Exhibit
10.1


AMENDMENT NO. 7


The Workers’
Compensation and Employers’ Liability Excess of Loss Reinsurance Agreement of
July 1, 2002, between EMPLOYERS REINSURANCE CORPORATION of Overland Park,
Kansas, and ZENITH INSURANCE COMPANY and ZNAT INSURANCE COMPANY, both of
Woodland Hills, California, is hereby amended as follows:


I.                                         As respects occurrences taking place on
or after May 1, 2007, and net premium income entered on the books and records
of the REINSURED on and after such date:


A.                                  All references to separate layers under
this agreement are hereby deleted, and Article II, Reinsurance, and Article
VIII, Reinsurance Premium, are hereby amended as described herein.


B.                                    Article II, Reinsurance, is hereby
deleted in its entirety and the following is substituted therefor:


ARTICLE II


REINSURANCE.  As respects
loss sustained by the REINSURED under this agreement, for each occurrence
regardless of the number of policies involved in such occurrence, the REINSURED
shall retain as its own net retention the first $5,000,000 of loss and the
CORPORATION hereby agrees to indemnify the REINSURED against loss in excess of
such retention subject to a limit of $5,000,000 each occurrence and an annual
aggregate limit of $25,000,000, the first such annual period commencing on May 1,
2007 and ending the following April 30, and each successive 12 calendar month
period thereafter.


Occupational disease sustained by each employee shall
be deemed to be a separate occurrence.


C.                                    The Terrorism Sublimit specified in
Article III, Terrorism Sublimit, is hereby decreased from $9,000,000 to
$5,000,000 any one 12 month period.


D.                                   Article VIII, Reinsurance Premium, as
amended, is hereby deleted in its entirety and the following is substituted
therefor:


ARTICLE VIII


REINSURANCE PREMIUM.  As respects
net premium income derived from policies reinsured under this agreement, the
REINSURED shall pay to the CORPORATION a reinsurance premium equal to .834% of
the net premium income derived by the REINSURED from those lines of business to
which this agreement applies.



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II.                                     As respects occurrences taking place on
or after May 1, 2007:


A.                                  The following new article is hereby added
to this agreement:


ARTICLE V-A


DEFINITION OF OCCURRENCE. 
The term “occurrence” shall mean any accident or occurrence or series of
accidents or occurrences arising out of any one event and happening within the
term and scope of this agreement. 
Without limiting the generality of the foregoing, the term “occurrence”
shall be held to include:


As respects Occupational Disease under Workers
Compensation and Employers Liability, each case of an employee contracting any
disease for which the REINSURED may be liable shall be considered a separate
and distinct occurrence and the date of each occurrence shall be deemed to be
as follows:


(a)                                  If the case
is compensable under the Workers Compensation Law or any Occupational Disease
Compensation Act, the date of the beginning of the disability for which
compensation is payable;


(b)                                 If the case
is not compensable under the Workers Compensation Law or any Occupational
Disease Compensation Act, the date of the disability due to said disease
actually began;


(c)                                  Where claim
is made after employment has ceased, then the date of the cessation of
employment shall be deemed to be the date of disability.


B.                                    The following new paragraph is hereby
added to Article VI, Definitions of Loss and Claim Expenses:


However, coverage in excess of policy limits and
coverage for extra contractual obligations, as described in subparagraphs (b)
and (c) of this article, respectively, shall not apply where the loss has been
incurred due to fraud by a member of the Board of Directors or a corporate
officer of the REINSURED acting individually or collectively or in collusion
with an individual or corporation or any other organization or party involved
in the presentation, defense or settlement of any claim covered hereunder.



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III.                                 Effective May 1, 2007:


A.                                  The following new paragraph is hereby
added to Article VI, Definitions of Loss and Claim Expenses:


If any provision of this
article 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 article or the enforceability of such provision in any other
jurisdiction.


B.                                    The following new article is hereby added
to this agreement:


ARTICLE XV-A


DISPUTE RESOLUTION.


Part I - Choice Of Law And Forum


Any dispute arising under this agreement shall be
resolved in the State of California, and the laws of the State of California
shall govern the interpretation and application of this agreement.


Part II - Mediation


If a dispute between the REINSURED and the
CORPORATION, arising out of the provisions of this agreement or concerning its
interpretation or validity and whether arising before or after termination of
this agreement has not been settled through negotiation, both parties agree to
try in good faith to settle such dispute by nonbinding mediation, before resorting
to arbitration.


Part III - Arbitration


A.                                  Resolution
of Disputes - As a condition precedent to any right of action arising
hereunder, any dispute not resolved by mediation between the REINSURED and the
CORPORATION arising out of the provisions of this agreement or concerning its
interpretation or validity, whether arising before or after termination of this
agreement, shall be submitted to arbitration in the manner hereinafter set
forth.


