**Exhibit 10.31**

**CASUALTY EXCESS OF LOSSREINSURANCE AGREEMENTNO. POR327454**

**EFFECTIVE January l, 2006**

between

SAFETY INSURANCE COMPANYSAFETY INDEMNITY INSURANCE COMPANYBoston, Massachusetts

**and**

**SWISS REINSURANCE AMERICA CORPORATION**Armonk, New York

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**CASUALTY EXCESS OF LOSSREINSURANCE AGREEMENT NO POR327454**
| ARTICLE | ** ** | **CONTENTS**                    | ** ** | **PAGE** |
|---------|------------|---------------------------------|------------|----------|
|    |       |                            |       |     |
|    |       | PREAMBLE                        |       | 1        |
| I       |       | BUSINESS COVERED                |       | 1        |
| II      |       | EFFECTIVE DATE AND TERMINATION  |       | 2        |
| III     |       | TERRITORY                       |       | 2        |
| IV      |       | LIMIT AND RETENTION             |       | 2        |
| V       |       | ULTIMATE NET LOSS               |       | 3        |
| VI      |       | LOSS IN EXCESS OF POLICY LIMITS |       | 4        |
| VII     |       | EXTRA CONTRACTUAL OBLIGATIONS   |       | 5        |
| VIII    |       | EXCLUSIONS                      |       | 6        |
| IX      |       | SPECIAL ACCEPTANCE              |       | 7        |
| X       |       | LOSS OCCURRENCE                 |       | 8        |
| XI      |       | REINSURANCE PREMIUM             |       | 9        |
| XII     |       | CONTINGENT COMMISSION           |       | 10       |
| XIII    |       | REPORTS AND REMITTANCES         |       | 10       |
| XIV     |       | CLAIMS                          |       | 11       |
| XV      |       | SALVAGE AND SUBROGATION         |       | 12       |
| XVI     |       | ACCESS TO RECORDS               |       | 13       |
| XVII    |       | TAXES                           |       | 13       |
| XVIII   |       | CURRENCY                        |       | 13       |
| XIX     |       | OFFSET                          |       | 13       |
| XX      |       | ERRORS OR OMISSIONS             |       | 14       |
| XXI     |       | DISPUTE RESOLUTION              |       | 14       |
| XXII    |       | INSOLVENCY                      |       | 16       |
| XXIII   |       | SPECIAL TERMINATION             |       | 16       |
| XXIV    |       | AMENDMENTS                      |       | 18       |
|    |       | SIGNATURES                      |       | 19       |

 
| ATTACHMENTS: |   | POLLUTION  LIABILITY EXCLUSION CLAUSE - REINSURANCE INSOLVENCY FUNDS EXCLUSION CLAUSE |
|--------------|--------|---------------------------------------------------------------------------------------|
|         |   | NUCLEAR INCIDENT EXCLUSION CLAUSE - LIABILITY -  REINSURANCE - U.S.A.                 |
|         |   | NUCLEAR INCIDENT  EXCLUSION CLAUSE - LIABILITY - REINSURANCE - CANADA                 |
|         |   | NUCLEAR INCIDENT EXCLUSION CLAUSE - REINSURANCE -  NO. 4                              |
|         |   | PHARMACEUTICAL / MEDICAL COMPANY EXCLUSION LISTING                                    |

 

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CASUALTY EXCESS OFLOSSREINSURANCE AGREEMENTNO. POR327454(hereinafter referred to as the “Agreement”)

between

SAFETY INSURANCECOMPANYSAFETY INDEMNITY INSURANCE COMPANYBoston, Massachusetts

**(hereinafterreferred to as the “Company”)**

**and**

**SWISS REINSURANCE AMERICA CORPORATION**Armonk, New York

(hereinafter referred toas the “Reinsurer”)

**ARTICLE I - BUSINESS COVERED**

A                         TheReinsurer shall indemnify the Company on an excess of loss basis in respect ofthe Company’s Ultimate Net Loss paid by the Company as a result of lossesoccurring during the term of this Agreement, for Policies in force as ofJanuary 1, 2006, and new and renewal Policies becoming effective on or aftersaid date, subject to the terms and conditions contained herein.

B.                        ThisAgreement is solely between the Company and the Reinsurer, and nothingcontained in this Agreement shall create any obligations or establish anyrights against the Reinsurer in favor of any person or entity not a partyhereto.

C                         Theperformance of obligations by both parties under this Agreement shall be inaccordance with a fiduciary standard of good faith and fair dealing.

D.                       Theterm “Policies” shall mean each of the Company’s binders, policies andcontracts of insurance on the business covered hereunder.

E.                         Underthis Agreement, the indemnity for reinsured loss applies solely to thefollowing Classes of Insurance as respects voluntary automobile businesswritten by the Company, except as excluded under Article VIII - Exclusions ofthis Agreement. However, as respects Automobile Liability and AutomobileCollision coverage added to the Commonwealth Automobile Facility, the Reinsurershall provide 80% recovery as respects Extra Contractual Obligations resultingfrom losses arising and covered under said facility.

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**CLASSES OF INSURANCE**

1.                         AutomobileLiability

Bodily Injury Liability, Property Damage Liability,Medical Payments, Uninsured Motorists, Underinsured Motorists and No-FaultCoverage.

2                            AutomobileCollision

3                            Homeowners(Section II only)

4                            Commercialand Personal Umbrella Liability

5                            Businessowners(Section II only)

**ARTICLE II - EFFECTIVE DATE ANDTERMINATION**

A                         ThisAgreement shall become effective with respect to losses occurring on and after12:01 a.m., Eastern Standard Time, January 1, 2006, and shall remain in fullforce until terminated. This Agreement may be terminated at the close of anycalendar quarter by either party giving to the other 90 days prior writtennotice by certified mail of its intention to do so.

B.                        Duringthe running of such notice as stipulated in Paragraph A. above, the Reinsurershall participate in business coming within the terms of this Agreement untilthe date of termination of this Agreement.

C.                        Inthe event of termination of this Agreement, the Reinsurer shall be liable forlosses occurring prior to the date of termination; however, the Reinsurer shallhave no liability for losses occurring subsequent to the termination of thisAgreement.

**ARTICLE III - TERRITORY**

This Agreement applies to Policies issued by theCompany within the Commonwealth of Massachusetts and shall apply to lossescovered hereunder wherever occurring.

