<PAGE>   1
                                                                   EXHIBIT 10(b)


             PHYSICIANS, ALLIED MEDICAL PRACTITIONERS, DENTISTS, &
                                 CHIROPRACTORS
             CASUALTY FIRST THROUGH FOURTH AND CLASH EXCESS OF LOSS
                             REINSURANCE AGREEMENT


                              FINAL PLACEMENT SLIP


COMPANY:                  FPIC Insurance Group
                          a Florida corporation
                                  and/or
                          Florida Physicians Insurance Company
                          a Florida corporation
                                  and/or
                          any company now or hereafter affiliated with
                          FPIC Insurance Group

INCEPTION:                January 1, 1997


EFFECTIVE:                Effective from 12:01 a.m., Eastern Standard Time,
                          January 1, 1997, to 12:01 a.m., Eastern Standard
                          Time, January 1, 2000, as respects:

                 First, Second, Third, and Fourth Layers

                                  Claims made on and after 12:01 a.m., Eastern
                                  Standard Time, January 1, 1997 (including
                                  prior acts), on policies attaching from 12:01
                                  a.m., Eastern Standard Time, January 1, 1997,
                                  to 12:01 a.m., Eastern Standard Time, January
                                  1, 2000.

                 Clash Layer:

                                  Claims made during the currency of this
                                  Agreement, regardless of the limits or
                                  effective dates of the Company's policies
                                  (but in the event of cancellation or
                                  expiration of this Agreement on a run-off
                                  basis, coverage will continue to apply in
                                  respect of all claims made during the runoff
                                  period arising from policies in effect at the
                                  cancellation or expiration date).  The date
                                  of loss in respect to this Layer will be
                                  deemed to be the earliest date that any
                                  individual claim was first made against the
                                  Company under any of its policies.


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<PAGE>   2
FPIC INSURANCE GROUP                                     CASUALTY EXCESS OF LOSS
                                                                         AR 4373





CANCELLATION:                     At January 1, 1998, or January 1, 1999, by
                                  either party via 90 days prior notice by
                                  certified or registered mail.


EXPIRATION
AND
CANCELLATION
OPTIONS:                  At expiration or in the event of cancellation, the
                          Reinsurers' liability for each policy in force at
                          expiration or cancellation date will be run off until
                          its cancellation, natural expiration, or next
                          anniversary date, whichever first occurs.  During the
                          run-off period, the Company will continue to cede to
                          the Reinsurers the appropriate earned premium (in the
                          case of the Clash Layer, the runoff premium will be
                          determined at the rates in effect at the cancellation
                          date).  Alternatively, the Company may elect to have
                          the Reinsurers' liability terminate on a cut-off
                          basis as of the date of expiration or cancellation,
                          and the Reinsurers will not be liable for any claims
                          made on or after the expiration or cancellation date.

                          Regardless of the option chosen by the Company at
                          expiration or cancellation, Reinsurers' liability
                          will continue in the event any extended reporting
                          period options are exercised in accordance with the
                          Company's claims made policies and/or in the event
                          the Company is bound by statute or regulation to
                          continue coverage.


BUSINESS
COVERED:                          All business written and classified by the
                                  Company as Professional Liability, including
                                  Loss of Privileges coverage and Owners,
                                  Landlords, and Tenants coverage, issued to
                                  Physicians, Dentists, Nurse Anesthetists,
                                  Licensed Physicians' Assistants,
                                  Chiropractors and other Allied Medical
                                  Practitioners, Clinics, and Professional
                                  Associations (corporate policies) of
                                  Physicians, Dentists, and Chiropractors.

                                  The Company's policies will not exceed 12
                                  months duration and will contain a warranty
                                  to the effect that there have been no known





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<PAGE>   3
FPIC INSURANCE GROUP                                     CASUALTY EXCESS OF LOSS
                                                                         AR 4373



                                  incidents likely to give rise to a claim,
                                  other than those already reported to the 
                                  Company.


DEFINITIONS:              "Agreement year" as used in this Agreement will mean
                          a calendar year.

                          "Claims made" as used in this Agreement will mean
                          those claims first made against the insured during
                          the policy period and occurring on or after the
                          retroactive date, if any.  The date on which a claim
                          is made or reported will be understood to be the
                          earlier of the date on which a written notice of
                          claim is received by the Company, or a report by
                          telephone is made to the Company by the insured or
                          their representative.

                          "Retroactive date" as used in this Agreement will
                          mean the date prescribed in the Company's policy,
                          which is the earliest date losses can actually occur
                          for which an insured can claim coverage.

