INTERESTS AND LIABILITIES AGREEMENT
  UNDERWRITERS AT LLOYDS, LONDON
AS SET FORTH IN THE SIGNING SCHEDULE ATTACHED HERETO
  CASUALTY EXCESS OF LOSS
REINSURANCE CONTRACT
  PHILADELPHIA INSURANCE COMPANY
PHILADELPHIA INDEMNITY INSURANCE
both of Bala Cynwyd, Pennsylvania
And any additional company established or acquired by the Company
    IN WITNESS WHEREOF




---



##### 



TABLE OF CONTENTS
 AGREEMENT OF REINSURANCE
NO. 9034-08   PHILADELPHIA INDEMNITY INSURANCE COMPANY
PHILADELPHIA INSURANCE COMPANY   GENERAL REINSURANCE CORPORATION
 PageGENERAL ARTICLESArticle I
    
    SCOPE OF AGREEMENT
    
    
    1Article II
    
    PARTIES TO THE AGREEMENT
    
    
    2Article III
    
    MANAGEMENT OF CLAIMS AND LOSSES
    
    
    2Article IV
    
    RECOVERIES
    
    
    2Article V
    
    TRIA INUREMENT
    
    
    2Article VI
    
    PREMIUM REPORTS AND REMITTANCES
    
    
    3Article VII
    
    ERRORS AND OMISSIONS
    
    
    3Article VIII
    
    SPECIAL ACCEPTANCES
    
    
    3Article IX
    
    RESERVES AND TAXES
    
    
    4Article X
    
    OFFSET
    
    
    4Article XI
    
    INSPECTION OF RECORDS
    
    
    4Article XII
    
    ARBITRATION
    
    
    4Article XIII
    
    INSOLVENCY OF THE COMPANY
    
    
    5Article XIV
    
    ENTIRE AGREEMENT
    
    
    5EXHIBIT A  EXCESS OF LOSS REINSURANCE (Per Risk) of Property BusinessSection 1
    
    BUSINESS SUBJECT TO THIS EXHIBIT
    
    
    A-1Section 2
    
    COMMENCEMENT
    
    
    A-1Section 3
    
    LIABILITY OF THE REINSURER
    
    
    A-1Section 4
    
    DEFINITIONS
    
    
    A-2Section 5
    
    EXCLUSIONS
    
    
    A-7Section 6
    
    OTHER REINSURANCE
    
    A-10Section 7
    
    REINSURANCE PREMIUM
    
    A-10Section 8
    
    REPORTS AND REMITTANCES
    
    A-11Section 9
    
    AUTOMATIC REINSTATEMENT
    
    A-12Section 10
    
    TERMINATION
    
    A-12Section 11
    
    MORTGAGEE REINSURANCE ENDORSEMENT
    
    A-13EXHIBIT B  EXCESS OF LOSS REINSURANCE (Per Risk) of Property Business (Coverage for Terrorism Only)Section 1
    
    BUSINESS SUBJECT TO THIS EXHIBIT
    
    
    B-1Section 2
    
    TERM
    
    
    B-1Section 3
    
    LIABILITY OF THE REINSURER
    
    
    B-1Section 4
    
    DEFINITIONS
    
    
    B-2Section 5
    
    EXCLUSIONS
    
    
    B-2Section 6
    
    REINSURANCE PREMIUM
    
    
    B-3Section 7
    
    REPORTS AND REMITTANCES
    
    
    B-3
 AGREEMENT OF REINSURANCE
 GENERAL REINSURANCE CORPORATION  A Berkshire Hathaway Company




---



##### 



NO. 9034-08
  PHILADELPHIA INDEMNITY INSURANCE COMPANY
PHILADELPHIA INSURANCE COMPANY
  GENERAL REINSURANCE CORPORATION
  Article I    SCOPE OF AGREEMENT
   EXHIBIT A    EXCESS OF LOSS REINSURANCE
 Property Business
 EXHIBIT B    EXCESS OF LOSS REINSURANCE
 Property Business (Coverage for Terrorism Only)
 GENERAL REINSURANCE CORPORATION
 - 2 -




