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Exhibit
10.9
 STATE BOARD OF ADMINISTRATION
OF FLORIDA
1801 Hermitage Boulevard-Suite 100
Tallahassee, Florida 332308
(850) 488-4406
 Post Office Box 13300
32317-3300
 REIMBURSEMENT CONTRACT
Effective: June 1, 2005
(Contract)
  MOBILE USA INSURANCE COMPANY
Pinellas Park, FL
 NAIC # 32760
  THE STATE BOARD OF ADMINISTRATION OF THE STATE OF FLORIDA (SBA) WHICH ADMINISTERS THE FLORIDA HURRICANE
CATASTROPHE FUND (FHCF)
 PREAMBLE
   ARTICLE I  SCOPE OF AGREEMENT
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ARTICLE II  PARTIES TO THE CONTRACT
  ARTICLE III  TERM
    
    ARTICLE IV  LIABILITY OF THE FHCF
 (1)
    
    The SBA shall reimburse the Company, with respect to each Loss Occurrence commencing during the Contract Year for the Reimbursement Percentage elected, this percentage times the
amount of Ultimate Net Loss paid by the Company in excess of the Companys Retention, plus 5%
of the reimbursed losses for Loss Adjustment Expense Reimbursement.(2)
    
    The Reimbursement Percentage will be 45% or 75% or 90%, at the Companys option as elected under ARTICLE XVIII herein.(3)
    
    The aggregate liability of the FHCF with respect to all Reimbursement Contracts covering this contract year shall not exceed the limit set forth under Section 215.555(4)(c)1., Florida
Statutes. For specifics regarding loss reimbursement calculations, see section (3)(c) of
ARTICLE X herein.(4)
    
    Reimbursement amounts shall not be reduced by reinsurance paid or payable to the Company from other sources.(5)
    
    After the end of each calendar year, the SBA shall notify insurers of the estimated Borrowing Capacity and the Balance of the Fund as of December 31. In May and October of each year, the
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SBA shall publish in the Florida Administrative Weeklya statement of the FHCFs estimated
Borrowing Capacity and the projected Balance of the Fund as of December 31.
 (6)
    
    The obligation of the SBA with respect to all Contracts covering a particular Contract Year
shall not exceed the Balance of the Fund as of December 31 of that Contract Year, together with the
maximum amount the SBA is able to raise through the issuance of revenue bonds or other means
available to the SBA under Section 215.555, Florida Statutes, up to the limit in accordance with
Section 215.555(4)(c)1., Florida Statutes. The obligations and the liability of the SBA are more
fully described in Rule 19-8.013, Florida Administrative Code (F.A.C.). If Reimbursement
Premiums are used for debt service in the event of a temporary shortfall in the collection of
emergency assessments, then the amount of the Premiums so used will be reimbursed to the SBA
when sufficient emergency assessments are received.
 ARTICLE V  DEFINITIONS
 (1)
    
    Actual Claims-Paying Capacity of the FHCF
  (2)
    
    Actuarially Indicated
  (3)
    
    Additional Living Expense (ALE)
  (4)
    
    Administrator
  (5)
    
    Authorized Insurer
  (6)
    
    Borrowing Capacity
  (7)
    
    Citizens Property Insurance Corporation (Citizens)
  (8)
    
    Contract
  (9)
    
    Covered Event
  (10)
    
    Covered Policy or Covered Policies
 (a)
    
    Covered Policy, as defined in Section 215.555(2)(c), Florida Statutes, is further clarified to
mean only that portion of a binder, policy or contract of insurance that insures real or personal
property located in the State of Florida to the extent such policy insures a Residential Structure,
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as defined in definition (27) herein, or the contents of a Residential Structure, located in the
State of Florida, or ALE coverage as defined in definition (3) herein.(b)
    
    Due to the specialized nature of the definition of Covered Policies, Covered Policies are not
limited to only one line of business in the Companys annual statement required to be filed by Section 624.424, Florida Statutes. Instead, Covered Policies are found in several lines of
business on the Companys annual statement. Covered Policies will at a minimum be reported
in the Companys statutory annual statement as:
 
    
    Fire
    
    Allied Lines
    
    Farmowners Multiple Peril
    
    Homeowners Multiple Peril
    
    Commercial Multiple Peril (non liability portion, covering condominiums and
apartments)
    
    Inland Marine
 
 (c)
    
    This definition applies only to the first-party property section of a policy pertaining strictly to the structure, its contents, appurtenant structures, or ALE coverage.(d)
    
    Covered Policy also includes any collateral protection insurance policy covering personal residences which protects both the borrowers and the lenders financial interest, in an
amount
at least equal to the coverage for the dwelling in place under the lapsed homeowners
policy, if
such policy can be accurately reported as required in Section 215.555(5), Florida Statutes.
A
Company will be deemed to be able to accurately report data if the required data, as
specified in
the Premium Formula adopted in Section 215.555(5), Florida Statutes, is available.
  (11)
    
    Deductible Buy-Back Policies
  (12)
    
    Estimated Claims-Paying Capacity of the FHCF
  (13)
    
    Excess Policies
  (14)
    
    Florida Department of Financial Services (Department)
  (15)
    
    Florida Insurance Code
  (16)
    
    Formula or the Premium Formula
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(17)
    
    Fund Balance or Balance of the Fund as of December 31
  (18)
    
    Insurer Group
  (19)
    
    Loss Occurrence
  (20)
    
