Document:

COMMERCIAL AND PRIVATE PASSENGER AUTOMOBILE
                               QUOTA SHARE TREATY

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                                TABLE OF CONTENTS
PREAMBLE......................................................................1

ARTICLE 1 - BUSINESS REINSURED................................................1
ARTICLE 2 - COVER.............................................................1
ARTICLE 3 - COMMENCEMENT AND TERMINATION......................................3
ARTICLE 4 - NON-TRADITIONAL QUOTA SHARE OPTION................................3
ARTICLE 5 - SPECIAL TERMINATION...............................................4
ARTICLE 6 - TERRITORY.........................................................5
ARTICLE 7 - EXCLUSIONS........................................................5
ARTICLE 8 - REPORTS AND REMITTANCES...........................................6
ARTICLE 9 - CEDING COMMISSION.................................................7
ARTICLE 10 - DEFINITIONS......................................................9
ARTICLE 11 - ORIGINAL CONDITIONS.............................................10
ARTICLE 12 - CURRENCY........................................................10
ARTICLE 13 - TAXES...........................................................11
ARTICLE 14 - LOSS AND LOSS EXPENSE...........................................11
ARTICLE 15 - EXCESS OF POLICY LIMITS.........................................11
ARTICLE 16 - EXTRA CONTRACTUAL OBLIGATIONS...................................11
ARTICLE 17 - DELAY, OMISSION OR ERROR........................................12
ARTICLE 18 - INSPECTION......................................................12
ARTICLE 19 - OFFSET..........................................................12
ARTICLE 20 - SALVAGE AND SUBROGATION.........................................12
ARTICLE 21 - WARRANTY........................................................12
ARTICLE 22 - ARBITRATION.....................................................13
ARTICLE 23 - INSOLVENCY......................................................13
ARTICLE 24 - EXECUTION.......................................................14

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                   COMMERCIAL AND PRIVATE PASSENGER AUTOMOBILE
                               QUOTA SHARE TREATY
                  (hereinafter referred to as the "Agreement")

                                     between

                      FEDERATED NATIONAL INSURANCE COMPANY
                   (hereinafter referred to as the "Company")

                                       and

                        TRANSATLANTIC REINSURANCE COMPANY
                  (hereinafter referred to as the "Reinsurer")

                                    PREAMBLE

In consideration of the mutual covenants hereinafter contained the parties
hereto agree as follows:

                         ARTICLE 1 - BUSINESS REINSURED

This Agreement is to share with the Reinsurer the interests and liabilities of
the Company under all policies for Commercial and/or Non-Standard Private
Passenger Automobile Liability and Physical Damage Business written or renewed
by or on behalf of the Company during the term of this Agreement, subject to the
terms and conditions herein contained.

                                ARTICLE 2 - COVER

A.   The Company will cede,  and the  Reinsurer  will accept as  reinsurance,  a
     variable Quota Share from 40% to 45% of all business reinsured  (Sections A
     and B) hereunder subject to the maximum Policy limits stated below:

B.   SECTION A: For the basic limits program, the following maximum limits will
     be offered:

                  Bodily Injury/Per Person                             $10,000

                  Bodily Injury/Per Occurrence                         $20,000

                  Property Damage Liability                            $10,000
                  Automobile Physical Damage (ACV)
                  Private Passenger                                    $50,000
                  Commercial                                           $50,000

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                  Personal Injury Protection
                  Statutory Uninsured Motorist/Bodily Injury           $10,000

C. SECTION B: For the increased limits program, the following maximum limits
will be offered:

                  Bodily Injury/Per Person                            $100,000

                  Bodily Injury/Per Occurrence                        $300,000

                  Property Damage Liability                            $50,000

                  Uninsured Motorist
                  Bodily Injury/Per Person                            $100,000
                  Bodily Injury/Per Occurrence                        $300,000

Basic limits and increased limits will be reported separately.

D.   The limit of liability of the Reinsurer as respects Excess of Policy Limits
     or Extra Contractual Obligations shall be $500,000 inclusive of contractual
     loss.

E.   The maximum limit of liability of the Reinsurer in any one Agreement Year
     as respects Excess of Policy Limits or Extra Contractual Obligations only,
     shall be $1,500,000.

F.   In the event of an act of terrorism  this  agreement  will be subject to an
     annual limit of $1,000,000 for all losses incurred by the act of terrorism.

G.   A pro rata share of the amount, if any, by which financial assistance paid
     to the Company under "TRIA" for Acts of Terrorism occurring during any one
     Program Year, combined with the Company's total private-sector reinsurance
     recoveries for such Acts of Terrorism, exceeds the amount of Insured Losses
     paid by the Company for such Acts of Terrorism, shall be reimbursed by the
     Company to the Reinsurer. Such pro rata share shall be calculated by
     dividing:

          1.   the Reinsurer's payment under this Contract of Insured Losses for
               the Program Year; by

          2.   the Company's total private-sector reinsurance recoveries arising
               from all  Act(s) of  Terrorism  covered  under  TRIA  during  the
               Program Year.

Payment shall be made as promptly as possible after the Company's receipt of any
recovery in excess of its Insured Losses. The Company shall provide the
Reinsurer with all necessary data respecting the transactions covered under this
Article.

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Such payment to the Reinsurer shall apply unless disallowed by the U.S.
Department of the Treasury.

"Insured Losses" and "Program Year" shall follow the definitions provided in
TRIA.

As respect losses subject to the Terrorism Risk Insurance Act 2002 (TRIA) the
phrase "Acts of Terrorism" shall follow the definition in TRIA. As respects all
other loss, the phrase "Acts of Terrorism" shall be as defined in Article 10 -
Definitions.

                    ARTICLE 3 - COMMENCEMENT AND TERMINATION

A.   This Agreement shall become effective at 12:01 a.m., Eastern Standard Time,
     December 31, 2002 and shall remain in full force and effect until
     terminated as provided in the following paragraph.

B.   Either the Company or the Reinsurer shall have the right to terminate this
     Agreement at any June 30th or December 31st by giving the other party 90
     days prior notice in writing via either Certified or Registered Mail,
     return receipt requested.

C.   As respects policies ceded hereunder which are still in force at the
     termination of this Agreement, The Reinsurer shall remain liable on such
     policies for a further twelve (12) months plus odd time, not to exceed
     eighteen (18) months in all or until the natural expiration, renewal or
     cancellation of such policies, whichever occurs first. The Company may at
     its option, within 30 days of any notice of termination, elect to terminate
     the entire liability of the Reinsurer for losses occurring subsequent to
     the time and date of termination in which event the Reinsurer shall return
     the appropriate unearned premium reserve to the Company less the commission
     previously allowed thereon.

D.   Regardless of the method of termination the liability of the Reinsurer will
     continue in the event that the Company is bound by statute or regulation.

                 ARTICLE 4 - NON-TRADITIONAL QUOTA SHARE OPTION

The Reinsurer will have the option at December 31, 2003 to modify the terms of
this Agreement to a Non-Standard Quota Share treaty to include the following:

     1.  Change would be retroactive to December 31, 2002;

     2.  Reinsurer's margin- 4% (Combined Ratio = 96%);

     3.  Reinsurer will transfer funds to establish a Funds Withheld structure
         with the Company retaining all funds except for Reinsurer's margin;

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     4.  Ceding commission- 30% at a 66% ratio of losses incurred to premiums
         earned with Company realizing 100% of the profits under a 66% ratio of
         losses incurred to premiums earned;

     5.  Profit Commission to be calculated 24 months from inception with a 6.5%
         IBNR factor applied;

     6.  The Company to assume 100% of incurred losses from a 66% ratio of
         losses incurred to premiums earned to an 86% ratio of losses incurred
         to premiums earned;

     7.  Establishment of a ratio of losses incurred to premiums earned cap of
         110%.

                         ARTICLE 5 - SPECIAL TERMINATION

A.   Either party to this Agreement shall have the right to cancel this
     Agreement immediately by giving 10 days written notice to the other party
     by registered mail in the event that one party:

     1.  Has its financial condition impaired by a reduction of surplus as
         regards policyholders of 15% or more in any twelve month period from
         the inception date of this Agreement;

     2.   Is declared insolvent or put in liquidation by any competent
          regulatory authority or court of competent jurisdiction;

     3.   Loses its operating license, or has its operating license suspended,
          in any jurisdiction;

     4.   Ceases writing new or renewal business;

     5.   Has any change in ownership, which is considered to be 10% or more of
          its stock and/or a change in management;

     6.   Fails to remit premiums/losses in accordance with the terms of this
          Agreement. The coverage afforded by this Agreement shall cease as of
          the date of termination except in the case of failure to remit
          premium, termination shall be effective as at the date through which
          premium has been paid.

B.   The Reinsurer  shall have the right to cancel this Agreement 90 days notice
     if A.M. Best rating is reduced to C++ or lower or its S&P rating reduced to
     BB+ or lower.

C.   Subject to the Special Termination items above, the party giving notice
     shall have the option to return or request the return of the unearned
     premium, if any, on the business in force at the date of cancellation, less
     any commission allowed thereon, thereby terminating this agreement on a
     cutoff basis.

D.   Regardless of the method of termination the liability of the Reinsurer will
     continue in the event that the Company is bound by statute or regulation.

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                              ARTICLE 6 - TERRITORY

This Agreement applies to losses arising out of Policies written in Florida,
occurring in the United States of America, its territories and possessions, and
Puerto Rico or as per original Policies.

                             ARTICLE 7 - EXCLUSIONS

This Agreement does not apply to and specifically excludes the following:

     1.   All excess of loss reinsurance assumed by the Company.

     2.   Reinsurance assumed by the Company under obligatory reinsurance
          agreements.

     3.   Business written to apply in excess of a deductible of more than
          $5,000, and business issued to apply specifically in excess over
          underlying insurance.

     4.   Liability as a member, subscriber or reinsurer of any pool, syndicate
          or association; and any combination of insurers or reinsurers formed
          for the purpose of covering specific perils, specific classes of
          business or for the purpose of insuring risks located in specific
          geographical areas; but this exclusion shall not apply to Assigned
          Risk Plans or FAIR Plans or to Coastal Pools, Beach Plans or similar
          plans, however styled. It is understood and agreed, however, that this
          reinsurance does not include any increase in liability to the Company
          resulting from (a) The inability of any other participant in a FAIR
          Plan, Coastal Pool, Beach Plan or similar plan to meets its liability,
          or (b) any claim against such a FAIR Plan, Coastal Pool, Beach Plan or
          similar plan, or any participant therein, including the Company,
          whether by way of subrogation or otherwise, brought by or on behalf of
          any insolvency fund.

     5.   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, however denominated, established or governed, which
          provides for any assessment of or payments or assumption by the
          Company of part or all of any claim, debt, charge, fee or other
          obligation of an insurer, or its successors 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.

     6.   Automobile Liability Insurance relating to the ownership, maintenance
          or use of:

          a.   A Taxicab, public livery conveyance or bus;

          b.   An ambulance, fire department or law enforcement, private
               emergency vehicle or other municipal equipment;

          c.   A racing or exhibition vehicle;

          d.   Rental and leasing of all motor vehicles;

          e.   Commercial automobiles, except service vehicles used by Craftsmen
               and Artisans up to a maximum of one ton;

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          f.   Risks engaged in the transportation or distribution of munitions
               and explosives such as, but not limited to: liquid hydrogen,
               nitrogen, chlorine, fireworks, fuses, dynamite, nitroglycerine,
               ammonia nitrate, anhydrous ammonia, celluloid, pryroxline, or
               their derivatives, LGP, butane, propane and gasoline;

          g.   Recreational and high performance vehicles; h. Policies sold to
               celebrity persons.