---



##### 



Article II    PARTIES TO THE AGREEMENT
  Article III    MANAGEMENT OF CLAIMS AND LOSSES
  Article IV    RECOVERIES
    Article V    TRIA INUREMENT
   (a)
    
    Financial assistance provided under the Act to the Company and its
affiliates, if any, (as affiliate is defined in the Act) with respect to all
insured loss that applies to each program year, as defined in the Act;
and
 GENERAL REINSURANCE CORPORATION
 - 3 -




---



##### 



(b)
    
    Amounts due from all reinsurance which the Company and its
affiliates, if any, purchase, including but not limited to this reinsurance,
all other treaty reinsurance and all facultative reinsurance, and whether
collectible or not, under which there is a recoverable for any such insured
loss,
   Article VI    PREMIUM REPORTS AND REMITTANCES
  
  
 Article VII    ERRORS AND OMISSIONS
  Article VIII    SPECIAL ACCEPTANCES
  Article IX    RESERVES AND TAXES
  GENERAL REINSURANCE CORPORATION
 - 4 -




---



##### 



Article X    OFFSET
  Article XI    INSPECTION OF RECORDS
  Article XII    ARBITRATION
    
  GENERAL REINSURANCE CORPORATION
 - 5 -




---



##### 



Article XIII    INSOLVENCY OF THE COMPANY
   Article XIV    ENTIRE AGREEMENT
  IN WITNESS WHEREOF
 GENERAL REINSURANCE CORPORATION
 - 6 -




---



##### 



nd
 PHILADELPHIA INDEMNITY INSURANCE COMPANY
PHILADELPHIA INSURANCE COMPANYChristopher J Maguire EVP & COOAttest: William A McKennaand this 22nd day of May, 2008.GENERAL REINSURANCE CORPORATIONJoan Lafrance
 Senior Vice PresidentAttest: Diane B Hyland
 EXHIBIT A
 GENERAL REINSURANCE CORPORATION
 A - 7




---



##### 



Agreement of Reinsurance No. 9034-08
 EXCESS OF LOSS REINSURANCE
(Per Risk)   Property Business
 Section 1    BUSINESS SUBJECT TO THIS EXHIBIT
  Section 2    COMMENCEMENT
  Section 3    LIABILITY OF THE REINSURER
  SCHEDULE OF REINSURANCE
 Class of Business
    
    Company Retention
    
    Limits of Liability of the ReinsurerProperty Business
    
    $
    2,500,000
    
    
    First Excess Cover: The next$2,500,000 in excess of the first$2,500,000
 GENERAL REINSURANCE CORPORATION
 A - 8




---



##### 



SCHEDULE OF REINSURANCE (Continued)
 Class of Business
    
    Company Retention
    
    Limits of Liability of the ReinsurerSecond Excess Cover: The next$5,000,000 in excess of the first$5,000,000Third Excess Cover: The next$5,000,000 in excess of the first$10,000,000
  (a)
    
    $5,000,000 under the First Excess Cover nor $10,000,000 under the
Second Excess Cover nor $10,000,000 under the Third Excess Cover with respect
to all Net Loss on all Risks involved in one Loss Occurrence.(b)
    
    $20,000,000 under the Second Excess Cover nor $15,000,000 under the
Third Excess Cover with respect to all Net Loss on all Risks involved in all
Loss Occurrences (including Extra Contractual Obligations) taking place during
each Agreement Year. For purposes of this provision, upon a run off
termination of this Exhibit the last completed Agreement Year shall be
combined with the remaining period that reinsurance is afforded under this
Exhibit to constitute a single Agreement Year.
  Section 4    DEFINITIONS
 (a)
    
    Company RetentionThis term shall mean the amount the Company and its underlying facultative
reinsurers shall retain for its own account; however, this requirement shall
be satisfied if this amount is retained by the Company or its affiliated
companies under common management or common ownership.(b)
    