**ARTICLE IV - LIMIT AND RETENTION**

A.                      TheCompany shall retain the first $1,000,000 of Ultimate Net Loss as respects anyone Loss Occurrence. The Reinsurer shall then be liable for the amount by whichthe Company’s Ultimate Net Loss exceeds the Company’s retention of $1,000,000,but the liability of

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the Reinsurer shall never exceed $5,000,000 withrespect to any one Loss Occurrence.

B                           Theaddition to the Company’s retention set forth in Paragraph A. above, theCompany shall be subject to an annual aggregate deductible of $500,000. Eachloss paid by the Company in excess of $1,000,000 retention shall be accumulatedand retained by the Company until the total accumulated excess amount totals$500,000. Thereafter, losses in excess of the $1,000,000 retention shall berecovered from the Reinsurer for the balance of the calendar year.

C                           TheCompany’s retention and the Reinsurer’s limit of liability for each LossOccurrence, set forth in Paragraph A. above, shall apply irrespective of thenumber of Policies affected or number of hazards in one Policy and regardlessof the number of Classes of Insurance involved.

D                          Reinsuranceof the Company’s retention, set forth above, shall not be deducted in arrivingat the Company’s Ultimate Net Loss herein.

E                            Itis understood that as respects Commercial and Personal Umbrella Liabilitybusiness, this Agreement shall apply to the Company’s retention under theUmbrella Liability Quota Share Reinsurance Agreement No. POR327548.

F                            TheCompany warrants that the maximum limit of liability, per occurrence set forthunder each Policy subject to this Agreement shall not exceed $1,000,000.

**ARTICLE V - ULTIMATE NET LOSS**

A                         Theterm “Ultimate Net Loss” shall mean the actual sum paid by the Company insettlement of losses or liability including interest accrued prior to judgmentafter making deductions for all recoveries, including subrogation, salvages,and claims upon other reinsurances, whether collectible or not, which inure tothe benefit of the Reinsurer under this Agreement, and shall exclude allexpenses incurred by the Company; provided, however, that in the event of theinsolvency of the Company, Ultimate Net Loss shall mean the amount of loss forwhich the Company is liable, and payment by the Reinsurer shall be made to theliquidator, receiver, conservator or statutory successor of the Company inaccordance with the provisions of Article 13 - Insolvency of this Agreement.

B                           Theterm “Ultimate Net Loss” shall include 80% of Loss In Excess of Policy Limitsand 80% of Extra Contractual Obligations, as defined herein, but only asrespects business covered under this Agreement.

All Loss Adjustment Expenses defined below shall beapportioned in the same proportion that each party’s interest bears to the

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Company’s Ultimate Net Loss. The Reinsurer shall notbe liable for any portion of the Company’s Loss Adjustment Expenses, unless theCompany’s Ultimate Net Loss exceeds its retention.

D                          Inthe event a verdict, award or judgment is ultimately compromised, reduced orreversed on appeal, the Reinsurer shall indemnify the Company for the LossAdjustment Expenses incurred in obtaining such reduction or reversal in theratio that the benefit each party derives from such reduction, reversal orcompromise bears to the total benefit derived therefrom. However, all LossAdjustment Expenses incurred up to the time of the original verdict or judgmentshall be considered separate and apart from appeal expenses and shall be proratedin proportion to each party’s interests in such original verdict or judgment.

E.                         Theterm “Loss Adjustment Expenses” shall mean all expenses incurred by the Companyin connection with the investigation, settlement, defense or litigation,including court costs and post-judgment interest, of any claim or loss coveredby the Policies reinsured under this Agreement, but shall exclude the salariesand expenses of Company employees, office expenses, Declaratory JudgmentExpenses and other overhead expenses.

F                            Theterm “Declaratory Judgment Expenses” shall mean all legal expenses, incurred inthe representation of the Company in litigation brought to determine theCompany’s defense and/or indemnification obligations.

G.                        Allrecoveries, salvages or payments recovered or received subsequent to a losssettlement under this Agreement shall be applied as if recovered or receivedprior to the aforesaid settlement and all necessary adjustments to the losssettlement shall be made by the parties hereto.

H.                       Nothingin this Article shall be construed to mean that losses are not recoverablehereunder until the Ultimate Net Loss of the Company has been ascertained.

**ARTICLE VI - LOSS IN EXCESS OF POLICYLIMITS**

A                         “Lossin Excess of Policy Limits” is defined as loss in excess of the limit of theoriginal Policy, such loss in excess of the limit having been incurred becauseof failure by the Company to settle within the Policy, limit or by reason ofalleged or actual negligence, fraud or bad faith in rejecting an offer of settlementor in the preparation of the defense or in the trial of any action against itsinsured or in the preparation or prosecution of an appeal consequent upon suchaction.

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B                           However,this Article shall not apply where the loss has been incurred due to fraud by amember of the Board of Directors or a corporate officer of the Company actingindividually or collectively or in collusion with any individual or corporationor any other organization or party involved in the presentation, defense orsettlement of any claim covered hereunder.

C                           Forthe purposes of this Article, the word “loss” shall mean any amounts which theCompany would have been contractually liable to pay had it not been for thelimit of the original Policy.

D                          Withrespect to coverage provided under this Article, recoveries from any insuranceor reinsurance other than this Agreement, whether collectible or not, shall bededucted to arrive at the amount of the Company’s Ultimate Net Loss.

**ARTICLE VII - EXTRA CONTRACTUAL OBLIGATIONS**

A                         “ExtraContractual Obligations” are defined as those liabilities not covered under anyother provision of this Agreement and which arise from the handling of anyclaim on business covered hereunder, such liabilities arising because of, butnot limited to, the following: failure by the Company to settle within thePolicy limit, or by reason of alleged or actual negligence, fraud or bad faithin rejecting an offer of settlement or in the preparation of the defense or inthe trial of any action against its insured or in the preparation orprosecution of an appeal consequent upon such action.

B                           Thedate on which an Extra Contractual Obligation is incurred by the Company shallbe deemed, in all circumstances, to be the data of the original accident,casualty, disaster or loss occurrence.

C                           However,coverage hereunder as respects Extra Contractual Obligations shall not applywhere the loss has been incurred due to the fraud of a member of the Board ofDirectors or a corporate officer of the Company acting individually or collectivelyor in collusion with any individual or corporation or any other organization orparty involved in the presentation, defense or settlement of any claim coveredhereunder.

D                          Recoveries,collectible or retention from any other form of insurance or reinsuranceincluding deductibles or self-insured retention which protect the Companyagainst Extra Contractual Obligations, whether collectible or not, shall inureto the benefit of the Reinsurer and shall be deducted from the total amount ofExtra contractual obligation for purposes of determining the loss hereunder.