                          "Extended reporting period" as used in this Agreement
                          will mean a time period after a policy's termination
                          date within which claims may be made with respect to
                          occurrences happening between the original
                          retroactive date, if any, and the original
                          termination date of the policy.  As regards deceased,
                          disabled, and retired insureds and other withdrawing
                          insureds, the extended reporting coverage will be
                          understood to commence with:

                          1.      The date the insured deceases as certified in
                                  their death certificate; or

                          2.      The date the insured ceases to practice as a
                                  result of their permanent disability as
                                  certified by the insured's physician; or

                          3.      The date the insured is retired as indicated
                                  in their written notification to the Company;
                                  or

                          4.      The date that the Company's policy is
                                  terminated.


EXCLUSIONS: As attached.





                                  - 3 OF 21 -
<PAGE>   4
FPIC INSURANCE GROUP                                     CASUALTY EXCESS OF LOSS
                                                                         AR 4373




TERRITORY:       To follow the Company's policies.

RETENTION        First Layer (all Insureds)
AND
LIMIT:                    $500,000 ultimate net loss each and every loss, each
                          and every insured, each and every policy,
                          excess of
                          $500,000 ultimate net loss each and every loss, each 
                          and every insured, each and every policy.

                 Second Layer (all Insureds except Dentists)

                          $500,000 ultimate net loss each and every loss,
                          each and every insured, each and every policy, 
                          excess of 
                          $1,000,000 ultimate net loss each and every loss,
                          each and every insured, each and every policy.

                 Third Layer (all Insureds except Dentists)

                          $500,000 ultimate net loss each and every loss,
                          each and every insured, each and every policy, 
                          excess of 
                          $1,500,000 ultimate net loss each and every loss,
                          each and every insured, each and every policy.

                 Fourth Layer (Clinics and Corporation Policies only) - 
                          (Applicable to CNA International Reinsurance Company 
                          Limited only)

                          $3,000,000 ultimate net loss each and every loss, 
                          each and every insured, each and every policy,
                          excess of
                          $2,000,000 ultimate net loss each and every loss, 
                          each and every insured, each and every policy;





                                  - 4 OF 21 -
<PAGE>   5
FPIC INSURANCE GROUP                                     CASUALTY EXCESS OF LOSS
                                                                         AR 4373



                          subject to a maximum recovery hereunder any one
                          Agreement year of $3,000,000 in respect to each 
                          insured.


         Clash Layer (all Insureds)

                 $750,000 ultimate net loss each and every loss
                 excess of
                 $750,000 ultimate net loss each and every loss;
                 subject to a maximum recovery hereunder any one Agreement
                 year of $1,500,000.

                          Coverage applicable only when two or more insureds
                          are involved in the same loss.

                          Recoveries under the First through Fourth Layers will
                          inure to the benefit of this Layer.


LOSS             Applying to the First, Second, and Clash Layers Combined
CORRIDOR:
                 In addition to the Company's retentions as shown above in
                 respect to the captioned Layers, for each Agreement year that
                 this Agreement remains in force the Company will retain the
                 aggregate of ultimate net loss and loss expense otherwise
                 collectable under the captioned Layers for the Agreement year
                 in question which exceeds an amount equal to 100% of net
                 reinsurance premium ceded under the captioned Layers; however,
                 such retention will not exceed an amount equal to 25% of net
                 reinsurance premium ceded under the First and Second Layers
                 (but excluding net reinsurance premium in respect of Dentists)
                 for the Agreement year in question.

PREMIUM:         First through Third Layers

                 Annual deposit premium $3,000,000 payable quarterly in
                 advance.





                                  - 5 OF 21 -
<PAGE>   6
FPIC INSURANCE GROUP                                     CASUALTY EXCESS OF LOSS
                                                                         AR 4373



                 Adjustable at the end of each Agreement year, and quarterly
                 thereafter, to net reinsurance premium (earned premium basis)
                 as determined by the rates shown in Exhibit A attached hereto.

                 Fourth Layer

                 Net reinsurance premium (written premium basis) as determined
                 by the rates shown in Exhibit A attached hereto, payable
                 quarterly in arrears.

                 Clash Layer

                 Annual deposit premium $300,000 payable quarterly in advance,
                 adjustable at:

                 1.       .6% of the sum of the Company's gross earned premium;
                          plus

                 2.       45.0% of the gross original written premium charged
                          by the Company for the first $500,000 of limits on
                          corporation policies.

                 "Gross earned premium" is defined as the Company's premium for
                 the first $500,000 of limits on all business the subject
                 matter of this Agreement (but excluding premium for
                 corporation policies), earned during the Agreement year
                 (without regard to the original effective dates of the
                 policies).