    Loss Adjustment Expense Reimbursement
 (a)
    
    Loss Adjustment Expense Reimbursement shall be 5% of the reimbursed losses under this
Contract as provided in Article IV, pursuant to Section 215.555(4)(b)1., Florida Statutes.(b)
    
    To the extent that loss reimbursements are limited to the Payout Multiple applied to each
Company, the 5% Loss Adjustment Expense is included in the total Payout Multiple applied to
each Company.
 (21)
    
    New Participant(s)
 
 (22)
    
    Office of Insurance Regulation
  (23)
    
    Payout Multiple
  (24)
    
    Premium
  (25)
    
    Projected Payout Multiple
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(26)
    
    Reimbursement Premium
  (27)
    
    Residential Structures
 Covered Residential
Structures
do not include
 (28)
    
    Retention
  (29)
    
    Retention Multiple
 (a)
    
    The Retention Multiple is applied to the Companys Reimbursement Premium to determine
the Companys Retention. The Retention Multiple for the 2005-2006 Contract Year shall be
equal to $4.5 billion, adjusted based upon the reported exposure for the 2004/2005
Contract
Year divided by the estimated total industry Reimbursement Premium at the 90%
reimbursement percentage level for the Contract Year as determined by the SBA.(b)
    
    The Retention Multiple as determined under (29)(a) above shall be adjusted to reflect the
reimbursement percentage elected by the Company under this Contract as follows:
 1.
    
    If the Company elects a 90% reimbursement percentage, the adjusted Retention Multiple
is
100% of the amount determined under (29)(a) above;2.
    
    If the Company elects a 75% reimbursement percentage, the adjusted Retention Multiple
is
120% of the amount determined under (29)(a) above; or3.
    
    If the Company elects a 45% reimbursement percentage, the adjusted Retention Multiple
is
200% of the amount determined under (29)(a) above.
 (30)
    
    Ultimate Net Loss
 (a)
    
    This term means all losses of the Company under Covered Policies, prior to the application
of
the Companys FHCF Retention and reimbursement percentage, and excluding loss
adjustment expense, arising from each Loss Occurrence during the Contract Year, provided,
however, that the Companys loss shall be determined in accordance with the deductible
levels
reported to the FHCF for the exposure sustaining the loss.(b)
    
    Salvages and all other recoveries, excluding reinsurance recoveries, shall be first
deducted
from such loss to arrive at the amount of liability attaching hereunder.(c)
    
    All salvages, recoveries or payments recovered or received subsequent to a loss settlement
under this Contract shall be applied as if recovered or received prior to the aforesaid
settlement
and all necessary adjustments shall be made by the parties hereto.(d)
    
    Nothing in this clause shall be construed to mean that losses under this Contract are not
recoverable until the Companys Ultimate Net Loss has been ascertained.(e)
    
    The SBA shall be subrogated to the rights of the Company to the extent of its reimbursement
of the Company. The Company agrees to assist and cooperate with the SBA in all respects as
regards such subrogation. The Company further agrees to undertake such actions as may be
necessary to enforce its rights of salvage and subrogation, and its rights, if any,
against other
insurers as respects any claim, loss, or payment arising out of a Covered Event.
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ARTICLE VI  EXCLUSIONS
  (1)
    
    Any losses not defined as being within the scope of a Covered Policy.(2)
    
    Any policy which excludes wind or hurricane coverage.(3)
    
    Any Excess Policy or Deductible Buy-Back Policy that requires individual ratemaking.(4)
    
    Any liability of the Company attributable to losses for fair rental value, loss of use, loss of
rents, or
business interruption.(5)
    
    Any collateral protection policy that does not meet the definition of Covered Policy as defined
in
Article V(10)(d) herein.(6)
    
    Any reinsurance assumed by the Company.
(7) Any exposure for: hotels, motels, timeshares, or other similar structures that are rented out
daily,
weekly, or monthly; homeowner associations, if no habitational structures are insured under the
policy; shelters, camps or retreats; vacant properties insured under a commercial policy; and
boats or
related equipment insured under a separate policy or endorsement.(8)
    
    Commercial healthcare facilities and nursing homes; however, a nursing home which is an
integral
part of a retirement community consisting primarily of habitational structures that are not
nursing
homes will not be subject to this exclusion.(9)
    
    Any exposure under commercial policies covering only appurtenant structures or structures that
do
not function as a habitational structure (e.g. a policy covering only the pool of an apartment
complex).(10)
    
    Personal contents in a commercial storage facility covered under a policy that covers only
those
personal contents.(11)
    
    Policies covering only Additional Living Expense.(12)
    
    Any liability of the Company for extra contractual obligations and excess of original policy
limits
liabilities.(13)
    
    Losses in excess of the sum of the Balance of the Fund as of December 31 of the Contract Year
and
the amount the SBA is able to raise through the issuance of revenue bonds or by the use of
other
financing mechanisms, up to the limit pursuant to Section 215.555(4)(c), Florida Statutes.(14)
    
    Any liability assumed by the Company from Pools, Associations, and Syndicates. Exception:
Covered Policies assumed from Citizens under the terms and conditions of an executed assumption
agreement between the Authorized Insurer and Citizens are covered by this Contract.(15)
    
    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 an
insurer, or its successors or assigns, which has been declared by any competent authority to be
insolvent, or which is otherwise deemed unable to meet any claim, debt, charge, fee or other
obligation in whole or in part.(16)
    
