Document:

EXHIBIT 10(m)

                    THIRD PROPERTY CATASTROPHE EXCESS OF LOSS
                              REINSURANCE CONTRACT
                           Effective: January 1, 2001

                                    issued to

                         2lst CENTURY INSURANCE COMPANY
                          21st CENTURY CASUALTY COMPANY
                           Woodland Hills, California

                                       and
               all other insurance companies 50% or more owned by
                          21ST Century Insurance Group

                       (hereinafter called the "Company")

                                       by

                   The Subscribing Reinsurer(s) Executing the
                     Interests and Liabilities Agreement(s)
                                 Attached Hereto
                      (hereinafter called the "Reinsurer")

<PAGE>
                                      INDEX
                                      -----

CLAUSE                                                                   ARTICLE
------                                                                   -------

CLASSES OF BUSINESS REINSURED                                            I

TERM                                                                     II

SPECIAL TERMINATION OR SETTLEMENT                                        III

TERRITORY                                                                IV

EXCLUSIONS                                                               V

SELF-INSURED OBLIGATIONS                                                 VI

RETENTION AND LIMIT                                                      VII

REINSTATEMENT                                                            VIII

DEFINITION OF ULTIMATE NET LOSS                                          IX

DEFINITION OF LOSS OCCURRENCE                                            X

NOTICE OF LOSS AND LOSS SETTLEMENT                                       XI

REINSURANCE PREMIUM                                                      XII

OFFSET                                                                   XIII

ACCESS TO RECORDS                                                        XIV

NET RETAINED LINES                                                       XV

ERRORS AND OMISSIONS                                                     XVI

CURRENCY                                                                 XVII

TAXES                                                                    XVIII

FEDERAL EXCISE TAX                                                       XIX

RESERVE DEPOSIT (NON ADMITTED REINSURERS)                                XX

INSOLVENCY                                                               XXI

ARBITRATION                                                              XXII

SERVICE OF SUIT (U.S.A.) - N.M.A.1998                                    XXIII

GOVERNING LAW                                                            XXIV

SEVERABILITY                                                             XXV

CONFIDENTIALITY                                                          XXVI

INTERMEDIARY                                                             XXVII

<PAGE>
                    THIRD PROPERTY CATASTROPHE EXCESS OF LOSS
                              REINSURANCE CONTRACT
                           Effective: January 1, 2001

                                    issued to

                         2lST CENTURY INSURANCE COMPANY
                          21ST CENTURY CASUALTY COMPANY
                           Woodland Hills, California

                                       and
               all other insurance companies 50% or more owned by
                          21ST Century Insurance Group

                       (hereinafter called the "Company")

                                       by

                   The Subscribing Reinsurer(s) Executing the
                     Interests and Liabilities Agreement(s)
                                 Attached Hereto
                      (hereinafter called the "Reinsurer")

ARTICLE I     CLASSES OF BUSINESS RENSURED
---------     ----------------------------

By this Contract the Reinsurer agrees to reinsure the excess liability which may
accrue to the Company under its policies, contracts and binders of insurance or
reinsurance (hereinafter called "policies") in force on the effective date
hereof or issued or renewed on or after that date, and classified by the Company
as:

     1.   Property  business,  including  but not limited to Homeowners Multiple
          Peril  (property  perils  only),  Dwelling  Fire,  Inland  Marine  and

     2.   Workers'  Compensation,  but  only  as  respects  losses  arising from
          Property  perils.

ARTICLE II     TERM
----------     ----

A.   This  Contract shall become effective on 12:01 A.M., Pacific Standard Time,
     January  1,  2001,  with  respect to losses arising out of loss occurrences
     commencing  on  or  after  that date, and shall remain in force until 12:01
     A.M.,  Pacific  Standard  Time,  January  1,  2002.

B.   If  this  Contract expires or is terminated while a loss occurrence covered
     hereunder  is  in  progress,  the  Reinsurer's  liability  hereunder shall,
     subject  to  the other terms and conditions of this Contract, be determined
     as  if  the entire loss occurrence had occurred prior to the termination or
     expiration  of this Contract, provided that no part of such loss occurrence
     is  claimed  against  any  renewal  or  replacement  of  this  Contract.

<PAGE>
ARTICLE  III     SPECIAL  TERMINATION  OR  SETTLEMENT
------------     ------------------------------------

Section  I  (Termination)
------------------------

A.   Either  party may terminate this Agreement upon 45 days notice in the event
     that:

     1.   The  other  party  should  at any time become insolvent, or suffer any
          impairment  of  capital,  or file a petition in bankruptcy, or go into
          liquidation,  rehabilitation,  or  have  a  receiver  appointed, or be
          acquired or controlled by any other insurance company or organization,
          or

     2.   There  is  a  severance  or  obstruction  of  free  and  unfettered
          communication  and/or  normal  commercial and/or financial intercourse
          between  the  United  States  of  America and the country in which the
          Reinsurer  is  incorporated or has its principal office as a result of
          war,  currency  regulations,  or  any  circumstances  arising  out  of
          political,  financial  or  economic  emergency.

B.   The  Company  may  terminate  this  Agreement  forthwith in the event that:

     1.   The  Reinsurer  ceases  writing  reinsurance and elects to run-off its
          existing  business.

     2.   As  respects  domestic  reinsurers:

          Upon  application  of the NAIC Insurance Regulatory Information System
          (IRIS) tests to the Reinsurer's quarterly and annual statements (which
          the  Reinsurer  hereby agrees to furnish to the Company upon request),
          it  is  found  that four (4) or more of the Reinsurer's IRIS financial
          ratio  values  are outside of the normal range established in the IRIS
          system.

<PAGE>
     3.   As  respects  alien  reinsurers:

          Upon  review of the Insurance Solvency International (ISI) Performance
          Tests  as published with respect to the Reinsurer (or upon application
          of  such  Performance  Tests  to  the  Reinsurer's  annual  financial
          statements which the Reinsurer hereby agrees to furnish to the Company
          upon  request),  it  is found that four (4) or more of the Reinsurer's
          ratios  are  outside  of  the  normal  range  (as  defined  by the ISI
          standard).

Termination  under A. or B. shall be effected by written notice of cancellation.
The  Company  will  specify  the  mode  of  payment,  i.e., a run-off basis or a
clean-cut basis with portfolio transfer, if applicable. In the event the Company
elects  a  run-off  basis,  the Reinsurer will fund all of the outstanding ceded
liabilities  through  a  Trust  Account  or by providing a Letter of Credit that
meets  the  requirements  of  the  New  York  State  Insurance  Department.

Section  II  (Settlement)
------------------------

After  termination  of  this  Agreement under this or any article, including the
natural  expiry of the Agreement, if the Reinsurer has any residual liability to
the  Company,  the Reinsurer will, at the request of the Company, furnish to the
Company  statements  as  specified  in  Section  1B., above, and if four or more
values  are outside of the usual range established in the IRIS or 151 system (as
applicable  in  accordance  with  Section 1B., above) the Company shall have the
option  of  an  immediate settlement of all present and future obligations under
this Agreement in accordance with Section III, below, or requiring the Reinsurer
to  fund  all of the outstanding ceded liabilities through a Trust Account or by
providing  a  Letter of Credit that meets the requirements of the New York State
Insurance  Department.  In  the  event the Company elects the funding option, it
shall  notify  the  Reinsurer  in  writing  and the Reinsurer shall provide such
funding  within  15  days  of  such notification; however, it is agreed that the
Company  retains  the right to require settlement in accordance with Section III
at  any  subsequent  date.

Section  III  (Payment)
----------------------

A.   Amounts  due  the Company or the Reinsurer under this Article shall include
     all  present  and  future  obligations and shall include unearned premiums,
     outstanding  losses  (including  IBNR),  and  all  other  balances.
B.   In  the  event  of  a  clean-cut  termination with portfolio transfer or an
     immediate  settlement  of  all  present  and future obligations the Company
     will,  upon  receipt  of payment, provide to the Reinsurer a full and final
     release  of  Reinsurer's  liability  under  the  Agreement.

<PAGE>
C.   When  requested by either party an appraisal of outstanding losses and IBNR
     shall  be  made  by  a  disinterested  actuary.

o.   Settlement  shall  take  into  account  adjustment  for  net present value.

This  Article  shall  survive  the  termination  of  this  Agreement.

ARTICLE IV     TERRITORY
----------     ---------

The  liability  of  the  Reinsurer  shall  be  limited  to losses under policies
covering  property located within the territorial limits of the United States of
America, its territories or possessions, including the District of Columbia; but
this  limitation  shall not apply to moveable property if the Company's policies
provide  coverage  when  said  moveable  property  is  outside  the  aforesaid
territorial  limits.

ARTICLE V     EXCLUSIONS
---------     ----------

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

     1.   Reinsurance  assumed  by  the  Company  under  obligatory  reinsurance
          agreements,  except  treaty  reinsurance  written on a portfolio basis
          where  the  policies  involved  are to be reunderwritten in accordance
          with the underwriting standards of the Company and reissued as Company
          policies  at  the  next  anniversary  or  expiration date and business
          assumed  from  other  member  companies  of the 21st Century Insurance
          Group.

     2.   Bodily  Injury  liability,  Property  Damage  liability  and  Medical
          Payments  business.

     3.   Financial  guarantee  and  insolvency.

     4.   All Accident and Health, Fidelity and Surety, Boiler and Machinery and
          Credit  business.

     5.   All  Ocean  Marine  business.

     6.   All  aviation,  aerospace  and  satellite  business.

     7.   All  insurance  on  growing  or  standing  crops.

     8.   Mortgage  Impairment  insurances  and  similar  kinds  of  insurances,
          however  styled.

<PAGE>
     9.   Nuclear  risks  as defined in the "Nuclear Incident Exclusion Clause -
          Physical  Damage  - Reinsurance (U.S.A.)" attached to and forming part
          of  this  Contract.

     10.  Loss or damage caused by or resulting from war, invasion, hostilities,
          acts  of foreign enemies, civil war, rebellion, insurrection, military
          or  usurped  power,  or  martial  law  or confiscation by order of any
          government  or public authority, but this exclusion shall not apply to
          loss  or  damage  covered  under a standard policy with a standard War
          Exclusion  Clause.

     11.  Loss  or  liability  excluded  under  the  provisions  of  the "Pools,
          Associations  and Syndicates Exclusion Clause" attached to and forming
          part  of  this  Contract.

     12.  All liability of the Company arising by contract, operation of law, or
          otherwise, from its participation or member ship, 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 payment or assumption by the Company
          of  part or all of any claim, debt, charge, fee or other obligation of
          an  insurer,  or  its successor or assigns, which has been declared by
          any  competent authority to be insolvent, or which is otherwise deemed
          unable  to  meet  any  claim, debt, charge, fee or other obligation in
          whole  or  in  part.

     13.  Pollution  and  seepage coverages excluded under the provisions of the
          "Pollution  and Seepage Exclusion Clause" attached to and forming part
          of  this  Contract.

          14.  Flood  when written as such except for excess flood written above
               the  National  Flood Insurance Program limits either as part of a
               Homeowners  policy  or  separately,  however  styled.

          15.  Earthquake,  landslide,  subsidence  or  other  earth movement or
               volcanic  eruption.

          16.  All  Automobile  Physical  Damage.

ARTICLE VI     SELF-INSURED OBLIGATIONS
----------     ------------------------

A.   As  respects all business the subject matter hereof, where the coverage has
     been  agreed upon between the Company and the Reinsurer this Contract shall
     cover  all  obligations  of the Company assumed by it as a self-insurer (or
     self-insured  obligations  in excess of any valid and collectible insurance

<PAGE>
     available  to  the Company) to the same extent as if all types of insurance
     covered by this Contract were afforded under the broadest form of contracts
     issued  by  the  Company.

