Exhibit 10.39


 


	
   

  	
   

  	
  Swiss Re

  
	
   

  	
   

  	
  

  



 


 


WORKERS’
COMPENSATION AND EMPLOYERS LIABILITY

QUOTA SHARE REINSURANCE AGREEMENT


 


between


 


AMCOMP
ASSURANCE COMPANY and/or

AMCOMP PREFERRED INSURANCE COMPANY and/or PINNACLE ASSURANCE CORPORATION

and/or THOMAS JEFFERSON INSURANCE COMPANY

and/or other insurance companies owned by


AmCOMP,
INCORPORATED


North
Palm Beach, Florida



and



SWISS REINSURANCE AMERICA CORPORATION


Armonk,
New York


 





















 


WORKERS’
COMPENSATION AND EMPLOYERS LIABILITY

QUOTA SHARE REINSURANCE AGREEMENT


 


Table of Contents


 


	
  ARTICLE

  	
   

  	
  TITLE

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  I

  	
   

  	
  BUSINESS
  COVERED

  	
   

  	
  1

  
	
  II

  	
   

  	
  TERM

  	
   

  	
  1

  
	
  III

  	
   

  	
  TERRITORY

  	
   

  	
  2

  
	
  IV

  	
   

  	
  EXCLUSIONS

  	
   

  	
  2

  
	
  V

  	
   

  	
  FULL
  REINSURANCE CLAUSE

  	
   

  	
  5

  
	
  VI

  	
   

  	
  OTHER
  REINSURANCE

  	
   

  	
  5

  
	
  VII

  	
   

  	
  DEFINITIONS

  	
   

  	
  5

  
	
  VIII

  	
   

  	
  RETENTION
  AND CESSION

  	
   

  	
  6

  
	
  IX

  	
   

  	
  PREMIUM
  AND COMMISSION

  	
   

  	
  7

  
	
  X

  	
   

  	
  ACCOUNTS
  AND SETTLEMENTS

  	
   

  	
  7

  
	
  XI

  	
   

  	
  OFFSET

  	
   

  	
  8

  
	
  XII

  	
   

  	
  RESERVES

  	
   

  	
  8

  
	
  XIII

  	
   

  	
  CURRENCY

  	
   

  	
  9

  
	
  XIV

  	
   

  	
  ACCESS
  TO RECORDS

  	
   

  	
  9

  
	
  XV

  	
   

  	
  ERRORS
  AND OMISSIONS

  	
   

  	
  10

  
	
  XVI

  	
   

  	
  TAXES

  	
   

  	
  10

  
	
  XVII

  	
   

  	
  ARBITRATION

  	
   

  	
  10

  
	
  XVIII

  	
   

  	
  SALVAGE
  AND SUBROGATION

  	
   

  	
  11

  
	
  XIX

  	
   

  	
  SERVICE
  OF SUIT

  	
   

  	
  11

  
	
  XX

  	
   

  	
  INSOLVENCY

  	
   

  	
  12

  
	
  XXI

  	
   

  	
  INSOLVENCY
  FUNDS EXCLUSION

  	
   

  	
  12

  
	
  XXII

  	
   

  	
  EXTRA
  CONTRACTUAL OBLIGATIONS

  	
   

  	
  13

  
	
  XXIII

  	
   

  	
  EXCESS
  OF POLICY LIMITS

  	
   

  	
  13

  
	
  XXIV

  	
   

  	
  SERVICING
  CLAUSE

  	
   

  	
  13

  
	
  XXV

  	
   

  	
  PARTICIPATION

  	
   

  	
  14

  
	
   

  	
   

  	
  SIGNATURES

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ATTACHMENTS:

  	
  SCHEDULE
  X-A

  	
   

  	
   

  
	
   

  	
  POLLUTION EXCLUSION CLAUSE

  	
   

  	
   

  
	
   

  	
  NUCLEAR INCIDENT EXCLUSION
  CLAUSE – REINSURANCE - USA

  	
   

  	
   

  
	
   

  	
  NUCLEAR INCIDENT EXCLUSION
  CLAUSE – REINSURANCE - CANADA

  	
   

  	
   

  
	
   

  	
  NUCLEAR INCIDENT EXCLUSION
  CLAUSE – REINSURANCE NO. 4

  	
   

  	
   

  
						



 





















 


WORKERS’
COMPENSATION AND EMPLOYERS LIABILITY

QUOTA SHARE REINSURANCE AGREEMENT




(hereinafter referred to as the “Agreement”)




between



AMCOMP ASSURANCE COMPANY and/or

AMCOMP PREFERRED INSURANCE COMPANY and/or

PINNACLE ASSURANCE CORPORATION and/or

THOMAS JEFFERSON INSURANCE COMPANY

and/or other insurance companies owned by


AmCOMP,
INCORPORATED


North
Palm Beach, Florida



(hereinafter referred to as the “Company”)



and




SWISS REINSURANCE AMERICA CORPORATION


Armonk,
New York



(hereinafter referred to as the “Reinsurer”)


 





















 


ARTICLE I


BUSINESS COVERED


 


The Company obliges itself to cede and the Reinsurer
obliges itself to accept proportional Loss and Loss Adjustment Expense as
described in Article VIII and proportional premium as described in Article IX
in respect of Policies inforce, written or renewed during the Term of this Agreement
issued by Florida Administrative Services and/or Pinnacle Administrators, Inc.
on behalf of the Company or other issuing carriers under executed underwriting
management agreement(s) on behalf of the Company and classified by the Company
as Statutory Workers’ Compensation and Employers’ Liability insurance.


 


ARTICLE II


 


TERM


 


A.    This Agreement shall
be effective at 12:01 A.M. Eastern Daylight Time on January 1, 2000 in respect
of Policies

then in force as well as new and renewal Policies accepted thereafter and shall
remain in force until canceled.