     7.   Any automobile not classified as private passenger automobile.

     8.   Auto Physical damage only policies.

     9.   Business written on a co-surety or co-indemnity basis not controlled
          by the Company.

     10.  Business excluded by the following attached Nuclear Incident Exclusion
          Clauses: a. Nuclear Incident Exclusion Clause- Physical Damage-
          Reinsurance- U.S.A. b. Nuclear Incident Exclusion Clause- Liability-
          Reinsurance- U.S.A.

     11.  Business excluded by the following attached Pollution and Seepage
          Exclusion Clauses: a. Pollution Exclusion Clause- Auto Liability-
          Reinsurance. b. Pollution and Seepage Exclusion Clause.

     12.  Loss or damage resulting from any of the following lines of business;
          Ocean Marine, Accident and Health, Workers' Compensation, Aircraft
          (all perils), Fidelity, Financial Guarantee, Surety, Glass, Boiler and
          Machinery, Credit, Title, and /or Life.

     13.  Loss or damage caused by or resulting from war, invasion, hostilities,
          acts of foreign enemies, civil war, insurrection, military or unsurped
          power, martial law or confiscation by order or any government or
          public authority

     If any business falling within the scope of one or more of the exclusions
     is assigned to the Company under an Assigned Risk Plan, such exclusion(s)
     shall not apply, it being understood and agreed that the limits of
     liability extended by the Company as respects such policies shall not
     exceed the minimum statutory limits of liability prescribed in such
     Assigned Risk Plan.

                       ARTICLE 8 - REPORTS AND REMITTANCES

A.   Within 30 days following the end of each month, the Company will render a
     net account to the Reinsurer for the current Agreement Year. Prior
     Agreement Years having activity during the month will be accounted for
     separately in a similar manner. Basic Limits (Section A) and Increased
     Limits (Section B) are to be reported separately. Such account will contain
     the following:

     1.   Gross Net written premium accounted for during the month; less returns
          and cancellations;

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     2.   Collected Net written  premiums  accounted for during the month;  less
          returns and cancellations;

     3.   The ceding commission due as provided for in this Agreement;

     4.   Losses and loss expense paid on losses occurring during the month;

     5.   Outstanding loss and loss adjustment expense reserves at the end of
          the period;

     6.   Subrogation, salvage, or other recoveries on losses occurring during
          the month;

     7.   Unearned premium reserve at the end of the period.

B.   Within 30 days following the end of the month the debtor party will remit
     to the creditor party any balance due including;

     l.   Ceded Net Written Premium collected during the month, less;

     2.   Ceding commission due the Company during the month, less;

     3.   Paid losses and loss adjustment expense paid, net of salvage and
          recoveries, provided such loss and loss adjustment expense have not
          been deducted on behalf of the Company in any previous monthly report.

C.   Within 45 days following the end of each Agreement Year, the Company shall
     furnish the following information to the Reinsurer for the Agreement Year:

     1.   A summary of written premium ceded;

     2.   A summary of premiums earned;

     3.   A summary of loss and loss adjustment expense paid and outstanding,
          segregated by the Agreement Year in which the loss occurred;

     4.   Any other information, which the Reinsurer may require for its Annual
          Convention Statement, which may be reasonably available to the
          Company.

                          ARTICLE 9 - CEDING COMMISSION

A.   The Reinsurer will allow the Company a provisional ceding commission of
     29.0% of the Written premium for Agency Bill policies and Collected premium
     on Direct Bill policies ceded hereunder. Return commission shall be allowed
     on return premiums at the same rate.

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B.   The final ceding commission shall be determined by the loss experience
     under this Agreement Year. There shall be provisional adjustments and a
     final adjustment all in accordance with the other paragraphs of this
     Article.

C.   Within 45 days following 24 months from the inception of the Agreement
     Year, the Company will calculate an adjusted ceding commission based on
     premiums earned and losses incurred. The ceding commission paid to that
     date shall be adjusted between the parties as appropriate. Adjustments will
     continually be made annually until all losses have been paid, closed or
     commuted, at which time the ceding commission shall become final.

D.   Premiums earned for the Agreement Year shall mean the earned portion all
     written premium ceded to this Agreement Year, as herein defined using the
     daily pro rata calculation method or other accepted calculation method as
     agreed to.

E.   Losses incurred for the Agreement Year shall mean the loss and loss expense
     paid by the reinsurer (less salvages and recoveries received) on loss
     occurring during the Agreement Year, plus loss and loss expense reserves
     outstanding on losses occurring during the Agreement Year and an IBNR
     factor of 6.5% for the first adjustment period.

F.   Should the ratio of losses incurred to premiums earned be 66.0% or higher,
     then the adjusted ceding commission shall be 29.0%.

G.   Should the ratio of losses incurred to premiums earned be less than 66.0%,
     but not less than 64.0%, the adjusted commission rate for the Agreement
     Year will remain at 29.0%.

H.   Should the ratio of losses incurred to premiums earned be less than 64.0%,
     but not less than 43.0%, the adjusted commission rate for the Agreement
     Year under consideration shall be 29.0%, plus the difference in percentage
     points between 64.0% and the actual ratio of losses incurred to premiums
     earned to a maximum commission of 50.0%.

I.   If the ratio of losses incurred to premiums earned for any Agreement Year
     is greater than 66%, the difference in percentage points between the actual
     ratio of losses incurred to premiums earned and 66% shall be multiplied by
     premiums earned for the Agreement Year and the product shall be carried
     forward to the next adjustment period as a debit to losses incurred. If the
     ratio of losses incurred to premiums earned for any Agreement Year is less
     than 43%, the difference in percentage points between 43% and the actual
     ratio of losses incurred to premiums earned shall be multiplied by premiums
     earned for the Agreement Year and the product shall be carried forward to
     the next adjustment period as a credit to losses incurred.

J.   Notwithstanding the above, the Company shall retain 50% of incurred losses
     otherwise recoverable from the Reinsurer under this Agreement above a ratio
     of losses incurred to premiums earned to the Reinsurer of 70.0% up to a
     ratio of losses incurred to premiums earned to the Reinsurer of 75.0%. In
     addition the Company shall retain 100% of incurred

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     losses otherwise recoverable from the Reinsurer under this Agreement above
     a ratio of losses incurred to premiums earned to the Reinsurer of 75.0% up
     to a ratio of losses incurred to premiums earned to the Reinsurer of 80.0%.

K.   Upon termination, any period of less than 12 months from inception shall be
     considered as an Agreement Year for purposes of this Article; any period of
     less than 12 months from anniversary will be considered as part of the
     preceding Agreement Year.

L.   Should this Agreement be terminated on a run-off basis wherein the
     reinsurer is liable for losses occurring after the date of termination,
     then such run-off period shall be considered as part of the last Agreement
     Year.

M.   Notwithstanding anything above, if the Reinsurer elects to modify this
     Agreement at December 31, 2003, per Article 4- Non-Traditional Quota Share
     Option, the commissions payable hereunder will be as outlined in Article 4
     and not as above.

                            ARTICLE 10 - DEFINITIONS

A.   The term "Policy" as used in this Agreement shall mean any binder, policy,
     or contract of insurance or reinsurance issued, accepted or held covered
     provisionally or otherwise, by or on behalf of the Company.

B.   The term "Agreement Year" as used in this Agreement shall mean each 12
     consecutive month period commencing with December 31, 1999. Any period
     following termination of this Agreement in which the Reinsurer remains
     liable for losses arising out of Policies in force at the date of
     termination will be considered as part of the concluding Agreement Year.

C.   The term "Loss Occurrence" as used in this Agreement shall mean any one
     disaster or casualty or accident or loss or series of disasters or
     casualties or accidents or losses arising out of or caused by one event.

D.   The term "Commercial and/or Non-Standard Private Passenger Automobile
     Liability and/or Physical Damage Business" as used in this Agreement shall
     mean all insurances and reinsurances written by the Company and classified
     as Commercial and/or Non-Standard Private Passenger Automobile Liability
     and/or Physical Damage including bodily injury and property damage,
     personal injury protection, medical payments, comprehensive, collision and
     uninsured motorists coverage.

E.   Written Premium: Gross Written Premium on Policies written hereunder, less
     cancellations and returned premium.

F.   Collected Premium: Down payments plus installment received by the Company
     on Policies written hereunder.

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G.   Recreational Vehicle: road buggies, dune buggies, caravans, motor coaches
     and motor homes and motor homes.

H.   Celebrity Persons: actors (guild and/or association membership),
     professional athletes (with league membership), Olympic athletes, college
     athletes, radio personalities, news broadcasters, musicians,
     authors/writers (of published works where as the income generated from
     these activities/occupations is more than 30% of the total income for the
     individual), and models.

I.   An act of terrorism includes any act, or preparation in respect of action,
     or threat of action designed to influence the government de jure or de
     facto of any nation or any political division thereof, or in pursuit of
     political, religious, ideological, or similar purposes to intimidate the
     public or a section of the public of any nation by any person or group(s)
     of persons whether acting alone or on behalf of or in connection with any
     organization(s) or government(s) de jure or de facto, and which:

     i.   Involves violence against one or more persons; or

     ii.  Involves damage to property; or

     iii. Endangers life other than that of the person committing the action; or

     iv.  Creates a risk to health or safety of the public or a section of the
          public; or

     v.   Is designed to interfere with or to disrupt an electronic system.

Notwithstanding the above and subject otherwise to the terms, conditions, and
limitations of this reinsurance agreement, in respects to personal lines this
reinsurance agreement will pay actual loss or damage (but not related to cost or
expense) caused by any act of terrorism provided such act is not directly or
indirectly caused by, contributed to by, resulting from, or arising out of or in
connection with biological, chemical, or nuclear pollution or contamination.

                        ARTICLE 11 - ORIGINAL CONDITIONS

All insurances falling under this Agreement shall be subject to the same terms,
rates conditions and waivers, and to the same modifications, alterations and
cancellations as the respective Policies of the Company (except that in the
event of the Insolvency of the Company the provisions of the Insolvency Clause
shall apply) and the Reinsurer shall be credited with its exact proportion of
the original gross premiums received by the Company.

Nothing herein shall in any manner create any obligations or establish any
rights against the Reinsurer in favor of any third parties or any persons not
parties to this Agreement.

                              ARTICLE 12 - CURRENCY

The currency to be used for all purposes of this Agreement shall be United
States of America currency.

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                               ARTICLE 13 - TAXES

The Company will be liable for taxes on premiums reported to the Reinsurer
hereunder.

                       ARTICLE 14 - LOSS AND LOSS EXPENSE

Any loss settlement made by the Company, whether under strict Policy conditions
or by way of compromise, shall be unconditionally binding upon the Reinsurer in
proportion to its participation, and the Reinsurer shall benefit proportionally
in all salvages and recoveries.