B.                                    Composition
of Panel - Unless the parties agree upon a single arbitrator within 15 days
after the receipt of a notice of intention to arbitrate, all disputes shall be
submitted to an arbitration panel composed of two arbitrators and an umpire
chosen in accordance with Paragraph C. hereof.



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C.                                    Appointment
of Arbitrators - The members of the arbitration panel shall be chosen from
disinterested persons with at least 10 years experience in the insurance and
reinsurance business.  Unless a single
arbitrator is agreed upon, the party requesting arbitration (hereinafter
referred to as the “claimant”) shall appoint an arbitrator and give written
notice thereof by certified mail, to the other party (hereinafter referred to
as the “respondent”) together with its notice of intention to arbitrate.  Within 30 days after receiving such notice,
the respondent shall also appoint an arbitrator and notify the claimant thereof
by certified mail.  Before instituting a
hearing, the two arbitrators so appointed shall choose an umpire.  If, within 20 days after the appointment of
the arbitrator chosen by the respondent, the two arbitrators fail to agree upon
the appointment of an umpire, each of them shall nominate three individuals to
serve as umpire, of whom the other shall decline two and the umpire shall be
chosen from the remaining two by drawing lots. 
The name of the individual first drawn shall be the umpire.


D.                                   Failure of
Party to Appoint an Arbitrator - If the respondent fails to appoint an
arbitrator within 30 days after receiving a notice of intention to arbitrate,
the claimant’s arbitrator shall appoint an arbitrator on behalf of the
respondent, such arbitrator shall then, together with the claimant’s
arbitrator, choose an umpire as provided in Paragraph C. of Part III of this
Article.


E.                                     If the
REINSURED is involved in a dispute under the terms of this agreement and in one
or more separate disputes with one or more other reinsurers in which common
questions of law or fact are in issue, the REINSURED or the CORPORATION, at its
option, may join with such other reinsurers in a common arbitration proceeding
under the terms of this article.  If the
REINSURED and such other reinsurers have commenced arbitration, the CORPORATION
may at its option join such proceeding for the determination of the disupte between
the REINSURED and the CORPORATION.


F.                                     Submission
of Dispute to Panel – Within 30 days after the notice of appointment of all
arbitrators, the panel shall meet, and determine a timely period for discovery,
discovery procedures and schedules for hearings.


G.                                    Procedure
Governing Arbitration - All proceedings before the panel shall be informal and
the panel shall not be bound by the formal rules of evidence.  The panel shall have the power to fix all
procedural rules relating to the arbitration proceeding.  In reaching any decision, the panel shall
give due consideration to the customs and usages of the insurance and
reinsurance business.



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H.                                   Arbitration
Award - The arbitration panel shall render its decision within 60 days after
termination of the proceeding, which decision shall be in writing, stating the
reasons therefor.  The decision of the
majority of the panel shall be final and binding on the parties to the
proceeding.  In no event, however, will
the panel be authorized to award punitive, exemplary or consequential damages
of whatsoever nature in connection with any arbitration proceeding concerning
this agreement.


I.                                        Cost of
Arbitration - Unless otherwise allocated by the panel, each party shall bear
the expense of its own arbitrator and shall jointly and equally bear with the
other parties the expense of the umpire and the arbitration.


In all other
respects not inconsistent herewith, said agreement shall remain unchanged.


IN WITNESS
WHEREOF, the parties hereto have caused this amendment to be executed in
duplicate.


	
  ZENITH INSURANCE COMPANY

  	
   

  	
  EMPLOYERS
  REINSURANCE

  
	
   

  	
   

  	
  CORPORATION

  
	
   

  	
   

  	
   

  
	
  /s/ Jack D.
  Miller

  	
   

  	
  /s/ Lawrence D. Hunter-Blank

  
	
  Title: President

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
  /s/ Michael E.
  Jansen

  	
   

  	
  /s/ Holly W. Lowe

  
	
  Title: Executive
  Vice President and General Counsel

  	
   

  	
  Title: Second Vice President

  
	
   

  	
   

  	
   

  
	
  Date:

  	
     July
  20, 2007

  	
   

  	
  Date:

  	
     July 18, 2007

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ZNAT INSURANCE COMPANY

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Jack D.
  Miller

  	
   

  	
   

  
	
  Title: President

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Michael E.
  Jansen

  	
   

  	
   

  
	
  Title: Executive
  Vice President and General Counsel

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
     July
  20, 2007

  	
   

  	
   

  



 



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