Document:

Service Contract

 Exhibit 10.11 
 SERVICE CONTRACT FOR 
 HOMEOWNERS CLAIMS HANDLING 
 THIS SERVICE CONTRACT FOR HOMEOWNERS CLAIMS HANDLING is made and entered into this 30th day of May, 2007, but is effective for all purposes as of the 1st day of July,
2007, by and between HOMEOWNERS CHOICE MANAGERS, INC., (herein after referred to as the “Client”), and JOHNS EASTERN COMPANY, INC. (hereinafter referred to as the “Service Agent”). 
 This contract supersedes all previous agreements between Client and Service Agent. 
 WITNESSETH: 
 WHEREAS, the Client has undertaken to provide homeowners insurance in accordance with Florida Law and other applicable
statutes and regulations; and 
 WHEREAS, the Service Agent is engaged in providing the claims programs administration for homeowners claims;

 WHEREAS, the Client desires to engage the Service Agent for, and the Service Agent desires to assist the Client in homeowners claims
handling; 
 NOW, THEREFORE, for and in consideration of the premises and of the mutual obligations, performance of services, and payment of
compensation set forth herein, the parties agree as follows: 
 DEFINITIONS Where used in this Agreement: 
 Catastrophe claims shall mean losses, occurring during any period of 96 consecutive hours, resulting from a single event (i.e. Hurricane and/or Tropical Storm).

 Services shall mean those services provided hereunder by Service Agent which are further defined in Addendum A and Addendum B, attached hereto and
incorporated by reference. 
 1. Engagement. The Client hereby engages the Service Agent to supervise and administer the Homeowners Claims Program of the
Client in accordance with the applicable rules, regulations, and laws of the State of Florida, all in accordance with the Service Agent’s Addendum A and Addendum B, copies of which are attached hereto and incorporated herein by this reference
(the “Proposal”). 
 2. Term. Subject to termination pursuant to Paragraph 8, the term of this Agreement shall begin as of July 1,2007 and
shall terminate on December 31,2009, provided, however, that this Agreement shall renew automatically for two additional one-year terms unless otherwise terminated. 

 3. Fund for Payment of Claims. The Client has the sole obligation and responsibility for funding the payment of claims.
The Service Agent assumes no duty to fund any such claims at any time and shall have no obligation to advance funds for any such payment. The Client agrees to maintain all necessary funds for payment of claims and to inform the Service Agent of all
relevant details with respect to any such accounts in order for the Service Agent to perform its duties under this Agreement. 
 4. Allocated Claims
Expenses. “Allocated Claims Expenses” shall be defined as expenses arising in connection with the settlement of claims, which shall be defined as expenses directly allocated to a particular claim to be discharged from the accounts funded
by the Client specified in Paragraph 3, including, but not limited to: 
 a. Attorneys’ and legal assistants’ fees for claim and any lawsuits,
before and at trial, on appeal, or otherwise; 
 b. Court and other litigation and settlement expenses, including, without limitation: 
 (i) Medical examinations to determine extent of liability; 
 (ii) Expert
medical and other testimony; 
 (iii) Laboratory, X-ray and other diagnostic tests; 
 (iv) Autopsy, surgical reviews, and other pathology services; 
 (v) Physician and related fees and expenses in reading,
interpreting, or performing any of the foregoing tests or services; 
 (vi) Stenographer, process server, and other related trial preparation, trial,
settlement, and court costs; 
 (vii) Witnesses fees and expenses before and at trial, deposition, settlement discussions, or otherwise; and 
 c. Fees and expenses for surveillance, private investigators, and other outside experts. 
 d. Fees for the indexing of injured claimants. 
 e. Fees for over-night or special mail service for various documents.

 f. Photocopying and review of relevant documentation. 
 g.
Fees and expenses for engineers, industrial hyginess, and other outside experts necessary to properly investigate and settle property claims. 

 h. Fees and expenses for field adjusters necessary to perform field adjustment activities for catastrophe and
non-catastrophe exposures with dates of loss from January 1, 2008 through December 31,2009. 
 5. Compensation for the Service Agent, For
performing its services under this Agreement, the Service Agent shall be entitled to the following compensation: 
 See
Addendum A (Non-CAT Claims Services Agreement) 
 See Addendum B (Catastrophe Claims Services Agreement) 
 Notwithstanding anything in this Paragraph 5 to the contrary, the Client agrees to bear the cost of printing checks in connection with the payment of claims or otherwise
under this Agreement. 
 6. Continuing Handling of Claims After Termination of Contract or Legally Imposed Mandates. Upon termination of this Agreement as
set forth in paragraph 8, the Service Agent agrees to return all claims that have been made and reported to it prior to such date of termination immediately to the Client unless the parties have agreed otherwise in writing. 
 Upon contract termination, client data will be provided to the new Service Agent either by a series of attachments to one or more email messages containing zip files
which can be password-protected or via CD ROMS. The claim files may exist as paper files and will be shipped as such. If the claim files are stored as images in a document retrieval system, they will be provided via CD ROM or the most current means
of providing data. The cost for this will be no greater than $3,500.00. The Client will be billed for any additional programming to help in data transfer. 
 Not withstanding any provision herein to the contrary, in no event shall either Party be liable for any indirect, incidental, special, consequential, punitive or exemplinary damages, including, without limitations, damages for loss of
profits, data or use, incurred by any Party whether in an action in contract or tort, even if the other Party has been advised of the possibilities of such damages. 
 7. Dispute Resolution. Except as otherwise expressly provided herein, any dispute between Client and Service Agent arising out of or relating to this Agreement shall be resolved in accordance with this
Section 7 and its subsections. 
 (i) Upon the initial occurrence of a dispute under this Agreement, the senior management
(“Executive Relationship Managers”) of Service Agent and Client shall negotiate in good faith the resolution of any dispute in an effort to resolve such dispute within twenty (20) business days of Client or Service Agent, as the case
may be, notifying the other party of any such dispute. In the event the Executive Relationship Managers of the parties to the dispute are unable to resolve a dispute within such twenty (20) business day period, any of the parties to the dispute
shall be entitled to commence arbitration as stated below; provided, however, that if a dispute cannot be resolved by the Executive Relationship Managers of the parties to the dispute, the proceedings occurring pursuant to this Section and its
subsections shall have been without prejudice to the legal positions of the parties to the dispute. 

 (ii) Any dispute arising out of this Agreement which shall not be settled by the parties using the
dispute resolution procedure described above shall be resolved by binding arbitration under the then current commercial arbitration rules of the American Arbitration Association in the State of Florida, before a single arbitrator who shall not be,
nor have been, an employee, officer, director or agent of any party, or any of their respective Affiliates and who is: (i) agreeable to the Executive Relationship Managers of the parties to the dispute, or (ii) if the Executive
Relationship Managers of the parties to the dispute cannot agree on an arbitrator within fifteen (15) business days after a demand for arbitration has been request in writing by any of them, appointed by the Florida office of the American
Arbitration Association under its then-current commercial arbitration rules (such Person, the “Arbitrator”). The Arbitrator shall have experience in the commercial insurance industry and shall be either a business executive or a lawyer who
has participated previously in arbitration or dispute resolution proceedings. Any arbitration shall consist of not more than three (3) days of hearings all of which shall occur within thirty (30) days after the Arbitrator has been
selected. The Arbitrator shall issue a written decision with findings of fact and reason for his (her) decision within one (1) week after the final hearing date. The arbitration award shall be specifically enforceable, and judgment upon
any award rendered pursuant to the arbitration may be entered in any court with jurisdiction over the parties and subject matter of the dispute; provided, however, that the parties stipulate that the United States District Court for the State of
Florida and the Supreme Court of the State of Florida, each sitting in the State of Florida, are courts of competent jurisdiction for this purpose. The Arbitrator shall apply the substantive law of the State of Florida to the merits of any dispute
or claim. The parties agree that, any provision of Applicable Law notwithstanding, they will not request, and the Arbitrator shall have no authority to award, punitive or exemplary damages against any party or any damages not otherwise recoverable
pursuant to this Agreement. The costs of the arbitration, including administrative and Arbitrator’s fees, shall be shared equally by the parties. Each party shall bear the cost of its own attorney’s fees and expert witness fees.

 (iii) Notwithstanding any other provision of this Section and its subsections, any party may seek injunctive relief (temporary,
preliminary and/or permanent) in a court of law for any breach by a party of its payment obligations hereunder or any breach of a party’s obligation with respect to Confidential Information, in each case, pursuant to the terms thereof;
provided, that the parties stipulate that the United States District Court of the State of Florida and the Supreme Court of the State of Florida, each sitting in the State of Florida, are courts of competent jurisdiction for this purpose.