                                  - 6 OF 21 -
<PAGE>   7
FPIC INSURANCE GROUP                                     CASUALTY EXCESS OF LOSS
                                                                         AR 4373


                 All Layers

                 The Company's policies use rates loaded for unlimited
                 discovery for deceased insureds, insureds who through
                 disability are unable to practice, and insureds who retire
                 from practice; however, the net reinsurance premium relating
                 to the load for any such discovery extension will not be ceded
                 hereunder until and unless such extension comes into effect.

CREDIT           As Respects the First through Third Layers Combined
FUND:
                 The Company has the option to maintain a Credit Fund equal to
                 15% of the net reinsurance premium which would have been ceded
                 under the First through Third Layers, and the final
                 disposition of such Fund will be at the sole discretion of the
                 Company.  The amounts used to constitute such Fund will be
                 withheld by the Company prior to making payment of premium
                 (other than deposit premiums) to Reinsurers, and regardless of
                 the eventual disposition of the Fund, all amounts withheld by
                 the Company will reduce the net reinsurance premium.


CONTINGENT       As Respects the First, Second, and Clash Layers Combined
PROFIT
COMMISSION:      As attached.

                 As Respects the Third and Fourth Layers

                 Nil.

OTHER
REINSURANCE:     Company permitted to purchase facultative reinsurance and to
                 deduct the premium therefor; Company permitted to purchase
                 other treaty reinsurance, and to deduct the premium therefor
                 if it inures to the benefit of this Agreement.





                                  - 7 OF 21 -
<PAGE>   8
FPIC INSURANCE GROUP                                     CASUALTY EXCESS OF LOSS
                                                                         AR 4373


FUNDING OF
RESERVES:        Letters of Credit required from unauthorized Reinsurers--full
                 text as attached.


LOSS EXPENSE:    Pro rata in addition to the ultimate net loss.

DECLARATORY
JUDGMENT
EXPENSE:         Included hereunder, whether or not a loss is sustained as a
                 result of the action, as per the definition attached.

REPORTS:         Reports within 60 days following the end of each quarter, to
                 include all information required by Reinsurers for completion
                 of their NAIC reports.

OTHER
PROVISIONS:      Reinsurers will be subject to terms, conditions,
                 interpretations, waivers, modifications, and alterations of
                 the Company's policies that are the subject of this Agreement.

                 Access to Records Clause
                 Amendments Clause
                 Aon Re Inc. Intermediary Clause (DOES NOT APPLY TO GENERAL RE)
                 Arbitration Clause - as attached
                 Claims Review Clause
                 Correspondence and Payments Clause (APPLICABLE TO GENERAL RE 
                          ONLY)
                 Delays, Errors, or Omissions Clause
                 Excess of Original Policy Limits (90%)/Extra Contractual 
                          Obligations (90%) Clause - included within
                          ultimate net loss; coverage exists as respects the
                          First through Third Layers if any cession has been
                          made to this Agreement; coverage exists as respects
                          the Fourth Layer only if a cession has been made to
                          that Layer in respect to the policy under which the
                          EOPL/ECO loss arises.  No EOPL/ECO coverage in
                          respect to the Clash Layer.
                 Insolvency Clause





                                  - 8 OF 21 -
<PAGE>   9
FPIC INSURANCE GROUP                                     CASUALTY EXCESS OF LOSS
                                                                         AR 4373


                 Loss Notices and Settlements Clause - as attached
                 Offset Clause - this Agreement only
                 Net Retained Liability Clause
                 Subrogation Clause
                 Service of Suit Clause (NMA 1998)
                 Ultimate Net Loss, Loss Expense, and Declaratory Judgment 
                          Expense Clause - as attached


INFORMATION:     Aon Fee for General Re: 5% of ceded premium





                                  - 9 OF 21 -
<PAGE>   10
FPIC INSURANCE GROUP                                     CASUALTY EXCESS OF LOSS
                                                                         AR 4373



In accordance with your instructions, we have placed reinsurance with the
Reinsurers listed hereon, subject to the terms and conditions hereinabove
stated.  We ask that you promptly advise us if the terms, conditions, or
Reinsurers vary in any respect from your instructions.  Aon Re Inc. will not be
responsible for the financial or other obligations of any Reinsurer.  Should
you desire financial information regarding the Reinsurers listed hereon, please
contact us and we will furnish it.

The Reinsurers' obligations under this Agreement are several and not joint and
are limited solely to the extent of their individual participation.  The
Reinsurers are not responsible for the participation of any co-subscribing
Reinsurer that for any reason does not satisfy all or part of its obligations.

