Document:

exv10w144

EXHIBIT
10.144

          

REINSURANCE AGREEMENT

This agreement is made between the Liberty Mutual Insurance Company, Mutual Fire Insurance
Company, Liberty Mutual (Bermuda) Ltd., Liberty Insurance Corporation, LM Insurance Corporation,
The First Liberty Insurance Corporation and Lexco, Limited, collectively referred to as the
COMPANY, and Liberty Northwest Insurance Corporation, referred to as the REINSURER.

It is the intent of this agreement that the Company, at the Reinsurers’s request, subject to the
law of the jurisdiction of the Company’s domicile, will issue effective 1/1/93 binders and
contracts of insurance in accordance with all of the Company’s rates, rules and forma filings.
These binders and contracts of insurance will be identified by a policy prefix of  –163.

ARTICLE I

REINSURING AGREEMENT AND NATURE OF PARTICIPATION

In consideration of the mutual covenants hereinafter contained the parties hereto agree that the
REINSURER shall hereby reinsure the Company to the extent and on the terms and conditions and
subject to the exceptions, exclusions and limitations hereinafter set forth and that nothing
herein after shall in any manner create any obligations or establish any rights against the
Reinsurer in favor of any third parties or any persons not parties to this Agreement.

The liability of the Reinsurer and all other benefits accruing to the Company, as provided in
this Agreement or any amendments thereof, shall apply to the parties comprising the Company as a
group and not separately to each of the parties. Payments by the Reinsurer under this Agreement
to any of the parties comprising the Company shall constitute payment to the Company.

The Company shall cede to the Reinsurer and the Reinsurer shall accept from the company 100% of
the liability of the Company under all policies, binders and contracts of insurance and/or
reinsurance (hereafter referred to as “policies”) issued by or on behalf of the Company as
accommodation business for Liberty Northwest Insurance Company.

The liability of the Reinsurer for each cession hereunder shall commence obligatory and
simultaneously with that of the Company, subject to all the terms and conditions hereinafter set
forth.

 

 

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ARTICLE II

TERM

This Agreement shall become effective at 12:01 am, January 1, 1993, Local Standard Time and shall
apply to loss or losses resulting from, incidents covered under policies written, renewed or with
anniversaries on and after the aforementioned date. “Local Standard Time” shall mean Standard Time
at the Home Office of the Company.

This Agreement shall be of an unlimited duration but may be canceled prior to the January 1
anniversary date by the Company giving 90 days prior written notice to the Reinsurer.

	1.	 	In the event that this Agreement is terminated, the Reinsurer shall be liable for its share
of the liability under all policies in force under the Agreement at the effective date of
termination up to the natural expiration or prior termination date of said policies or for the
next twelve months, whichever shall first occur. It is understood, however, that by giving
notice in writing prior to the date of termination, the Company shall have the option of
reassuming the liability in force as of the date of termination and all future liability of
the Reinsurer shall cease as of such date.
	 
	2.	 	Except with respect to policies which, under applicable laws, may not be canceled mid-term
except for specific reasons stated in law or a regulation of the governmental body having
jurisdiction, the Company may terminate reinsurance in respect of any policy falling within
the scope of the Agreement at any time by sending to the Reinsurer by registered mail to its
principal office, notice stating the time and date when, not less than 30 days after the date
of mailing of such notice, termination shall be effective. As to policies which are subject
to limited cancellation laws as aforesaid, the Company may terminate reinsurance as respects
any such policy at any anniversary thereof by sending to the Reinsurer by registered mail at
its principal office, notice of such termination at least 60 days prior to the anniversary
date of such policy. However, if the Company is obligated by law to continue for the duration
of such period, reinsurance as respects such policy shall then terminate upon expiration of
said fixed period.
	 
	 	 	Unless this Agreement has been terminated in accordance with this Article, the Company may
not cancel, without prior approval of the Reinsurer, any individual policy covered by this
Reinsurance Agreement, except for non-payment of premium for that individual policy or for a
violation of any security requirement or at the request of the individual insured.
	 
	3.	 	When all reinsurance is expired or terminated, the Reinsurer shall return to the Company the
reinsurance premium unearned, if any, calculated on the monthly pro rata basis, less the
Ceding Commission and/or Excise Tax, if applicable, previously allowed thereon.

 

 

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	 	 	Should at any time subsequent to the commencement of this Agreement either party:

	 	(a)	 	lose the whole or any part of its paid-up Capital or Reserve Fund, as the
case may be, or
	 
	 	(b)	 	go into liquidation or suffer the appointment of a
Receiver or the presentation of a petition for the winding-up of its business, or
	 
	 	(c)	 	become acquired or controlled by or transfer its portfolio to any other
company or corporation, or
	 
	 	(d)	 	have its license to conduct insurance business revoked,
or
	 
	 	(e)	 	fail to comply in any manner whatsoever with the stipulations of this
Agreement,

	 	 	then this Agreement may be terminated immediately by the other party at any time upon
giving notice in writing to the remaining party.
	 
	4.	 	If any law or regulation of the federal, state, or local government of the United
States or the rulings of officials having supervision over insurance companies should
render illegal or materially change the undertaking of this Agreement as to risks
located in the jurisdiction of such authority, the Company may upon written notice to
the Reinsurer suspend, abrogate, or amend this Agreement insofar as it relates to risks
located within such jurisdiction to such extent that it deems necessary. Such
suspension, abrogation, or amendment of a portion of this Agreement shall in no way
affect any other portion thereof.
	 
	5.	 	Should either party as a result of legislation or for any other reason fail to remit to
the other party any amount due under this Agreement, this Agreement may be terminated
immediately by the other party at any time upon giving notice in writing to the
remaining party.
	 
	6.	 	In the event of termination of this Agreement in any of the circumstances detailed in
paragraphs 4 and 5 of this Article, the Company shall have the option to back date the
effective date of termination to the last day of the previous monthly statement.
	 
	7.	 	On the termination of this Agreement under the provisions of paragraph (3) (b) of this
Article, the Company shall be entitled to retain all balances of account due to the
Reinsurer until the business ceded under this Agreement shall have been completely
wound-up and liquidated and all obligations of the Reinsurer hereunder duly discharged.
In other cases of termination, the Company shall be entitled to retain balances only
sufficient to cover outstanding losses and unexpired liability.

 

 

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	9.	 	In the event of the voluntary or compulsory liquidation of the Reinsurer, the Company
shall have prior charge and lien on any moneys due to the Company hereunder, and the
Company shall be a secured creditor to that extent.

ARTICLE III

ORIGINAL CONDITIONS

The reinsurance provided hereunder shall be subject to the same terms, rates, conditions,
and waivers, and to the same modifications, alterations and cancellations as the
respective policies, contracts, and binders of the Company. The Reinsurer shall be
credited with its exact proportion of the original premiums received by the Company.

ARTICLE IV

CLAIMS AND LOSSES

The Reinsurer agrees to indemnify the Company for that part of the sums which the Company
shall become legally obligated to pay under its policy(ies) as set out in Article I. For the
purpose of this Agreement, if any underlying insurance policy(ies) listed do not contain a
definition of “losses”, losses shall mean the sum of:

	 	1.	 	All losses, including medical, actually paid;
	 
	 	2.	 	Reserves for unpaid losses as estimated by the Company, including IBNR
reserves;
	 
	 	3.	 	Premiums on bonds paid for by the Company in accordance with provision of
any policy(ies) listed in the Declaration made a part hereof;
	 
	 	4.	 	Interest accruing at the entry of judgment against an insured under any
of the policies listed in the Declaration made a part hereof.
	 
	 	5.	 	Allocated loss adjustment expense including but not limited to:

	 	a.	 	Attorney’s fees for claims in suit, threatened, or reasonably
anticipated;
	 
	 	b.	 	Court Costs and other items or expense such as:

	 	i.	 	medical examinations, laboratory, X-Ray and
autopsy expense to determine the extent of the company’s liability,
and
	 
	 	ii.	 	medical, expert and other witnesses at trials
or hearings, stenographic costs and costs of copies of documents and
transcripts.

 

 

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	 	6.	 	Expense incurred by the Company in seeking recovery from a third party less all
loss and allocated loss adjustment expense amounts recovered from any third party.

In addition to Reinsurer’s obligations cited, the Reinsurer agrees to reimburse the Company for
punitive, exemplary or extra-contractual damages whenever the ultimate loss includes such damages.
The terms “punitive, exemplary or extra-contractual damages” are defined as those liabilities not
included in the definition of loss 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 rejecting an offer of settlement or in the preparation of the defense, or in the
trial of any action against the Original Insured or in the preparation or prosecution of an appeal
consequent upon such action.

The Company shall give notice as soon as practicable to the Reinsurer of any claim which they have
reason to believe could involve this Contract. The Company shall keep the Reinsurer informed of
all developments likely to affect the cost of any claim or claims hereunder. The Company may
commence, continue, defend, settle or withdraw from actions, suits or prosecutions and generally
do all such things relating to any claim or loss in which the Reinsurer is interested as, in the
Company’s judgment, may be beneficial or expedient to both parties. All claim settlements made by
the Company, provided that in the Company’s judgment same are within the terms of the original
policies and within the terms of this Contract, shall be unconditionally binding upon the
Reinsurer.

The share of the Reinsurer in any claim settlement shall be immediately payable by the Reinsurer
to the Company upon reasonable evidence of the amount paid being given by the Company and such
settlement amount is included in the monthly statement prepared by the Company and transmitted to
the Reinsurer in accordance with Article V of this Agreement.

While the Reinsurer does not undertake to investigate or defend claims or suits, it shall
nevertheless have the right and be given the opportunity to associate with the company and its
representative, at its own expense, in the defense and control of any claim, suit or proceeding
involving this Agreement, with the full cooperation of the Company.

 

 

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ARTICLE V

PREMIUMS AND COMMISSIONS

Premiums shall be payable on the terms and conditions of this Agreement and any Endorsements
attached hereto and made a part hereof.

1. Accounts Payable by the Company to the Reinsurer.

The Company agrees to pay the Reinsurer:

	 	A.	 	An amount equal to the Reinsurance Premium less: Ceding Commission to
include the ceding expense allowance outlined in Exhibit I and dividends paid on a
direct basis to policyholders.

Plus;

	 	B.	 	An amount equal to any additional Reinsurance premium which results from
any premium audit on the Reinsured Policies and which is collected by the Company.
Additional premium shall be proportionately reduced by Ceding Commission.

	2.	 	Amounts Payable by the Reinsurer to the Company.
	 
	 	 	The Reinsurer agrees to pay to the Company:

	 	A.	 	Loss(es) including those amounts defined in Article IV, except
subparagraph 2, —  Claims, and Losses
	 
	 	B.	 	An amount equal to any reduction in the Reinsurance premium resulting
from any premium audit or cancellation on the Reinsured Policies.
	 
	 	C.	 	General Expense
	 
	 	D.	 	Unallocated Expense
	 
	 	E.	 	Premium and other taxes
	 
	 	F.	 	Expenses associated with involuntary/residual market charges
	 
	 	G.	 	Profit Commission
	 
	 	H.	 	Dividends as paid on a direct basis to policyholders.

	 	 	The percentage (%) of items C, D, E, F and G as outlined in Exhibit I will be applied to the
monthly reinsurance written premium ceded. These percentages will be adjusted on an annual
basis at renewal to reflect the expected costs incurred by the Company.

 

 

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	3.	 	Timing and Transmittal of Information.
	 
	 	 	The Company shall prepare and transmit to the Reinsurer a monthly statement
indicating the following:

	 	A.	 	Calculation of amount payable by the Company to the Reinsurer in
accordance with Section 1, and
	 
	 	B.	 	Calculation of amounts payable by the Reinsurer to the Company in
accordance with Section 2.

	 	 	Said statements shall be due and payable in cash or its equivalent thirty (30) days
from the receipt of such statements.
	 
	4.	 	Currency.
	 
	 	 	All payments hereunder shall be made in United States currency.
	 
	 	 	Whenever the word “Dollar” or the “$” sign appears in this Agreement, they shall be
construed to mean United States Dollars and all transactions under this Agreement
shall be in United States Dollars.
	 
	 	 	Amounts paid or received by the Company in any other currency shall be converted to
United States Dollars at the rate of exchange at the date such transaction is entered
on the books of the Company.

ARTICLE VI

RESERVES AND SECURITY Requirement

The Reinsurer shall provide funding to the Company for reserves for unpaid losses, incurred
but not reported losses, unearned premium reserves or paid loss recoverables on account of
policies reinsured under this Agreement, by providing to the Company within sixty (60) days
after this Agreement is signed a clean, irrevocable, and unconditional Letter of Credit,
issued by a bank acceptable to the Company, to cover the sum of all such Reserves,
(hereinafter referred to as “Reinsurer’s Obligations”). Such Letter of Credit shall be
issued for a period of not less than one year, and shall be automatically extended for one
year from its date of expiration or any future expiration date unless sixty (60) days prior
to any expiration date the issuing bank shall notify the Company by certified mail that the
issuing bank elects not to consider the Letter of Credit extended for any additional period.
The Letter of Credit shall contain all provisions prescribed by any insurance regulatory
authority to enable the Company to receive credit in accounting and financial statements on
account of policies reinsured under this Agreement. The Company agrees that thereafter it
will forward to the Reinsurer on a monthly basis a specific statement showing the

 

 

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amount of Reinsurer’s Obligations for the sole purpose of amending the Letter of Credit, in the
following manner:

	(a)	 	if the statement shows that the Reinsurer’s Obligations exceed the balance of credit
as of the statement date, this Reinsurer shall, within (30) days after receipt of notice
of such excess, secure delivery to the Company of an amendment to the Letter of Credit,
increasing the amount of such credit by the amount of such difference;
	 
	(b)	 	If, however, the statement shows that the Reinsurer’s Obligations are less than the
balance of credit as of the statement date, the Company shall, within thirty (30) days
after receipt of written request from the Reinsurer, release such excess credit by
agreeing to secure an amendment to the Letter of Credit, reducing the amount of credit
available by the amount of such excess credit.

     The Reinsurer and the Company agree that the Letter of Credit provided by the Reinsurer
pursuant to this Agreement may be drawn upon at any time, notwithstanding any other
provisions in this Agreement, and shall be utilized by the Company or its successors in
interest, by operation of law, including, without limitation, any liquidator, rehabilitator,
receiver or conservator of the Company for one or more of the following:

	 	(i)	 	to reimburse the Company for the Reinsurer’s share of premiums returned
to the owners of policies reinsured under this Agreement on account of
cancellations of such policies.
	 
	 	(ii)	 	to reimburse the Company for the Reinsurer’s share of losses paid by the
Company under the terms and provisions of the policies reinsured under this
Agreement.
	 
	 	(iii)	 	to fund an account with the Company in an amount at least equal to the
deduction, for reinsurance ceded, from the Company’s liabilities for policies
ceded under this Agreement. Such amount shall include, but not be limited to,
amounts for policy reserves, claims and losses incurred and unearned premiums
reserves, and reserves for incurred but not reported losses.
	 
	 	(iv)	 	to pay any other amounts the Company claims are due under this
Agreement.

In addition, the Reinsurer hereby agrees to maintain at all times a maximum ratio of 5 to 1
of gross earned premium to policyholders’ surplus. Gross earned premium is that part of the
premium before any reinsurance or retrocession which has been used to provide coverage
during the term of policies in force. Policyholders’ Surplus is the sum of paid in capital,
paid in and contributed surplus, and net earned surplus, including voluntary contingency
reserves. If said ratio is not maintained, at the Company’s option, either all losses
covered under this agreement will be commuted in accordance with Article XV, or, the
Reinsurer

 

 

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will immediately increase by 25% all trust amounts for policy (ies) covered by this
Agreement.

ARTICLE VII

INSOLVENCY OF THE COMPANY OR REINSURER

The reinsurance provided by this Agreement shall be payable by the Reinsurer directly to the
Company or to its liquidator, receiver or statutory successor on the basis of the liability
of the Company under the contacts reinsured without diminution because of the insolvency of
the Company. In the event of the insolvency of the Company, the liquidator or receiver or
statutory successor of the Company shall give written notice of the pendency of each claim
against the Company on a policy or bond reinsured within a reasonable time after such claim
is filed in the insolvency proceeding; and during the pendency of such claim, the Company
may investigate such claim and interpose, at their own expense, in the proceeding where such
claim is to be adjudicated any defense or defenses which it may deem available to the
Company, its liquidator or receiver or statutory successor. The expense thus incurred by the
Reinsurer shall be chargeable, subject to court approval, against the Company as a part of
the expense of liquidation to the extent of such proportionate share of the benefit as shall
accrue to the Company solely as a result of the defense undertaken by the Reinsurer.