 (iv) All applicable statutes of limitation shall be tolled while the procedures specified in this Section and its subsections are pending.
The parties shall take such action, if any, required to effectuate such tolling. 
 8. Termination. This Agreement may be terminated by either the Client or
the Service Agent by giving prior written notice of ninety (90) days. In the event of such termination, compensation paid or payable to Service Agent under Paragraph 5 shall be prorated as 

 
appropriate. Notwithstanding anything in this Paragraph 8 to the contrary, the insolvency or filing for relief from creditors of any party pursuant to the
United States bankruptcy Code or the material breach of a material provision of this Agreement by any party shall permit the other party to cancel this Agreement immediately upon written notice. 
 9. Covenants of the Service Agent and the Client: The Service Agent and the Client each agrees to use its normal and ordinary professional care and diligence in the
performance of its duties under this Agreement and will use its best efforts to comply at all times with the Law of the State of Florida. 
 10.
Indemnification. Each party agrees to indemnify and hold harmless the other and its directors, officers, employees, stockholders, and agents against any and all claims, lawsuits, settlements, judgments, costs, penalties, and expenses, including,
without limitation, attorneys’ and legal assistants’ fees before and at trial, on appeal, or otherwise, resulting from the breach of, or negligence or misconduct in performing, any provision of this Agreement, by such party or by its
directors, officers, employees, stockholders or agents, whether acting alone or in collusion with others. 
 Client agrees to provide an answer and to defend
Service Agent in any lawsuits involving claims handled by the Service Agent for the Client unless the complaint alleges specific acts of negligence on the part of the Service Agent. A general statement in the complaint that the Service Agent handled
the claim improperly is not considered a specific act of negligence. 
 11. Service Agent and Client mutually agree that, during the previous Agreement, and
for the period of one year thereafter, they will not solicit for employment, or employ, any of each others employees contracted on the performance of this Agreement. 
 12. “Confidential Information”, as used herein, shall mean any materials, data, information and documents disclosed by either party or their affiliates, (whether transmitted orally, in writing, or through
any electronic medium) or generated in connection with the services of this Agreement which relate to the business, business activities, business operations, customer data or proprietary trade secrets. Confidential Information may include, but not
be limited to, (i) trade secrets and work product, (ii) information relating to business plans, sales, pricing, financial data, or marketing plans or methods, (iii) software, applications, and systems, including source code, object
code and documentation and commentary related thereto, (iv) information relating to one or more customers, including, but not limited to: (a) personal information such as a customer’s name, address, telephone number, account
relationships, account numbers, account balances, and account histories; (b) information concerning such customers which would be considered “non-public personal information” within the meaning of Title V of the Gramm-Leach Bliley Act
of 1999 (Public Law 106-102, 113 Stat. 1338) and its implementing regulations, as the same may be amended from time to time; (c) information concerning such customers which would be considered “individually identifiable health
information” within the meaning of the Health Insurance Portability and Accountability Act; and (d) information concerning such customers which is protected from disclosure by other applicable federal or state laws and regulations
regarding privacy; (e) confidential information of third parties in either party’s possession, and (f) security procedures and measures (collectively and separately the “Confidential 

 
Information”). Confidential Information shall remain the property of the disclosing party and the recipient shall not be deemed by virtue of this
Agreement or by any access to Confidential Information to have acquired any right or interest of any kind in or to any such Confidential Information. Each party represents and warrants that it shall not use the other party’s Confidential
Information for its benefit, nor shall it disclose Confidential Information to any third parties, other than persons specifically authorized in writing, or as may be required by order of a court of competent jurisdiction, a governmental agency or by
operation of law. 
 Notwithstanding the foregoing, “Confidential Information” shall not include information, which is disclosed to a party by
third parties not under a confidentiality obligation, or information, which is public information, or information known by a party prior to the effective date of this Agreement and for which such party is not under a separate confidentiality
obligation. 
 13. Client will report to and advise its reinsurers if any, in accordance with the terms of the policies with its carriers. Reporting to
reinsurers will not be the responsibility of Service Agent. In addition, Client will make all required state and federal reports and filings. Client further agrees that Service Agent shall have no obligation to make any such reports or filings on
behalf of or instead of, Client. 
 14. Mold Adjustments. Service Agent will provide no mold remediation services. Mold remediation is outside the scope of
this contract. Service Agent will scope and estimate mold damages, and that will be the extent of its services. Not withstanding anything to the contrary herein, Client understands and agrees that it assumes the risk of all liabilities it may incur,
including, without limited to, damage or injury to persons and property arising in connection with any assignment to investigate, detect, remediate or remove mold or any other environmental site inspection, investigation or remediation assignment,
either alone or in combination with any other assignment, and the Client waives all claims against Service Agent and its affiliates in connection therewith. Service Agent will not be liable directly, or indirectly, for any liability (including legal
fees and expenses) including, without limitations, any third party claims arising therefrom. 
 15. Miscellaneous. 
 a. Each party represents and warrants that it has full power and authority to enter into this Agreement 
 b. All notices, requests, demands and other communications which are required or may be given under this Agreement shall be in writing and shall be deemed to have been duly given when received if personally delivered;
when transmitted if transmitted by telecopy, electronic telephone line facsimile transmission, or other similar electronic or digital transmission method; the day after it is sent, if sent by recognized expedited delivery service; and five
(5) days after it is sent, if mailed, certified or registered mail, return receipt requested, postage prepaid. In each case, notice shall be sent to: 

			
	If to Client:	  	Homeowners Choice Managers, Inc.
		  	145 NW Central Park Plaza, #110
		  	Port St. Lucie, FL 34986
		
	If to the Service Agent:	  	Johns Eastern Company, Inc.
		  	Post Office Box 4175
		  	Sarasota, FL 34230

 or to such other address as either party may have specified in writing to the other using the procedures specified
above in this Paragraph. 
 c. (i) This Agreement shall be construed pursuant to and governed by the substantive laws of the State of Florida (and any
provision of any other state law shall not apply if the law of a state or jurisdiction other than Florida would otherwise apply). 
 (ii) The headings of the
various Paragraphs in this Agreement are inserted for the convenience of the parties and shall not affect the meaning, construction, or interpretation of this Agreement. 
 (iii) Any provision of this Agreement which is determined by a court of competent jurisdiction to be prohibited, unenforceable or not authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition, unenforceability or non-authorization without invalidating the remaining provisions hereof or affecting the validity, enforceability or legality of such provision in any other jurisdiction. In any such case, such
determination shall not affect any other provision of this Agreement, and the remaining provisions of this Agreement shall remain in full force and effect. If any provision or term of this Agreement is susceptible to two or more constructions or
interpretations, one or more of which would render the provision or term void or unenforceable, the parties agree that a construction or interpretation which renders the term or provision valid shall be favored. 
 d. This Agreement constitutes the entire Agreement, and supersedes all prior agreements and understandings, oral and written among the parties to this Agreement with
respect to the subject matter hereof. 
 e. (i) If, within ten (10) days after demand to comply with the obligations of one of the parties to this
Agreement served in writing on the other, compliance or reasonable assurance of compliance is not forthcoming, and the other party takes steps to enforce rights under this Agreement pursuant to Paragraph 7 or otherwise, the prevailing party in any
action shall be entitled to recover all reasonable costs and expenses (including reasonable attorneys’ and legal assistants’ fees before and at trial, on appeal, or otherwise.) 
 (ii) If any monies shall be due either of the parties to this Agreement hereunder and shall not be paid within thirty (30) days from the due date of such payment, interest shall accrue on such unpaid amount at
the rate of 1 % per month in accordance with the Florida Prompt Payment Act -F.S.218.70-79. 

 f. This Agreement shall be binding upon and inure to the benefit of the successors in interest and assigns of the
parties. 
 g. The parties to this Agreement will execute and deliver, or cause to be executed and delivered, such additional or further documents,
agreements, or instruments and shall cooperate with one another in all respects for the purpose of carrying out the transactions contemplated by this Agreement. 
 h. This Agreement may be executed in any number of counterparts, each of which shall be considered an original, but all of which together shall constitute one and the same instrument and shall become effective when each of the parties has
executed at least one of the counterparts even if all the parties have not executed the same counterpart. 
 16. Extended Claims Handling. 
 Service Agent will handle all claims received whose date of loss is within the terms of this contract. If and when the contract is terminated, we will handle the claims
for a period of thirty (30) days thereafter at no additional charge. If Client wishes the claims to be handled beyond this point, fees will be negotiated at that time. 
 IN WITNESS WHEREOF, the parties have executed this Agreement effective for all purposes as of (inception date). 
  