 


B.    The Company or the
Reinsurer may cancel this Agreement by giving the other party ninety (90) days
prior written notice by registered mail to be effective December 31, 2000 or
any December 31 thereafter. The Company shall continue to underwrite and accept
new and renewal Policies during the period between the notice and effective
date of termination.


 


 


1





















 


C.    In the event of
termination of this Agreement, at the Company’s option:


 


l.      Run-off
termination. The Reinsurer shall
remain liable in respect of all Policies then in force at the effective date of
termination until the termination or next anniversary of such Policies,
whichever occurs first, following the effective date of termination, provided
that the run-off period will not exceed twelve (12) months from the effective
date of termination plus odd time, if any, not to exceed eighteen (18) months
in all; or


 


2.     Cut-off
termination. The Company shall relieve
the Reinsurer of all liability hereunder for Losses and Loss Adjustment
Expenses arising from an Occurrence subsequent to the effective date of
termination. If the Company elects cut-off termination, the Reinsurer shall
refund to the Company the Gross Net Unearned Premium applicable to the
unexpired liability on Policies in force minus the commission allowed by the
Reinsurer.


 


D.    Article II-B
notwithstanding, either party to this Agreement shall have the right to cancel
this Agreement immediately by giving written notice to the other party by
registered mail in the event that the other party:


 


1.     Suffers a reduction
of policyholder surplus of 50% or greater during any Treaty Year; or


 


2.     Is declared
insolvent, put in liquidation, or restricted as to underwriting by any
competent regulatory authority or court of competent jurisdiction.


 


Termination pursuant to Article II-D
does not alter the Company’s or its successor’s rights under Article II-C.


 


 Immediate Termination shall
apply on a “cut-off” basis only.


 


ARTICLE III


 


TERRITORY


 


This Agreement applies within the territorial limits of
the Company’s policies. 


 


ARTICLE IV


 


 


EXCLUSIONS


 


THIS AGREEMENT DOES NOT COVER:


 


A.            THE FOLLOWING GENERAL CATEGORIES:


 


1.             Ex-gratia
payments unless agreed in advance by the Reinsurer.


 


2.             Risks
subject to a deductible excess of $25,000, or a self-insured retention excess
of $25,000.


 


3.             Loss or
damage caused directly or indirectly by: (a) enemy attack by armed forces
including action taken by military, naval or air forces in resisting an actual
or an immediately impending enemy attack; (b) invasion; (c) insurrection; (d)
rebellion; (e) revolution; (f) intervention; (g) civil war; and (h) usurped power.


 


2





















 


4.             Reinsurance
assumed by the Company unless agreed in advance by the Reinsurer. This
exclusion shall not apply to fronted business assumed by the Company provided
that it is agreed in advance by the Reinsurer. This exclusion is intended to
only apply on a portfolio basis.


 


5.             Business
derived from any Pool, Association, including Joint Underwriting Association,
Syndicate, Exchange, Plan, Fund or other facility directly as a member,
subscriber or participant, or indirectly by way of reinsurance or assessments;
provided this exclusion shall not apply to Workers Compensation assigned risks
which may be currently or subsequently covered hereunder.


 


6.             Pollution
Liability as per the attached Pollution Liability Exclusion Clause -
Reinsurance.


 


7.             Insolvency
Funds, as per Article XXI of this Agreement.


 


8.             Nuclear
Incident Exclusion Clauses which are attached and made part of this Agreement:


 


	
   

  	
   

  	
  a.

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

  
	
   

  	
   

  	
  b.

  	
  Nuclear Incident Exclusion Clause -
  Liability - Reinsurance - Canada.

  
	
   

  	
   

  	
  c.

  	
  Nuclear Incident Exclusion Clause -
  Reinsurance - No. 4.

  



 


B.            THE FOLLOWING RISKS AS RESPECTS WORKERS COMPENSATION
AND EMPLOYERS LIABILITY:


 


	
  1.

  	
   

  	
  a.

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

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (i)

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

  
	
   

  	
   

  	
   

  	
  (ii)

  	
  the use, handling or transportation
  of radioactive materials, or

  
	
   

  	
   

  	
   

  	
  (iii)

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  b.

  	
  The preceding exclusions (i), (ii)
  and (iii) do not apply to:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (i)

  	
  the exclusive use of particle
  accelerators incidental to ordinary industrial or educational research
  pursuits, or

  
	
   

  	
   

  	
   

  	
  (ii)

  	
  the exclusive use, handling or
  transportation of radioisotopes for medical or industrial use, or

  
	
   

  	
   

  	
   

  	
  (iii)

  	
  radium or radium compounds.

  



 


2.             Operations
under the jurisdiction of the U.S. Longshoremen’s and Harbor Workers’ Act, the
Jones Act and the Maritime Employers Liability Act, except for incidental
exposures.


 


3.             Operation of
docks or wharves.


 


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


 


5.             Risks
involving known exposure to the following substances:


 


a. dioxin.


b. polychlorinated biphenols.


c. asbestos.


 


3





















 


6.             All railway
operations except sidetrack agreements.


 


7.             Amusement
parks, carnivals or circuses.


 


8.             Subaqueous
operations.


 


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


 


10.           Blasting
operations.


 


11.           Demolition of
buildings or structures in excess of five stories.


 


12.           Manufacture,
sale, rental, lease, erection or repair of scaffolds. 


 


13.           Construction
of tunnels or dams.


 


	
  14.

  	
   

  	
  a.

  	
  Manufacturers or importers of
  fireworks, fuses, or any substance, as defined and noted below, intended for
  use as an explosive.

  
	
   

  	
   

  	
  b.

  	
  Loading of fireworks, fuses, or any
  explosive substance defined below into containers for use as explosive
  objects, propellant charges or detonation devices and the storage thereof.