The reinsurance shall be payable as herein before in the above paragraph provided except as
otherwise provided by Section 411B (relating to Fidelity and Surety Risks) of the Insurance
Law of New York at except (a) where the Agreement specifically provides another payee of
such reinsurance in the event of the insolvency of the Company and (b) where the Reinsurer
with the consent of the direct insured or insureds have assumed such policy obligations of
the Company as direct obligations of the Reinsurer to the payees under such policies and in
substitution for the obligations of the Company to such payees.

In the event the Reinsurer shall become insolvent this Reinsurance Agreement shall
automatically be terminated as of the date of insolvency.

ARTICLE VIII

INSPECTION

The Reinsurer may at any time during normal office hours inspect and take copies of such of
the Company’s records and documents which relate to business covered under this Agreement.
It is agreed that the Reinsurer’s right of inspection shall continue so long as either party
has a claim against the other arising out of this Agreement.

 

 

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ARTICLE IX

RIGHT OF OFFSET

The Reinsurer or the Company may offset any balance whether on account of premiums,
commissions, losses or loss or claims expense due from one party to the other under this
Agreement or under any other reinsurance agreement heretofore or hereafter entered into
between the Reinsurer and the Company, whether acting as assuming reinsurer or ceding
company.

ARTICLE X

ERRORS AND OMISSIONS

Any inadvertent acts, delays, omissions, or errors made in connection with this Agreement
shall not be held to relieve either of the parties hereto from any liability which would
have attached hereunder if such acts, delays, omissions or errors had not been made,
provided such acts, delays, omissions or errors are rectified immediately upon discovery. It
is further agreed that in all things coming within the scope of this Agreement the Reinsurer
shall share to the extent of its interest the fortunes of the Company.

ARTICLE XI

SERVICE OF SUIT

In the event of the failure of the Reinsurer to pay any amount claimed to be due hereunder,
the Reinsurer agrees that, at the request of the Company, the Reinsurer will submit to the
jurisdiction of any court of competent jurisdiction in any State of the United States, will
comply with all requirements necessary to give such court jurisdiction, and will abide by
the final decision of such court, or of any Appellate court in the event of an appeal, with
all relevant matters to be determined in accordance with the law and practice of such court.
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 pursuant to any statute of any state, territory, or district of
the United States, which makes provision therefor, the Reinsurer 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
arising out of this Agreement instituted by or on behalf of the Company or any beneficiary
hereunder.

 

 

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Further, it is agreed that if any statute of any state, territory or district of the United
States does not allow service of process as heretofore outlined, the Reinsurer agrees that
service of process may be made upon the firm of Schabe, Williamson & Wyatt. The firm of
Schabe, Williamson & Wyatt is hereby authorized to accept any such suit, and upon the request
of the Company to give a written undertaking to the Company that it will enter a general
appearance on the Reinsurer’s behalf in the event that such a suit shall be instituted.

ARTICLE XII

ARBITRATION

As a condition precedent to any right of action hereunder, any dispute or difference arising
between the parties out of this Agreement shall be submitted to the decision of a board of
arbitration composed of two arbitrators and an umpire, meeting in Boston, Massachusetts
unless otherwise agreed.

The members of the board of arbitration shall be active or retired disinterested officials
of insurance or reinsurance companies. Each party shall appoint its arbitrator and the two
arbitrators shall choose an umpire before instituting the hearing. In the event that either
party should fail to choose an arbitrator within thirty (30) days following a written
request by the other party to enter into arbitration, the requesting party may choose two
arbitrators who shall in turn choose an umpire before entering upon arbitration. In the
event the two arbitrators fail to agree on an umpire either party shall have the right to
submit the matter to the American Arbitration Association subject to its rules in effect at
that time.

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

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

 

 

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ARTICLE XIII

CHOICE OF LAW

The validity, construction, interpretation and performance of this agreement, except as to rules
with respect to credit for reinsurance in which case the rules of all applicable states shall
apply, shall be governed by the law of the Commonwealth of Massachusetts, United States of America,
exclusive of the Commonwealth’s rules with respect to conflicts of law.

ARTICLE XIV

MODIFICATION

This Reinsurance Agreement may not be altered, modified or amended in whole or part, in any
way except by an instrument in writing signed by both parties.

ARTICLE XV

COMMUTATION

Within 60 months from expiration of each agreement year, and annually thereafter, the
Company shall submit a statement to the Reinsurer listing amounts paid and reserved for all
claims under this contract. This statement shall form the basis of an agreed value for all
such losses. The amounts of reserves contained therein shall be calculated in accordance
with the following criteria, except as may be mutually agreed:

	 	1.	 	Mortality assumptions will be calculated from the latest available United
States census tables as follows:
	 
	 	 	 	Survivor Benefits — Total Females
	 
	 	 	 	Disability Benefits — Total Males
	 
	 	2.	 	The annual interest discount percentage shall be an average (rounded to the
nearest one-half percentage point) of the Company’s investment purchases for the
three latest available calendar years.
	 
	 	3.	 	Remarriage expectations will be in accordance with the assumptions used by
the National Council on Compensation Insurance in the statistical tables.

 

 

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	 	4.	 	For all future medical costs, an annuity calculation shall be based upon
the Company’s evaluation of long term medical care and rehabilitation
requirements, using an annual discount of 0% and an annual escalation of 0%.

The above criteria shall not apply to losses with future escalation of indemnity benefits as
described below:

	 	1.	 	Annuity values for “index-linked” benefits shall be calculated based upon
an annual discount of 0% and an annual escalation of 0%.
	 
	 	2.	 	For “index-linked” benefits, remarriage expectations will not be used.

Except as may be mutually agreed for specific losses, these calculations shall be considered
the final and agreed value of all known losses for the period of this Agreement. The Company
and the Reinsurer may mutually agree to commute the claims in the manner above described,
except where commutation is required by Article V of this Agreement, in which case the
claims are required to be commuted in the manner herein prescribed without mutual agreement.
A resulting payment, if any, shall be accepted by the Company in full settlement of the
Reinsurer’s liability for all such losses. In the event that a loss is not reported to the
Company until after the Company’s statement has been submitted, immediate notice of such
loss shall be given to the Reinsurer in order that an agreed present value, or, if after a
required commutation, a required present value, may be determined.

Terms and conditions regarding commutation, as outlined heretofore, will not expire with the
termination of this Agreement.

ARTICLE XVII

Honorable Undertaking

This Agreement shall be construed as an honorable undertaking between the parties hereto not
to be defeated by technical legal construction or poverty of language, the true intent of
this Agreement continuing and being that the Reinsurer, in every case to which this
Agreement applies, follows the fortunes of the Company.

 

 

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IN WITNESS WHEREOF this present Agreement has been executed in duplicate by their respective
officers duly authorized.

LIBERTY MUTUAL INSURANCE COMPANY

LIBERTY MUTUAL FIRE INSURANCE COMPANY

LIBERTY MUTUAL (BERMUDA) LTD.

LIBERTY INSURANCE CORPORATION

LM INSURANCE CORPORATION

THE FIRST LIBERTY INSURANCE CORPORATION 
LEXCO LIMITED

	 	 	 	 	 

	This 17th day of December, 1993	 	 
	 
	 	 	 	 
	BY

	 	/s/ 	 	 
	 	 	 	 	 
	TITLE:

	 	Duly Authorized Official	 	 
	 
	WITNESSED

	 	/s/ 	 	 
	 
	 	 	 	 
	LIBERTY NORTHWEST INSURANCE COMPANY	 	 
	 
	 	 	 	 
	This 24th day of January, 1994	 	 
	 
	 	 	 	 
	BY

	 	/s/ David A. Davidson	 	 
	 	 	 	 	 
	TITLE:

	 	EXECUTIVE VICE PRESIDENT
	 	 
	 
	WITNESSED

	 	/s/ 	 	 
	 
	DATED

	 	1-24-94	 	 

 

 

EXHIBIT I

LIBERTY NORTHWEST CEDED ACCOMODATION BUSINESS

Ceding Expense Allowance for 1993 Policy Year

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	General	 	 	 	 	 	Premium & 	 	Involuntary	 	Profit *	 	 
	 	 	Expense	 	ULAE	 	Other Taxes	 	 Load	 	Margin	 	TOTAL
	WORKERS’ COMPENSATION
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Alabama
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	28.9	%	 	 	3.5	%	 	 	50.3	%
	Alaska
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	0.0	%	 	 	3.5	%	 	 	21.4	%
	Arizona
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	1.6	%	 	 	3.5	%	 	 	23.0	%
	Arkansas
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	46.2	%	 	 	3.5	%	 	 	67.6	%
	California
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	S.F.	 	 	 	3.5	%	 	 	21.4	%
	Colorado
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	S.F.	 	 	 	3.5	%	 	 	21.4	%
	Connecticut
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	6.0	%	 	 	3.5	%	 	 	27.4	%
	Delaware
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	5.8	%	 	 	3.5	%	 	 	27.2	%
	District of Columbia
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	9.6	%	 	 	3.5	%	 	 	31.0	%
	Florida
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	24.4	%	 	 	3.5	%	 	 	45.8	%
	Georgia
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	11.2	%	 	 	3.5	%	 	 	32.6	%
	Hawaii
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	4.5	%	 	 	3.5	%	 	 	25.9	%
	Idaho
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	2.1	%	 	 	3.5	%	 	 	23.5	%
	Illinios
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	1.7	%	 	 	3.5	%	 	 	23.1	%
	Indiana
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	3.3	%	 	 	3.5	%	 	 	24.7	%
	Iowa
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	4.3	%	 	 	3.5	%	 	 	25.7	%
	Kansas
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	24.6	%	 	 	3.5	%	 	 	46.0	%
	Kentucky
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	26.4	%	 	 	3.5	%	 	 	47.8	%
	Louisiana
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	151.1	%	 	 	3.5	%	 	 	172.5	%
	Maine
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	374.7	%	 	 	3.5	%	 	 	396.1	%
	Maryland
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	S.F.	 	 	 	3.5	%	 	 	21.4	%
	Massachusetts
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	51.7	%	 	 	3.5	%	 	 	73.1	%
	Michigan
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	3.3	%	 	 	3.5	%	 	 	24.7	%
	Minnesota
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	S.P.	 	 	 	3.5	%	 	 	21.4	%
	Mississippi
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	33.0	%	 	 	3.5	%	 	 	54.4	%
	Missouri
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	24.3	%	 	 	3.5	%	 	 	45.7	%
	Montana
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	S.F.	 	 	 	3.5	%	 	 	21.4	%
	Nebraska
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	11.1	%	 	 	3.5	%	 	 	32.5	%
	Nevada
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	S.F.	 	 	 	3.5	%	 	 	21.4	%
	New Hampshire
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	17.5	%	 	 	3.5	%	 	 	38.9	%
	New Jersey
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	15.1	%	 	 	3.5	%	 	 	36.5	%
	New Mexico
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	23.6	%	 	 	3.5	%	 	 	45.0	%
	New York
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	S.P.	 	 	 	3.5	%	 	 	21.4	%
	North Carolina
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	14.8	%	 	 	3.5	%	 	 	36.2	%
	North Dakota
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	S.F.	 	 	 	3.5	%	 	 	21.4	%
	Ohio
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	S.F.	 	 	 	3.5	%	 	 	21.4	%
	Oklahoma
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	S.F.	 	 	 	3.5	%	 	 	21.4	%
	Oregon
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	6.7	%	 	 	3.5	%	 	 	28.1	%
	Pennsylvania
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	S.F.	 	 	 	3.5	%	 	 	21.4	%
	Rhode Island
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	399.0	%	 	 	3.5	%	 	 	420.4	%
	South Carolina
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	22.6	%	 	 	3.5	%	 	 	44.0	%
	South Dakota
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	10.1	%	 	 	3.5	%	 	 	31.5	%
	Tennessee
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	23.8	%	 	 	3.5	%	 	 	45.2	%
	Texas
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	5.0	%	 	 	3.5	%	 	 	26.4	%
	Utah
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	S.F.	 	 	 	3.5	%	 	 	21.4	%
	Vermont
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	17.1	%	 	 	3.5	%	 	 	38.5	%
	Virginia
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	17.0	%	 	 	3.5	%	 	 	38.4	%
	Washington
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	S.F.	 	 	 	3.5	%	 	 	21.4	%
	West Virginia
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	S.F.	 	 	 	3.5	%	 	 	21.4	%
	Wisconsin
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	S.P.	 	 	 	3.5	%	 	 	21.4	%
	Wyoming
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	S.F.	 	 	 	3.5	%	 	 	21.4	%
	COMMERCIAL AUTOMOBILE
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	All States
	 	 	25.3	%	 	 	6.0	%	 	 	2.8	%	 	 	5.0	%	 	 	3.5	%	 	 	42.6	%
	ALL OTHER COVERAGES
(Lines)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	All States
	 	 	18.9	%	 	 	10.7	%	 	 	1.5	%	 	 	0.0	%	 	 	3.5	%	 	 	34.6	%

Source:

     NCCI Management Summary 1991 and Liberty Mutual — Internal Reporting.

Note:

			
	*	 	Includes Credit Risk for Uncollectible Premium.

 

	 	 	 	 	 

	S.F. — State Fund

	 	
	 	Prepared By:     Reinsurance Acctg. — M.S.
	S.P. — State Pool

	 	 	 	10/27/93

 

 

The REINSURANCE AGREEMENT between the Liberty Mutual Insurance Companies referred to collectively
in this contract as the Company and Liberty Northwest Insurance Corporation, referred to as the
Reinsurer is amended effective 1/1/93.

Exhibit I-A replaces Exhibit I for all expenses associated with policies written and issued
effective 1/1/93 through 12/31/93.

In WITNESS WHEREOF this amendment to the Reinsurance Agreement has been executed in duplicate by
their respective officers duly authorized.

LIBERTY MUTUAL INSURANCE COMPANY

LIBERTY MUTUAL FIRE INSURANCE COMPANY

LIBERTY MUTUAL (BERMUDA) LTD.