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E                            Ifany provision of this Article shall be rendered illegal or unenforceable by thelaws, regulations or public policy of any state, such provision shall beconsidered void in such state, but this shall not affect the validity orenforceability of any other provision of this Article or the enforceability ofsuch provision in any other jurisdiction.

**ARTICLE VIII - EXCLUSIONS**

THIS AGREEMENT DOES NOT COVER

A.                      THE FOLLOWING GENERAL CATEGORIES

1                            Ex-gratiapayments

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

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

4                            Reinsuranceassumed by the Company

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

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

7                            InsolvencyFunds as per the attached Insolvency Funds Exclusion Clause.

8                            NuclearIncident Exclusion Clauses which are attached and made part of this Agreement:

a                     NuclearIncident Exclusion Clause - Liability - Reinsurance - U.S.A.

b                    NuclearIncident Exclusion Clause - Liability - Reinsurance - Canada.

c                     NuclearIncident Exclusion Clause - Reinsurance - No. 4.

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9                            Anyactual or alleged liability whatsoever for any claim or claims in respect ofloss or losses, directly or indirectly arising out of, resulting from, or inconsequence of asbestos, in whatever form or quantity.

B                           THEFOLLOWING RISKS AS RESPECTS AUTOMOBILE LIABILITY AND AUTOMOBILE COLLISION

1                            Vehiclesused in or while in practice or preparation for, a prearranged racing, speed,exhibition or demolition contest.

2                            Allvehicles classified as “Public Automobiles” except church buses, social serviceagency automobiles, van pools and vehicles used for the transportation ofemployees.

3                            Fire,police emergency or municipal vehicles

The rental or leasing of vehicles to others

5                            Loggingtrucks

6                            Vehiclesengaged in the transportation or distribution of fireworks, fuses, explosives,ammunitions, natural or artificial fuel, gas, or liquefied petroleum gases orgasoline.

C                           Inthe event the Company is inadvertently bound on any risk which is excludedunder this Agreement and identified below, the reinsurance provided under thisAgreement shall apply to such risk until discovery by the Company within itsHome Office of the existence of such risk and for 30 days thereafter, and shallthen cease unless within the 30 day period, the Company has received from theReinsurer written notice of its approval of such risk:

As respects Automobile Liability And Collision.

Items 2. through 6. of Section B. of this Article

**ARTICLE IX - SPECIAL ACCEPTANCE**

Policies which are beyond the terms, conditions or limitationsof this Agreement may be submitted to the Reinsurer for special acceptancehereunder; and such Policies, if accepted in writing by the Reinsurer, shall besubject to all of the terms, conditions and limitations of this Agreement,except as modified by the special acceptance. Premiums and losses derived fromany special acceptance shall be included with other data for rating purposesunder this Agreement.

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**ARTICLE X - LOSS OCCURRENCE**

The term “Loss Occurrence” shall mean any accident or occurrence orseries of accidents or occurrences arising out of any one event and happeningwithin the term and scope of this Agreement. Without limiting the generality ofthe foregoing, the term “Loss Occurrence” shall be held to include:

A                         Asrespects Products Bodily Injury and Products Property Damage Liability,injuries to all persons and all damage to property of others occurring during aPolicy Period and proceeding from or traceable to the same causative agencyshall be deemed to arise out of one Loss Occurrence, and the date of such LossOccurrence shall be deemed to be the commencing date of the Policy Period. Forthe purpose of this provision, each annual period of a Policy which continuesin force for more than one year shall be deemed to be a separate Policy Period.

B.                        Asrespects Bodily Injury Liability (other than Automobile and Products), saidterm shall also be understood to mean, as regards each original assured,injuries to one or more than one person resulting from infection, contagion,poisoning, or contamination proceeding from or traceable to the same causativeagency.

C.                        Asrespects Property Damage Liability (other than Automobile and Products), saidterm shall also, subject to Provisions 1. and 2. below, be understood to meanloss or losses caused by a series of operations, events, or occurrences arisingout of operations at one specific site and which cannot be attributed to anysingle one of such operations, events or occurrences, but rather to thecumulative effect of the same. In assessing each and every Loss Occurrencewithin the foregoing definition, it is understood and agreed that:

the series of operations, events or occurrences shallnot extend over a period longer than 12 consecutive months; and

2                            theCompany may elect the date on which the period of not exceeding 12 consecutivemonths shall be deemed to have commenced.

In the event that the series of operations, events or occurrencesextend over a period longer than 12 consecutive months, then each consecutiveperiod of 12 months, the first of which commences on the date elected under 2.above, shall form the basis of claim under this Agreement.

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**ARTICLE XI - REINSURANCE PREMIUM**

A                         TheCompany shall pay to the Reinsurer a premium for the reinsurance providedhereunder a rate of .12%. Such rate shall be applied to the Company’s SubjectEarned Premium for the quarterly period being reported.

B                           Theterm “Subject Earned Premium” as used herein is equal to the sum of the NetPremium Written on the business covered hereunder during the period underconsideration, plus the unearned premium reserve as respects premiums in forceat the beginning of such period, less the unearned premium reserve as respectspremiums in force at the end of the period, said unearned premium is to becalculated on an actual daily basis or in accordance with the Company’smethodology, as agreed.

C                           Theterm “Net Premiums Written” shall mean gross premiums written less returns,allowances and reinsurances which inure to the benefit of the Reinsurer.

**ARTICLE XII - CONTINGENT COMMISSION**

A                         TheReinsurer shall allow the Company a contingent commission of 15% of the profit,if any, accruing to the Reinsurer hereunder, such profit to be computed on thefollowing formula:

CONTINGENT COMMISSION COMPUTATION FOR THE PERIOD

**INCOME**

1                            Premiumsreceived by the Reinsurer, as determined under Article XI - Reinsurance Premiumof this Agreement, for the Period.

**OUTGO**

2                            IncurredLosses of the Reinsurer during the Period

3                            Deficit,if any, brought forward from the preceding Period.

The amount by which Income exceeds Outgo is profit

The amount by which Outgo exceeds Income is deficit.

C                           Theterm “Incurred Losses” means all losses and Loss Adjustment Expenses paid lessrecoveries, including salvage and subrogation, during the current Period asrespects losses which occurred during the period for which computation is beingmade plus the reserve for all unpaid losses and Loss Adjustment Expensesoutstanding at the end of the current Period.