    Net LossThis term shall mean all payments by the Company within the terms and limits
of its policies in settlement of claims or losses, after deduction of salvage
and other recoveries and after deduction of amounts
due from all other reinsurance, except underlying facultative reinsurance
 GENERAL REINSURANCE CORPORATION
 A - 9




---



##### 



and catastrophe reinsurance, whether collectible or not. This term shall include
Adjustment Expense. If the Company becomes insolvent, this definition shall
be modified to the extent set forth in the article entitled INSOLVENCY OF THE
COMPANY.Notwithstanding the provisions of the article entitled MANAGEMENT OF CLAIMS
AND LOSSES, this term shall also include 95% of Extra Contractual
Obligations.Nothing in this definition shall imply that losses are not recoverable
hereunder until the Companys Net Loss has been finally ascertained.(c)
    
    Adjustment ExpenseThis term shall mean expenditures by the Company within the terms of its
policies in the direct defense of claims and in connection with Extra
Contractual Obligations and as allocated to an individual claim or loss
(other than for office expenses and for the salaries and expenses of
employees of the Company or of any subsidiary or related or wholly owned
company of the Company) made in connection with the disposition of a claim,
loss, or legal proceeding including investigation, negotiation, and legal
expenses; court costs; prejudgment interest; and postjudgment interest.Notwithstanding the provisions of the article entitled MANAGEMENT OF CLAIMS
AND LOSSES, this term shall also be deemed to include any expenses incurred
by the Company in bringing or in defending a declaratory judgment action
brought to determine the Companys obligations to its insured with respect to
a specific claim under a policy (or coverage part thereof) reinsured
hereunder. However, the amount of any declaratory judgment expense that may
be included in computation of Adjustment Expense shall not exceed the lesser
of the amount of insurance under the policy or the Reinsurers Limit of
Liability for each Risk under this Exhibit.The date on which a declaratory judgment expense is incurred by the Company
shall be deemed, in all circumstances, to be the date of the original Loss
Occurrence.(d)
    
    Extra Contractual ObligationsThis term shall mean a loss which is not covered under any other provision of
this Exhibit resulting from an action taken by the insured or assignee
arising from the Companys handling of any claim otherwise covered under this
Exhibit on the Risks reinsured hereunder which have total amounts of
insurance greater than the Company Retention.The date on which an Extra Contractual Obligation is incurred by the Company
shall be deemed, in all circumstances, to be the date of the original Loss
Occurrence.There shall be no coverage hereunder where the Extra Contractual Obligation
has been incurred due to the adjudication or admission of
 GENERAL REINSURANCE CORPORATION
 A - 10




---



##### 



fraud or criminal
conduct of a member of the Board of Directors, a corporate officer of the
Company, or any other employee of the Company, acting individually or
collectively or in collusion with any individual or corporation or any other
organization or party involved in the investigation, defense or settlement of
any claim covered hereunder.Any insurance which indemnifies or protects the Company against claims which
are the subject matter of this definition shall inure to the benefit of the
Reinsurer and shall be deducted to arrive at the amount of the Companys Net
Loss.Loss otherwise covered hereunder includes punitive damages awarded against
the Company where such coverage is permitted by applicable law.(e)
    
    RiskThe Company shall establish what constitutes one Risk and shall make such
determination based on the peril of fire at the time of acceptance, provided:(1)
    
    A Building and its contents, regardless of the number of insureds or
policies involved, including time element coverages, shall never be considered
more than one Risk.When two or more Buildings and their contents, including time element
coverages, are situated at the same General Location, the Company shall
identify on its records at the time of acceptance by the Company those
individual Buildings and their contents, including time element coverages,
that are to be considered to constitute each Risk; if such identification is
not made, all of the Buildings and their contents situated at the same
General Location shall be considered one Risk.When there are known and named extensions of coverage involving other risk
locations (including but not limited to suppliers extensions, customer
extensions and interdependencies and whether triggered by physical loss at
the risk location or another location) that are included and formally
recorded on the Companys records at the time of acceptance of the Risk, all
such known and named extensions of coverage shall be included in calculation
of the one Risk.(2)
    
