Document:

Exhibit 10.7

 

Amendment No. 1

 

To

 

Traditional Program
Business 

Amended and Restated

Quota Share Reinsurance
Agreement 

 

This is Amendment Number 1 (this “Amendment”), dated as of the date set
forth below, to the Amended and Restated Traditional Program Business Quota
Share Reinsurance Agreement (“Agreement”), dated August 30, 2006, by and among
Tower Insurance Company of New York, and Tower National Insurance Company
(collectively the “Company”) and CastlePoint Reinsurance Company, Ltd.
(“Reinsurer”), effective as of April 1, 2006.

 

RECITALS

 

A.                                   The
parties entered into the Agreement effective as of April 1, 2006, whereby the
Reinsurer agreed to reinsure Traditional Program Business written by the
Company subject to the terms and conditions as set forth in the Agreement.

 

B.                                     The
parties now desire to further amend the Agreement in accordance with paragraph
B of Article XXIV of the Agreement.

 

Now therefore, in consideration of the foregoing, of the mutual
covenants and undertakings as set forth below, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereby agree as follows:

 

1.               Amendment

 

A.                Effective
April 1, 2006, Article V, Exclusions, paragraph K is revised to read as
follows:

 

“Pollution loss or
liability excluded by the provisions of the applicable ISO Pollution
Exclusionary language drafted by the Company in use at the time the policy
involved is written or renewed and where available per filed rule and not
precluded by regulatory constraint.  Further, the Reinsurer agrees that
this exclusion shall not apply in any case where the Company has included such
language in an original policy and/or as an endorsement to an original policy
but has sustained a loss as a result of such exclusionary language being
declared invalid or inapplicable by a court of law.”

 

B.                Effective
July 1, 2006 Article VI, Reinsurance Coverage, paragraph A is revised to read
as follows:

 

“Upon the contribution of capital to the Reinsurer by its parent in the
amount of at least $156 million, the Company shall automatically and
obligatorily cede to the Reinsurer, and the Reinsurer shall be obligated to
accept as assumed reinsurance, a

 1
 

50% quota share portion of the Net Liabilities with respect to such
Policies, subject to adjustment as set forth below. The Company may, in its
sole discretion, change the quota share participation of the Reinsurer from
time to time as of any six month anniversary date of the effective date of this
Agreement upon not less than thirty (30) days prior written notice to the
Reinsurer, unless such notice is waived by the Reinsurer, and provided,
however, that the Company and the Reinsurer may agree to change the Reinsurer’s
quota share participation as of any calendar quarter with all such changes
being affixed to the Agreement; provided further, however that the quota
share participation of the Reinsurer shall at all times during the term of this
Agreement be a minimum of 50% and a maximum of 75%; and provided further that
the Reinsurer’s quota share participation does not exceed $50 million of gross
written premium for the 12 month period ended March 31, 2007, with such maximum
amount subject to a 25% growth factor per 12 month period thereafter.  If the Reinsurer’s quota share participation
maximum of $50 million (subject to growth factor) is attained in any twelve
month period ended March 31, then the quota share participation percentage,
which shall apply to all premiums and losses on a pro-rated basis for such
period, shall be decreased for that 12 month period even if such participation
is below 50%. Each such change shall apply to Policies issued or renewed after
the effective date of such change. Notwithstanding the foregoing, if the
Company writes business of the type that it has historically not written or
writes more than 25% of its gross written premiums outside the state of New
York in any 12 month period ending on the anniversary date of this Agreement,
then the Reinsurer has the right to refuse to reinsure such business that the Company
has not historically written and such excess business written outside the State
of New York.

 

The quota share participation of the Reinsurer effective July 1, 2006
shall apply to new and renewal business written by the Company after July 1,
2006.”

 

C.                Effective July 1, 2006,
Article VII, Reinsurance Premium, is revised to read as follows:

 

“As premium for the reinsurance provided by this
Agreement, the Company shall cede to the Reinsurer an amount equal to the
Reinsurer’s quota share assumption of the Net Written Premium of the Company
for the Business Covered by this Agreement. If, after allowance for the ceding
commission as set forth below in Article VIII, the reinsurance premium is
insufficient to cover losses (including loss adjustment expenses) attributable
to the Business Covered under this Agreement, the Company shall make an
additional premium payment to the Reinsurer in an amount that is equal to the
product of the Reinsurer’s assumed share times the excess of losses over the
reinsurance premium paid. To the extent that the reinsurance premium paid to
Reinsurer is in excess of losses paid attributable to the Business Covered
under this Agreement, the Reinsurer shall return to the Company an amount that
is equal to the product of the reinsurance premium paid less losses paid times
the Company’s retained cession.” 

