EXHIBIT
10.3
 PHILADELPHIA INDEMNITY
INSURANCE COMPANY
PHILADELPHIA INSURANCE COMPANY
 Agreement No. P304
 GENERAL REINSURANCE CORPORATION  A Berkshire Hathaway Company




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TABLE OF CONTENTS
 PROPERTY FACULTATIVE AGREEMENT OF REINSURANCE
NO. P304   PHILADELPHIA INDEMNITY INSURANCE COMPANY
PHILADELPHIA INSURANCE COMPANY   GENERAL REINSURANCE CORPORATION
 Article
    
    
    
    
    
    Page #Article I
    
    
    
    SCOPE OF AGREEMENT
    
    
    1Article II
    
    
    
    PARTIES TO THE AGREEMENT
    
    
    1Article III
    
    
    
    COMMENCEMENT AND TERMINATION
    
    
    1Article IV
    
    
    
    BUSINESS SUBJECT TO THIS AGREEMENT
    
    
    2Article V
    
    
    
    LIABILITY OF THE REINSURER
    
    
    2Article VI
    
    
    
    ALLOCATION OF ADJUSTMENT EXPENSE
    
    
    3Article VII
    
    
    
    DEFINITIONS
    
    
    3Article VIII
    
    
    
    EXCLUSIONS
    
    
    5Article IX
    
    
    
    OTHER REINSURANCE
    
    
    8Article X
    
    
    
    REINSURANCE PREMIUM
    
    
    9Article XI
    
    
    
    RISK REPORTS AND REMITTANCES
    
    
    9Article XII
    
    
    
    REPORTS AND CLAIM REMITTANCES
    
    
    10Article XIII
    
    
    
    ERRORS AND OMISSIONS
    
    
    11Article XIV
    
    
    
    SPECIAL ACCEPTANCES
    
    
    11Article XV
    
    
    
    MANAGEMENT OF CLAIMS AND LOSSES
    
    
    11Article XVI
    
    
    
    RECOVERIES
    
    
    11Article XVII
    
    
    
    TRIA EXCESS RECOVERY
    
    
    11Article XVIII
    
    
    
    RESERVES AND TAXES
    
    
    12Article XIX
    
    
    
    OFFSET
    
    
    12Article XX
    
    
    
    INSPECTION OF RECORDS
    
    
    12Article XXI
    
    
    
    ARBITRATION
    
    
    13Article XXII
    
    
    
    INSOLVENCY OF THE COMPANY
    
    
    13Article XXIII
    
    
    
    ENTIRE AGREEMENT
    
    
    14
 Attachments
 
 GENERAL REINSURANCE CORPORATION




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PROPERTY FACULTATIVE AGREEMENT OF REINSURANCE
NO. P304
  PHILADELPHIA INDEMNITY INSURANCE COMPANY
PHILADELPHIA INSURANCE COMPANY
  GENERAL REINSURANCE CORPORATION
  Article I  SCOPE OF AGREEMENT
  Article II  PARTIES TO THE AGREEMENT
  Article III COMMENCEMENT AND TERMINATION
  GENERAL REINSURANCE CORPORATION  A Berkshire Hathaway Company




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Article IV  BUSINESS SUBJECT TO THIS AGREEMENT
   Article V  LIABILITY OF THE REINSURER
  SCHEDULE OF REINSURANCE
 Limits of LiabilityClass of Business
    
    Company Retention
    
    of the ReinsurerProperty BusinessRisks located in Florida, Hawaii
or Harris County, Texas
    
    $
    75,000,000
    
    
    $
    30,000,000All other Risks
    
    $
    75,000,000
    
    
    $
    50,000,000Wood Frame Builders Risks
    
    $
    25,000,000
    
    
    $
    25,000,000
 GENERAL REINSURANCE CORPORATION
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Article VI  ALLOCATION OF ADJUSTMENT EXPENSE
  Article VII  DEFINITIONS
 (a)
    
    Company RetentionThis term shall mean the amount the Company and its treaty reinsurers shall
retain for their 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.Recoveries from catastrophe reinsurance shall be deemed not to reduce the
amount required with respect to the Company Retention.(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 catastrophe reinsurance and except treaty reinsurance
within the Company Retention, whether collectible or not. This term shall not
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.(c)
    