The Reinsurer shall bear its proportionate share of all expenses incurred by the
Company in the investigation, adjustment, appraisal or defense of all claims
under Policies reinsured hereunder (excluding, however, office expenses and
salaries of claims staff and officials of the Company) and shall receive its
proportionate share of any recoveries of such expenses. Notwithstanding the
above, expenses hereunder shall be limited to Actual Paid Loss Adjustment
Expense or 8.0% of earned premiums (which ever is less), inclusive of legal,
court and all other costs.

Payment of Loss Adjustment Expense to Superior Adjusting Inc. will be through
the monthly accounting statements at a rate of 7.5% of Earned Premium. An
adjustment to Actual Loss Adjustment Expense or 8% of Earned Premium (which ever
is less) will be made at the time of the Commission Adjustment

                       ARTICLE 15- EXCESS OF POLICY LIMITS

In the event the loss includes an amount in excess of the Company's Policy
limit, 100% of such amount, in excess of the Company's Policy limit shall be
added to the amount of the Company's Policy limit, and the sum thereof shall be
covered hereunder, subject to the Reinsurer's limit of liability appearing in
the COVER ARTICLE of this Agreement.

However, this Article shall not apply where the loss has been incurred due to
the fraud of a member of the Board of Directors or of a corporate officer of the
Company acting individually or collectively or in collusion with any individual
or corporation or any other organization or party involved in the presentation,
defense or settlement of any claim covered hereunder.

For the purpose of this Article, the word "loss" shall mean any amounts for
which the Company would have been contractually liable to pay had it not been
for the limit of the original policy.

                    ARTICLE 16- EXTRA CONTRACTUAL OBLIGATIONS

This Agreement shall protect the Company, subject to the reinsurer's limit of
liability appearing in the COVER ARTICLE of this Agreement, where the loss
includes any Extra Contractual Obligations for 100% of such Extra Contractual
Obligations. "Extra Contractual Obligations" are defined as those liabilities
not covered under any provision of this Agreement and which arise from handling
of any claim on business covered hereunder, such liabilities arising because of,
but

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not limited to, the following: failure by the Company to settle within the
Policy limit, or by reason of alleged or actual negligence, fraud or bad faith
in rejecting an offer of settlement or in the preparation of the defense or in
the trial of any action against its insured or in the preparation or prosecution
of an appeal consequent upon such action.

The date on which any Extra Contractual Obligation is incurred by the Company
shall be deemed, in all circumstances, to be the date of the original loss.

However, this Article shall not apply where the loss has been incurred due to
the fraud of a member of the Board of Directors or of a corporate officer of the
Company acting individually or collectively or in collusion with any individual
or corporation or any other organization or party involved in the presentation,
defense or settlement of any claim covered hereunder.

                      ARTICLE 17 - DELAY, OMISSION OR ERROR

Any inadvertent delay, omission or error shall not relieve either party hereto
from any liability that would attach to it hereunder if such delay, omission or
error had not been made, provided that such delay, omission or error is
rectified upon discovery.

                             ARTICLE 18 - INSPECTION

The Company shall place at the disposal of the Reinsurer at all reasonable
times, and the Reinsurer shall have the right to inspect, through its authorized
representatives, all books, records and papers of the Company in connection with
any reinsurance hereunder or claims in connection herewith.

                               ARTICLE 19 - OFFSET

The Company or the Reinsurer shall have, and may exercise at any time the right
to offset any balance or balances, whether on account of premiums, losses, or
otherwise, due from one party to the other under the terms of this Agreement.

                      ARTICLE 20 - SALVAGE AND SUBROGATION

The Reinsurer shall be credited with its proportionate share of salvage or
subrogation recoveries (i.e., reimbursement obtained or recovery made by the
Company, less the actual cost, excluding salaries of officials and employees of
the Company, of obtaining such reimbursement or making such recovery) on account
of claims and settlements involving reinsurance hereunder.

                              ARTICLE 21 - WARRANTY

A.   It is hereby warranted that no rate decreases or discount increases without
     prior Reinsurer written approval.

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B.   It is hereby warranted that the maximum amount of Gross Written Premium to
     be written under in any one underwriting year under this Agreement is
     $12,000,000.

                            ARTICLE 22 - ARBITRATION

As a condition precedent to any right of action hereunder, any irreconcilable
dispute between the parties to this Agreement will be submitted for decision to
a board of arbitration composed of two arbitrators and an umpire.

Arbitration shall be initiated by the delivery of a written notice of demand for
arbitration by one party to the other within a reasonable time after the dispute
has arisen.

The members of the board of arbitration shall be active or retired disinterested
officials of insurance or reinsurance companies, or underwriters at Lloyd's,
London, not under the control or management of either party to this agreement.
Each party shall appoint its arbitrator and the two arbitrators shall choose an
umpire before instituting the hearing. If the respondent fails to appoint its
arbitrator within four weeks after being requested to do so by the claimant, the
latter shall also appoint the second arbitrator. If the two arbitrators fail to
agree upon the appointment of an umpire within four weeks after their
nominations, each of them shall name three, of whom the other shall decline two,
and the decision shall be made by drawing lots.

The claimant shall submit its initial brief within 45 days from the appointment
of the umpire. The respondent shall submit its brief within 45 days thereafter
and the claimant may submit a reply brief within 30 days after filing of the
respondent's brief.

The board shall make its decision with regard to the custom and usage of the
insurance and reinsurance business. The board shall issue its decision in
writing based upon a hearing in which evidence may be introduced without
following strict rules of evidence but in which cross examination and rebuttal
shall be allowed. The board shall make its decision within 60 days following the
termination of the hearings unless the parties consent to an extension. The
majority decision of the board shall be final and binding upon all parties to
the proceeding. Judgment may be entered upon the award of the board in any court
having jurisdiction.

Each party shall bear the expense of its own arbitrator and shall jointly and
equally bear with the other party the expense of the umpire. The remaining costs
of the arbitration proceedings shall be allocated by the board.

Any arbitration proceeding shall be conducted in Plantation, Florida unless the
parties agree on a mutually agreeable site.

                             ARTICLE 23 - INSOLVENCY

In the event of the insolvency of the Company, reinsurance under this Agreement
shall be payable by the Reinsurer on the basis of the Company under Policy or
Policies reinsured without

                                       13
<PAGE>

diminution because of the insolvency of the Company, to the Company or to its
liquidator, receiver, or statutory successor except as provided by Section
4118(a) of the New York Insurance Law or except when the Agreement specifically
provides another payee of such reinsurance in the event of the insolvency of the
Company, or when the Reinsurer with the consent of the direct insured or
insureds has assumed such Policy obligations of the Company as direct
obligations of the Reinsurer to the payees under such Policies and in
substitution for the obligations of the Company to such payees.

It is agreed, however, that the liquidator, receiver or statutory successor of
the insolvent Company shall give written notice to the Reinsurer of the pendency
of a claim against the insolvent Company on the Policy or Policies reinsured
within a reasonable time after such claim is filed in the insolvency proceeding
and that during the pendency of such claim, the Reinsurer may investigate such
claim and interpose, at its own expense in the proceeding when such claim is to
be adjudicated, any defense or defenses which it may deem available to the
Company or its liquidator, receiver, or statutory successor. The expense thus
incurred by the Reinsurer shall be chargeable, subject to court approval,
against the insolvent Company as part of the expense of liquidation to the
extent of a proportionate share of the benefit which may accrue to the Company
solely as a result of the defense undertaken by the Reinsurer.

Where two or more reinsurers are involved in the same claim and a majority in
interest elects to interpose defense to such claim, the expense shall be
apportioned in accordance with the terms of this Agreement as though such
expense had been incurred by the insolvent Company.

Should the Company go into liquidation or should a receiver be appointed, the
Reinsurer shall be entitled to deduct from any sums which may be due or may
become due to the Company under this reinsurance Agreement any sums which are
due to the Reinsurer by the Company under this reinsurance Agreement and which
are payable at a fixed or stated date as well as any other sums due the
Reinsurer which are permitted to be offset under applicable law.

                             ARTICLE 24 - EXECUTION

This Agreement is executed by the Company and the Reinsurer by the signing, in
duplicate, of the Interests and Liabilities Contract attached to this Agreement.

                                       14
<PAGE>

                     POLLUTION AND SEEPAGE EXCLUSION CLAUSE

This Contract excludes loss and/or damage and/or costs and/or expenses arising
from seepage and/or pollution and/or contamination, other than contamination
from smoke. Nevertheless, this exclusion does not preclude payment of the cost
of removing debris of property damaged by a loss otherwise covered hereunder,
subject always to a limit of 24% of the Company's property loss under the
applicable original policy.

                                       15
<PAGE>

            POLLUTION EXCLUSION CLAUSE - AUTO LIABILITY - REINSURANCE

A. This reinsurance excludes all loss and/or liability accruing to the Company
as a result of:

     1.  bodily injury or property damage arising out of the actual, alleged or
         threatened discharge, dispersal, release or escape of pollutants:

          a)   that are (or that are contained in any property that is):

               i.   being transported or towed by, or handled for movement into,
                    onto or from the insured auto, or otherwise in the course of
                    transit;

               ii.  being stored, disposed of, treated or processed in or upon
                    the insured auto;

          b)   before the pollutants (or any property in which the pollutants
               are contained) are moved from the place where they are accepted
               by the insured for movement into or onto the insured auto; or

          c)   after the pollutants (or any property in which the pollutants are
               contained) are moved from the insured auto to the place where
               they are finally delivered, disposed of or abandoned by the
               insured;

     2.  any governmental direction or request that the insured test for,
         monitor, clean up, remove, contain, treat, detoxify or neutralize
         pollutants.

B.   Paragraph A above does not apply to environmental restoration coverage
     required by the Motor Carrier Act of 1980, or similar mandatory laws.

C.   Subparagraph A(1)(a)(ii) above does not apply to fuels, lubricants, fluids,
     exhaust gases or other similar pollutants that are needed for or result
     from the normal electrical, hydraulic or mechanical functioning of the
     insured auto or its parts, if:

     1.  the pollutants escape or are discharged, dispersed or released directly
         from an auto part designed by its manufacturer to hold, store, receive
         or dispose of such pollutants; and

                                       16
<PAGE>

     2.  the bodily injury or property damage does not arise out of the
         operation of a cherry picker or similar device mounted on an automobile
         or truck chassis and used to raise or lower workers, air compressors,
         pumps and/or generators, including spraying, welding, building
         cleaning, geophysical exploration, lighting and well servicing
         equipment.

D. Paragraphs A(1)(b) and A(1)(c) above do not apply if:

     1.  the pollutants (or any property in which the pollutants are contained)
         are upset, overturned or damaged as a result of the maintenance or use
         of an insured auto; and

     2.  the discharge, dispersal, release or escape of the pollutants is caused
         directly by such upset, overturn or damage.

E.   "Pollutants" mean any solid, liquid, gaseous or thermal irritant or
     contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals
     and waste. Waste includes material to be recycled, reconditioned or
     reclaimed.

                                       17
<PAGE>

   NUCLEAR INCIDENT EXCLUSION CLAUSE - PHYSICAL DAMAGE - REINSURANCE - U.S.A.

1)     This Agreement does not cover any loss or liability accruing to the
       Reinsured, directly or indirectly, and whether as Insurer or Reinsurer,
       from any Pool of Insurers or Reinsurers formed for the purpose of
       covering Atomic or Nuclear Energy risks.