LIBERTY INSURANCE CORPORATION

LM INSURANCE CORPORATION

THE FIRST LIBERTY INSURANCE CORPORATION 
LEXCO LIMITED

	 	 	 	 	 

	This 22nd day of Sept. 1995	 	 
	 
	 	 	 	 
	BY

	 	/s/ 	 	 
	 	 	 	 	 
	TITLE

	 	VICE PRESIDENT	 	 
	 
	 	 	 	 
	LIBERTY NORTHWEST INSURANCE CORPORATION	 	 
	 
	 	 	 	 
	This 1st day of August, 1995	 	 
	 
	 	 	 	 
	BY

	 	/s/ David A. Davidson	 	 
	 	 	 	 	 
	TITLE

	 	EXECUTIVE VP	 	 

 

 

EXHIBIT I-A

LIBERTY NORTHWEST CEDED ACCOMODATION BUSINESS

Ceding Expense Allowance for 1993 Policy Year

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Gen.	 	 	 	 	 	Prem.	 	Invol.	 	Profit	 	 
	 	 	Exp.	 	ULAE	 	Taxes	 	Load	 	Margin	 	TOTAL
	WORKERS’ COMPENSATION
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Alabama
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	28.9	%	 	 	3.5	%	 	 	50.3	%
	Alaska
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	0.0	%	 	 	3.5	%	 	 	21.4	%
	Arizona
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	1.6	%	 	 	3.5	%	 	 	23.0	%
	Arkansas
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	46.2	%	 	 	3.5	%	 	 	67.6	%
	California
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	0.0	%	 	 	3.5	%	 	 	21.4	%
	Colorado
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	0.0	%	 	 	3.5	%	 	 	21.4	%
	Connecticut
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	6.0	%	 	 	3.5	%	 	 	27.4	%
	Delaware
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	5.8	%	 	 	3.5	%	 	 	27.2	%
	Dist. of Columbia
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	9.6	%	 	 	3.5	%	 	 	31.0	%
	Florida
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	0.0	%	 	 	3.5	%	 	 	21.4	%
	Georgia
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	11.2	%	 	 	3.5	%	 	 	32.6	%
	Hawaii
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	4.5	%	 	 	3.5	%	 	 	25.9	%
	Idaho
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	2.1	%	 	 	3.5	%	 	 	23.5	%
	Illinios
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	1.7	%	 	 	3.5	%	 	 	23.1	%
	Indiana
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	3.3	%	 	 	3.5	%	 	 	24.7	%
	Iowa
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	4.3	%	 	 	3.5	%	 	 	25.7	%
	Kansas
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	24.6	%	 	 	3.5	%	 	 	46.0	%
	Kentucky
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	26.4	%	 	 	3.5	%	 	 	47.8	%
	Louisiana
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	0.0	%	 	 	3.5	%	 	 	21.4	%
	Maine
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	0.0	%	 	 	3.5	%	 	 	21.4	%
	Maryland
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	0.0	%	 	 	3.5	%	 	 	21.4	%
	Massachusetts
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	51.7	%	 	 	3.5	%	 	 	73.1	%
	Michigan
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	3.3	%	 	 	3.5	%	 	 	24.7	%
	Minnesota
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	0.0	%	 	 	3.5	%	 	 	21.4	%
	Mississippi
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	0.0	%	 	 	3.5	%	 	 	21.4	%
	Missouri
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	24.3	%	 	 	3.5	%	 	 	45.7	%
	Montana
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	0.0	%	 	 	3.5	%	 	 	21.4	%
	Nebraska
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	11.1	%	 	 	3.5	%	 	 	32.5	%
	Nevada
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	0.0	%	 	 	3.5	%	 	 	21.4	%
	New Hampshire
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	17.5	%	 	 	3.5	%	 	 	38.9	%
	New Jersey
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	15.1	%	 	 	3.5	%	 	 	36.5	%
	New Mexico
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	23.6	%	 	 	3.5	%	 	 	45.0	%
	New York
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	0.0	%	 	 	3.5	%	 	 	21.4	%
	North Carolina
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	14.8	%	 	 	3.5	%	 	 	36.2	%
	North Dakota
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	0.0	%	 	 	3.5	%	 	 	21.4	%
	Ohio
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	0.0	%	 	 	3.5	%	 	 	21.4	%
	Oklahoma
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	0.0	%	 	 	3.5	%	 	 	21.4	%
	Oregon
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	6.7	%	 	 	3.5	%	 	 	28.1	%

 

 

EXHIBIT I-A

LIBERTY NORTHWEST CEDED ACCOMODATION BUSINESS

Ceding Expense Allowance for 1993 Policy Year

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Gen.	 	 	 	 	 	Prem.	 	Invol.	 	Profit	 	 
	 	 	Exp.	 	ULAE	 	Taxes	 	Load	 	Margin	 	TOTAL
	WORKERS’ COMPENSATION
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pennsylvania
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	0.0	%	 	 	3.5	%	 	 	21.4	%
	Rhode Island
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	0.0	%	 	 	3.5	%	 	 	21.4	%
	South Carolina
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	22.6	%	 	 	3.5	%	 	 	44.0	%
	South Dakota
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	10.1	%	 	 	3.5	%	 	 	31.5	%
	Tennessee
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	23.8	%	 	 	3.5	%	 	 	45.2	%
	Texas
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	0.0	%	 	 	3.5	%	 	 	21.4	%
	Utah
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	0.0	%	 	 	3.5	%	 	 	21.4	%
	Vermont
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	17.1	%	 	 	3.5	%	 	 	38.5	%
	Virginia
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	17.0	%	 	 	3.5	%	 	 	38.4	%
	Washington
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	0.0	%	 	 	3.5	%	 	 	21.4	%
	West Virginia
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	0.0	%	 	 	3.5	%	 	 	21.4	%
	Wisconsin
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	0.0	%	 	 	3.5	%	 	 	21.4	%
	Wyoming
	 	 	9.7	%	 	 	5.5	%	 	 	2.7	%	 	 	0.0	%	 	 	3.5	%	 	 	21.4	%
	COMMERCIAL AUTOMOBILE
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	All States
	 	 	25.3	%	 	 	6.0	%	 	 	2.8	%	 	 	5.0	%	 	 	3.5	%	 	 	42.6	%
	ALL OTHER COVERAGES(Lines)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	All States
	 	 	18.9	%	 	 	10.7	%	 	 	1.5	%	 	 	0.0	%	 	 	3.5	%	 	 	34.6	%

 

 

Endorsement 1

The REINSURANCE AGREEMENT between the Liberty Mutual Insurance Companies referred to collectively
in this contract as the Company and Liberty Northwest Insurance Corporation, referred to as the
Reinsurer is amended effective 1/1/94.

Exhibit 2 replaces Exhibit I for all expenses associated with policies written and issued effective
1/1/94 through 12/31/94.

In WITNESS WHEREOF this amendment to the Reinsurance Agreement has been executed in duplicate by
their respective officers duly authorized.

LIBERTY MUTUAL INSURANCE COMPANY

LIBERTY MUTUAL FIRE INSURANCE COMPANY

LIBERTY MUTUAL (BERMUDA) LTD.

LIBERTY INSURANCE CORPORATION

LM INSURANCE CORPORATION

THE FIRST LIBERTY INSURANCE CORPORATION

LEXCO LIMITED

	 	 	 	 	 

	This 22nd day of Sept. 1995	 	 
	 
	 	 	 	 
	BY

	 	/s/ 	 	 
	 

	 	 	 	 
	TITLE

	 	VICE PRESIDENT	 	 
	 
	 	 	 	 
	LIBERTY NORTHWEST INSURANCE CORPORATION	 	 
	 
	 	 	 	 
	This 1st day of August 1995	 	 
	 
	 	 	 	 
	BY

	 	/s/ David A. Davidson
	 	 
	 

	 	 	 	 
	TITLE

	 	 EXECUTIVE VP	 	 

 

 

EXHIBIT 2

LIBERTY NORTHWEST CEDED ACCOMODATION BUSINESS

Ceding Expense Allowance for 1994 Policy Year

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Gen.	 	 	 	 	 	Prem.	 	Invol.	 	Profit	 	 
	 	 	Exp.	 	ULAE	 	Taxes	 	Load	 	Margin	 	TOTAL
	WORKERS’ COMPENSATION
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Alabama
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	30.0	%	 	 	3.5	%	 	 	49.2	%
	Alaska
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	2.2	%	 	 	3.5	%	 	 	21.4	%
	Arizona
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	1.6	%	 	 	3.5	%	 	 	20.8	%
	Arkansas
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	41.9	%	 	 	3.5	%	 	 	61.1	%
	California
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Colorado
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Connecticut
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	6.4	%	 	 	3.5	%	 	 	25.6	%
	Delaware
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	10.1	%	 	 	3.5	%	 	 	29.3	%
	Dist. of Columbia
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	5.8	%	 	 	3.5	%	 	 	25.0	%
	Florida
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Georgia
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	13.8	%	 	 	3.5	%	 	 	33.0	%
	Hawaii
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	6.4	%	 	 	3.5	%	 	 	25.6	%
	Idaho
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.8	%	 	 	3.5	%	 	 	20.0	%
	Illinios
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	2.4	%	 	 	3.5	%	 	 	21.6	%
	Indiana
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	3.2	%	 	 	3.5	%	 	 	22.4	%
	Iowa
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	3.8	%	 	 	3.5	%	 	 	23.0	%
	Kansas
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	18.2	%	 	 	3.5	%	 	 	37.4	%
	Kentucky
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	40.8	%	 	 	3.5	%	 	 	60.0	%
	Louisiana
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Maine
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Maryland
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Massachusetts
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	31.5	%	 	 	3.5	%	 	 	50.7	%
	Michigan
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	3.8	%	 	 	3.5	%	 	 	23.0	%
	Minnesota
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Mississippi
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Missouri
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	18.6	%	 	 	3.5	%	 	 	37.8	%
	Montana
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Nebraska
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	8.7	%	 	 	3.5	%	 	 	27.9	%
	Nevada
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	New Hampshire
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	34.8	%	 	 	3.5	%	 	 	54.0	%
	New Jersey
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	16.1	%	 	 	3.5	%	 	 	35.3	%
	New Mexico
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	10.8	%	 	 	3.5	%	 	 	30.0	%
	New York
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	North Carolina
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	12.8	%	 	 	3.5	%	 	 	32.0	%
	North Dakota
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Ohio
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Oklahoma
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Oregon
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	2.5	%	 	 	3.5	%	 	 	21.7	%

 

 

EXHIBIT 2

LIBERTY NORTHWEST CEDED ACCOMODATION BUSINESS

Ceding Expense Allowance for 1994 Policy Year

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Gen.	 	 	 	 	 	Prem.	 	Invol.	 	Profit	 	 
	 	 	Exp.	 	ULAE	 	Taxes	 	Load	 	Margin	 	TOTAL
	WORKERS’ COMPENSATION
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pennsylvania
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Rhode Island
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	South Carolina
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	14.5	%	 	 	3.5	%	 	 	33.7	%
	South Dakota
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	14.9	%	 	 	3.5	%	 	 	34.1	%
	Tennessee
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	28.3	%	 	 	3.5	%	 	 	47.5	%
	Texas
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Utah
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Vermont
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	19.2	%	 	 	3.5	%	 	 	38.4	%
	Virginia
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	19.6	%	 	 	3.5	%	 	 	38.8	%
	Washington
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	West Virginia
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Wisconsin
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Wyoming
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	All other W.C.
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	COMMERCIAL AUTOMOBILE
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	All States
	 	 	5.50	%	 	 	3.39	%	 	 	2.55	%	 	 	3.0	%	 	 	3.5	%	 	 	17.9	%
	ALL OTHER COVERAGES (Line)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	All States
	 	 	5.09	%	 	 	7.67	%	 	 	2.79	%	 	 	0.0	%	 	 	3.5	%	 	 	19.1	%

 

 

Endorsement 2

The REINSURANCE AGREEMENT between the Liberty Mutual Insurance Companies referred to collectively
in this contract as the Company and Liberty Northwest Insurance Corporation, referred to as the
Reinsurer is amended effective 1/1/95.

Exhibit 3 replaces Exhibit 2 for all expenses associated with policies written and issued effective
1/1/95 through 12/31/95.

In WITNESS WHEREOF this amendment to the Reinsurance Agreement has been executed in duplicate by
their respective officers duly authorized.

LIBERTY MUTUAL INSURANCE COMPANY

LIBERTY MUTUAL FIRE INSURANCE COMPANY

LIBERTY MUTUAL (BERMUDA) LTD.

LIBERTY INSURANCE CORPORATION

LM INSURANCE CORPORATION

THE FIRST LIBERTY INSURANCE CORPORATION

LEXCO LIMITED

	 	 	 	 	 

	This 22nd day of Sept. 1995	 	 
	 
	 	 	 	 
	BY

	 	/s/ 	 	 
	 

	 	 	 	 
	TITLE

	 	 VICE PRESIDENT	 	 
	 
	 	 	 	 
	LIBERTY NORTHWEST INSURANCE CORPORATION	 	 
	 
	 	 	 	 
	This 1st day of August, 1995	 	 
	 
	 	 	 	 
	BY

	 	/s/ David A. Davidson	 	 
	 

	 	 	 	 
	TITLE

	 	 EXECUTIVE VP	 	 

 

 

EXHIBIT 3

LIBERTY NORTHWEST CEDED ACCOMODATION BUSINESS

Ceding Expense Allowance for 1995 Policy Year

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Gen.	 	 	 	 	 	Prem.	 	Invol.	 	Profit	 	 
	 	 	Exp.	 	ULAE	 	Taxes	 	Load	 	Margin	 	TOTAL
	WORKERS’ COMPENSATION
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Alabama
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	25.7	%	 	 	3.5	%	 	 	44.9	%
	Alaska
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	4.0	%	 	 	3.5	%	 	 	23.2	%
	Arizona
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	1.5	%	 	 	3.5	%	 	 	20.7	%
	Arkansas
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	21.7	%	 	 	3.5	%	 	 	40.9	%
	California
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Colorado
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Connecticut
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	4.7	%	 	 	3.5	%	 	 	23.9	%
	Delaware
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	13.9	%	 	 	3.5	%	 	 	33.1	%
	Dist. of Columbia
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	4.6	%	 	 	3.5	%	 	 	23.8	%
	Florida
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Georgia
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	17.4	%	 	 	3.5	%	 	 	36.6	%
	Hawaii
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	14.5	%	 	 	3.5	%	 	 	33.7	%
	Idaho
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.8	%	 	 	3.5	%	 	 	20.0	%
	Illinios
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	2.1	%	 	 	3.5	%	 	 	21.3	%
	Indiana
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	1.9	%	 	 	3.5	%	 	 	21.1	%
	Iowa
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	2.3	%	 	 	3.5	%	 	 	21.5	%
	Kansas
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	14.3	%	 	 	3.5	%	 	 	33.5	%
	Kentucky
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	45.4	%	 	 	3.5	%	 	 	64.6	%
	Louisiana
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Maine
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Maryland
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Massachusetts
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	23.4	%	 	 	3.5	%	 	 	42.6	%
	Michigan
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	3.2	%	 	 	3.5	%	 	 	22.4	%
	Minnesota
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Mississippi
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Missouri
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	13.9	%	 	 	3.5	%	 	 	33.1	%
	Montana
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Nebraska
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	3.7	%	 	 	3.5	%	 	 	22.9	%
	Nevada
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	New Hampshire
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	34.0	%	 	 	3.5	%	 	 	53.2	%
	New Jersey
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	17.1	%	 	 	3.5	%	 	 	36.3	%
	New Mexico
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	6.6	%	 	 	3.5	%	 	 	25.8	%
	New York
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	North Carolina
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	8.9	%	 	 	3.5	%	 	 	28.1	%
	North Dakota
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Ohio
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Oklahoma
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Oregon
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	1.8	%	 	 	3.5	%	 	 	21.0	%

 

 

EXHIBIT 3

LIBERTY NORTHWEST CEDED ACCOMODATION BUSINESS

Ceding Expense Allowance for 1995 Policy Year

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Gen.	 	 	 	 	 	Prem.	 	Invol.	 	Profit	 	 
	 	 	Exp.	 	ULAE	 	Taxes	 	Load	 	Margin	 	TOTAL
	WORKERS’ COMPENSATION
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pennsylvania
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Rhode Island
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	South Carolina
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	13.4	%	 	 	3.5	%	 	 	32.6	%
	South Dakota
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	12.2	%	 	 	3.5	%	 	 	31.4	%
	Tennessee
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	43.1	%	 	 	3.5	%	 	 	62.3	%
	Texas
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Utah
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Vermont
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	18.4	%	 	 	3.5	%	 	 	37.6	%
	Virginia
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	21.9	%	 	 	3.5	%	 	 	41.1	%
	Washington
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	West Virginia
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Wisconsin
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Wyoming
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	COMMERCIAL AUTOMOBILE
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	All States
	 	 	5.50	%	 	 	3.39	%	 	 	2.55	%	 	 	3.0	%	 	 	3.5	%	 	 	17.9	%
	ALL OTHER COVERAGES (Line
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	All States
	 	 	5.09	%	 	 	7.67	%	 	 	2.79	%	 	 	0.0	%	 	 	3.5	%	 	 	19.1	%

 

 

Endorsement 3

The REINSURANCE AGREEMENT between the Liberty Mutual Insurance Companies, referred to collectively
in this contract as the Company, and Liberty Northwest Insurance Corporation, referred to as the
Reinsurer, is amended effective 1/1/96.

EXHIBIT 4 replaces EXHIBIT 3 for all expenses associated with policies written and issued effective
on and after 1/1/96.

In WITNESS WHEREOF this amendment to the Reinsurance Agreement has been executed in duplicate by
their respective officers duly authorized.

LIBERTY MUTUAL INSURANCE COMPANY

LIBERTY MUTUAL FIRE INSURANCE COMPANY

LIBERTY MUTUAL (BERMUDA) LTD.

