Document:

exv10w148

EXHIBIT 10.148

CASUALTY EXCESS OF LOSS

REINSURANCE AGREEMENT

No. RAM Re BSGCX — 2006

EFFECTIVE JANUARY 1, 2006

between

LIBERTY MUTUAL INSURANCE COMPANY

Boston, Massachusetts

(with and on behalf of THE FIRST LIBERTY INSURANCE CORPORATION)

West Des Moines, Iowa

LIBERTY MUTUAL FIRE INSURANCE COMPANY

Boston, Massachusetts

LM INSURANCE CORPORATION

West Des Moines, Iowa

LIBERTY INSURANCE CORPORATION

South Burlington, Vermont

(for business classified as Business Solutions Group, only)

(hereinafter referred to as the “Company”)

and

PEERLESS INSURANCE COMPANY

Keene, New Hampshire

(herinafter referred to as the “Subscribing Reinsurer”)

Agreement No. RAM Re BSGCX — 2006

CAS06BSG01

 

 

CASUALTY EXCESS OF LOSS REINSURANCE AGREEMENT NO. RAM Re BSGCX — 2006

	 	 	 	 	 	 	 
	ARTICLE	 	CONTENTS	 	PAGE
	 

	 	PREAMBLE
	 	 	1	 
	I

	 	BUSINESS COVERED
	 	 	1	 
	II

	 	EFFECTIVE DATE AND TERMINATION
	 	 	2	 
	III

	 	TERRITORY
	 	 	3	 
	IV

	 	LIMIT AND RETENTION
	 	 	3	 
	V

	 	WARRANTIES
	 	 	4	 
	VI

	 	ULTIMATE NET LOSS
	 	 	4	 
	VII

	 	LOSS IN EXCESS OF POLICY LIMITS
	 	 	5	 
	VIII

	 	EXTRA CONTRACTUAL OBLIGATIONS
	 	 	5	 
	IX

	 	EXCLUSIONS
	 	 	6	 
	X

	 	SPECIAL ACCEPTANCES
	 	 	10	 
	XI

	 	LOSS OCCURRENCE
	 	 	10	 
	XII

	 	REINSURANCE PREMIUM
	 	 	12	 
	XIII

	 	REPORTS AND REMITTANCES
	 	 	12	 
	XIV

	 	LOSS ADJUSTMENTS AND SETTLEMENTS
	 	 	13	 
	XV

	 	SALVAGE AND SUBROGATION
	 	 	13	 
	XVI

	 	FEDERAL TERRORISM EXCESS RECOVERY CLAUSE
	 	 	14	 
	XVII

	 	ACCESS TO RECORDS
	 	 	14	 
	XVIII

	 	DIVIDENDS AND TAXES
	 	 	15	 
	XIX

	 	FEDERAL EXCISE TAX
	 	 	16	 
	XX

	 	GOVERNING LAW
	 	 	16	 
	XXI

	 	CURRENCY
	 	 	16	 
	XXII

	 	OFFSET
	 	 	16	 
	XXIII

	 	ERRORS OR OMISSIONS
	 	 	16	 
	XXIV

	 	INSOLVENCY
	 	 	17	 
	XXV

	 	MEDIATION
	 	 	17	 
	XXVI

	 	ARBITRATION
	 	 	18	 
	XXVII

	 	SPECIAL CONDITIONS
	 	 	20	 
	XXVIII

	 	THIRD PARTIES
	 	 	22	 
	XXIX

	 	UNAUTHORIZED REINSURENCE
	 	 	22	 
	XXX

	 	SERVICE OF SUIT
	 	 	23	 
	XXXI

	 	CONFIDENTIALITY CLAUSE
	 	 	24	 
	XXXII

	 	AMENDMENTS
	 	 	25	 
	XXXIII

	 	SEVERABILITY
	 	 	25	 
	XXXIV

	 	INTEREST PENALTY
	 	 	25	 
	XXXV

	 	ASSIGNMENT
	 	 	26	 
	XXXVI

	 	ENTIRE AGREEMENT
	 	 	26	 

ATTACHMENTS:

EXHIBIT A — FIRST EXCESS OF LOSS

EXHIBIT B — SECOND EXCESS OF LOSS

EXHIBIT C — THIRD EXCESS OF LOSS

APPENDIX A — DEFINITION OF PROFIT CENTER

APPENDIX B — FORTUNE’S GLOBAL 500 LIST

APPENDIX C — PHARMACEUTICAL/MEDICAL RISKS INSOLVENCY FUNDS EXCLUSION CLAUSE

Agreement No. RAM Re BSGCX — 2006

 

 

NUCLEAR INCIDENT EXCLUSION CLAUSE — LIABILITY — REINSURANCE — U.S.A.

NUCLEAR INCIDENT EXCLUSION CLAUSE — LIABILITY — REINSURANCE — CANADA.

NUCLEAR INCIDENT EXCLUSION CLAUSE — REINSURANCE — NO. 4.

Agreement No. RAM Re BSGCX — 2006

 

 

CASUALTY EXCESS OF LOSS

REINSURANCE AGREEMENT

No. RAM Re BSGCX — 2006

(hereinafter referred to as the “Agreement”)

between

LIBERTY MUTUAL INSURANCE COMPANY

Boston, Massachusetts

(with and on behalf of THE FIRST LIBERTY INSURANCE CORPORATION

West Des Moines, Iowa

LIBERTY MUTUAL FIRE INSURANCE COMPANY

Wausau, Wisconsin

LM INSURANCE CORPORATION

West Des Moines, Iowa

LIBERTY INSURANCE CORPORATION

South Burlington, Vermont

LIBERTY COUNTY MUTUAL INSURANCE COMPANY

Irving, Texas

for business classified as Business Solutions Group, only)

(hereinafter referred to as the “Company”)

and

PEERLESS INSURANCE COMPANY

Keene, New Hampshire

(hereinafter referred to as the “Subscribing Reinsurer”)

ARTICLE I — BUSINESS COVERED

	A.	 	The Subscribing 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 or claims made during the term of the Agreement for Policies in force as of January
1, 2006, and new and renewal Policies becoming effective on or after said date, subject to the
terms and conditions contained herein.
	 
	B.	 	This Agreement is solely between the Company and the Subscribing Reinsurer, and nothing
contained in this Agreement shall create any obligations or establish any rights against the
Subscribing Reinsurer in favor of any person or entity not a party hereto.
	 
	C.	 	The term “Policies” shall mean each of the Company’s binders, policies and contracts of
insurance or reinsurance on business classified by the Company as the Business Solutions Group
Profit Center, only, as shown in Appendix A.
	 
	D.	 	Under this Agreement, the indemnity for reinsured loss applies only to the following Annual
Statement Lines of Business and Classes of Insurance written by the Company as respects the
Company’s Underwriting Line Guide:

	 	 	 
	NAIC	 	 
	CODE:	 	LINES OF BUSINESS:
	 
	 	 
	03

	 	Farmowners (Section II only)

					
	 	 	 	 	 
	Agreement No. RAM Re BSGCX — 2006
	 	1.
	 	 

 

 

	 	 	 
	NAIC	 	 
	CODE:	 	LINES OF BUSINESS:
	 
	 	 
	04

	 	Homeowners (Section II only)
	05.2

	 	Commercial Multiple Peril (Section II only)
	16

	 	Workers Compensation
	17

	 	Other Liability
	18

	 	Products Liability
	19.1, 19.2

	 	Private Passenger Automobile Liability
	19.3, 19.4

	 	Commercial Automobile Liability
	21

	 	Automobile Physical Damage (Auto Physical Damage Collision, only)

Coverage is provided, as respects the Company’s Underwriting Line Guide as follows:

	 	1.	 	Automobile Liability includes; Bodily Injury Liability, Property Damage
Liability, Medical Payments, Uninsured Motorists, Underinsured Motorists,
No-Fault Coverage and Auto Physical Damage Collision.
	 