B.   Any  exposure of the Company in respect of the classes of business included
     in  this  Contract  for which the Company has issued a policy naming itself
     and/or  an affiliated and/or subsidiary Company as the insured or reinsured
     party,  whether  alone or jointly with some other party, shall be deemed to
     be  an  insurance  or reinsurance coming within the scope of this Contract.

ARTICLE VII     RETENTION AND LIMIT
-----------     -------------------

A.   The  Company  shall  retain  and  be  liable  for  the first $50,000,000 of
     ultimate  net loss arising out of each loss occurrence. The Reinsurer shall
     then  be  liable for the amount by which such ultimate net loss exceeds the
     Company's  retention,  but  the liability of the Reinsurer shall not exceed
     $35,000,000  as  respects  any  one  loss  occurrence.

B.   In addition to its initial retention each loss occurrence the Company shall
     retain  2.5%  part  of  100%  share in the interests and liabilities of the
     Reinsurers.

C.   No  claim  shall  be  made  under  this Contract in any one loss occurrence
     unless  at least two risks insured or reinsured by the Company are involved
     in  such  loss  occurrence.

ARTICLE VIII     REINSTATEMENT
------------     -------------

A.   In  the  event all or any portion of the reinsurance hereunder is exhausted
     by  loss,  the amount so exhausted shall be reinstated immediately from the
     time  the  loss  occurrence commences hereon. For each amount so reinstated
     the  Company  agrees  to pay additional premium equal to the product of the
     following:

     1.   The  percentage  of the occurrence limit reinstated (based on the loss
          paid  by  the  Reinsurer);  times

     2.   The  reinsurance  premium  for the term of this Contract (exclusive of
          reinstatement  premium).

B.   Whenever  the  Company  requests  payment  by  the  Reinsurer  of  any loss
     hereunder,  the  Company  shall  submit  a  statement  to  the Reinsurer of
     reinstatement premium due the Reinsurer. If the reinsurance premium for the
     term of this Contract has not been finally determined as of the date of any
     such statement, the calculation of reinstatement premium due shall be based

<PAGE>
     on  the annual deposit premium and shall be readjusted when the reinsurance
     premium  for  the  term  of  this Contract has been finally determined. Any
     rein-statement  premium  shown  to be due the Reinsurer as reflected by any
     such  statement  (less  prior  payments,  if  any)  shall be payable by the
     Company  concurrently  with payment by the Reinsurer of the requested loss.
     Any  return  reinstatement  premium  shown  to  be due the Company shall be
     remitted  by  the  Reinsurer  as  promptly  as  possible  after receipt and
     verification  of  the  Company's  statement.

C.   Notwithstanding  anything  stated  herein,  the  liability of the Reinsurer
     hereunder  shall  not exceed $35,000,000 as respects loss or losses arising
     out  of  any loss occurrence, nor shall it exceed $70,000,000 in all during
     the  term  of  this  Contract.

ARTICLE  IX          DEFINITION  OF  ULTIMATE  NET  LOSS
-----------          -----------------------------------

A.   The  term  "Ultimate  Net Loss" shall mean the actual loss sustained by the
     Company,  such loss to include 80% of extra contractual obligations and all
     expenses  (regardless  of  how  such  expenses are classified for statutory
     reporting  purposes)  incurred  by  the  Company  in  connection  with  the
     settlement  of  losses  or  resistance to or negotiations concerning a loss
     (including  those  losses  which  are the result of actions and/or disputes
     between  the  insured  and  the  Company  and  legal  expenses  incurred in
     connection  with  coverage  questions and legal actions connected thereto),
     excluding,  however,  any  part  of  the office expenses of the Company and
     salaries  of  employees  other  than  salary  charges  for staff adjusters,
     fieldpersons or other employees while actually engaged in the settlement of
     losses.

B.   Salvages  and recoveries, whether recovered or received prior or subsequent
     to loss settlement under this Contract, including amounts recoverable under
     all  reinsurances,  whether  collected  or  not,  shall  be  applied  as if
     recovered  or received prior to the aforesaid settlement and shall be first
     deducted from the actual loss sustained to arrive at the amount of ultimate
     net  loss.  Nothing,  however,  in  this Article shall be construed to mean
     losses  are  not  recoverable  hereunder until the ultimate net loss to the
     Company  has  been  ascertained.

C.   Any  reinsurance  effected  by  the  Company  whose  ultimate purpose is to
     procure  a  catastrophe  bond  or  other  financial instrument, shall inure
     solely  to  the  benefit  of  the  Company  and  is  to  be  disregarded in
     determining  the  ultimate  net  loss.

D.   The  Company  is  granted  permission  to  carry  pro  rata  and/or  excess
     reinsurance,  recoveries under which shall inure to the sole benefit of the
     Company  and  shall be entirely disregarded for the purposes of determining

<PAGE>
     the  Company's  ultimate  net  loss  under  this Contract, unless otherwise
     stipulated  by  the  Company.

E.   "Extra  contractual  obligations"  as  used herein shall mean any punitive,
     exemplary,  compensatory  or  consequential  damages paid or payable by the
     Company as a result of an action against it by its insured or its insured's
     assignee,  which  action alleges negligence or bad faith on the part of the
     Company  in  handling  a  claim  under  a  policy subject to this Contract.
     However,  for  the purposes of this Contract, extra contractual obligations
     arising  out  of  any  one  loss  occurrence  shall  not  exceed 25% of the
     contractual  loss  under  all  policies involved in the loss occurrence. An
     extra  contractual  obligation shall be deemed to have occurred on the same
     date  as  the  loss  covered  or  alleged  to  be covered under the policy.
     Notwithstanding  anything  stated  herein, this Contract shall not apply to
     any extra contractual obligation incurred by the Company as a result of any
     fraudulent  and/or  criminal  act by any officer or director 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 X     DEFINITION OF LOSS OCCURRENCE
---------     -----------------------------

A.   The  term  "loss  occurrence"  shall  mean the sum of all individual losses
     directly  occasioned  by  any  one  disaster, accident or loss or series of
     disasters, accidents or losses arising out of one event which occurs within
     the  area  of  one state (or the District of Columbia) of the United States
     and  states  or  the  District  of  Columbia) contiguous thereto and to one
     another.  However,  the  duration  and  extent of any one "loss occurrence"
     shall  be  limited  to  all  individual  losses  sustained  by  the Company
     occurring  during  any  period  of 166 consecutive hours arising out of and
     directly  occasioned  by  the  same  event  except  that  the  term  "loss
     occurrence"  shall  be  further  defined  as  follows:

     1.   As  regards  windstorm,  hail,  tornado, hurricane, cyclone, including
          ensuing  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 the District of Columbia)
          or  states  (or  the  District  of  Columbia)  contiguous  thereto.

     2.   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

<PAGE>
          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.

     3.   As  regards  fire following an earthquake (the epicentre of which need
          not  necessarily  be  within  the  territorial confines referred to in
          paragraph  A  above) 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 "loss occurrence".

     4.   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  "loss
          occurrence".

B.   For  all  those  "loss  occurrences",  other  than  those  referred  to  in
     subparagraph  2  of  paragraph A above, 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  shall  apply  with respect to one event, except for any
     "loss occurrences" referred to in subparagraph 1 of paragraph A above where
     only  one  such  period of 72 consecutive hours shall apply with respect to
     one  event,  regardless  of  the  duration  of  the  event.

C.   As  respects  those  "loss  occurrences"  referred  to in subparagraph 2 of
     paragraph  A  above,  if  the  disaster, accident or loss occasioned by the
     event  is  of  greater duration than 72 consecutive hours, then the Company
     may  divide  the  disaster,  accident  or  loss  into  two  or  more  "loss
     occurrences",  provided  no  two  periods overlap and no individual loss is
     included in more than one such period and provided that no period commences
     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.

<PAGE>
D.   No  individual  losses  occasioned  by an event that would be covered by 72
     hours  clauses  may  be included in any "loss occurrence" claimed under the
     168  hours  provision.

ARTICLE  XI     NOTICE  OF  LOSS  AND  LOSS  SETTLEMENTS
-----------     ----------------------------------------

A.   In  the event of a loss which either results in or appears to be of serious
     enough  nature  to  result in the involvement of this Contract, the Company
     shall  give  notice  as soon as reasonably practicable to the Reinsurer and
     the Company shall keep the Reinsurer advised of all subsequent developments
     in  connection  therewith.

B.   The  Reinsurer agrees to abide by the loss settlements of the Company, such
     settlements  to  be  considered as satisfactory proofs of loss, and amounts
     falling  to  the share of the Reinsurer shall be immediately payable to the
     Company  by the Reinsurer upon reasonable evidence of the amount paid or to
     be  paid  within  10  working  days  by  the Company being presented to the
     Reinsurer  by  the  Company.

ARTICLE XII     REINSURANCE PREMIUM
-----------     -------------------

A.   As  premium  for  the reinsurance provided hereunder, the Company shall pay
     the Reinsurer 3.30% of its net earned premium for the term of this Contract
     as  respects all business reinsured hereunder, subject to a minimum premium
     of  $742,000.  However, if this Contract is terminated, the minimum premium
     shall  be  pro  rated.

B.   The  Company  shall pay the Reinsurer a deposit premium of $927,500 in four
     installments  of  $231,875  on  January  1, April 1, July 1, and October 1,
     2001.  However, if this Contract is terminated, no deposit premium shall be
     due  after  the  effective  date  of  termination.

C.   Within  60  days  after the expiration or termination of this Contract, the
     Company  shall  provide a report to the Reinsurer setting forth the premium
     due  hereunder, computed in accordance with paragraph A, and any additional
     premium  due  the  Reinsurer  or  return  premium  due the Company shall be
     remitted  promptly.

D.   "Net  earned  premium"  as  used  herein is defined as gross premium of the
     Company  for  the  classes of business reinsured hereunder, less the earned
     portion  of  premiums  ceded by the Company for reinsurance which inures to
     the  benefit  of  this  Contract.

<PAGE>
ARTICLE XIII     OFFSET
------------     ------

A.   Each party hereto shall have, and may exercise at any time and from time to
     time,  the  right  to offset any undisputed balance or balances, whether on
     account  of  premiums  or  on account of losses or otherwise, due from such
     party  to  the  other  (or, if more than one, any other) party hereto under
     this  Contract  or  under  any  other  reinsurance  contract  heretofore or
     hereafter entered into by and between them, and may offset the same against
     any  undisputed balance or balances due to the former from the latter under
     the  same  or  any  other  reinsurance contract between them, and the party
     asserting  the  right  of  offset  shall  have  and may exercise such right
     whether the undisputed balance or balances due to such party from the other
     are  on  account  of  premiums  or  on  account  of losses or otherwise and
     regardless  of  the  capacity,  whether  as  assuming  insurer  or a ceding
     insurer, in which each party acted under the contract or, if more than one,
     the difference contracts involved, provided, however, that, in the event of
     the  insolvency  of  a  party  hereto,  offsets  shall  only  be allowed in
     accordance with the applicable provisions of the Insurance Law of the State
     of  California.

ARTICLE XIV     ACCESS TO RECORDS
-----------     -----------------

The  Reinsurer, or its duly authorized representative, shall have free access at
all  reasonable  times  during and after the currency of this Contract, to books
and  records maintained by any of the division, department and branch offices of
the  Company which are involved in the subject matter of this Contract and which
pertain  to the reinsurance provided hereunder and all claims made in connection
therewith.  Notwithstanding  the  provisions  of  the  preceding  sentence,  if
undisputed  balances  due  from  the Reinsurer under this Contract have not been
paid for the two most recent reported calendar quarters, the Reinsurer shall not
have  access  to  any of the Company's records relating to this Contract without
the  specific  consent  of  the  Company.