					
	WITNESSES:	 		 	HOMEOWNERS CHOICE MANAGERS, INC.
			
	 

	 		 	 

		 		 	Paresh Patel
	 

	 		 	Chairman of the Board
		 		 	
	WITNESSES:	 		 	JOHNS EASTERN COMPANY, INC.
			
	 

	 		 	 

		 		 	Kenneth M. Johns, III, CPCU, AIM, ARM
	 

	 		 	Chairman and President

 ADDENDUM A 
 Non-CAT Claims Services Agreement 
 SECTION I 
 In consideration for the terms and provisions outlined in this contract, Service Agent and Client agree that the following services will be offered by Service Agent: 
 1. To accept and review all non-catastrophe claims and loss reports involving those exposures described in the preceding paragraph. “Catastrophe” exposures will
be handled under the terms of the “Catastrophe Claims Service Agreement.” 
 2. To investigate accepted claims and losses to the extent deemed
necessary in the judgment of Service Agent, and to adjust, settle, resist or otherwise handle all such claims or losses within the authority granted by Client. 
 3. To investigate accepted claims and losses to the extent deemed necessary in the judgment of Service Agent and to adjust, settle, resist, or otherwise handle all such claims and losses in excess of the authority granted Service Agent,
with the prior approval of Client. 
 4. To establish claim and/or loss files for all accepted claims and losses, which shall be available for review at all
reasonable times by Client. 
 5. To provide Client via the Internet, after the end of each month
during which services are performed under this contract, an electronic report showing the status of each open claim assigned, including details of payments and outstanding reserves for the month and year covered by the report. Service Agent shall
make all normal efforts and take reasonable measures to have this information available to Client after the 5th business day of the following month.

 6. To retain and store files as follows: 
 Loss and Claim
files to be stored in their existing state at the time of file closure for a period up to two (2) years from expiration of contract. 
 Upon expiration
of this two (2) year period, Client shall have one of the following options. 
  

	 	a.	Require Service Agent to return all stored files to Client at Client’s expense, or 

  

	 	b.	Require Service Agent to continue storing files at the then prevailing rate and expense method of billing. 

 If at the end of the two (2) year period Client has not notified Service Agent in writing of its selection of one of the options set forth in a, or b, above, it is
agreed that Service Agent will return all stored files to Client at Client’s expense. 

 7. Service Agent will maintain in its information system data on each claim, including insurer’s name and address,
appropriate reserve, appropriate paid amount, open or close status, description of accident, and other information as may be agreed upon in the future. That will be available to Client on a monthly basis, in a form to be determined at a later date.

 8. This addendum does not cover claims handling for catastrophe situations. 
 SECTION II 
 In consideration, for the terms and provisions outlined in this contract, Service Agent and
Client agree that the following services will be offered by Client: 
  

	 	1.	Monthly information regarding direct written premium, earned premium, number of policies, and any other data necessary for the proper confirmation of coverage and handling of
claims. 

 SECTION III 
 In
consideration of that listed above, Service Agent fees will be paid as follows: 
  

	 	1.	Fees for claims services for Client’s exposures whose dates of loss fall between July 1, 2007 and December 31, 2007, will be a minimum and deposit of $250,000.
Service Agent will bill this minimum and deposit quarterly, with the first payment due on July 1, 2007. This fee covers handling 200 new property exposures. If the number of exposures exceeds 200, each additional exposure will be billed at the
rate of $1,250 per exposure. This fee includes field adjustment expenses for exposures whose dates of loss fall between July 1, 2007 and December 31, 2007. 

  

	 	2.	Fees for claims services for the Client’s exposures whose dates of loss fall between January 1, 2008 and December 31, 2008 will be a minimum and deposit of $264,960.
Service Agent will bill this minimum and deposit quarterly, with the first payment due January 1, 2008. This fee covers handling 480 new exposures. If the number of exposures exceeds 480, each additional exposure will be billed at the rate of
$552 per exposure. Expenses for field adjustment services for exposures whose dates of loss fall between January 1, 2008 and December 31, 2008 will be invoiced per the attached Preferred Rate Fee Schedule. 

  

	 	3.	Fees for claims services for Client exposures whose dates of loss fall between January 1, 2009 and December 31, 2009 will mirror the agreement for January 1, 2008
through December 31, 2008. 

  

	 	4.	This agreement is renewable for two additional one-year terms at negotiated rates not to exceed 7.5% over the previous year’s rates. 

  

	 	5.	All years are subject to audit on an annual basis.  

 The above
fees do not cover catastrophe services 

 Addendum A 
 JOHNS EASTERN COMPANY, INC. 
 PREFERRED PROPERTY RATE SCHEDULE 
  

			
	 Full Repair Cost
	  	 Full Adjustment

	 $           0.01 –
$       500.00
	  	$208.00
	          500.01 –       1,000.00
	  	237.00
	       1,000.01 –       2,500.00
	  	379.00
	       2,500.01 –       5,000.00
	  	433.00
	       5,000.01 –       7,500.00
	  	515.00
	       7,500.01 –     10,000.00
	  	619.00
	     10,000.01 –     15,000.00
	  	725.00
	     15,000.01 –     20,000.00
	  	850.00
	     20,000.01 –     30,000.00
	  	4.5% of Loss - $ 995 minimum
	     30,000.01 –     40,000.00
	  	3.5% of Loss - $1,350 minimum
	     40,000.01 –     55,000.00
	  	3.0% of Loss - $1,400 minimum
	     55,000.01 –     70,000.00
	  	2.5% of Loss - $1,650 minimum
	     70,000.01 –     90,000.00
	  	2.0% of Loss - $1,750 minimum
	     90,000.01 –   110,000.00
	  	2.0% of Loss - $1,800 minimum
	   110,000.01 –   150,000.00
	  	2.0% of Loss - $2,200 minimum
	   150,000.01 –   ABOVE
	  	2.0% of Loss - $3,000 minimum

  

	1.	Above fees include local telephone, file creation, copying, and secretarial support. 

  

	2.	Full Repair Cost—Agreed cost to repair or replace before applying depreciation, deductible, or other clauses limiting coverage. 

  

	3.	In addition to the schedule, the following charges will be made: 

  

	 	a.	All miles driven at $0.55 per mile. 

  

	 	b.	Photos—$2.00 each 

  

	 	c.	Outside fees, reports, telephone, and other direct expense, at cost. 

  

	 	d.	Drive time charged (prorated when possible) when loss is more than 20 miles from our office. 

  

	4.	These schedules do not apply to catastrophes. 

  

	5.	Subrogation efforts charged on an hourly basis. 

 This schedule is
renewable for two additional one-year terms at negotiated rates not to exceed 7.5% over the previous year’s rates. 

 ADDENDUM B 
 CATASTROPHE CLAIMS SERVICES AGREEMENT 
 SECTION I 
 In consideration of the terms and provisions outlined in this contract, Service Agent and Client agree that during a catastrophe as outlined in the
Service Contract, the following services will be provided by the Service Agent: 
 1. To accept and review all claims and loss reports involving those
exposures described in the preceding paragraph. 
 2. To investigate accepted claims and losses to the extent deemed necessary in the judgment of Service
Agent, and to adjust, settle, resist or otherwise handle all such claims or losses within the authority granted by Client. 
 3. To investigate accepted
claims and losses to the extent deemed necessary in the judgment of Service Agent and to adjust, settle, resist, or otherwise handle all such claims and losses in excess of the authority granted Service Agent, with the prior approval of Client.

 4. To establish claim and/or loss files for all accepted claims and losses, which shall be available for review at all reasonable times by Client.

 5. To retain and store files as follows: 
 Loss and Claim
files to be stored in their existing state at the time of file closure for a period up to two (2) years from expiration of contract. 
 Upon expiration
of this two (2) year period, Client shall have one of the following options. 
  

	 	c.	Require Service Agent to return all stored files to Client at Client’s expense, or 

  

	 	d.	Require Service Agent to continue storing files at the then prevailing rate and expense method of billing. 

 If at the end of the two (2) year period Client has not notified Service Agent in writing of its selection of one of the options set forth in a, or b, above, it is
agreed that Service Agent will return all stored files to Client at Client’s expense. 
 6. Service Agent will maintain in its information system data
on each claim, including insurer’s name and address, appropriate reserve, appropriate paid amount, open or close status, description of accident, and other information as may be agreed upon in the future. That will be available to Client on a
monthly basis, in a form to be determined at a later date. 