  
	
   

  	
   

  	
  c.

  	
  Manufacturers or importers of any
  product in which fireworks, fuses, or any explosive substance defined below
  is an ingredient.

  
	
   

  	
   

  	
  d.

  	
  Handling, storage, transportation or
  use of fireworks, fuses, or any explosive substance defined below.

  



 


NOTE: An 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.


 


15.           Manufacture,
production, refining, storage of natural or artificial fuel, gas, butane,
propane or liquefied petroleum gasses or gasoline.


 


16.           Onshore and
offshore gas and oil drilling operations.


 


17.           Ownership,
maintenance or use of any airport or aircraft, including fueling, or any device
or machine intended for and/or aiding in the achievement of atmospheric flight,
projection or orbit, except for incidental exposures.


 


18.           Municipal law
enforcement organizations and municipal fire fighting organizations.


 


C.            Those
exclusions set forth in Item 2, 12 & 18. of Section B. of this agreement,
shall not apply if the exposure is incidental to the regular operations of the
insured covered hereunder.


 


D.            In the event
the Company is inadvertently bound on any risk that is excluded under Items 2.
and 6. through 18. Of Section B. of this Article, the reinsurance provided under
this Agreement shall apply to such risk until discovery by the Company within
its Home Office of the existence of such risk and for 30 days thereafter, and
shall then cease unless within the 30 day period, the Company has received from
the Reinsurer written notice of its approval of such risk.


 


4





















 


ARTICLE V


 


FULL REINSURANCE CLAUSE


 


A.            All amounts
ceded hereunder shall be subject to the same gross rates and to the same
conditions and modifications of the Company’s policies, and the Reinsurer shall
pay losses as may be paid thereon and shall follow the settlements of the
Company subject to the limits, terms, and conditions of this Agreement.


 


ARTICLE VI


 


OTHER REINSURANCE


 


A.            The Company
shall deduct three and one half per cent (3.50%) of Gross Subject Unearned
and/or Written Premium for Excess Reinsurance in respect of limits and/or
exposures in excess of two hundred and fifty thousand dollars ($250,000) each
and every occurrence.


 


B.            The Company
may also purchase facultative reinsurance within limits and/or exposures of two
hundred and fifty thousand ($250,000) and deduct such premiums in addition to
the excess deduction as referenced in Article VI-A, recoveries under which
shall inure to the benefit of this Agreement.


 


C.            In open
rating states, the Company shall calculate the subject premium to this
Agreement after deduction of overlying facultative pricing, grossed up 15% to
accommodate the Company’s variable costs to produce this business. Said
business to be placed with effective dates on or after March 31, 2000. The
Reinsurer shall receive first right of refusal to accommodate the Company’s
facultative requirement; however, the Company shall not be required to place
this business with the Reinsurer.


 


D.            The Company
may at its own expense purchase underlying excess reinsurance (on a finite risk
or funded basis, an indemnity basis, or any combination thereof) in respect of
the Company’s retained portion of the Net Retained Liability, recoveries under
which would be ignored for the purposes of determining the Company’s portion of
Net Retained Liability. The Company shall advise the Reinsurer accordingly in
advance of any such coverages purchased.


 


ARTICLE VII


 


DEFINITIONS


 


“Gross Ceded Premium” means the Reinsurer’s share of
Gross Subject Unearned Premium plus Gross Subject Written Premium.


 


“Gross Net Earned Premium” means Gross Net Unearned
Premium at the beginning of the Treaty Year plus Gross Net Written Premium
during the Treaty Year minus Gross Net Unearned Premium at the end of the
Treaty Year.


 


“Gross Net Unearned Premium” means Gross Subject
Unearned Premium minus deductions allowed pursuant to Article VI.


 


“Gross Net Written Premium” means Gross Subject Written
Premium minus deductions allowed pursuant to Article VI.


 


“Gross Subject Earned Premium” means Gross Subject
Unearned Premium at the beginning of a Treaty Year plus Gross Subject Written
Premium during a Treaty Year minus Gross Subject Unearned Premium at the end of
a Treaty


 


5





















 


Year. In the event of cut-off termination, there will
be a deduction of Gross Subject Unearned Premium returned by the Reinsurer to
the Company.


 


“Gross Subject Unearned Premium” means the direct and
assumed premium reserve for unexpired liability established in the Company’s
statutory balance sheets.


 


“Gross Subject Written Premium” means gross premium
accounted as written by the Company in respect of business ceded hereunder,
plus or minus premiums arising from audit adjustments or retrospective rating
adjustments, minus cancellations and return premiums.


 


“Loss” means payments and reserves established by the
Company as a result of claims under its Policies with dates of loss occurrence
within the Treaty Year.


 


“Loss Adjustment Expense” means all costs and expenses
allocable to specific claims that are incurred by the Company in the
adjustment, evaluation, investigation, defense, litigation, settlement, and/or
appeal of specific claims, including (a) courts costs and costs of supersedaes
and appeal bonds, (b) interest accrued after award or judgment and pre-judgment
interest awarded against the insured, and (c) legal expenses and costs incurred
by the Company in connection with coverage questions and legal actions
connected thereto. Loss Adjustment Expenses do not include salaries and
expenses of Company officers and staff adjusters with the exception of staff
nurses, whose cost the Company will bill to specific cases on a time and
expense basis.


 


“Loss Ratio” means ceded Loss and Loss Adjustment
Expense divided by ceded Gross Net Earned Premium.


 


“Net Retained Liability” means Loss and Loss Adjustment
Expense retained by the Company after deduction of Excess Reinsurance and
salvage and subrogation recoveries, provided that the Company’s Net Retained
Liability shall for the purposes of this Agreement be deemed not to exceed the
amount displayed in Article VI-A each and every Occurrence.


 


“Occurrence” means each and every event or series of
events that gives rise to a loss payable under the Company’s policies.