2)     Without in any way restricting the operation of paragraph (1) of this
       Clause, this Agreement does not cover any loss or liability accruing to
       the Reinsured, directly or indirectly and whether as Insurer or
       Reinsurer, from any Insurance against Physical Damage (including business
       interruption or consequential loss arising out of such Physical Damage)
       to:

       I.     Nuclear reactor power plants including all auxiliary property on
              the site, or

       II.    Any other nuclear reactor installation, including laboratories
              handling radioactive materials in connection with reactor
              installations, and "critical facilities" as such, or

       III.   Installations for fabricating complete fuel elements or for
              processing substantial quantities of "special nuclear material,"
              and for reprocessing, salvaging, chemically separating, storing or
              disposing of "spent" nuclear fuel or waste materials, or

       IV.    Installations other than those listed in paragraph 2) III above
              using substantial quantities of radioactive isotopes or other
              products of nuclear fission.

3)     Without in any way restricting the operations of paragraphs 1) and 2)
       hereof, this Agreement does not cover any loss or liability by
       radioactive contamination accruing to the Reinsured, directly or
       indirectly, and whether as Insurer or Reinsurer, from any insurance on
       property which is on the same site as a nuclear reactor power plant or
       other nuclear installation and which normally would be insured therewith
       except that this paragraph 3) shall not operate

          a)   where the Reinsured does not have knowledge of such nuclear
               reactor power plant or nuclear installation, or

          b)   where said insurance contains a provision excluding coverage for
               damage to property caused by or resulting from radioactive
               contamination, however caused. However, on and after 1st, January
               1960, this sub-paragraph b) shall only apply provided the said
               radioactive contamination exclusion provision has been approved
               by the Government Authority having jurisdiction thereof.

4)     Without in any way restricting the operations of paragraphs 1), 2) and 3)
       hereof, this Agreement does not cover any loss or liability by
       radioactive contamination accruing to the Reinsured, directly or
       indirectly, and whether as Insurer or Reinsurer, when such radioactive
       contamination is a named hazard specifically insured against.

5)     It is understood and agreed that this Clause shall not extend to risks
       using radioactive isotopes in any form where the nuclear exposure is not
       considered by the Reinsured to be the primary hazard.

6)     The term "special nuclear material" shall have the meaning given it in
       the Atomic Energy Act of 1954, or by any law amendatory thereof.

7)     Reinsured to be sole judge of what constitutes:

          a)   substantial quantities, and

          b)   the extent of installation, plant or site.

                                       18
<PAGE>

       NUCLEAR INCIDENT EXCLUSION CLAUSE - LIABILITY - REINSURANCE U.S.A.
           (Approved by Lloyd's Underwriters' Non-Marine Association)

(1) This reinsurance does not cover any loss or liability accruing to the
Reassured as a member of, or subscriber to any association of insurers or
reinsurers formed for the purpose of covering nuclear energy risks or as a
direct or indirect reinsurer of any such member, subscriber or association.

(2) Without in any way restricting the operation of paragraph (1) of this Clause
it is understood and agreed that for all purposes of this reinsurance all the
original policies of the Reassured (new, renewal and replacement) of the classes
specified in Clause II of this paragraph (2) from the time specified in Clause
III in this paragraph (2) shall be deemed to include the following provision
(specified as the Limited Exclusion Provision):

Limited Exclusion Provision.*

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

II.  Family Automobile Policies (liability only), Special Automobile Policies
     (private passenger automobiles, liability only), Farmers Comprehensive
     Personal Liability Policies (liability only), Comprehensive Personal
     Liability Policies (liability only) or policies of a similar nature; and
     the liability portion of combination forms related to the four classes of
     policies stated above, such as the Comprehensive Dwelling Policy and the
     applicable types of Homeowners Policies.

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

                  (a) become effective on or after 1st May, 1960, or
                  (b) become effective before that date and contain the Limited
           Exclusion Provision set out above; provided this paragraph (2) shall
           not be applicable to Family Automobile Policies, Special Automobile
           Policies, or policies or combination policies of a similar nature,
           issued by the Reassured on New York risks, until 90 days following
           approval of the Limited Exclusion Provision by the Governmental
           Authority having jurisdiction thereof.

(3) Except for those classes of policies specified in Clause II of paragraph (2)
and without in any way restricting the operation of paragraph (1) of this
Clause, it is understood and agreed that for all purposes of this reinsurance
the original liability policies of the Reassured (new, renewal and replacement)
affording the following coverage's:

     Owners, Landlords and Tenants Liability, Contractual Liability, Elevator
     Liability, Owners or Contractors (including railroad) Protective Liability,
     Manufacturers and Contractors Liability, Product Liability, Professional
     and Malpractice Liability, Storekeepers Liability, Garage Liability,
     Automobile Liability (including Massachusetts Motor Vehicle or Garage
     Liability) shall be deemed to include, with respect to such coverages, from
     the time specified in Clause V of this paragraph (3), the following
     provision (specified as the Broad Exclusion Provision):

Broad Exclusion Provision.*
---------------------------
It is agreed that the policy does not apply:

I.   Under any Liability Coverage, to (injury, sickness, disease, death or
     destruction (bodily injury or property damage

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

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

II.  Under any Medical Payments Coverage, or under any Supplementary Payments
     Provision relating to (immediate medical or surgical relief, (first aid, to
     expenses incurred with respect to (bodily injury, sickness, disease or
     death (bodily injury resulting from the hazardous properties of nuclear
     material and arising out of the operation of a nuclear facility by any
     person or organization.

                                       19
<PAGE>

III. Under any Liability Coverage to (injury, sickness, disease, death or
     destruction (bodily injury or property damage resulting from the hazardous
     properties of nuclear material, if

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

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

          (c)  the (injury, sickness, disease, death or destruction (bodily
               injury or property damages arises out of 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, but if such facility is located within the
               United States of 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 threat.

IV.  As used in this endorsement:

         "Hazardous properties" include radioactive, toxic or explosive
         properties; "nuclear material" means source material, special nuclear
         material or byproduct material; "source material," "special nuclear
         material," and "byproduct material" have the meanings given them in the
         Atomic Energy Act of 1954 or in any law amendatory thereof; "spent
         fuel" means any fuel element or fuel component, solid or liquid, which
         has been used or exposed to radiation in a nuclear reactor; "waste"
         means any waste material (I) containing byproduct material and
         (2)resulting from the operation by any person or organization of any
         nuclear facility included within the definition of nuclear facility
         under paragraph (a) or (b) thereof; "nuclear facility" means

          (a)  any nuclear reactor,

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

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

          (d)  any structure, basin, excavation, premises or place prepared or
               used for the storage or disposal of waste, and includes the site
               on which any of the foregoing is located, all operations
               conducted on such site and all premises used for such operations;
               "nuclear reactor" means any apparatus designed or used to sustain
               nuclear fission in a self-supporting chain reaction or to contain
               a critical mass of fissionable material; (With respect to injury
               to or destruction of property, the word "injury" or "destruction"
               ("property damage" includes all forms of radioactive
               contamination of property (includes all forms of radioactive
               contamination of property.

V.   The inception dates and thereafter of all original policies affording
     coverage's specified in this paragraph (3), whether new, renewal or
     replacement, being policies which become effective on or after 1st May,
     1960, provided this paragraph (3) shall not be applicable to

     (i)  Garage and Automobile Policies issued by the Reassured on New York
          risks, or

     (ii) statutory liability insurance required under Chapter 90, General Laws
          of Massachusetts, until 90 days following approval of the Broad
          Exclusion Provision by the Governmental Authority having jurisdiction
          thereof.

(4) Without in any way restricting the operation of paragraph (1) of this
Clause, it is understood and agreed that paragraphs (2) and (3) above are not
applicable to original liability policies of the Reassured in Canada and that
with respect to such policies this Clause shall be deemed to include the Nuclear
Energy Liability Exclusion Provisions adopted by the Canadian Underwriters'
Association of the Independent Insurance Conference of Canada.

*NOTE: The words printed in italics in the Limited Exclusion Provision and in
the Broad Exclusion Provision shall apply only in relation to original liability
policies which include a Limited Exclusion Provision or a Broad Exclusion
Provision containing those words.

                                       20
<PAGE>

                       INTERESTS AND LIABILITIES CONTRACT
                   (hereinafter referred to as the "Contract")

                                     between

                      FEDERATED NATIONAL INSURANCE COMPANY
                               Plantation, Florida
                   (hereinafter referred to as the "Company")

                                       and

                        TRANSATLANTIC REINSURANCE COMPANY
            (hereinafter referred to as the "Subscribing Reinsurer")

                                in respect of the

                   COMMERCIAL AND PRIVATE PASSENGER AUTOMOBILE
                        QUOTA SHARE REINSURANCE AGREEMENT
                  (hereinafter referred to as the "Agreement")

IT IS AGREED that, effective 12:01 a.m., Eastern Standard Time, December 31,
2002, the SUBSCRIBING REINSURER shall have a 100% share in the Interests and
Liabilities of the Reinsurer as set forth in the above Agreement to which this
Contract is attached. This Contract shall continue in force until terminated in
accordance with the provisions contained in the above Agreement.

The share of the SUBSCRIBING REINSURER in the Interests and Liabilities of the
Reinsurer under the above Agreement shall be several and not joint with the
shares of any other subscribing reinsurer, and in no event shall the SUBSCRIBING
REINSURER participate in the Interests and Liabilities of any other subscribing
reinsurer.

                                       21
<PAGE>

IN WITNESS WHEREOF, the parties hereto by their respective duly authorized
representatives have executed this Contract, in duplicate, as of the dates
undermentioned.

Signed in Plantation, Florida, this 10 day of Oct, 2003.

FEDERATED NATIONAL INSURANCE COMPANY

BY:               /s/   Richard A. Widdicombe
         --------------------------------------------

TITLE:            President
         --------------------------------------------

Signed in New York, New York, this 29 day of September, 2003.

TRANSATLANTIC REINSURANCE COMPANY

BY:               /s/ Suzanne A. Spantidos
         --------------------------------------------

TITLE:            Sr. Vice President
         --------------------------------------------

                  300300302

                                       22PRIVATE PASSENGER AUTOMOBILE
                               QUOTA SHARE TREATY

<PAGE>

                                TABLE OF CONTENTS
PREAMBLE......................................................................1
ARTICLE 1 - BUSINESS REINSURED................................................1
ARTICLE 2 - COVER.............................................................1
ARTICLE 3 - COMMENCEMENT AND TERMINATION......................................3
ARTICLE 4 - NON-TRADITIONAL QUOTA SHARE OPTION................................4
ARTICLE 5 - SPECIAL TERMINATION...............................................4
ARTICLE 6 - TERRITORY.........................................................5
ARTICLE 7 - EXCLUSIONS........................................................5
ARTICLE 8 - REPORTS AND REMITTANCES...........................................7
ARTICLE 9 - CEDING COMMISSION.................................................8
ARTICLE 10 - DEFINITIONS......................................................9
ARTICLE 11 - ORIGINAL CONDITIONS.............................................10
ARTICLE 12 - CURRENCY........................................................10
ARTICLE 13 - TAXES...........................................................11
ARTICLE 14 - LOSS AND LOSS EXPENSE...........................................11
ARTICLE 15 - EXCESS OF POLICY LIMITS.........................................11
ARTICLE 16 - EXTRA CONTRACTUAL OBLIGATIONS...................................11
ARTICLE 17 - DELAY, OMISSION OR ERROR........................................12
ARTICLE 18 - INSPECTION......................................................12
ARTICLE 19 - OFFSET..........................................................12
ARTICLE 20 - SALVAGE AND SUBROGATION.........................................12
ARTICLE 21 - WARRANTY........................................................13
ARTICLE 22 - ARBITRATION.....................................................13
ARTICLE 23 - INSOLVENCY......................................................14
ARTICLE 24 - EXECUTION.......................................................14

<PAGE>

                          PRIVATE PASSENGER AUTOMOBILE
                               QUOTA SHARE TREATY
                  (hereinafter referred to as the "Agreement")
                                     between
                       AMERICAN VEHICLE INSURANCE COMPANY
                   (hereinafter referred to as the "Company ")
                                       and
                        TRANSATLANTIC REINSURANCE COMPANY
                  (hereinafter referred to as the "Reinsurer")

PREAMBLE

In consideration of the mutual covenants hereinafter contained the parties
hereto agree as follows:

ARTICLE 1 - BUSINESS REINSURED

This Agreement is to share with the Reinsurer the interests and liabilities of
the Company under all policies for Private Passenger Automobile Liability and
Physical Damage Business written or renewed by or on behalf of the Company
during the term of this Agreement, subject to the terms and conditions herein
contained.