	 	2.	 	Other Liability including Professional Liability; Bodily Injury Liability,
Property Damage Liability, Personal and Advertising Injury Liability and Medical
Payments Coverage when written as part of a Commercial or Personal Package Policy or on
a monoline basis. However, Advertising Injury Liability shall only apply to this
Agreement when written as part of a Commercial Package Policy or a Commercial General
Liability Coverage Form.
	 
	 	3.	 	Workers Compensation and Employers Liability.
	 
	 	4.	 	Personal and Commercial Umbrella Liability.
	 
	 	5.	 	Clash of multiple policies involved in the same occurrence.

ARTICLE II — EFFECTIVE DATE AND TERMINATION

	A.	 	This Agreement shall become effective at 12:01 a.m., Local Standard Time, with respect to
Policies in force at 12:01 a.m., Local Standard Time, January 1, 2006, and new and renewal
Policies becoming effective on or after said date. 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.	 	This Agreement shall apply to loss occurrence and claims made Policies in accordance with the
following provisions:

	 	1.	 	As respects Policies written on an occurrence basis:
	 
	 	 	 	This Agreement shall apply with respect to losses occurring on or after the inception
date of this Agreement.
	 
	 	2.	 	As respects Policies written on a claims made basis:
	 
	 	 	 	This Agreement shall apply to claims made Policies as respects claims received and
recorded by the Company or the insured, whichever comes first, at and after the effective
date of this Agreement, provided that each such Policy includes a specific retroactive
date and the occurrence which results in each such claim takes place on or after such
retroactive date, and provided further that such retroactive date is on or after the
inception date of the first of one or more consecutive claims made policies issued by the
Company or another insurer(s) to the named insured.

					
	 	 	 	 	 
	Agreement No. RAM Re BSGCX — 2006
	 	2.
	 	 

 

 

	C.	 	In the event of termination of this Agreement, the Company shall have the option of
continuing or terminating the liability in force at the date of termination as set forth
below. The Company may exercise such option provided written notice of the Company’s election
is given by certified mail to the Subscribing Reinsurer prior to the date of termination. If
the Company does not choose to exercise its option prior to the date of termination, such
option shall revert to the Subscribing Reinsurer.

	 	1.a.  	 	As respects Policies written on an occurrence basis:
	 
	 	 	 	Upon termination of this Agreement, all Policies covered hereunder and in force at the
date of termination of this Agreement shall continue until their natural expiry,
cancellation or next anniversary of such business, whichever first occurs; but in no
case shall this reinsurance be extended for longer than one year, plus odd time, after
the termination date.
	 
	 	1.b.  	 	As respects Policies written on a claims made basis:
	 
	 	 	 	Upon termination of this Agreement, the Subscribing Reinsurer shall continue to be
liable for claims received or recorded by the Company or by the insured with respect to
Policies in force at the date of termination for the full original policy period until
the natural expiry, cancellation or next anniversary of such policies, not to exceed
one year, whichever comes first. However, if the Company has provided an Extended
Reporting Period within one year after the date of termination on policies in force at
the date of termination or if the Extended Reporting Period is in force at the date of
termination, the Subscribing Reinsurer shall continue to be liable for such extended
reporting period.
	 
	 	2.a.  	 	As respects Policies written on an occurrence basis:
	 
	 	 	 	Upon termination of this Agreement, the Subscribing Reinsurer shall be liable for
losses occurring prior to the date of termination; however, the Subscribing Reinsurer
shall have no liability for losses occurring subsequent to the termination of this
Agreement.
	 
	 	2.b.  	 	As respects Policies written on a claims made basis:
	 
	 	 	 	Upon termination of this Agreement, the Subscribing Reinsurer shall not be liable for
claims received or recorded by the Company or insured after the effective date of
termination unless such claim is received and recorded by the Company or the insured
during an Extended Reporting Endorsement Period in force at the date of termination.

ARTICLE III — TERRITORY

The territorial limits of this Agreement shall be identical with those of the Company’s Policies.

ARTICLE IV — LIMIT AND RETENTION

	A.	 	The limits and retentions provided under this Agreement are as set forth in Exhibits A, B and
C attached hereto and made a part of this Agreement.
	 
	B.	 	The Company’s retention and the Subscribing Reinsurer’s limit of liability for each Loss
Occurrence, set forth in Section I of Exhibits A, B and C 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 the Company shall retain for its own account only the first $2,000,000 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 Company’s retention thereon shall be

					
	 	 	 	 	 
	Agreement No. RAM Re BSGCX — 2006
	 	3.
	 	 

 

 

	 	 	apportioned to each Property and Casualty loss in the same proportion that the Company’s
Ultimate Net Loss for each such Property and Casualty loss bears to the Company’s combined
Ultimate Net Loss from both losses. The Subscribing Reinsurer shall reimburse the Company for
the difference between the Company’s Ultimate Net Loss under each Property and Casualty loss
and the Company’s pro rated retention on each Property and Casualty loss.
	 
	D.	 	Reinsurance of the Company’s retention, set forth in each Exhibit, shall not be deducted in
arriving at the Company’s Ultimate Net Loss herein.

ARTICLE V — WARRANTIES

Notwithstanding any other provision of this Agreement, Subscribing Reinsurer’s liability under
this Agreement shall be limited to a maximum of:

	1.	 	$5,000,000 Maximum Any One Life for Worker’s Compensation;
	 
	2.	 	$10,000,000 aggregate coverage for mold in the states of California, Florida and Texas.
	 
	3.	 	Maximum Umbrella limit $10,000,000 per Loss Occurrence.
	 
	4.	 	Maximum Employers Liability limit $2,000,000 per Loss Occurrence.

ARTICLE VI — ULTIMATE NET LOSS

The term “Ultimate Net Loss” as used in this Agreement shall mean: (1) all amounts paid or due and
payable by the Company in the investigation, appraisal, adjustment, settlement, litigation,
defense or appeal, or payment of claims or judgments arising from each and every loss, and/or Loss
Occurrence for which the Company is or may be found liable under the Policies, less salvages and
subrogation recoveries and amounts recovered or recoverable under pooling agreements or other
reinsurances, whether collectible, or not “Ultimate Net Loss” includes, but is not limited to, the
following paid or payable amounts: loss adjustment expenses, defense costs, court costs,
supersedeas and appeal bond costs, Post or Prejudgment Interest and Delayed Damages, Attorneys
Fees and Expenses, Claim-Specific Declaratory Judgment Expenses, a pro rata share of salaries and
expenses of the Company’s field employees according to the time occupied in adjusting, defending,
and settling such loss, and expenses of all of the Company’s officers and employees incurred in
connection with the loss; (except that salaries of officers and employees engaged in general
management and located in the home office of the Company and any office expense of the Company
shall not be included), and all other costs of investigation or litigation, (2) Extra Contractual
Obligations (as defined in the Extra Contractual Obligations Article, and (3) loss in excess of
original Policy limits (as described in the Loss in Excess of Original Policy Limits Article).

“Claim-Specific Declaratory Judgment Expenses” shall be defined as fees and expenses incurred in
actions brought to determine whether the Company has a defense and/or indemnification obligation
for individual claims presented against Policies covered under this Agreement. Any Claim-Specific
Declaratory Judgment Expense shall be deemed to have been fully incurred on the same date as the
insured’s original loss (if any) giving rise to the action, unless otherwise provided for within
this Agreement.

The term “Attorneys’ Fees and Expenses” as used above, means the fees and expenses of attorneys,
including the fees and expenses of the Company’s in-house attorneys providing legal advice on
coverage questions and/or defending the Company in coverage litigation, and fees and expenses of
staff counsel in the defense of policyholder claims. Such Attorneys’ Fees and Expenses for in-house
attorneys and staff counsel shall be calculated at the rate for such attorneys plus the expenses
incurred by such attorneys, but excluding office expenses of the Company and salaries and expenses
of its other employees.

					
	 	 	 	 	 
	Agreement No. RAM Re BSGCX — 2006
	 	4.
	 	 