    Adjustment ExpenseThis term shall mean expenditures by the Company within the terms of its
policies in the direct defense of claims 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.(d)
    
    RiskThe Company shall establish what constitutes one Risk provided:
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(1)
    
    A Building and its contents, including time element coverages, shall never
be considered more than one Risk;(2)
    
    When two or more Buildings and their contents 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 that are
considered to constitute each Risk; if such identification is not made, each
Building and its contents shall be considered to be a separate Risk;(3)
    
    Multiple general locations shall never be combined and considered one Risk.
 (e)
    
    BuildingThis term shall mean each separately roofed structure enclosed within exterior walls.(f)
    
    Total Insured ValueThis term shall mean the sum total of property values for the Risk ceded according to the
policy form written.(g)
    
    Terrorism Occurrence
 (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.
 (h)
    
    Agreement YearThis term shall mean each twelve month period commencing on January 1st.
 GENERAL REINSURANCE CORPORATION
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Article VIII  EXCLUSIONS
  (a)
    
    Business assumed by the Company other than reinsurance assumed from
affiliated companies;(b)
    
    Nuclear incident per the Nuclear Incident Exclusion  Physical Damage -
Reinsurance attached hereto;(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, 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 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.(f)
    
    Business written on a layered basis, whether primary or excess of loss and
business written on a co-indemnity, co-insurance or shared basis;(g)
    
    Business not written 100% by the Company;(h)
    
    Risks or policies written with a deductible or franchise of more than
$100,000; however, this exclusion shall not apply to Risks or policies which provide
a percentage deductible or franchise in connection with windstorm;(i)
    
    Wood Frame Builders Risks which have a Total Insured Value of more than
$50,000,000 and all other Risks which have a Total Insured Value of more than
$200,000,000, unless submitted to the Reinsurer for special acceptance and accepted
by the Reinsurer in accordance with the provisions of the article entitled SPECIAL
ACCEPTANCES;(j)
    
    Insurance against:
 (1)
    
    Any earth movement (other than sinkhole collapse), such as
earthquake, landslide, mine subsidence or earth sinking, rising
 GENERAL
REINSURANCE CORPORATION
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or shifting; however, this exclusion shall not apply to ensuing loss by fire or
explosion not otherwise excluded;(2)
    
    Volcanic eruption, explosion or effusion; however, this exclusion shall not
apply to ensuing loss by fire or volcanic action not otherwise excluded.
  (k)
    
    Insurance against flood, surface water, waves, tidal waves, overflow of any body of water,
or their spray, all whether driven by wind or not;(I)
    
    Difference in conditions insurance and similar kinds of insurance, howsoever styled;(m)
    
    Insurance against earthquake sprinkler leakage;(n)
    
    Loss, damage, costs or expenses arising out of the release, discharge, dispersal, or escape
of pollutants; the extraction, removal, clean up, containment, monitoring, or detoxification
of pollutants; or the removal, restoration, or replacement of polluted land or water, but this
exclusion does not preclude coverage for loss, damage, costs, or expenses which are covered
under Insurance Services Office basic wordings promulgated on or after April 1, 1986. However,
this exclusion does not apply to any Risk located in a jurisdiction which has not approved the
Insurance Services Office wordings or where other regulatory constraints prohibit the Company
from implementing such wordings. If the Company elects to file an endorsement independent of
ISO, such endorsement will be deemed a suitable substitute provided the Company has submitted
the wording to the Reinsurer and received the Reinsurers prior approval. Nevertheless, if the
insured elects to purchase any buy back or additional coverage options, such options shall
not be covered hereunder even if such options are provided by or covered under ISO wordings;(o)
    
    Any loss or damage caused by or resulting from:
 (1)
    
    Explosion of steam boilers, steam pipes, steam engines or steam turbines
owned by, leased by or operated under the control of the insured; however, this
exclusion shall not apply to loss or damage resulting from fire or combustion
explosion, nor to loss or damage caused by or resulting from the explosion of
gases or fuel within the furnace of any fired vessel or within the flues or
passages through which the gases of combustion pass;(2)
    