 


“Policy” means contracts of insurance or reinsurance
including without limitation oral and written binders pursuant to the terns and
conditions of which the Company is obliged to pay Losses and/or Loss Adjustment
Expense.


 


“Policy dividends” mean dividends declared and paid by
the Company during the term of each Treaty Year of this Agreement.


 


“Treaty Year” means the period from inception through
the first date of termination and, thereafter, each calendar year.


 


ARTICLE VIII


 


RETENTION AND CESSION


 


A.            Retention. The Company will retain net and unreinsured, except as
provided in Article VI (D), sixty-five percent (65.0%) of Losses and Loss
Adjustment Expense up to but not exceeding sixty-five percent (65.0%) of two
hundred and fifty thousand dollars ($250,000) each and every occurrence plus
one hundred percent (100.0%) of Losses and Loss Adjustment Expense greater than
two hundred and fifty thousand dollars ($250,000) each and every occurrence.


 


B.            Loss Ratio
Corridor and Loss Ratio Cap.


 


6





















 


1.     It is understood
that as respects recoveries under this Agreement the Reinsurer shall never pay
during any one Treaty Year a Loss Ratio greater than seventy two percent
(72.0%) after the application of the provisions of Article VIII-B.2.


 


2.     If the ceded Loss
Ratio for any Treaty Year (including run-off, if applicable) exceeds sixty per
cent (60.0%), the Company will retain Loss and Loss Adjustment Expense for
which the Reinsurer would otherwise be liable (but for this Loss Corridor
provision) equal to three and one half per cent (3.50%) of ceded Gross Net
Earned Premium. The Reinsurer will resume responsibility for Losses and Loss
Adjustment Expenses if the ceded Loss Ratio exceeds sixty-three and one half
per cent (63.5%).


 


C.            Cession. The Company will cede and the Reinsurer will accept
thirty-five percent (35.0%) of Losses and Loss Adjustment Expense up to but not
exceeding thirty-five percent (35.0%) of two hundred and fifty thousand dollars
($250,000) each and every occurrence.


 


D.            Policy
Dividends. The Company will be responsible for all Policy Dividends allocated earned
and paid during a Treaty Year.


 


E.             Adjustment. The Company may adjust its Retention and Cession on a
run-off or cut-off basis, provided that (a) the Retention must be not greater
than ninety per cent (90.0%) or less than sixty percent (60%) and (b) the
Company may adjust the Retention only once during each Treaty Year. The Company
may adjust its Retention and Cession only within thirty days of April 1, July 1
or October 1. However, adjustment at October 1 is subject to review and
approval by the Reinsurer.


 


ARTICLE IX


 


PREMIUM AND COMMISSION


 


A.            Subject to
adjustment as displayed in Article VIII (E), the Company shall cede thirty five
percent (35.0%) of its Gross Net Unearned Premium at the inception of this
Agreement plus thirty five percent (35.0%) of its Gross Net Written Premium in
respect of new and renewal Policies accepted during the Term of this Agreement.


 


B.            The Reinsurer
shall allow the Company to deduct a ceding commission of forty six percent
(46%) of the Company’s Gross Ceded Premium.


 


ARTICLE X


 


ACCOUNTS AND SETTLEMENTS


 


Monthly within sixty (60) days of the end of each
calendar month, the Company will submit accounts in accordance with Schedule X-A annexed
hereto.


 


(** Incoming UPR cession shall be due and payable on
March 31, 2000. Sixty (60) days after the end of the first treaty month. )


 


A.            Simultaneously
with its submission of accounts, the Company will remit any balance it owes the
Reinsurer.


 


B.            The Reinsurer
shall remit any balance it owes the Company within thirty (30) days of its
receipt of the Company’s monthly account.


 


C.            Quarterly
within seventy-five (75) days of the end of each calendar quarter, the Company
and the Reinsurer shall exchange statutory financial statements filed with
their respective state regulatory authorities.


 


7





















 


ARTICLE XI


 


OFFSET


 


Each party hereto shall have, and may exercise at any
time and from time to time, the right to offset any balances, whether on
account of premiums or on account of losses or otherwise, due from such party
to the other party hereto under this Agreement and may offset the same against
any balance or balances due or to become due to the former from the latter
under the same Agreement between them; and the party asserting the right of
offset shall have and may exercise such right whether the balance or balances
due or to become due to such party from the other are on account of premiums or
on account of losses or otherwise and regardless of the capacity, whether as
Company or as Reinsurer, in which each party acted under this Agreement,
provided, however, that in the event of the insolvency of a party hereto, offsets
shall only be allowed in accordance with relevant statutes.


 


ARTICLE XII


 


RESERVES


 


(This Article applies to Reinsurer: (a) which do not
qualify for credit by any state or any other governmental authority having
jurisdiction over the Company’s affairs; or (b) whose rating by A.M. Best drops
below “A”.)


 


A.            As regards
all business coming within the scope of this Agreement, the Reinsurer agree
that, if the Company so requests, the Reinsurer shall fund its share of the
Company’s ceded Unearned Premium and Outstanding Loss and Loss Adjustment
Expense Reserves including incurred but not reported loss reserves by:


 


1.     Clean, unconditional
and irrevocable Letter of Credit issued by any bank acceptable to the state or
other governmental authority having jurisdiction in this matter, and/or


 


2.     Acceptable escrow
accounts for the benefit of the Company, and/or


 


3.     Cash advances, if,
without such funding, a penalty would accrue to the Company on any financial
statement it is required to file with any insurance regulatory authorities.


 


B.            With regard
to funding in whole or in part by Letter of Credit, it is agreed that each such
Letter of Credit will be issued for a term of not less than one year and will
include a so-called “evergreen” clause which automatically extends the term for
at least one additional year at each expiration date unless thirty (30) days
prior to any expiration date, the issuing bank notifies the Company by
certified mail it elects not to consider the Letter of Credit renewed or
extended for any additional period.