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D                          Theterm “Period” means the actual time covered by each adjustment of commission.

E                            TheCompany shall calculate the commission adjustment for each Period, 36 monthsafter the close of such Period. The first calculation of commission adjustmentshall cover the Period January 1, 2006**throughDecember 31, 2006, and thereafter adjustments shall be made for each subsequentPeriod commencing January 1 and ending the following December 31.

F                            If,for any Period, the Income of the plan exceeds the total of the Items shownunder Outgo of the plan, the Reinsurer shall pay to the Company, within 30 daysafter verification of the Company’s calculations, 15% of the difference. If,for any Period, the total of the Items shown under Outgo of the plan exceedsthe Income of the plan, the difference shall be carried forward to the next Period’scalculation of commission adjustment as a deficit.

G                           Incase notice of termination has been given

1                            Bythe Company, no further adjustments of commission shall be made.

2                            Bythe Reinsurer, no further adjustments of commission shall be made until theexpiration of all liability and the settlement of all losses covered under thisAgreement.

**ARTICLE XIII - REPORTS ANDREMITTANCES**

A                         TheCompany shall furnish the Reinsurer with all necessary data respecting premiumsand losses for as long as one of the parties hereto has a claim against theother arising from this Agreement.

B                           Within30 days after the close of each calendar quarter, the Company shall submit anaccount to the Reinsurer summarizing Subject Earned Premium by Line ofBusiness, and the reinsurance premium due. Such reinsurance premium shall beremitted within 45 days after the close of each calendar quarter.

C                           Inrespect of Paragraph B above

All quarterly account statements shall be sent to theReinsure at:

a                             E-Mail/XMLor EDI Formats reaccount_[Illegible].com, or

b                            StandardMail

Swiss Reinsurance America Corporation AccountingDepartment

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175 King Street

Armonk, NY 10504

Telephone: 914-828-8000

Facsimile: 914-828-5919

2.                          Allchecks and supporting documentation shall be sent to the Reinsurer through oneof the options set forth below:

a.                         WIRETRANSFER

i)                            Allwires should be sent to

The Bank of New York1 Wall StreetNew York, NY 10286Account Name: Swiss Reinsurance America CorporationAccount Number: ABA Number:

(ii                                                          Allsupporting documentation should be sent to

Swiss Reinsurance America CorporationAccounting Department175 King StreetArmonk, NY 10504

b                           LOCKBOX

Both checks and supporting documentation shall be sentto

Swiss Reinsurance America CorporationP.O. Box 7247-[Illegible]Philadelphia, PA 19170-[Illegible]

D.                       Paymentby the Reinsurer of its portion of loss and Loss Adjustment Expenses paid bythe Company shall be made by the Reinsurer to the Company within 15 days afterproof of payment is received by the Reinsurer.

**ARTICLE XIV - CLAIMS**

A.                      TheCompany shall promptly notify the Reinsurer of each claim which may involve thereinsurance provided hereunder and of all subsequent developments relatingthereto, stating the amount claimed and estimate of the Company’s Ultimate NetLoss and Loss Adjustment Expenses. Notwithstanding the provisions set forth inany other Article herein, prompt notification of loss shall be considered acondition precedent to liability under this Agreement.

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B                           TheCompany shall advise the Reinsurer of all Claims which:

1                            Arereserved by the Company for an amount in excess of 50% of its retention;

2                            Originatefrom fatal injuries;

3                            Originatefrom the following kinds of bodily injury:

a.                          Braininjuries resulting in impairment of physical function;

b.                         Spinalinjuries resulting in a partial or total paralysis of upper or lowerextremities;

c.                          Amputationor permanent loss of use of upper or lower extremities;

d.                         Severeburn injuries;

e.                          Lossof sight in one or both eyes;

f.                            Allother injuries likely to result in a permanent disability rate of 50% or more.

C.                        TheCompany shall have the responsibility to investigate, defend or negotiatesettlements of all claims and lawsuits related to Policies written by theCompany and reinsured under this Agreement. The Reinsurer, at its own expense,may associate with the Company in the defense or control of any claim, suit orother proceeding which involves or is likely to involve the reinsuranceprovided under this Agreement, and the Company shall cooperate in every respectin the defense of any such claim, suit or proceeding.

**ARTICLE XV - SALVAGE AND SUBROGATION**

A                         Inthe event of the payment of any indemnity by the Reinsurer under thisAgreement, the Reinsurer shall be subrogated, to the extent of such payment, toall of the rights of the Company against any person or entity legallyresponsible for damages of the loss. The Company agrees to enforce such rights;but, in case the Company refuses or neglects to do so, the Reinsurer is herebyauthorized and empowered to bring any appropriate action in the name of theCompany or their policyholders or otherwise to enforce such rights.

B                           Fromany amount recovered by subrogation, salvage or other means, there shall firstbe deducted the expenses incurred in effecting the recovery. The balance shallthen be used to reimburse the excess carriers in the inverse order to that inwhich their respective liabilities attached, before being used to reimburse theCompany for its primary loss.

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**ARTICLE XVI - ACCESS TO RECORDS**

The Reinsurer or its duly authorized representativesshall have the right to examine, at the offices of the Company at a reasonabletime, during the currency of this Agreement or anytime thereafter, all booksand records of the company relating to business which is the subject of this Agreement.

**ARTICLE XVII - TAXES**

The Company shall be liable for all taxes on premiumspaid to the Reinsurer under this Agreement, except income or profit taxes ofthe Reinsurer, and shall indemnify and hold the Reinsurer harmless for any suchtaxes which the Reinsurer may become obligated to pay to any local, state orfederal taxing authority.

**ARTICLE XVIII - CURRENCY**

Wherever the word “dollars” or the “$” symbol is usedin this Agreement, it shall mean dollars of the United States of America,excepting in those cases where the Policy is issued by the Company in Canadiandollars, in which case it shall mean dollars of Canada. In the event theCompany is involved in a loss requiring payment in United States and Canadiancurrency, the Company’s retention and the limit of liability of the Reinsurershall be apportioned between the two currencies in the same proportion as theamount of net loss in each currency bears to the total amount of net loss paidby the Company. For the purposes of this Agreement, where the Company receivespremiums or pays losses in currencies other than United States or Canadiancurrency, such premiums and losses shall be converted into United Statesdollars at the actual rates of exchange at which the premiums and losses areentered in the Company’s books.