    Artificially generated electric current, including electric arcing, that
disturbs electrical devices, appliances or wires; however,
 GENERAL
REINSURANCE CORPORATION
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this exclusion shall not apply to ensuing loss by fire not otherwise excluded;(3)
    
    Mechanical breakdown, including rupture or bursting caused by centrifugal
force; however, this exclusion shall not apply to any resulting loss or damage
caused by elevator collision;
 (p)
    
    Vacant or unoccupied properties;(q)
    
    Losses with respect to overhead transmission and distribution lines (including those used by
cable operators and telecommunications providers) 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)
    
    Petrochemical Risks, including oil refining and processing, petrochemical operations,
pipelines, tank farms, gas processing, and any hydrocarbon processing;(s)
    
    Railroad property;(t)
    
    Offshore property Risks;(u)
    
    Mobile homes unless written as part of a commercial multiple peril policy;(v)
    
    Watercraft, other than watercraft insured under a standard homeowners policy;(w)
    
    Insurance on growing crops;(x)
    
    Inland marine business with respect to the following:
 (1)
    
    All bridges, dams, tunnels, piers and wharves;(2)
    
    Cargo insurance when written as such with respect to ocean, lake, or inland
waterways vessels;(3)
    
    Faulty film, tape, processing and editing insurance and cast insurance;(4)
    
    Drilling rigs for natural fuels;(5)
    
    Furriers customers policies;(6)
    
    Garment contractors policies;(7)
    
    Insurance on livestock under so-called mortality policies;(8)
    
    Jewelers block policies and furriers block policies;
 GENERAL REINSURANCE CORPORATION
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(9)
    
    Mining equipment while underground;(10)
    
    Transit;(11)
    
    Radio, television, telephone towers or other towers used
in communications;(12)
    
    Registered mail and armored car insurance;
 (y)
    
    Risks that involve the manufacture or fabrication of chips and or
integrated circuits that operate in a clean room environment.(z)
    
    Risks which have an insurable value of $5,000,000 or more on any of
the following coverages:
 (1)
    
    Accounts receivable;(2)
    
    Valuable papers;(3)
    
    Fine arts;(4)
    
    Electronic data processing equipment, media,
and extra expense;
 (aa)
    
    Business classified as fidelity;(bb)
    
    Credit insurance;(cc)
    
    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;(dd)
    
    Contingent business interruption insurance;(ee)
    
    Risks located on the keys and islands listed in Appendix A attached
hereto;(ff)
    
    Risks located within 1,000 feet of tidal waters in Hawaii and Risks
located within one mile of tidal water including the Intracoastal Waterway, as
respects the Gulf of Mexico from Brownsville, Texas to Key West, Florida and
the Atlantic Ocean from Key West, Florida through Cape Cod, Massachusetts and
Risks excluded by the Companys 2008 Property Guidelines-Florida edition
1-2008 and the Companys Windstorm Underwriting Guidelines edition 11-2007.
 Article IX  OTHER REINSURANCE
  GENERAL
REINSURANCE CORPORATION
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Article X
 REINSURANCE PREMIUM
  Article XI  RISK REPORTS AND REMITTANCES
    (1)
    
    Name(s) of insured(s);(2)
    
    Location(s);(3)
    
    Policy number(s);(4)
    
    Transaction description (new, renewal, endorsement);(5)
    
    Reinsurance term (multi year policies must be ceded annually to this
Agreement);(6)
    
    Total Insured Value;(7)
    
    Construction;(8)
    
    Sprinklered or non sprinklered;(9)
    
    ISO protection class;(10)
    
    Risk occupancy;(11)
    
    Company Retention;(12)
    
    Reinsurance limit;(13)
    
    Pro rata ceded premium.
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Article XII  REPORTS AND CLAIM REMITTANCES
 (a)
    
    Claims and LossesThe Company shall report promptly to the Reinsurer, but within no more than 25
days, each claim or loss which, in the Companys opinion, may involve the
reinsurance afforded by this Agreement. 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, the Reinsurer shall
promptly pay to the Company the Reinsurers portion of Net Loss and the
Reinsurers portion of Adjustment Expense, if any. Any subsequent changes in
the amount of Net Loss and/or Adjustment Expense shall be reported by the
Company to the Reinsurer and the amount due either party shall be remitted
promptly, but within no more than 25 days.(b)
    
    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.
 (c)
    
    GeneralIn addition to the reports required by (a) and (b) 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
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Article XIII  ERRORS AND OMISSIONS
   Article XIV   SPECIAL ACCEPTANCES
  Article XV   MANAGEMENT OF CLAIMS AND LOSSES
  Article XVI   RECOVERIES
    Article XVII   TRIA EXCESS RECOVERY
  GENERAL REINSURANCE CORPORATION
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1.
    
