLYING EXCESS OF LOSS REINSURANCE CONTRACT 
 FOR THE PERIOD 
 12:01 A.M., EASTERN TIME, JULY 1, 2007 
 THROUGH 
 12:01 A.M., EASTERN TIME, JULY 1, 2008

 PREMIUM CALCULATION 
 Subject Premium Basis - July 1, 2006 through March 31, 2007 
  

																																						
	 Annual
 Statement Line
	 	Mutual	 	 	Milbank	 	 	National	 	 	SAIC of
Wisconsin	 	 	Farmers	 	 	SAIC of
Ohio	 	 	Meridian
Security	 	 	Meridian
Citizens
Mutual	 	 	State Auto
Florida	 	 	Beacon*	 	 	Sub-Total	 
	 1.0
	 	@	 	100%	 	20,998,619	 	 	544,199	 	 	0	 	 	221,970	 	 	263,665	 	 	1,230,786	 	 	3,047,547	 	 	508,773	 	 	465,995	 	 	1,231,599	 	 	28,513,153	 
	 2.1
	 	@	 	100%	 	13,690,523	 	 	402,213	 	 	0	 	 	126,394	 	 	316,637	 	 	745,121	 	 	1,490,907	 	 	11,116	 	 	726,082	 	 	1,728,758	 	 	19,237,751	 
	 3.0
	 	@	 	65%	 	0	 	 	0	 	 	0	 	 	0	 	 	0	 	 	0	 	 	0	 	 	9,386,287	 	 	0	 	 	937,823	 	 	10,324,110	 
	 4.0
	 	@	 	65%	 	32,508,920	 	 	9,515,041	 	 	0	 	 	4,081,306	 	 	1,217,305	 	 	1,503,788	 	 	6,110,275	 	 	0	 	 	2,112,436	 	 	7,965,844	 	 	65,014,915	 
	 5.0
	 	@	 	50%	 	9,293,684	 	 	854,886	 	 	0	 	 	0	 	 	534,189	 	 	0	 	 	1,013,931	 	 	0	 	 	1,132,730	 	 	1,728,758	 	 	14,558,178	 
	 8.0
	 	@	 	90%	 	170,554	 	 	220	 	 	0	 	 	469	 	 	1,304	 	 	151,158	 	 	24,297	 	 	0	 	 	55,072	 	 	0	 	 	403,074	 
	 9.0
	 	@	 	100%	 	9,137,717	 	 	982,159	 	 	0	 	 	403,655	 	 	92,445	 	 	153,372	 	 	743,400	 	 	0	 	 	331,882	 	 	361,570	 	 	12,206,200	 
	 12.0
	 	@	 	100%	 	1,690,139	 	 	10,759	 	 	0	 	 	1,802	 	 	10,554	 	 	37,270	 	 	460,012	 	 	154,826	 	 	171	 	 	0	 	 	2,365,533	 
	 21.1
	 	@	 	50%	 	20,758,665	 	 	4,986,626	 	 	3,954,261	 	 	3,315,035	 	 	1,470,715	 	 	862,218	 	 	3,461,294	 	 	0	 	 	0	 	 	2,643,982	 	 	41,452,796	 
	 21.2
	 	@	 	50%	 	4,741,875	 	 	186,043	 	 	0	 	 	0	 	 	47,237	 	 	0	 	 	257,323	 	 	305,943	 	 	50	 	 	485,860	 	 	6,024,331	 
		 		 		 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
		 		 		 	112,990,696	 	 	17,482,146	 	 	3,954,261	 	 	8,150,631	 	 	3,954,051	 	 	4,683,713	 	 	16,608,986	 	 	10,366,945	 	 	4,824,418	 	 	17,084,194	 	 	200,100,041	 
	 Percent of
   Total
	 	56.5	%	 	8.7	%	 	2.0	%	 	4.1	%	 	2.0	%	 	2.3	%	 	8.3	%	 	5.2	%	 	2.4	%	 	8.5	%	 	100.0	%  
	 Annual
   Premium
	 	2,011,400	 	 	309,720	 	 	71,200	 	 	145,960	 	 	71,200	 	 	81,880	 	 	295,480	 	 	185,120	 	 	85,440	 	 	302,600	 	 	3,560,000	 
	 Quarterly
   Installment
	 	502,850	 	 	77,430	 	 	17,800	 	 	36,490	 	 	17,800	 	 	20,470	 	 	73,870	 	 	46,280	 	 	21,360	 	 	75,650	 	 	890,000	 
														
		 		 		 			 			 			 			 			 			 			 			 			 			 	Sub-Total	 
	Annual Premium / Subject Premium:	 	 	1.7791%	 

  

													
	 Annual
 Statement Line
	  	Patrons
Mutual	 	 	Litchfield	 	 	Patrons
Fire	 	 	Provision
State	 
	   1.0  @  100%
	  	1,886,945	 	 	101,692	 	 	0	 	 	0	 
	   2.1  @  100%
	  	1,276,795	 	 	11,299	 	 	0	 	 	0	 
	   3.0  @    65%
	  	666,645	 	 	892,626	 	 	0	 	 	0	 
	   4.0  @    65%
	  	10,203,060	 	 	11,299	 	 	0	 	 	0	 
	   5.0  @    50%
	  	4,225,852	 	 	158,187	 	 	0	 	 	0	 
	   8.0  @    90%
	  	0	 	 	0	 	 	0	 	 	0	 
	   9.0  @  100%
	  	463,262	 	 	67,794	 	 	0	 	 	0	 
	 12.0  @  100%
	  	0	 	 	0	 	 	0	 	 	0	 
	 21.1  @    50%
	  	1,028,215	 	 	0	 	 	0	 	 	0	 
	 21.2  @    50%
	  	0	 	 	0	 	 	0	 	 	0	 
		  	 	 	 	 	 	 	 	 	 	 	 
		  	19,750,774	 	 	1,242,897	 	 	0	 	 	0	 
					
	 Semi-Annual Premium:
	  	175,694	 	 	11,056	 	 	0	 	 	0	 
	 Quarterly Installment:
	  	87,847	 	 	5,528	 	 	0	 	 	0	 
					
	 	  	Patrons
Mutual	 	 	Litchfield	 	 	Patrons
Fire	 	 	Provision
State	 
	 Rate as % of Subject Premium:
	  	1.7791	%	 	1.7791	%	 	1.7791	%	 	1.7791	%

  

	 *
	 “Beacon” includes Beacon National, First Preferred, Petrolia and Beacon Lloyds Insurance Companies.