 


C.            The Company
and the Reinsurer further agree, notwithstanding anything to the contrary in
this Agreement, that said Letter of Credit may be drawn upon by the Company or
its successors in interest at any time, without diminution because of the
insolvency of the Company or the Reinsurer, but only for one or more of the
following purposes:


 


1.      To reimburse itself
for the Reinsurer share of the Unearned Premium paid under this Agreement,
and/or


 


2.      To reimburse itself
for the Reinsurer’ share of the Unearned Premium returned or returnable to
insured upon cancellation of Policies covered under this Agreement, and/or


 


3.      To pay the
Reinsurer’ share or to reimburse the Company for the Reinsurer’ share of any
liability for loss reinsured by this Agreement, which is due to the Company and
has not been otherwise paid by the Reinsurer, and/or


 


8





















 


4.      To refund to the
Reinsurer of any sum which is in excess of the actual amounts required to pay
the Reinsurer’ obligations under 1, 2, and 3 above.


 


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


 


E.             At annual
intervals or more frequently as determined by the Company, but never more
frequently than quarterly, the Company shall prepare a specific statement, for
the sole purpose of amending the Letter of Credit, and/or the escrow accounts
and/or the Reinsurer’ cash advances, of the Reinsurer’ share of any
obligations. If the statement shows that the Reinsurer’ share of obligations
exceeds the balance of funding as of the statement date, the Reinsurer shall,
within thirty (30) days after receipt of notice of such excess, secure delivery
to the Company of an amendment of the Letter of Credit increasing the amount of
credit by the amount of such difference and/or increase the balances of the
escrow accounts and/or make additional cash advances to eliminate the
difference. If, however, the statement shows that the Reinsurer’ share of
obligations is less than the balance of funding as of the statement date, the
Company shall, within thirty (30) days after receipt of written request from
the Reinsurer, release such excess funding by agreeing to secure an amendment
to the Letter of Credit reducing the amount of credit available and/or
returning excess amounts from escrow accounts and/or cash advances.


 


F.             The rights
and obligations of the Company and the Reinsurer, as set forth in this Article,
shall not be diminished in any manner whatsoever by the insolvency of any party
hereto.


 


ARTICLE XIII


 


CURRENCY


 


All of the provisions of this Agreement involving
dollar amounts are expressed in terms of United States dollars and all premium
and loss payments hereunder shall be made in United States dollars.


 


ARTICLE XIV


 


ACCESS TO RECORDS


 


The Company shall place at the disposal of the
Reinsurer at all reasonable times, and the Reinsurer shall have the right to
inspect, through its authorized representatives, all books, records, or papers
of the Company in connection with any reinsurance hereunder, or claims in
connection herewith.


 


ARTICLE XV


 


ERRORS AND OMISSIONS


 


Any inadvertent neglect, delay, omission or error shall
not be held to relieve the Reinsurer from any liability which would attach to
it hereunder if such neglect, delay, omission or error had not been made,
provided the Company rectifies such neglect, delay, omission, or error upon
discovery.


 


9





















 


ARTICLE XVI


 


TAXES


 


The Company will pay all taxes of premiums reported to
the Reinsurer on this Agreement. 


 


ARTICLE XVII


 


ARBITRATION


 


As a condition precedent to any right of action
hereunder, any dispute arising out of this Agreement, whether arising before or
after termination, shall be submitted to the decision of a board of arbitration
composed of two arbitrators and an umpire, meeting in North Palm Beach, Florida
unless otherwise agreed.


 


The members of the board of arbitration shall be active
or retired disinterested officials of insurance or reinsurance companies. Each
party shall appoint its arbitrator, and the two arbitrators shall choose an
umpire before instituting the hearing. If the respondent fails to appoint its
arbitrator within four weeks after being requested to do so by the claimant,
the latter shall also appoint the second arbitrator. If the two arbitrators
fail to agree upon the appointment of an umpire within four weeks after their
nominations, each of them shall name three, of whom the other shall decline
two, and the decision shall be made by drawing lots.


 


The claimant shall submit its initial brief within twenty
(20) days from appointment of the umpire. The respondent shall submit its brief
within twenty (20) days thereafter, and the claimant may submit a reply brief
within ten (10) days after filing of the respondent’s brief.


 


The board shall make its decision with regard to the
custom and usage of the insurance and reinsurance business. The board shall
issue its decision in writing based upon a hearing in which evidence may be
introduced without following strict rules of evidence but in which
cross-examination and rebuttal shall be allowed. The board shall make its
decision within sixty (60) days following the termination of the hearings
unless the parties consent to an extension. The majority decision of the board
shall be final and binding upon all parties to the proceeding. Judgment may be
entered upon the award of the board in any court having jurisdiction thereof.


 


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


 


Each party shall bear the expense of its own arbitrator
and shall jointly and equally bear with the other party the expense of the
umpire. The remaining costs of the arbitration proceedings shall be allocated
by the board.


 


It is agreed that the jurisdiction of the arbitrators
to make or render any decision or award shall be limited by the limit of
liability expressly hereinbefore set forth, and that the arbitrators shall have
no jurisdiction to make any decision or render any award exceeding such
expressly stated limit of liability of the Reinsurer.


 


ARTICLE XVIII


 


SALVAGE AND SUBROGATION


 


The Reinsurer shall be credited with its proportionate
share of salvage or subrogation recoveries (i.e., reimbursement obtained or
recovery made by the Company, less the actual cost, excluding salaries of
officials and employees of the


 


10





















 


Company, of obtaining such reimbursement or making such
recovery) on account of claims and settlements involving reinsurance hereunder.