 

 

“Post or Prejudgment Interest or Delayed Damages” shall mean interest or damages added to a
settlement, verdict, award, or judgment based on the period of time prior to or after the
settlement, verdict, award, or judgment whether or not made part of the settlement, verdict,
award, or judgment.

Nothing in this Article shall be construed to mean that losses under this Agreement are not
recoverable until the Company’s Ultimate Net Loss has been ascertained. In the event a verdict or
judgment is reduced by an appeal or a settlement subsequent to the entry of the judgment, thereby
resulting in an ultimate saving on such verdict or judgment, or in the event a judgment is
reversed outright, the loss adjustment expense incurred in securing such final reduction or
reversal shall be prorated between the Reinsurers and the Company in the proportion that each
benefits from such reduction or reversal, and the expenses incurred up to the time of the original
verdict or judgment shall be added to the Ultimate Net Loss. In the event there is no reduction or
reversal of a verdict or judgment, the loss adjustment expense incurred in attempting to secure
such reduction or reversal shall be added to the Ultimate Net Loss.

ARTICLE VII — LOSS IN EXCESS OF POLICY LIMITS

This Agreement shall protect the Company within the limits hereof, for 90% of any Loss in excess
of the Company’s original Policy limit where Loss in excess of the limit has been incurred because
of a failure by the Company or by a third-party claims administrator 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 defending or prosecuting litigation, including appeals, arbitration, or any
alternative dispute resolution or settlement discussions involving any claim.

However, the above paragraph 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.

With regard to excess of Policy limits, the word “Loss” shall mean any amounts for which the
Company would have been contractually liable to pay had it not been for the limit of the original
Policy. The date on which any Loss in excess of the Company’s original Policy limit is incurred by
the Company shall be deemed, in all circumstances, to be the date of the original Occurrence,
accident, casualty, disaster, loss occurrence or loss, as selected by the Company.

ARTICLE VIII — EXTRA CONTRACTUAL OBLIGATIONS

This Agreement shall protect the Company within the limits hereof for 90% of Extra Contractual
Obligations. “Extra Contractual Obligations” are defined as those liabilities not covered under
any other provision of this Agreement, 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 or by a third party claims administrator 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 defending or prosecuting litigation, including appeals, arbitration, or any alternative dispute
resolution or settlement discussions involving any claim.

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

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

					
	 	 	 	 	 
	Agreement No. RAM Re BSGCX — 2006
	 	5.
	 	 

 

 

ARTICLE IX — EXCLUSIONS

THIS AGREEMENT DOES NOT COVER:

	A.	 	THE FOLLOWING GENERAL CATEGORIES

	 	1.	 	Ex-gratia payments.
	 
	 	2.	 	Loss or damage caused directly or indirectly by: (a) enemy attack by armed forces
including action taken by military, naval or air forces in resisting an actual or an
immediately impending enemy attack; (b) invasion; (c) insurrection; (d) rebellion; (e)
revolution; (f) intervention; (g) civil war; and (h) usurped power.
	 
	 	3.	 	Reinsurance assumed by the Company, except intercompany reinsurance.
	 
	 	4.	 	Business derived from any Pool, Association, including Joint Underwriting
Association, Syndicate, Exchange, Plan, Fund or other facility directly as a member,
subscriber or participant, or indirectly by way of reinsurance or assessments; provided
this exclusion shall not apply to Automobile or Workers Compensation assigned risks which
may be currently or subsequently covered hereunder.
	 
	 	5.	 	Pollution Liability as per the Company’s original Policies and endorsements except
when a judicial entity invalidates the Company’s exclusion or in any jurisdiction whose
regulatory authorities have prohibited the exclusion.
	 
	 	6.	 	Insolvency Funds as per the attached Insolvency Funds Exclusion Clause.
	 
	 	7.	 	Global Fortune 500 Risks as per the attached Appendix B.
	 
	 	8.	 	Pharmaceutical/Medical Risks per the attached Appendix C.
	 
	 	9.	 	Nuclear Incident Exclusion Clauses which are attached and made part of this Agreement:

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

	 	10.	 	Risks with umbrella coverage in excess of $200,000,000.
	 
	 	11.	 	Any actual or alleged liability whatsoever for any claim or claims in respect of
loss or losses directly or indirectly arising out of, resulting from or in consequence
of, or in any way involving asbestos, or any materials containing asbestos in whatever
form or quantity.
	 
	 	12.	 	Business classified as multi-state business written on behalf of other Profit
Centers as defined in Appendix A — Definition of Profit Center.

	B.	 	THE FOLLOWING INSURANCE COVERAGES

	 	1.	 	Fiduciary Liability.
	 
	 	2.	 	Surety and Credit insurance.

					
	 	 	 	 	 
	Agreement No. RAM Re BSGCX — 2006
	 	6.
	 	 

 

 

	 	3.	 	Fidelity Bonds.
	 
	 	4.	 	Credit and Financial Guarantee.
	 
	 	5.	 	Securities and Exchange Liability.
	 
	 	6.	 	Malpractice insurance, Directors and Officers Liability insurance or any form of
Errors and Omissions or Professional Liability insurance, except as provided for under
the Company’s Underwriting Guidelines.
	 
	 	7.	 	Advertisers’, Broadcasters’ and Telecasters’ Liability as respects Personal Injury
Liability except as provided for under the Company’s Underwriting Guidelines.
	 
	 	8.	 	Kidnap, Extortion and Ransom Liability.
	 
	 	9.	 	Protection and Indemnity (Ocean Marine) except for hulls under 50 feet.
	 
	 	10.	 	Entertainment Business, defined as Feature Film and Major Motion Picture
Studios, Commercial Negative Film Coverages, Cast Coverage, Completion Bond and
Television Productions.
	 
	 	11.	 	Asbestos liability to the extent excluded in the Company’s original policies and
endorsements except when a judicial entity invalidates the Company’s exclusion or in any
jurisdiction whose regulatory authorities have prohibited the exclusion.

	C.	 	THE FOLLOWING RISKS AS RESPECTS AUTOMOBILE LIABILITY AND AUTOMOBILE COLLISION

	 	1.	 	Autos as used in or being prepared for, any professional or organized racing or
demolition contest or stunting activity except as provided for under ISO’s Business Auto
and Garage Policy.
	 
	 	2.	 	All vehicles classified as “Public Automobiles” except school buses, church buses,
social service agency automobiles, van pools, vehicles used for the transportation of
employees and courtesy vans and buses.
	 
	 	3.	 	All rental operations. An exception for rental vehicles shall apply as respects
auto dealerships when customer’s vehicle is being serviced.
	 
	 	4.	 	Vehicles regularly used to haul property of others and operating beyond a 500 mile radius.
	 
	 	5.	 	Newspaper delivery trucks except in non-metropolitan locations with a population of
less than 50,000.
	 
	 	6.	 	Vehicles engaged in the transportation or distribution of fireworks, fuses,
explosives, ammunitions, natural or artificial fuel gas, or liquefied petroleum gases or
gasoline, except when written as incidental coverage, as defined in the Company’s
Underwriting Guidelines. This exclusion shall not apply to vehicles engaged in the
transportation of natural or artificial fuel gas or liquified petroleum gases or gasoline
when operations are within a 500 mile radius.

	D.	 	THE FOLLOWING AS RESPECTS LIABILITY OTHER THAN AUTOMOBILE

	 	1.	 	Liability as respects Products and Completed
Operations:

	 	a.	 	The manufacture, importation, labeling or re-labeling
of:

					
	 	 	 	 	 
	Agreement No. RAM Re BSGCX — 2006
	 	7.
	 	 

 

 

	 	(i)	 	Drugs or Pharmaceuticals.
	 
	 	(ii)	 	Cosmetics.
	 
	 	(iii)	 	Herbicides, insecticides or pesticides, except as respects risks
involved in a farming operation.

	 	b.	 	The manufacture or importing of motorized or self-propelled vehicles and equipment.
	 
	 	c.	 	The manufacture, sale, distribution, handling, servicing or maintenance of
aircraft, aerospacecraft, missiles, satellites or any component or components
thereof.