LIBERTY INSURANCE CORPORATION

LM INSURANCE CORPORATION

THE FIRST LIBERTY INSURANCE CORPORATION

LEXCO LIMITED

	 	 	 	 	 

	This 29th day of June, 1999	 	 
	 
	 	 	 	 
	By

	 	/s/ Illegible	 	 
	 

	 	 	 	 
	TITLE

	 	 VICE PRESIDENT	 	 
	 
	WITNESSED

	 	 /s/ Lauren H. Covert

	 	 
	 
	DATED

	 	June 29, 1999	 	 
	 
	 	 	 	 
	LIBERTY NORTHWEST INSURANCE COMPANY	 	 
	 
	 	 	 	 
	This 26th day of May, 1998	 	 
	 
	 	 	 	 
	By

	 	/s/ David A. Davidson	 	 
	 

	 	 	 	 
	TITLE

	 	 EXECUTIVE VICE PRESIDENT	 	 
	 
	WITNESSED

	 	/s/ 	 	 
	 
	DATED

	 	May 26, 1998	 	 

 

 

Exhibit 4

LIBERTY NORTHWEST CEDED ACCOMODATION BUSINESS

Ceding Expense Allowance

Policy Year 1996

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Premium	 	 	 	 	 	 
	 	 	General	 	 	 	 	 	&	 	Involuntary	 	Profit*	 	 
	 	 	Expense	 	ULAE	 	Other Taxes	 	Load	 	Margin	 	TOTAL
	WORKERS’ COMPENSATION
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Alabama
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Alaska
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Arizona
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Arkansas
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	California
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Colorado
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Connecticut
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Delaware
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	District of Columbia
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Florida
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Georgia
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Hawaii
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Idaho
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Illinois
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Indiana
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Iowa
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Kansas
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Kentucky
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Louisiana
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Maine
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Maryland
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Massachusetts
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Michigan
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Minnesota
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Mississippi
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Missouri
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Montana
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Nebraska
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Nevada
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	New Hampshire
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	New Jersey
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	New Mexico
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	New York
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	North Carolina
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	North Dakota
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Ohio
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Oklahoma
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Oregon
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Pennsylvania
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Rhode Island
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	South Carolina
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	South Dakota
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Tennessee
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Texas
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Utah
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Vermont
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Virginia
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Washington
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	West Virginia
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Wisconsin
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Wyoming
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	All other W.C.
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	COMMERCIAL AUTOMOBILE
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	All States
	 	 	5.5	%	 	 	3.39	%	 	 	2.55	%	 	 	0.0	%	 	 	3.5	%	 	 	14.9	%
	ALL OTHER (GL)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	All States
	 	 	5.09	%	 	 	7.67	%	 	 	2.79	%	 	 	0.0	%	 	 	3.5	%	 	 	19.1	%

			
	 	 	 
	Note:
	 	Prepared By: K. Heap
	 
	 	Date Prepared: 6/8/98
	*     Profit Margin to include uncollectible premium charge.
	 	Filename: Lib. Northwest Comm-96

 

 

Endorsement 4

The REINSURANCE AGREEMENT between the Liberty Mutual Insurance Companies, referred to collectively
in this contract as the Company, and Liberty Northwest Insurance Corporation, referred to as the
Reinsurer, is amended effective 1/1/97.

EXHIBIT 5 replaces EXHIBIT 4 for all expenses associated with policies written and issued effective
on and after 1/1/97.

In WITNESS WHEREOF this amendment to the Reinsurance Agreement has been executed in duplicate by
their respective officers duly authorized.

	 	 	 	 	 
	LIBERTY MUTUAL INSURANCE COMPANY

LIBERTY MUTUAL FIRE INSURANCE COMPANY

LIBERTY MUTUAL (BERMUDA) LTD.

LIBERTY INSURANCE CORPORATION

LM INSURANCE CORPORATION

THE FIRST LIBERTY INSURANCE CORPORATION

LEXCO LIMITED

This 29th day of June, 1999

 	 	 
	By  	 	/s/
 	 	 
	TITLE 	 	 VICE PRESIDENT 	 	 

	 	 	 	 	 
	WITNESSED  	 /s/  Lauren H. Covert
 	 	 

DATED June 29, 1999

	 	 	 	 	 
	LIBERTY NORTHWEST INSURANCE COMPANY

This 26th day of May, 1998

 	 	 
	By  	 	/s/ David A. Davidson
 	 	 
	TITLE	 	EXECUTIVE VICE PRESIDENT 	 	 

	 	 	 	 	 
	WITNESSED  	  /s/

	 	 

	DATED May 26, 1998

 

 

Exhibit 5

LIBERTY NORTHWEST CEDED ACCOMODATION BUSINESS

Ceding Expense Allowance

Policy Year 1997

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Premium	 	 	 	 	 	 
	 	 	General	 	 	 	 	 	&	 	Involuntary	 	Profit *	 	 
	 	 	Expense	 	ULAE	 	Other Taxes	 	Load	 	Margin	 	TOTAL
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	WORKERS’ COMPENSATION
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Alabama
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Alaska
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Arizona
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Arkansas
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	California
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Colorado
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Connecticut
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Delaware
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	District of Columbia
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Florida
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Georgia
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Hawaii
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Idaho
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Illinois
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Indiana
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Iowa
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Kansas
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Kentucky
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Louisiana
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Maine
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Maryland
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Massachusetts
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Michigan
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Minnesota
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Mississippi
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Missouri
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Montana
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Nebraska
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Nevada
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	New Hampshire
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	New Jersey
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	New Mexico
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	New York
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	North Carolina
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	North Dakota
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Ohio
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Oklahoma
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Oregon
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Pennsylvania
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Rhode Island
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	South Carolina
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	South Dakota
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Tennessee
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Texas
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Utah
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Vermont
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Virginia
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Washington
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	West Virginia
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Wisconsin
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	Wyoming
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	All other W.C.
	 	 	7.18	%	 	 	5.37	%	 	 	3.11	%	 	 	0.0	%	 	 	3.5	%	 	 	19.2	%
	COMMERCIAL AUTOMOBILE
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	All States
	 	 	5.5	%	 	 	3.39	%	 	 	2.55	%	 	 	0.0	%	 	 	3.5	%	 	 	14.9	%
	ALL OTHER (GL)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	All States
	 	 	5.09	%	 	 	7.67	%	 	 	2.79	%	 	 	0.0	%	 	 	3.5	%	 	 	19.1	%

 Note:

	*	 	Profit Margin to include uncollectible premium charge.

Prepared By: K. Heap

Date Prepared: 6/8/98

Filename: Lib. Northwest Comm-97

 

 

Endorsement 5

The REINSURANCE AGREEMENT between the Liberty Mutual Insurance Companies, referred to collectively
in this contract as the Company, and Liberty Northwest Insurance Corporation, referred to as the
Reinsurer, is amended effective 1/1/98.

EXHIBIT 6 replaces EXHIBIT 5 for all expenses associated with policies written and issued effective
on and after 1/1/98.

In WITNESS WHEREOF this amendment to the Reinsurance Agreement has been executed in duplicate by
their respective officers duly authorized.

	 	 	 	 	 
	LIBERTY MUTUAL INSURANCE COMPANY

LIBERTY MUTUAL FIRE INSURANCE COMPANY

LIBERTY MUTUAL (BERMUDA) LTD.

LIBERTY INSURANCE CORPORATION

LM INSURANCE CORPORATION

THE FIRST LIBERTY INSURANCE CORPORATION

LEXCO LIMITED

This 29th day of June, 1999

 	 	 
	By  	 	/s/
 	 	 
	TITLE  	 	VICE PRESIDENT 	 	 

	 	 	 	 	 
	WITNESSED  	 /s/ Lauren H. Covert

 	 	 

	DATED June 29, 1999

	 	 	 	 	 
	LIBERTY NORTHWEST INSURANCE COMPANY

This 26th day of May, 1998

 	 	 
	By  	 	/s/ David A. Davidson
 	 	 
	TITLE  	 	EXECUTIVE VICE PRESIDENT 	 	 

	 	 	 	 	 
	WITNESSED   	/s/

 	 	 

DATED May 26, 1998

 

 

Exhibit 6

LIBERTY NORTHWEST CEDED ACCOMODATION BUSINESS

Ceding Expense Allowance

Policy Year 1998

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	General
 Expense	 	ULAE	 	Premium &
 Other Taxes	 	Involuntary 
Load	 	Profit * 
Margin	 	Total
	WORKERS’ COMPENSATION
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	All States
	 	 	10.7	%	 	 	5.4	%	 	 	3.1	%	 	 	0.0	%	 	 	3.5	%	 	 	22.7	%
	 
	COMMERCIAL AUTOMOBILE
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	All States
	 	 	8.9	%	 	 	3.4	%	 	 	2.6	%	 	 	0.0	%	 	 	3.5	%	 	 	18.4	%
	 
	ALL OTHER 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	All States
	 	 	8.6	%	 	 	7.7	%	 	 	2.8	%	 	 	0.0	%	 	 	3.5	%	 	 	22.6	%

Note:

	*	 	Profit Margin to include uncollectible premium charge.

Prepared By: S. Petrillo

Date Prepared: 4/26/99

Filename: LNW Comm-99

 

 

Endorsement 6

The REINSURANCE AGREEMENT between the Liberty Mutual Insurance Companies, referred to collectively
in this contract as the Company, and Liberty Northwest Insurance Corporation, referred to as the
Reinsurer, is amended effective 1/1/99.

EXHIBIT 7 replaces EXHIBIT 6 for all expenses associated with policies written and issued effective
on and after 1/1/99.

In WITNESS WHEREOF this amendment to the Reinsurance Agreement has been executed in duplicate by
their respective officers duly authorized.

	 	 	 	 	 
	LIBERTY MUTUAL INSURANCE COMPANY

LIBERTY MUTUAL FIRE INSURANCE COMPANY

LIBERTY MUTUAL (BERMUDA) LTD.

LIBERTY INSURANCE CORPORATION

LM INSURANCE CORPORATION

THE FIRST LIBERTY INSURANCE CORPORATION

LEXCO LIMITED

This 29th day of June, 1999

 	 	 
	By  	 	/s/
 	 	 
	TITLE 	 	 VICE PRESIDENT 	 	 

	 	 	 	 	 
	WITNESSED  	 /s/   Lauren H. Covert
 	 	 

	DATED June 29, 1999

	 	 	 	 	 
	LIBERTY NORTHWEST INSURANCE COMPANY

This 6th day of November, 2000

 	 	 
	By  	 	/s/ David A. Davidson
 	 	 
	TITLE  	 	EXECUTIVE VICE PRESIDENT 	 	 

	 	 	 	 	 
	WITNESSED    	/s/

 	 	 

DATED 11-6-00

 

 

Exhibit 7

LIBERTY NORTHWEST CEDED ACCOMODATION BUSINESS

Ceding Expense Allowance

Policy Year 1999

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	General
 Expense	 	ULAE	 	Premium &
 Other Taxes	 	Involuntary
 Load	 	Profit * 
Margin	 	Total
	WORKERS’ COMPENSATION
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	All States
	 	 	10.8	%	 	 	7.8	%	 	 	5.0	%	 	 	0.0	%	 	 	3.5	%	 	 	27.1	%
	 
	COMMERCIAL
AUTOMOBILE 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	All States
	 	 	10.5	%	 	 	8.9	%	 	 	2.8	%	 	 	1.2	%	 	 	3.5	%	 	 	26.9	%
	 
	GENERAL LIABILITY
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	All States
	 	 	10.3	%	 	 	6.0	%	 	 	2.7	%	 	 	0.0	%	 	 	3.5	%	 	 	22.5	%
	 
	COMMERCIAL MULTI PERIL
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	All States
	 	 	16.2	%	 	 	6.3	%	 	 	2.9	%	 	 	0.0	%	 	 	3.5	%	 	 	28.9	%
	 
	OTHER
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	All States
	 	 	21.7	%	 	 	6.1	%	 	 	2.6	%	 	 	0.0	%	 	 	3.5	%	 	 	33.9	%

Note:

	*	 	Profit Margin to include uncollectible premium charge.

Prepared By: S. Petrillo

Date Prepared: 4/26/99

Filename: LNW Comm-99exv10w145

EXHIBIT
10.145

PROPERTY PER RISK EXCESS OF LOSS

REINSURANCE AGREEMENT

NO. LMPpR — 2005

EFFECTIVE JANUARY 1, 2005

between

PEERLESS INSURANCE COMPANY

Keene, New Hampshire

and

The reinsurers subscribing to the respective

Interests and Liabilities Contracts attached to

and forming part of this Agreement

 

 

PROPERTY PER RISK EXCESS OF LOSS REINSURANCE AGREEMENT NO. LMPpR — 2005

	 	 	 	 	 	 	 
	ARTICLE	 	CONTENTS	 	PAGE
	 

	 	PREAMBLE
	 	 	1	 
	I

	 	BUSINESS COVERED
	 	 	1	 
	II

	 	EFFECTIVE DATE AND TERMINATION
	 	 	2	 
	III

	 	TERRITORY
	 	 	3	 
	IV

	 	LIMIT AND RETENTION
	 	 	3	 
	V

	 	ULTIMATE NET LOSS
	 	 	3	 
	VI

	 	LOSS IN EXCESS OF POLICY LIMITS
	 	 	4	 
	VII

	 	EXTRA CONTRACTUAL OBLIGATIONS
	 	 	5	 
	VIII

	 	DEFINITION OF RISK
	 	 	5	 
	IX

	 	EXCLUSIONS
	 	 	5	 
	X

	 	SPECIAL ACCEPTANCE
	 	 	7	 
	XI

	 	LOSS OCCURRENCE
	 	 	8	 
	XII

	 	REINSURANCE PREMIUM
	 	 	9	 
	XIII

	 	REPORTS AND REMITTANCES
	 	 	10	 
	XIV

	 	CLAIMS
	 	 	10	 
	XV

	 	SALVAGE AND SUBROGATION
	 	 	10	 
	XVI

	 	ACCESS TO RECORDS
	 	 	11	 
	XVII

	 	TAXES
	 	 	11	 
	XVIII

	 	CURRENCY
	 	 	11	 
	XIX

	 	OFFSET
	 	 	11	 
	XX

	 	ERRORS OR OMISSIONS
	 	 	12	 
	XXI

	 	INSOLVENCY
	 	 	12	 
	XXII

	 	DISPUTE RESOLUTION
	 	 	12	 
	XXIII

	 	SPECIAL CONDITIONS
	 	 	14	 
	XXIV

	 	RESERVES
	 	 	15	 
	XXV

	 	SERVICE OF SUIT
	 	 	17	 
	XXVI

	 	CONFIDENTIALITY CLAUSE
	 	 	17	 
	XXVII

	 	AMENDMENTS
	 	 	17	 
	XXVIII

	 	ENTIRE AGREEMENT
	 	 	18	 

	 	 	 
	ATTACHMENTS:

	 	EXHIBIT A — FIRST EXCESS OF LOSS
	 

	 	EXHIBIT B — SECOND EXCESS OF LOSS
	 

	 	APPENDIX A — DEFINITION OF PROFIT CENTERS
	 

	 	INSOLVENCY FUNDS EXCLUSION CLAUSE
	 

	 	POOLS, ASSOCIATIONS AND SYNDICATES EXCLUSION CLAUSE
	 

	 	TOTAL INSURED VALUE EXCLUSION CLAUSE
	 

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

	 	NUCLEAR INCIDENT EXCLUSION CLAUSE — PHYSICAL DAMAGE — REINSURANCE — CANADA
	 

	 	NUCLEAR INCIDENT EXCLUSION CLAUSE — REINSURANCE — NO. 4
	 

	 	TERRORISM EXCLUSION CLAUSE REINSURANCE (PROPERTY)

 

 

PROPERTY PER RISK EXCESS OF LOSS 
REINSURANCE AGREEMENT

NO. LMPpR — 2005

(hereinafter referred to as the “Agreement”)

between

PEERLESS INSURANCE COMPANY

Keene, New Hampshire

(hereinafter referred to as the “Company”)

and

The reinsurers subscribing to the respective Interests and Liabilities Contracts attached to and

forming part of this Agreement

(hereinafter referred to as the “Reinsurer”)

ARTICLE 1 — BUSINESS COVERED

	A.	 	The Reinsurer shall indemnify the Company on an excess of loss basis in respect of the
Company’s Ultimate Net Loss paid or to be paid by the Company as a result of losses occurring
during the term of this Agreement, for Policies in force as of January 1, 2005 and new and
renewal Policies becoming effective on or after said date, for the Profit Centers’ Annual
Statement Lines of Business, subject to the terms and conditions contained herein.