 SECTION II 
 In consideration, for the terms and provisions outlined in this contract, Service Agent and Client agree that the following services will be offered by Client: 
 Monthly information regarding direct written premium, earned premium, number of policies, and any other data necessary for the proper confirmation of coverage and handling of claims. 
 SECTION III 
 In consideration of that listed above, Service
Agent fees will be paid as follows: 
  

	 	1.	Fees for claim services for Client’s catastrophe exposures whose dates of loss fall between July 1, 2007 and December 31, 2007 will equal 0.5% of premium earned
during the 90 day or 180 day period following the date of the catastrophe. This fee is in addition to fees agreed to under the non-cat services agreement. 

 For Tropical Storms, Category I, Category II, and Category III hurricanes, a 90 day period will be used to calculate the 0.5% of earned premium fee. 
 For Category IV and Category V hurricanes, a 180 day period will be used to calculate the 0.5% of earned premium fee. 
 Above fee is charge on a per storm basis. 
 All field work is invoiced per attached Approved Adjuster Fee Schedule—Catastrophe Claims and is in addition to above fee. 
  

	 	2.	Fees for claim services for Client’s catastrophe exposures whose dates of loss fall between January 1, 2008 and December 31, 2008 will equal 0.5% of premium earned
during the 90 day or 180 day period following the date of the catastrophe. This fee is in addition to fees agreed to under the non-cat services agreement. 

 For Tropical Storms, Category I, Category II, and Category III hurricanes, a 90 day period will be used to calculate the 0.5% of earned premium fee. 
 For Category IV and Category V hurricanes, a 180 day period will be used to calculate the 0.5% of earned premium fee. 
 Above fee is charge on a per storm basis. 
 All field work is invoiced per attached Approved Adjuster Fee Schedule—Catastrophe Claims and is in addition to above fee. 

	 	3.	Fees for claims services for catastrophe exposures whose dates of loss fall between January 1, 2009 and December 31, 2009 will mirror the arrangement for January 1,
2008 through December 31, 2008. 

  

	 	4.	This agreement is renewable for two additional one-year terms at negotiated rates not to exceed 7.5% over the previous year’s rates. 

  

 14 

 Addendum B 
 APPROVED ADJUSTER FEE SCHEDULE 
 JOHNS EASTERN COMPANY, INC. 
 CATASTROPHE CLAIMS 
  

			
	 GROSS LOSS
	  	 SERVICE FEE

	 $         0.01 – $    2,500.00
	  	$325.00
	     2,500.01 –       5,000.00
	  	$450.00
	     5,000.01 –       7,500.00
	  	$575.00
	     7,500.01 –     10,000.00
	  	$650.00
	   10,000.01 –     15,000.00
	  	$900.00
	   15,000.01 –     20,000.00
	  	$1,100.00
	   20,000.01 –     25,000.00
	  	$1,375.00
	   25,000.01 –     50,000.00
	  	$1,575.00
	   50,000.01 –   100,000.00
	  	3% of Loss
	 Over 100,001.00
	  	2% of Loss

 GROSS LOSS: Gross loss shall mean the agreed RCV loss before the application of the deductible or
other limiting clauses. 
  

			
	File Set Up and Administration:	  	$0
		
	Photographs:	  	Includes 2, then $2.00/each
		
	Mileage:	  	First 50 miles included $1.00/per mile thereafter
		
	Miscellaneous Expense:	  	Actual Cost

 Time and Expense charges are applicable to re-inspections and/or inspections wherein a known coverage concern is
advised at assignment (i.e., wind/hail exclusion). Time and expense charged at $75.00/per hour. All additional charges and expenses charged at cost. 
 Rate
schedule is for those catastrophe exposures with dates of loss July 1, 2007 through December 31, 2009. 
 This schedule is renewable for two
additional one-year terms at negotiated rates not to exceed 7.5% over the previous year’s rates.Policy Administration Agreement

 Exhibit 10.12 
 POLICY ADMINISTRATION AGREEMENT 
 BETWEEN 
 Homeowners Choice Managers, Inc. 
 and 
 Southern Administration, Inc. 
 This Policy
Administration Services Agreement (“Agreement”) is effective as of the 15th day of September 2007 (“Effective Date”) by and between Southern Administration, Inc., (“SA”) a Florida Corporation with principal operating
offices at 3125 Fifth Avenue North, Suite 306, St. Petersburg, FL 33713 and Homeowners Choice Managers, Inc. (“HCM”) with principal offices at 145 NW Central Park Plaza, Suite 115 Port St Lucie, Fl 34986, a Florida Corporation. 

Whereas HCM is desirous of SA providing policy administration services for which HCM has ultimate responsibility to the customers of its insurance
business as set forth in this agreement; 
 Whereas HCM is not seeking, and SA does not act as, a sub-managing general agent; 
 Whereas, SA wishes to provide such services for HCM; and 
 Whereas, the parties hereto wish to reduce their agreement in writing, 
 Now, therefore, in consideration of
the premises set forth below and other good and valuable consideration, the receipt and sufficiency of which is expressly acknowledged, HCM and SA hereby agree as follows: 
 ARTICLE I—TERM 
  

	 	1.1	The term of this Agreement shall commence on the Effective Date and shall have a minimum term of 36 full calendar months unless terminated earlier pursuant to the provisions of this
Agreement. 

 ARTICLE II—DUTIES OF SA 
  

	 	2.1	Within Ninety (90) days from the effective date of this Agreement SA shall design, construct and implement a software system to support the Services enumerated in the attached
EXHIBIT I. SA will have a designated team to handle the HCM account. The systems shall include bridges necessary to communicate with other parties and all work needed to accommodate the data to be received from Citizens Insurance Company. If SA
fails to construct such software and system pursuant to the timeframe described in this paragraph, HCM shall have the right to immediately terminate this Agreement unless fault for any such delay- rests with HCM or Citizens Insurance Company. HCM
shall use its best efforts to provide SA as soon as possible the rates, filings forms, artwork, guidelines, procedures, manuals, information and specifications as may be required to perform the services, but in no case later than September 15,
2007, such that the policy system is operational by September 15, 2007. 

  

	 	2.2	SA shall identify an employee to act as liaison and account manager with HCM to facilitate the provision of this Agreement. 

  

	 	2.3	SA shall maintain complete, accurate and orderly files, records and accounts of all transactions in accordance with generally accepted insurance and accounting practices. SA will
provide HCM with a copy on CD/DVD of all the HCM data on a monthly basis. Such data shall be made available within ten business days from the end of each calendar month during the term hereof. 

 POLICY ADMINISTRATION AGREEMENT 
  

	 	2.4	SA shall maintain electronic or paper copies of all policies and applications and correspondence related to the policies. These copies will not be destroyed without the written
permission of HCM for a period of not less than five years from the termination date of such policies or the period specified by the applicable state statute regulating the preservation of records, whichever is longer unless such records are
returned to HCM. For disaster recovery purposes a copy of all such records will be transmitted and maintained at HCM on a weekly basis. HCM will have access to all accounts and records related to HCM policies, applications and correspondence.

  

	 	2.5	SA agrees that HCM, being at risk and having ultimate responsibility for the policies to be administered by SA, shall at all times have ultimate discretion with respect to all
matters pertaining to the policies, including the ability to suspend underwriting authority of SA at any time during this Agreement. 

  

	 	2.6	SA does not assume responsibility for notification to any excess or quota share reinsurance carrier, however reports will be provided as required by HCM under the terms of this
agreement. SA may not bind reinsurance or retrocession on behalf of any entity. 

  

	 	2.7	SA shall at all times use qualified personnel in providing policyholder service including appropriately licensed personnel where required by the laws or the regulations of the
Insurance Department of any state authorized in this Agreement. 

  

	 	2.8	SA shall maintain a refund account as designated by HCM. HCM shall be entitled to sign and access funds in these accounts without the signature of SA. 

 ARTICLE III—DUTIES OF HCM 
  

	 	3.1	HCM will provide agents and producers with such training as may be required for the routine conduction of business. HCM will respond with remedial training, rehabilitation and/or
termination of agents or producers as may be appropriate when their failure to follow standard and/or ethical practices results in substantially higher than average servicing costs to SA. 

  

	 	3.2	HCM will provide SA with rates, filings forms, artwork, guidelines, procedures, manuals, information and specifications as may be required to perform the services defined in Exhibit
I attached hereto. This will include HCM’s banking institution and account numbers, corporate and subsidiary logos, form letter text, brochures and other material needed to perform the services. 

  

	 	3.4	HCM will appoint a Project Manager as its primary contact for SA with sufficient authority to make such decisions as are required to facilitate the services to be performed. SA will
comply with the requirements set forth in the attached Exhibit     . 