	 	2.	 	All railway operations except Railroad Protective Liability coverage as respects jobs
which do not involve track work or service disruptions.
	 
	 	3.	 	Amusement parks, carnivals or circuses, except county or country fairs.
	 
	 	4.	 	Public assembly exposure in excess of 5,000 except for schools and colleges.
	 
	 	5.	 	Gas or electric companies.
	 
	 	6.	 	Subaqueous operations.
	 
	 	7.	 	Mining.
	 
	 	8.	 	Demolition of buildings or structures in excess of three stories or 50 feet in height.
	 
	 	9.	 	Shoring, underpinning or moving of buildings or structures.
	 
	 	10.	 	Manufacture, sale, rental, lease or repair of scaffolds.
	 
	 	11.	 	Construction of bridges over 50 feet, and tunnels or dams.

	 	12. 	a. 	 	Manufacturers or importers of fireworks, fuses, or any substance, as defined
and noted below, intended for use as an explosive.

	 	b.	 	Loading of fireworks, fuses, or any explosive substance defined below into
containers for use as explosive objects, propellant charges or detonation devices and
the storage thereof.
	 
	 	c.	 	Manufacturers or importers of any product in which fireworks, fuses, or any
explosive substance defined below is an ingredient.
	 
	 	d.	 	Handling, storage, transportation or use of fireworks, fuses, or any
explosive substance defined below.

	 	 	 	NOTE: An explosive substance is defined as any substance manufactured for the express
purpose of exploding as differentiated from commodities used industrially and which are
only incidentally explosive.
	 
	 	13.	 	Manufacture, production, refining, storage, wholesale distribution or transportation
of natural or artificial fuel gas, butane, propane or liquefied petroleum gases or
gasoline, except when written as incidental coverage, as defined in the Company’s
Underwriting Guidelines, or when operations are within a 500 mile radius.
	 
	 	14.	 	Onshore and offshore gas and oil drilling operations.
	 
	 	15.	 	Ownership, maintenance or use of any aircraft, including fueling, or any device or
machine intended for and/or aiding in the achievement of atmospheric flight, projection or
orbit.

					
	 	 	 	 	 
	Agreement No. RAM Re BSGCX — 2006
	 	8.
	 	 

 

 

	 	16.	 	Municipalities except for those with a population less than 25,000.

	E.	 	THE FOLLOWING RISKS AS RESPECTS WORKERS COMPENSATION AND EMPLOYERS LIABILITY

	 	1.	 	Operations under the jurisdiction of the U.S. Longshoremen’s and Harbor Workers’ Act,
the Jones Act and the Maritime Employers Liability Act except when written as incidental
coverages as defined in the Company’s Underwriting Guidelines.
	 
	 	2.	 	Operation of docks or wharves, other than small marinas or pleasure docks.
	 
	 	3.	 	The manufacturing, mining, refining, processing, distribution, installation, removal
or encapsulment of asbestos.
	 
	 	4.	 	Risks involving known exposure to asbestos.
	 
	 	5.	 	All railway operations except sidetrack agreements.
	 
	 	6.	 	Amusement parks, carnivals or circuses, except county or country fairs.
	 
	 	7.	 	Subaqueous operations.
	 
	 	8.	 	Mining.
	 
	 	9.	 	Demolition of buildings or structures in excess of three stories or 50 feet in height.
	 
	 	10.	 	Shoring, underpinning or moving of buildings or structures.
	 
	 	11.	 	Manufacture, sale, rental, lease, erection or repair of scaffolds.
	 
	 	12.	 	Construction of bridges over 50 feet, and tunnels or dams.

	 	13.	a.	 	Manufacturers or importers of fireworks, fuses, or any substance, as defined and noted
below, intended for use as an explosive.

	 	b.	 	Loading of fireworks, fuses, or any explosive substance defined below
into containers for use as explosive objects, propellant charges or detonation
devices and the storage thereof.
	 
	 	c.	 	Manufacturers or importers of any product in which fireworks,
fuses, or any explosive substance defined below is an ingredient.
	 
	 	d.	 	Handling, storage, transportation or use of fireworks, fuses, or any
explosive substance defined below.

	 	 	 	NOTE: An explosive substance is defined as any substance manufactured for the express
purpose of exploding as differentiated from commodities used industrially and which are
only incidentally explosive.
	 
	 	14.	 	Manufacture, production, refining, storage, wholesale distribution or
transportation of natural or artificial fuel gas, butane, propane or liquefied petroleum
gases or gasoline, except when written as incidental coverages as defined in the
Company’s Underwriting Guidelines.
	 
	 	15.	 	Onshore and offshore gas and oil drilling
operations.

					
	 	 	 	 	 
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	 	16.	 	Ownership, maintenance or use of any airport or aircraft, including fueling, or any
device or machine intended for and/or aiding in the achievement of atmospheric flight,
projection or orbit except as respects corporate owned aircraft up to four passengers.
	 
	 	17.	 	Municipalities, except for those with a population less than 25,000.

	F.	 	THE FOLLOWING RISKS AS RESPECTS TERRORISM
	 
	 	 	Terrorism losses arising from Airports, Bridges, Government Buildings, Nuclear Facilities,
Office Buildings over 25 stories, Security Services, Stadiums and Tunnels, Nuclear, Biological
and Chemical exposures, Explosive Manufacturing risks, Fertilizer mixing plants, Railroads,
Amusement/Theme parks with greater than 5,000 person capacity, Distribution and manufacturing
of weapons/munitions.
	 
	G.	 	The Company and the Subscribing Reinsurer have agreed on the Company’s Underwriting
Guidelines, as respects policies covered under this Agreement. The Company shall advise the
Subscribing Reinsurer of any change in such Underwriting Guidelines.
	 
	H.	 	In the event the Company is inadvertently bound on any risk which is excluded under this
Agreement, the reinsurance provided under this Agreement shall apply to such risk until
discovery by the Company within its Home Office of the existence of such risk and for 45 days
thereafter or for the period required by statutes, and shall then cease unless within such
period, the Company has received from the Subscribing Reinsurer written notice of its
approval of such risk.

ARTICLE X — SPECIAL ACCEPTANCES

	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 Reinsurer’s failure to respond
within 2 full business days shall be deemed approval of a risk submitted for special
acceptance.
	 
	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

The provisions under this Article are set forth in the following Parts I, II and III:

Part I — As respects Policies written on an occurrence basis:

The term “Loss Occurrence” shall mean any accident or occurrence or series of accidents or
occurrences arising out of any one event and happening within the term and scope of this
Agreement. Without limiting the generality of the foregoing, the term “Loss Occurrence” shall be
held to include:

	A.	 	As respects Products Bodily Injury and Products Property Damage Liability, injuries to all
persons and all damage to property of others occurring during a Policy Period and proceeding
from or

					
	 	 	 	 	 
	Agreement No. RAM Re BSGCX — 2006
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	 	 	traceable to the same causative agency shall be deemed to arise out of one Loss Occurrence,
and the date of such Loss Occurrence shall be deemed to be the commencing date of the Policy
Period. For the purpose of this provision, each annual period of a Policy which continues in
force for more than one year shall be deemed to be a separate Policy Period.
	 
	B.	 	As respects Bodily Injury Liability (other than Automobile and Products), said term shall
also be understood to mean, as regards each original assured, injuries to one or more than one
person resulting from infection, contagion, poisoning, or contamination proceeding from or
traceable to the same causative agency.
	 
	C.	 	As respects Property Damage Liability (other than Automobile and Products), said term shall
also, subject to Provisions 1. and 2. below, be understood to mean loss or losses caused by a
series of operations, events, or occurrences arising out of operations at one specific site
and which cannot be attributed to any single one of such operations, events or occurrences,
but rather to the cumulative effect of the same. In assessing each and every Loss Occurrence
within the foregoing definition, it is understood and agreed that:

	 	1.	 	the series of operations, events or occurrences shall not extend over a period
longer than 12 consecutive months; and
	 
	 	2.	 	the Company may elect the date on which the period of not exceeding 12 consecutive
months shall be deemed to have commenced.