    Unknown, unnamed or unidentified extensions of coverage shall be
considered separate Risks. The maximum amount which may be included in Net
Loss with respect to each such Risk shall be $250,000. Further, the Limit of
Liability of the Reinsurer shall not exceed $500,000 of Net Loss with respect
to all such Risks involved in one Loss Occurrence. Such Loss Occurrence limit
is part of, and not in addition to the Loss Occurrence limit stipulated in the
section entitled LIABILITY OF THE REINSURER.(3)
    
    As respects the Companys Antique/Collector Car Program, each
collection will be considered a Risk.
 GENERAL REINSURANCE CORPORATION
 A - 11




---



##### 



(f)
    
    BuildingThis term shall mean each structure enclosed within exterior walls. Exterior
walls are defined as walls constructed on the perimeter foundation,
regardless of the number of additional structures or roofs placed upon this
perimeter foundation.(g)
    
    Loss OccurrenceThe term loss occurrence shall mean the sum of all individual losses
directly occasioned by any one disaster, accident or loss or series of
disasters, accidents or losses arising out of one event which occurs within
the area of one state of the United States or province of Canada and states
or provinces contiguous thereto and to one another. However, the duration
and extent of any one loss occurrence shall be limited to all individual
losses sustained by the Company occurring during any period of 168
consecutive hours arising out of and directly occasioned by the same event,
except that the term loss occurrence: shall be further defined as follows:
 (a)
    
    As regards windstorm, hail, tornado, hurricane,
cyclone, including ensuing collapse and water damage, all individual
losses sustained by the Company occurring during any period of 72
consecutive hours arising out of and directly occasioned by the same
event. However, the event need not be limited to one state or
province or states or provinces contiguous thereto.(b)
    
    As regards riot, riot attending a strike, civil
commotion, vandalism and malicious mischief, all individual losses
sustained by the Company occurring during any period of 72
consecutive hours within the area of one municipality or county and
the municipalities or counties contiguous thereto arising out of and
directly occasioned by the same event. The maximum duration of 72
consecutive hours may be extended in respect of individual losses
which occur beyond such 72 consecutive hours during the continued
occupation of an insureds premises by strikers, provided such
occupation commenced during the aforesaid period.(c)
    
    As regards earthquake (the epicenter of which need
not necessarily be within the territorial confines referred to in
the introductory portion of this paragraph) and fire following
directly occasioned by the earthquake, only those individual fire
losses which commence during the period of 168 consecutive hours may
be included in the Companys loss occurrence.(d)
    
    As regards freeze, only individual losses directly
occasioned by collapse, breakage of glass and water damage (caused
by bursting frozen pipes and tanks) may be included in the Companys
loss occurrence.
 GENERAL REINSURANCE CORPORATION
 A - 12




---



##### 



(e)
    
    As regards firestorms, brush fires, and any other
fires or a series of fires, irrespective of origin (except as
provided in subparagraphs (a) and (b) above, which spread through
trees, grassland or other vegetations, all individual losses
sustained by the Company which occur during any period of 168
consecutive hours within a 150-mile radius of any fixed point
selected by the Company may be included in the Companys loss
occurrence. However, an individual loss subject to this
subparagraph cannot be included in more than one loss occurrence.
 For all those loss occurrences, the Company may choose the date and time
when any such period of consecutive hours commences, provided that it is not
earlier than the date and time of the occurrence of the first recorded
individual loss sustained by the Company arising out of that disaster,
accident or loss, and provided that only one such period of 168 consecutive
hours shall apply with respect to one event, except for any loss occurrence
referred to in subparagraphs (a) and (b) above where only one such period of
72 consecutive hours shall apply with respect to one event, regardless of the
duration of the event.No individual losses occasioned by an event that would be covered by 72 hours
clauses may be included in any loss occurrence claimed under the 168 hours
provision.(h)
    
    General LocationThis term shall mean a contiguous and unbroken tract of land surrounded by
public roads, railroads, rivers or other natural barriers.(i)
    
    Agreement YearThis term shall mean each twelve month period commencing on January
1st.(j)
    