ARTICLE XV     NET RETAINED LINES
----------     ------------------

A.   This  Contract applies only to that portion of any insurance or reinsurance
     which  the  Company  retains net for its own account (prior to deduction of
     any  underlying reinsurance specifically permitted in this Contract) and in
     calculating  the  amount  of  any  loss hereunder and also in computing the
     amount  or  amounts in excess of which this Contract attaches, only loss or
     losses in respect of that portion of any insurance or reinsurance which the
     Company  retains  net  for  its  own  account  shall  be  included.

<PAGE>
B.   The amount of the Reinsurer's liability hereunder in respect of any loss or
     losses  shall not be increased by reason of the inability of the Company to
     collect from any other reinsurers, whether specific or general, any amounts
     which  may  become  due  from  them  whether such inability arises from the
     insolvency  of  such  other  reinsurers  or  otherwise.

C.   Reinsurances  or pooling agreements effected or entered into by the Company
     with  any  of  its,  affiliated companies under common management or common
     ownership,  including member companies of the American International Group,
     which  reduce  the  individual  retained  line  of  the  Company  shall  be
     disregarded  for  the  purposes  of  this  Contract.

ARTICLE XVI     ERRORS AND OMISSIONS
-----------     --------------------

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

ARTICLE XVII     CURRENCY
------------     --------

A.   Wherever the sign "$" or the word "Dollars" is used herein it is understood
     to  mean  United  States  Dollars.

B.   All premium and loss payments hereunder shall be in United States currency.

B.   All foreign currencies for premiums and losses shall be converted to United
     States  currency  at  the  same rates of exchange as used by the Company in
     recording  the  transactions  in  the  Company's  records.

ARTICLE XVIII     TAXES
-------------     -----

In  consideration  of the terms under which this Contract is issued, the Company
undertakes not to claim any deduction of the premium hereon when making Canadian
tax  returns  or  when  making  tax  returns,  other  than Income or Profits Tax
returns,  to  any  state  or  territory  of  the  United States, the District of
Columbia  or  to  Canada.

ARTICLE XIX     FEDERAL EXCISE TAX
-----------     ------------------

(Federal  Excise Tax applies only to those Reinsurers, excepting Underwriters at
Lloyd's  and  other Reinsurers exempt from Federal Excise Tax, who are domiciled
outside  the  United  States  of  America).

<PAGE>
A.   The  Reinsurer  has  agreed  to allow for the purpose of paying the Federal
     Excise  Tax  1% of the premium payable hereon to the extent such premium is
     subject  to  Federal  Excise  Tax.

B.   In the event of any return of premium becoming due hereunder, the Reinsurer
     will  deduct  1% from the amount of the return and the Company or its agent
     should  take  steps  to  recover the Tax from the United States Government.

ARTICLE  XX     RESERVE  DEPOSIT  (NON  ADMITTED  REINSURERS)
-----------     ---------------------------------------------

A.   With  respect  to  loss liability on an insured risk in any jurisdiction in
     which  the  Reinsurer  is  not admitted, the Reinsurer shall fund an amount
     herein  called  the  "deposit".  The  deposit  initially  shall  equal  the
     Reinsurer's share of outstanding loss and loss adjustment expense reserves.
     However,  the  deposit  for  the Reinsurer not federally licensed in Canada
     shall  instead  initially  equal  1151  of  the  statutory  loss  reserves.

B.   The  deposit  shall be adjusted quarterly to equal the outstanding loss and
     loss  adjustment  expense  reserves,  calculated  on  the  basis  of  the
     requirements of the California State Insurance Department and/or applicable
     Insurance  Regulatory  Agencies,  corresponding  to  the  Reinsurer's
     proportionate  share.

C.   The  Company  may  at  any  time after default by the Reinsurer of payments
     owing  to  the  Company require, by notice in writing to the Reinsurer, the
     payment  of  the sum due. In the event the Reinsurer shall not pay such sun
     within  seven  days  after  receipt  of  said  notice, the Company shall be
     entitled  to  appropriate  so  much  of  the  deposit as may be required to
     eliminate  the  default.  Until the deposit shall have been utilized in the
     manner  aforesaid,  interest  thereon  shall  be  credited to the Reinsurer
     quarterly  at  the  rate  of  four  percent  per  annum.

D.   The  Company  may  at  its  discretion,  instead  of taking any part of the
     deposit,  require payment of any sum in default, and it shall be no defense
     to  any such claim that the Company might have had recourse to the deposit.

E.   The  deposit  may  be  in  the  form  of cash, a Letter of Credit, or other
     security,  provided  such  Letter of Credit or other security satisfies the
     requirements  of  the  law  and the applicable Insurance Regulatory Agency.
     However,  a  Letter  of  Credit  is not an acceptable substitute in Canada.

<PAGE>
E.   Notwithstanding any other provisions of this Contract, the Letter of Credit
     or  other security may be drawn upon by the Company at any time to fund the
     deposit  or  for  any  amounts  due from the Reinsurer under this Contract.

ARTICLE XXI     INSOLVENCY
-----------     ----------

In  the event of insolvency and the appointment of a conservator, liquidator, or
statutory successor of the ceding company, the portion of any risk or obligation
assumed  by  the  Reinsurer  shall be payable to the conservator, liquidator, or
statutory successor on the basis of claims allowed against the insolvent company
by  any  court  of  competent jurisdiction or by any conservator, liquidator, or
statutory  successor  of  the  company  having  authority  to allow such claims,
without  diminution  because  of  that  insolvency,  or because the conservator,
liquidator,  or  statutory  successor  has failed to pay all or a portion of any
claims. Payments by the Reinsurer as set forth in this subdivision shall be made
directly  to  the ceding insurer or to its conservator, liquidator, or statutory
successor,  except  where  the contract of insurance or reinsurance specifically
provides another payee of such reinsurance in the event of the insolvency of the
ceding  insurer. The conservator, liquidator, or statutory successor of a ceding
insurer  shall give written notice of the pendency of a claim against the ceding
insurer  indicating the policy or bond reinsured, within a reasonable time after
such  claim is filed and the Reinsurer may interpose, at its own expense, in the
proceeding  where such claim is to be adjudicated, any defense or defenses which
it  may  deem available to the ceding insurer or its conservator, liquidator, or
statutory successor. The expense thus incurred by the Reinsurer shall be payable
subject  to  court approval out of the estate of the insolvent ceding insurer as
part  of  the  expense  of  conservation  or  liquidation  to  the  extent  of a
proportionate  share  of  the  benefit which may accrue to the ceding insurer in
conservation or liquidation, solely as a result of the defense undertaken by the
Reinsurer.

ARTICLE XXII     ARBTRATION
------------     ----------

A.   Any  and  all  disputes  or  differences  arising  out  of  this Agreement,
     including  its  formation  and  validity,  shall  be  submitted  to binding
     arbitration.  Any  arbitration  shall  be based upon the Procedures for the
     Resolution  of U.S. Insurance and Reinsurance Disputes dated September 1999
     (the  "Procedures"),  as  supplemented  by  the  paragraphs  below.

B.   The  Panel  shall  consist  of  three  Disinterested arbitrators, one to be
     appointed  by the Petitioner, one to be appointed by the Respondent and the
     third  to  be  appointed  by the two Party-appointed arbitrators. The third
     arbitrator shall serve as the umpire, who shall be neutral. The arbitrators
     and  umpire  shall  be  persons  who  are  current  or  former  officers or

<PAGE>
     executives  of  an  insurer  or  reinsurer.  Within  thirty  days  of  the
     commencement  of  the arbitration proceeding (or, if applicable, the longer
     period  provided  in paragraph E below), each Party shall provide the other
     Party with the identification of its Party-appointed arbitrator, his or her
     address  (including  telephone,  fax and e-mail information), and provide a
     copy of the arbitrator's curriculum vitae. If either Party fails to appoint
     an  arbitrator within that thirty-day period (or applicable longer period),
     the  non-defaulting  Party  will appoint an arbitrator to act as the Party-
     appointed  arbitrator  for  the  defaulting  Party.  The  umpire  shall  be
     appointed  by the two Party-appointed arbitrators as soon as practical (but
     no  later than 30 days) after the appointment of the second arbitrator. The
     Party-appointed arbitrators may consult, in appointed them confidence, with
     the  Party  who  concerning  the  appointment  of  the  umpire.

C.   Where the two Party-appointed arbitrators have failed to reach agreement on
     an  umpire  within  the  time  specified  in  paragraph B, each Party shall
     propose  to  the  other  in writing, within 7 days thereafter, eight umpire
     candidates  from the ARIAS U.S. Certified Arbitrators List in effect at the
     time  of  the  commencement  of  the  arbitration.  The umpire will then be
     selected  in  accordance  with  6.7(b)-(e)  of  the Procedures. (Unless the
     Parties agree otherwise, the ARIAS U.S. Umpire Questionnaire Form in effect
     at  the  time  of  the  commencement  of  the  arbitration  shall be used.)

D.   The  arbitration  shall  take  place  in  Woodland  Hills,  California.

E.   If  the  Company  and  more  than  one  Reinsurer  are involved in the same
     dispute(s)  or difference(s) arising out of this Agreement, and the Company
     requests  consolidated  arbitration  with  those  Reinsurers  in an initial
     Notice  of  Arbitration or Response, then those Reinsurers shall constitute
     and  act as one Party for purposes of the arbitration and thus shall select
     a  single  Party-appointed  arbitrator among them. (If the Company requests
     consolidation  in  a  Response, then (i) that Response shall be appended to
     the  Company's  Notice of Arbitration to the additional Reinsurer(s) joined
     in  the proceeding, (ii) any arbitral appointment made before that Response
     shall  be  of  no  effect,  and  (iii)  the  Reinsurers  shall select their
     arbitrator  within  30  days  of  their  receipt  of  those pleadings.) For
     purposes  of  this  paragraph, any instance in which two or more Reinsurers
     have  not paid their proportional shares of the same balance claimed due by
     the  Company  shall  be  deemed  to  involve  the  "same  dispute(s)  or
     difference(s)  arising out of this Agreement." Communications shall be made
     by the Company to each of the Reinsurers constituting one Party. Nothing in

<PAGE>
     this  paragraph  shall  impair  the  rights of Reinsurers to assert several
     rather  than  joint  defenses  or claims, change their liability under this
     Agreement  from several to joint, or impair their rights to retain separate
     counsel  in  connection  with  the  arbitration.

F.   Unless  prohibited by law, the Supreme Court of the State of California and
     the  United  States  District Court for the Southern District of California
     shall  have  exclusive jurisdiction over any and all court proceedings that
     either  Party  may  initiate  in connection with the arbitration, including
     proceedings  to  compel, stay, or enjoin arbitration or to confirm, vacate,
     modify,  or  correct  an  Arbitration  Award.

G.   For  purposes  of  this  Article,  the  terms  "Arbitration  Award,"
     "Disinterested,"  "Notice of Arbitration," "Panel," "Party" (or "Parties"),
     "Petitioner,"  "Respondent,"  and  "Response'  shall  have the meanings set
     forth  in  article  2  of  the  Procedures  (Definitions).

H.   In  the event of any conflict between the Procedures and this Article, this
     Article,  and  not  the  Procedures,  will  control.