**ARTICLE XIX - OFFSET**

Each party to this Agreement together with theirsuccessors or assigns shall have and may exercise, at any time, the right tooffset any balance or balances due the other (or, if more than one, any other).Such offset may include balances due under this Agreement and any otheragreements heretofore or hereafter entered into between the parties regardlessof whether such balances arise from premiums, losses or otherwise, andregardless of capacity of any party, whether as assuming insurer and/or codinginsurer, under the various agreements involved, provided however, that in theevent of insolvency of a party hereto, offsets shall only be allowed inaccordance with the provisions of Section 7427 of the Insurance Law of theState of New York to the extent such statute or any other applicable law,statute or regulation governing such offset shall apply.

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**ARTICLE XX - ERRORS OR OMISSIONS**

Errors or omissions of an administrative nature on thepart of the Company shall not invalidate the reinsurance under this Agreement,provided such errors or omissions are corrected promptly after discoverythereof; but the liability of the Reinsurer under this Agreement or anyexhibits, addenda, or endorsement attached hereto shall in no event exceed thelimits specified herein nor be extended to cover any risks, perils, lines ofbusiness or classes of insurance generally or specifically excluded herein.

**ARTICLE XXI - DISPUTE RESOLUTION**

**Part I - Choice Of Law And Forum**

Any dispute arising under this Agreement shall beresolved in the Commonwealth of Massachusetts, and the laws of the State ofCommonwealth of Massachusetts shall govern the interpretation and applicationof this Agreement.

**Part II - Mediation**

If a dispute between the Company and the Reinsurer,arising out of the provisions of this Agreement or concerning itsinterpretation or validity and whether arising before or after termination ofthis Agreement has not been settled through negotiation, both parties agree totry in good faith to settle such dispute by nonbinding mediation, beforeresorting to arbitration.

**Part III - Arbitration**

A.                      Resolutionof Disputes - As a condition precedent to any right of action arisinghereunder, any dispute not resolved by mediation between the Company and theReinsurer arising out of the provisions of this Agreement or concerning itsinterpretation or validity, whether arising before or after termination of thisAgreement, shall be submitted to arbitration in the manner hereinafter setforth.

B.                        Compositionof Panel - Unless the parties agree upon a single arbitrator within 15 daysafter the receipt of a notice of intention to arbitrate, all disputes shall besubmitted to an arbitration panel composed of two arbitrators and an umpirechosen in accordance with Paragraph C. hereof.

C.                        Appointmentof Arbitrators - The members of the arbitration panel shall be chosen fromdisinterested persons with at least 10 years experience in the insurance andreinsurance business. Unless a single arbitrator is agreed upon, the partyrequesting arbitration (hereinafter referred to as the “claimant”) shallappoint an arbitrator and give written notice thereof by certified mail, to the

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other party (hereinafter referred to as the “respondent”)together with its notice of intention to arbitrate. Within 30 days afterreceiving such notice, the respondent shall also appoint an arbitrator andnotify the claimant thereof by certified mail. Before instituting a hearing,the two arbitrators so appointed shall choose an umpire. If, within 20 daysafter the appointment of the arbitrator chosen by the respondent, the twoarbitrators fail to agree upon the appointment of an umpire, each of them shallnominate three individuals to serve as umpire, of whom the other shall declinetwo and the umpire shall be chosen from the remaining two by drawing lots. Thename of the individual first drawn shall be the umpire.

D.                       Failureof Party to Appoint an Arbitrator - If the respondent fails to appoint anarbitrator within 30 days after receiving a notice of intention to arbitrate,the claimant’s arbitrator shall appoint an arbitrator on behalf of therespondent, such arbitrator shall then, together with the claimant’sarbitrator, choose an umpire as provided in Paragraph C. of Part III of thisArticle.

E.                         Submissionof Dispute to Panel - Unless otherwise extended by the arbitration panel oragreed to by the parties, each party shall submit its case to the panel within30 days after the selection of the umpire.

F.                         ProcedureGoverning Arbitration - All proceedings before the panel shall be informal andthe panel shall not be bound by the formal rules of evidence. The panel shallhave the power to fix all procedural rules relating to the arbitrationproceedings. In reaching any decision, the panel shall give due considerationto the customs and usages of the insurance and reinsurance business.

G.                        ArbitrationAward - The arbitration panel shall render its decision within 60 days aftertermination of the proceeding, which decision shall be in writing, stating thereasons therefor. The decision of the majority of the panel shall be final andbinding on the parties to the proceeding. In no event, however, will the panelbe authorized to award punitive, exemplary or consequential damages ofwhatsoever nature in connection with any arbitration proceeding concerning thisAgreement.

H.                       Cost ofArbitration - Unless otherwise allocated by the panel, each party shall bearthe expense of its own arbitrator and shall jointly and equally bear with theother parties the expense of the umpire and the arbitration.

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**ARTICLE XXII - INSOLVENCY**

A                         Inthe event of insolvency of the Company, the reinsurance provided by thisAgreement shall be payable by the Reinsurer on the basis of the liability ofthe Company as respects Policies covered hereunder, without diminution becauseof such insolvency, directly to the Company or its liquidator, receiver,conservator or statutory successor except as provided in Sections 4118 (a) (1)(A) and 1114 (c) of the New York Insurance Law.

B                           TheReinsurer shall be given written notice of the pendency of each claim or losswhich may involve the reinsurance provided by this Agreement within areasonable time after such claim or loss is filed in the insolvencyproceedings. The Reinsurer shall have the right to investigate each such claimor loss and interpose, at its own expense, in the proceedings where the claimor loss is to be adjudicated, any defense which it may deem available to theCompany, its liquidator, receiver, conservator or statutory successor. Theexpense thus incurred by the Reinsurer shall be chargeable, subject to courtapproval, against the insolvent Company as part of the expense of liquidationto the extent of a proportionate share of the benefit which may accrue to theCompany solely as a result of the defense undertaken by the Reinsurer.

C                           Inaddition to the offset provisions set forth in Article XVIII Offset, any debtsor credits, liquidated or unliquidated, in favor of or against either party onthe date of the receivership or liquidation order (except where the obligationwas purchased by or transferred to be used as an offset) are deemed mutualdebts or credits and shall be set off with the balance only to be allowed orpaid. Although such claim on the part of either party against the other may beunliquidated or undetermined in amount of the date of entry of the receivershipor liquidation order, such claim will be regarded as being in existence as ofsuch date and any claims then in existence and held by the other party may beoffset against it.

D                          Nothingcontained in this Article is intended to change the relationship or status ofthe parties to this Agreement or to enlarge upon the rights or obligations ofeither party hereunder except as provided herein.