    Companys Subject Earned PremiumThis term shall mean the premium earned by the Company on the business
reinsured hereunder, after deduction from such premium earned of the portion
paid for share reinsurance which inures to the benefit of the Reinsurer.
 Section 5    EXCLUSIONS
  (a)
    
    Reinsurance assumed by the Company other than reinsurance of primary
business assumed from affiliated companies;(b)
    
    Nuclear incident per the Nuclear Incident Exclusion Clause  Physical
Damage  Reinsurance attached hereto;
 GENERAL REINSURANCE CORPORATION
 A - 13




---



##### 



(c)
    
    Any loss or liability accruing to the Company directly or indirectly
from any insurance written by or through any pool or association including
pools or associations in which membership by the Company is required under any
statutes or regulations;(d)
    
    Any liability of the Company arising from its participation or
membership in any insolvency fund;(e)
    
    Any loss or damage directly or indirectly arising out of, caused by,
or resulting from war, as described in paragraph (1) below, or any act of
terrorism, as described in paragraphs (2), (3), (4) and (5) below. Such loss
or damage is excluded regardless of (i) any other cause or event contributing
to such loss or damage in any way or at any time, or (ii) whether such loss or
damage is accidental or intentional.(1)
    
    War, including undeclared or civil war; warlike action by a military
force, including action in hindering or defending against an actual or
expected attack, by any government, sovereign or other authority using
military personnel or other agents; or insurrection, rebellion, revolution,
usurped power or action taken by governmental authority in hindering or
defending against any of these. War includes any activity that would be
included as an act of terrorism in paragraphs (2), (3), (4) and (5) below,
but for the fact that such activity was perpetrated by an official, employee
or agent of a foreign state acting for or on behalf of such state.(2)
    
    Any act of terrorism, as described in paragraphs (3), (4) and (5)
below, but only with respect to loss or damage that is not excluded by
paragraph (1) above.(3)
    
    Any act defined as an act of terrorism in the Terrorism Risk
Insurance Act of 2002 as subsequently amended.(4)
    
    Any act authorized by a governmental authority for the purpose of
preventing, terminating, countering or responding to any act or threat of
terrorism or for the purpose of preventing or minimizing the consequences of
any act or threat of terrorism.
 (5)
    
    Any activity (other than an act described in (3)
above), including the threat of an activity or any preparation for
an activity, that (a) causes either (i) damage to property, or (ii)
injury to persons; and (b) appears to be intended to: (i) intimidate
or coerce a civilian population, or (ii) disrupt any segment of an
economy, or (iii) influence the policy of a government by
intimidation or coercion, or (iv) affect the conduct of a government
by destruction, assassination,
kidnapping or hostage-taking, or (v) advance a political, religious
or ideological cause; provided, however, that an act of terrorism
for purposes of this exclusion shall not include any act or threat
as described above perpetrated by an official, employee or agent of
a foreign state acting for or on behalf of such state.
 GENERAL REINSURANCE CORPORATION
 A - 14




---



##### 



(f)
    
    Risks written on a layered basis, whether primary or excess of loss,
or policies written with a deductible or franchise of more than $500,000;
however, this exclusion shall not apply to policies which provide a percentage
deductible or franchise in connection with windstorm, earthquake or flood;(g)
    
    Pollution to the extent excluded in the Companys policies.
Nevertheless, if the insured elects to purchase any buy back or additional
coverage options, such options shall not be covered hereunder;(h)
    
    Insurance against earthquake, except when written in conjunction with
fire and otherwise eligible perils;(i)
    
    Insurance on growing crops;(j)
    
    Insurance against flood, surface water, waves, tidal waves, overflow
of any body of water, or their spray, all whether driven by wind or not,
except when written in conjunction with fire and otherwise eligible perils;(k)
    
    Business classified as fidelity;(l)
    
    Credit insurance;(m)
    
    Business classified as boiler and machinery;(n)
    