    Any liability of the Company for loss or damage caused by or resulting from nuclear reaction,
nuclear radiation, or radioactive contamination from any cause, whether direct or indirect,
proximate
or remote, and regardless of any other cause or event contributing concurrently or in any other
sequence to the loss.(17)
    
    The FHCF does not provide coverage for water damage which is generally excluded under property
insurance contracts and has been defined to mean flood, surface water, waves, tidal water,
overflow
of a body of water, storm surge, or spray from any of these, whether or not driven by wind.(18)
    
    Specialized Fine Arts Risks as defined in Rule 19-8.028(4)(d), F.A.C.
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ARTICLE VII  MANAGEMENT OF CLAIMS AND LOSSES
  ARTICLE VIII  LOSS REIMBURSEMENT ADJUSTMENTS
 (1)
    
    Offsets
  (2)
    
    Reimbursement Adjustments
  ARTICLE IX  REIMBURSEMENT PREMIUM
 (1)
    
    The Company shall, in a timely manner, pay the SBA its Reimbursement Premium for the Contract
Year. The Reimbursement Premium for the Contract Year shall be calculated in accordance with
Section 215.555, Florida Statutes, with any rules promulgated thereunder, and with Article
X(2).(2)
    
    Since the calculation of the Actuarially Indicated Premium assumes that the Companies will pay
their Reimbursement Premiums timely, interest charges will accrue under the following
circumstances. A Company may choose to estimate its own Premium installments. However, if the
Companys estimation is less than the provisional Premium billed, an interest charge will
accrue on
the difference between the estimated Premium and the final Premium. If a Company estimates its
first installment, the Administrator shall bill that estimated Premium as the second
installment as
well, which will be considered as an estimate by the Company. No interest will accrue regarding
any provisional Premium if paid as billed by the FHCFs Administrator, except in the case of an
estimated second installment as set forth in this Article. Also, if a Company makes an
estimation
that is higher than the provisional Premium billed but is less than the final Premium, interest
will not
accrue. If the Premium payment is not received from a Company when it is due, an interest
charge
will accrue on a daily basis until the payment is received. Interest will also accrue on
Premiums
resulting from submissions or resubmissions finalized after December 1 of the Contract Year. An
interest credit will be applied for any Premium which is overpaid as either an estimate or as a
provisional Premium. Interest shall not be credited past December 1 of the Contract Year. The
applicable interest rate for interest credits will be the average rate earned by the SBA for
the FHCF
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for the first five months of the Contract Year. The applicable interest rate for interest
charges will
accrue at this rate plus 5%.
 ARTICLE X  REPORTS AND REMITTANCES
 (1)
    
    Exposures
 (a)
    
    If the Company writes Covered Policies before June 1 of the Contract Year, the Company
shall
report to the SBA, unless otherwise provided in Rule 19-8.029, F.A.C., no later than the
statutorily required date of September 1 of the Contract Year, by ZIP Code or other limited
geographical area as specified by the SBA, its insured values under Covered Policies as of
June 30 of the Contract Year as outlined in the annual reporting of insured values form,
FHCFD1A (Data Call) adopted for the Contract Year under Rule 19-8.029, F.A.C., and other
data or information in the format specified by the SBA.(b)
    
    If the Company first begins writing Covered Policies on or after June 1 but prior to
December 1
of the Contract Year, the Company shall report to the SBA, no later than March 1 of the
Contract Year, by ZIP Code or other limited geographical area as specified by the SBA, its
insured values under Covered Policies as of December 31 of the Contract Year as outlined in
the Supplemental Instructions for New Participants section of the Data Call adopted for the
Contract Year under Rule 19-8.029, F.A.C., and other data or information in the format
specified by the SBA.(c)
    
    If the Company first begins writing Covered Policies on or after December 1 but through and
including May 31 of the Contract Year, the Company shall not report its exposure data for
the
Contract Year to the SBA.(d)
    
    The requirement that a report is due on a certain date means that the report shall be in
the
physical possession of the FHCFs Administrator in Minneapolis no later than 5 p.m. on the
due date. If the applicable due date is a Saturday, Sunday or legal holiday, then the
actual due
date will be the day immediately following the applicable due date which is not a Saturday,
Sunday or legal holiday. For purposes of the timeliness of the submission, neither the
United
States Postal Service postmark nor a postage meter date is in any way determinative.
Reports
sent to the SBA in Tallahassee, Florida, will be returned to the sender. Reports not in the
physical possession of the FHCFs Administrator by 5 p.m., Central Time, on the applicable
due date are late.(e)
    
    Pursuant to the provisions of Section 215.557, Florida Statutes, the reports of insured
values
under Covered Policies by ZIP Code submitted to the SBA pursuant to Section 215.555,
Florida
Statutes, are confidential and exempt from the provisions of Section 119.07(1), Florida
Statutes,
and Section 24(a), Art. I of the State Constitution.
 (2)
    
    Reimbursement Premium
 (a)
    