<TABLE>
<CAPTION>
Domestic Reinsurers                     First         Second        Third         Fourth       Clash
-------------------                     Layer         Layer         Layer         Layer        Layer
                                        -----         -----         -----         -----        -----
<S>                                     <C>           <C>           <C>           <C>          <C>
General Reinsurance Corporation         25.0000%      25.0000%      25.0000%      0.0000%      25.0000%
TIG Reinsurance Company                 16.3650%      16.3650%      16.3650%      0.0000%      16.3650%

TOTAL DOMESTIC REINSURERS               41.3650%      41.3650%      41.3650%      0.0000%      41.3650%
</TABLE>


LONDON MARKETS THROUGH DENIS M. CLAYTON AND COMPANY LIMITED

<TABLE>
<CAPTION>
London Companies:
-----------------
<S>                                     <C>           <C>           <C>           <C>          <C>
CNA International Reinsurance Company
   Limited                              13.7980%      13.798%       13.7980%      100.00%      13.7980%
Hannover Ruckversicherungs-
   Aktiengesellschaft                   5.17400%      5.1740%       5.17400%      0.0000%      5.17400%
Terra Nova Insurance Company
   Limited                              2.06900%      2.0690%       2.06900%      0.0000%      2.06900%
Unionamerica Insurance Company
   Limited                              15.1750%      15.1750%      15.1750%      0.0000%      15.1750%
Zurich Re (UK) Limited                  13.7960%      13.7960%      13.7960%      0.0000%      13.7960%

 TOTAL LONDON COMPANIES:                50.0120%      50.0120%      50.0120%      100.0000%    50.0120%
</TABLE>





                                  - 10 OF 21 -
<PAGE>   11
FPIC INSURANCE GROUP                                     CASUALTY EXCESS OF LOSS
                                                                         AR 4373


<TABLE>
<CAPTION>
UNDERWRITERS AT LLOYD'S
-----------------------
<S>                                     <C>           <C>           <C>           <C>          <C>
Lloyd's Syndicate #0991 AEG             3.4490%       3.4490%       3.4490%       0.0000%      3.4490%
Lloyd's Syndicate #1141 JEM             5.17400%      5.17400%      5.17400%      0.0000%      5.1740%

Total Underwriters At Lloyd's           8.62300%      8.6230%       8.6230%       0.0000%      8.6230%

Total Denis M. Clayton & Company
   Limited                              58.6350%      58.6350%      58.6350%      100.0000%    58.6350%
Total Non-Domestic Companies            58.6350%      58.6350%      58.6350%      100.0000%    58.6350%

TOTAL ALL PARTICIPANTS:                 100.0000%     100.0000%     100.0000%     100.0000%    100.0000%
</TABLE>


Assuming that you find everything in order, please indicate your acceptance and
approval by signing and returning this Final Placement Slip to Aon Re Inc., 201
California Street, Suite 900, San Francisco, California 94111.

ACCEPTED AND
APPROVED BY:                                    DATED: 
             ---------------------------------         ------------------
REFERENCE
NUMBER:
       ---------------------


(For processing purposes it is important that you provide your Company's
reference number for this program.)





                                  - 11 OF 21 -
<PAGE>   12
FPIC INSURANCE GROUP                                     CASUALTY EXCESS OF LOSS
                                                                         AR 4373


                                 EXCLUSION LIST


No reinsurance indemnity will be afforded under this Agreement for:

  A.     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.

  B.     Reinsurance assumed by the Company other than inter-company
         reinsurance.

  C.     Loss or liability excluded by the provisions of the Nuclear Incident
         Exclusion Clause - Liability - Reinsurance - U.S.A. - attached to this
         Agreement, or as may be revised hereafter by the Lloyd's Underwriters'
         Non-Marine Association.





                                  - 12 OF 21 -
<PAGE>   13
FPIC INSURANCE GROUP                                     CASUALTY EXCESS OF LOSS
                                                                         AR 4373


                          LOSS NOTICES AND SETTLEMENTS

         The Company will advise the Reinsurers promptly of all losses reserved
at:

         A.      $100,000 from the ground up as respects the Clash Layer; or

         B.      $100,000 from the ground up as respects the First through
                 Third Layers, but reported to each Layer only if a cession has
                 been made to that Layer; or

         C.      $1,500,000 from the ground up as respects the Fourth Layer but
                 only if a cession has been made to that Layer;

or that, in the opinion of the Company, may involve the Reinsurers under this
Agreement, and of all subsequent developments pertaining thereto that may
materially affect them as well.  Inadvertent omission in dispatching the
aforementioned notices will in no way affect the obligation of the Reinsurers
under this Agreement, provided the Company informs the Reinsurers of such
omission promptly upon discovery.