 ARTICLE
IV—AUDIT PROVISIONS 
  

	 	4.1	SA shall maintain records of amounts billable to and payments made on behalf of HCM. In addition SA shall maintain records of the data utilized to perform the services defined in
EXHIBIT I of the Agreement until five years following the termination date of the applicable policies or the period specified by the applicable state statute unless such records are returned to HCM. 

  

	 	4.2	HCM and an auditor selected by HCM shall have access to all such records within three business days for the purposes of audit and verification during normal business hours during
the full term of this Agreement and during the respective periods in which SA is required to maintain such records. SA shall provide immediate business day access to its books, records and bank accounts to the insurance department of any state,
which governs business serviced under this Agreement in a form required by and usable by that Department. 

 POLICY ADMINISTRATION AGREEMENT 
  

	 	4.3	SA agrees to provide reasonable supporting documentation concerning any disputed invoice amount to HCM within 5 days after HCM provides written notification of the dispute to SA.

  

	 	4.4	SA will provide HCM with access to all underwriting, billing and rating information (whether in paper or electronic format) as it shall require for the conduction of routine quality
control reviews at any time during ordinary business hours and upon reasonable notice. SA shall cooperate with HCM or anyone authorized by HCM in conducting such audits and reviews. It is expressly understood and agreed that this right includes
without limitation the right to audit Premium Refund account records and all accounting records affecting HCM programs. 

  

	 	4.5	If the audit or review is conducted at SA offices, a minimum of one (1) desktop personal computer(s), with Internet access, Word and Excel capabilities, shall be made available
to the HCM representative. 

  

	 	4.6	HCM representatives shall have electronic access via the Internet at all times to all files and documents pertaining to HCM business. This access shall be password protected, but
will allow properly authorized HCM representatives to conduct audits and reviews from HCM offices on the same basis as if they were on-site at SA offices. SA may not alter the password without concurrence of HCM. 

  

	 	4.7	Non-Performance by SA: 

  

	 	a.	Should SA fail to meet the performance standards or other provisions as outlined in this Agreement, HCM shall send a written notice to SA, which will delineate the specifics of such
unsatisfactory performance. SA will have fifteen (15) calendar days, or other reasonable amount of time as may be mutually agreed upon by SA and HCM, to correct the unsatisfactory performance. 

  

	 	b.	There will be no penalties if the unsatisfactory performance is corrected within the agreed amount of time as set forth in 4.7.a. However, if HCM determines that service has not
been restored to a satisfactory level within the agreed amount of time as set forth in 4.7.a., HCM shall have the option of assessing a penalty as described in subpart c., below. 

  

	 	c.	A penalty of 10% of the monthly fee due to SA will be assessed for the second 15-days of continued unsatisfactory performance, and 15% for any additional 15-day periods of
unsatisfactory performance. This penalty shall continue to be deducted from the monthly payment for the period of time of such non-compliance, as determined solely by HCM. 

 ARTICLE V: LICENSE—TRADE SECRET AND PROPRIETARY RIGHTS 
  

	 	5.1	Although SA may use its own proprietary computer software in the performance of the Services listed in EXHIBIT I, this Agreement does not grant a license or any other interest to
HCM for the use of any software products. 

  

	 	5.2	This Agreement grants to HCM no right to possess or reproduce, except as required hereunder, or assume any other interest in, the computer software programs performing all or any
part of the Services of their specifications in any tangible or intangible medium. HCM may not mortgage, hypothecate, sell, assign, pledge, lease, transfer, license or sublicense the computer software programs performing all or any part of the
Services, nor allow any person, firm, or corporation to transmit, copy or reproduce the computer software programs performing all or any part of the services of their specifications in whole or in part. In the event that HCM shall come into
possession of this computer software HCM shall immediately notify SA of their existence, where the said copies were attained, return the software, and all copies thereof to SA at their request. 

 POLICY ADMINISTRATION AGREEMENT 
  

	 	5.3	HCM promises and agrees not to disclose or otherwise make available the computer software programs performing all or part of the Service to any person other than employees of HCM
required to have normal use of them. HCM agrees to obligate each such employee to a level of care sufficient to protect the computer software programs from unauthorized disclosure. 

  

	 	5.4	SA warrants and represents that it owns or is licensed to use all software it will employ in the performance of Services under this Agreement. 

 ARTICLE VI—CONFIDENTIALITY 
  

	 	6.1	SA agrees that the data and other information collected or computer generated as a result of this Agreement is the proprietary information of HCM. Such proprietary information,
including but not limited to, policy information, agency information, performance files, rate filings and manuals, website content and art whether copyrighted or not, or, any other and all data gathered as a result of the performance of the duties
of this Agreement, represents independent and/or unique efforts created by HCM, its staff or independent contractors acting on its behalf. 

  

	 	6.2	Such property to which paragraph 6.1 above refers is considered the “Intellectual Property” of HCM, and shall not be disclosed by SA, its representatives, agents and
vendors, to any other party or otherwise used in any manner without the expressed written consent of HCM, and may only be used in performing the services called for in this Agreement, whether such information is considered “public
information” or not. 

  

	 	6.3	SA shall at all times conduct business in accordance with the Gramm-Leach-Bliley Privacy Act 

  

	 	6.4	The provisions of Article VI shall expire twenty-four (24) months after all HCM business has ceased to be processed by SA, 

 ARTICLE VII—TERMINATION PROVISIONS 
  

	 	7.1	Either party may terminate this Agreement at the expiration of the term set forth in Article I provided the other party receives at least three (3) months prior notice of
termination. If necessary to facilitate transfer to another servicing firm, the contract may upon mutual agreement of the parties be continued under current terms for up to six (6) months after the expiration of the term.

  

	 	7.2	Either party may terminate this Agreement upon breach by the other party of any one or more of the terms and conditions of this Agreement provided that the party in breach is
notified in writing by the other party of the breach and the breach is not cured or a satisfactory resolution agreed upon in writing within thirty (30) days of such written notification, or if such breach is non-monetary and is of such a nature
that it cannot reasonably be cured within such notice period, if the breaching party has not within such time commenced to cure same and does not diligently continue to and actually cure same within a reasonable period thereafter.

  

	 	7.3	In the event either party makes a general assignment for the benefit of creditors or files a voluntary petition in bankruptcy or petitions for reorganization or arrangement under
the bankruptcy laws or if a petition in bankruptcy is filed against either party and remains undismissed for a period of thirty (30) days, or if a receiver or trustee is appointed for all or any part of the property and assets of either party
the other party may terminate the Agreement immediately or either party has a judgment rendered against it and said judgment is recorded and not paid within 90 days -. 

 HCM may terminate this Agreement With 120 days written notice in the event that either SA changes more than 20% of its ownership. SA may terminate this Agreement with 120 days written notice in the event that either
HCM or affiliated company of Homeowners Choice Property and Casualty. 

 POLICY ADMINISTRATION AGREEMENT 
  

	 	7.4	Company changes more than 20% of its ownership. 

  

	 	7.5	Rights Upon Termination of this Agreement: 

  

	 	a.	The obligations of SA and HCM to the date of termination shall be discharged promptly. 

  

	 	b.	SA shall promptly return to HCM any policies, forms or supplies imprinted with the name or logo of HCM regardless of who incurred the cost for same. 

  

	 	c.	SA shall upon request promptly provide HCM without charge, with an electronic copy of all data files (the “Data”) in a format acceptable to HCM. 

 

	 	d.	Any and all “Intellectual Property” of HCM will be returned or, at the election of HCM, destroyed with no retention of copies within the SA organization other than
required by Federal State of Local law or regulation. 

  

	 	e.	SA shall continue to service until expiration those policies for which it has received a payment under this agreement, or until such time before the expiration date of the said
policies, that HCM releases SA from obligations under this clause. 

  

	 	f.	At the termination of this Agreement, HCM shall have the option to license the software and operating system used by WestPoint to handle policy administration for HCM under the
License agreement attached hereto as Exhibit VI. In the event HCM elects to use a different provider to handle its policy administration or elects to perform policy administrative functions in-house, then WestPoint shall cooperate fully with HCM and
the new service provider to transfer all data and information necessary to permit the new provider to handle policy administration at no cost to HCM. 

  

	 	7.6	This Agreement may be terminated with mutual written consent. 

  

	 	7.7	HCM may terminate this Agreement upon 90 days prior written notice at any time after March 31, 2007 if HCM elects to execute the attached License Agreement.

 ARTICLE VIII—LIMITATIONS OF LIABILITY AND REMEDIES 
  

	 	8.1	If data is processed in error due to an error or defects in the services provided by SA, then upon SA receiving notice of such error or defect, SA shall reprocess such data without
charge to HCM. This provision includes errors to single or multiple policies affected by such errors. 