    If the Company writes Covered Policies before June 1 of the Contract Year, the Company
shall
pay the FHCF its Reimbursement Premium in installments due on or before August 1,
October 1, and December 1 of the Contract Year in amounts to be determined by the FHCF.
However, if the Companys Reimbursement Premium for the prior Contract Year was less than
$5,000, the Companys full provisional Reimbursement Premium, in an amount equal to the
Reimbursement Premium paid in the prior year, shall be due in full on or before August 1 of
the
Contract Year. The Company will be invoiced for amounts due, if any, beyond the provisional
Reimbursement Premium payment, on or before December 1 of the Contract Year. In addition,
if a company has been placed under regulatory supervision by a State or control of the
Company has been transferred through any legal or regulatory proceeding to a state
regulator or
court appointed receiver or rehabilitator (referred to in the aggregate as State action),
the full
annual provisional Reimbursement Premium as billed and any outstanding balances will be due
on August 1, or the date that such State action occurs after August 1 and before May 31 of
the
Contract Year.
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(b)
    
    A New Participant that first begins writing Covered Policies on or after June 1 but prior to
December 1 of the Contract Year shall pay the FHCF a provisional Reimbursement Premium of
$1,000 upon execution of this Contract. The Administrator shall calculate the Companys
actual
Reimbursement Premium for the period based on its actual exposure as of December 31 of the
Contract Year, as reported on or before March 1. To recognize that New Participants have
limited exposure during this period, the actual Premium as determined by processing the
Companys exposure data shall then be divided in half, the provisional Premium shall be
credited, and the resulting amount shall be the total Premium due for the Company for the
remainder of the Contract Year. However, if that amount is less than $1,000, then the
Company shall pay $1,000. The Premium payment is due no later than May 1 of the Contract
Year. The Companys Retention and coverage will be determined based on the total Premium
due as calculated above.(c)
    
    A New Participant that first begins writing Covered Policies on or after December 1 but
through and including May 31 of the Contract Year shall pay the FHCF a Reimbursement
Premium of $1,000 upon execution of this Contract.(d)
    
    The requirement that the Reimbursement Premium is due on a certain date means that the
Premium shall be in the physical possession of the FHCF no later than 5 p.m., Eastern Time,
on
the due date applicable to the particular installment. If remitted by check to the FHCFs
Post
Office Box, the check shall be physically in the Post Office Box 550261, Tampa, FL 33655-
0261, as set out on the invoice sent to the Company. If remitted by check by hand delivery,
the
check shall be physically on the premises of the FHCFs bank in Tampa, Florida, as set out
on
the invoice sent to the Company. If remitted electronically, the wire transfer shall have
been
completed to the FHCFs account at its bank in Tampa, Florida, as set out on the invoice
sent to
the Company. If the applicable due date is a Saturday, Sunday or legal holiday, then the
actual
due date will be the day immediately following the applicable due date which is not a
Saturday,
Sunday or legal holiday. For purposes of the timeliness of the remittance, neither the
United
States Postal Service postmark nor a postage meter date is in any way determinative.
Premium
checks sent to the SBA in Tallahassee, Florida, or to the FHCFs Administrator in
Minneapolis,
Minnesota, will be returned to the sender. Reimbursement Premiums not in the physical
possession of the FHCF by 5 p.m., Eastern Time, on the applicable due date are late.(e)
    
    Except as required by Section 215.555(7)(c), Florida Statutes, or as described in the
following
sentence, Reimbursement Premiums, together with earnings thereon, received in a given
Contract Year will be used only to pay for losses attributable to Covered Events occurring
in
that Contract Year or for losses attributable to Covered Events in subsequent Contract
Years
and will not be used to pay for past losses or for debt service on revenue bonds. Pursuant
to
Section 215.555(6)(a)1., Florida Statutes, Premiums, or earnings thereon, may be used for
payments relating to revenue bonds in the event Emergency Assessments are insufficient. If
Premiums are used for debt service, then the amount of the Premiums so used shall be
returned,
without interest, to the Fund when Emergency Assessments remain available after making
payment relating to the revenue bonds and any other purposes for which Emergency
Assessments were levied.
 (3)
    
    Claims and Losses
 (a)
    
    In General
 1.
    
    Claims and losses resulting from Loss Occurrences commencing during the Contract Year
shall be reported by the Company and reimbursed by the FHCF as provided herein and in
accordance with the Statute, this Contract, and any rules adopted pursuant to the Statute.
For a Company participating in a quota share primary insurance agreement(s) with Citizens
Property Insurance Corporation High Risk Account, Citizens and the Company shall report
only their respective portion of losses under the quota share primary insurance
agreement(s). Pursuant to Section 215.555(4)(c), Florida Statutes, the SBA is obligated to
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pay for losses not to exceed the Actual Claims-Paying Capacity of the FHCF, up to the limit
in accordance with Section 215.555(4)(c)1., Florida Statutes, for any one Contract
Year.
 (b)
    
    Loss Reports
 1.
    
    At the direction of the SBA, the Company shall report its projected Ultimate Net Loss from
each Loss Occurrence to provide information to the SBA in determining any potential
liability for possible reimbursable losses under the Contract on the Interim Loss
Report,
Form FHCF-L1A, as adopted in Rule 19-8.029, F.A.C.2.
    
    FHCF loss reimbursements will be issued based on Ultimate Net Loss information reported
by the Company on the Proof of Loss Report, Form FHCF-L1B, as adopted in Rule 19-
8.029, F.A.C. To qualify for reimbursement, the Proof of Loss Report must have the
original signatures of two executive officers authorized by the Company to sign the report.
While a Company may submit a Proof of Loss Report requesting reimbursement at any
time following a Loss Occurrence, all Companies shall submit a mandatory Proof of Loss
Report for each Loss Occurrence no earlier than December 15 and no later than December
31 of the Contract Year during which the Covered Event(s) occurs using the most current
data available, regardless of the amount of Ultimate Net Loss or the amount of loss
reimbursements or advances already received. Reports may be faxed only if the Company
does not qualify for a reimbursement.3.
    