**ARTICLE XXIII - SPECIAL TERMINATION**

Notwithstanding thetermination provisions set forth in Article II - Effective Date andTermination, this Agreement shall be:

1                            Terminatedautomatically and simultaneously upon the happening of any of the followingevents:

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a                             Entryof an order of liquidation, rehabilitation, receivership or conservatorshipwith respect to the Company or the Reinsurer by any court or regulatoryauthority;

b                            Assignmentof this Agreement by either party;

c                             Generalreinsurance of any portion of the Company’s business it retains net for its ownaccount, as determined under the provisions of this Agreement without priorconsent of the Reinsurer.

2                            Terminatedby either party giving not less than 30 days prior written notice to the otherparty upon the happening of the following event:

Any transfer of control of either party by change inownership or otherwise.

3                            Terminatedby the Reinsurer by giving not less than 30 days prior written notice to theCompany upon the happening of the following event:

Failure of the Company to remit premiums in accordancewith the provisions set forth in this Agreement.

4                            Terminatedin accordance with the provisions set forth in this Paragraph, upon thediscovery of the following event:

A reduction of 50% or more of the Company’spolicyholders surplus during any calendar year. Such reduction shall bedetermined by calculating the difference between the Company’s prior yearannual statement and each subsequent quarterly statutory statement within suchcurrent calendar year.

As respects the event set forth in this ParagraphA.4., the Company shall be obligated to notify the Reinsurer in writing within30 days after the filing of its quarterly statement. Upon receipt of suchnotification the Reinsurer shall have the right to terminate this Agreement, bygiving not less than 30 days notice of its intention to do so.

B                           Anynotice of termination pursuant to the provisions set forth in Paragraphs A.2.,A.3. and A.4. above shall be sent by certified mail, return receipt requested.Such notice period shall commence upon the other party’s receipt of the noticeof termination.

C                           Inthe event of termination, as provided under the provisions of this Article, theReinsurer shall not be liable for losses occurring subsequent to the date oftermination.

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**ARTICLE XXIV - AMENDMENTS**

This Agreement may be amended by mutual consent of theparties expressed in an addendum; and such addendum, when executed by bothparties, shall be deemed to be an integral part of this Agreement and bindingon the parties hereto.

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IN WITNESS WHEREOF, theparties hereto have caused this Agreement to be executed in duplicate, by theirduly authorized representatives as of the following dates:

In Boston, MA, this 5th day of September,2006
| ATTEST:       |   |   |   | SAFETY INSURANCE COMPANY  SAFETY INDEMNITY INSURANCE COMPANY |
|---------------|--------|--------|--------|--------------------------------------------------------------|
|          |   |   |   |                                                         |
|          |   |   |   |                                                         |
| /s/ Illegible |   |   |   | /s/ Illegible                                                |
|          |   |   |   |                                                         |
|          |   |   |   |                                                         |
| Illegible     |   |   |   | Illegible                                                    |
| Name          |   |   |   | Name                                                         |
|          |   |   |   |                                                         |
|          |   |   |   |                                                         |
| Illegible     |   |   |   | Illegible                                                    |
| Title         |   |   |   | Title                                                        |

 

And in Armonk, New York,this 3rd day of March, 2006
| ATTEST:                                     |   |   |   | SWISS REINSURANCE AMERICA CORPORATION       |
|---------------------------------------------|--------|--------|--------|---------------------------------------------|
|                                        |   |   |   |                                        |
|                                        |   |   |   |                                        |
| /s/ Illegible                               |   |   |   | /s/ Illegible                               |
|                                        |   |   |   |                                        |
|                                        |   |   |   |                                        |
| Illegible                                   |   |   |   | Illegible                                   |
| Name                                        |   |   |   | Name                                        |
|                                        |   |   |   |                                        |
|                                        |   |   |   |                                        |
| Vice President  Member of Senior Management |   |   |   | Vice President  Member of Senior Management |
| Title                                       |   |   |   | Title                                       |

 

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**SUPPLEMENT TO THE ATTACHMENTS**

**DEFINITION OFIDENTIFICATION TERMS USED WITHIN THE ATTACHMENTS**

A.                      Whereverthe term “Company” or “Reinsured” to “Reassured” or whatever other term is usedto designate the reinsured company or companies within the various attachmentsto the reinsurance agreement, the term shall be understood to mean Company orReinsured or Reassured or whatever other term is used in the attachedreinsurance agreement to designate the reinsured company or companies.

B.                        Whereverthe term “Agreement” or “Contract” or “Policy” or whatever other term is usedto designate the attached reinsurance agreement within the various attachmentsto the reinsurance agreement, the term shall be understood to mean Agreement orContract or Policy or whatever other term is used to designate the attachedreinsurance agreement.

C.                        Whereverthe term “Reinsurer” or “ Reinsurers” or “Underwriters” or whatever other termis used to designate the reinsurer or reinsurers in the various attachments tothe reinsurance agreement, the term shall be understood to mean Reinsurer orReinsurers or Underwriters or whatever other term is used to designate thereinsuring company or companies.

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**POLLUTION LIABILITYEXCLUSION CLAUSE - REINSURANCE**

This Reinsurance excludes :

(1                        Anyloss occurrence arising out of the actual, alleged or threatened discharge,dispersal, release or escape of pollutants

a)                         Ator from premises owned, rented or occupied by an original assured; or

b)        At orfrom any site or location used for the handling, storage, disposal, processingor treatment of waste; or

c)        Whichare at any time transported, handled, stored, treated disposed of, or processedas waste; or

d)        At orfrom any site or location on which any original assured is performingoperation:

(i                           Ifthe pollutants are brought on or to the site or location in connection withsuch operations; or

(ii                        Ifthe operations are to test for, monitor, clean up, remove, contain, treat,detoxify or neutralise the pollutants.

2)                        Anyliability, loss, cost or expense arising out of any governmental direction orrequest to test for, monitor, clean up, remove, contain, treat, detoxify orneutralize the pollutants.

“Pollutants” means any solid, liquid, gaseous orthermal irritant or contaminant, including smoke, vapor, soot, fumes, acids,alkalis, chemicals and waste. Waste includes materials to be recycled,reconditioned or reclaimed.

Subparagraphs a) and d) (i) of paragraph (1) of thisexclusion do not apply to loss occurrences caused by heat, smoke or fumes froma hostile fire. As used herein, “hostile fire” means one which becomesuncontrollable or breaks out from where it was intended to be.

“Original assured” as used herein means all insuredsas defined in the policy issued by the Company.