    Mortgage impairment insurance and similar kinds of insurance,
howsoever styled, providing coverage to an insured with respect to its
mortgagee interest in property or its owner interest in foreclosed property;(o)
    
    Difference in conditions insurance and similar kinds of insurance,
howsoever styled, but not to include the Condominium Association Difference in
Conditions Coverage Form (PI-DIC-1, 11/03);(p)
    
    Risks which have a total insurable value of more than $250,000,000;
however, this exclusion shall not apply if the Company writes 100% of the
Risk;(q)
    
    Losses with respect to overhead transmission and distribution lines
and their supporting structures, other than those on or within 1,000 feet of
the insured premises. However, public utilities extension and/or suppliers
extension and/or contingent business interruption coverage are not subject to
this exclusion, provided these are not part of a transmitters or
distributors policy;(r)
    
    Inland marine business with respect to the following:
 (1)
    
    Cargo insurance when written as such with respect to
ocean vessels;(2)
    
    Faulty film, tape, processing and editing insurance
and cast insurance;(3)
    
    Furriers customers policies;
 GENERAL REINSURANCE CORPORATION
 A - 15




---



##### 



(4)
    
    Insurance on livestock under so-called mortality
policies;(5)
    
    Mining equipment while underground;(6)
    
    Registered mail and armored car insurance;
 (s)
    
    Loss of, damage to, or failure of, or consequential loss resulting
therewith (including but not limited to earnings and extra expense) of
satellites, spacecraft, and launch vehicles, including cargo and freight
carried therein, in all phases of operation (including but not limited to
manufacturing, transit, pre-launch, launch, and in-orbit);(t)
    
    Losses arising, directly or indirectly, out of loss of, alteration
of, or damage to or a reduction in the functionality, availability or
operation of a computer system, hardware, program, software, data, information
repository, microchip, integrated circuit or similar device in computer
equipment or non-computer equipment, whether the property of the policyholder
of the Company or not, unless such loss arises out of physical damage
occurring at the insureds premises as a result of the following perils to the
extent that these perils are covered under this Exhibit: fire, lightning,
explosion, windstorm or hail, smoke, aircraft or vehicles, riot or civil
commotion, sprinkler leakage, sinkhole collapse, volcanic action, falling
objects, weight of snow, ice or sleet, water damage, flood and/or earth
movement. Nothing in this exclusion shall be construed to extend coverage
under this Exhibit to any liability which would not have been covered in the
absence of this exclusion;(u)
    
    Mobile homes unless written as part of a commercial multiple peril
policy;(v)
    
    Watercraft, other than watercraft insured under a standard homeowners
policy or when written as part of contents coverage under a commercial
multiple peril policy.
  Section 6    OTHER REINSURANCE
   GENERAL REINSURANCE CORPORATION
 A - 16




---



##### 



Section 7    REINSURANCE PREMIUM
  (a)
    
    For Commercial Property business:
 (1)
    
    For the First Excess Cover, 1.74% of the Companys
Subject Earned Premium;(2)
    
    For the Second Excess Cover, 1.11% of the Companys
Subject Earned Premium;(3)
    
    For the Third Excess Cover, 0.34% of the Companys
Subject Earned Premium.
 (b)
    
    For Builders Risk business:
 (1)
    
    For the First Excess Cover, 3.60% of the Companys
Subject Earned Premium;(2)
    
    For the Second Excess Cover, 3.91% of the Companys
Subject Earned Premium;(3)
    
    For the Third Excess Cover, 1.50% of the Companys
Subject Earned Premium.
 Section 8    REPORTS AND REMITTANCES
 (a)
    
    Reinsurance PremiumWithin 25 days after the close of each calendar quarter, the Company shall
render to the Reinsurer a report of the reinsurance premium for the quarter
with respect to the Companys Subject Earned Premium
during the quarter, summarizing the reinsurance premium by line of insurance.
The amount due the Reinsurer, shall be remitted within 25 days after the
close of the quarter.(b)
    