    Quarterly thereafter until all claims and losses resulting from a Loss Occurrence are fully
discharged or the Company has received its full coverage under the Contract Year in
which
the Loss Occurrence(s) occurred, the Company shall submit updated Proof of Loss Reports
for each Loss Occurrence, as applicable. If the Companys Retention must be
recalculated
as the result of an exposure resubmission, and if the recalculated Retention changes
the
FHCFs reimbursement obligations, then the Company shall submit additional Proof of
Loss Reports for recalculation of the FHCFs obligations.4.
    
    Annually thereafter, all Companies shall submit a mandatory year-end Proof of Loss Report
for each Loss Occurrence, as applicable, using the most current data available. This
Proof
of Loss Report shall be filed no earlier than December 15 and no later than December 31
of
each year and shall continue until the earlier of the expiration of the commutation
period
described in (3)(d) below or until all claims and losses resulting from the Loss
Occurrence
are fully discharged including any adjustments to such losses due to salvage or other
recoveries.5.
    
    The SBA, except as noted below, will determine and pay, within 30 days or as soon as
practicable after receiving Proof of Loss Reports, the reimbursement amount due based
on
losses paid by the Company to date and adjustments to this amount based on subsequent
quarterly information. The adjustments to reimbursement amounts shall require the SBA
to
pay, or the Company to return, amounts reflecting the most recent determination of
losses.
The FHCF shall have the right to conduct a claims examination prior to the issuance of
any
advances or reimbursements submitted by Companies that have been placed under
regulatory supervision by a State or where control has been transferred through any
legal or
regulatory proceeding to a state regulator or court appointed receiver or
rehabilitator.6.
    
    If a Covered Event occurs during the Contract Year, but after December 31, at the direction
of the SBA, Companies shall file an Interim Loss Report within 30 days after the
Covered
Event and Proof of Loss Reports quarterly thereafter. Subparagraphs 2-5 above regarding
Proof of Loss Reports shall apply.7.
    
    All Proof of Loss Reports received will be compared with the FHCFs exposure data to
establish the facial reasonableness of the reports. The SBA may also review the results
of
current and prior Contract Year exposure and loss examinations to determine the
reasonableness of the reported losses. Except as noted in paragraph 4. above, Companies
meeting these tests for reasonableness will be scheduled for reimbursement. Companies
not meeting these tests for reasonableness will be handled on a case-by-case basis and
will
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be contacted to provide specific information regarding their individual book of
business.
The discovery of errors in a Companys reported exposure under the Data Call may
require
a resubmission of the current Contract Year Data Call which, as the Data Call impacts
the
Companys premium, retention, and coverage for the Contract Year, will be required
before
the Companys request for reimbursement or an advance will be fully processed by the
Administrator.
 (c)
    
    Loss Reimbursement Calculations
 1.
    
    In general, the Companys paid Ultimate Net Losses must exceed its full FHCF Retentionfor a specific Covered Event before any reimbursement is payable from the FHCF for that
Covered Event. Each Company sustaining reimbursable losses will receive the amount of
reimbursement due under the Contract up to the amount of the Companys payout. If more
than one Covered Event occurs in any one Contract Year, any reimbursements due from the
FHCF shall take into account the Companys Retention for each Covered Event. However,
the Companys reimbursements from the FHCF for all Covered Events occurring during the
Contract Year shall not exceed, in aggregate, the Projected Payout Multiple or Payout
Multiple, as applicable, times the individual Companys Reimbursement Premium for the
Contract Year.2.
    
    In determining reimbursements under this Contract, the SBA shall:
 a.
    
    First, reimburse Companies qualified as limited apportionment companies under
Section 627.351(2)(b)3., Florida Statutes, for the amount (if any) of reimbursement
due under the individual Companys Contract, but not to exceed the lesser of $10
million or an amount equal to 10 times the individual Companys Reimbursement
Premium for the Contract Year. This provision does not apply if the projected Balance
of the Fund as of December 31 of the Contract Year, exclusive of any bonding
capacity of the FHCF, exceeds $2 billion. Further, if the Company is a member of an
NAIC group, the Company may not receive reimbursement under this provision if any
other member of the NAIC group has received reimbursement under this provision.b.
    
    Next, reimburse each of the Companies for the amount (if any) of reimbursement due
under the individual Companys Contract, but not to exceed for all Loss Occurrences,
an amount equal to the Projected Payout Multiple or the Payout Multiple, as
applicable, times the individual Companys Reimbursement Premium for the Contract
Year. For a limited apportionment company, any amount payable under this provision
shall be reduced by the amount (if any) payable under (a) above.c.
    