ARTICLE 2 - COVER

A.   The Company will cede, and the Reinsurer will accept as reinsurance,  a 40%
     share of all business  reinsured  hereunder  subject to the maximum  Policy
     limits stated below:

B.   The following maximum limits will be offered:

                  Bodily Injury/Per Person                    $10,000

                  Bodily Injury/Per Occurrence                $20,000

                  Property Damage Liability                   $10,000
                  Automobile Physical Damage (ACV)
                  Private Passenger                           $50,000

                  Personal Injury Protection
                  Statutory Uninsured Motorist/Bodily Injury  $10,000

C.   The limit of liability of the Reinsurer as respects Excess of Policy Limits
     or Extra Contractual Obligations shall be $500,000 inclusive of contractual
     loss per occurrence with a maximum limit of liability of $1,500,000.
<PAGE>

D.   In the event of an act of terrorism this agreement will be subject to an
     annual limit of $1,000,000 for all losses incurred by the act of terrorism.

E.   As respects business produced under this Agreement, the total amount that
     can be ceded on an annual aggregate basis from a Catastrophe Occurrence(s)
     will be 2.5% of earned premium. The term "Catastrophe Occurrence" shall
     mean the sum of all individual losses directly occasioned by any one
     disaster, accident or loss or series of disaster, accidents or losses
     arising out of one event which occurs within the area of one state of the
     United States or province of Canada and states or provinces contiguous
     thereto and to one another. However, the duration and extent of any one
     "Catastrophe Occurrence" shall be limited to all individual losses
     sustained by the Company occurring during any period of 168 consecutive
     hours arising out of and directly occasioned by the same event except that
     the term "Catastrophe Occurrence" shall be further defined as follows:

     (a)  As regards windstorm, hail, tornado, hurricane, cyclone, including
          ensuring collapse and water damage, all individual losses sustained by
          the Company occurring during any period of 72 consecutive hours
          arising out of and directly occasioned by the same event. However, the
          event need not be limited to one state or province or states or
          provinces contiguous thereto.

     (b)  As regards riot, riot attending a strike, civil commotion, vandalism
          and malicious mischief, all individual losses sustained by the Company
          occurring during any period of 72 consecutive hours within the area of
          one municipality or county and the municipalities or counties
          contiguous thereto arising out of and directly occasioned by the same
          event. The maximum duration of 72 consecutive hours may be extended in
          respect of individual losses which occur beyond such 72 consecutive
          hours during the continued occupation of an assured's premises by
          strikers, provided such occupation commenced during the aforesaid
          period.

     (c)  As regards earthquake (the epicenter of which need not necessarily be
          within the territorial confines referred to in the opening paragraph
          of this Article) and fire following directly occasioned by the
          earthquake, only those individual fire losses which commence during
          the period of 168 consecutive hours may be included in the Company's
          "Catastrophe Occurrence."

     (d)  As regards "Freeze, " only individual losses directly occasioned by
          collapse, breakage of glass and water damage (caused by bursting of
          frozen pipes and tanks) may be included in the Company's "Catastrophe
          Occurrence."

         For all "Catastrophe Occurrences" the Company may choose the date and
time when any such period of consecutive hours commences provided that it is not
earlier than the date and time of the occurrence of the first recorded
individual loss sustained by the Company arising out of that disaster, accident
or loss and provided that only one such period of 168 consecutive hours

                                       2
<PAGE>

shall apply with respect to one event, except for those "Catastrophe Occurrence"
referred to in subparagraphs (a) and (b) above where only one such period of 72
consecutive hours shall apply with respect to one event, regardless of the
duration of the event.

No individual losses occasioned by an event that would be covered by 72 hours
clauses may be included in any "Catastrophe Occurrence" claimed under the 168
hours provision.

F.   A pro rata share of the amount, if any, by which financial assistance paid
     to the Company under "TRIA" for Acts of Terrorism occurring during any one
     Program Year, combined with the Company's total private-sector reinsurance
     recoveries for such Acts of Terrorism, exceeds the amount of Insured Losses
     paid by the Company for such Acts of Terrorism, shall be reimbursed by the
     Company to the Reinsurer. Such pro rata share shall be calculated by
     dividing:

     1.   the Reinsurer's payment under this Contract of Insured Losses for the
          Program Year; by

     2.   the Company's total private-sector reinsurance recoveries arising from
          all Act(s) of Terrorism covered under TRIA during the Program Year.

     Payment shall be made as promptly as possible after the Company's receipt
     of any recovery in excess of its Insured Losses. The Company shall provide
     the Reinsurer with all necessary data respecting the transactions covered
     under this Article.

     Such payment to the  Reinsurer  shall apply unless  disallowed  by the U.S.
     Department of the Treasury.

     "Insured  Losses" and "Program Year" shall follow the definitions  provided
     in TRIA.

As respect losses subject to the Terrorism Risk Insurance Act 2002 (TRIA) the
phrase "Acts of Terrorism" shall follow the definition in TRIA. As respects all
other loss, the phrase "Acts of Terrorism" shall be as defined in Article
10-Definitions.

ARTICLE 3 - COMMENCEMENT AND TERMINATION

A.   This Agreement shall become effective at 12:01 a.m., Eastern Standard Time,
     November 1, 2002 and shall remain in full force and effect until terminated
     as provided in the following paragraph.

B.   Either the Company or the Reinsurer shall have the right to terminate this
     Agreement at any June 30th or December 31st by giving the other party 90
     days prior notice in writing via either Certified or Registered Mail,
     return receipt requested.

C.   As respects policies ceded hereunder which are still in force at the
     termination of this Agreement, The Reinsurer shall remain liable on such
     policies for a further twelve (12) months plus odd time, not to exceed
     eighteen (18) months in all or until the natural expiration, renewal or
     cancellation of such policies, whichever occurs first. The Company

                                       3
<PAGE>

     may at its option, within 30 days of any notice of termination, elect to
     terminate the entire liability of the Reinsurer for losses occurring
     subsequent to the time and date of termination in which event the Reinsurer
     shall return the appropriate unearned premium reserve to the Company less
     the commission previously allowed thereon.

D.   Regardless of the method of termination the liability of the Reinsurer will
     continue in the event that the Company is bound by statute or regulation.

ARTICLE 4 - NON-TRADITIONAL QUOTA SHARE OPTION

The Reinsurer will have the option at December 31, 2003 to modify the terms of
this Agreement to a Non-Standard Quota Share treaty to include the following:

     1.  Change would be retroactive to November 1, 2002;

     2.  Reinsurer's margin- 4% (Combined Ratio = 96%);

     3.  Reinsurer will transfer funds to establish a Funds Withheld structure
         with the Company retaining all funds except for Reinsurer's margin;

     4.  Ceding commission- 30% at a 66% ratio of losses incurred to premiums
         earned with Company realizing 100% of the profits under a 66% ratio of
         losses incurred to premiums earned;

     5.  Profit Commission to be calculated 24 months from inception with a 6.5%
         IBNR factor applied;

     6.  The Company to assume 100% of incurred losses from a 66% ratio of
         losses incurred to premiums earned to an 86% ratio of losses incurred
         to premiums earned;

Establishment of a ratio of losses incurred to premiums earned cap of 110%.

ARTICLE 5 - SPECIAL TERMINATION

A.   Either party to this Agreement shall have the right to cancel this
     Agreement immediately by giving 10 days written notice to the other party
     by registered mail in the event that one party:

     1.  Has its financial condition impaired by a reduction of surplus as
         regards policyholders of 15% or more in any twelve month period from
         the inception date of this Agreement;

     2. Is declared insolvent or put in liquidation by any competent regulatory
        authority or court of competent jurisdiction;

     3. Loses its operating license, or has its operating license suspended, in
        any jurisdiction;

     4. Ceases writing new or renewal business;

                                       4
<PAGE>

     5. Has any change in ownership, which is considered to be 10% or more of
        its stock and/or a change in management;

     6. Fails to remit premiums/losses in accordance with the terms of this
        Agreement. The coverage afforded by this Agreement shall cease as of
        the date of termination except in the case of failure to remit premium,
        termination shall be effective as at the date through which premium has
        been paid.

B.   The Reinsurer  shall have the right to cancel this Agreement 90 days notice
     if A.M. Best rating is reduced to C++ or lower or its S&P rating reduced to
     BB+ or lower.

C.   Subject to the Special Termination items above, the party giving notice
     shall have the option to return or request the return of the unearned
     premium, if any, on the business in force at the date of cancellation, less
     any commission allowed thereon, thereby terminating this agreement on a
     cutoff basis.

D.   Regardless of the method of termination the liability of the Reinsurer will
     continue in the event that the Company is bound by statute or regulation.

ARTICLE 6 - TERRITORY

This Agreement applies to losses arising out of Policies written in Florida,
occurring in the United States of America, its territories and possessions, and
Puerto Rico or as per original Policies.

ARTICLE 7 - EXCLUSIONS

This Agreement does not apply to and specifically excludes the following:

1.   All excess of loss reinsurance assumed by the Company.

2.   Reinsurance assumed by the Company under obligatory reinsurance agreements.

3.   Business written to apply in excess of a deductible of more than $5,000,
     and business issued to apply specifically in excess over underlying
     insurance.

4.   Liability as a member, subscriber or reinsurer of any pool, syndicate or
     association; and any combination of insurers or reinsurers formed for the
     purpose of covering specific perils, specific classes of business or for
     the purpose of insuring risks located in specific geographical areas; but
     this exclusion shall not apply to Assigned Risk Plans or FAIR Plans or to
     Coastal Pools, Beach Plans or similar plans, however styled. It is
     understood and agreed, however, that this reinsurance does not include any
     increase in liability to the Company resulting from (a) the inability of
     any other participant in a FAIR Plan, Coastal Pool, Beach Plan or similar
     plan to meets its liability, or (b) any claim against such a FAIR Plan,
     Coastal Pool, Beach Plan or similar plan, or any participant therein,
     including the Company, whether by way of subrogation or otherwise, brought
     by or on behalf of any insolvency fund.

                                       5
<PAGE>

5.   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, however denominated, established or governed, which provides
     for any assessment of or payments or assumption by the Company of part or
     all of any claim, debt, charge, fee or other obligation of an insurer, or
     its successors 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.