    These provisions shall apply separately to each Program Year (as defined in the Act).2.
    
    The term Affiliated Companies shall mean the Company named in this Agreement and all of its
affiliates (as affiliate is defined under the Act).3.
    
    If the sum of:
 (a)
    
    Financial assistance provided under the Act to the Affiliated
Companies with respect to all Insured Loss that applies to the Program Year;
and(b)
    
    Amounts recovered by or credited to the Affiliated Companies under
all reinsurance which the Affiliated Companies purchase, including but not
limited to this reinsurance, all other treaty reinsurance and all
facultative, in respect of any of the Affiliated Companies Insured Loss that
applies to the Program Year,
    Article XVIII   RESERVES AND TAXES
   Article XIX   OFFSET
  Article XX   INSPECTION OF RECORDS
  GENERAL REINSURANCE CORPORATION
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Article XXI
 ARBITRATION
        Article XXII
  INSOLVENCY OF THE COMPANY
  GENERAL REINSURANCE CORPORATION
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Article XXIII
  ENTIRE AGREEMENT
  IN WITNESS WHEREOF,
 ST
 PHILADELPHIA INDEMNITY INSURANCE
COMPANY
PHILADELPHIA INSURANCE COMPANY/s/
Christopher J. MaguireEVP & COOTitle /s/  William A. McKenna
  GENERAL REINSURANCE CORPORATION/s/ Andrew CastroVice PresidentTitle /s/ Lavren McDermott
 GENERAL REINSURANCE CORPORATION
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APPENDIX A
 AGREEMENT NO. P304
 EXCLUDED KEYS AND ISLANDS
 ALABAMA:
 
 FLORIDA:
 
 
 GEORGIA:
 
 LOUISIANA:
 
 MISSISSIPPI:
 
 GENERAL
REINSURANCE CORPORATION




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NORTH CAROLINA:
 
 SOUTH CAROLINA:
 
 TEXAS:
 
 VIRGINIA:
 
 GENERAL REINSURANCE CORPORATION
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NUCLEAR INCIDENT EXCLUSION CLAUSE  PHYSICAL DAMAGE  REINSURANCE  USA
   (i)
    
    Nuclear reactor power plants including all auxiliary property on the site, or(ii)
    
    Any other nuclear reactor installation, including laboratories
handling radioactive materials in connection with reactor installations, and
critical facilities as such, or(iii)
    
    Installations for fabricating complete fuel elements or for
processing substantial quantities of special nuclear material, and for
reprocessing, salvaging, chemically separating, storing or disposing of spent
nuclear fuel or waste materials, or(iv)
    
    Installations other than those listed in paragraph (2) (iii) above
using substantial quantities of radioactive isotopes or other products of nuclear
fission.
  (a)
    
    where the Company does not have knowledge of such nuclear reactor
power plant or nuclear installation, or(b)
    
    where said insurance contains a provision excluding coverage for
damage to property caused by or resulting from radioactive contamination, however
caused. However on and after 1st January 1960 this sub-paragraph (b) shall only
apply provided the said radioactive contamination exclusion provision has been
approved by the Governmental Authority having jurisdiction thereof.
     (a)
    
    substantial quantities, and(b)
    
    the extent of installation, plant or site.
  (a)
    
    all policies issued by the Company on or before 31st December 1957 shall be free
from the application of the other provisions of this Clause until expiry date or 31st
December 1960 whichever first occurs whereupon all the provisions of this Clause shall
apply.(b)
    
    with respect to any risk located in Canada policies issued by the Company on or
before 31st December 1958 shall be free from the application of the other provisions of
this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all
the provisions of this Clause shall apply.
  GENERAL REINSURANCE CORPORATION