         The Company will have the right to settle all claims under its
policies.  The settlements, provided they are within the terms of the Company's
policies and of this Agreement, will be unconditionally binding on the
Reinsurers in proportion to their participation in this Agreement.  The Company
will likewise, at its sole discretion, commence, continue, defend, or withdraw
from actions, suits, or proceedings and generally handle all matters related to
all claims and losses, and all payments made and costs and expenses incurred in
connection therewith, or in taking legal advice therefor, will be shared by the
Reinsurers.  When so requested, however, the Company will afford the
Reinsurers, at the Reinsurers' own expense, an opportunity to be associated
with the Company in the defense of any claim, suit, or proceeding involving
this Agreement, and the Company and the Reinsurers will cooperate in every
respect in such defense.  Amounts due the Company hereunder in the settlement
of ultimate net loss and loss expense will be payable by the Reinsurers
immediately upon being furnished by the Company with reasonable evidence of the
amount paid or to be paid in excess of the Company's retention as set forth in
the Retention and Limit Sections of the Agreement.





                                  - 13 OF 21 -
<PAGE>   14
FPIC INSURANCE GROUP                                     CASUALTY EXCESS OF LOSS
                                                                         AR 4373


                      ULTIMATE NET LOSS, LOSS EXPENSE, AND
                          DECLARATORY JUDGMENT EXPENSE

         "Ultimate net loss" as used in this Agreement will mean the amount of
any settlement, award, or judgment paid by the Company or for which the Company
has become liable to pay, including: plaintiff's attorney fees where applicable;
interest accrued prior to final judgment if included as part of loss on
reinsured policies; 90% of any claims-related extra contractual obligations
where applicable; 90% of any claims-related excess limits liability where
applicable; and declaratory judgment expense where the Company has not paid or
has not become liable to pay any settlement, award, or judgment under its
policy.  Ultimate net loss will also include any coinsurance retention,
deductible, or self-insured retention paid by the insured.  Ultimate net loss
will not include loss expense.  All recoveries and subrogations which are
actually recovered, and inuring reinsurance whether recovered or not, will be
deducted from the amount of the ultimate net loss.  Nothing, however, in this
Agreement will be construed as meaning that losses are not recoverable
hereunder until the actual loss to the Company has been ascertained.

         "Loss expense" as used in this Agreement will mean all expenses
incurred by the Company in the investigation, appraisal, adjustment, litigation
and/or defense of claims under policies reinsured hereunder, including court
costs, interest accrued prior to judgment if included as part of expense on
reinsured policies, and interest accrued after final judgment, but excluding
internal office expenses, salaries, per diem, and other remuneration of regular
Company employees.  Loss expense will also include declaratory judgment expense
incurred by the Company in an action that results in a loss to the Company
(however, the maximum contribution to loss expense as respects declaratory
judgment expense arising from any one declaratory judgment action will be
$2,000,000).  Loss expense where incurred in connection with claims involving
this Agreement will be apportioned between the Company and the Reinsurers in
proportion to their respective interests as finally determined.  However, in
the event a verdict or judgment is reduced by an appeal or a settlement,
subsequent to the entry of the judgment, resulting in an ultimate saving on
such verdict or judgment, or a judgment is reversed outright, the loss expense
incurred in securing such final reduction or reversal will be prorated between
the Reinsurers and the Company in the proportion that each benefits from such
reduction or reversal, and the expenses incurred up to the time of the original
verdict or judgment will be (a) prorated in proportion to each party's interest
in such verdict or judgment, or (b) added to the Company's loss when the terms
and conditions of the Company's policies reinsured hereunder include loss
expense as part of the policy limit.





                                  - 14 OF 21 -
<PAGE>   15
FPIC INSURANCE GROUP                                     CASUALTY EXCESS OF LOSS
                                                                         AR 4373


         "Declaratory judgment expense" as used in this Agreement will mean all
expenses incurred by the Company in connection with declaratory judgment
actions brought to determine the Company's defense and/or indemnification
obligations that are allocable to specific policies and claims subject to this
Agreement.  Declaratory judgment expense will be deemed to have been fully
incurred by the Company on the date of the actual or alleged loss under the
Company's policy giving rise to the action.


                          CONTINGENT PROFIT COMMISSION

         (This Article applies only to the First, Second, and Clash Layers, on
         a combined basis.)