I.   This  Article  shall  survive  the  termination  of  this  Agreement.

ARTICLE  XXIII     SERVICE  OF  SUIT  (U.S.A.)  -  N.M.A.  1998
--------------     --------------------------------------------

(Applicable  only  to reinsurers domiciled outside the United States of America)

A.   It  is  agreed  that in the event of the failure of the Reinsurer hereon to
     pay  any  amount  claimed to be due hereunder, the Reinsurer hereon, at the
     request  of  the  Company,  will  submit  to the jurisdiction of a Court of
     competent  jurisdiction  within  the United States. Nothing in this Article
     constitutes  or  should  be  understood  to  constitute  a  waiver  of  the
     Reinsurer's  rights  to  commence  an  action  in  any  Court  of competent
     jurisdiction  in  the United States, to remove an action to a United States
     District  Court,  or  to  seek  a  transfer  of  a case to another Court as
     permitted  by  the  laws of the United States or of any state in the United
     States.  It  is  further agreed that service of process in such suit may be
     made  upon  Mendes  &  Mount,  750  Seventh  Avenue,  New  York,  New  York
     10019-6929,  and  that  in any suit instituted against any one of them upon
     this Contract, the Reinsurer will abide by the final decision of such Court
     or  of  any  Appellate  Court  in  the  event  of  an  appeal.

B.   The above-named are authorized and directed to accept service of process on
     behalf  of  the  Reinsurer  in any such suit and/or upon the request of the
     Company to give a written undertaking to the Company that they will enter a
     general  appearance  upon  the  Reinsurer's behalf in the event such a suit
     shall  be  instituted.

<PAGE>
C.   Further, pursuant to any statute of any state, territory or district of the
     United  States  which  makes provision thereof, the Reinsurer hereon hereby
     designates  the  Superintendent,  Commissioner  or Director of Insurance or
     other  officer  specified for that purpose in the statute, or his successor
     or  successors  in office, as its true and lawful attorney upon whom may be
     served  any  lawful process in any action, suit or proceeding instituted by
     or  on  behalf  of the Company and any beneficiary hereunder arising out of
     this  Contract of reinsurance, and hereby designated the above-named Mendes
     &  Mount  as  the  firm to whom the said officer is authorized to mail such
     process  or  a  true  copy  thereof.

ARTICLE XXIV     GOVERNING LAW
------------     -------------

The  Contract  shall be governed by and construed in accordance with the laws of
the  State  of  California.

ARTICLE XXV     SEVERABILITY
-----------     ------------

If  any provision of this Contract shall be rendered illegal or unenforceable by
the  laws,  regulations  or  public policy of any state, such provision shall be
considered  void  in  such  state,  but  this  shall  not affect the validity or
enforceability  of any other provision of this Contract or the enforceability of
such  provision  in  any  other  jurisdiction.

ARTICLE XXVI     CONFIDENTIALITY
------------     ---------------

All  terms  and  conditions  of  this  Contract and any material provided in the
course  of  inspection  shall  be  kept confidential by the Reinsurer as against
third  parties,  unless the disclosure is required pursuant to process of law or
unless the disclosure is to Reinsurer's retrocessionaires, financial auditors or
governing  regulatory  bodies.  Disclosing  or  using  this  information for any
purpose  beyond  the  scope of this Contract, or beyond the exceptions set forth
above,  is  expressly  forbidden  without  the  prior  consent  of  the Company.

ARTICLE XXVII     INTERMIDIARY
-------------     ------------

John  P.  Woods  Co., Inc. is hereby recognized as the Intermediary through whom
all  communications  relating  hereto  (including  but  not  limited to notices,
statements,  premiums,  return  premiums,  commissions,  taxes,  losses,  loss
adjustment  expenses, salvage and loss settlements) shall be transmitted to both
parties.  It  is  understood, as regards remittances due either party hereunder,
that  payment by the Company to John P. woods Co., Inc. shall constitute payment

<PAGE>
to the Reinsurer, but payment by the Reinsurer to John P. Woods Co., Inc., shall
only  constitute payment to the Company to the extent such payments are actually
received  by  the  Company.

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

     1.     This  Reinsurance  does  not cover any loss or liability accruing to
the  Company,  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 Reinsurance does not cover any loss or liability accruing to
the  Company,  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 Reinsurance 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  Company  does  not have knowledge of such nuclear reactor power
          plant  or  nuclear  installation,  or
     (b)  where  said  insurance  contains  a  provision  excluding coverage for
          damage  to  property  caused  by  or  resulting  from  radioactive

<PAGE>
          contamination,  however  caused. However on and after 1st January 1960
          this  sub-paragraph (b) shall only apply provided the said radioactive
          contamination  exclusion  provision  has  been  approved  by  the
          Governmental  Authority  having  jurisdiction  thereof.

     4.     Without in any way restricting the operations of paragraphs (1), (2)
and  (3)  hereof,  this  Reinsurance  does  not  cover  any loss or liability by
radioactive  contamination  accruing to the Company, 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  Company  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.     Company  to  be  sole  judge  of  what  constitutes:
          (a)  substantial  quantities,  and
          (b)  the  extent  of  installation,  plant  or  site.

NOTE:  Without  in any way restricting the operation of paragraph (1) hereof, it
is  understood  and  agreed  that

          (a)  all  policies  issued  by  the Company on or before 31st December
               1957  shall  be free from the application of the other provisions
               of  this Clause until expiry date or 31st December 1960 whichever
               first  occurs  whereupon  all the provisions of this Clause shall
               apply.

          (b)  with respect to any risk located in Canada policies issued by the
               Reinsured  on or before 31st December 1956 shall be free from the
               application  of  the other provisions of this Clause until expiry
               date  or  31st December 1960 whichever first occurs whereupon all
               the  provisions  of  this  Clause  shall  apply.

<PAGE>
                       POOLS, ASSOCIATIONS AND SYNDICATES
                                EXCLUSION CLAUSE

SECTION A

Excluding:

          (a)  All  Business  derived  directly  or  indirectly  from  any Pool,
               Association  or  Syndicate  which  maintains  its own reinsurance
               facilities.

          (b)  Any  Pool or Scheme (whether voluntary or mandatory) formed after
               March  1,  1968 for the purpose of insuring property whether on a
               country-wide  basis  or  in  respect  of  designated  areas. This
               exclusion shall not apply to so-called Automobile Insurance Plans
               or other Pools formed to provide coverage for Automobile Physical
               Damage.

SECTION  B
----------

     Nevertheless  the  Reinsurer specifically agrees that liability accruing to
the  Company  from its participation in residual market mechanisms including but
not  limited  to:

(1)  The following so-called "Coastal Pools":

     Alabama  Insurance  Underwriting  Association
     Florida  Windstorm  Underwriting  Association  ("FWUA")
     Louisiana  Insurance  Underwriting  Association
     Mississippi  Windstorm  Underwriting  Association
     North  Carolina  Insurance  Underwriting  Association
     South  Carolina  Windstorm  and  Hail  Underwriting  Association
     Texas  Catastrophe  Property  Insurance  Association

                                       AND

(2)  All "Fair Plan" and "Rural Risk Plan" business

                                       AND

(1)  The Florida Property and Casualty Joint Underwriting Association
     ("FPCJUA"), the Florida Residential Property and Casualty Joint
     Underwriting Association ("RPCJUA") and the California Earthquake Authority
     (CEA).

For  all  perils  otherwise  protected  hereunder shall not be excluded, except,
however,  that  this reinsurance does not include any increase in such liability
resulting  from:

<PAGE>
     (i)  The  inability  of any other participant in such "Coastal Pool" and/or
          "Fair Plan" and/or "Rural Risk Plan" and/or Residual Market Mechanisms
          to  meet  its  liability.

     (ii) Any claim against such "Coastal Pool" and/or "Fair Plan" and/or "Rural
          Risk  Plan"  and/or  Residual  Market  Mechanisms,  or any participant
          therein,  including  the  Company,  whether  by  way of subrogation or
          otherwise,  brought by or on behalf of any insolvency fund (as defined
          in the Insolvency Fund Exclusion Clause incorporated in the Contract).

SECTION  C
----------

(1)  Notwithstanding Section B above, in respect of the CEA, where an assessment
     is  made  against  the  Company  by  the CEA, the Company may include in it
     Ultimate  Net  Loss  only  that  assessment  directly  attributable to each
     separate  loss  occurrence covered hereunder. The Company's initial capital
     contribution  to  the  CEA  shall not be included in the Ultimate Net Loss.

(2)  Notwithstanding Section B above, in respect of the FWUA, FPCJUA and RPCJUA,
     where  an  assessment  is made against the Company by the FWUA, the FPCJUA,
     the  RPCJUA,  or any combination thereof, the maximum loss that the Company
     may  include  in  the  Ultimate  Net Loss in respect of any loss occurrence
     hereunder shall  not  exceed  the  lesser  of:

     (a)  The Company's assessment from the relevant entity (FWUA, FPCJUA and/or
          RPCJUA)  for  the  accounting  year  in  which  the  loss  occurrence
          commenced,  or

     (b)  The  product  of  the  following:

          (i)  The Company's percentage participation in the relevant entity for
               the  accounting  year in which the loss occurrence commenced; and

          (ii) The  relevant  entity's  total  losses  in  such loss occurrence.

     Any  assessments  for accounting years subsequent to that in which the loss
     occurrence  commenced  may  not  be  included  in  the  Ultimate  Net  Loss
     hereunder.  Moreover,  notwithstanding  Section  B above, in respect of the
     FWUA,  the  FPCJUA and/or the RPCJUA, the Ultimate Net Loss hereunder shall
     not  include  any  monies  expended  to  purchase  or  retire  bonds  as  a
     consequence  of  being  a member of the FWUA, the FPCJUA and/or the RPCJUA.
     For  the  purposes  of  this  Contract,  the Company may not include in the
     Ultimate Net Loss any assessment or any percentage assessment levied by the

<PAGE>
     FWUA,  the FPCJUA and/or the RPCJUA to meet the obligations of an insolvent
     insurer  member or other party, or to meet any obligations arising from the
     deferment  by  the  FWUA, the FPCJUA and/or the RPCJUA of the collection of
     monies.

NOTES:     Wherever  used  herein  the  terms:

"Company"     shall be understood to mean "Company", "Reinsured", "Reassured" or
              whatever other terms is used in the attached reinsurance document
              to  designate  the  reinsured  company  or  companies.

"Agreement"    shall  be understood to mean "Agreement",  "Contract", "Policy",
               or  whatever  other  term  is  used  to  designate  the  attached
               reinsurance  document.

"Reinsurers"   shall  be  understood  to  mean  "Reinsurers", Underwriters" or
               whatever  other term is used in the attached reinsurance document
               to  designate the  reinsurer  or  reinsurers.

<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 25% of the Company's property loss under the
applicable original policy.

<PAGE>EXHIBIT 10(n)

                        QUOTA SHARE REINSURANCE AGREEMENT

                                  by and among

                         21st CENTURY INSURANCE COMPANY
                          21st CENTURY CASUALTY COMPANY

                                       and

                            BALBOA INSURANCE COMPANY.