	 	 	In the event that the series of operations, events or occurrences extend over a period longer
than 12 consecutive months, then each consecutive period of 12 months, the first of which
commences on the date elected under 2. above, shall form the basis of claim under this
Agreement.
	 
	D.	 	As respects those Policies of the Company which provide aggregate limits of liability, the
total of all individual losses occurring during any one policy year which proceed from or are
traceable to the same causative agency.
	 
	E.	 	As respects an occupational or other disease or cumulative injury under Workers Compensation
and Employers Liability, each case of an employee contracting any disease for which the
Company may be liable shall be considered a separate and distinct occurrence and the date of
each occurrence shall be deemed to be as follows:

	 	1.	 	If the case is compensable under the Workers Compensation Law or any Occupational
Disease Compensation Act, the date of the beginning of the disability for which
compensation is payable;
	 
	 	2.	 	If the case is not compensable under the Workers Compensation Law or any
Occupational Disease Compensation Act, the date of the disability due to said disease
actually began;
	 
	 	3.	 	Where claim is made after employment has ceased, then the date of the cessation of
employment shall be deemed to be the date of disability;
	 
	 	4.	 	Notwithstanding the foregoing, in the incidence of a sudden catastrophic event not
exceeding 24 hours in duration including traumatic injury or death, all losses to all
employers shall be deemed an occurrence.

Part II — As respects Policies written on a claims made basis:

	A.	 	The term “Loss Occurrence” shall mean each claim or series of claims made to the Company, or
the insured, during the term of this Agreement arising out of one casualty or event.

					
	 	 	 	 	 
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	B.	 	As respects a Loss Occurrence involving one or more Policies written on a claims made
basis, the date of Loss Occurrence for purposes of reinsurance, shall be considered the
earliest date when notice of claims is first received and recorded by the Company or the
insured, whichever comes first, and any related claims reported subsequent to such date shall
be included in such loss. However, if notice of claims is first received and recorded by the
Company or the insured during an Extended Reporting Period, the date of occurrence shall be
deemed to be the last day of the policy period.

Part III — As respects loss occurrence and claims-made Policies involved in the same Loss
Occurrence:

In the event a Loss Occurrence involving one or more Policies written on an occurrence basis and
one or more Policies written on a claims-made basis, it is understood that the earliest date on
which bodily injury or property damage occurs, and any related claims reported subsequent to such
date shall be included in such loss whether they are covered under occurrence or claims-made
Policies.

ARTICLE XII — REINSURANCE PREMIUM

The rates set forth in Section 4 of the attached Exhibits A, B and C, shall be applied to the
Company’s Subject Earned Premium for all classes of Business Covered hereunder, as stated in
Paragraph D. of Article I — Business Covered, however the Company’s Subject Earned Premium shall
not include Multi-State Business.

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

	C.	 	The term “Subject Earned Premium” shall mean the Company’s Earned Premium times the rates
noted below.

	 	 	 	 	 
	ASLOB	 	Percentage
	052 — CMPL (Includes BOP @35%)
	 	 	100	%
	016 — Workers Compensation
	 	 	100	%
	017 — Commercial Umbrella
	 	 	100	%

	D.	 	The following percentages of the Company’s indivisible premium shall be allocated to the
business covered under this Agreement: 35% — Businessowners.

ARTICLE XIII — REPORTS AND REMITTANCES

	A.	 	The Company shall furnish the Subscribing 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.

					
	 	 	 	 	 
	Agreement No. RAM Re BSGCX — 2006
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	B.	 	Quarterly Deposit Premiums equal to 1/4 of the 100% of Annual Deposit Premium will be
remitted on January 15, May 15, August 15 and November 15, according to the schedule below.
The Company shall submit finalized accounts to the Subscribing Reinsurer on February 15, of
the subsequent year, summarizing the actual subject earned premium for the previous Agreement
Year. 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. However, in no event shall the
annual adjusted premium be less than the Annual Minimum Premium for each layer, set forth
below:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	SEP LOB	 	Annual 
Deposit	 	 	Annual 
Minimum	 	 	Quarterly 
Deposit	 
	Umbrella
	 	$	334,993	 	 	$	267,995	 	 	$	83,748	 
	WC
	 	$	841,066	 	 	$	672,853	 	 	$	210,267	 
	CMPL
	 	$	44,152	 	 	$	35,321	 	 	$	11,038	 
	 
	 	 	 	 	 	 	 	 	 
	Total
	 	$	1,220,211	 	 	$	976,169	 	 	$	305,053	 

	C.	 	Payment by the Subscribing Reinsurer of its portion of Loss and Loss Adjustment Expenses
paid by the Company shall be made by the Subscribing Reinsurer to the Company immediately
upon reasonable evidence of the amount due or to be due being furnished by the Company.

ARTICLE XIV — LOSS ADJUSTMENT AND SETTLEMENT

The Company shall give notice, as soon as practicable, to the Subscribing Reinsurer of any claim
that it has reason to believe could involve this Agreement. The Company shall keep the Subscribing
Reinsurer informed of significant 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
Subscribing Reinsurer is interested as, in the Company’s judgment, may be beneficial or expedient
to the Company and the Subscribing Reinsurer. The Company shall be the sole judge as to what claims
are covered under its Policies. All of the Company’s Ultimate Net Loss (and loss occurrences), as
well as all loss settlements made and judgments paid by the Company, provided they are within the
terms of this Agreement either under the strict conditions of the Company’s Policies or by way of
compromise, shall be unconditionally binding upon the Subscribing Reinsurer, who agrees to pay all
amounts for which they are liable immediately upon reasonable evidence of the amount due being
furnished to the Subscribing Reinsurer by the Company. The true intent of this Agreement is that
the Subscribing Reinsurer shall, in every case to which this Agreement applies, follow the
settlements of the Company.

The Company shall advise the Subscribing Reinsurer of all claims which

	 	1.	 	Are reserved by the Company for an amount in excess of 50% of its retention;
	 
	 	2.	 	Originate from fatal injuries;
	 
	 	3.	 	Originate from the following kinds of bodily injury:

	 	a.	 	Brain injuries resulting in impairment of physical function;
	 
	 	b.	 	Spinal injuries resulting in a partial or total paralysis of upper or lower
extremities;
	 
	 	c.	 	Amputation or permanent loss of use of upper or lower extremities;
	 
	 	d.	 	Severe burn injuries;
	 
	 	e.	 	Loss of sight in one or both eyes;
	 
	 	f.	 	All other injuries likely to result in a permanent disability rate of 50% or more.

					
	 	 	 	 	 
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ARTICLE XV — SALVAGE AND SUBROGATION

The Reinsurers shall be credited with their share of salvage and/or subrogation in respect of
claims and settlements under this Agreement, less their share of recovery expense. Unless the
Company and Reinsurers agree to the contrary, the Company shall enforce its right to salvage
and/or subrogation and shall prosecute all claims arising out of such right. Should the Company
refuse or neglect to enforce this right, the Reinsurers are hereby empowered and authorized to
institute appropriate action in the name of the Company.

Amounts recovered from salvage and/or subrogation shall always be used to reimburse the excess
Reinsurers (and the Company, should it carry a portion of excess coverage net) in the reverse
order of their participation in the loss before being used in any way to reimburse the Company for
its primary loss. If the amount recovered exceeds the recovery expense, the recovery expense shall
be borne by each party in proportion to its benefit from the recovery. If the recovery expense
exceeds the amount recovered, the amount recovered (if any) shall be applied to the reimbursement
of recovery expense and the remaining expense, as well as any originally incurred loss expense,
shall be added to the Ultimate Net Loss. If no amount is recovered from salvage and/or
subrogation, the expense incurred in attempting such recovery shall be deemed loss expense and
shall be added to the Ultimate Net Loss.