  

	 	8.2	SA shall indemnify, protect, defend and hold HCM, its officers, directors, shareholders and employees harmless from and against any and all losses, damages, liabilities, fines,
settlements, penalties and judgments (including reasonable costs and attorney’s fees) (herein “Damages”) arising out of or resulting from the negligent, willful or intentional acts of SA performed in connection with this Agreement or
arising from a breach of this Agreement by SA. 

  

	 	8.3	HCM shall indemnify, protect, defend and hold SA, its officers, directors, shareholders and employees harmless from and against any and all losses, damages, liabilities, fines,
settlements, penalties and judgments (including reasonable costs and attorney’s fees) (herein “Damages”) arising out of or resulting from the negligent, willful or intentional acts of HCM performed in connection with this Agreement or
arising from a breach of this Agreement by HCM. 

 POLICY ADMINISTRATION AGREEMENT 
  
 ARTICLE IX—GENERAL 
  

	 	9.1	The parties shall not be liable or deemed to be in default for any delay or failure in performance under this Agreement or interruption of services resulting, directly or
indirectly, from acts of God, civil or military authority, labor disputes, shortages of suitable parts, materials, labor or transportation or any similar cause beyond the reasonable control of the parties. 

  

	 	9.2	During the term of this Agreement and for one year immediately flowing the termination of this Agreement for any reason or for no reason whatsoever, SA (for purposes of this Article
9.2, SA shall be referred to as a “Party”) shall refrain from directly or indirectly employing, attempting to employ, recruiting or otherwise soliciting, inducing, or influencing nay employee of the other Party or any member of the other
Party’s Related party Group. 

  

	 	9.3	All notices which are required to be given or submitted pursuant to this Agreement shall be in writing and shall be either delivered in person or sent by certified mail, return
receipt requested to the address set forth herein or to such other address as the parties may from time to time designate in writing for such purposes. Notices shall be deemed to have been given at the time when personally delivered or mailed in a
certified postage-paid envelope, upon the fifth day after the day such notice shall be postmarked. All notices to either party shall be addressed to the respective presidents of each firm. 

  

	 	9.4	The parties covenant and promise not to disclose the terms and conditions of this Agreement to any third party unless expressly agreed to by the parties or as required by law.
Notwithstanding the forgoing, the parties agree that disclosure may be made to any auditors or regulators on a need-to-know only basis without prior consent. 

  

	 	9.5	This Agreement and any exhibits attached hereto: (a) constitute the entire Agreement between the parties and supersede and merge any and all prior discussions, representations,
negotiations, correspondence, writings and other agreements and together state the entire understanding and Agreement between HCM and SA with respect to the Services described; (b) may be amended or modified only in a written instrument agreed
to and signed by SA and HCM; and (c) shall be deemed to have been entered into and executed in the State of Florida and shall be construed, performed and enforced in all respects in accordance with the laws of that state. For purposes of venue,
this Agreement is performable in a mutually agreed upon county in the State of Florida. 

  

	 	9.6	Neither party hereto shall be deemed to have waived any rights or remedies accruing to it hereunder unless such waiver is in writing and signed by such party. No delay or omission
by either party hereto in exercising any right shall operate as a waiver of said right on any future occasion. All rights and remedies hereunder shall be cumulative and may be exercised singularly or concurrently. 

  

	 	9.7	The descriptive headings of this Agreement are intended for reference only and shall not affect the construction or interpretation of this Agreement. 

  

	 	9.8	Wherever the singular of any term in used herein it shall be deemed to include the plural wherever the plural thereof may be applicable. 

  

	 	9.9	The parties shall not assign this Agreement or any of its rights hereunder without the prior written consent of the other party except that HCM may assign this Agreement in the
event of the sale of all or substantially all of its assets. 

  

	 	9.10	If any provision of this Agreement or any Exhibit hereto or the application thereof to any party or circumstances shall to any extent, now or hereafter, be or become invalid or
unenforceable, the remainder of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 

 POLICY ADMINISTRATION AGREEMENT 
  

	 	9.11	In the event of any action between HCM and SA seeking enforcement of any of the terms and conditions of this Agreement the prevailing party in such action shall be awarded its
reasonable costs and expenses including its court costs and reasonable attorney’s fees. 

  

	 	9.12	The parties hereto are individual contractors independent of one another, and they should not in any instance be construed as partners or joint ventures. Furthermore, the parties
acknowledge that SA is not acting as a sub-managing general agent and that HCM is not assigning its managing general agent responsibilities to SA. 

  

	 	9.13	SA shall not sign any new Service Agreements for ninety (90) days. 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. 
  

									
	Homeowners Choice Managers, Inc. 145 NW Central Park Plaza #115 Port St Lucie, Fl 34986	 		 	Southern Administration, Inc. 3125 Fifth Avenue North #306 St. Petersburg, Fl 33713
					
	By:	 	 /s/ Frank McCahill III
	 		 	By:	 	 /s/ Richard Allen

		 	Frank McCahill, President	 		 		 	Richard Allen, Chief Financial Officer
			
	Dated:	 		 	Dated:

 Homeowners Choice Property and Casualty Insurance Company, Inc. an affiliated entity of Homeowners Choice
Managers, Inc., hereby acknowledges that it shall be bound by the provisions of Article 9.2 of this Agreement. 
  

			
	Homeowners Choice Property and Casualty
		
	By:	 	/s/ Frank McCahill III
		 	Frank McCahill, President

 POLICY ADMINISTRATION AGREEMENT 
  
 EXHIBIT I—SERVICES 
 Southern Administrators (SA) will provide the services and policy administration (herein called “Services”) defined below at the direction and guidance of Homeowners Choice Managers, Inc. (HCM) for the lines and states to which
this Agreement applies. Such services shall include but are not limited to the following: 
  

	 	1.	SA will provide the technical and administrative services needed to support the acquisition and management of all HCM policies. The SA system must have the capability of
automatically retrieving pertinent underwriting data (i.e. fire protection classes, responding fire department information, flood zones, etc.). 

  

	 	2.	SA will select business within the underwriting guidelines and other authorities presented to it by HCM and will either decline, negotiate to acceptability or refer to HCM risks
which fall outside this scope of authority at the direction of HCM underwriting management. 

  

	 	3.	SA will support the rating programs agreed to by SA and HCM. 

  

	 	a.	Rate changes or changes to inherent tables of the programs will be made in the normal course of business. SA will make its best effort to modify and update rate tables, test rate
algorithms and output for accuracy within thirty (30) calendar days of receipt of new rates as long as no new program code modifications are required to implement these changes. 

  

	 	b.	The SA System should be capable of maintaining multiple filings and effective dates. 

  

	 	c.	The SA System should be capable of supporting non-production testing of changes prior to moving changes to a production environment. 

  

	 	e.	Maintenance of the system should be user-friendly and accessible via the Internet subject to appropriate protection (i.e. tables, underwriting grid, base rates, agency records, etc.
should be made available in due course). 

  

	 	f.	Office or remote access to system by HCM or its duly authorized representative(s) (excludes cost of hardware and line charges). 

  

	 	4.	SA will Host and maintain a website for the use of HCM and affiliates as provided to SA by HCM. This site will provide links to SA systems and services, which are invisible to
outside parties. 

  

	 	5.	SA will issue HCM policies and policy change endorsements, process renewals, cancellations and reinstatements. SA will use such non-renewal or cancellation wording and format as
filed by HCM and/or required by statute. 

  

	 	6.	Invoices will be processed for premiums due or returned for all policy transactions. Refund checks will be issued for return premiums from a refund account.

  

	 	7.	Inquiries from agents, policyholders and other relevant third parties (mortgagees) will be handled on behalf of HCM unless HCM designates otherwise. SA will hire, train, license and
manage such customer service representatives, underwriters and other staff required to conduct the services provided by this Agreement. 

  

	 	8.	SA will provide Data Processing support for policy processing to include data entry, editing, rule based system underwriting, interface with data vendors, rating, coding,
statistical and management reporting, accounting and maintenance of policy records. 

  

	 	9.	SA will handle mailings of all necessary policy documents to relevant parties. 

 POLICY ADMINISTRATION AGREEMENT 
  

	 	10.	Policy billing will be handled through direct bill to the party responsible for payment and SA will provide copy of policy bill to Agent. 

  

	 	a.	Provisions will be made for payment via major credit cards or direct electronic funds transfer. Installment plans as defined by HCM will be supported. 

  

	 	b.	Renewal billing rules will prevent earned exposure on non-payment transactions. 

  

	 	c.	Non-pay cancellations will be processed on an equity date basis. 