    Claims and LossesThe Company shall report promptly to the Reinsurer each claim or loss which
in the Companys opinion may involve the reinsurance afforded by this
Exhibit. The Company shall also report promptly to the Reinsurer any action
alleging Extra Contractual Obligations against the
 GENERAL REINSURANCE CORPORATION
 A - 17




---



##### 



Company or any declaratory
judgment action brought by or against the Company on the business reinsured
hereunder. The Company shall advise the Reinsurer of the estimated amount of
Net Loss in connection with each such claim or loss and of any subsequent
changes in such estimates.Promptly upon receipt of a definitive statement of Net Loss from the Company,
but within no more than 25 days after receipt of such statement, the
Reinsurer shall pay to the Company the Reinsurers portion of Net Loss. The
Company shall report to the Reinsurer any subsequent changes in the amount of
Net Loss, and the amount due either party shall be remitted promptly, but
within no more than 25 days after receipt of such report.(c)
    
    P.C.S. Catastrophe BulletinsThe Company shall furnish to the Reinsurer, upon request, the following
information with respect to each catastrophe set forth in the Catastrophe
Bulletins published by the Property Claim Services:
 (1)
    
    The preliminary estimates of the amount recoverable
from the Reinsurer;(2)
    
    The Reinsurers portion of claims, losses, and
Adjustment Expenses paid less salvage recovered during each calendar
quarter;(3)
    
    The Reinsurers portion of reserves for claims,
losses, and Adjustment Expenses at the end of each calendar quarter.
 (d)
    
    GeneralIn addition to the reports required by (a), (b), and (c) above, the Company
shall furnish such other information as may be required by the Reinsurer for
the completion of the Reinsurers quarterly and annual statements and
internal records.All reports shall be rendered on forms or in format acceptable to the Company
and the Reinsurer.
 Section 9    AUTOMATIC REINSTATEMENT
  (a)
    
    For each amount so reinstated in the First and Second Excess Covers,
there shall be no additional reinsurance premium;
 GENERAL REINSURANCE CORPORATION
 A - 18




---



##### 



(b)
    
    For first $5,000,000 so reinstated in the Third Excess Cover, there
shall be no additional reinsurance premium;(c)
    
    For the next $5,000,000, so reinstated in the Third Excess Cover, the
Company shall pay to the Reinsurer an additional reinsurance premium that
shall be the product of 100% of the reinsurance premium set forth in
sub-paragraph (c) of the section entitled REINSURANCE PREMIUM for the
Agreement Year multiplied by the amount of the reinstated Limit of Liability
of the Reinsurer divided by $5,000,000.
  Section 10    TERMINATION
  (a)
    
    The Reinsurer shall continue to be liable, with respect to policies
in force at the time and date of termination, for claims and losses resulting
from Loss Occurrences taking place until the expiration, cancellation, or next
anniversary date, not to exceed one year (or as respects builders risk
policies not to exceed 24 months) of each such policy of the Company, which
ever occurs first. The reinsurance premium for policies in force at the time
and date of termination shall be calculated by applying the provisions of the
section entitled REINSURANCE PREMIUM to the monthly earned premiums that
derive from the unearned premium applicable to policies in force at the time
and date of termination.
 GENERAL REINSURANCE CORPORATION
 A - 19




---



##### 



(b)
    
    The Reinsurer shall not be liable for claims and losses resulting from
Loss Occurrences taking place at and after the effective time and date of
termination.
 Section 11    MORTGAGEE REINSURANCE ENDORSEMENTS
   (a)
    
    Benefit pro-rata in reductions of the Companys loss by salvage,
subrogation, compromise, or otherwise.(b)
    
    Be automatically subrogated to all of the mortgagees rights against
the Company under the policy.(c)
    
    Be completely discharged from its obligation to make any payment to
the Company under this Exhibit and be entitled to set off against any amount
due from the Reinsurer to the Company under this or any other agreement for
any amounts for which the Reinsurer would not be liable except for the
existence of such Mortgagee Reinsurance Endorsement.
   EXHIBIT B
 GENERAL REINSURANCE CORPORATION
 - 20-