ARTICLE XVI — FEDERAL TERRORISM RECOVERY CLAUSE

Any loss reimbursement the Company receives from the United States Government under the Terrorism
Risk Insurance Act of 2002 (“TRIA”) as a result of loss occurrences commencing during the term of
this Agreement shall apply as follows:

Except as provided below, any loss reimbursement under TRIA shall inure solely to the benefit of
the Company and shall be entirely disregarded in applying all of the provisions of this Agreement.

If one or more loss occurrences commencing during the term of this Agreement result(s) in
reinsurance recoveries to the Company under this Agreement and reimbursement under TRIA, and such
amounts, together with any other reinsurance recoveries to the Company for said loss
occurrence(s), exceed the total amount of “Insured Losses” to the Company, any amount in excess
thereof shall be held by the Company. The Company shall then reimburse the Subscribing Reinsurer a
portion of such excess recovery in an amount equal to the proportion that the Subscribing
Reinsurer’s payment under this Agreement bears to the total treaty reinsurance recoveries to the
Company for Insured Losses for said loss occurrence(s). Provided, however, that in no event shall
such reimbursement exceed the amount paid by the Subscribing Reinsurer to the Company under this
Agreement.

For purposes hereof, if a loss reimbursement received by the Company under TRIA is based on the
Company’s Insured Losses in more than one loss occurrence and neither the Secretary of the
Treasury nor his delegatee specifies the amount of loss allocable to each respective loss
occurrence, the reimbursement shall be pro-rated in the proportion that the Company’s Insured
Losses in each loss occurrence bears to the Company’s total Insured Losses resulting from all loss
occurrences to which the reimbursement applies.

For purposes of this Article: (a) “TRIA” shall mean the Terrorism Risk Insurance Act of 2002 and
any subsequent amendments thereto; and (b) “Insured Loss(es)” shall have the same meaning as set
forth in Section 102(5) of TRIA.

					
	 	 	 	 	 
	Agreement No. RAM Re BSGCX — 2006
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ARTICLE XVII — ACCESS TO RECORDS

Except as otherwise provided in this Article, the Subscribing Reinsurer, or its duly authorized
representative, may upon reasonable prior written notice to the Company, at Subscribing
Reinsurer’s own expense, examine at the offices of the Company, during normal office hours, the
Company’s Policy, accounting, underwriting, or claim records and files, or any such additional
relevant records and files, as they exist in the Company’s possession or reasonable control,
relating to business ceded under this Agreement. The Subscribing Reinsurer’s notice shall
reasonably describe the nature of the inspection that it wishes to conduct, the persons conducting
the inspection and upon notice of available files from the Company, the files that it wishes to
review. Subject to the limitations expressed in this Article, this right of inspection shall
survive termination or expiration of this Agreement and shall continue as long as either Party has
any rights or obligations under this Agreement.

The Company reserves the right to deny the Subscribing Reinsurer access to records or files
concerning any particular claim(s) if the Subscribing Reinsurer has not disputed liability for
payment of such claim(s), and payment of such claim(s) is more than ninety (90) days overdue
according to the Company’s records. The Company shall, however, prior to an arbitration demand
that may be instituted by either party, continue to respond to reasonable specific requests for
information and questions raised by the Subscribing Reinsurer concerning such claims; and nothing
in this Article shall restrict the right or ability of the Subscribing Reinsurer to seek discovery
of relevant information in an arbitration proceeding pursuant to the Arbitration Article of this
Agreement.

As a condition precedent to access to records under this Article, the Subscribing Reinsurer, its
personnel and any authorized third party representative of the Subscribing Reinsurer shall agree
to the provisions of the Confidentiality Article of this Agreement.

The Company reserves the right to withhold any documents from Subscribing Reinsurer (a) concerning
Trade Secrets of the Company, (b) subject to the terms of a third party non-disclosure agreement
with the Company requiring third party consent to disclosure, (c) subject to the Work Product
Privilege or Attorney-Client Privilege or (d) concerning individual private information that as a
matter of law cannot be disclosed by the Company (hereinafter referred to in the Agreement as
“Privileged Documents”). The Company shall reasonably try to exempt the Reinsurers from any third
party non-disclosure agreement or obtain consent from the third party to disclose to the
Subscribing Reinsurer.

Notwithstanding the foregoing, the Company shall permit and not object to the Subscribing
Reinsurer’s access to Privileged Documents in connection with the underlying claim reinsured
hereunder following final settlement or final adjudication of the case or cases involving such
claim, with prejudice against all claimants, and all parties to such adjudications; provided that
the Company, may defer release of such Privileged Documents if there are subrogation,
contribution, or other third party actions with respect to that claim or case, which might
jeopardize the Company’s defense by release of such Privileged Documents. In the event that the
Company shall seek to defer release of such Privileged Documents, it will in consultation with the
Subscribing Reinsurer take other steps as reasonably necessary to provide the Subscribing
Reinsurer with the information it reasonably requires to indemnify the Company without causing a
loss of such privileges. The Subscribing Reinsurer, however, shall not have access to Privileged
Documents relating to any dispute between the Company and the Subscribing Reinsurer.

For purposes of this Article, “Trade Secrets” shall have the meaning provided in Section 1839 of
the United States Economic Espionage Act of 1996. “Attorney-Client Privilege” shall mean
communications of a confidential nature between a) the Company, or anyone retained or in the
control of the Company, or its in-house or outside legal counsel, or anyone in the control of such
legal counsel, and b) any in-house or outside legal counsel which relate to legal advice being
sought by the Company and/or which contains legal advice being provided to the Company. “Work
Product Privilege” shall mean communications, written materials and tangible things prepared by or
for in-house or outside counsel, or prepared by or for

					
	 	 	 	 	 
	Agreement No. RAM Re BSGCX — 2006
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the Company, in anticipation of or in connection with litigation, arbitration, or other dispute
resolution proceedings.

ARTICLE XVIII — DIVIDENDS AND TAXES

In consideration of the terms of this Agreement, the Company shall not claim any deduction in
respect of any amount paid as dividends or as reinsurance premium when making tax returns, other
than income or profits tax returns to any State or to the District of Columbia.

ARTICLE XIX — FEDERAL EXCISE TAX

This Article is applicable to any Subscribing Reinsurer who is domiciled outside of the United
States of America, except for any Subscribing Reinsurer exempt from Federal Excise Tax. A
Subscribing Reinsurer that claims exempt status from Federal Excise Tax shall provide to the
Company, upon its request, proof that the exempt status adequately satisfies the demands of the
U.S. Internal Revenue Agency and/or other applicable U.S. government authority.

Each Subscribing Reinsurer shall allow the applicable percentage of the premium payable hereon (as
imposed under Section 4371 of the Internal Revenue Code) for the purpose of paying Federal Excise
Tax to the extent such premium is subject to such tax.

In the event of any return of premium, the Subscribing 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 XX — GOVERNING LAW

The validity and interpretation of this Agreement shall be governed by and construed in accordance
with the law of the State of New Hampshire.

ARTICLE XXI — CURRENCY

Whenever a reference to a monetary currency appears in this Agreement, it shall be construed to
mean United States Dollars (“USD”). However, in those cases where the Policies are issued by the
Company using Canadian Dollars (“CAD”), it shall mean Canadian Dollars. All payments made by either
party shall be made in United States Dollars except that payments made involving Policies issued
using Canadian Dollars shall be made in Canadian Dollars.

ARTICLE XXII — 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(s) due the other (or, if more than one, any other).
Such offset may include balances due under this Agreement, and any other agreements between the
parties, whether such balances arises from premium, losses, or otherwise, and regardless of the
capacity of any party, whether as assuming and/or ceding insurer, under the various reinsurance
agreements involved, provided however, that in the event of insolvency of a party hereto, offsets
shall only be allowed in accordance with the provisions of the applicable law, statute, or
regulation governing such offset.

					
	 	 	 	 	 
	Agreement No. RAM Re BSGCX — 2006
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ARTICLE XXIII — ERRORS AND OMISSIONS

Any inadvertent delay, omission, or error in complying with the terms and conditions of this
Agreement shall not be held to relieve either party hereto from any liability, which would attach
to it hereunder if such delay, omission, or error had not been made, provided such delay,
omission, or error is rectified upon discovery.