         The Reinsurers will allow the Company a contingent profit commission
of 50% of the combined net profit of the First, Second, and Clash Layers under
this Agreement.  "Net profit" as used herein is the amount by which the earned
reinsurance premium as in A. below, less reinsurance losses as in B. below, and
less net expenses as in C. below, produces a positive balance:

         A.      "Earned reinsurance premium" is the sum of the actual net
                 reinsurance premiums ceded in respect of the adjustment
                 period, less the Reinsurers' portion of the unearned premium
                 reserve on those premiums at the time of the contingent profit
                 commission computation (calculated on a monthly pro rata
                 expiration basis).

         B.      1.       As respects the First and Second Layers, "Reinsurance
                          losses" are the Reinsurers' portion of payments
                          (including loss expense) for claims made on policies
                          written or renewed with effective dates during the
                          period of this Agreement, plus the Company's estimate
                          of the Reinsurers' portion of the reserve for
                          outstanding losses (including loss expense) on
                          policies written or renewed with effective dates
                          during the period of this Agreement as such estimate
                          stands at the time of the contingent profit
                          commission computation.

                 2.       As respects the Clash Layer, "Reinsurance losses" are
                          the Reinsurers' portion of payments (including loss
                          expense) for claims made during the period of this
                          Agreement, plus the Company's estimate of the
                          Reinsurers' portion of the reserve for outstanding
                          losses (including loss expense) on claims made during
                          the period of this Agreement as such estimate stands
                          at the time of the contingent profit commission
                          computation.





                                  - 15 OF 21 -
<PAGE>   16
FPIC INSURANCE GROUP                                     CASUALTY EXCESS OF LOSS
                                                                         AR 4373


         C.      "Net expenses" are the Reinsurers' home office expenses of 20%
                 of A. above, and federal excise tax paid by Reinsurers where
                 applicable.

         The entire term of this Agreement will constitute a single adjustment
period for all purposes of this Article.  If the adjustment period becomes less
than three years, whether due to cancellation of this Agreement, cancellation
of an individual Reinsurer's participation, or inception of an individual
Reinsurer's participation at a date when the adjustment period is already
in progress, such shortened adjustment period will be subject to adjustment as
if it were the complete adjustment period.

         The first computation of contingent profit commission as respects the
adjustment period will include only the first year within the period, and will
be computed and a statement forwarded to the Reinsurers 36 months after the
inception of the adjustment period.  Upon verification of amount due, the
Reinsurers will immediately pay the Company.  The first recomputation,
including the first and second years within the adjustment period, and the
second recomputation, including all three years within the adjustment period,
will be computed 48 and 60 months after the inception of the adjustment period,
respectively.  Annual recomputations will continue to be made thereafter until
all losses affecting this Agreement are fully settled and/or all liability is
discharged and all premium is earned, when a final computation will be
determined; cancellation of this Agreement will have no affect on the said
annual recomputations.  The debtor party will pay the other party whatever
amount, if any, is due as a result of each recomputation.

         Should this Agreement be canceled on a cut-off basis, only the premium
earned and the claims made during the period will be considered in the
computations for the adjustment period; notwithstanding the foregoing, losses
associated with extended reporting coverages in effect at the time of
cancellation will continue to be taken into account in the computations, as
will the premium therefor.





                                  - 16 OF 21 -
<PAGE>   17
FPIC INSURANCE GROUP                                     CASUALTY EXCESS OF LOSS
                                                                         AR 4373


                         RESERVES AND LETTERS OF CREDIT

         As regards policies issued by the Company coming within the scope of
this Agreement, the Company agrees that, when it files with the Insurance
Department or sets up on its books statutory reserves, it will forward to the
Reinsurers a statement showing the proportion of such reserves applicable to
them.  Such reserves will consist of:

         A.      The difference between the deposit premiums and the earned
                 premiums in respect to the First through Third and Clash
                 Layers; and

         B.      Losses, including:

                 1.       Loss and loss expense paid by the Company, but not
                          recovered from the Reinsurers, and

                 2.       Loss and loss expense reserves (both case and bulk),
                          as set out in Schedule F of the Company's annual
                          statement.

         The Reinsurers hereby agree that they will apply for and secure
delivery to the Company of a clean, irrevocable, and unconditional Letter of
Credit, dated on or before December 31 of the year in which the request is
made, issued by Citibank, N.A.  (or another member of the Federal Reserve
System or any other bank approved for use by the NAIC Securities Valuation
Office), and containing provisions acceptable to the insurance regulatory
authorities having jurisdiction over the Company's reserves in an amount equal
to the Reinsurers' proportion of such reserves as shown in the statement
prepared by the Company.