---



##### 



Agreement of Reinsurance No. 9034-08
 EXCESS OF LOSS REINSURANCE
(Per Risk)   Property Business
(Coverage for Terrorism Only)
 Section 1    BUSINESS SUBJECT TO THIS EXHIBIT
  Section 2    TERM
   Section 3    LIABILITY OF THE REINSURER
  SCHEDULE OF REINSURANCE
 Class of Business
    
    Company Retention
    
    Limits of Liability of the ReinsurerProperty Business
    
    $
    2,500,000
    
    
    $
    12,500,000
  GENERAL REINSURANCE CORPORATION
 - 21-




---



##### 



Section 4    DEFINITIONS
   (1)
    
    An Act of Terrorism means an activity, including the threat of an
activity or any preparation for an activity, that (a) causes either (i) damage
to property, or (ii) injury to persons; and (b) appears to be intended to: (i)
intimidate or coerce a civilian population, or (ii) disrupt any segment of an
economy, or (iii) influence the policy of a government by intimidation or
coercion, or (iv) affect the conduct of a government by destruction,
assassination, kidnapping or hostage-taking, or (v) advance a political,
religious or ideological cause; provided, however, that an Act of Terrorism
for purposes of this definition shall not include any act or threat as
described above perpetrated by an official, employee or agent of a foreign
state acting for or on behalf of such state.(2)
    
    An Act of Terrorism is also deemed to include any act authorized by a
governmental authority for the purpose of preventing, terminating, countering
or responding to any act or threat of terrorism or for the purpose of
preventing or minimizing the consequences of any act or threat of terrorism.
 Section 5    EXCLUSIONS
  (e)
    
    Any loss or damage directly or indirectly arising out of, caused by,
or resulting from war, including undeclared or civil war; warlike action by a
military force, including action in hindering or defending against an actual
or expected attack, by any government, sovereign or other authority using
military personnel or other agents; or insurrection, rebellion, revolution,
usurped power or action taken by governmental authority in hindering or
defending against any of these. War includes any
activity that would be included as an Act of Terrorism, but for the fact that
such activity was perpetrated by an official, employee or agent of a foreign
state acting for or on behalf of such state. Such loss or dam-
 GENERAL REINSURANCE CORPORATION
 - 22-




---



##### 



age is excluded regardless of (i) any other cause or event contributing to such loss
or damage in any way or at any time, or (ii) whether such loss or damage is
accidental or intentional.
 Section 6    REINSURANCE PREMIUM
  Section 7    REPORTS AND REMITTANCES
 (a)
    
    Reinsurance PremiumWithin 25 days after the close of each calendar quarter, the Company shall
pay to the Reinsurer one quarter of the flat reinsurance premium stipulated
in the section entitled REINSURANCE PREMIUM.(b)
    
    Claims and LossesThe Company shall report promptly to the Reinsurer each claim or loss which
in the Companys opinion may involve the reinsurance afforded by this
Exhibit. The Company shall also report promptly to the Reinsurer any action
alleging Extra Contractual Obligations against the Company or any declaratory
judgment action brought by or against the Company on the business reinsured
hereunder. The Company shall advise the Reinsurer of the estimated amount of
Net Loss and Adjustment Expense in connection with each such claim or loss
and of any subsequent changes in such estimates.Promptly upon receipt of a definitive statement of Net Loss and Adjustment
Expense from the Company, but within no more than 25 days after receipt of
such statement, the Reinsurer shall pay to the Company the Reinsurers
portion of Net Loss and the Reinsurers portion of Adjustment Expense, if
any. The Company shall report to the Reinsurer any subsequent changes in the
amount of Net Loss and/or Adjustment Expense, and the amount due either party
shall be remitted promptly, but within no more than 25 days after receipt of
such report.(c)
    
    GeneralIn addition to the reports required by (a), (b), and (c) above, the Company
shall furnish such other information as may be required by the Reinsurer for
the completion of the Reinsurers quarterly and annual statements and
internal records.All reports shall be rendered on forms or in format acceptable to the Company
and the Reinsurer.
 GENERAL REINSURANCE CORPORATION
 - 23-