ARTICLE XXIV — INSOLVENCY

(If more than one reinsured company is referenced within the definition of “Company” in the
Preamble to this Agreement, this Article shall apply severally to each such company. Further, this
Article and the laws of the domiciliary state shall apply in the event of the insolvency of any
company intended to be covered hereunder. In the event of a conflict between any provision of this
Article and the laws of the domiciliary state of any company intended to be covered hereunder,
that domiciliary state’s laws shall prevail.)

In the event of the insolvency of the Company, reinsurance under this Agreement shall be payable
on demand, with reasonable provision for verification, on the basis of claims allowed against the
insolvent Company by any court of competent jurisdiction or by any liquidator, receiver,
conservator, or statutory successor of the Company having authority to allow such claims, without
diminution because of such insolvency or because such liquidator, receiver, conservator, or
statutory successor has failed to pay all or a portion of any claims. Such payments by the
Subscribing Reinsurer shall be made directly to the Company or its liquidator, receiver,
conservator, or statutory successor, except to the extent Section 4118(a) of the New York
Insurance Law applies, or except (a) where the Agreement specifically provides another payee of
such reinsurance in the event of the insolvency of the Company, or (b) where the Subscribing
Reinsurer with the consent of the direct insured or insureds has assumed such Policy obligations
of the Company as direct obligations of the Subscribing Reinsurer to the payees under such
Policies and in substitution for the obligations of the Company to such payees.

It is agreed, however, that the liquidator, receiver, conservator, or statutory successor of the
insolvent Company shall give written notice to the Subscribing Reinsurer of the pendency of a
claim against the insolvent Company on the Policy or Policies reinsured within a reasonable time
after such claim is filed in the insolvency proceeding and that during the pendency of such claim
the Subscribing Reinsurer may investigate such claim and interpose, at its own expense, in the
proceeding where such claim is to be adjudicated, any defense or defenses which it may deem
available to the Company or its liquidator, receiver, conservator, or statutory successor. The
expense thus incurred by the Subscribing 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 Subscribing Reinsurer.

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

With respect to California Workers Compensation loss(es), it is agreed that in the event of any
delinquency proceeding, receivership, or insolvency of the Company and/or the failure of the
Subscribing Reinsurer, for any reason, to make payments under this Agreement, the Insurance
Commissioner of California may, upon 30-days notice, draw upon any sums from the deposit made by
the Subscribing Reinsurer in accordance with the provisions of sections 11691 — 11703 of the
California Insurance Code.

ARTICLE XXV — MEDIATION

					
	 	 	 	 	 
	Agreement No. RAM Re BSGCX — 2006
	 	17.
	 	 

 

 

	A.	 	In the event of any dispute or difference of opinion arising out of or relating to this
Agreement, including but not limited to the formation, interpretation, performance or breach of
this Agreement, whether such dispute arises before or after the expiration of this Agreement,
the Company and the Subscribing Reinsurer may mutually agree in writing that, prior to
proceeding with arbitration, they will submit such dispute or difference of opinion to
non-binding mediation which will be held at a location mutually agreed by the parties.

	B.	 	Each party shall submit a list of not more than four (4) potential mediators to the other
party within the fourteen (14) days of reaching such mutual agreement. The two parties shall
then agree on the appointment on one (1) mediator from the combined lists within seven (7)
days. The mediator shall be a neutral, impartial third party, without past employment or
directorial relationships with the parties to the mediation. Such mediator shall make full
disclosure of all past partisan relationships with either the Company or Subscribing Reinsurer
to the parties within seven (7) days of his or her notification that he or she has been
selected as a Mediator.

	C.	 	If the Company and the Subscribing Reinsurer cannot agree on a mediator within twenty one
(21) days from the date of a mutual agreement to mediate, then arbitration proceedings may
commence in accordance with the Arbitration Article.

	D.	 	The mediator will schedule an initial mediation session within thirty (30) days of his or her
appointment and will be responsible for the formulation of an agenda to be distributed to the
parties involved in the mediation not less than five (5) days before the mediation commences.

	E.	 	The mediator will not have the power of enforcement of any agreement between the parties nor
will the mediator have any right to assess any damages, including punitive damages, to either
party participating in the mediation.

	F.	 	If, in the opinion of the mediator, the parties cannot resolve the dispute or difference of
opinion, Arbitration proceedings may commence in accordance with the Arbitration Article. In
any event, the mediation shall conclude within sixty (60) days of its referral to the
mediator. Should the mediation not be resolved in sixty (60) days, then arbitration
proceedings may commence in accordance with the Arbitration Article.

	G.	 	Each party shall bear the expense of its own representatives and shall jointly and equally
bear with the other party the expenses of the mediator and the place of mediation.

ARTICLE XXVI — ARBITRATION

	A.	 	Disputes to be Arbitrated. With the exception of any dispute resolution procedures
regarding commutation that are otherwise contained in this Agreement and any mutual agreement
to initially mediate any dispute pursuant to the Mediation Article, any and all disputes
between the Company and any Subscribing Reinsurer or Reinsurers (“Party” individually or
“Parties” collectively) arising out of, relating to, or concerning this Agreement, whether
sounding in contract or tort and whether arising during or after this Agreement’s formation,
or after its termination, including disputes as to whether the Agreement was validly formed or
is voidable, shall be submitted to the decision of an arbitration panel (“Panel”). The Panel
shall consist of an umpire and two party-appointed arbitrators unless a Party meets the
requirements of Paragraph C of this Article and demands arbitration pursuant thereto, in which
case the Panel would consist of an umpire only.

	B.	 	Procedures. Except as provided herein, any arbitration shall be based upon the
Procedures for the resolution of U.S. Insurance and Reinsurance Disputes, Regular Panel
Version, dated April 2004 (the “Procedures”), developed by the Insurance and Reinsurance
Dispute Resolution Task Force, subject to the following modifications:

					
	 	 	 	 	 
	Agreement No. RAM Re BSGCX — 2006
	 	18.
	 	 

 

 

	 	1.	 	Qualifications of the arbitrators and umpires shall be in accordance with Alternative
section 6.2 of the Procedures.
	 
	 	2.	 	The Parties hereby designate the umpire list maintained by ARIAS (U.S.) as the list
to be used in the event that section 6.7(a) of the Procedures is invoked.
	 
	 	3.	 	Unless otherwise mutually agreed, the members of the Panel shall be
impartial and disinterested. The members of the Panel may not be: (1) in the control of
any Party or its parent, affiliate, or agent, (2) a former director or officer of any
Party or its parent, affiliate, or agent, or (3) a likely witness in the arbitration. The
requirement of impartiality means that all members of the Panel shall have the same
obligation to approach the Panel’s duties and decisions with fairness and without
consideration for the fact that Panel members may have been appointed by one of the
Parties. The requirement of impartiality does not mean that any arbitrator can have no
previous knowledge of or experience with respect to issues involved in the dispute or
disputes.
	 
	 	4.	 	The first sentence of Section 10.4 of the Procedures shall be replaced by the
following sentence: “The Panel shall require that each Party submit concise written
statements of position, including summaries of the facts and evidence a Party intends to
present, discussion of the applicable law and the basis for the requested Award or denial
of relief sought.”
	 
	 	5.	 	Once the Panel has been constituted, no Party (or anyone acting for a Party) shall
have any communications concerning the arbitration or any of the issues before the Panel
with any member of the Panel that is not also disclosed to all other Parties and all
members of the Panel. Each Panel member shall have a continuing duty to disclose promptly
to all Parties and all Panel members any violation of this prohibition and the specifics
of any improper communications that occurred. This prohibition shall remain in place until
all challenges to any arbitration awards and decisions have been either waived or finally
concluded.
	 
	 	6.	 	Section 11.1 of the Procedures shall be replaced by the following provision: “The
Parties may propound discovery seeking disclosure of such information and/or documents
relevant to the dispute or necessary for the proper resolution of the dispute.”
	 