6.   Automobile Liability Insurance relating to the ownership, maintenance or
     use of:

     a.   A Taxicab, public livery conveyance or bus;

     b.   An ambulance,  fire department or law enforcement,  private  emergency
          vehicle or other municipal equipment;

     c.   A racing or exhibition vehicle;

     d.   Rental and leasing of all motor vehicles;

     e.   Commercial automobiles, except service vehicles used by Craftsmen and
          Artisans up to a maximum of one ton;

     f.   Risks engaged in the transportation or distribution of munitions and
          explosives such as, but not limited to: liquid hydrogen, nitrogen,
          chlorine, fireworks, fuses, dynamite, nitroglycerine, ammonia nitrate,
          anhydrous ammonia, celluloid, pryroxline, or their derivatives, LGP,
          butane, propane and gasoline;

     g.   Recreational and high performance vehicles.

     h.   Policies sold to celebrity persons.

7.   Any automobile not classified as private passenger automobile.

8.   Auto Physical damage only policies.

9.   Business written on a co-surety or co-indemnity basis not controlled by the
     Company.

10.  Business excluded by the following attached Nuclear Incident Exclusion
     Clauses: a. Nuclear Incident Exclusion Clause- Physical Damage-
     Reinsurance- U.S.A. b. Nuclear Incident Exclusion Clause- Liability-
     Reinsurance- U.S.A.

11.  Business excluded by the following attached Pollution and Seepage Exclusion
     Clauses: a. Pollution Exclusion Clause- Auto Liability- Reinsurance. b.
     Pollution and Seepage Exclusion Clause.

12.  Loss or damage resulting from any of the following lines of business; Ocean
     Marine, Accident and Health, Workers' Compensation, Aircraft (all perils),
     Fidelity, Financial Guarantee, Surety, Glass, Boiler and Machinery, Credit,
     Title, and /or Life.

13.  Loss or damage caused by or resulting from war, invasion, hostilities, acts
     of foreign enemies, civil war, insurrection, military or usurped power,
     martial law or confiscation by order or any government or public authority.

                                       6
<PAGE>

If any business falling within the scope of one or more of the exclusions is
assigned to the Company under an Assigned Risk Plan, such exclusion(s) shall not
apply, it being understood and agreed that the limits of liability extended by
the Company as respects such policies shall not exceed the minimum statutory
limits of liability prescribed in such Assigned Risk Plan.

ARTICLE 8 - REPORTS AND REMITTANCES

A.   Within 30 days following the end of each month, the Company will render a
     net account to the Reinsurer for the current Agreement Year. Prior
     Agreement Years having activity during the month will be accounted for
     separately in a similar manner. Such account will contain the following:

     1.   Gross Net written premium accounted for during the month; less returns
          and cancellations;

     2.   Collected Net written premiums accounted for during the month; less
          returns and cancellations;

     3.   The ceding commission due as provided for in this Agreement;

     4.   Losses and loss expense paid on losses occurring during the month;

     5.   Outstanding loss and loss adjustment expense reserves at the end of
          the period;

     6.   Subrogation, salvage, or other recoveries on losses occurring during
          the month;

     7.   Unearned premium reserve at the end of the period.

B.   Within 60 days following the end of the month the debtor party will remit
     to the creditor party any balance due including;

     1.   Ceded Net Written Premium collected during the month, less;

     2.   Ceding commission due the Company during the month, less;

     3.   Paid losses and loss adjustment expense paid, net of salvage and
          recoveries, provided such loss and loss adjustment expense have not
          been deducted on behalf of the Company in any previous monthly report.

C.   Within 45 days following the end of each Agreement Year, the Company shall
     furnish the following information to the Reinsurer for the Agreement Year:

     1.   A summary of written premium ceded;

     2.   A summary of premiums earned;

     3.   A summary of loss and loss adjustment expense paid and outstanding,
          segregated by the Agreement Year in which the loss occurred;

     4.   Any other information, which the Reinsurer may require for its Annual
          Convention Statement, which may be reasonably available to the
          Company.

                                       7
<PAGE>

ARTICLE 9 - CEDING COMMISSION

A.   The Reinsurer will allow the Company a provisional ceding commission of
     29.0% of the Written premium for Agency Bill policies and Collected premium
     on Direct Bill policies ceded hereunder. Return commission shall be allowed
     on return premiums at the same rate.

B.   The final ceding commission shall be determined by the loss experience
     under this Agreement Year. There shall be provisional adjustments and a
     final adjustment all in accordance with the other paragraphs of this
     Article.

C.   Within 45 days following 24 months from the inception of the Agreement
     Year, the Company will calculate an adjusted ceding commission based on
     premiums earned and losses incurred. The ceding commission paid to that
     date shall be adjusted between the parties as appropriate. Adjustments will
     continually to be made annually until all losses have been paid, closed or
     commuted, at which time the ceding commission shall become final.

D.   Premiums earned for the Agreement Year shall mean the earned portion all
     written premium ceded to this Agreement Year, as herein defined using the
     daily pro rata calculation method or other accepted calculation method as
     agreed to.

E.   Losses incurred for the Agreement Year shall mean the loss and loss expense
     paid by the reinsurer (less salvages and recoveries received) on loss
     occurring during the Agreement Year, plus loss and loss expense reserves
     outstanding on losses occurring during the Agreement Year and an IBNR
     factor of 6.5% for the first adjustment period.

F.   Should the ratio of losses incurred to premiums earned be 66.0% or higher,
     then the adjusted ceding commission shall be 29.0%.

G.   Should the ratio of losses incurred to premiums earned be less than 66.0%,
     but not less than 64.0%, the adjusted commission rate for the Agreement
     Year will remain at 29.0%.

H.   Should the ratio of losses incurred to premiums earned be less than 64.0%,
     but not less than 43.0%, the adjusted commission rate for the Agreement
     Year under consideration shall be 29.0%, plus the difference in percentage
     points between 64.0% and the actual ratio of losses incurred to premiums
     earned to a maximum commission of 50.0%.

I.   If the ratio of losses incurred to premiums earned for any Agreement Year
     is greater than 66%, the difference in percentage points between the actual
     ratio of losses incurred to premiums earned and 66% shall be multiplied by
     premiums earned for the Agreement Year and the product shall be carried
     forward to the next adjustment period as a debit to losses incurred. If the
     ratio of losses incurred to premiums earned for any Agreement Year is less
     than 43%, the difference in percentage points between 43% and the actual
     ratio of losses incurred to premiums earned shall be multiplied by premiums
     earned for the Agreement Year and the product shall be carried forward to
     the next adjustment period as a credit to losses incurred.

                                       8
<PAGE>

J.   Notwithstanding the above, the Company shall retain 50% of incurred losses
     otherwise recoverable from the Reinsurer under this Agreement above a ratio
     of losses incurred to premiums earned to the Reinsurer of 70.0% up to a
     ratio of losses incurred to premiums earned to the Reinsurer of 75.0%. In
     addition the Company shall retain 100% of incurred losses otherwise
     recoverable from the Reinsurer under this Agreement above a ratio of losses
     incurred to premiums earned to the Reinsurer of 75.0% up to a ratio of
     losses incurred to premiums earned to the Reinsurer of 80.0%.

K.   Upon termination, any period of less than 12 months from inception shall be
     considered as an Agreement Year for purposes of this Article; any period of
     less than 12 months from anniversary will be considered as part of the
     preceding Agreement Year.

L.   Should this Agreement be terminated on a run-off basis wherein the
     reinsurer is liable for losses occurring after the date of termination,
     then such run-off period shall be considered as part of the last Agreement
     Year.

M.   Notwithstanding anything above, if the Reinsurer elects to modify this
     Agreement at December 31, 2003, per Article 4- Non-Traditional Quota Share
     Option, the commissions payable hereunder will be as outlined in Article 4
     and not as above.

ARTICLE 10 - DEFINITIONS

A.   The term "Policy" as used in this Agreement shall mean any binder, policy,
     or contract of insurance or reinsurance issued, accepted or held covered
     provisionally or otherwise, by or on behalf of the Company.

B.   The term "Agreement Year" as used in this Agreement shall mean the period
     from November 1, 2002 to December 31, 2003 both days inclusive and each
     respective twelve (12) month period commencing with January 1, 2004. Any
     period following termination of this Agreement in which the Reinsurer
     remains liable for losses arising out of Policies in force at the date of
     termination will be considered as part of the concluding Agreement Year.

C.   The term Private Passenger Automobile Liability and/or Physical Damage
     Business" as used in this Agreement shall mean all insurances and
     reinsurances written by the Company and classified as Private Passenger
     Automobile Liability and/or Physical Damage including bodily injury and
     property damage, personal injury protection, medical payments,
     comprehensive, collision and uninsured motorists coverage.

D.   Written Premium: Gross Written Premium on Policies written hereunder, less
     cancellations and returned premium.

E.   Collected Premium: Down payments plus installment received by the Company
     on Policies written hereunder.

                                       9
<PAGE>

F.   Recreational Vehicle:  road buggies, dune buggies, caravans, motor coaches
     and motor homes and motor homes.

G.   Celebrity Persons: actors (guild and/or association membership),
     professional athletes (with league membership), Olympic athletes, college
     athletes, radio personalities, news broadcasters, musicians,
     authors/writers (of published works where as the income generated from
     these activities/occupations is more than 30% of the total income for the
     individual), and models.

I.   An act of terrorism includes any act, or preparation in respect of action,
     or threat of action designed to influence the government de jure or de
     facto of any nation or any political division thereof, or in pursuit of
     political, religious, ideological, or similar purposes to intimidate the
     public or a section of the public of any nation by any person or group(s)
     of persons whether acting alone or on behalf of or in connection with any
     organization(s) or government(s) de jure or de facto, and which:

     i.   Involves violence against one or more persons; or

     ii.  Involves damage to property; or

     iii. Endangers life other than that of the person committing the action; or

     iv.  Creates a risk to health or safety of the public or a section of the
          public; or

     v.   Is designed to interfere with or to disrupt an electronic system.

Notwithstanding the above and subject otherwise to the terms, conditions, and
limitations of this reinsurance agreement, in respects to personal lines this
reinsurance agreement will pay actual loss or damage (but not related to cost or
expense) caused by any act of terrorism provided such act is not directly or
indirectly caused by, contributed to by, resulting from, or arising out of or in
connection with biological, chemical, or nuclear pollution or contamination.

ARTICLE 11 - ORIGINAL CONDITIONS

All insurances falling under this Agreement shall be subject to the same terms,
rates conditions and waivers, and to the same modifications, alterations and
cancellations as the respective Policies of the Company (except that in the
event of the Insolvency of the Company the provisions of the Insolvency Clause
shall apply) and the Reinsurer shall be credited with its exact proportion of
the original gross premiums received by the Company.

Nothing herein shall in any manner create any obligations or establish any
rights against the Reinsurer in favor of any third parties or any persons not
parties to this Agreement.

ARTICLE 12- CURRENCY

The currency to be used for all purposes of this Agreement shall be United
States of America currency.

                                       10
<PAGE>

ARTICLE 13 - TAXES

The Company will be liable for taxes on premiums reported to the Reinsurer
hereunder.