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**INSOLVENCY FUNDSEXCLUSION CLAUSE**

This Agreement excludes all liability of the Company arising bycontract, operation of law, or otherwise from its participation or membership,whether voluntary or involuntary, in any insolvency fund or from reimbursementof any person for any such liability. “Insolvency fund” includes any guarantyfund, insolvency fund, plan, pool, association, fund or other arrangement,however denominated, established or governed, which provides for any assessmentof or payment or assumption by any person of part or all of any claim, debt, charge,fee, or other obligation of an insurer, or its successors or assigns, which hasbeen declared by any competent authority to be insolvent or which is otherwisedeemed unable to meet any claim, debt, charge, fee or other obligation in wholeor in part.

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**NUCLEAR INCIDENTEXCLUSION CLAUSE - LIABILITY - REINSURANCE - U.S.A**

N.M.A1590

1                             Thisreinsurance does not cover any loss or liability accruing to the Reassured as amember of, or subscriber to, any association of insurers of reinsurers formedfor the purpose of covering nuclear energy risks or as a direct or indirectreinsurer of any such member, subscriber or association.

2                             Withoutin any way restricting the operation of paragraph 1. of this Clause it isunderstood and agreed that for all purposes of this reinsurance all theoriginal policies of the Reassured (new, renewal and replacement) of theclasses specified in Clause II. in this paragraph 2. from the time specified inClause III. in this paragraph 2. shall be deemed to include the followingprovision (specified as the Limited Exclusion Provision):

LIMITED EXCLUSION PROVISION*

I.                            Itis agreed that the policy does not apply under any liability coverage, toinjury, sickness, disease, death or destruction, bodily injury or propertydamage with respect to which an insured under the policy is also an insuredunder a nuclear energy liability policy issued by Nuclear Energy LiabilityInsurance Association, Mutual Atomic Energy Liability Underwriters or NuclearInsurance Association of Canada, or would be an insured under any such policybut for its termination upon exhaustion of its limit of liability.

II.                        FamilyAutomobile Policies (liability only), Special Automobile Policies (privatepassenger automobiles, liability only), Farmers Comprehensive Personal LiabilitiesPolicies (liability only), Comprehensive Personal Liability Policies (liabilityonly) or policies of a similar nature; and the liability portion of combinationforms related to the four classes of policies stated above, such as the ComprehensiveDwelling Policy and the applicable types of Homeowners Policies.

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

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(a)                    becomeeffective on or after 1st May 1960 or

(b)                   becomeeffective before that date and contain the Limited Exclusion Provision set outabove; provided this paragraph 2. shall not be applicable to Family AutomobilePolicies, Special Automobile Policies, or policies or combination policies of asimilar nature, issued by the Reassured on New York risks, until 90 daysfollowing approval of the Limited Exclusion Provision by the GovernmentalAuthority having jurisdiction thereof.

3                             Exceptfor those classes of policies specified in Clause II. of paragraph 2. andwithout in any way restricting the operation of paragraph 1. of this Clause, itis understood and agreed that for all purposes of this reinsurance the originalliability policies of the Reassured (new, renewal and replacement) affordingthe following coverages:

Owners, Landlords and Tenants Liability, ContractualLiability, Elevator Liability, Owners or Contractors (including railroad)Protective Liability, Manufacturers and Contractors Liability, ProductLiability, Professional and Malpractice Liability, Storekeepers Liability,Garage Liability, Automobile Liability (including Massachusetts Motor Vehicleor Garage Liability)

shall be deemed to include with respect to suchcoverages, from the time specified in Clause V. of this paragraph 3., thefollowing provision (specified as the Broad Exclusion Provision):

BROAD EXCLUSION PROVISION*

It is agreed that the policy does not apply

I                               underany Liability Coverage to injury, sickness, disease death or destruction,bodily injury or property damage

(a)          with respect to which aninsured under the policy is also an insured under nuclear energy liabilitypolicy issued by Nuclear Energy Liability Insurance Association, Mutual AtomicEnergy Liability Underwriters or Nuclear Insurance Association of Canada, orwould be an insured under any such policy but for its termination uponexhaustion of its limit of liability; or

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(b)         resulting from thehazardous properties of nuclear material and with respect to which (1) anyperson or organization is required to maintain financial protection pursuant tothe Atomic Energy Act of 1954, or any law amendatory thereof, or (2) theinsured is, or had this policy not been issued would be, entitled to indemnityfrom the United States of America, or any agency thereof, under any agreemententered into by the United States of America, or any agency thereof, with anyperson or organization.

II                           Underany Medical Payments Coverage, or under any Supplementary Payments Provisionrelating to immediate medical or surgical relief, first aid, to expensesincurred with respect to bodily injury, sickness, disease or death, bodilyinjury resulting from the hazardous properties of nuclear material and arisingout of the operation of a nuclear facility by any person or organization.

III                       Underany Liability Coverage, to injury, sickness, disease, death or destruction,bodily injury or property damage resulting from the hazardous properties ofnuclear material if

(a)                    thenuclear material (1) is at any nuclear facility owned by, or operated by or onbehalf of, an insured or (2) has been discharged or dispersed therefrom;

(b)                   thenuclear material is contained in spent fuel or waste at any time possessed,handled, used, processed, stored, transported or disposed of by or on behalf ofan insured; or

(c)          the injury, sickness,disease, death or destruction, bodily injury or property damage arises out ofthe furnishing by an insured of services, materials, parts or equipment inconnection with the planning, construction, maintenance, operation or use ofany nuclear facility, but if such facility is located within the United Statesof America, its territories, or possessions or Canada, this exclusion (c)applies only to injury to or destruction of property at such nuclear facility,property damage to such nuclear facility and any property thereat.