    Thereafter, pursuant to Section 215.555(4)(d)2.c., Florida Statutes, establish the
prorated reimbursement level at the highest level for which any remaining fund
balance or bond proceeds (as limited by Section 215.555(4)(c), Florida Statutes) are
sufficient to reimburse entities created pursuant to Section 627.351(6), Florida
Statutes, for reimbursable losses exceeding the amounts payable pursuant to (b) above
for the Contract Year. The proration shall be determined based on each entitys share
of their aggregate reimbursable losses exceeding the amounts payable pursuant to (b)
above. Any additional reimbursements pursuant to this paragraph shall not include
losses under an entitys FHCF Retention and will be at the 90% Reimbursement
Percentage. In order to determine the amount available for additional reimbursements,
the SBA will review reported loss information from all Companies and determine that
all Companies which received payments for reimbursable losses but which did not
exceed their projected payout have settled all, or substantially all, of their claims
eligible for reimbursement. The SBA will then determine the remaining amount of
Claims-Paying Capacity available for such additional reimbursements. Such
additional reimbursement amounts shall not be limited due to the transitional
provision
created for the 2004-2005 Contract Year.
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3.
    
    Reserve established. When a Covered Event occurs in a subsequent Contract Year when
reimbursable losses are still being paid for a Covered Event in a previous Contract Year, the
SBA will establish a reserve for the outstanding reimbursable losses for the previous
Contract Year, based on the length of time the losses have been outstanding, the amount of
losses already paid, the percentage of incurred losses still unpaid, and any other factors
specific to the loss development of the Covered Events involved.
 (d)
    
    Commutation
 1.
    
    Not less than 36 months or more than 60 months after the end of the Contract Year, the
Company shall report to the FHCF all claims and losses, both reported and unreported, for
the Contract Year which are not finally settled and which may be reimbursable losses
under
this Contract. The Company and the SBA or their respective representatives may, by
mutual agreement, determine the capitalized value of all claims and losses, both reported
and unreported, resulting from Loss Occurrences commencing during the Contract Year,
and the Company shall provide the SBA with a copy of a written opinion on such
capitalized value by the Companys certifying actuary. Payment by the SBA of its portion
of any amount or amounts so mutually agreed and certified by the Companys certifying
actuary shall constitute a complete and final release of the SBA in respect of all claims
and
losses, both reported and unreported, under this Contract.2.
    
    If agreement on capitalized value cannot be reached within 60 days after the Company
reports its claims and losses to the FHCF, the Company and the SBA may mutually appoint
an actuary or appraiser to investigate, determine and capitalize such claims or losses.
If
both parties then agree, the SBA shall pay its portion of the amount so determined to be
the
capitalized value of such claims or losses.3.
    
    If the parties fail to agree, then any difference shall be settled by a panel of three
actuaries,
one to be chosen by each party and the third by the two so chosen. If either party does
not
appoint an actuary within 30 days, the other party may appoint two actuaries. If the two
actuaries fail to agree on the selection of a third actuary within 30 days of their
appointment, each of them shall name two, of whom the other shall decline one and the
decision shall be made by drawing lots. All the actuaries shall be regularly engaged in
the
valuation of property claims and losses and shall be members of the Casualty Actuarial
Society and of the American Academy of Actuaries. None of the actuaries shall be under
the control of either party to this Contract. Each party shall submit its case to its
actuary
within 30 days of the appointment of the third actuary. The decision in writing of any
two
actuaries, when filed with the parties hereto, shall be final and binding on both
parties.4.
    
    The reasonable and customary expense of the actuaries and of the commutation (as a result
of 2. and 3. above) shall be equally divided between the two parties. Said commutation
shall take place in Tallahassee, Florida, unless some other place is mutually agreed upon
by
the Company and the SBA.
 (4)
    
    Advances
 (a)
    
    In accordance with Section 215.555(4)(e), Florida Statutes, the SBA may make advances for
loss reimbursements as defined herein, at market interest rates, to the Company in
accordance
with Section 215.555(4)(e), Florida Statutes. An advance is an early reimbursement which
allows the Company to continue to pay claims in a timely manner. Advances will be made
based on the Companys Ultimate Net Loss, on an incurred basis, as reported on a Proof of
Loss Report, and shall include Loss Adjustment Expense Reimbursement as calculated by the
FHCF. In order to be eligible for an advance, the Company must submit its exposure data for
the Contract Year as required under paragraph (1) of this Article. Except as noted below,
advances, if approved, will be made as soon as practicable after the SBA receives a written
request, signed by two officers of the Company, for an advance of a specific amount and any
other information required for the specific type of advance under subparagraph (c) below.
All
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reimbursements due to a Company shall be offset against any amount of outstanding advances
plus the interest due thereon.(b)
    
    The market interest rate shall be the average rate earned by the SBA for the FHCF for the
first
five months of the Contract Year. All interest charged will commence on the date the SBA
issues a check for an advance and will cease on the date upon which the FHCF has received
the
Companys Proof of Loss Report(s) for the Covered Event(s) for which the Company qualifies
for reimbursement(s). If such reimbursement(s) are less than the amount of outstanding
advance(s) issued to the Company, interest will continue to accrue on the outstanding
balance
of the advance(s) until subsequent Proof of Loss Reports qualify the Company for
reimbursement under any Covered Event equal to or exceeding the amount of any outstanding
advance(s). If an advance is offset entirely by loss reimbursements before the average rate
earned for the first five months of the Contract Year can be determined, the interest on
the
advance(s) shall be invoiced once the interest rate has been determined. Interest shall be
billed
on a periodic basis. If it is determined that the Company received funds in excess of those
to
which it was entitled, the interest as to those sums will not cease on the date of the
receipt of
the Proof of Loss Report but will continue until the Company reimburses the FHCF for the
overpayment. If it is determined that an excess reimbursement or advance has occurred
before
the average rate earned for the first five months of the Contract Year can be determined,
the
Company shall be invoiced for the amount of the excess reimbursement or advance, and the
interest thereon will be invoiced once the interest rate has been determined.(c)
    
    The specific type of advances enumerated in the Section 215.555, Florida Statutes, follow.
 1.
    