	B.	 	This Agreement is solely between the Company and the Reinsurer, and nothing contained in this
Agreement shall create any obligations or establish any rights against the Reinsurer in favor
of any person or entity not a party hereto.

	C.	 	The term “Policies” shall mean each of the Company’s or Profit Center’s binders, policies and
contracts of insurance on the business covered hereunder

	D.	 	“Annual Statement Lines of Business” shall mean business written by the Company or ceded to
the Company by:
	 
	 	 	American Ambassador Casualty Company, Itasca, Illinois

America First Insurance Company, Keene, New Hampshire

America First Lloyd’s Insurance Company, Dallas, Texas

Colorado Casualty Insurance Company, Englewood, Colorado

Consolidated Insurance Company, Indianapolis, Indiana

Excelsior Insurance Company, Keene, New Hampshire

Globe American Casualty Company, Loveland, Ohio

Golden Eagle Insurance Corporation, San Diego, California

Hawkeye-Security Insurance Company, Pewaukee, Wisconsin

Indiana Insurance Company, Indianapolis, Indiana

Merchants and Business Men’s Mutual Insurance Company, Harrisburg, Pennsylvania

Mid-American Fire and Casualty Company, Loveland, Ohio

Montgomery Mutual Insurance Company, Sandy Spring, Maryland

National Insurance Association, Indianapolis, Indiana

Peerless Indemnity Insurance Company, Lisle, Illinois

LMPpR — 2005

1.

 

 

The Midwestern Indemnity Company, Loveland, Ohio

The Netherlands Insurance Company, Keene, New Hampshire (known as the Peerless
Insurance Company pool),

Liberty Mutual Insurance Company, Boston, Massachusetts (on behalf of
The First Liberty Insurance Corporation, LM Insurance Corporation, both of West Des Moines,
Iowa, Liberty Insurance Corporation, South Burlington, Vermont, Liberty Mutual Fire Insurance
Company, Boston, Massachusetts, for business classified as Business Solutions Group
only)

Liberty County Mutual Insurance Company, Irving, Texas, for business classified as RAM
only

OneBeacon Insurance Company, Boston, Massachusetts, for policies subject to the rewritten
Indemnity Reinsurance Agreement by and between Peerless Insurance Company and
OneBeacon Insurance Company,

hereinafter individually referred to as “Profit Center” or
collectively referred to as the “Profit Centers”, as defined in Appendix A — Definition of
Profit Centers, except as excluded under Article IX — Exclusions of this Agreement.

The Annual Statement Lines of Business shall mean the following lines of business written by
the Company or ceded to the Company by the Profit Centers:

	 	 	 
	NAIC	 	 
	CODE:	 	LINES OF BUSINESS:
	 
	01

	 	Fire
	02

	 	Allied Lines
	03

	 	Farmowners (Section I only)
	04

	 	Homeowners (Section I only)
	05

	 	Commercial Multiple Peril (Section I only)
	06

	 	Mobile Homeowners (Section I only)
	09

	 	Inland Marine
	12

	 	Earthquake (except Commercial Property Business written by

Golden Eagle Insurance Corporation)
	21

	 	Auto Physical Damage (not to include Collision coverage)
	25

	 	Plate Glass
	26

	 	Burglary and Theft

ARTICLE II — EFFECTIVE DATE AND TERMINATION

	A.	 	This Agreement shall become effective with respect to losses occurring on and after 12:01
a.m., Local Standard Time, January 1, 2005, and shall remain in full force until terminated.
Subject to Article XXIII — Special Conditions below, this Agreement may be terminated at the
close of any calendar year by either party giving to the other 90 days prior written notice by
certified mail of its intention to do so.

	B.	 	During the running of such notice as stipulated in Paragraph A. above, the Reinsurer shall
participate in business coming within the terms of this Agreement until the date of
termination of this Agreement.

C. Upon termination of this Agreement, the Reinsurer shall be liable for the losses occurring

LMPpR — 2005

2.

 

 

	 	 	prior to the date of termination; however, the Reinsurer shall have no liability for losses
occurring subsequent to the termination of this Agreement.
	 
	D.	 	If this Agreement shall expire or terminate while a loss covered hereunder is in progress,
it is agreed that, subject to the other conditions of this Agreement, the Reinsurer shall
indemnify the Company as if the entire loss had occurred during the time this Agreement is in
force provided the loss covered hereunder started before the date of termination.

ARTICLE III — TERRITORY

	 	 	This Agreement applies to risks located in the United States of America, its territories and
possessions, and Canada, except that with respect to Inland Marine and Multiple Peril Policies
covered hereunder, the territorial limits of this Agreement shall be those of the original
Policies when such Policies are written to cover risks primarily located in the United States of
America, its territories and possessions, and Canada.

ARTICLE IV — LIMIT AND RETENTION

	A.	 	The limits and retentions provided under this Agreement are as set forth in Exhibits A and B
attached hereto and made a part of this Agreement.

	B.	 	The various Profit Centers’ retention and the Reinsurer’s limit of liability for each Risk,
each Loss Occurrence, set forth in Section I of Exhibits A and B attached hereto and made part
of this Agreement, shall apply irrespective of the number of Policies affected or number of
hazards in one policy and regardless of the number of Lines of Business involved.

	C.	 	In the event both a Property and Casualty loss are involved in the same Loss Occurrence, it
is understood that each Profit Center shall retain for its own account only the first (the
highest respective retention stated in Section 1 of each Exhibit) of the combined Property and
Casualty Ultimate Net Loss, provided only one Property risk may be combined in the same Loss
Occurrence. Such loss and the Profit Centers’ retention thereon shall be apportioned to each
Property and Casualty loss in the same proportion that each Profit Center’s Ultimate Net Loss
for each such Property and Casualty loss bears to the Profit Center’s combined Ultimate Net
Loss from both losses. The Reinsurer shall reimburse the Profit Center for the difference
between the Profit Center’s first (respective retention as stated in Section 1 of each
Exhibit) of Ultimate Net Loss under each Property and Casualty loss and the Profit Center’s
pro rated retention on each Property and Casualty loss.

	D.	 	Reinsurance of the Profit Centers’ retention, set forth in each Exhibit, shall not be
deducted in arriving at the Profit Centers’ Ultimate Net Loss herein.

ARTICLE V — ULTIMATE NET LOSS

	A.	 	The term “Ultimate Net Loss” shall mean the actual sum paid by the Company in settlement of
losses or liability after making deductions for all recoveries, including subrogation,
salvages, and claims upon other reinsurances, whether collectible or not, which inure to the
benefit of the Reinsurer under this Agreement, and shall include Loss Adjustment Expenses
incurred by the Company; provided, however, that in the event of the insolvency of the
Company, Ultimate Net Loss shall mean the amount of loss and Loss Adjustment Expenses

LMPpR — 2005

3.

 

 

	 	 	for which the Company is liable, and payment by the Reinsurer shall be made to the
liquidator, receiver, conservator or statutory successor of the Company in accordance with
the provisions of Article XXI — Insolvency of this Agreement.
	 
	B.	 	The term “Ultimate Net Loss” shall include 90% of Loss In Excess of Policy Limits and Extra
Contractual Obligations, as defined herein, but only as respects business covered under this
Agreement.
	 
	C.	 	The term “Loss Adjustment Expenses” shall mean all expenses incurred by the Company in
connection with the investigation, settlement, defense or litigation of any claim or loss
covered by the Policies reinsured under this Agreement, and shall include Declaratory Judgment
Expenses. However, the term “Loss Adjustment Expenses” shall not include the salaries and
expenses of Company employees, office expenses and other overhead expenses.
	 
	D.	 	The term “Declaratory Judgment Expenses” shall mean all legal expenses, incurred in the
representation of the Company in litigation brought to determine the Company’s defense and/or
indemnification obligations, that are allocable to any specific claim or loss covered by
Policies reinsured under this Agreement. In addition, the Company shall promptly notify the
Reinsurer of any Declaratory Judgment Expenses subject to this Agreement.
	 
	E.	 	All recoveries, salvages or payments recovered or received subsequent to a loss settlement
under this Agreement shall be applied as if recovered or received prior to the aforesaid
settlement and all necessary adjustments to the loss settlement shall be made by the parties
hereto.
	 
	F.	 	Nothing in this Article shall be construed to mean that losses are not recoverable hereunder
until the Ultimate Net Loss of the Company has been ascertained.

ARTICLE VI — LOSS IN EXCESS OF POLICY LIMITS

	A.	 	As respects incidental third party liability coverages allowed under Article I — Business
Covered, “Loss in Excess of Policy Limits” is defined as loss in excess of the limit of the
original Policy, such loss in excess of the limit having been incurred because of failure by
the Company to settle within the Policy limit or by reason of alleged or actual negligence,
fraud or bad faith in rejecting an offer of settlement or in the preparation of the defense or
in the trial of any action against its insured or reinsured or in the preparation or
prosecution of an appeal consequent upon such action.

	B.	 	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.

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

	D.	 	With respect to coverage provided under this Article, recoveries from any insurance or
reinsurance other than this Agreement shall be deducted to arrive at the amount of the
Company’s Ultimate Net Loss.

LMPpR — 2005

4.

 

 

ARTICLE VII — EXTRA CONTRACTUAL OBLIGATIONS

	A.	 	“Extra Contractual Obligations” are defined as those liabilities 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 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.

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

	C.	 	However, coverage hereunder as respects Extra Contractual Obligations shall not apply where
the loss has been incurred due to the fraud of 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.

	D.	 	Recoveries, collectibles or retention from any other form of insurance or reinsurance
including deductibles or self-insured retention which protect the Company against Extra
Contractual Obligations shall inure to the benefit of the Reinsurer and shall be deducted from
the total amount of Extra Contractual Obligations for purposes of determining the loss
hereunder.

	E.	 	If any provision of this Article 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 VIII — DEFINITION OF RISK

The Company warrants or it shall be so deemed that the definition of Risk shall be determined as
defined per each Profit Center’s underwriting guidelines which are on file with the Reinsurer.

ARTICLE IX — EXCLUSIONS

THIS AGREEMENT DOES NOT COVER:

	A.	 	THE FOLLOWING GENERAL CATEGORIES

	 	1.	 	Policies issued with a deductible of $250,000 or more, provided this exclusion
shall not apply to Policies which customarily provide a percentage deductible on the
perils of earthquake or windstorm.
	 
	 	2.	 	Reinsurance assumed, except Profit Centers’ Annual Statement Lines of Business
ceded to the Company, pro rata local agency reinsurance on specific
risks, intercompany reinsurance and reinsurance agreements with One Beacon Insurance
Company.

LMPpR — 2005

5.

 

 

	 	3.	 	Ex-gratia Payments.
	 
	 	4.	 	Loss or damage occasioned by war, invasion, revolution, bombardment, hostilities,
acts of foreign enemies, civil war, rebellion, insurrection, military or usurped power,
martial law, or confiscation by order of any government or public authority, but not
excluding loss or damage which would be covered under a standard form of Policy
containing a standard war exclusion clause.
	 
	 	5.	 	Insolvency Funds as per the attached Insolvency Funds Exclusion Clause, which is
made part of this Agreement.
	 
	 	6.	 	Pool, Syndicate and Association business as per the attached Pools, Associations
and Syndicates Exclusion Clause, which is made part of this Agreement.
	 
	 	7.	 	Risks where the Total Insured Value, per risk, exceeds the figure specified as per
the attached Total Insured Value Exclusion Clause, which is made part of this Agreement.

	B.	 	THE FOLLOWING CLASSES OF BUSINESS AND TYPES OF RISKS

	 	1.	 	Mortgage Impairment.
	 
	 	2.	 	Growing and/or standing crops.
	 
	 	3.	 	Mortality and Health covering birds, animals or fish.
	 
	 	4.	 	All onshore and offshore gas and oil drilling rigs.
	 
	 	5.	 	Petrochemical operations engaged in the production, refining or upgrading of
petroleum or petroleum derivatives or natural gas.
	 
	 	6.	 	Satellites.
	 
	 	7.	 	All railroad business.
	 
	 	8.	 	Space and Space related risks.
	 
	 	9.	 	As respects Inland Marine business:

	 	a.	 	Registered Mail and Armored Car Policies.
	 
	 	b.	 	Rolling Stock.
	 
	 	c.	 	Commercial Negative Film Insurance.
	 
	 	d.	 	Mining Equipment while underground.
	 
	 	e.	 	Cargo transported by lake and inland waterway watercraft.
	 
	 	f.	 	Furrier’s Customers Policies written for a limit greater than $2,000,000.

	 	10.	 	Overhead and underground transmission and distribution lines other than those
within 1000 feet of an insured’s premises; it is understood and agreed that public
utilities extension and/or suppliers extension and/or contingent business interruption
coverages are not subject to this exclusion provided that these are not part of a
transmitter’s or distributor’s Policy.

LMPpR — 2005

6.

 

 

	 	11.	 	Entertainment business defined as Feature Film and Major Motion Picture studios,
Commercial Negative Film Coverage, Cast Coverage, Completion Bond Coverage, and
Television Productions.
	 
	 	12.	 	Credit and Surety liability
	 
	 	13.	 	Ocean Marine except pleasure craft
	 
	 	14.	 	Bridges, dams and tunnels over 50 feet

	C.	 	THE FOLLOWING PERILS

	 	1.	 	Pollution and Seepage as per the Company’s original Policies and endorsements.
	 
	 	2.	 	Nuclear Incident Exclusion Clauses which are attached and made part of this
Agreement:

	 	a.	 	Nuclear Incident Exclusion Clause — Physical Damage — Reinsurance — U.S.A.
	 
	 	b.	 	Nuclear Incident Exclusion Clause — Physical Damage — Reinsurance — Canada.
	 
	 	c.	 	Nuclear Incident Exclusion Clause — Reinsurance — No. 4.

	 	3.	 	Terrorism as per the attached Terrorism Exclusion Clause — Reinsurance (Property),
which is made part of this Agreement.
	 
	 	4.	 	Loss, damage or expense of whatsoever nature caused directly or indirectly by any
of the following, regardless of any other cause or event contributing concurrently or in
any other sequence to the loss:

	 	a.	 	Nuclear reaction or radiation, or radioactive contamination, however caused.
	 
	 	b.	 	However, if nuclear reaction or radiation, or radioactive contamination
results in fire it is specifically agreed herewith that this Agreement will pay for
such fire loss or damage subject to all of the terms, conditions and limitations of
this Agreement.
	 
	 	c.	 	This exclusion shall not apply to loss, damage or expense originating
from and occurring at risks using radioactive isotopes in any form where the
nuclear exposure is not considered by the Company to be the primary hazard.

	 	D.	 	The exclusions set forth above in A or B shall not apply if the exposure is incidental to the
regular operations of the insured covered thereunder.

ARTICLE X — SPECIAL ACCEPTANCE

	A.	 	Risks which are beyond the terms, conditions or limitations of this Agreement may be
submitted to each Subscribing Reinsurer identified on the attached Interests and Liabilities
Agreement for special acceptance hereunder. Upon receipt of approval from all Subscribing
Reinsurers, such acceptance shall bind each Subscribing Reinsurer for its respective share in
the interests and liabilities of said risk. A Subscribing Reinsurers’ failure to respond
within 2 full business days shall be deemed approval of a risk submitted for special
acceptance.

LMPpR — 2005

7.

 

 

	B.	 	When a risk is specially accepted, such risk shall be covered under the terms and
conditions of this Agreement, except as such terms shall be modified by such acceptance.
Premiums and losses derived from any special acceptance shall be included with other data for
rating purposes of this Agreement. Once a risk has been accepted under the provisions of this
Article, it will automatically be included at renewal unless there have been material changes
to the risk, in which case the risk will be resubmitted.