 


ARTICLE XIX


 


SERVICE OF SUIT


 


(This Clause is only applicable to unauthorized
Reinsurer, or to the Reinsurer who are domiciled outside the United States of
America.)


 


It is agreed that in the event of the failure of the
Reinsurer to pay any amount claimed to be due hereunder, the Reinsurer, at the
request of the Company, will submit to the jurisdiction of any Florida State
Court and will comply with all requirements necessary to give such Court
jurisdiction, and all matters arising hereunder shall be determined in
accordance with the law of the State of Florida and practice of such Court.
Nothing in this Clause constitutes or should be understood to constitute a waiver
of the Reinsurer’ rights to commence an action in any Court of competent
jurisdiction in the United States, to remove an action to a United States
District Court, or to seek a transfer of a case to another Court as permitted
by the laws of the United States or of any State in the United States.


 


It is further agreed that service of process in such
suit may be made upon Harris, Kukaey, Helgesen, P.A., or an agreed-upon
attorney, and that in any suit instituted, the Reinsurer will abide by the
final decision of such Court or of any Appellate Court in the event of an
appeal.


 


The above named are authorized and directed to accept
service of process on behalf of the Reinsurer in any such suit and/or upon the
request of the Company to give a written undertaking to the Company that they
will enter a general appearance upon the Reinsurer’ behalf in the event such a
suit shall be instituted.


 


Further, pursuant to any statute of any State,
Territory or District of the United States which makes provision therefor, the
Reinsurer hereby designates the Superintendent, Commissioner or the Director of
Insurance or other officer specified for that purpose in the statute, or his
successor or successors in office, as his true and lawful attorney upon whom
may be served any lawful process in any action, suit or proceeding instituted
by or on behalf of the Company or any beneficiary hereunder arising out of this
Agreement, and hereby designates the above-named as the firm to whom the said
officer is authorized to mail such process or a true copy thereof.


 


 


ARTICLE XX


 


INSOLVENCY


 


In the event of the insolvency of the Company, 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 any 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


 


11





















 


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.


 


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


 


It is further understood and agreed that, in the event
of the insolvency of the Company, the reinsurance under this Agreement shall be
payable directly by the Reinsurer to the Company or to its liquidator,
receiver, conservator or statutory successor, except as provided by the
applicable reinsurance regulation or except (a) where the Agreement
specifically provides another payee of such reinsurance in the event of the
insolvency of the Company or (b) 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 XXI


 


INSOLVENCY FUNDS EXCLUSION


 


This Agreement excludes 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, howsoever denominated, established or governed,
which provides for any assessment of or payment or assumption by the Company of
part or all of any claim, debt, charge, fee, or other obligation of any
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.


 


ARTICLE XXII


 


EXTRA CONTRACTUAL OBLIGATIONS


 


This Agreement shall protect the Company for any Extra
Contractual Obligations within the limits hereof. The term “Extra Contractual
Obligations” is defined as those liabilities not covered under any other
provision of this Agreement and which arise from the handling of any claim on
business covered hereunder, such liabilities arising because of, but not
limited to, the following: failure by the Company to settle within the policy
limit, or by reason of alleged or actual negligence, fraud, or bad faith in
rejecting an offer of settlement or in the preparation of the defense or in the
trial of any action against its insured or reinsured or in the preparation or
prosecution of an appeal consequent upon such action.


 


The date on which any Extra Contractual Obligation is
incurred by the Company shall be deemed, in all circumstances, to be the date
of the original disaster and/or casualty.


 


12





















 


However, this Article 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 Company acting individually or collectively or in
collusion with any individual or corporation or any other organization or party
involved in the presentation, defense or settlement of any claim covered
hereunder.


 


ARTICLE XXIII


 


EXCESS OF POLICY LIMITS


 


This Agreement shall protect the Company, within the
limits hereof, in connection with loss in excess of the limit of its original
policy, such loss in excess of the limit having been incurred because of
failure by it to settle within the policy limit or by reason of alleged or
actual negligence, fraud, or bad faith in rejecting an offer of settlement or
in the preparation of the defense or in the trial of any action against its
insured or reinsured or in the preparation or prosecution of an appeal
consequent upon such action.


 


However, this Article 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 Company acting individually or collectively or in
collusion with any individual or corporation or any other organization or party
involved in the presentation, defense or settlement of any claim covered
hereunder.


 


For the purpose of this Article, the word “loss” shall
mean any amounts for which the Company would have been contractually liable to
pay had it not been for the limit of the original policy.


 


ARTICLE XXIV


 


SERVICING CLAUSE


 


The parties to this Agreement hereby recognize that
Jardine Sayer & Company, Inc., (“Jardine”) P.O. Box 6400,
Lawrenceville, New Jersey 08648-0400, will provide certain ongoing
services with respect this Agreement. Communications including notices,
statements, premiums, return premiums, commissions, taxes, losses, loss
adjustment expense, salvages and loss settlements shall be submitted to the
Company or the Reinsurer through Jardine; provided, however, that this Clause
shall not preclude the Company and the Reinsurer from communicating directly on
matters relating to this Agreement. The parties to this Agreement further
recognize that the provision of services by Jardine shall in no way be
construed as providing Jardine with the authority to negotiate on behalf of the
Reinsurer nor shall Jardine receive any remuneration from the Reinsurer for
providing such services. Payments made by the Company to Jardine shall
constitute payment to the Reinsurer to the extent of such payments. Payments
made by the Reinsurer to Jardine shall only constitute payment to the Company
to the extent that such payments are actually received by the Company.


 


ARTICLE XXV


 


PARTICIPATION


 


WORKERS’ COMPENSATION AND EMPLOYERS LIABILITY QUOTA
SHARE REINSURANCE AGREEMENT EFFECTIVE: January 1, 2000.


 


100.0%


 


This Agreement obligates the Reinsurer for the
proportion shown below of the interests and liabilities set forth under this
Agreement.