    Advances to Companies to prevent insolvency, as defined under Article XIV of this
Contract.
 a.
    
    Section 215.555(4)(e)1., Florida Statutes, provides that the SBA shall advance to the
Company amounts necessary to maintain the solvency of the Company, up to 50
percent of the SBAs estimate of the reimbursement due to the Company.b.
    
    In addition to the requirements outlined in subparagraph (4)(a) above, the
requirements
for an advance to a Company to prevent insolvency are that the Company demonstrates
that it is likely to qualify for reimbursement, that the Company demonstrates that the
immediate receipt of moneys from the SBA is likely to prevent the Company from
becoming insolvent, and that the Company provides the following information:
 i.Current assets;ii.Current liabilities other than liabilities due to the Covered Event;iii.Current surplus as to policyholders;iv.Estimate of other expected liabilities not due to the Covered Event; andv.Amount of reinsurance available to pay claims for the Covered Event under other
reinsurance treaties.
 c.
    
    The SBAs final decision regarding an application for an advance to prevent insolvency
shall be based on whether or not, considering the totality of the circumstances,
including the SBAs obligations to provide reimbursement for all Covered Events
occurring during the Contract Year, granting an advance is essential to allowing the
entity to continue to pay additional claims for a Covered Event in a timely manner.
 2.
    
    Advances to entities created pursuant to Section 627.351(6), Florida Statutes.
 a.
    
    Section 215.555(4)(e)2., Florida Statutes, provides that the SBA may advance to an
entity created pursuant to Section 627.351(6), Florida Statutes, up to 90% of the lesser
of the SBAs estimate of the reimbursement due or the entitys share of the actual
aggregate Reimbursement Premium for that Contract Year, multiplied by the current
available liquid assets of the FHCF.b.
    
    In addition to the requirements outlined in subparagraph (4)(a) above, the
requirements
for an advance to entities created pursuant to Section 627.351(6), Florida Statutes are
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that the entity must demonstrate to the SBA that the advance is essential to allow the
entity to pay claims for a Covered Event.
 3.
    
    Advances to limited apportionment companies.
Section 215.555(4)(e)3., Florida Statutes, provides that the SBA may advance the amount
of estimated reimbursement payable to limited apportionment companies.
 (d)
    
    In determining whether or not to grant an advance, the SBA:
 1.
    
    Must determine whether its assets are sufficient and sufficiently liquid to fulfill its
obligations to other Companies prior to granting an advance;2.
    
    Shall review and consider all the information submitted by such Companies;3.
    
    Shall review such Companies compliance with all requirements of Section 215.555,
Florida Statutes;4.
    
    Shall consult with all relevant regulatory agencies to seek all relevant information;5.
    
    Shall review the damage caused by the Covered Event and when that Covered Event
occurred; and6.
    
    Shall consider any other factors deemed relevant.
 (e)
    
    In situations where a Company has been placed under regulatory supervision by a State, or
where control has been transferred through any legal or regulatory proceeding to a state
regulator, court appointed receiver or rehabilitator, or a state insurance guarantee
association,
all requirements of the Company outlined herein shall remain applicable and must be met prior
to the issuance of any advance of reimbursements for which the Company may be eligible to
receive under the Contract.(f)
    
    Any amount advanced by the SBA shall be used by the Company only to pay claims of its
policyholders for the Covered Event or Covered Events which have precipitated the immediate
need to continue to pay additional claims as they become due.
 (5)
    
    Delinquent Premium Payments
  (6)
    
    Inadequate Data Submissions
  (7)
    
    Delinquent Submissions
  ARTICLE XI  TAXES
  ARTICLE XII  ERRORS AND OMISSIONS
  15




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ARTICLE XIII  INSPECTION OF RECORDS
  (1)
    
    Examination Requirements for Exposure Verification
  (2)
    
    Examination Requirements for Loss Reports
  (3)
    
    Examination Procedures
 (a)
    
    The FHCF will send an examination notice to the Company providing the commencement date
of the examination, the site of the examination, any accommodation requirements of the
examiner, and the reports and data which must be assembled by the Company and forwarded
to the FHCF upon request. The Company shall be prepared to choose one location in which to
be examined, unless otherwise specified by the SBA.(b)
    
    The reports and data are required to be forwarded to the FHCF as set forth in an
examination
notice letter. The information is then forwarded to the examiner. If the FHCF receives
accurate and complete records as requested, the examiner will contact the Company to inform
the Company as to what policies or other documentation will be required once the examiner is
 16




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##### 



on site. Any records not required to be provided to the examiner in advance shall be made
available at the time the examiner arrives on site.(c)
    
    At the conclusion of the examiners work and the management review of the examiners
report, findings, recommendations, and work papers, the FHCF will forward a preliminary
draft of the examination report to the Company and require a response from the Company by a
date certain as to the examination findings and recommendations.(d)
    
    If the Company accepts the examination findings and recommendations, and there is no
recommendation for resubmission of the Companys exposure data, the examination report
will be finalized and the exam file closed.(e)
    
    If the Company disputes the examiners findings, the
areas in dispute will be resolved by a
meeting or a conference call between the Company and FHCF management.(f)1.
    