ARTICLE XI — 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 of the United States or province of Canada
and states or provinces contiguous thereto and to one another. However, the duration and
extent of any one Loss Occurrence shall be limited to all individual losses sustained by the
Company occurring during any period of 168 consecutive hours arising out of and directly
occasioned by the same event except that the term “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 province or states or provinces
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 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 earthquake (the epicentre of which need not necessarily be within the
territorial confines referred to in the opening paragraph of this Article) and fire
following directly occasioned by the earthquake, only those individual fire losses which
commence during the period of 168 consecutive hours may be included in the Company’s 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.	 	Except for those Loss Occurrences referred to in 1. and 2. 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.

	C.	 	However, as respects those Loss Occurrences referred to in 1. and 2. above, if the disaster,
accident or toss occasioned by the event is of greater duration than 72 consecutive hours,

LMPpR — 2005

8.

 

 

	 	 	then the Company may divide that 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.
	 
	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 XII — REINSURANCE PREMIUM

The rates set forth in Section 3 of the attached Exhibits A and B shall be applied to the various
Profit Centers’ Subject Earned Premium for all classes of Business Covered hereunder, as stated in
Paragraph D. of Article I — Business Covered.

	A.	 	The term “Subject Earned Premium” as used herein is equal to the sum of the Net Premiums
Written on the business covered hereunder during the period under consideration, plus the
unearned premium reserve as respects premiums in force at the beginning of such period, less
the unearned premium reserve as respects premiums in force at the end of the period, said
unearned premium is to be calculated on a monthly pro rata basis.

	B.	 	The term “Earned Premium” as used herein shall mean the gross premiums earned on business
covered hereunder less returns and cancellations.

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

	D.	 	The following percentages have been applied to the Company’s Earned Premium for purposes of
calculating the Subject Earned Premium as set forth in Section 3 of the attached Exhibits A
and B:

	 	 	 	 	 
	ASLOB	 	Percentage
	Fire
	 	 	100	%
	Allied Lines
	 	 	100	%
	Homeowners
	 	 	10	%
	Farmowners
	 	 	10	%
	Commercial Multiple Peril (Property)
	 	 	100	%
	Inland Marine
	 	 	100	%
	Earthquake
	 	 	100	%
	Auto Physical Damage (Private Passenger)
	 	 	10	%
	Auto Physical Damage (Commercial)
	 	 	35	%
	Burglary & Theft
	 	 	100	%
	Plate Glass
	 	 	100	%

	E.	 	The following percentages of the Company’s and/or various Profit Centers’ indivisible premium
shall be allocated to the business covered under this Agreement: 65% Businessowners.

LMPpR — 2005

9.

 

 

ARTICLE XIII — REPORTS AND REMITTANCES

	A.	 	The Company shall furnish the Reinsurer with all necessary data respecting premiums and
losses for as long as one of the parties hereto has a claim against the other arising from
this Agreement.
	 
	B.	 	Deposit premiums equal to 1/4 of the 100% of anticipated premium will be remitted on January
15, May 15, August 15 and November 15, 2005 according to the schedule below. The Company
shall submit finalized accounts to the Reinsurer on February 15, 2006, summarizing the actual
subject earned premium for the January 1, 2005 through December 31, 2005 coverage period. The
difference between the deposit premium and the actual subject earned premium will be settled
to/from the Company within 15 days of February 15, 2006. However, in no event shall the
annual adjusted premium be less than the minimum premium for each layer, set forth below:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Layer	 	Annual Minimum	 	Annual Deposit	 	Quarterly Deposit
	1. LMPpR—2005
	 	$	8,643,198	 	 	$	10,803,998	 	 	$	2,701,000	 
	2. LMPpR—2005
	 	$	5,610,612	 	 	$	7,013,265	 	 	$	1,753,316	 

	C.	 	Payment by the Reinsurer of its portion of loss and Loss Adjustment Expenses paid by the
Company shall be made by the Reinsurer to the Company within 15 days after proof of payment is
received by the Reinsurer.

ARTICLE XIV — CLAIMS

	A.	 	The Company shall promptly, but in no event later than 15 days after the end of the calendar
quarter, notify the Reinsurer of each claim which may involve the reinsurance provided
hereunder and of all subsequent developments relating thereto, stating the amount claimed and
estimate of the Company’s Ultimate Net Loss and Loss Adjustment Expenses.

	B.	 	The Company shall have the responsibility to investigate, defend or negotiate settlements of
all claims and lawsuits related to Policies written by the Company and/or the Profit Centers’
Annual Statement Lines of Business and reinsured under this Agreement. The Reinsurer, at its
own expense, may associate with the Company in the defense or control of any claim, suit or
other proceeding which involves or is likely to involve the reinsurance provided under this
Agreement, and the Company shall cooperate in every respect in the defense of any such claim,
suit or proceeding.

ARTICLE XV — SALVAGE AND SUBROGATION

	A.	 	In the event of the payment of any indemnity by the Reinsurer under this Agreement, the
Reinsurer shall be subrogated, to the extent of such payment, to all of the rights of the
Company against any person or entity legally responsible for damages of the loss. The Company
agrees to enforce such rights; but, in case the Company refuses or neglects to do so, the
Reinsurer is hereby authorized and empowered to bring any appropriate action in the name of
the Company or their policyholders or otherwise to enforce such rights.

LMPpR — 2005

10.

 

 

	B.	 	From any amount recovered by subrogation, salvage or other means, there shall first be
deducted the expenses incurred in effecting the recovery. The balance shall then be used to
reimburse the excess carriers in the inverse order to that in which their respective
liabilities attached, before being used to reimburse the Company for its primary loss.

ARTICLE XVI — ACCESS TO RECORDS

The Reinsurer or its duly authorized representatives shall have the right to examine, at the
offices of the Company at a reasonable time, during the currency of this Agreement or anytime
thereafter, all books and records of the Company relating to business which is the subject of this
Agreement.

ARTICLE XVII — TAXES

	A.	 	The Company shall be liable for all taxes on premiums paid to the Reinsurer under this
Agreement, except income or profit taxes of the Reinsurer, and shall indemnify and hold the
Reinsurer harmless for any such taxes which the Reinsurer may become obligated to pay to any
local, state or territorial taxing authority.

	B.	 	The Reinsurer shall allow for the purpose of paying Federal Excise Tax the applicable
percentage of the premium payable hereon (as imposed under Section 4371 of the Internal
Revenue Code) to the extent such premium is subject to such tax. In the event of any return
premium, the Reinsurer shall deduct the aforesaid percentage from the return premium payable
hereon and the Company or its agent shall recover such tax from the United States Government.

ARTICLE XVIII — CURRENCY

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

ARTICLE XIX — OFFSET

Each party to this Agreement together with their successors or assigns shall have and may exercise,
at any time, the right to offset any balance or balances due the other (or, if more than one, any
other). Such offset may include balances due under this Agreement (which may take into account
underlying internal offsets within, between and/or among the Profit Centers listed on Appendix A)
and any other agreements heretofore or hereafter entered into between the parties regardless of
whether such balances arise from premiums, losses or otherwise, and regardless of capacity of any
party, whether as assuming insurer and/or ceding insurer, under the various agreements involved,
provided however, that in the event of insolvency of a party hereto, offsets

LMPpR — 2005

11.

 

 

shall only be allowed in accordance with the provisions of the applicable law, statute or
regulation governing such offset.

ARTICLE XX — ERRORS OR OMISSIONS

Errors or omissions of an administration nature on the part of the Company shall not invalidate
the reinsurance under this Agreement, provided such errors or omissions are corrected promptly
after discovery thereof; but the liability of the Reinsurer under this Agreement or any exhibits,
addenda, or endorsements attached hereto shall in no event exceed the limits specified herein nor
be extended to cover any risks, perils, lines of business or classes of insurance generally or
specifically excluded herein.

ARTICLE XXI — INSOLVENCY

	A.	 	In the event of insolvency of the Company, the reinsurance provided by this Agreement shall
be payable by the Reinsurer on the basis of the liability of the Company as respects Policies
covered hereunder, without diminution because of such insolvency, directly to the Company or
its liquidator, receiver, conservator or statutory successor except as provided in the New
Hampshire Insurance Law.

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

	C.	 	In addition to the offset provisions set forth in Article XIX — Offset, any debts or credits,
liquidated or unliquidated, in favor of or against either party on the date of the
receivership or liquidation order (except where the obligation was purchased by or transferred
to be used as an offset) are deemed mutual debts or credits and shall be set off with the
balance only to be allowed or paid. Although such claim on the part of either party against
the other may be unliquidated or undetermined in amount on the date of the entry of the
receivership or liquidation order, such claim will be regarded as being in existence as of
such date and any claims then in existence and held by the other party may be offset against
it.

	D.	 	Nothing contained in this Article is intended to change the relationship or status of the
parties to this Agreement or to enlarge upon the rights or obligations of either party
hereunder except as provided herein.

ARTICLE XXII — DISPUTE RESOLUTION

Part I — Choice Of Law And Forum

LMPpR — 2005

12.

 

 

Any dispute arising under this Agreement shall be resolved in the State of New Hampshire, and the
laws of the State of New Hampshire shall govern the interpretation and application of this
Agreement.

Part II — Mediation

If a dispute between the Company and the Reinsurer, arising out of the provisions of this
Agreement or concerning its interpretation or validity and whether arising before or after
termination of this Agreement has not been settled through negotiation, both parties agree to try
in good faith to settle such dispute by nonbinding mediation, before resorting to arbitration. The
parties shall choose a mediator within thirty (30) days of a written demand by either party for
mediation under Part II of this Article. The mediator shall be a disinterested current or retired
insurance or reinsurance officer knowledgeable in reinsurance matters. The parties shall have
sixty (60) days from the selection of the mediator in which to mediate the dispute to resolution.
In the event that mediation fails to resolve the dispute, the parties shall proceed to arbitration
in accordance with Part III of this Article.

Part III — Arbitration

	A.	 	Resolution of Disputes — As a condition precedent to any right arising hereunder, any dispute
not resolved by mediation between the Company and the Reinsurer arising out of the provisions
of this Agreement or concerning its interpretation or validity, whether arising before or
after termination of this Agreement, shall be submitted to arbitration in the manner
hereinafter set forth.

	B.	 	Composition of Panel — Unless the parties agree upon a single arbitrator within 15 days after
the receipt of a notice of intention to arbitrate, all disputes shall be submitted to an
arbitration panel composed of two arbitrators and an umpire chosen in accordance with
Paragraph C. hereof. The mediator from Part II may not be an arbitrator or an umpire.

	C.	 	Appointment of Arbitrators — The members of the arbitration panel shall be chosen from
disinterested current or retired, insurance or reinsurance officers knowledgeable in
reinsurance matters. Unless a single arbitrator is agreed upon, the party requesting
arbitration (hereinafter referred to as the “claimant”) shall appoint an arbitrator and give
written notice thereof by certified mail, to the other party (hereinafter referred to as the
“respondent”) together with its notice of intention to arbitrate. Within 30 days after
receiving such notice, the respondent shall also appoint an arbitrator and notify the claimant
thereof by certified mail. Before instituting a hearing, the two arbitrators so appointed
shall choose an umpire. If, within 20 days after the appointment of the arbitrator chosen by
the respondent, the two arbitrators fail to agree upon the appointment of an umpire, each of
them shall within 7 days nominate three individuals to serve as umpire, of whom the other
shall decline two and the umpire shall be chosen from the remaining two by drawing lots. The
name of the individual first drawn shall be the umpire.

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

	E.	 	Involvement of Other Reinsurers — If more than one reinsurer is involved in the same dispute,
all such reinsurers shall constitute and act as one party for purposes of this Article and
communications shall be made by the Company to each of the reinsurers constituting the one

LMPpR — 2005

13.

 

 

	 	 	party; provided, however, nothing herein shall impair the right of such reinsurers to assert
several, rather than joint, defenses or claims, nor be construed as changing the liability of
the reinsurers under the terms of this Agreement from several to joint.
	 
	F.	 	If the Company is involved in a dispute under the terms of this Agreement and in one or more
separate disputes with one or more other reinsurers in which common questions of law or fact
are in issue, the Company or the Reinsurer, at its option, may join with such other reinsurers
in a common arbitration proceeding under the terms of this Article. If the Company and such
other reinsurers have commenced arbitration, the Reinsurer may at its option join such
proceeding for the determination of the dispute between the Company and the Reinsurer.
	 
	G.	 	Submission of Dispute to Panel — Unless otherwise extended by the arbitration panel or agreed
to by the parties, each party shall submit its case to the panel within 30 days after the
selection of the umpire.
	 
	H.	 	Procedure Governing Arbitration — All proceedings before the panel shall be informal and the
panel shall not be bound by the format rules of evidence. The panel shall have the power to
fix all procedural rules relating to the arbitration proceeding. In reaching any decision,
the panel shall give due consideration to the customs and usages of the insurance and
reinsurance business.
	 
	I.	 	Arbitration Award — The arbitration panel shall render its decision within 60 days after
termination of the proceeding, which decision shall be in writing, stating the reasons
therefore. The decision of the majority of the panel shall be final and binding on the
parties to the proceeding.
	 
	J.	 	Cost of Arbitration — Unless otherwise allocated by the panel, each party shall bear the
expense of its own arbitrator and shall jointly and equally bear with the other parties the
expense of the umpire and the arbitration.

ARTICLE XXIII — SPECIAL CONDITIONS

The Company may terminate this Agreement at any time by the giving of 30 days notice in writing to
the Reinsurer upon the happening of any one of the following circumstances:

	A.	 	A State Insurance Department or other legal authority orders the Reinsurer to cease writing
business; or
	 
	B.	 	The Reinsurer has become insolvent or has been placed into liquidation or receivership
(whether voluntary or involuntary), or there have been instituted against it proceedings for
the appointment of a receiver, liquidator, rehabilitator, conservator, trustee in bankruptcy
or other agent known by whatever name, to take possession of its assets or control of its
operations; or
	 
	C.	 	The Reinsurer’s policyholders” surplus has been reduced by 25% of the amount of surplus at
the inception of this Agreement; or
	 
	D.	 	The Reinsurer has become merged with, acquired or controlled by any company, corporation or
individual(s) not controlling the Reinsurer’s operations at the inception of this Agreement.

LMPpR — 2005

14.

 

 

	E.	 	The Reinsurer’s A.M. Best Rating has been assigned or downgraded below A- or Standard and
Poor’s rating has been assigned or downgraded below A-.

The coverage afforded by this Agreement shall cease as of the date of termination and the Reinsurer
shall return the unearned premium net of ceding commission, if any. If coverage hereunder
terminates while a claim covered by this Agreement is in progress, the Reinsurer shall be liable
subject to all other conditions hereof for its proportion of the entire claim, provided that the
event giving rise to the claim started before such termination.

If the Company chooses to effect termination, it shall have the option to commute the Reinsurer’s
liability for loss(es), whether reported or unreported, on policies covered by this Agreement as
of the effective date of termination. The Company shall submit a statement of valuation of the
outstanding claim or claims showing the elements considered reasonable to establish the “ultimate
net loss,” and the Reinsurer shall pay the amount requested. In the event the Company and the
Reinsurer cannot agree on the statement of valuation of the Reinsurer’s liability under such
policies, either party may request in writing that the differences be settled by a panel of three
actuaries. Each party shall appoint an actuary to assess such liability within 15 days after
receipt of the written request for commutation. Upon such appointment, the two actuaries shall
appoint a third actuary. If the two actuaries fail to agree on the third actuary within 30 days of
their appointment, each of them shall nominate three individuals, of whom the other shall decline
two, and the final decision shall be made by drawing lots. The actuaries shall then investigate
and capitalize such loss(es) within 30 days. As used herein, capitalize shall mean to determine
the present value of ultimate net losses, without regard to the Reinsurer’s ability to pay such
losses. The panel shall meet in Boston, Massachusetts, unless the Company and Reinsurer agree
otherwise.

All actuaries shall be disinterested in the outcome of the commutation and shall be Fellows of the
Society of Actuaries/Fellows of the Casualty Actuarial Society. Except as stated below, the expense
of the actuaries and of the commutation shall be equally divided between the parties of the
commutation.