                          Dated as of December 18, 2001

<PAGE>
                        QUOTA SHARE REINSURANCE AGREEMENT

                                      INDEX

CLAUSE                                                          ARTICLE  PAGE
------                                                          -------  ----

DEFINITIONS                                                           I     1

BUSINESS REINSURED                                                   II     3

REINSURING CLAUSE                                                   III     4

COMMENCEMENT AND EXPIRATION                                          IV     4

TERRITORY                                                             V     5

EXCLUSIONS                                                           VI     5

EXTRA CONTRACTUAL OBLIGATIONS                                       VII     6

REINSURANCE PREMIUM                                                VIII     7

REINSURANCE CEDING COMMISSION                                        IX     7

SALVAGE AND SUBROGATION                                               X     9

REPORTS, REMITTANCES AND CLAIMS                                      XI    10

OFFSET                                                              XII    12

ACCESS TO RECORDS                                                  XIII    12

ERRORS AND OMISSIONS                                                XIV    12

REINSURANCE SECURITY                                                 XV    12

INSOLVENCY                                                          XVI    13

ARBITRATION                                                        XVII    14

NOTICES                                                            XVII    16

GOVERNING LAW                                                       XIX    16

SEVERABILITY                                                         XX    17

CONFIDENTIALITY                                                     XXI    17

ENTIRE AGREEMENT, INTERPRETATION                                   XXII    17

MISCELLANEOUS                                                     XXIII    17

                                      -i-
<PAGE>

                        QUOTA SHARE REINSURANCE AGREEMENT
                        ---------------------------------

     This  AGREEMENT  is  made  and  entered  into  by and between, 21ST CENTURY
INSURANCE  COMPANY,  2LST CENTURY CASUALTY COMPANY, both of which are California
domiciled  insurance  companies  (the "COMPANY") and, BALBOA INSURANCE COMPANY a
California  insurance  company  (the  "REINSURER"),

     WHEREAS,  subject  to  the  terms of this AGREEMENT, the Company desires to
cede to the REINSURER, 100% of the INCURRED LOSSES on the BUSINESS REINSURED, as
defined  below,  arising under certain insurance policies written and renewed by
the  Company;  and

     WHEREAS,  the  REINSURER  desires to accept from the Company as reinsurance
100% of such INCURRED LOSSES on these certain policies in return for 100% of the
REINSURANCE PREMIUM, net of the REINSURANCE CEDING COMMISSION, as defined below;

     NOW  THEREFORE,  for and in consideration of the foregoing premises and the
mutual  covenants  and agreements hereinafter set forth, (the "AGREEMENT") it is
agreed  by  the  COMPANY  and  the  REINSURER  as  follows:

ARTICLE  I.     DEFINITIONS
-----------     -----------

1.   As  used  in  this  AGREEMENT,  capitalized  terms shall have the following
     meanings  (the  definitions  to  be applicable to both the singular and the
     plural  forms  of  each  term  defined  in  this  AGREEMENT):

2.   ACCIDENT  YEAR  LOSSES INCURRED shall have the meaning set forth in Article
     IX

3.   ALLOCATED LOSS ADJUSTMENT EXPENSE means all costs and expenses allocable to
     a  specific  claim  that  are incurred by the COMPANY in the investigation,
     appraisal,  adjustment,  settlement,  litigation,  defense  or  appeal of a
     specific  claim, including court costs and costs of supersede as and appeal
     bonds,  and  including legal expenses and costs incurred in connection with
     coverage  questions  and  EXTRA  CONTRACTUAL  OBLIGATIONS and legal actions
     connected  thereto  which  are  allocable  to a specific claim or action on
     POLICIES  covered  hereunder.  ALLOCATED LOSS ADJUSTMENT EXPENSE shall also
     include  a  pro  rata  share  of  salaries  and  expenses  of COMPANY field

<PAGE>
     employees,  and  expenses  of  other  COMPANY  employees  who  have  been
     temporarily diverted from their normal and customary duties and assigned to
     the  field  adjustment  of  losses covered by the COMPANY in the event of a
     loss  designated  as a catastrophic loss. ALLOCATED LOSS ADJUSTMENT EXPENSE
     does  not  include  unallocated  loss  adjustment expense. Unallocated loss
     adjustment  expense  includes,  but  is  not  limited  to, office and other
     overhead expenses and salaries and expenses of COMPANY employees, except as
     in  this  paragraph.

4.   COMPANY shall mean 21st Century Insurance Company and 21st Century Casualty
     Company.

5.   BUSINESS  REINSURED  shall  have  the  meaning  set  forth  in  Article II.

6.   EFFECTIVE  DATE shall be 12:00 A.M. Pacific Standard Time, January 1, 2002.

7.   EARNED  REINSURANCE PREMIUM shall have the meaning set forth in Article IX.

8.   EXTRA  CONTRACTUAL  OBLIGATION  shall have the meaning set forth in Article
     VII.

9.   FIRST  MANIFESTED shall mean with respect to MOLD LOSSES, the date the MOLD
     first  begins  to  appear,  grow, cause damage to property, or emit toxins,
     allergens,  irritants  vapors  or  gas  as a result of a condition or event
     occurring  prior  to  the  EFFECTIVE  DATE.

10.  GROSS NET WRITTEN PREMIUM shall have the meaning set forth in Article VIII.

11.  Incurred  Losses shall mean with respect to the BUSINESS REINSURED, subject
     to  the  terms,  conditions,  exclusions  and limitations contained in this
     AGREEMENT, all LOSSES and ALLOCATED LOSS ADJUSTMENT EXPENSES ("ALAE") first
     occurring  on  or  after the EFFECTIVE DATE, less Salvage, and Subrogation,
     provided,  however,  that any claims for LOSSES related to exposure to MOLD
     shall  be deemed to have occurred prior to the EFFECTIVE DATE if the LOSSES
     are  related  to  or resulting from a LOSS occurring prior to the EFFECTIVE
     DATE or FIRST MANIFESTED prior to the EFFECTIVE DATE and, provided further,
     that  all  LOSSES  related  to a claim of a continuing nature, or resulting
     from  continuous  or repeated exposure to substantially the same conditions
     will  be  considered  as  resulting  from  one  occurrence and if the first
     manifestation  of  the LOSS is prior to the EFFECTIVE DATE, shall be deemed
     to  have  occurred  prior  to  the  EFFECTIVE  DATE.

<PAGE>
12.  LOSSES  shall  mean  gross  amounts payable by the Company in settlement of
     claims  under  the  POLICIES  including EXTRA CONTRACTUAL OBLIGATIONS, and,
     with  respect  to  Losses  arising  from  or  related to Mold, any costs or
     expenses  associated,  in  any  way,  with  the  abatement,  mitigation,
     remediation,  containment,  detoxification,  neutralization,  monitoring,
     removal,  or disposal of Mold or property affected or contaminated by Mold.

13.  MOLD  shall  mean  any  form of fungus, fungi, mold, mushroom, microbes, or
     spores  and any substance, toxin, allergen, irritant, vapor or gas produced
     by  or  arising  out  of  any  MOLD.

14.  POLICIES  shall  have  the  meaning  set  forth  in  Article  II.

15.  REINSURANCE  CEDING  COMMISSION shall have the meaning set forth in Article
     IX.

16.  REINSURANCE  PREMIUM  shall  have  the  meaning  set forth in Article VIII.

17.  REINSURER  shall  mean  Balboa  Insurance  Company.

ARTICLE  II.     BUSINESS  REINSURED
------------     -------------------

1.   "BUSINESS REINSURED" hereunder is defined to mean:

     A.   All  policies, certificates and binders of insurance covering inforce,
          new  and  renewal business under-written and classified by the COMPANY
          as Homeowners', Condominium Owners', and Dwelling Fire policies on the
          list  of policies set forth on Exhibit I-A hereto, ("POLICIES") issued
          or  renewed  on  or  after  January 1, 2001 but prior to the EFFECTIVE
          DATE.  COMPANY  represents  and  warrants  that Exhibit 1-A sets forth
          complete  and  accurate  details  of the POLICIES reinsured hereunder;
          provided,  however,  that notwithstanding the foregoing, if and to the
          extent  that Exhibit 1-A is inaccurate, the sole remedy of the parties
          hereto  is to correct the inaccuracy in Exhibit 1-A and, as corrected,
          Exhibit  1-A  will  be  incorporated  herein.

<PAGE>
     B.   All  POLICIES  issued  or  renewed  by  the  COMPANY  on  or after the
          EFFECTIVE  DATE  through  March  31, 2002, but only to the extent that
          such POLICIES are renewals of POLICIES written by the COMPANY prior to
          the  EFFECTIVE  DATE  that,  despite its best efforts, the COMPANY has
          been  unable  to  non-renew.

ARTICLE  III.     REINSURING  CLAUSE
-------------     ------------------

1.   Subject  to  the terms, conditions, exclusions and limitations contained in
     this  AGREEMENT,  the COMPANY hereby cedes and the REINSURER hereby accepts
     as  reinsurance  of  the  COMPANY  a  100% Quota Share reinsurance, without
     limitation  as  to  the  amount of liability, of the INCURRED LOSSES of the
     COMPANY.

2.   The  REINSURER'S  liability  shall  attach  simultaneously with that of the
     COMPANY  and  shall  be  subject  in all respects to the same risks, terms,
     conditions,  interpretations,  waivers,  and  to  the  same  modification,
     alterations  and cancellations as the respective insurances of the COMPANY,
     the  true intent of this AGREEMENT being that the REINSURER shall, in every
     case  to  which this AGREEMENT applies, follow the underwriting fortunes of
     the  COMPANY.

ARTICLE  IV.     COMMENCEMENT  AND  EXPIRATION
------------     -----------------------------

1.   This  AGREEMENT  shall  incept  on the EFFECTIVE DATE and the liability and
     obligations  of  the  Reinsurer  shall  be continuous and shall, subject to
     section  IV.2,  below, remain in effect until the date on which the parties
     mutually agree (or it is judicially determined) that all obligations of the
     Reinsurer  under  this  AGREEMENT  have  been  discharged.

2.   Within  forty-five  (45)  days  after  December  31, 2003 the COMPANY shall
     provide  the  REINSURER  with a report on outstanding LOSSES. Based on said
     report  the  parties  will  in  good faith attempt to negotiate a portfolio
     transfer from the COMPANY to the REINSURER of all remaining unpaid INCURRED
     LOSSES  and  upon  entry into such a loss portfolio transfer agreement this
     AGREEMENT  shall  terminate.

<PAGE>
ARTICLE  V.     TERRITORY
-----------     ---------

1.   The  liability  of  the REINSURER shall be limited to losses under POLICIES
     covering  property  located  within  the  territorial  limits of the United
     States  of  America, its territories or possessions, including the District
     of  Columbia;  but  this limitation shall not apply to moveable property if
     the  COMPANY'S  POLICIES  provide  coverage  when said moveable property is
     outside  the  aforesaid  territorial  limits.

ARTICLE  VI.     EXCLUSIONS
------------     ----------

1.   This AGREEMENT does not apply to and specifically excludes, unless required
     by  operation  of  law  to  be  covered  by  the  COMPANY,  the  following:

     A.   Reinsurance  assumed  by  the  COMPANY.

     B.   Bodily  Injury  liability,  Property  Damage  liability  and  Medical
          Payments  business  other than as covered or required to be covered by
          POLICIES.

     C.   Nuclear  risks  as  defined  in  the  "Nuclear  Incident  Exclusion
          Clauses--Physical Damage-Reinsurance (U.S.A.)" attached to and forming
          part  of  this  AGREEMENT.

     D.   Loss or damage caused by or resulting from war, invasion, hostilities,
          acts  of foreign enemies, civil war, rebellion, insurrection, military
          or  usurped  power,  or  martial  law  or confiscation by order of any
          government  or public authority, but this exclusion shall not apply to
          loss  or  damage  covered  under a standard policy with a standard War
          Exclusion  Clause.

     E.   Loss  or  liability  excluded  under  the  provisions  of  the "Pools,
          Associations  and Syndicates Exclusion Clause" attached to and forming
          part  of  this  AGREEMENT.

     F.   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 payment or assumption by the COMPANY
          of  part or all of any claim, debt, charge, fee or other obligation of
          an  insurer,  or  its successor or assigns, which has been declared by
          any  competent authority to be insolvent, or which is otherwise deemed
          unable  to  meet  any  claim, debt, charge, fee or other obligation in
          whole  or  in  part.