  

	 	d.	SA shall be responsible for all billings, accounting of same, including all premiums, fees, and installments. SA shall indemnify HCM for any loss of collection of these revenue
items if the amounts not collected are due to error on the part of SA, and HCM does not otherwise waive in writing the provisions of this paragraph. 

  

	 	11.	SA shall deposit all funds received on behalf of HCM to accounts designated by HCM. 

  

	 	12.	Customer Service and Loss Reporting: Phone access on a toll-free basis will be provided to agents, policyholders and other relevant parties. Phones will be answered in a manner that
either identifies with HCM or in a generic manner, which does not imply any other business image other than that of HCM. 

 POLICY ADMINISTRATION AGREEMENT 
  
 EXHIBIT II—PERFORMANCE LEVEL STANDARDS 
 POLICY PROCESSING AND SERVICING 
  

	1.	System Availability 

  

	 	a.	The computer system, including Internet access, used for HCM’s business shall be available at all times, except for scheduled maintenance. Any downtime due to maintenance of
the system shall be communicated to all users at least one (1) business days in advance of the maintenance; however SA may bring the system down intermittently to initiate changes, but will make an attempt to notify all users if possible.

  

	 	b.	Any maintenance downtime shall be scheduled for weekends or the hours between 6 PM and 8 AM on business days. 

  

	 	c.	In the event of a system failure during normal business hours, the downtime shall last no longer than two (2) hours before service to the system is restored, unless the failure
is due to a recognized catastrophe, or services outside the control of SA. 

  

	 	d.	In the event of a catastrophe causing a system failure or resulting in the system being inaccessible, a backup server in a remote location shall be available so that service can be
restored within two (2) hours. 

  

	 	e.	An on-site generator shall be installed in SA’s St. Petersburg, Florida location with the capacity to provide electricity for full system functionality for a minimum of four
days. 

  

	 	f.	SA shall submit to HCM, at inception of this agreement and updated on an annual basis thereafter, a Disaster Recovery Plan clearly outlining all elements of how SA will resume all
normal activities following a catastrophe. This is to include but is not limited to the following: 

  

	 	1)	Details of backup of data – i.e. how often data is backed up, where the backup is kept, safeguarding of data, etc. 

  

	 	2)	Alternate power supply available to resume critical functions. 

  

	 	3)	Provisions for hardware necessary to conduct normal operations at an alternate site. 

  

	 	4)	Provisions for telephone service at an alternate site. 

  

	 	5)	Duties of key personnel in the event of a catastrophe. 

  

	2.	New Business Policy Issuance 

  

	 	a.	95% of all policies issued and mailed within three (3) business days following receipt of application and payment, whether received by mail or electronically, provided that all
required information is received. 

  

	 	b.	Where applications are submitted with incomplete information, or further information gathering is necessary to complete the underwriting process, 95% of policies will be printed and
mailed within two (2) business days following the receipt of the last required piece of information. 

  

	 	c.	Policies not passing the “underwriting grid” will be reviewed and a final decision made by the underwriter and communicated to the agent within one (1) business day,
with appropriate processing and mailing within two (2) business days following the decision. 

  

	 	d.	Records of policies issued and subsequently cancelled due to underwriting ineligibility will be furnished to HCM, listed by agent, on a monthly basis. 

  

	 	e.	95% of all policies issued without data entry errors (not included in this error ratio are mistakes made by agents when entering business into the system). 

 

	 	f.	97% of all policies issued without major errors (a major error is an entry error that impacts rate or coverage). 

  

	3.	Renewal Business Processing 

  

	 	a.	100% of renewal policies and billings will be mailed approximately forty-five (45) days prior to the expiration of the current policy, utilizing “self destruct”
language. 

  

	 	b.	100% of all renewal follow-up notices will be mailed according to established renewal notice timetables (reminder and expiration termination notices). 

 POLICY ADMINISTRATION AGREEMENT 
  

	4.	Endorsement Processing 

  

	 	a.	98% of endorsements processed and mailed within ten (10) business days following receipt of completed and required information. 

  

	 	b.	Endorsements not passing the “underwriting grid” will be reviewed and a final decision made by the underwriter and communicated to the agent within five (5) business
days, with appropriate processing and mailing within seven (7) business days following the decision. 

  

	5.	Cancellations/Non-Renewals 

  

	 	a.	98% of cancellation requests processed and mailed within five (5) business day of receipt of request for cancellation. 

  

	 	b.	98% of new business cancellations for cause mailed within the first ninety (90) days of the policy inception date, except for reasons specified in the policy contract which
allow cancellation anytime during the policy term (i.e. non-payment of premium, increase in hazard, material misrepresentation), unless not received by the inspection company within the 90 day window. 

  

	 	c.	98% of non-renewals mailed no later than ninety-five (95) days prior to the expiration of the current policy provided timely notice is received. 

  

	6.	Reinstatements 

  

	 	a.	95% of all reinstatements processed and mailed within three (3) business days of receipt of a valid request for reinstatement. 

  

	7.	Premium Refunds 

  

	 	a.	98% of all premium refunds mailed within seven (7) business days following processing of any policy activity generating a return premium of any kind. 

 

	 	 b.
	 The Refund Account monthly reconciliation will be due in HCM’s office by the 15th of each month. 

  

	8.	Premium Receipt Processing 

  

	 	a.	98% of premiums are deposited and processed by the end of the first business day following receipt. 

  

	9.	Mail Review 

  

	 	a.	98% of all mail received by SA will be reviewed daily and put into process daily. 

  

	10.	Commission Processing (Paid on paid premiums) 

  

	 	a,	98% of payments with statements mailed to all agents within ten (10) business days after month’s end. 

  

	 	b.	Track and pay commissions at various commission levels and by line of business. 

  

	11.	Agency installation and Management 

  

	 	a.	All newly appointed agencies must have Internet access in order for SA to provide this capability. 

  

	 	b.	SA will maintain a database of all agencies contracted with HCM, including master codes, sub-agency codes, and sub-producer codes for multi-location agencies.

  

	12.	Phone Standards 

 98% of all calls shall be answered
within 60 seconds. Average hold time less than two minutes. Abandon rate shall be below 5%. 
 UNDERWRITING AUTHORITY 
  

	1.	Forms 

 Full authority for all filed forms,
endorsements and programs. No authority for man scripting endorsements without prior approval of HCM. 
  

	2.	Limits 

 Full authority for all limits as published
in HCM’s program manuals and underwriting guidelines. 

 POLICY ADMINISTRATION AGREEMENT 
  

	3.	Policy Term 

 No policy may be written for a period
of greater than twelve (12) months. 
  

	4.	Rates 

 As approved by the Florida Office of
Insurance Regulation (OIR) 
  

	5.	Programs 

 All HCM program manuals and underwriting
guidelines shall be strictly adhered to. Any deviation from HCM’s manuals and guidelines is prohibited without prior approval of HCM. 
  

	6.	Insurance Department Complaints or Inquiries 

  

	 	a.	Copies of any formal Insurance Department Complaint or Inquiry will be sent to HCM within twenty-four (24) business hours of receipt. Where related to services defined in this
Agreement, a draft response to the Complaint or Inquiry will be sent to HCM for approval within seventy-two (72) business hours of the receipt of the Complaint or Inquiry. For matters not related to services provided under this Agreement, HCM
will respond to the Department of Insurance directly. 

  

	 	b.	SA shall maintain a Complaint Log in the format specified by the HCM. 

  

	7.	OIR Market Conduct Examinations 

 SA will have
primary responsibility for collection of data, coordinating and managing OIR Market Conduct Examinations. 

 POLICY ADMINISTRATION AGREEMENT 
  
 EXHIBIT III—STATES AND LINES OF BUSINESS 
 This Agreement applies to business written in the State of Florida under the programs as approved by the Florida Office of Insurance Regulation. Product Lines to be supported include: 
  

	 	•	 	 Homeowners (HO3), (HO4), (HO6), (HO8) 

  

	 	•	 	 Inland Marine (when attached by standard form to a homeowners policy) 

  

	 	•	 	 Dwelling Fire 

  

	 	•	 	 Other lines of business that may be identified in the future. 

 POLICY ADMINISTRATION AGREEMENT 
  
 EXHIBIT IV—PRICE AND PAYMENT 
 HCM agrees to pay the following applicable services/rates, payable on a monthly basis as follows: 
  

	 	1.	To SA, software maintenance and general service fees equal to thirty-five dollars ($35.00) per policy generated as a new policy issued, and, or, a paid renewal policy under this
Agreement for the first thirty-six months of processing all HCM policies. There shall be no offset or reduction for cancelled policies. No fees shall be charged for non-paid renewals. SA will provide HCM with a detailed invoice listing of all billed
policies on a monthly basis. 