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IV                      Asused in this endorsement:

“hazardous properties” include radioactive, toxic orexplosive properties; “nuclear material” means source material, special nuclearmaterial or byproduct material; “source material,” “special nuclear material,”and “byproduct material” have the meanings given them in the Atomic Energy Actof 1954 or in any law amendatory thereof; “spent fuel” means any fuel elementor fuel component, solid or liquid, which has been used or exposed to radiationin a nuclear reactor; “waste” means any waste material (1) containing byproductmaterial other than the tailings or wastes produced by the extraction orconcentration of uranium or thorium from any ore processed for its sourcematerial content and (2) resulting from the operation by any person ororganization of any nuclear facility included within the definition of nuclearfacility under paragraph (a) or (b) thereof ; “nuclear facility” means

(a)                     anynuclear reactor

(b)                    anyequipment or device designed or used for (1) separating the isotopes of uraniumor plutonium, (2) processing or utilizing spent fuel, or (3) handling,processing or packaging waste,

(c)                     anyequipment or device used for the processing, fabricating or alloying of specialnuclear material if at any time the total amount of such material in thecustody of the insured at the premises where such equipment or device islocated consists of or contains more than 25 grams of plutonium or uranium 233or any combination thereof, or more than 250 grams of uranium 235,

(d)                    anystructure, basin, excavation, premises or place prepared or used for thestorage or disposal of waste

and includes the site on which any of the foregoing islocated, all operations conducted on such site and all premises used for suchoperations; “nuclear reactor” means any apparatus designed or used to sustainnuclear fission in a self-supporting chain reaction or to contain a criticalmass of fissionable material; with respect to injury to or destruction of property,the word “injury” or “destruction” includes all forms of radioactivecontamination of property; “property damage” includes all forms of radioactivecontamination of property.

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V                          Theinception dates and thereafter of all original policies affording coveragesspecified in this paragraph 3., whether new, renewal or replacement, beingpolicies which become effective on or after 1st May, 1960, provided thisparagraph 3. shall not be applicable to

i                                Garageand Automobile Policies issued by the Reassured on New York risks, or

(ii                         Statutoryliability insurance required under Chapter 90, General Laws of Massachusetts,

until 90 days following approval of the BroadExclusion Provision by the Governmental Authority having jurisdiction thereof.

4                             Withoutin any way restricting the operations of paragraph 1. of this Clause, it isunderstood and agreed that paragraphs 2. and 3. above are not applicable tooriginal liability policies of the Reassured in Canada, and that with respectto such policies, this Clause shall be deemed to include the Nuclear EnergyLiability Exclusion Provisions adopted by the Canadian Underwriters’Association or the Independent Insurance Conference of Canada.

* Note                    The wordsprinted in BOLD TYPE in the Limited Exclusion Provision and in the BroadExclusion Provision shall apply only in relation to original liability policieswhich include a Limited Exclusion Provision or a Broad Exclusion Provisioncontaining those words.

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**NUCLEAR INCIDENT EXCLUSION CLAUSE - LIABILITY -REINSURANCE - CANADA**

M.M.A 1979a

2                             ThisAgreement does not cover any loss or liability accruing to the Company as amember of, or subscriber to, any association of insurers or reinsurers formedfor the purpose of covering nuclear energy risks or as a direct or indirectreinsurer of any such member, subscriber or association.

Without in any way restricting the operation ofParagraph 1. of this Clause, it is agreed that for all purposes of thisAgreement all the original liability contracts of the Company, whether new,renewal or replacement, of the following classes, namely,

Personal Liability Farmers’ LiabilityStorekeepers’ Liability

which become effective on or after 31st December 1992,shall be deemed to include, from their inception dates and thereafter, thefollowing provision:

Limited Exclusion Provision -

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

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

3                             Withoutin any way restricting the operation of Paragraph 1. of this Clause, it is agreedthat for all purposes of this Agreement all the original liability contracts ofthe Company, whether new, renewal or replacement, of any class whatsoever(other than Personal Liability, Farmers’ Liability, Storekeepers’ Liability orAutomobile Liability contracts), which become effective on or after 31stDecember 1992, shall be deemed to include, from their inception dates andthereafter, the following provision:

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Broad Exclusion Provision

It is agreed that this Policy does not apply

(a)                     toliability imposed by or arising from any nuclear liability act, law or statuteor any law amendatory thereof; nor

(b)                    tobodily injury or property damage with respect to which an Insured under thisPolicy is also insured under a contract of nuclear energy liability insurance(whether the Insured is unnamed in such contract and whether or not it islegally enforceable by the Insured) issued by the Nuclear Insurance Associationof Canada or any other insurer or group or pool of insurers or would be anInsured under any such policy but for its termination upon exhaustion of itslimit of liability; nor

(c)                     tobodily injury or property damage resulting directly or indirectly from thenuclear energy hazard arising from:

the ownership, maintenance, operation or use of a nuclearfacility by or on behalf of an Insured;

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

iii                         thepossession, consumption, use, handling, disposal or transportation offissionable substances, or of other radioactive material (except radioactiveisotopes, away from a nuclear facility, which have reached the final stage offabrication so as to be usable for any scientific, medical, agricultural,commercial or industrial purpose) used, distributed, handled or sold by anInsured.

As used in this Policy

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

(2)                     Theterm “radioactive material” means uranium, thorium, plutonium, neptunium, theirrespective derivatives and compounds, radioactive isotopes of other elementsand any other substances which may be designated by or pursuant to any law, actor statute, or law amendatory thereof as being prescribed substances capable ofreleasing atomic energy, or as being requisite for the production, use orapplication of atomic energy;

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(3)                     Theterm “nuclear facility” means

(a)                    anyapparatus designed or used to sustain nuclear fission in a self-supportingchain reaction or to contain a critical mass of plutonium, thorium and uraniumor any one or more of them;

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

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

(d)                   anystructure, basin, excavation, premises or place prepared or used for thestorage or disposal of waste radioactive material;

and includes the site on which any of the foregoing is located,together with all operations conducted thereon and all premises used for suchoperations.

(4)                     Theterm “fissionable substances” means any prescribed substance that is, or fromwhich can be obtained, a substance capable of releasing atomic energy bynuclear fission.

(5)                     Withrespect to property, loss of use of such property shall be deemed to beproperty damage.

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**NUCLEAR INCIDENT EXCLUSION CLAUSE - REINSURANCE - NO.4**

1.                          ThisReinsurance does not cover any loss or liability accruing to the Reassured as amember of, or subscriber to, any association of insurers or reinsurers formedfor the purpose of covering nuclear energy risks or as a direct or indirectreinsurer of any such member, subscriber or association.

Without in any way restricting the operations ofNuclear Incident Exclusion Clauses, - Liability, - Physical Damage, - Boilerand Machinery and paragraph 1. of this Clause, it is understood and agreed thatfor all purposes of the reinsurance assumed by the Reinsurer from the Reinsured,all original insurance policies or contracts of the Reinsured (new, renewal andreplacement) shall be deemed to include the applicable existing Nuclear Clauseand/or Nuclear Exclusion Clause(s) in effect at the time and any subsequentrevisions thereto as agreed upon and approved by the Insurance Industry and/ora qualified Advisory or Rating Bureau

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