The decision in writing of the actuaries, when filed with the parties hereto, shall be final and
binding, except that if the Company does not agree with the capitalized value of the loss(es), the
Company shall have no obligation to commute. In the event the Company does not agree with the
capitalized value of the loss(es) and does not move forward with commutation, the expense of the
actuaries [including reasonable expense of the actuary appointed by the Reinsurer] will be paid by
the Company. If the Agreement is commuted, payment by the Reinsurer to the Company or any other
third party mutually agreed upon by the Reinsurer and the Company shall constitute a complete and
final release of the Reinsurer in respect to its liability under this Agreement.

ARTICLE XXIV — RESERVES

	A.	 	If a jurisdiction of the United States will not permit the Company, in the statements
required to be filed with its regulatory authority(ies), to receive full credit as admitted
reinsurance for any Reinsurer’s share of Obligations, the Company shall forward to such
Reinsurer a statement of the Reinsurer’s share of such Obligations. Upon receipt of such
statement the Reinsurer shall promptly apply for, and provide the Company with, a “clean,”
unconditional and irrevocable Letters of Credit, in the amount specified in the statement
submitted, with terms and bank acceptable to the regulatory authority(ies) having jurisdiction
over the Company.

B. “Obligations,” as used in this Article, shall mean the sum of losses paid and allocated loss

LMPpR — 2005

15.

 

 

	 	 	adjustment expenses paid by the Company but not yet recovered from the Reinsurer, plus
reserves for reported losses, allocated loss adjustment expenses and losses incurred but not
reported.
	 
	C.	 	The Reinsurer hereby agrees that the Letters of Credit will provide for automatic extension
of the Letters of Credit without amendment for one year from the date of expiration of said
Letter or any future expiration date unless thirty (30) days prior to any expiration the
issuing bank shall notify the Company by registered mail that the issuing bank elects not to
consider the Letters of Credit renewed for any additional period. An issuing bank, not a
“qualified bank” as defined by Regulation No. 133 promulgated by the Insurance Department of
the State of New York, shall provide sixty (60) days notice to the Company prior to any
expiration.
	 
	D.	 	Notwithstanding any other provision of this Agreement, the Company or any successor by
operation of law of the Company including, without limitation, any Liquidator, rehabilitator,
receiver or conservator of the Company may draw upon such credit, without diminution because
of the insolvency of any party hereto, at any time and undertakes to use and apply such credit
for one or more of the following purposes only:

	 	1.	 	To pay the Reinsurer’s share or to reimburse the Company for the Reinsurer’s share
of any obligations, as stipulated in the statement submitted by the Company to the
Reinsurer, which is due to the Company and not otherwise paid by the Reinsurer.
	 
	 	2.	 	In the event the Company has received effective notice of non-renewal of the
Letters of Credit and the Reinsurer’s liability remains unliquidated and undischarged
thirty (30) days prior to the expiry date of the Letters of Credit and place such sums in
an interest bearing trust account to secure the continuing liabilities of the Reinsurer
under this Agreement until renewal Letters of Credit acceptable to the regulatory
authority(ies) having jurisdiction over the Company, or a substitute in lieu thereof
acceptable to the regulatory authority(ies) having jurisdiction over the Company, has
been received by the Company. The Company shall provide to the Reinsurer payment of any
interest thereon accruing from such account.
	 
	 	3.	 	To make refund of any sum which is in excess of the actual amount required for
Sections 1, and 2, of this paragraph.

	E.	 	At annual intervals or more frequently as determined by the Company, but never more
frequently than quarterly, the Company shall prepare a specific statement, for the sole
purpose of amending the Letters of Credit, of the Reinsurer’s share of any obligations. If the
statement shows that the Reinsurer’s share of obligations exceeds the balance of credit as of
the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of
such excess, secure delivery to the Company of an amendment of the Letters of Credit
increasing the amount of credit by the amount of such difference. If the statement shows,
however, that the Reinsurer’s share of obligations is less than the balance of credit as of
the statement date, the Company shall, within thirty (30) days after receipt of a written
request from the Reinsurer, release such excess credit by agreeing to secure an amendment to
the Letters of Credit reducing the amount of credit available by the amount of such excess
credit.

	F.	 	The bank shall have no responsibility whatsoever in connection with the propriety of
withdrawals made by the Company or the disposition of funds withdraws, except to assure that
withdrawals are made only upon the order of properly authorized representatives of the
Company. The Company shall incur no obligation to the bank in acting upon the credit, other
than as appears in the express terms thereof.

LMPpR — 2005

16.

 

 

ARTICLE XXV — SERVICE OF SUIT

(This article applies to other than authorized Reinsurers and to Reinsurers who are domiciled
outside the United States of America.)

This Article shall not be read to conflict with or override the obligations of the parties to
arbitrate their disputes as provided for in the Arbitration Article. This Article is intended as
an aid to compelling arbitration or enforcing such arbitration or arbitral award, not as an
alternative to the Arbitration Article for resolving disputes arising out of this Agreement. In
the event of the failure of the Reinsurer to pay any amount claimed to be due hereunder, the
Reinsurer, at the request of the Company, shall 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 Reinsurers’ 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. The Reinsurer, once the appropriate Court is selected, whether such
court is the one originally chosen by the company and accepted by Reinsurer or is determined by
removal, transfer, or otherwise, as provided for above, shall comply with all requirements
necessary to give said Court jurisdiction and, in any suit instituted against any of them upon
this Agreement, shall abide by the final decision of such Court or of any Appellate Court in the
event of an appeal.

Service of process in such suit may be made upon Mendes & Mount, LLP, 750 Seventh Avenue, New
York, NY 10019-6829.

The above-named are authorized and directed to accept service of process on behalf of the
Reinsurer in any such suit.

Further, pursuant to any statute of any state, territory or district of the United States that
makes provision therefore, the Reinsurer hereby designate the Superintendent, Commissioner or
Director of Insurance, or other officer specified for that purpose in the statute, or their
successor or successors in office, as their true and lawful attorney upon whom may be served any
lawful process in any action, suit or proceedings instituted by or on behalf of the Company or any
beneficiary hereunder arising out of this Agreement, and hereby designate the above-named as the
person to whom the said officer is authorized to mail such process or a true copy thereof.

ARTICLE XXVI — CONFIDENTIALITY CLAUSE

All terms and conditions of this Agreement and any materials 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 XXVII — AMENDMENTS

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

LMPpR — 2005

17.

 

 

ARTICLE XXVIII — ENTIRE AGREEMENT

This written Agreement and the underwriting information provided for its formation and mutually
agreed letters of intent, clarification and/or understanding, if any, constitute the entire
agreement between the parties. However, in no event shall there be any provision that provides a
guarantee of profit, directly or indirectly, from the Reinsurer to the Company or from the Company
to the Reinsurer.

LMPpR — 2005

18.

 

 

EXHIBIT A

FIRST EXCESS OF LOSS

IS ATTACHED TO AND

FORMS PART OF

REINSURANCE AGREEMENT NO. LMPpR — 2005

 

 

EXHIBIT A — FIRST EXCESS OF LOSS

	 	 	 	 	 	 	 	 	 
	SECTION	 	SUBJECT	 	PAGE	 
	 
	 	 	 	 	 	 	 	 
	1
	 	LIMIT AND RETENTION	 	 	A-1	 
	 
	 	 	 	 	 	 	 	 
	2
	 	REINSTATEMENT	 	 	A-1	 
	 
	 	 	 	 	 	 	 	 
	3
	 	REINSURANCE PREMIUM	 	 	A-1	 

 

 

EXHIBIT A — FIRST EXCESS OF LOSS

SECTION 1 — LIMIT AND RETENTION (amounts shown are in terms of Ultimate Net Loss)

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Reinsurer’s Liability	 	Reinsurer’s Liability
	Profit	 	 	 	 	 	Each Risk Any One	 	Each Loss
	Center	 	Retention	 	Loss Occurrence	 	Occurrence
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	America First
	 	$	5,000,000	 	 	$	5,000,000	 	 	$	10,000,000	 
	Colorado Casualty
	 	$	5,000,000	 	 	$	5,000,000	 	 	$	10,000,000	 
	Golden Eagle
	 	$	5,000,000	 	 	$	5,000,000	 	 	$	10,000,000	 
	Hawkeye-Security
	 	$	5,000,000	 	 	$	5,000,000	 	 	$	10,000,000	 
	Indiana Non Schools
	 	$	5,000,000	 	 	$	5,000,000	 	 	$	10,000,000	 
	Indiana Schools
	 	$	5,000,000	 	 	$	5,000,000	 	 	$	10,000,000	 
	Montgomery
	 	$	5,000,000	 	 	$	5,000,000	 	 	$	10,000,000	 
	Peerless
	 	$	5,000,000	 	 	$	5,000,000	 	 	$	10,000,000	 
	Business Solutions Group
	 	$	5,000,000	 	 	$	5,000,000	 	 	$	10,000,000	 

SECTION 2 — REINSTATEMENT

	A.	 	It is understood and agreed that each claim hereunder reduces the amount of indemnity from
the time of occurrence of the loss by the sum paid, but any amount so exhausted is hereby
reinstated from the time the Loss Occurrence commences without payment of additional premium.

	B.	 	Notwithstanding the foregoing, Reinsurer’s liability hereunder shall be limited to an
aggregate of $25,000,000 each Profit Center, each Agreement Year. The term “Agreement Year”
shall mean each consecutive twelve month period commencing January 1 and ending December 31.

SECTION 3 — REINSURANCE PREMIUM

	 	 	 	 	 
	Profit Centers	 	Rate
	 
	America First
	 	 	1.300	%
	Colorado Casualty
	 	 	0.690	%
	Golden Eagle
	 	 	1.248	%
	Hawkeye-Security
	 	 	1.610	%
	Indiana Non Schools
	 	 	0.970	%
	Indiana Schools
	 	 	5.150	%
	Montgomery
	 	 	0.860	%
	Peerless
	 	 	0.720	%
	Business Solutions Group
	 	 	0.360	%

A-1

 

EXHIBIT B

SECOND EXCESS OF LOSS

IS ATTACHED TO AND

FORMS PART OF

REINSURANCE AGREEMENT NO. LMPpR — 2005

 

 

EXHIBIT B — SECOND EXCESS OF LOSS

	 	 	 	 	 	 	 	 	 
	SECTION	 	SUBJECT	 	PAGE	 
	 
	 	 	 	 	 	 	 	 
	1
	 	LIMIT AND RETENTION	 	 	B-1	 
	 
	 	 	 	 	 	 	 	 
	2
	 	REINSTATMENT	 	 	B-1	 
	 
	 	 	 	 	 	 	 	 
	3
	 	REINSURANCE PREMIUM	 	 	B-1	 

 

 

EXHIBIT B — SECOND EXCESS OF LOSS

SECTION 1 — LIMIT AND RETENTION (amounts shown are in terms of Ultimate Net Loss)

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Reinsurer’s	 	Reinsurer’s
	 	 	 	 	 	 	Liability Each	 	Liability
	Profit	 	 	 	 	 	Risk Any One	 	Each Loss
	Center	 	Retention	 	Loss Occurrence	 	Occurrence
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	America First
	 	$	10,000,000	 	 	$	15,000,000	 	 	$	30,000,000	 
	Golden Eagle
	 	$	10,000,000	 	 	$	15,000,000	 	 	$	30,000,000	 
	Hawkeye-Security
	 	$	10,000,000	 	 	$	15,000,000	 	 	$	30,000,000	 
	Indiana Non Schools
	 	$	10,000,000	 	 	$	15,000,000	 	 	$	30,000,000	 
	Indiana Schools
	 	$	10,000,000	 	 	$	15,000,000	 	 	$	30,000,000	 
	Montgomery
	 	$	10,000,000	 	 	$	15,000,000	 	 	$	30,000,000	 
	Peerless
	 	$	10,000,000	 	 	$	15,000,000	 	 	$	30,000,000	 

SECTION 2 — REINSTATEMENT

	A.	 	Each claim hereunder reduces the amount of indemnity from the time of occurrence of the loss
by the sum paid, but any amount so exhausted is hereby reinstated from the time the Loss
Occurrence commences hereon.

	B.	 	The first reinstatement is provided at no additional premium.

	C.	 	For each subsequent reinstatement, the Company agrees to pay an additional premium calculated
at pro rata of the annual premium hereon, being pro rata only as to the fraction of the limit
of liability of this Agreement (i.e., the fraction of 100% of $15,000,000 so reinstated) and
100% as to the term.

	D.	 	Nevertheless, the Reinsurer’s liability hereunder shall never exceed $30,000,000 in respect
of any one Loss Occurrence and shall be further limited to $45,000,000 each Agreement Year.

SECTION 3 — REINSURANCE PREMIUM

	 	 	 	 	 
	Profit Centers	 	Rate
	 
	 	 	 	 
	America First
	 	 	1.140	%
	Golden Eagle
	 	 	0.680	%
	Hawkeye-Security
	 	 	1.370	%
	Indiana Non Schools
	 	 	0.620	%
	Indiana Schools
	 	 	3.750	%
	Montgomery
	 	 	0.470	%
	Peerless
	 	 	0.388	%

B-1

 

Appendix A

Definition of Profit Centers:

For purposes of Article I or any Articles, wherever the word Profit Centers is used, the Profit
Centers are defined to include the following Liberty Regional Agency Market Profit Centers.

	 	 	 	 	 
	 	 	 	 	Business Produced
	 	 	 	 	By Agents Resident
	Profit Center	 	Legal Entities Used By Profit Center	 	in the Following State
	America First Insurance:

	 	America First Insurance Co.
	 	AK, LA, OK, TX
	 

	 	America First Lloyd’s Insurance Co.
	 	AK, LA, OK, TX
	 

	 	Peerless Insurance Co.
	 	AK, LA, OK, TX
	 
	 	 	 	 
	 

	 	Liberty County Mutual Insurance Co.
	 	For business classified as
RAM only
	 
	 	 	 	 
	 

	 	Business Solutions Group*
	 	(Multi-State Business **)
	 

	 	Peerless Indemnity Insurance Co.
	 	(Multi-State Business **)
	 

	 	The Netherlands Insurance Co.
	 	(Multi-State Business **)
	 
	 	 	 	 
	Colorado Casualty:

	 	Colorado Casualty Insurance Co.
	 	AZ, CO, NM, NV, WY, UT
	 

	 	Golden Eagle Insurance Corp.
	 	AZ, CO, NM, NV, WY, UT
	 

	 	One Beacon Insurance Co. Cession to
Peerless
	 	AZ, CO, NM, NV, WY, UT
	 
	 	 	 	 
	 

	 	Business Solutions Group *
	 	(Multi-State Business**)
	 

	 	Peerless Indemnity Insurance Co.
	 	(Multi-State Business**)
	 

	 	The Netherlands Insurance Co.
	 	(Multi-State Business**)
	 
	 	 	 	 
	Golden Eagle Insurance:

	 	Golden Eagle Insurance Corp.
	 	CA
	 

	 	One Beacon Insurance Co. Cession to
Peerless
	 	CA
	 

	 	Peerless Insurance Co.
	 	CA
	 
	 	 	 	 
	 

	 	Business Solutions Group*
	 	(Multi-State Business**)
	 

	 	Peerless Indemnity Insurance Co.
	 	(Multi-State Business**)
	 

	 	The Netherlands Insurance Co.
	 	(Multi-State Business**)
	 
	 	 	 	 
	Hawkeye-Security Insurance:

	 	Hawkeye-Security Insurance Co.
	 	IA, KS, MN, MO, NE, ND,
SD, WI
	 

	 	Consolidated Insurance Co.
	 	IA, KS, MN, MO, NE, ND,
SD, WI
	 

	 	Indiana Insurance Co.
	 	IA, KS, MN, MO, NE, ND,
SD, WI
	 

	 	One Beacon Insurance Co Cession to
Peerless
	 	IA, KS, MN, MO, NE, ND,
SD, WI
	 

	 	Peerless Insurance Co.
	 	IA, KS, MN, MO, NE, ND,
SD, WI

 

 

Definition of Profit Centers Continued;

	 	 	 	 	 
	 	 	 	 	Business Produced
	 	 	 	 	By Agents Resident
	Profit Center	 	Legal Entities Used By Profit Center	 	in the Following States
	Hawkeye-Security Continued:
	 	 	 	 
	 

	 	The Midwestern Indemnity Co.
	 	IA, KS, MN, MO, NE, ND, SD,WI
	 
	 	 	 	 
	 

	 	Business Solutions Group *
	 	(Multi-State Business**)
	 

	 	Peerless Indemnity Insurance Co.
	 	(Multi-State Business**)
	 

	 	The Netherlands Insurance Co.
	 	(Multi-State Business**)
	 
	 	 	 	 
	Indiana Insurance:

	 	Indiana Insurance Co.
	 	IL, IN, KY, Ml, OH, TN
	 

	 	Consolidated Insurance Co.
	 	IL, IN, KY, Ml, OH, TN
	 

	 	Mid-American Fire and Casualty Co.
	 	IL, IN, KY, Ml, OH, TN
	 

	 	One Beacon Insurance Co. Cession to
Peerless
	 	IL, IN, KY, Ml, OH, TN
	 

	 	Peerless Insurance Co.
	 	IL, IN, KY, Ml, OH, TN
	 

	 	The Midwestern Indemnity Co.
	 	IL, IN, KY, Ml, OH, TN
	 
	 	 	 	 
	 

	 	Business Solutions Group *
	 	(Multi-State Business**)
	 

	 	Peerless Indemnity Insurance Co.
	 	(Multi-State Business**)
	 

	 	The Netherlands Insurance Co.
	 	(Multi-State Business**)
	 
	 	 	 	 
	Business Solutions Group:

	 	Liberty Mutual Insurance Co.
	 	All states other than
	 

	 	Liberty Mutual Fire Insurance Co.
	 	multi-state business in
	 

	 	LM Insurance Corp.
	 	the other Profit Centers
	 

	 	Liberty Insurance Corp.	 	 
	 