    The recommendation of a loss reimbursement examination could require the Company to
resubmit its loss reports or exposure data.
 2.
    
    If the recommendation of the examiner is to resubmit the Companys exposure data for the
Contract Year in question, then the FHCF will send the Company a letter outlining the
process
for resubmission and including a deadline to resubmit. The resubmission will include a data
file to be submitted to the FHCFs Administrator and an exam file to be submitted to the
offices of the SBA. The resubmission is also required to be accompanied by a detailed
written
description of the specific changes made to the resubmitted data. Once the resubmission is
received by the FHCFs Administrator, the FHCFs Administrator calculates a revised
Reimbursement Premium for the Contract Year which has been examined. The SBA shall
then review the resubmission with respect to the examiners findings, and accept the
resubmission or contact the Company with any questions regarding the resubmission. Once
the SBA has accepted the resubmission as a sufficient response to the examiners findings,
the
FHCFs Administrator will send the Company an invoice for any Reimbursement Premium
and interest due or to refund Reimbursement Premium, as the case may be. Once the
resubmission has been approved, the exam file is closed.3.
    
    If the recommendation of the examiner is either to resubmit the Companys exposure data for
the Contract Year in question or giving the option to pay the estimated Premium difference,
then the FHCF will send the Company a letter outlining the process for resubmission or for
paying the estimated Premium difference and including a deadline for the resubmission or the
payment to be received by the FHCFs Administrator. If the Company chooses to resubmit,
the same procedures outlined in Article XIII(3)(f)2. apply.
 (g)
    
    If the Company continues to dispute the examiners findings and/or recommendations and no
resolution of the disputed matters is obtained through discussions between the Company and
FHCF management, then the process within the SBA is at an end and further administrative
remedies may be obtained under Chapter 120, Florida Statutes.(h)
    
    The examiners list of errors is made available in the examination report sent to the
Company.
Given that the examination was based on a sample of the Companys policies rather than the
whole universe of the Companys Covered Policy exposure, the error list is not intended to
provide a complete list of errors but is intended to indicate what Covered Policy
information
needs to be reviewed and corrected throughout the Companys book of Covered Policy
business to ensure more complete and accurate reporting in the resubmission if required and
for any future submissions.
 (4)
    
    Costs of the Examinations
  17




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##### 



ARTICLE XIV  INSOLVENCY OF THE COMPANY
  ARTICLE XV  TERMINATION
  ARTICLE XVI  VIOLATIONS
  ARTICLE XVII  APPLICABLE LAW
 (1)
    
    Applicable Law: This Contract shall be governed by and construed according to the laws of the
State of Florida in respect of any matter relating to or arising out of this Contract.(2)
    
    Notice of Rights: Pursuant to Chapter 120, Florida Statutes, and the Uniform Rules of
Procedure,
codified as Chapters 28-101 through 28-111, F.A.C., a person whose substantial interests are
affected by a decision of the SBA regarding the FHCF may request a hearing within 21 days shall
have waived his or her right to a hearing. The hearing may be a formal hearing or an informal
hearing pursuant to the provisions of Sections 120.569 and 120.57, Florida Statutes. The
petition
must be filed (received) in the office of the Agency Clerk, General Counsels Office, State
Board of
Administration of Florida, P.O. Box 13300, Tallahassee, FL 32317-3300, within the 21 day
period.
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##### 



ARTICLE XVIII  REIMBURSEMENT CONTRACT ELECTIONS
 Reimbursement Percentage
   (a)
    
    NAIC Group Affirmation: Initial the following box if the Company is part of an NAIC Group:
 TBM
 (b)
    
    Reimbursement Percentage Election: The Company hereby elects the following Reimbursement
Percentage for the Contract Year from 12:01 a.m., Eastern Time, June 1, 2005, to 12:01 a.m.,
Eastern
Time, June 1, 2006, (the individual executing this Contract on behalf of the Company shall
place his
or her initials in the box to the left of the percentage elected for the Company):
 45%
    
    OR
    
    
    75
    %
    
    OR
    
    TBM
    
    
    90
    %
 Reporting Exposure for a Single Structure, with a Mix of Commercial Habitational and Commercial Non-Habitational Exposure, Written on a Commercial Policy
 does not N/A does
 Commercial-Residential Class Code
  19




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##### 



Commercial Non-Residential/Business Class Code
   (1)
    
    The decision to not carve out and report the incidental habitational exposure shall apply to
all such structures insured by the Company; and(2)
    
    If the incidental habitational exposure is not reported to the FHCF, the Company agrees it
shall not report losses to the structure and the FHCF shall not reimburse any losses to the structure.
 CARVING OR NOT CARVING
 OR
    
    TBM
    
    ORCARVING
    
    
    
    NOT CARVING
    
    
    
    NA
 CARVING or NOT CARVING
 Important Note: Since this election will impact your Data Call submission, please share this
decision with the individual(s) responsible for compiling your Data Call
submission.
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ARTICLE XIX  SIGNATURES


Approved by:


Florida Hurricane Catastrophe FundBy:
    
    State Board of Administration of the State of FloridaBy:Coleman Stipanovich
    
    DateExecutive DirectorApproved as to legality:By:Linda Lettera
    
    DateGeneral CounselFL Bar ID#311911Mobile USA Insurance CompanyCompanyBy:
    
    T. Bruce Meyer, Sr VP& Treasurer
    
    5/18/2005Name/Title
    
    Date