 


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


 


13





















 


Executed
in North Palm Beach, Florida, this 29th day of September, 2000.


 


	
  ATTEST:

  	
  AmCOMP ASSURANCE CORPORATION

  AmCOMP PREFERRED INSURANCE COMPANY and/or

  PINNACLE ASSURANCE CORPORATION and/or 

  THOMAS JEFFERSON INSURANCE COMPANY and/or

  Other insurance companies owned by 

  AmCOMP INCORPORATED

  
	
   

  	
   

  
	
  /s/ Jean Buckert

  	
   

  	
  /s/ Donald Johnson

  	
   

  
	
   

  	
   

  
				



And
in Atlanta,  Georgia, this 27th
day of September, 2000. 


 


	
  ATTEST: 

  	
  SWISS REINSURANCE AMERICA
  CORPORATION

  
	
   

  	
   

  
	
  /s/ Jeff D. Rubin

  	
   

  	
  /s/ [ILLEGIBLE]

  	
   

  
				



 


14





















 


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 Agreementors or
subAgreementors 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.


 


1





















 


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


 


I.              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.


 


II.            Without in
any way restricting the operation of paragraph (I) 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 B in this paragraph (II) shall be deemed to include the
following provision (specified as the Limited Exclusion Provision):


 


LIMITED EXCLUSION PROVISION*


 


A.            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.


 


B.            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.


 


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


 


1.             become
effective on or after May 1st, 1960, or


 


2.             become
effective before that date and contain the Limited Exclusion Provision set out
above:


 


Provided this paragraph (II) 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.


 


III.           Except for
those classes of policies specified in Clause B of paragraph (II) and without
in any way restricting the operation of paragraph (I) 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 E of this
paragraph (III), the following provision (specified as Broad Exclusion
Provision):


 





















 


BROAD EXCLUSION PROVISION*


 


It is agreed that the policy does not apply:


 


A.            Under any
Liability Coverage, to:  injury,
sickness, disease, death or destruction, bodily injury or  property
damage


 


1.             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


 


2.             resulting
from 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 agency thereof, with any
person or organization.


 


B.            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.


 


C.            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:


 


1.             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;


2.             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


3.             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
(3) applies only to:


 


injury to
or destruction of property at such nuclear facility property damage to such nuclear facility and any
property thereat.


 


D.            As used in
this endorsement:


 


“hazardous properties” include
radioactive, toxic or explosive properties; “nuclear material” means source
material, special nuclear material or by-product material; “source material”, “special
nuclear material”, and “by-product 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 by-product 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 (1) or (2) thereof; “nuclear facility”
means


 





















 


(1)           any nuclear
reactor,


(2)           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,


(3)           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 Twenty-Five (25) grams of plutonium or uranium 233 or any
combination thereof, or more than Two Hundred Fifty (250) grams of uranium 235,


(4)           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.


 


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


 


1.             Garage and
Automobile Policies issued by the Reassured on New York risks, or


2.             statuary
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.


 


IV.           Without in any
way restricting the operation of paragraph (I) of this Clause, it is understood
and agreed that paragraphs (II) and (III) 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.


 


NOTES:                  The words underlined 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.


 


“Reassured”         shall be understood to mean “Reassured”,
“Company”, “Reinsured” or whatever other term is used in the attached
reinsurance agreement to designate the reinsured Company or Companies.


 


“Reinsurance”      shall be understood to mean “Reinsurance”,
“Contract”, “Agreement”, “Policy” or whatever other term is used to designate
the attached reinsurance document.


 





















 


for any scientific, medical,
agricultural, commercial or industrial purpose) used, distributed, handled or
sold by an Insured.


 


D.            As used in
this Policy:


 


l.              The term “nuclear
energy hazard” means the radioactive, toxic, explosive or other hazardous
properties of radioactive material;


 


2.             The term “radioactive
material” means uranium, thorium, plutonium, neptunium, their respective
derivatives and compounds, radioactive isotopes of other elements and any other
substances that the Atomic Energy Control Board may, by regulation, designate
as being prescribed substances capable of releasing atomic energy, or as being
requisite for the production, use or application of atomic energy;


 


3.             The term “nuclear
facility” means:


 


(a)           any apparatus
designed or used to sustain nuclear fission in a self-supporting chain reaction
or to contain a critical mass of plutonium, thorium and uranium or any one or
more of them;


(b)           any equipment
or device designed or used for (i) separating the isotopes of plutonium,
thorium and uranium or any one or more of the, (ii) processing or utilizing
spent fuel, or (iii) handling, processing or packaging waste;


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


(d)           any structure,
basin, excavation, premises or place prepared or used for the storage or
disposal of waste radioactive material; and includes the site on which any of
the foregoing is located, together with all operations conducted thereon and
all premises used for such operations.


 


4.             The term “fissionable
substance” means any prescribed substance that is, or from which can be
obtained, a substance capable of releasing atomic energy by nuclear fission.


 


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


 


NOTES:                  Wherever
used herein the terms:


 


“Reassured”         shall be understood
to mean “Reassured”, “Company”, “Reinsured” or whatever other term is used in
the attached reinsurance agreement to designate the reinsured Company or
Companies.


 


“Reinsurance”      shall be understood
to mean “Reinsurance”, “Contract”, “Agreement”, “Policy” or whatever other term
is used to designate the attached reinsurance document.


 





















 


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 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 operations of Nuclear Incident Exclusion Clauses, -
Liability, - Physical Damage, - Boiler and Machinery and paragraph (1) of this
clause, it is understood and agreed that for all purposes of the reinsurance
assumed by the Reinsurer from the Reinsured, all original insurance policies or
contracts of the Reinsured (new, renewal and replacement) shall be deemed to
include the applicable existing Nuclear Clause and/or Nuclear Exclusion(s) in
effect at the time and any subsequent revisions thereto a agreed upon and
approved by the Insurance Industry and/or a qualified Advisory or Rating
Bureau.