 

 2
 

D.            Effective
July 1, 2006, Article VIII, Ceding Commission, is revised to read as follows:

 

“ARTICLE
VIII            CEDING
COMMISSION

 

The Reinsurer shall allow the Company a ceding commission on all
premiums ceded hereunder which shall be an amount equal to the product of
Company's retained quota share percentage, as determined pursuant to Article VI
for the current period, times actual commissions paid to agents or brokers,
premium taxes, guarantee fund assessments, fees and assessments for boards,
bureaus and associations, fees and assessments for industry and residual
markets, and other similar expenses incurred by the Company on all premiums
ceded hereunder but after deduction of ceding commissions or expense
reimbursement amounts recovered under Existing Reinsurance. Ceding commissions
also will include an additional amount of Other Underwriting Expenses equal to
direct charges incurred by the company for travel, underwriting, and other
expenses directly incurred by the Company to underwrite Traditional
Programs.  These Other Underwriting
Expenses will be reimbursable by the Reinsurer and included as part of ceding
commissions only after an accounting of these Other Underwriting Expenses for
each Traditional Program is provided and approved by the
Reinsurer.”

 

E.             Effective January 1,
2007, Tower National Insurance Company shall be neither a party nor a company
within the definition of Company and shall not cede any premiums or losses directly
to the Reinsurer.

 

F.             The first sentence of
Article III, paragraph A, shall read “This Agreement is effective 12:01 a.m.,
Eastern Standard Time, April 1, 2006 (the Effective Date”) and shall have a
term of four (4) years. 

 

2.               Miscellaneous

 

A.            Except as specifically
set forth in this Amendment, the Agreement shall remain in full force and
effect without modification thereto.

 

B.            This Amendment may be
executed by the parties hereto in any number of counterparts, and by each of
the parties hereto in separate counterparts, each of which counterparts, when
so executed and delivered, shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.

 

C.            This Amendment and all
actions arising out of or in connection with this Amendment shall be governed
by and construed according to the laws of the State of New York, exclusive of
the rules with respect to conflict of laws.

 

[Signature Page
Follows]

 3
 

IN WITNESS WHEREOF, the
Company and the Reinsurer have caused this Amendment to be executed.

 

 

	
  

  	
  TOWER
  INSURANCE COMPANY OF NEW YORK

  
	
   

  
	
   

  	
  By:

  	
  /s/ Francis M.
  Colalucci

  	
   

  
	
   

  	
  Name:

  	
  Francis M.
  Colalucci

  	
   

  
	
   

  	
  Title: 

  	
  Senior Vice
  President and Chief Financial Officer

  	
   

  
	
   

  	
  Date:

  	
  January 11,
  2007

  	
   

  
	
   

  
	
   

  
	
   

  	
  TOWER
  NATIONAL INSURANCE COMPANY

  
	
   

  
	
   

  	
  By:

  	
  /s/ Francis M.
  Colalucci

  	
   

  
	
   

  	
  Name:

  	
  Francis M.
  Colalucci

  	
   

  
	
   

  	
  Title: 

  	
  Senior Vice
  President and Chief Financial Officer

  	
   

  
	
   

  	
  Date:

  	
  January 11,
  2007

  	
   

  
	
   

  	
   

  
	
   

  	
  CASTLEPOINT
  REINSURANCE COMPANY, LTD.