ARTICLE 14 - LOSS AND LOSS EXPENSE

Any loss settlement made by the Company, whether under strict Policy conditions
or by way of compromise, shall be unconditionally binding upon the Reinsurer in
proportion to its participation, and the Reinsurer shall benefit proportionally
in all salvages and recoveries.

The Reinsurer shall bear its proportionate share of all expenses incurred by the
Company in the investigation, adjustment, appraisal or defense of all claims
under Policies reinsured hereunder (excluding, however, office expenses and
salaries of claims staff and officials of the Company) and shall receive its
proportionate share of any recoveries of such expenses. Notwithstanding the
above, expenses hereunder shall be limited to Actual Paid Loss Adjustment
Expense or 8.0% of earned premiums (which ever is less), inclusive of legal,
court and all other costs.

Payment of Loss Adjustment Expense to Superior Adjusting Inc. will be through
the monthly accounting statements at a rate of 7.5% of Earned Premium. An
adjustment to Actual Loss Adjustment Expense or 8% of Earned Premium (which ever
is less) will be made at the time of the Commission Adjustment.

ARTICLE 15 - EXCESS OF POLICY LIMITS

In the event the loss includes an amount in excess of the Company's Policy
limit, 100% of such amount, in excess of the Company's Policy limit shall be
added to the amount of the Company's Policy limit, and the sum thereof shall be
covered hereunder, subject to the Reinsurer's limit of liability appearing in
the ARTICLE 2, Cover, of this Agreement.

However, this Article shall not apply where the loss has been incurred due to
the fraud of a member of the Board of Directors or of a corporate officer of the
Company acting individually or collectively or in collusion with any individual
or corporation or any other organization or party involved in the presentation,
defense or settlement of any claim covered hereunder.

For the purpose of this Article, the word "loss" shall mean any amounts for
which the Company would have been contractually liable to pay had it not been
for the limit of the original policy.

ARTICLE 16 - EXTRA CONTRACTUAL OBLIGATIONS

This Agreement shall protect the Company, subject to the reinsurer's limit of
liability appearing in the ARTICLE 2, Cover, of this Agreement, where the loss
includes any Extra Contractual Obligations for 100% of such Extra Contractual
Obligations.

 "Extra Contractual Obligations" are defined as those liabilities not covered
under any provision of this Agreement and which arise from handling of any claim
on business covered hereunder,

                                       11
<PAGE>

such liabilities arising because of, but not limited to, the following: failure
by the Company to settle within the Policy limit, or by reason of alleged or
actual negligence, fraud or bad faith in rejecting an offer of settlement or in
the preparation of the defense or in the trial of any action against its insured
or in the preparation or prosecution of an appeal consequent upon such action.

The date on which any Extra Contractual Obligation is incurred by the Company
shall be deemed, in all circumstances, to be the date of the original loss.

However, this Article shall not apply where the loss has been incurred due to
the fraud of a member of the Board of Directors or of a corporate officer of the
Company acting individually or collectively or in collusion with any individual
or corporation or any other organization or party involved in the presentation,
defense or settlement of any claim covered hereunder.

ARTICLE 17 - DELAY, OMISSION OR ERROR

Any inadvertent delay, omission or error shall not relieve either party hereto
from any liability that would attach to it hereunder if such delay, omission or
error had not been made, provided that such delay, omission or error is
rectified upon discovery.

ARTICLE 18 - INSPECTION

The Company shall place at the disposal of the Reinsurer at all reasonable
times, and the Reinsurer shall have the right to inspect, through its authorized
representatives, all books, records and papers of the Company in connection with
any reinsurance hereunder or claims in connection herewith.

ARTICLE 19 - OFFSET

The Company or the Reinsurer shall have, and may exercise at any time the right
to offset any balance or balances, whether on account of premiums, losses, or
otherwise, due from one party to the other under the terms of this Agreement.

ARTICLE 20 - SALVAGE AND SUBROGATION

The Reinsurer shall be credited with its proportionate share of salvage or
subrogation recoveries (i.e., reimbursement obtained or recovery made by the
Company, less the actual cost, excluding salaries of officials and employees of
the Company, of obtaining such reimbursement or making such recovery) on account
of claims and settlements involving reinsurance hereunder.

The adjusting company (Superior Adjusting, Inc.) will receive 15% of gross
subrogation recoveries and 10% of any salvage recoveries. Notwithstanding
anything above, payment for these fees will be made only when salvage or
subrogation recoveries are submitted in the monthly accounting statement.

                                       12
<PAGE>

ARTICLE 21- WARRANTY

A.   It is hereby warranted that no rate decreases or discount increases without
     prior Reinsurer written approval.

B.   It is hereby warranted that the maximum amount of Gross Written Premium to
     be written under in any one underwriting year under this Agreement is
     $13,000,000.

ARTICLE 22- ARBITRATION

As a condition precedent to any right of action hereunder, any irreconcilable
dispute between the parties to this Agreement will be submitted for decision to
a board of arbitration composed of two arbitrators and an umpire.

Arbitration shall be initiated by the delivery of a written notice of demand for
arbitration by one party to the other within a reasonable time after the dispute
has arisen.

The members of the board of arbitration shall be active or retired disinterested
officials of insurance or reinsurance companies, or underwriters at Lloyd's,
London, not under the control or management of either party to this agreement.
Each party shall appoint its arbitrator and the two arbitrators shall choose an
umpire before instituting the hearing. If the respondent fails to appoint its
arbitrator within four weeks after being requested to do so by the claimant, the
latter shall also appoint the second arbitrator. If the two arbitrators fail to
agree upon the appointment of an umpire within four weeks after their
nominations, each of them shall name three, of whom the other shall decline two,
and the decision shall be made by drawing lots.

The claimant shall submit its initial brief within 45 days from the appointment
of the umpire. The respondent shall submit its brief within 45 days thereafter
and the claimant may submit a reply brief within 30 days after filing of the
respondent's brief.

The board shall make its decision with regard to the custom and usage of the
insurance and reinsurance business. The board shall issue its decision in
writing based upon a hearing in which evidence may be introduced without
following strict rules of evidence but in which cross examination and rebuttal
shall be allowed. The board shall make its decision within 60 days following the
termination of the hearings unless the parties consent to an extension. The
majority decision of the board shall be final and binding upon all parties to
the proceeding. Judgment may be entered upon the award of the board in any court
having jurisdiction.

Each party shall bear the expense of its own arbitrator and shall jointly and
equally bear with the other party the expense of the umpire. The remaining costs
of the arbitration proceedings shall be allocated by the board.

Any arbitration proceeding shall be conducted in Plantation, Florida unless the
parties agree on a mutually agreeable site.

                                       13
<PAGE>

ARTICLE 23- INSOLVENCY

In the event of the insolvency of the Company, reinsurance under this Agreement
shall be payable by the Reinsurer on the basis of the Company under Policy or
Policies reinsured without diminution because of the insolvency of the Company,
to the Company or to its liquidator, receiver, or statutory successor except as
provided by Section 4118(a) of the New York Insurance Law or except when the
Agreement specifically provides another payee of such reinsurance in the event
of the insolvency of the Company, or when the Reinsurer with the consent of the
direct insured or insureds has assumed such Policy obligations of the Company as
direct obligations of the Reinsurer to the payees under such Policies and in
substitution for the obligations of the Company to such payees.

It is agreed, however, that the liquidator, receiver or statutory successor of
the insolvent Company shall give written notice to the Reinsurer of the pendency
of a claim against the insolvent Company on the Policy or Policies reinsured
within a reasonable time after such claim is filed in the insolvency proceeding
and that during the pendency of such claim, the Reinsurer may investigate such
claim and interpose, at its own expense in the proceeding when such claim is to
be adjudicated, any defense or defenses which it may deem available to the
Company or its liquidator, receiver, or statutory successor. The expense thus
incurred by the Reinsurer shall be chargeable, subject to court approval,
against the insolvent Company as part of the expense of liquidation to the
extent of a proportionate share of the benefit, which may accrue to the Company
solely as a result of the defense undertaken by the Reinsurer.

Where two or more reinsurers are involved in the same claim and a majority in
interest elects to interpose defense to such claim, the expense shall be
apportioned in accordance with the terms of this Agreement as though such
expense had been incurred by the insolvent Company.

Should the Company go into liquidation or should a receiver be appointed, the
Reinsurer shall be entitled to deduct from any sums which may be due or may
become due to the Company under this reinsurance Agreement any sums which are
due to the Reinsurer by the Company under this reinsurance Agreement and which
are payable at a fixed or stated date as well as any other sums due the
Reinsurer which are permitted to be offset under applicable law.

ARTICLE 24 - EXECUTION

This Agreement is executed by the Company and the Reinsurer by the signing, in
duplicate, of the Interests and Liabilities Contract attached to this Agreement.

                                       14
<PAGE>

                     POLLUTION AND SEEPAGE EXCLUSION CLAUSE

This Contract excludes loss and/or damage and/or costs and/or expenses arising
from seepage and/or pollution and/or contamination, other than contamination
from smoke. Nevertheless, this exclusion does not preclude payment of the cost
of removing debris of property damaged by a loss otherwise covered hereunder,
subject always to a limit of 24% of the Company's property loss under the
applicable original policy.

                                       15
<PAGE>

            POLLUTION EXCLUSION CLAUSE - AUTO LIABILITY - REINSURANCE

A.   This reinsurance excludes all loss and/or liability accruing to the Company
     as a result of:

     1.   bodily injury or property damage arising out of the actual, alleged or
          threatened discharge, dispersal, release or escape of pollutants:

          a)   that are (or that are contained in any property that is):

               i.   being transported or towed by, or handled for movement into,
                    onto or from the insured auto, or otherwise in the course of
                    transit;

               ii.  being stored, disposed of, treated or processed in or upon
                    the insured auto;

          b)   before the pollutants (or any property in which the pollutants
               are contained) are moved from the place where they are accepted
               by the insured for movement into or onto the insured auto; or

          c)   after the pollutants (or any property in which the pollutants are
               contained) are moved from the insured auto to the place where
               they are finally delivered, disposed of or abandoned by the
               insured;

     2.   any governmental direction or request that the insured test for,
          monitor, clean up, remove, contain, treat, detoxify or neutralize
          pollutants.

B.       Paragraph A above does not apply to environmental restoration coverage
         required by the Motor Carrier Act of 1980, or similar mandatory laws.

C.       Subparagraph A(1)(a)(ii) above does not apply to fuels, lubricants,
         fluids, exhaust gases or other similar pollutants that are needed for
         or result from the normal electrical, hydraulic or mechanical
         functioning of the insured auto or its parts, if:

     1.   the pollutants escape or are discharged, dispersed or released
          directly from an auto part designed by its manufacturer to hold,
          store, receive or dispose of such pollutants; and

     2.   the bodily injury or property damage does not arise out of the
          operation of a cherry picker or similar device mounted on an
          automobile or truck chassis and used to raise or lower workers, air
          compressors, pumps and/or generators, including spraying, welding,
          building cleaning, geophysical exploration, lighting and well
          servicing equipment.

D.   Paragraphs A(1)(b) and A(1)(c) above do not apply if:

     1.   the pollutants (or any property in which the pollutants are contained)
          are upset, overturned or damaged as a result of the maintenance or use
          of an insured auto; and

                                       16
<PAGE>

     2.   the discharge, dispersal, release or escape of the pollutants is
          caused directly by such upset, overturn or damage.