	 	The First Liberty Insurance Corp.	 	 
	 

	 	Liberty County Mutual Insurance Co.	 	 
	 
	 	 	 	 
	Montgomery Insurance:

	 	Montgomery Mutual Insurance Co.
	 	AL, DC, DE, FL, GA, MD, MS, NC, SC, VA, WV
	 

	 	Colorado Casualty Insurance Co.
	 	AL, DC, DE, FL, GA, MD, MS, NC, SC, VA, WV
	 

	 	Excelsior Insurance Co.
	 	AL, DC, DE, FL, GA, MD, MS, NC, SC, VA, WV
	 

	 	One Beacon Insurance Co. Cession to
Peerless
	 	AL, DC, DE, FL, GA, MD,
MS, NC, SC, VA, WV
	 

	 	Peerless Insurance Co.
	 	AL, DC, DE, FL, GA, MD, MS, NC, SC, VA, WV
	 

	 	The Midwestern Indemnity Co.
	 	AL, DC, DE, FL, GA, MD,

MS, NC, SC, VA, WV
	 
	 	 	 	 
	 

	 	Business Solutions Group *
	 	(Multi-State Business**)
	 

	 	Peerless Indemnity Insurance Co.
	 	(Multi-State Business**)
	 

	 	The Netherlands Insurance Co.
	 	(Multi-State Business**)

 

 

Definition of Profit Centers Continued;

	 	 	 	 	 
	 	 	 	 	Business Produced
	 	 	 	 	By Agents Resident
	Profit Center	 	Legal Entities Used By Profit Center	 	in the Following States
	Peerless Insurance

	 	Peerless Insurance Co.
	 	CT, MA, ME, NH, NJ, NY, PA, RI, VT
	 

	 	Excelsior Insurance Co.
	 	CT, MA, ME, NH, NJ, NY, PA, RI, VT
	 

	 	Indiana Insurance Co.
	 	CT, MA, ME, NH, NJ, NY, PA, RI, VT
	 
	 	 	 	 
	 

	 	One Beacon Insurance Co.
Cessions to
	 	CT, MA, ME, NH, NJ, NY, PA, RI, VT
	 

	 	Merchants and Business Men’s Mutual
Insurance Co.
	 	CT, MA, ME, NH, NJ, NY, PA, RI, VT
	 
	 	 	 	 
	 

	 	Business Solutions Group *
	 	(Multi-State Business**)
	 

	 	Peerless Indemnity
Insurance Co.
	 	(Multi-State Business**)
	 

	 	The Netherlands Insurance
Co.
	 	(Multi-State Business**)

 

			
	*	 	Business Solutions Group consists of; Liberty Mutual Insurance Co., Liberty Mutual Fire
Insurance Co., LM Insurance Corp., Liberty Insurance Corp., The First Liberty Insurance Corp.,
and Liberty County Mutual Insurance Co..
	 
	**	 	Agent responsible for the risk resides in the profit center but the risk is located in
multiple states both in and outside states assigned to the Profit Center.

SUPPLEMENT TO THE ATTACHMENTS

 

 

DEFINITION OF IDENTIFICATION TERMS USED WITHIN THE ATTACHMENTS

	A.	 	Wherever the term “Company” or “Reinsured” or “Reassured” or whatever other term is used to
designate the reinsured company or companies within the various attachments to the reinsurance
agreement, the term shall be understood to mean Company or Reinsured or Reassured or whatever
other term is used in the attached reinsurance agreement to designate the reinsured company or
companies.

	B.	 	Wherever the term “Agreement” or “Contract” or “Policy” or whatever other term is used to
designate the attached reinsurance agreement within the various attachments to the
reinsurance agreement, the term shall be understood to mean Agreement or Contract or Policy or
whatever other term is used to designate the attached reinsurance agreement.

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

INSOLVENCY FUNDS EXCLUSION CLAUSE

This Agreement excludes 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 or from reimbursement of any person for any such liability. “Insolvency fund” includes any
guaranty fund, insolvency fund, plan, pool, association, fund or other arrangement, howsoever
denominated, established or governed, which provides for any assessment of or payment or assumption
by any person of part or all of any claim, debt, charge, fee, or other obligation of an insurer, or
its successors or assigns, which 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.

 

 

POOLS, ASSOCIATIONS & SYNDICATES EXCLUSION CLAUSE

Section A:

Excluding:

	 	(1)	 	All business derived directly or indirectly from any Pool, Association or
Syndicate which maintains its own reinsurance facilities.
	 
	 	(2)	 	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:

It is agreed that business written by the Company for the same perils, which is
known at the time to be insured by, or in excess of underlying amounts placed in
the following Pools, Associations or Syndicates, whether by way of insurance or
reinsurance, is excluded hereunder:

Any Pool, Association or Syndicate formed for the purpose of writing Oil, Gas or
Petro-Chemical Plants and/or Oil or Gas Drilling Rigs, United States Aircraft
Insurance Group, Canadian Aircraft Insurance Group, Global Aerospace.

Section B does not apply:

	 	(1)	 	Where the Total Insured Value over all interests of the risk in question is
less than $250,000,000.
	 
	 	(2)	 	To interests traditionally underwritten as Inland Marine and/or Stock and/or
Contents written on a Blanket basis.
	 
	 	(3)	 	To Contingent Business Interruption, except when the Company is aware that
the key location is known at the time to be insured in any Pool, Association or
Syndicate named above, other than as provided for under Section B(1).
	 
	 	(4)	 	To risks as follows:
	 
	 	 	 	Offices, Hotels, Apartments, Hospitals, Educational Establishments, Public
Utilities (other than Railroad Schedules) and Builder’s Risks on the classes of
risks specified in this subsection (4) only.

 

 

TOTAL INSURED VALUE EXCLUSION CLAUSE

It is the mutual intention of the parties to exclude risks, other than Offices, Hotels, Apartments,
Hospitals, Educational Establishments, Public Utilities (except Railroad schedules) and Builders
Risk on the above classes where, at the time of the cession, the Total Insured Value over all
interests exceeds $500,000,000. However, the Company shall be protected hereunder, subject to the
other terms and conditions of this Agreement, if subsequently to cession being made the Company
becomes acquainted with the true facts of the case and discovers that the mutual intention has been
inadvertently breached, the Company shall at the first opportunity, and certainly by next
anniversary of the original policy, exclude the risk in question.

It is agreed that this mutual intention does not apply to Contingent Business Interruption or to
interest traditionally underwritten as Inland Marine or to Stock and/or Contents written on a
blanket basis except where the Company is aware that the Total Insured Value of $500,000,000 is
already exceeded for buildings, machinery, equipment and direct use and occupancy at the key
location.

It is understood and agreed that this Clause shall not apply hereunder where the Company writes
100% of the risk.

Notwithstanding anything contained herein to the contrary, it is the mutual intention of the
parties in respect of bridges and tunnels to exclude such risks where the Total Insured Value over
all interests exceeds $500,000,000.

 

 

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

N.M.A. 1119

	1.	 	This Reinsurance does not cover any loss or liability accruing to the Reassured, 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 Reassured, 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 operation of paragraphs 1. and 2. of this Clause, this
Reinsurance does not cover any loss or liability by radioactive contamination accruing to the
Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any insurance on
property which is on the same site as a nuclear reactor power plant or other nuclear
installation and which normally would be insured therewith, except that this paragraph 3.
shall not operate:

	 	(a)	 	where the Reassured does not have knowledge of such nuclear reactor power
plant or nuclear installation, or
	 
	 	(b)	 	where the said insurance contains a provision excluding coverage for
damage to property caused by or resulting from radioactive contamination, however
caused. However, on and after 1st January, 1960, this sub-paragraph (b) shall only
apply provided the said radioactive contamination exclusion provision has been
approved by the Governmental Authority having jurisdiction thereof.

	4.	 	Without in any way restricting the operation of paragraphs 1., 2. and 3. of this Clause, this
Reinsurance does not cover any loss or liability by radioactive contamination accruing to the
Reassured, 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 this Clause shall not extend to risks using radioactive isotopes
in any form where the nuclear exposure is not considered by the Reassured to be the primary
hazard.

	6.	 	The term “special nuclear material” shall have the meaning given to it by the Atomic Energy
Act of 1954 or by any law amendatory thereof.

7. Reassured to be sole judge of what constitutes:

-2-

 

	 	(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 Reassured 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 Reassured 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.

N.M.A. 1119

-3-

 

NUCLEAR INCIDENT EXCLUSION CLAUSE — PHYSICAL
DAMAGE — REINSURANCE — CANADA

N.M.A. 1980

	1.	 	This Agreement 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 Agreement
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:

	 	a.	 	Nuclear reactor power plants including all auxiliary property on the site, or
	 
	 	b.	 	Any other nuclear reactor installation, including laboratories handling radioactive
materials in connection with reactor installations, and critical facilities as such, or
	 
	 	c.	 	Installations for fabricating complete fuel elements or for processing substantial
quantities of prescribed substances, and for reprocessing, salvaging, chemically
separating, storing or disposing of spent nuclear fuel or waste materials, or
	 
	 	d.	 	Installations other than those listed in c. above using substantial quantities of
radioactive isotopes or other products of nuclear fission.

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

	 	a.	 	where the Company does not have knowledge of such nuclear reactor power plant or
nuclear installation, or
	 
	 	b.	 	where the said insurance contains a provision excluding coverage for damage to
property caused by or resulting from radioactive contamination, however caused.

	4.	 	Without in any way restricting the operation of paragraphs 1., 2. and 3. of this clause, this
Agreement 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.	 	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 “prescribed substances” shall have the meaning given to it by the Atomic Energy
Control Act R.S.C. 1974 or by any law amendatory thereof.

	7.	 	Company to be sole judge of what constitutes:

	 	a.	 	substantial quantities, and

-4-

 

	 	b.	 	the extent of installation, plant or site.

	8.	 	Without in any way restricting the operation of paragraphs 1., 2., 3. and 4. of this clause,
this Agreement does not cover any loss or liability accruing to the Company, directly or
indirectly, and whether as Insurer or Reinsurer, caused by any nuclear incident as defined in
The Nuclear Liability Act, nuclear explosion or contamination by radioactive material.

	 	 	NOTE: Without in any way restricting the operation of paragraphs 1., 2., 3. and 4. of this clause,
paragraph 8. of this clause shall apply to all original contracts of the Company whether new,
renewal or replacement which become effective on or after December 31, 1984.

N.M.A. 1980

-5-

 

NUCLEAR INCIDENT EXCLUSION CLAUSE — REINSURANCE — NO. 4

	1.	 	This Reinsurance does not cover any loss or liability accruing to the Reassured as a member
of, or subscriber to, any association of insurers or reinsurers formed for the purpose of
covering nuclear energy risks or as a direct or indirect reinsurer of any such member,
subscriber or association.
	 
	2.	 	Without in any way restricting the operations of Nuclear Incident Exclusion Clauses, —
Liability, — Physical Damage, — Boiler and Machinery and paragraph 1. of this Clause, it is
understood and agreed that for all purposes of the reinsurance assumed by the Reinsurer from
the Reinsured, all original insurance policies or contracts of the Reinsured (new, renewal and
replacement) shall be deemed to include the applicable existing Nuclear Clause and/or Nuclear
Exclusion Clause(s) in effect at the time and any subsequent revisions thereto as agreed upon
and approved by the Insurance Industry and/or a qualified Advisory or Rating Bureau.

 

 

TERRORISM EXCLUSION CLAUSE — REINSURANCE (PROPERTY)

Notwithstanding any provision to the contrary within this Agreement or any endorsement thereto,
this reinsurance Agreement does not cover any loss, damage or expense of whatsoever nature directly
or indirectly caused by, resulting from, arising out of or in connection with any act of terrorism,
regardless of any other cause contributing concurrently or in any other sequence to the loss,
damage or expense.

For the purpose of this exclusion, terrorism means any actual or threatened violent act or act
harmful to human life, tangible or intangible property or infrastructure, directed towards or
having the effect of (a) influencing or protesting against any de jure or de facto government or
policy thereof or (b) intimidating, coercing or putting in fear a civilian population or section
thereof.

In any action suit or other proceedings where the reinsurer alleges that by reason of this
exclusion a loss, damage or expense is not covered by this reinsurance Agreement, the burden of
proving that such loss, damage or expense is covered shall be upon the reinsured.

 

 

INTEREST AND LIABILITIES CONTRACT

(hereinafter referred to as the “Contract”)

to the

PROPERTY PER RISK EXCESS OF LOSS
 REINSURANCE AGREEMENT

No. LMPpR—2005

(hereinafter referred to as the “Agreement”)

between

PEERLESS INSURANCE COMPANY

(Liberty RAM)

Keene, New Hampshire

(hereinafter referred to as the “Company”)

and

LIBERTY MUTUAL INSURANCE COMPANY

Boston, Massachusetts

(hereinafter referred to as the “Subscribing Reinsurer”)

It is understood and agreed that as respects policies in force at 12:01 a.m., Local Standard Time,
January 1, 2005, and new and renewal policies becoming effective on and after said date, the
Subscribing Reinsurer shall have the following shares in the interests and liabilities of all
reinsurers participating in the attached Agreement entitled:

PROPERTY PER RISK EXCESS OF LOSS

REINSURANCE AGREEMENT

LMPpR — 2005

	 	 	 	 	 
	Exhibit	 	Share
	Exhibit A — First Excess of Loss Cover
	 	 	 	 
	Indiana Schools
	 	 	00.0	%
	All Other
	 	 	50.0	%
	 
	 	 	 	 
	Exhibit B — School Excess of Loss Cover
	 	 	 	 
	Indiana Schools
	 	 	00.0	%
	All Other
	 	 	50.0	%

LMPpR—2005

Interest & Liabilities Contract page 1

 

 

IN WITNESS WHEREOF, the parities hereto have caused this Endorsement to be executed in
duplicate, by their duly authorized representatives as of the following dates:

In Keene, New Hampshire, this 19th day of August, 2005.

	 	 	 	 	 	 	 

	ATTEST:

	 	 
	 	PEERLESS INSURANCE COMPANY
	 	 
	 
	 	 	 	 	 	 
	/s/
	 	 	 	/s/	 	 
	 

	 	 	 	 	 	 
	VP— Claims

	 	 	 	A.V.P— Risk Management	 	 

And in Boston, Massachusetts, this 23rd day of August, 2005.

	 	 	 	 	 	 	 

	ATTEST:

	 	 
	 	LIBERTY MUTUAL INSURANCE COMPANY
	 	 
	 
	 	 	 	 	 	 
	/s/
	 	 	 	/s/	 	 
	 

	 	 	 	 	 	 
	Member of Management

	 	 	 	Member of Senior Management	 	 

LMPpR — 2005

Interest & Liabilities Contract page 2

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