  
	
   

  
	
   

  	
  By:

  	
  /s/ Joel S.
  Weiner

  	
   

  
	
   

  	
  Name:

  	
  Joel S. Weiner

  	
   

  
	
   

  	
  Title: 

  	
  Senior Vice
  President and Chief Financial Officer

  	
   

  
	
   

  	
  Date:

  	
  January 11,
  2007

  	
   

  

 

 4Exhibit 10.8

 

Amendment No.1

 

To

 

Amended and Restated

Specialty Program
Business and Insurance Risk Sharing Business

Quota Share Reinsurance
Agreement 

 

 

This is Amendment Number 1 (this
“Amendment”), dated as of the date set forth below to the Amended and Restated
Specialty Program Business and Insurance Risk Sharing Business Quota Share
Reinsurance Agreement (“Agreement”), dated August 30, 2006, by and among Tower
Insurance Company of New York and Tower National Insurance Company
(collectively the “Company”) and CastlePoint Reinsurance Company, Ltd.
(“Reinsurer”), effective as of April 1, 2006.

 

RECITALS

 

A.                                   The parties entered into the Agreement
effective as of April 1, 2006, whereby the Reinsurer agreed to reinsure
Specialty Program Business and Insurance Risk Sharing Business written by the
Company subject to the terms and conditions as set forth in the Agreement.

 

B.                                     The parties now desire to further amend the
Agreement in accordance with paragraph B of Article XXIV of the Agreement.

 

Now therefore, in consideration of the
foregoing, of the mutual covenants and undertakings as set forth below, and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereby agree as follows:

 

1.                                       Amendment

 

A.           Effective April 1, 2006, Article V,
Exclusions, paragraph K is revised to read as follows: 

     

“Pollution
loss or liability excluded by the provisions of the applicable ISO Pollution
Exclusionary language drafted by the Company in use at the time the policy
involved is written or renewed and where available per filed rule and not
precluded by regulatory constraint.  Further, the Reinsurers agree that
this exclusion shall not apply in any case where the Company has included such
language in an original policy and/or as an endorsement to an original policy
but has sustained a loss as a result of such exclusionary language being
declared invalid or inapplicable by a court of law.”

 

B.             Effective January 1, 2007, Tower National
Insurance Company shall be neither a party nor a company within the definition
of Company and shall not cede any premiums or losses directly to the Reinsurer.

 

C.             The first sentence of Article III, paragraph
A, shall read “This Agreement is effective 12:01 a.m., Eastern Standard Time,
April 1, 2006 (the Effective Date”) and shall have a term of four (4) years. 

 1
 

2.                                                               Miscellaneous

 

A.         Except as specifically set forth in this Amendment, the Agreement shall
remain in full force and effect without modification thereto.

 

B.          This Amendment may be executed by the
parties hereto in any number of counterparts, and by each of the parties hereto
in separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.

 

C.          This Amendment and all actions arising out of or in connection with
this Amendment shall be governed by and construed according to the laws of the
State of New York, exclusive of the rules with respect to conflict of laws.

 

 

IN WITNESS WHEREOF, the Company and the Reinsurer have caused
this Agreement to be executed.

 

 

	
  

  	
  TOWER
  INSURANCE COMPANY OF NEW YORK

  
	
   

  
	
   

  	
  By:

  	
  /s/ Francis M.
  Colalucci

  	
   

  
	
   

  	
  Name:

  	
  Francis M.
  Colalucci

  	
   

  
	
   

  	
  Title: 

  	
  Senior Vice
  President and Chief Financial Officer

  	
   

  
	
   

  	
  Date:

  	
  January 11,
  2007

  	
   

  
	
   

  
	
   

  
	
   

  	
  TOWER
  NATIONAL INSURANCE COMPANY

  
	
   

  
	
   

  	
  By:

  	
  /s/ Francis M.
  Colalucci

  	
   

  
	
   

  	
  Name:

  	
  Francis M.
  Colalucci

  	
   

  
	
   

  	
  Title: 

  	
  Senior Vice
  President and Chief Financial Officer

  	
   

  
	
   

  	
  Date:

  	
  January 11,
  2007

  	
   

  
	
   

  	
   

  
	
   

  	
  CASTLEPOINT
  REINSURANCE COMPANY, LTD.

  
	
   

  
	
   

  	
  By:

  	
  /s/ Joel S.
  Weiner

  	
   

  
	
   

  	
  Name:

  	
  Joel S. Weiner

  	
   

  
	
   

  	
  Title: 

  	
  Senior Vice
  President and Chief Financial Officer

  	
   

  
	
   

  	
  Date:

  	
  January 11, 2007

  	
   

  

 

 2

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