<PAGE>
     G.   Pollution  and  seepage coverages excluded under the provisions of the
          "Pollution  and Seepage Exclusion Clause" attached to and forming part
          of  this  AGREEMENT.

     H.   Flood  when  written as such except for excess flood written above the
          National Flood Insurance Program limits either as part of a Homeowners
          policy  or  separately,  however  styled.

     I.   Earthquake,  landslide, subsidence or other earth movement or volcanic
          eruption,  provided,  however,  that  nothing in this Article shall be
          interpreted  as  excluding  "fire  following  earthquake".

Article VII.          EXTRA CONTRACTUAL OBLIGATIONS
------------          -----------------------------

1.   This  AGREEMENT,  to  the extent permitted by applicable law, shall protect
     the  COMPANY  for  100%  of  any  EXTRA CONTRACTUAL OBLIGATIONS relating to
     INCURRED  LOSSES.  The  term  "EXTRA CONTRACTUAL OBLIGATIONS" is defined as
     those  liabilities  resulting  from  loss  in  excess  of  the limit of the
     Company's  original policy or not covered under any other provision of this
     AGREEMENT  and  which  arise  from  the  handling  of any claim on business
     covered hereunder, 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 claims
     adjustment,  rejecting  an offer of settlement or in the preparation of the
     defense  or  in the trial of any action against its insured or reinsured or
     in the preparation or prosecution of an appeal consequent upon such action.

2.   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
     INCURRED  LOSS.

3.   However,  this Article shall not apply where the loss has been incurred due
     to  fraud  by  a member of the Board of Directors or 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.

<PAGE>
ARTICLE  VIII.     REINSURANCE  PREMIUM
--------------     --------------------

1.   The  COMPANY  shall  cede  and  pay  to  the REINSURER the Unearned Premium
     Reserve established by the Company as of December 31, 2001 for the POLICIES
     issued  prior  to  the  EFFECTIVE  DATE, less returned premium for Policies
     issued  prior  to the EFFECTIVE DATE and cancelled after the EFFECTIVE DATE
     and  100% of the Gross Net Written Premium subject to this AGREEMENT on all
     POLICIES issued on or after the Effective Date (the "REINSURANCE PREMIUM").

2.   The term "GROSS NET WRITTEN PREMIUM" as used herein means gross premiums on
     POLICIES  issued  by  the  COMPANY  after  the  EFFECTIVE DATE, less return
     premiums.

ARTICLE  IX.     REINSURANCE  CEDING  COMMISSION
------------     -------------------------------

1.   The  REINSURER  shall  allow  the  COMPANY a provisional REINSURANCE CEDING
     COMMISSION of sixteen percent (16%) on all REINSURANCE PREMIUM. The COMPANY
     shall  allow the REINSURER return commission on return premiums at the same
     rate.

2.   The  provisional REINSURANCE CEDING COMMISSION allowed the COMPANY shall be
     adjusted  periodically  in accordance with the provisions set forth herein.
     The  first  adjustment  period  shall  be  from  the EFFECTIVE DATE through
     December  31, 2002. The second and final adjustment period shall be January
     1,  2003  through  December  31,  2003.

3.   The  adjusted  REINSURANCE CEDING COMMISSION rate shall be calculated on an
     accident year basis as follows separately for each adjustment period and be
     applied  to  the  EARNED  REINSURANCE  PREMIUM  for  the  period  under
     consideration:

     A.   If  the  ratio  of  ACCIDENT  YEAR LOSSES INCURRED to EARNED REINSURED
          PREMIUM is 100% or greater, the adjusted REINSURANCE CEDING COMMISSION
          rate  for  the  period  under  consideration  shall be negative 12.8%;

     B.   If  the  ratio  of ACCIDENT YEAR LOSSES INCURRED to EARNED REINSURANCE
          PREMIUM  is  less  than  100%  but  not  less than 82.2%, the adjusted
          REINSURANCE  CEDING COMMISSION rate for the period under consideration
          shall  be  87.2%,  minus  the  actual  ratio  of  ACCIDENT YEAR LOSSES
          INCURRED  to  EARNED  REINSURANCE  PREMIUM;

<PAGE>
     C.   If  the  ratio  of ACCIDENT YEAR LOSSES INCURRED to EARNED REINSURANCE
          PREMIUM  is  less  than  82.2%  but  not less than 67.2%, the adjusted
          REINSURANCE  CEDING COMMISSION rate for the period under consideration
          shall  be  5%, plus 75% of the difference between 82.2% and the actual
          ratio  of ACCIDENT YEAR LOSSES INCURRED to EARNED REINSURANCE PREMIUM;

     D.   If  the  ratio  of ACCIDENT YEAR LOSSES INCURRED to EARNED REINSURANCE
          PREMIUM  is  less  than  67.2%  but  not less that 62.2%, the adjusted
          REINSURANCE  CEDING COMMISSION rate for the period under consideration
          shall be 16.25% and 50% of the difference between 67.2% and the actual
          ratio  of ACCIDENT YEAR LOSSES INCURRED to EARNED REINSURANCE PREMIUM.

     E.   If  the  ratio  of ACCIDENT YEAR LOSSES INCURRED to EARNED REINSURANCE
          PREMIUM  is  less  than  62.2%  but  not less than 52.2%, the adjusted
          REINSURANCE  CEDING COMMISSION rate for the period under consideration
          shall  be  16.25%,  plus  75%  of the difference between 62.2% and the
          actual  ratio  of  ACCIDENT YEAR LOSSES INCURRED to EARNED REINSURANCE
          PREMIUM.

     F.   If  the  ratio  of ACCIDENT YEAR LOSSES INCURRED to EARNED REINSURANCE
          PREMIUM is less than 52.2%, the adjusted REINSURANCE CEDING COMMISSION
          rate  for the period under consideration shall be 26.25%, plus 100% of
          the difference in percentage points between 52.2% and the actual ratio
          of  ACCIDENT  YEAR  LOSSES  INCURRED  to  EARNED  REINSURANCE PREMIUM.

4.   If the ratio of ACCIDENT YEAR LOSSES INCURRED to EARNED REINSURANCE PREMIUM
     for  any  period  is greater than 100%, the difference in percentage points
     between  the  actual  ratio  of  ACCIDENT  YEAR  LOSSES  INCURRED to EARNED
     REINSURANCE  PREMIUM  and  100%  shall  be multiplied by EARNED REINSURANCE
     PREMIUM for the period and the product shall be carried forward to the next
     adjustment  period  and  added  to  ACCIDENT  YEAR LOSSES INCURRED for that
     period.

<PAGE>
5.   Within  forty-five  (45)  days  after the end of each adjustment period The
     REINSURER  shall  calculate  and  report  the  adjusted  REINSURANCE CEDING
     COMMISSION  on EARNED REINSURANCE PREMIUM for the adjustment period. If the
     adjusted  REINSURANCE  CEDING  COMMISSION  on EARNED REINSURANCE PREMIUM is
     less  than  REINSURANCE  CEDING  COMMISSIONS  previously  allowed  by  the
     REINSURER  on  EARNED  REINSURANCE  PREMIUM  for the adjustment period, the
     COMPANY  shall  remit the difference to the REINSURER within 15 days of the
     receipt  of  the  REINSURER'S  report.  If  the adjusted REINSURANCE CEDING
     COMMISSION on EARNED REINSURANCE PREMIUM is greater than REINSURANCE CEDING
     COMMISSIONS  previously  allowed  by  the  REINSURER  on EARNED REINSURANCE
     PREMIUM  for the adjustment period, REINSURER shall remit the difference to
     the  Company within 15 days of the issuance of the report by the Reinsurer.
     Any verifications of data provided in the report will be made within the 15
     days  following  receipt  of  the  report  from  the  REINSURER.

6.   "ACCIDENT  YEAR LOSSES INCURRED" as used herein means Losses, and ALLOCATED
     LOSS  ADJUSTMENT  EXPENSE  paid  during  the  adjustment  period  under
     consideration,  plus  the reserves for LOSSES, including IBNR, and reserves
     for  ALLOCATED  LOSS  ADJUSTMENT  EXPENSE  outstanding as of the end of the
     adjustment period under consideration, plus the adjustment to ACCIDENT YEAR
     LOSSES  Incurred  from  the  preceding  adjustment  period,  if  any.

7.   "EARNED  REINSURANCE  PREMIUM"  as  used  herein  means  (i)  for the first
     adjustment  period,  the  sum  of the Unearned Premium Reserves paid to the
     REINSURER  (less returned premium) plus the premium earned during the first
     adjustment  period  by the COMPANY for POLICIES renewed after the EFFECTIVE
     DATE  and  (ii) for the second adjustment period, the premium earned during
     the  second adjustment period by the COMPANY for POLICIES renewed after the
     EFFECTIVE  DATE.

ARTICLE  X.     SALVAGE  AND  SUBROGATION
-----------     -------------------------

1.   The  REINSURER shall be credited with its proportionate share of salvage or
     subrogation  recoveries  (i.e., reimbursement actually obtained or recovery
     actually  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.

<PAGE>
ARTICLE  XI.     REPORTS,  REMITTANCES  AND  CLAIMS
------------     ----------------------------------

1.   The  COMPANY  shall pay and transfer to the REINSURER on the first Business
     Day after the EFFECTIVE DATE cash equal to the unearned premium reserves as
     of  11:59  P.M.  Pacific  Standard  Time  December 31, 2001 with respect to
     POLICIES  issued or renewed by the COMPANY prior to the EFFECTIVE DATE, net
     of  the  provisional  REINSURANCE  CEDING  COMMISSION.

2.   The  COMPANY  shall directly deposit or immediately electronically transfer
     into  a  bank  account  established  by  the REINSURER all written premiums
     received by the COMPANY with respect to POLICIES issued after the EFFECTIVE
     DATE,  net  of  the  provisional  REINSURANCE  CEDING  COMMISSION.

3.   The  COMPANY shall provide the REINSURER with monthly bordereaus of premium
     and loss information, which bordereaus will be first provided for the month
     of  January  2002  on  or  before February 10, 2002, and will thereafter be
     provided  within  10  days  after  the last day of each month after January
     2002.  Within thirty (30) days after the close of each quarter, the COMPANY
     shall  furnish  the REINSURER with a report summarizing the written premium
     ceded less return premium, LOSSES paid by the COMPANY, LOSSES reimbursed by
     or  paid  directly  by  the  REINSURER  pursuant  to  Article XI section 7,
     ALLOCATED  LOSS  ADJUSTMENT EXPENSE paid, monies recovered, the provisional
     REINSURANCE  CEDING  COMMISSION  and  net  balance  due  either  party.  In
     addition,  the  COMPANY  shall  furnish the REINSURER a quarterly statement
     showing  the  unearned  premium,  the total reserves for outstanding LOSSES
     including ALLOCATED LOSS ADJUSTMENT EXPENSE, IBNR, FAIR Plan assessments, a
     breakdown  by  Property  Claims Services catastrophic code numbers for paid
     and  outstanding  catastrophe  losses and loss adjustment expense, and such
     other information as may be required by the REINSURER for completion of its
     NAIC  annual  statements.  The  net balance shall be paid within forty five
     (45)  days  after  the  close  of  the  respective  quarter.

4.   All  reports  required  to  be  provided  by  the  COMPANY to the REINSURER
     pursuant  to  this  Article XI, shall be provided (i) electronically to the
     e-mail  address  set  forth  in  Article  XVIII, and (ii) with a paper copy
     delivered  to  the  REINSURER  by  overnight  delivery  or  express  mail.