         The Letter of Credit will be issued for a period of not less than one
year, and will be automatically extended for one year from its date of
expiration or any future expiration date unless 30 days prior to any expiration
date the issuing bank notifies the Company by registered mail that it elects
not to consider the Letter of Credit extended for any additional period.  An
issuing bank, not a member of the Federal Reserve System or not chartered in
the state of domicile of the Company, will provide 60 days notice to the
Company prior to any expiration in the event of nonextension.

         Notwithstanding any other provisions of this Agreement, the Company or
its court-appointed successor in interest may draw upon such credit at any time
without diminution because of the insolvency of the Company or of any Reinsurer
for one or more of the following purposes only:





                                  - 17 OF 21 -
<PAGE>   18
FPIC INSURANCE GROUP                                     CASUALTY EXCESS OF LOSS
                                                                         AR 4373


         A.      To pay the Reinsurer's share or to reimburse the Company for
                 the Reinsurer's share of any loss reinsured by this Agreement,
                 which has not been otherwise paid.

         B.      To make refund of any sum in excess of the actual amount
                 required to pay the Reinsurer's share of any liability
                 reinsured by this Agreement.

         C.      To make refund of the difference between the deposit premiums
                 and the earned premiums in respect to the First through Third
                 and Clash Layers.

         D.      To make refund of the unearned premium portion of premium
                 ceded to the Fourth Layer.

         E.      In the event of nonextension of the Letter of Credit as
                 provided for above, to establish deposit of the Reinsurer's
                 share of reserves under this Agreement.  Such cash deposit
                 will be held in an interest bearing account separate from the
                 Company's other assets, and interest thereon at a rate at
                 least equal to that paid by Citibank, N.A., in New York, will
                 accrue to the benefit of the Reinsurer.

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

         At annual intervals, or more frequently as agreed but never more
frequently than quarterly, the Company will prepare, for the sole purpose of
amending the Letter of Credit, a specific statement of the Reinsurers' share of
reserves.  If the statement shows that the Reinsurers' share of such reserves
exceeds the balance of credit as of the statement date, the Reinsurers will,
within 30 days after receipt of notice of such excess, secure delivery to the
Company of an amendment of the Letter of Credit, increasing the amount of
credit by the amount of such difference.  If, however, the statement shows that
the Reinsurers' share of such reserves is less than the balance of credit as of
the statement date, the Company will, within 30 days after receipt of written
request from the Reinsurers, release such excess credit by agreeing to secure
an amendment to the Letter of Credit, reducing the amount of credit available
by the amount of such excess credit.





                                  - 18 OF 21 -
<PAGE>   19
FPIC INSURANCE GROUP                                     CASUALTY EXCESS OF LOSS
                                                                         AR 4373


                            EXHIBIT A - RATING CHART

         The net reinsurance premium to be paid by the Company, as called for
in the Premium Section of this Slip, will be determined by applying the rates
in the following chart.  For purposes of the chart, the following definitions
will apply:

Net Base Premium (NBP) = 75% of the gross premium charged by the Company for
                        the first $500,000 of limits.
Net Original Premium (NOP) = Gross premium charged by the Company for limits of
                          $500,000 excess $500,000.

<TABLE>
<CAPTION>
             -------------------------------------------------------------------------------------------------
                    PHYSICIANS, NURSE ANESTHETISTS, LICENSED
                     PHYSICIANS' ASSISTANTS, CHIROPRACTORS,
                    OTHER ALLIED MEDICAL PRACTITIONERS, AND                                    DENTISTS
                                   CLINICS
             -------------------------------------------------------------------------------------------------
                                                              Clinics and Corporation
                    All Types of Insureds within the          Policies Only
                              above-named  
             -------------------------------------------------------------------------------------------------
               1st Layer       2nd Layer      3rd Layer                4th Layer*               1st Layer
             -------------------------------------------------------------------------------------------------
                500,000         500,000        500,000                 3,000,000                 500,000
               excess of       excess of      excess of                excess of                excess of
                500,000        1,000,000      1,500,000                2,000,000                 500,000
--------------------------------------------------------------------------------------------------------------
                                                            $1,000,000         $2,000,000 
                                                                xs                 xs     
                                                            $2,000,000         $3,000,000 
--------------------------------------------------------------------------------------------------------------
<S>              <C>            <C>            <C>            <C>               <C>               <C>
CLASSES                                                                  
--------------------------------------------------------------------------------------------------------------
0 thru 2         21.25%         14.87%         10.41%         20.22%             20.22%
(% of NBP)                                                               
--------------------------------------------------------------------------------------------------------------
3 thru 8         27.62%         17.00%         11.90%         23.10%             23.10%
(% of NBP)                                                               
--------------------------------------------------------------------------------------------------------------
all                                                                                               75.00%
(% of NOP)                                                               
--------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------
DISCRETIONARY    10.00%         10.00%           nil           nil                nil               nil
CREDIT                                                                   
--------------------------------------------------------------------------------------------------------------
</TABLE>

-----------------------------
* Note that the Company, at its discretion, may allow a credit of up to 50% on
the NBP against which these rates are to be applied.