 


1





















 


Schedule X-A


 


Monthly account statement


 


	
  1.

  	
   

  	
  Gross Subject Unearned Premium at
  inception

  	
   

  	
  per statutory statement of Company

  
	
  2.

  	
   

  	
  Excess limits and inuring
  reinsurance deduction

  	
   

  	
  (1) x 0.035

  
	
  3.

  	
   

  	
  Gross Net Unearned Premium at
  inception

  	
   

  	
  (1) - (2)

  
	
  4.

  	
   

  	
  Gross Subject Written Premium

  	
   

  	
  As reported by the Company

  
	
  5.

  	
   

  	
  Excess limits and inuring
  reinsurance deduction

  	
   

  	
  (4) x 0.035

  
	
  6.

  	
   

  	
  Gross Net Written Premium

  	
   

  	
  (4) - (5)

  
	
  7.

  	
   

  	
  Gross Net Ceded Premium

  	
   

  	
  [(3) + (6)] x 0.35

  
	
  8.

  	
   

  	
  Ceding Commission

  	
   

  	
  [(1) + (4)] x 0.46 x 0.35

  
	
  9.

  	
   

  	
  Net ceded premium

  	
   

  	
  (7) - (8)

  
	
  10.

  	
   

  	
  Paid Losses and Loss Adjustment
  Expenses

  	
   

  	
  As reported by the Company

  
	
  11. 

  	
   

  	
  Net balance

  	
   

  	
  (9) - (10)

  



 


Overlying
facultative reinsurance placements


 


Format to be agreed with Reinsurer.


 


Memo items


 


	
  1.

  	
   

  	
  Gross Subject Unearned Premium end
  of period

  
	
  2.

  	
   

  	
  Outstanding Case Loss Reserves

  
	
  3.

  	
   

  	
  Outstanding Case Loss Adjustment
  Expense Reserve

  
	
  4.

  	
   

  	
  Bulk and IBNR Reserves

  



 


Large claims list


 


List of
claims with reported ultimate loss greater than fifty thousand dollars
($50,000)


 





















 


NUCLEAR INCIDENT
EXCLUSION CLAUSE - LIABILITY - REINSURANCE - CANADA


 


I.              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.


 


II.            Without in
any way restricting the operation of paragraph I of this Clause it is agreed
that for all purposes of this Reinsurance all the original liability contracts
of the Reassured, whether new, renewal or replacement, of the following
classes, namely,


Personal Liability


Farmers’ Liability


Storekeepers’ Liability


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


 


Limited Exclusion Provision.


 


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


 


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


 


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


 


Broad Exclusion Provision


 


It is agreed that this Policy does not
apply:


 


A.            to liability
imposed by or arising under the Nuclear Liability Act; nor


B.            to bodily
injury or property damage with respect to which an Insured under this Policy is
also insured under a contract of nuclear energy liability insurance (whether
the Insured is unnamed in such contract and whether or not it is legally
enforceable by the Insured) issued by the Nuclear Insurance Association of Canada
or any other insurer or group or pool of insurers or would be an Insured under
any such policy but for its termination upon exhaustion of its limit of
liability; nor


C.            to bodily
injury or property damage resulting directly or indirectly from the nuclear
energy hazard arising from:


1.             the
ownership, maintenance, operation or use of a nuclear facility by or on behalf
of an Insured;


2.             the
furnishing by an Insured of services, materials, parts or equipment in
connection with the planning, construction, maintenance, operation or use of
any nuclear facility; and


3.             the
possession, consumption, use, handling, disposal or transportation of
fissionable substances, or of other radioactive material (except radioactive
isotopes, away from a nuclear facility, which have reached the final stage of
fabrication so as to be usable


 





















 


ADDENDUM
NO. 1




to the


 


WORKERS’
COMPENSATION AND EMPLOYERS LIABILITY

QUOTA SHARE REINSURANCE AGREEMENT

(hereinafter referred to as the “Agreement”)


 


between


 


AMCOMP
ASSURANCE COMPANY and/or

AMCOMP PREFERRED INSURANCE COMPANY and/or

other insuance companies owned by

AMCOMP, INCORPORATED

North Palm Beach, Florida

(hereinafter referred to as the “Company”)


 


and


 


SWISS
REINSURANCE AMERICA CORPORATION

Armonk, New York

(hereinafter referred to as the “Reinsurer”)


 


It is understood and agreed by the parties hereto that,
effective 12:01 a.m., Eastern Standard Time, January 1, 2001, this Agreement is
cancelled on a run-off basis in accordance with Article II - Term, Paragraph C.
section 1.


 


ALL OTHER TERMS AND CONDITIONS REMAIN THE SAME.


 


1





















 


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


 


 


Executed in North Palm Beach, Florida, this 12 day of September, 2001.


 


	
  ATTEST:

  	
   

  	
  AMCOMP ASSURANCE CORPORATION

  
	
   

  	
   

  	
  AMCOMP PREFERRED INSURANCE COMPANY

  
	
   

  	
   

  	
  and/or

  
	
   

  	
   

  	
  other insurance companies owned by

  
	
   

  	
   

  	
  AMCOMP INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Jean Buckert

  	
   

  	
  BY:

  	
   

  	
  /s/ Donald Johnson

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TITLE:

  	
  CFO

  
						



 


 


And in
Atlanta, Georgia, this 17 day of April, 2001.


 


	
  ATTEST:

  	
   

  	
  SWISS REINSURANCE AMERICA
  CORPORATION

  



 


 


	
  /s/ Jeff D. Rubin

  	
   

  	
  BY:

  	
   

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TITLE:

  	
  Member of Senior Management

  



 


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