<PAGE>
5.   The COMPANY shall adjust, settle or compromise all LOSSES arising under the
     POLICIES. All such adjustments, settlements or compromises shall be binding
     upon  the  REINSURER.

6.   The  COMPANY  will  immediately advise the REINSURER of all large losses by
     issuing  a  large loss notice and of all lawsuits involving (a) allegations
     of bad faith, extra contractual claims or claims in excess of policy limits
     or for liability indemnity, or (b) declaratory relief actions. For purposes
     of this section, large losses means any claim or LOSS for which the COMPANY
     makes a payment (individually or in the aggregate) or establishes a reserve
     in  excess  of  $25,000.

7.   Should  payment  due from the REINSURER exceed $250,000 as respects any one
     loss,  the  COMPANY  may  give  the REINSURER notice of payment made or its
     intention  to  make  payment on a certain date. If the COMPANY has paid the
     loss,  payment  shall  be made by the REINSURER immediately. If the COMPANY
     intends  to pay the loss by a certain date and has submitted a satisfactory
     proof  of loss or similar document, payment shall be due from the REINSURER
     twenty-four  (24)  hours  prior  to that date, provided the REINSURER has a
     period  of  five  (5) working days after receipt of said notice to dispatch
     the  payment.  Cash  loss amounts specifically remitted by the REINSURER as
     set  forth  herein  shall  be  credited  to  its  next  quarterly  account.

8.   With respect to all claims, suits and proceedings relating to the POLICIES,
     the  COMPANY will afford the Reinsurer an opportunity to be associated with
     the COMPANY in the defense or control of any such claim, suit or proceeding
     at  the  REINSURER'S  expense,  and  the  REINSURER  and  the COMPANY shall
     cooperate  in  every  respect  in  the  defense  of  such  suit,  claim, or
     proceeding,  provided further, that in the event the ratio of ACCIDENT YEAR
     LOSSES  INCURRED to EARNED REINSURANCE PREMIUM has exceeded or is likely to
     exceed  100%,  the  REINSURER,  at its own expense, shall have the right to
     become  directly  involved  in  the  administration  of  claims  and  claim
     settlement  decisions,  including the right to have counsel of its choosing
     actively  participate  in,  inter  alia, all court proceedings, alternative
     dispute  resolution  processes  and  settlement  discussions.

<PAGE>
ARTICLE  XII.     OFFSET
-------------     ------

1.   Each party hereto shall have, and may exercise at any time and from time to
     time,  the  right  to offset any undisputed balance or balances, whether on
     account  of  premiums  or  on account of LOSSES or otherwise, due from such
     party  to  the  other  party hereto under this AGREEMENT or under any other
     reinsurance  agreement  heretofore or hereafter entered into by and between
     them,  and  may  offset the same against any undisputed balance or balances
     due  to  the former from the latter under the same or any other reinsurance
     contract  between  them,  and the party asserting the right of offset shall
     have and may exercise such right whether the undisputed balance or balances
     due  to  such party from the other are on account of premiums or on account
     of  LOSSES and regardless of the capacity, whether as assuming insurer or a
     ceding  insurer,  in  which each party acted under the contract or, if more
     than one, the different contracts involved, provided, however, that, in the
     event of the insolvency of a party hereto, offsets shall only be allowed in
     accordance with the applicable provisions of the Insurance Law of the State
     of  California.

ARTICLE  XIII.     ACCESS  TO  RECORDS
--------------     -------------------

1.   The  REINSURER,  or  its  duly  authorized  representative, shall have free
     access  at  all  reasonable  times  during  and  after the currency of this
     AGREEMENT,  to  books  and  records  maintained  by  any  of  the division,
     department  and  branch  offices  of  the COMPANY which are involved in the
     subject  matter  of  this  AGREEMENT  and  which pertain to the reinsurance
     provided  hereunder  and  all  claims  made  in  connection  therewith.

ARTICLE  XIV.     ERRORS  AND  OMISSIONS
-------------     ----------------------

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

ARTICLE  XV.          REINSURANCE  SECURITY
------------          ---------------------

1.   To  the  extent  that security is required in order to allow the COMPANY to
     obtain  financial  statement  credit  under  this  AGREEMENT, the REINSURER
     shall,  at  its  expense  assure  that  adequate  security  satisfying  the
     insurance  laws  of  the  state  of California is provided. The security so
     provided shall be adjusted quarterly to equal the unearned premium reserve,
     Incurred  Loss  and  ALLOCATED  LOSS ADJUSTMENT EXPENSE reserves, including
     incurred  but  not  reported  losses.

<PAGE>
ARTICLEXVI.          INSOLVENCY
-----------          ----------

1.   In  the  event  of  insolvency  and  the  appointment  of  a  conservator,
     liquidator, or statutory successor of the COMPANY, the portion. of any risk
     or obligation assumed by the REINSURER shall be payable to the conservator,
     liquidator,  or  statutory successor on the basis of claims allowed against
     the  COMPANY  by any court of competent jurisdiction or by any conservator,
     liquidator, or statutory successor of the COMPANY having authority to allow
     such  claims, without diminution because of that insolvency, or because the
     conservator,  liquidator, or statutory successor has failed to pay all or a
     portion  of  any  claims.  Payment  by  the  REINSURER as set forth in this
     Article  shall  be  made  directly  to  the  COMPANY or to its conservator,
     liquidator,  or  statutory  successor,  except  where  this  AGREEMENT
     specifically provides another payee of such reinsurance in the event of the
     insolvency  of  the  COMPANY.

2.   The  conservator,  liquidator,  or statutory successor of the COMPANY shall
     give  written  notice  of  the  pendency  of  a  claim  against the COMPANY
     indicating  the policy reinsured, within a reasonable time after such claim
     is  filed. During the pendency of such claim, the REINSURER may investigate
     said claim and interpose, at the REINSURER'S own expense, in the proceeding
     where  such claim is to be adjudicated, any defense or defenses that it may
     deem  available  to  the  COMPANY  or  to  its  conservator, liquidator, or
     statutory  successor.  The  expense thus incurred by the REINSURER shall be
     payable,  subject  to  court  approval, out of the estate of the COMPANY as
     part  of the expense of conservation or liquidation to the extent that such
     proportionate  share  of  the  benefit  shall  accrue  to  the  COMPANY  in
     conservation  or  liquidation, solely as a result of the defense undertaken
     by  the  REINSURER.

<PAGE>
ARTICLE  XVII.          ARBITRATION
--------------          -----------

1.   Any  and  all  disputes  or  differences  arising  out  of  this AGREEMENT,
     including  its  formation  and  validity,  shall  be  submitted  to binding
     arbitration.  Any  arbitration  shall  be based upon the Procedures for the
     Resolution  of U.S. Insurance and Reinsurance Disputes dated September 1999
     (the  "Procedures")  (which  are  attached  hereto  as  Exhibit XVII-l), as
     supplemented  by  the  paragraphs  below.

2.   The  Panel  shall  consist  of  three  disinterested arbitrators, one to be
     appointed  by the Petitioner, one to be appointed by the Respondent and the
     third  to  be  appointed  by the two Party-appointed arbitrators. The third
     arbitrator shall serve as the umpire, who shall be neutral. The arbitrators
     and  umpire  shall  be  persons  who  are  current  or  former  officers or
     executives  of  an  insurer  or  reinsurer.  Within  thirty  days  of  the
     commencement  of  the arbitration proceeding (or, if applicable, the longer
     period  provided  in paragraph E below), each Party shall provide the other
     Party with the identification of its Party-appointed arbitrator, his or her
     address  (including  telephone,  fax and e-mail information), and provide a
     copy of the arbitrator's curriculum vitae. If either Party fails to appoint
     an  arbitrator within that thirty-day period (or applicable longer period),
     the  non-defaulting  Party  shall  appoint  an  arbitrator  to  act  as the
     Party-appointed  arbitrator  for  the defaulting Party. The umpire shall be
     appointed  by the two Party-appointed arbitrators as soon as practical (but
     no  later than 30 days) after the appointment of the second arbitrator. The
     Party-appointed  arbitrators may consult, in confidence, with the Party who
     appointed  them  concerning  the  appointment  of  the  umpire.

3.   Where the two Party-appointed arbitrators have failed to reach agreement on
     an  umpire  within  the  time  specified  in  paragraph B, each Party shall
     propose  to  the  other  in writing, within 7 days thereafter, eight umpire
     candidates  from  the ARIASU.S. Certified Arbitrators List in effect at the
     time  of  the  commencement  of  the  arbitration. The umpire shall then be
     selected  in  accordance  with  6.7(b)-(e)  of  the Procedures. (Unless the
     Parties  agree otherwise, the ARIASU.S. Umpire Questionnaire Form in effect
     at  the  time  of  the  commencement  of  the  arbitration  shall be used.)

4.   The  arbitration  shall  take  place  in  Woodland  Hills,  California.

<PAGE>
5.   If  the  COMPANY  and  more  than  one  REINSURER  are involved in the same
     dispute(s)  or difference(s) arising out of this AGREEMENT, and the COMPANY
     requests  consolidated  arbitration  with  those  REINSURERS  in an initial
     Notice  of  Arbitration or Response, then those REINSURERS shall constitute
     and  act as one Party for purposes of the arbitration and thus shall select
     a  single  Party-appointed  arbitrator among them. (If the COMPANY requests
     consolidation  in  a  Response, then (i) that Response shall be appended to
     the  COMPANY'S  Notice of Arbitration to the additional REINSURER(s) joined
     in  the proceeding, (ii) any arbitral appointment made before that Response
     shall  be  of  no  effect,  and  (iii)  the  Reinsurers  shall select their
     arbitrator  within  30  days  of  their  receipt  of  those pleadings.) For
     purposes  of  this  paragraph, any instance in which two or more REINSURERS
     have  not paid their proportional shares of the same balance claimed due by
     the  COMPANY  shall  be  deemed  to  involve  the  "same  dispute(s)  or
     difference(s)  arising out of this AGREEMENT." Communications shall be made
     by the COMPANY to each of the REINSURERS constituting one Party. Nothing in
     this  paragraph  shall  impair  the  rights of REINSURERS to assert several
     rather  than  joint  defenses  or claims, change their liability under this
     AGREEMENT  from several to joint, or impair their rights to retain separate
     counsel  in  connection  with  the  arbitration.

6.   Unless prohibited by law, the Superior Court of the State of California and
     the  United  States  District Court for the Southern District of California
     shall  have  exclusive jurisdiction over any and all court proceedings that
     either  Party  may  initiate  in connection with the arbitration, including
     proceedings  to  compel, stay, or enjoin arbitration or to confirm, vacate,
     modify,  or  correct  an  Arbitration  Award.

7.   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.

8.   For  purposes  of  this  Article,  the  terms  "Arbitration  Award,"
     "Disinterested,"  "Notice of Arbitration," "Panel," "Party" (or "Parties"),
     "Petitioner,"  "Respondent,"  and  "Response"  shall  have the meanings set
     forth  in  article  2  of  the  Procedures  (Definitions).

9.   In  the event of any conflict between the Procedures and this Article, this
     Article,  and  not  the  Procedures,  shall  control.

<PAGE>
10.  This  Article  shall  survive  the  termination  of  this  Agreement.