E.   "Pollutants" mean any solid, liquid, gaseous or thermal irritant or
     contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals
     and waste. Waste includes material to be recycled, reconditioned or
     reclaimed.

                                       17
<PAGE>

NUCLEAR INCIDENT EXCLUSION CLAUSE - PHYSICAL DAMAGE - REINSURANCE - U.S.A.

1)     This Agreement does not cover any loss or liability accruing to the
       Reinsured, directly or indirectly, and whether as Insurer or Reinsurer,
       from any Pool of Insurers or Reinsurers formed for the purpose of
       covering Atomic or Nuclear Energy risks.

2)     Without in any way restricting the operation of paragraph (1) of this
       Clause, this Agreement does not cover any loss or liability accruing to
       the Reinsured, directly or indirectly and whether as Insurer or
       Reinsurer, from any Insurance against Physical Damage (including business
       interruption or consequential loss arising out of such Physical Damage)
       to:

          I.   Nuclear reactor power plants including all auxiliary property on
               the site, or

          II.  Any other nuclear reactor installation, including laboratories
               handling radioactive materials in connection with reactor
               installations, and "critical facilities" as such, or

          III. Installations for fabricating complete fuel elements or for
               processing substantial quantities of "special nuclear material,"
               and for reprocessing, salvaging, chemically separating, storing
               or disposing of "spent" nuclear fuel or waste materials, or

          IV.  Installations other than those listed in paragraph 2) III above
               using substantial quantities of radioactive isotopes or other
               products of nuclear fission.

3)     Without in any way restricting the operations of paragraphs 1) and 2)
       hereof, this Agreement does not cover any loss or liability by
       radioactive contamination accruing to the Reinsured, directly or
       indirectly, and whether as Insurer or Reinsurer, from any insurance on
       property which is on the same site as a nuclear reactor power plant or
       other nuclear installation and which normally would be insured therewith
       except that this paragraph 3) shall not operate

          a)   where the Reinsured does not have knowledge of such nuclear
               reactor power plant or nuclear installation, or

          b)   where said insurance contains a provision excluding coverage for
               damage to property caused by or resulting from radioactive
               contamination, however caused. However, on and after 1st, January
               1960, this sub-paragraph b) shall only apply provided the said
               radioactive contamination exclusion provision has been approved
               by the Government Authority having jurisdiction thereof.

4)     Without in any way restricting the operations of paragraphs 1), 2) and 3)
       hereof, this Agreement does not cover any loss or liability by
       radioactive contamination accruing to the Reinsured, directly or
       indirectly, and whether as Insurer or Reinsurer, when such radioactive
       contamination is a named hazard specifically insured against.

5)     It is understood and agreed that this Clause shall not extend to risks
       using radioactive isotopes in any form where the nuclear exposure is not
       considered by the Reinsured to be the primary hazard.

6)     The term "special  nuclear  material" shall have the meaning given it in
       the Atomic Energy Act of 1954, or by any law amendatory thereof.

7)     Reinsured to be sole judge of what constitutes:

          a)   substantial quantities, and

          b)   the extent of installation, plant or site.

                                       18
<PAGE>

       NUCLEAR INCIDENT EXCLUSION CLAUSE - LIABILITY - REINSURANCE U.S.A.
           (Approved by Lloyd's Underwriters' Non-Marine Association)

(1) This reinsurance does not cover any loss or liability accruing to the
Reassured as a member of, or subscriber to, any association of insurers or
reinsurers formed for the purpose of covering nuclear energy risks or as a
direct or indirect reinsurer of any such member, subscriber or association.

(2) Without in any way restricting the operation of paragraph (1) of this Clause
it is understood and agreed that for all purposes of this reinsurance all the
original policies of the Reassured (new, renewal and replacement) of the classes
specified in Clause II of this paragraph (2) from the time specified in Clause
III in this paragraph (2) shall be deemed to include the following provision
(specified as the Limited Exclusion Provision):

Limited Exclusion Provision.*

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

II.  Family Automobile Policies (liability only), Special Automobile Policies
     (private passenger automobiles, liability only), Farmers Comprehensive
     Personal Liability Policies (liability only), Comprehensive Personal
     Liability Policies (liability only) or policies of a similar nature; and
     the liability portion of combination forms related to the four classes of
     policies stated above, such as the Comprehensive Dwelling Policy and the
     applicable types of Homeowners Policies.

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

     (a)  become effective on or after 1st May, 1960, or

     (b)  become effective before that date and contain the Limited Exclusion
          Provision set out above; provided this paragraph (2) shall not be
          applicable to Family Automobile Policies, Special Automobile Policies,
          or policies or combination policies of a similar nature, issued by the
          Reassured on New York risks, until 90 days following approval of the
          Limited Exclusion Provision by the Governmental Authority having
          jurisdiction thereof.

(3)  Except for those classes of policies specified in Clause II of paragraph
     (2) and without in any way restricting the operation of paragraph (1) of
     this Clause, it is understood and agreed that for all purposes of this
     reinsurance the original liability policies of the Reassured (new, renewal
     and replacement) affording the following coverage's:

          Owners, Landlords and Tenants Liability, Contractual Liability,
          Elevator Liability, Owners or Contractors (including railroad)
          Protective Liability, Manufacturers and Contractors Liability, Product
          Liability, Professional and Malpractice Liability, Storekeepers
          Liability, Garage Liability, Automobile Liability (including
          Massachusetts Motor Vehicle or Garage Liability) shall be deemed to
          include, with respect to such coverages, from the time specified in
          Clause V of this paragraph (3), the following provision (specified as
          the Broad Exclusion Provision):

Broad Exclusion Provision.*

It is agreed that the policy does not apply:

I.   Under any Liability Coverage, to (injury, sickness, disease, death or
     destruction (bodily injury or property damage (a) with respect to which an
     insured under the policy is also an insured under a nuclear energy
     liability policy issued by Nuclear Energy Liability Insurance Association,
     Mutual Atomic Energy Liability Underwriters or Nuclear Insurance
     Association of Canada, or would be an insured under any such policy but for
     its termination upon exhaustion of its limit of liability; or (b) resulting
     from the hazardous properties of nuclear material and with respect to which
     (1) any person or organization is required to maintain financial protection
     pursuant to the Atomic Energy Act of 1954, or any law amendatory thereof,
     or (2) the insured is, or had this policy not been issued would be,
     entitled to indemnity from the United States of America, or any agency
     thereof, under any agreement entered into by the United States of America,
     or any agency thereof, with any person or organization.

II.  Under any Medical Payments Coverage, or under any Supplementary Payments
     Provision relating to (immediate medical or surgical relief, (first aid, to
     expenses incurred with respect to (bodily injury, sickness, disease or
     death (bodily injury resulting from the hazardous properties of nuclear
     material and arising out of the operation of a nuclear facility by any
     person or organization.

III. Under any Liability Coverage to (injury, sickness, disease, death or
     destruction (bodily injury or property damage resulting from the hazardous
     properties of nuclear material, if

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

                                       19
<PAGE>

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

     (c)  the (injury, sickness, disease, death or destruction (bodily injury or
          property damages arises out of 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, but if such facility is located within the United States of
          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
          threat.

IV.  As used in this endorsement:

         "Hazardous properties" include radioactive, toxic or explosive
         properties; "nuclear material" means source material, special nuclear
         material or byproduct material; "source material," "special nuclear
         material," and "byproduct material" have the meanings given them in the
         Atomic Energy Act of 1954 or in any law amendatory thereof; "spent
         fuel" means any fuel element or fuel component, solid or liquid, which
         has been used or exposed to radiation in a nuclear reactor; "waste"
         means any waste material (1) containing byproduct material and
         (2)resulting from the operation by any person or organization of any
         nuclear facility included within the definition of nuclear facility
         under paragraph (a) or (b) thereof; "nuclear facility" means

          (a)  any nuclear reactor,

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

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

          (d)  any structure, basin, excavation, premises or place prepared or
               used for the storage or disposal of waste, and includes the site
               on which any of the foregoing is located, all operations
               conducted on such site and all premises used for such operations;
               "nuclear reactor" means any apparatus designed or used to sustain
               nuclear fission in a self-supporting chain reaction or to contain
               a critical mass of fissionable material; (With respect to injury
               to or destruction of property, the word "injury" or "destruction"
               ("property damage" includes all forms of radioactive
               contamination of property (includes all forms of radioactive
               contamination of property.

V.   The inception dates and thereafter of all original policies affording
     coverage's specified in this paragraph (3), whether new, renewal or
     replacement, being policies which become effective on or after 1st May,
     1960, provided this paragraph (3) shall not be applicable to

     (i)  Garage and Automobile Policies issued by the Reassured on New York
          risks, or

     (ii) statutory liability insurance required under Chapter 90, General Laws
          of Massachusetts, until 90 days following approval of the Broad
          Exclusion Provision by the Governmental Authority having jurisdiction
          thereof.

(4) Without in any way restricting the operation of paragraph (1) of this
Clause, it is understood and agreed that paragraphs (2) and (3) above are not
applicable to original liability policies of the Reassured in Canada and that
with respect to such policies this Clause shall be deemed to include the Nuclear
Energy Liability Exclusion Provisions adopted by the Canadian Underwriters'
Association of the Independent Insurance Conference of Canada.

*NOTE: The words printed in italics in the Limited Exclusion Provision and in
the Broad Exclusion Provision shall apply only in relation to original liability
policies, which include a Limited Exclusion Provision or a Broad Exclusion
Provision containing those words.

                                       20
<PAGE>

                       INTERESTS AND LIABILITIES CONTRACT
                   (hereinafter referred to as the "Contract")
                                     between
                       AMERICAN VEHICLE INSURANCE COMPANY
                               Plantation, Florida
                   (hereinafter referred to as the "Company")
                                       and
                        TRANSATLANTIC REINSURANCE COMPANY
            (hereinafter referred to as the "Subscribing Reinsurer")
                                in respect of the
                          PRIVATE PASSENGER AUTOMOBILE
                        QUOTA SHARE REINSURANCE AGREEMENT
                  (hereinafter referred to as the "Agreement")

IT IS AGREED that, effective 12:01 a.m., Eastern Standard Time, November 1,
2002, the SUBSCRIBING REINSURER shall have a 100% share in the Interests and
Liabilities of the Reinsurer as set forth in the above Agreement to which this
Contract is attached. This Contract shall continue in force until terminated in
accordance with the provisions contained in the above Agreement.

The share of the SUBSCRIBING REINSURER in the Interests and Liabilities of the
Reinsurer under the above Agreement shall be several and not joint with the
shares of any other subscribing reinsurer, and in no event shall the SUBSCRIBING
REINSURER participate in the Interests and Liabilities of any other subscribing
reinsurer.

IN WITNESS WHEREOF, the parties hereto by their respective duly authorized
representatives have executed this Contract, in duplicate, as of the dates
undermentioned.

Signed in Plantation, Florida, this 10 day of October, 2003.

AMERICAN VEHICLE INSURANCE COMPANY

BY:               /s/ Richard A. Widdicombe
         -----------------------------------------------------

TITLE:   President
         -----------------------------------------------------

Signed in New York, New York, this 29th day of September, 2003.

TRANSATLANTIC REINSURANCE COMPANY

BY:               /s/ Suzanne A. Spantidos
         -----------------------------------------------------

TITLE:   Sr. Vice President
         -----------------------------------------------------

                                       21

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