  

	 	2.	To various vendors: charges incurred by SA to secure underwriting information according to HCM guidelines from independent vendors including but not limited to, costs of credit
reports, prior loss history reports, physical property inspections, DMV reports. 

  

	 	3.	HCM is responsible for the costs of public information, sales support and other information and delivery to SA. SA is responsible for the costs of distribution of these products and
marketing materials. 

  

	 	4.	If HCM requires that SA staff travel to any location for the purpose of performing work under this Agreement, HCM will reimburse SA for all reasonable travel, living and
out-of-pocket expenses sustained. 

  

	 	5.	Service and other fees will be due and payable within fifteen days (15) after the receipt of invoice from SA. 

  

	 	6.	HCM agrees that SA will have the right to renegotiate license fees in the event of statutory, regulatory or judicial changes that require additional activities not contemplated at
the inception of this Agreement, and that the overall pricing may be renegotiated for the third year of this Agreement. 

  

	 	7.	SA agrees that it is NOT responsible for: 

  

	 	a.	Premium Taxes 

  

	 	b.	Agency Licensing Fees 

  

	 	c.	Involuntary Market Assessments 

  

	 	d.	Costs charged by insurance departments in connection with market conduct examinations. 

  

	 	e.	Assessments by boards and bureaus. 

  

	 	f.	Charges incurred with banks and/or other vendors for the processing of credit card payments (credit card service charges and EFT payments), if applicable. 

 

	 	8.	The amounts payable in this Agreement may increase or decrease as agreed to by the parties if changes in the Services mutually agreed to in writing by the parties substantially
alter the servicing personnel, equipment, or software applicable hereunder. 

 POLICY ADMINISTRATION AGREEMENT 
  
 EXHIBIT V—REPORTS 
 DAILY, MONTHLY & YEARLY REPORTING 
  

	1.	All reports and reconciliations are to be provided to HCM under this Agreement in either hard copy or electronic format. 

  

	2.	All agreed daily production and accounting reports shall be reconciled and delivered on-line or in print within one (1) business day following month-end.

  

	3.	All agreed end-of-month accounting, financial and management reports shall be reconciled and delivered on-line or in print within ten (10) business days following
month-end. 

  

	4.	Such reports shall include, but are not limited to, information and statistical data required by regulators such as the National Association of Insurance Commissioners (NAIC),
Insurance Services Office (ISO), catastrophe pools, reinsurers, or any other reports reasonably requested to monitor and evaluate the subject business. Any reports to regulators, bureaus or statistical reporting agencies shall be reported by their
respective due dates. 

  

	5.	SA will be responsible for printing, issuance and filing of 1099 forms. 

  

	6.	SA will handle all Bureau reporting (fees excluded). 

  

	7.	SA will be responsible for annual FHCF, FWUA and QUASR Data Gail reporting. 

  

	8.	MANDATORY REPORTS: 

 Production: 

Daily New Business Register (daily) 
 New Business Production Report (daily, monthly, and query) 
 Cancelled Policy Report-all cancellations (monthly)

 Agents’ Experience Report—to include loss detail by agent (monthly or quarterly & annual) 
 TIV/PIF In-force Coverage Report (monthly) 
 Underwriting: 
 Underwriting Suspense Report (daily/weekly) 
 Inspection Activity Report (monthly) 
 Inspection Request Report (criteria-based request generated automatically) 
 Renewal Retention Report—Non-Paid
Renewals (monthly on the 15th) 
 Over 300K In Force Report (monthly) 
 Accounting & Management: 
 Daily Cash Receipts and Disbursements Journal (daily) 
 Daily Balance Control (daily) 
 Monthly Balance Control (monthly) 
 Monthly Accounting Detail Extract File (monthly) 
 Pay Plan Accounts Receivable Report (monthly) 
 Advance Premium Report (monthly) 
 Written Premium Report (monthly) 
 Earned/Unearned Report (monthly) 
 1099 Reporting (annual) 
 Statistical Reporting (annual—FHCF, FWUA, ISO, Quasar, Actuary and Auditor data, etc.) 
 Agents’ Commission
Report (monthly) 
 Report 14 Extract (Periodic/Annual) 

 POLICY ADMINISTRATION AGREEMENT 
  
 In force by Limits/Layer Report (annual) 
 Special Accident Year Loss Report (query) 
 Special Earned House Year Filing Data Report (query) 
 Premium Refund Report (monthly) 
 Premium Refund—Checks issued and Bank Reconciliation (monthly) 
 Premium Receivables Report / Advance Premium Report to include Installment Payments Received and Outstanding and other Receivable
items (MGA fees, EMPA, etc) (monthly) 
 Premium Reports to detail amounts collected for Recoupment on FIGA
Assessment and Amounts Paid on FHCF Recoupment Credit for next two years (monthly) 
 Premium Reports to Detail
Keep-outs and/or new Tri County Business (monthly) 
 Losses: 
 Written/Paid Experience Report (monthly) 
 Monthly Paid Losses and Loss Reserve Detail (monthly) 
 Yearly Paid Losses and Loss Reserve Detail (annual) 
 Large Claim Report (monthly) 
 Reserve Change Analysis (monthly) 
 Monthly Loss Account (monthly)

 Yearly Loss Account (annual) 
 Salvage and Subrogation Recoveries Report (monthly) 
 Claims Frequency by Cause (monthly) 
 Claims Severity by Cause (monthly) 
 Claims Severity by ASL (monthly) 
 Loss Reports—split by LOB and between Standard and Premier (monthly) 
 Loss
Reports to include Claims counts detail, Loss information on paid and reserves both MTD and YTD, Loss adjustment expense and reserves split between LOB, Standard and Premier and divided between DCC and A&O Paid and Reserves, and Salvage and
Subrogation (monthly) 
 Loss Reports also split out any Cat Losses & LAE—Internal and Actuary
(quarterly or annual) 
 All Loss Data by Accident Year and Calendar Year for Stat Statements & DOI Actuary
(quarterly) 
 Loss Reserve Development Report—Internal and DOI auditors (quarterly) 
 Loss Detail by County or Cat Territory (quarterly) 

 POLICY ADMINISTRATION AGREEMENT 
  
 HCM shall have the right to license the Southern Administration policy administration software (quoting, issuance, endorsements, billing,
and printing) for $550,000 at such times as outlined elsewhere within this overall agreement, and subject to the following conditions: 
  

	 	1	HCM’s use of the software shall be limited to policies processed for Homeowners Choice Property and Casualty. Other uses are not permitted. 

  

	 	2	Software is delivered on an as-is, where-is basis. No warranties are made, whether express or implied. 

  

	 	3	This license is non-transferable except with the express written agreement of SA 

  

	 	4	HCM may not share, divulge or publish the programming code of the West Point software with any outside party. 

  

	 	5	If desired, SA will operate the servers and keep the system operating its original code for $85,000 annually. 

  

	 	6	Any additional programming or maintenance work will be done on a time and materials basis. 

  

	 	7	Title to the software is not transferred to HCM. Ownership of all copies of the Software and of copies made by HCM is vested in SA, subject to the rights of use granted to HCM in
this Operating System License Agreement. As between HCM and SA, documents, files, style sheets, generated program code (including the Unrestricted Source Code) and schemas that are authored or created by HCM via its utilization of the software, in
accordance with the terms of this Operating System License Agreement, are its property. 

  

	 	8	HCM may not, directly or indirectly, encumber or suffer to exist any lien or security interest on the Software; knowingly take any action that would cause the Software to be placed
in the public domain; or use the Software in any computer environment not specified in this Software License Agreement. HCM will comply with applicable law and SA’s instructions regarding the use of the Software. HCM agrees to notify its
employees and agents who may have access to the Software of the restrictions contained in this Operating System License Agreement and to ensure their compliance with these restrictions. HCM agrees that it is solely responsible for the accuracy and
adequacy of the software for its intended use and HCM will indemnify and hold harmless SA from any third party suit to the extent based upon the accuracy and adequacy of the software in its use. 

  

	 	9.	TO THE MAXIMUM EXTENT PERMITTED -, IN NO EVENT SHALL SA OR ITS SUPPLIERS BE LIABLE FOR ANY SPECIAL, INCIDENTAL, DIRECT, INDIRECT OR CONSEQUENTIAL DAMAGES WHATSOEVER (INCLUDING,
WITHOUT LIMITATION, DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION, LOSS OF BUSINESS INFORMATION, OR ANY OTHER PECUNIARY LOSS) ARISING OUT OF THE USE OF OR INABILITY TO USE THE SOFTWARE OR THE PROVISION OF OR FAILURE TO PROVIDE SUPPORT
SERVICES, EVEN IF SA HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

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