                                  - 19 OF 21 -
<PAGE>   20
FPIC INSURANCE GROUP                                     CASUALTY EXCESS OF LOSS
                                                                         AR 4373


                                  ARBITRATION

         As a condition precedent to any right of action hereunder, any dispute
that arises out of or in connection with this Agreement, including its
formation or validity, will be submitted for decision to an arbitration panel
composed of two arbitrators and an umpire.  The arbitration will be conducted
under the Federal Arbitration Act and will proceed as set forth below.

         All notices in connection with arbitration will be in writing and sent
certified or registered mail, return receipt requested.  The term "days" as
used herein will mean calendar days.  Notice requesting arbitration will
reference this Article, will state issues to be resolved in the view of the
claimant, and will appoint the arbitrator selected by the claimant.  Within 30
days after receipt of such notice, the respondent will notify the claimant of
any additional issues to be resolved and of the name of its appointed
arbitrator.  As time is of the essence, if the respondent fails to appoint its
arbitrator within 30 days after receipt of notice requesting arbitration, the
claimant is authorized to and will appoint the second arbitrator.

         Unless otherwise mutually agreed, each member of the arbitration panel
will be an impartial active or former officer of an insurance or reinsurance
company or an Underwriter at Lloyd's of London.  Before instituting the hearing
the two appointed arbitrators will choose an impartial umpire.  If the two
arbitrators fail to agree on the appointment of an umpire within 30 days after
the appointment of the second arbitrator, within 10 days thereafter the two
arbitrators will request the American Arbitration Association ("AAA") to
appoint an umpire with the qualifications set forth above in this Article
without regard to the AAA's Commercial Arbitration Rules.  If the AAA fails to
appoint an umpire within 30 days after its receipt of the arbitrators' request,
either party may apply to a court of competent jurisdiction to appoint an
umpire with the qualifications set forth above in this Article.  The umpire
will immediately notify each party of his selection.  In the event of the
resignation or death of any member of the arbitration panel, a replacement will
be appointed in the same manner as the resigning or deceased member was
appointed.

         Within 30 days after notice of appointment of the umpire, the claimant
and respondent will each submit an initial brief to the panel.  Within 45 days
after notice of appointment of the umpire, the panel will meet and determine
timely periods for the submission of reply briefs and amended briefs,
procedures for discovery, and a scheduled date for the hearing.  Arbitration
will be held in the city of the Company's home office unless the parties
mutually agree to another venue.





                                  - 20 OF 21 -
<PAGE>   21
FPIC INSURANCE GROUP                                     CASUALTY EXCESS OF LOSS
                                                                         AR 4373



         The panel will be relieved of all judicial formality and the umpire
will be the final judge of the panel's procedures, the rules of evidence,
privilege, and production, and the excessiveness and relevancy of any witnesses
and documents upon the petition of any participating party.  The panel will be
authorized to issue interim orders and awards in the interest of fairness and
the prompt and orderly resolution of issues in dispute.  To the extent
permitted by law, the umpire and the panel will be empowered to issue orders to
enforce such decisions.  Insofar as the panel looks to substantive law, it will
consider the law of the State of Florida.

         The panel will make its award with regard to the terms expressed in
this Agreement, the original intentions of the parties to the extent reasonably
ascertainable, and the custom and practice of the insurance and reinsurance
business.  The panel will make its award within 30 days after the close of the
hearing.  Each award by the panel will be in writing and may state factual
findings that served as a basis for the award.  Each award by the panel will be
by a majority of the panel's members and will be final and binding on all
parties to the proceeding.  Any party may apply to a court of competent
jurisdiction for an order confirming the award, and a judgment of that court
will thereupon be entered on the award.  If such an order is issued, the
attorneys' fees of the party so applying and court costs will be paid by the
party against whom confirmation is sought.

         Each party will bear the expense of the arbitrator appointed on its
behalf and all remaining costs of the arbitration will be finally allocated by
the panel.  Punitive damages will not be awarded; however, the panel may award
interest, costs and expenses as it deems appropriate, including but not limited
to attorneys' fees, to the extent permitted by law,





                                  - 21 OF 21 -