ARTICLE  XVIII.     NOTICES
---------------     -------

1.   Any  notice  or  other  communication  required  or  permitted  under  this
     AGREEMENT shall be in writing and shall be delivered personally, or sent by
     certified,  registered  or  express  mail, postage prepaid. Any such notice
     shall  be  deemed given when so delivered personally, or, if mailed, on the
     date  of  receipt  as  follows:

          A.   if  to  the  COMPANY  to:

               21st  Century  Insurance  Company
               6301  Owensmouth  Avenue
               Woodland  Mills,  California  91367
               Attention:  General  Counsel

          B.   if  to  the  Reinsurer  to:

               Balboa  Insurance  Company
               18581  Teller  Avenue
               Irvine,  California  92612-1627
               ATTENTION:  General  Counsel

2.   All  reports  that  are  required  to  be electronically transmitted by the
     COMPANY  to  REINSURER  pursuant  to Article XI shall be transmitted to the
     following  e-mail  addresses:

          betsy_white@balboainsurance.com
          and  nick_lannutti@countrywide.com
               -----------------------------

3.   By  notice  given  in  accordance with this Article to the other party, any
     party may designate another address or person or e-mail address for receipt
     of  notices  or  reports  hereunder.

ARTICLE  XIX.     GOVERNING  LAW
-------------     --------------

1.   This  AGREEMENT  shall  be governed by and construed in accordance with the
     laws  of  the  State  of  California.

<PAGE>
ARTICLE  XX.     SEVERABILITY
------------     ------------

1.   If  any  provision  of  this  AGREEMENT  shall  be  rendered  illegal  or
     unenforceable  by the laws, regulations or public policy of any state, such
     provision shall be considered void in such state, but this shall not affect
     the  validity or enforceability of any other provision of this AGREEMENT or
     the  enforceability  of  such  provision  in  any  other  jurisdiction.

ARTICLE  XXI.     CONFIDENTIALITY
-------------     ---------------

1.   All terms and conditions of this AGREEMENT and any material provided in the
     course of inspection shall be kept confidential by the REINSURER as against
     third parties, unless the disclosure is required pursuant to process of law
     or  unless  the  disclosure  is to REINSURER'S retrocessionaires, financial
     auditors  or  governing  regulatory  bodies.  Disclosing  or  using  this
     information  for  any purpose beyond the scope of this AGREEMENT, or beyond
     the  exceptions  set  forth above, is expressly forbidden without the prior
     consent  of  the  COMPANY.

ARTICLE  XXII.     ENTIRE  AGREEMENT,INTERPRETATION
-------------      --------------------------------

1.   With  respect  to  the  BUSINESS  REINSURED  hereunder,  (i) this AGREEMENT
     constitutes the entire agreement between the parties, and (ii) there are no
     understandings or agreements between the parties other than those expressed
     in this AGREEMENT. Any change to or modification of this AGREEMENT shall be
     made  by  written  amendment  to  this  AGREEMENT and signed by the parties
     hereto.

2.   This AGREEMENT is between sophisticated parties, each of which has reviewed
     the  AGREEMENT  and  is fully knowledgeable about its terms and conditions.
     The  parties therefore agree that this AGREEMENT shall be construed without
     regard  to  the  authorship  of the language and without any presumption or
     rule  of  construction  in  favor  of  either  of  them.

ARTICLE  XXIII.          MISCELLANEOUS
---------------          -------------

1.   This  AGREEMENT:

     A.   may  be  executed in counterparts (or by counterpart signature pages),
          each  of which shall be deemed an original and all of which constitute
          one  and  the  same  instrument;

<PAGE>
     B.   is  not  intended  to  confer any rights upon any party other than the
          parties  hereto  and  their  respective  successors  and  assigns; and

     C.   shall  be  binding upon and inure to the benefit of the parties hereto
          and  their  respective  successors  and  assigns.

     IN  WITNESS  WHEREOF,  the  parties hereto have caused this AGREEMENT to be
executed  by  their  duly  authorized  representatives.

Signed  at  WOODLAND  HILLS,  CALIFORNIA

                         21ST CENTURY INSURANCE COMPANY
                         21ST CENTURY CASUALTY COMPANY

Signature:  /s/    Douglas  K.  Howell
                   -------------------
                   Douglas  K.  Howell
                   Senior  Vice  President  &  Chief  Financial  Officer

Attest:   /s/      Michael  J.  Cassanego     Date:  December  18,  2001
                   ----------------------
                   Michael  J.  Cassanego
                   Senior  Vice  President,  Secretary  &  General  Counsel

Signed  at  IRVINE,  CALIFORNIA

BALBOA  INSURANCE  COMPANY

Signature:  /s/    Patrick  Driscoll
                   -----------------
                   Patrick  Driscoll
                   Executive  Vice  President

Attest:     /s/    Robert P. Barbarowicz          Date: December 18, 2001
                   ---------------------
                   Robert P. Barbarowicz
                   Executive  Vice  President  &  Secretary

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

     1.     This  Reinsurance  does  not cover any loss or liability accruing to
the  COMPANY,  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 Reinsurance does not cover any loss or liability accruing to
the  COMPANY,  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

          V.   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 Reinsurance 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  COMPANY  does  not have knowledge of such nuclear reactor power
          plant  or  nuclear  installation,  or

     (b)  where  said  insurance  contains  a  provision  excluding coverage for
          damage  to  property  caused  by  or  resulting  from  radioactive
          contamination,  however  caused. However on and after 1st January 1960

<PAGE>
          this  sub-paragraph (b) shall only apply provided the said radioactive
          contamination  exclusion  provision  has  been  approved  by  the
          Governmental  Authority  having  jurisdiction  thereof.

     4.     Without in any way restricting the operations of paragraphs (1), (2)
and  (3)  hereof,  this  Reinsurance  does  not  cover  any loss or liability by
radioactive  contamination  accruing to the COMPANY, 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  COMPANY  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.     COMPANY  to  be  sole  judge  of  what  constitutes:
          (a)  substantial  quantities,  and
          (b)  the  extent  of  installation,  plant  or  site.

NOTE:     Without  in any way restricting the operation of paragraph (1) hereof,
it  is  understood  and  agreed  that

          (a)  all  POLICIES  issued  by  the COMPANY on or before 31st December
               1957  shall  be free from the application of the other provisions
               of  this Clause until expiry date or 31st December 1960 whichever
               first  occurs  whereupon  all the provisions of this Clause shall
               apply.

          (b)  with respect to any risk located in Canada POLICIES issued by the
               Reinsured  on or before 31st December 1958 shall be free from the
               application  of  the other provisions of this Clause until expiry
               date  or  31st December 1960 whichever first occurs whereupon all
               the  provisions  of  this  Clause  shall  apply.

<PAGE>
                       POOLS, ASSOCIATIONS AND SYNDICATES
                                EXCLUSION CLAUSE

     SECTION A

Excluding:

          (a)  All  Business  derived  directly  or  indirectly  from  any Pool,
               Association  or  Syndicate  which  maintains  its own reinsurance
               facilities.

          (b)  Any  Pool or Scheme (whether voluntary or mandatory) formed after
               March  1,  1968 for the purpose of insuring property whether on a
               country-wide  basis  or  in  respect  of  designated  areas. This
               exclusion shall not apply to so-called Automobile Insurance Plans
               or other Pools formed to provide coverage for Automobile Physical
               Damage.

     SECTION B

Nevertheless  the  REINSURER  specifically agrees that liability accruing to the
COMPANY  from  its participation in residual market mechanisms including but not
limited  to:

(1)  The  following  so-called  "Coastal  Pools":

     Alabama  Insurance  Underwriting  Association
     Florida  Windstorm  Underwriting  Association  ("FWUA")
     Louisiana  Insurance  Underwriting  Association
     Mississippi  Windstorm  Underwriting  Association
     North  Carolina  Insurance  Underwriting  Association
     South  Carolina  Windstorm  and  Hail  Underwriting  Association
     Texas  Catastrophe  Property  Insurance  Association

                                     a. AND

(2)  All  "Fair  Plan"  and  "Rural  Risk  Plan"  business

                                     b. AND

(3)  The  Florida  Property  and  Casualty  Joint  Underwriting  Association
     ("FPCJUA"),  the  Florida  Residential  Property  and  Casualty  Joint
     Underwriting Association ("RPCJUA") and the California Earthquake Authority
     (CEA).

For  all  perils  otherwise  protected  hereunder shall not be excluded, except,
however,  that  this reinsurance does not include any increase in such liability
resulting  from:

     (i)  The  inability  of any other participant in such "Coastal Pool" and/or
          "Fair Plan" and/or "Rural Risk Plan" and/or Residual Market Mechanisms
          to  meet  its  liability.

<PAGE>
     (ii) Any claim against such "Coastal Pool" and/or "Fair Plan" and/or "Rural
          Risk  Plan"  and/or  Residual  Market  Mechanisms,  or any participant
          therein,  including  the  COMPANY,  whether  by  way of subrogation or
          otherwise,  brought by or on behalf of any insolvency fund (as defined
          in  the  Insolvency  Fund  Exclusion  Clause  incorporated  in  the
          AGREEMENT).

     SECTION C

(l)  Notwithstanding Section B above, in respect of the CEA, where an assessment
     is  made  against  the  COMPANY  by  the CEA, the COMPANY may include in it
     Ultimate  Net  Loss  only  that  assessment  directly  attributable to each
     separate  loss  occurrence covered hereunder. The COMPANY'S initial capital
     contribution  to  the  CEA  shall not be included in the Ultimate Net Loss.

(2)  Notwithstanding Section B above, in respect of the FWUA, FPCJUA and RPCJUA,
     where  an  assessment  is made against the COMPANY by the FWUA, the FPCJUA,
     the  RPCJUA,  or any combination thereof, the maximum loss that the COMPANY
     may  include  in  the  Ultimate  Net Loss in respect of any loss occurrence
     hereunder  shall  not  exceed  the  lesser  of:

     (a)  The COMPANY'S assessment from the relevant entity (FWUA, FPCJUA and/or
          RPCJUA)  for  the  accounting  year  in  which  the  loss  occurrence
          commenced,  or

     (b)  The  product  of  the  following:

          (i)  The COMPANY'S percentage participation in the relevant entity for
               the  accounting  year in which the loss occurrence commenced; and

          (ii) The  relevant  entity's  total  LOSSES  in  such loss occurrence.

     Any  assessments  for accounting years subsequent to that in which the loss
     occurrence  commenced  may  not  be  included  in  the  Ultimate  Net  Loss
     hereunder.  Moreover,  notwithstanding  Section  B above, in respect of the
     FWUA,  the  FPCJUA and/or the RPCJUA, the Ultimate Net Loss hereunder shall
     not  include  any  monies  expended  to  purchase  or  retire  bonds  as  a
     consequence  of  being  a member of the FWUA, the FPCJUA and/or the RPCJUA.
     For  the  purposes  of  this  AGREEMENT, the COMPANY may not include in the
     Ultimate Net Loss any assessment or any percentage assessment levied by the
     FWEJA, the FPCJUA and/or the RPCJUA to meet the obligations of an insolvent
     insurer  member or other party, or to meet any obligations arising from the
     deferment  by  the  FWUA, the FPCJUA and/or the RPCJUA of the collection of
     monies.

<PAGE>
NOTES:     Wherever used herein the terms:

"COMPANY"           shall  be  understood  to  mean  "COMPANY",  "Reinsured",
                    "Reassured"  or whatever other terms is used in the attached
                    reinsurance  document  to designate the reinsured COMPANY or
                    companies.

"AGREEMENT"         shall  be  understood  to  mean  "AGREEMENT",  "Contract",
                    "Policy",  or  whatever  other term is used to designate the
                    attached  reinsurance  document.

"REINSURERS"        shall be understood to mean  "REINSURERS", Underwriters" or
                    whatever  other  term  is  used  in the attached reinsurance
                    document  to  designate  the  reinsurer  or  reinsurers.

<PAGE>
                     POLLUTION AND SEEPAGE EXCLUSION CLAUSE

This  AGREEMENT 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  25%  of the COMPANY'S property loss under the
applicable  original  policy.

<PAGE>

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