	 	7.	 	Position statements may be amended at any reasonable time, but not later than the
close of discovery without a showing to the Panel that the amending Party could not
reasonably have raised the new claim or issue at an earlier time.
	 
	 	8.	 	The Panel shall hold an evidentiary hearing, if one is necessary, within one year of
the arbitration demand, unless the Parties otherwise agree. Should a Party seek a
reasonable extension to this time frame for good cause shown, the other Party’s agreement
shall not be unreasonably withheld.
	 
	 	9.	 	To the extent permitted by the law, the Panel shall have the authority to issue
subpoenas and other orders to enforce its decisions.
	 
	 	10.	 	The Panel may award reasonable attorneys’ fees and arbitration costs to the
prevailing Party, as determined by the Panel.
	 
	 	11.	 	Section 14.3 of the Procedures shall be replaced by the following provision: “The
Panel shall make a decision and issue an award with regard to the terms expressed in this
Agreement, and the custom and practice of the property and casualty insurance and
reinsurance business. The Panel shall not be obligated to follow the strict rules of law
and evidence.”

					
	 	 	 	 	 
	Agreement No. RAM Re BSGCX — 2006
	 	19.
	 	 

 

 

	C.	 	Alternative Streamlined Procedures. Notwithstanding the foregoing provisions of
this Article, the Alternative Streamlined Procedures set forth in section 16 of the Procedures,
as modified by sections B3, B4, and B9 through B11 of this Article, shall apply in the event
that, in a consolidated proceeding or otherwise, the Party initiating arbitration is seeking
payment of a total amount that is no greater than one million dollars ($1,000,000), or the
currency equivalent thereof. Sections 16.1, 16.2, 16.3 and the second sentence of section
16.4 of the Alternative Streamlined Procedures shall not apply. The Parties agree to comply
with section 6.7 of the Procedures to appoint a single umpire, and hereby designate the umpire
list maintained by ARIAS (U.S.) as the list to be used in section 6.7(a).

	D.	 	Hearing Location. The hearing shall be held in Boston, Massachusetts, unless the
Parties mutually agree to a different location.

	E.	 	Confirmation. Either Party may apply to a court of competent jurisdiction for an
order confirming any award of the Panel; a judgment of that court shall thereupon be entered
on any award. If such an order is issued, the Party against whom confirmation is sought shall
pay the attorneys’ fees incurred of the Party who applied for the confirmation order and all
court costs of any such proceeding.

	F.	 	Equitable Relief from a Court of Law, Nothing herein shall be construed to prevent
any participating Party from applying to a court of competent jurisdiction to issue a
restraining order or other equitable relief to maintain the “status quo” of the Parties
participating in the arbitration pending the decision and award by the Panel.

	G.	 	Consolidated Proceedings.

	 	1.	 	Same agreement, single Subscribing Reinsurer. Both the Company and any
single Subscribing Reinsurer on this Agreement have the right to combine any and all
disputes between them that concern this Agreement (including any renewal of this
Agreement or any agreement for which this Agreement is a renewal) into a single
arbitration proceeding before a single Panel, except that the standard for determining
whether a Party may add a new issue, claim, or dispute to an arbitration proceeding
shall be the standard for amending a Position statement, as set forth in Paragraph B7
of this Article.
	 
	 	2.	 	Multiple agreements, single Subscribing Reinsurer. The Company has the right
to combine any and all disputes between the Company and a single Subscribing Reinsurer
into a single arbitration proceeding before a single Panel where such disputes involve
this Agreement and any additional agreements between the two Parties, except that the
standard for determining whether a Party may add a new issue, claim, or dispute to an
arbitration proceeding shall be the standard for amending a Position statement, as set
forth in Paragraph B7 of this Article.
	 
	 	3.	 	Same agreement, multiple Reinsurers. At the Company’s option, if more than
one Subscribing Reinsurer is involved in arbitration relating to this Agreement, where
there are common questions of law or fact and a possibility of conflicting awards or
inconsistent results, 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 Party; provided, however, that the Reinsurers shall
have the right to assert several, rather than joint defenses or claims, and to be
represented by separate counsel. This provision shall not change the liability of each
of the Reinsurers under the terms of this Agreement from several to joint.

	H.	 	Choice of Law. The law set forth in the Governing Law Article shall apply to this
Arbitration Article. In addition, to the extent the Panel (or the umpire in an Alternative
Streamlined Procedure) looks to applicable law, such Panel or umpire shall apply the law as
set forth in the Governing Law Article of this Agreement.

					
	 	 	 	 	 
	Agreement No. RAM Re BSGCX — 2006
	 	20.
	 	 

 

 

	I.	 	Survival of Article. This Article shall survive the termination or expiration of this
Agreement.

ARTICLE XXVII — SPECIAL CONDITIONS

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

	A.	 	A State Insurance Department or other legal authority orders the Subscribing Reinsurer to
cease writing business; or

	B.	 	The Subscribing 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 Subscribing Reinsurer’s policyholders’ surplus has been reduced by 25% of the amount of
surplus at the inception of this Agreement; or

	D.	 	The Subscribing 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; or

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

The coverage afforded by this Agreement shall cease as of the date of termination and the
Subscribing Reinsurer shall return the unearned premium, if any. If coverage hereunder terminates
while a claim covered by this Agreement is in progress, the Subscribing 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 elects to terminate this Agreement, the Company shall have the option to commute
the Subscribing Reinsurer’s liability for loss(es), whether reported or unreported, comprising the
sum total of the present value of the ceded (1) case reserves and allocated loss adjustment
expense, (2) projected ultimate losses, (3) any unearned premium reserve, and (4) undiscounted
outstanding paid claims (hereinafter the “Commutation Losses”), on Policies covered by this
Agreement as of the effective date of termination.

	A.	 	The Company shall submit a statement of valuation showing the elements considered reasonable
to establish the Commutation Losses, and the Subscribing Reinsurer shall pay the amount
requested. In the event the Company and the Subscribing Reinsurer cannot agree on the
statement of valuation of the Subscribing 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 Commutation Loss (es) within 30 days. As used herein,
“capitalize” shall mean to determine the present value of Commutation Losses, without regard
to the Subscribing Reinsurer’s ability to pay such losses. The panel shall meet in Boston
Massachusetts, unless the Company and Subscribing Reinsurer agree otherwise.

					
	 	 	 	 	 
	Agreement No. RAM Re BSGCX — 2006
	 	21.
	 	 

 

 

	B.	 	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.

	C.	 	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
Commutation Loss(es), the Company shall have no obligation to commute. In the event the
Company does not agree with the capitalized value of the Commutation Loss(es) and does not
move forward with commutation, the expense of the actuaries [including reasonable expense of
the actuary appointed by the Subscribing Reinsurer] will be paid by the Company. If the
Agreement is commuted, payment by the Subscribing Reinsurer to the Company or any other third
party mutually agreed upon by the Subscribing Reinsurer and the Company shall constitute a
complete and final release of the Subscribing Reinsurer in respect to its liability under this
Agreement.

Termination under the terms of this Article can be made after the date of expiration of this
Agreement.

ARTICLE XXVIII — THIRD PARTIES

This Agreement shall not be deemed to give any right or remedy to any third party whatsoever
unless said right or remedy is specifically granted to such third party by the terms of this
Agreement.

ARTICLE XXIX — UNAUTHORIZED REINSURANCE

(Applies only to a Subscribing Reinsurer who does not qualify for full credit with any insurance
regulatory authority having jurisdiction over the Company’s reserves.)

As regards Policies or bonds issued by the Company coming within the scope of this Agreement, the
Company agrees that when it shall file with the insurance regulatory authority or set up on its
books reserves for unearned premium and losses covered hereunder which it shall be required by law
to set up, it will forward to the Subscribing Reinsurer a statement showing the proportion of such
reserves which is applicable to the Subscribing Reinsurer. The Subscribing Reinsurer hereby agrees
to fund such reserves in respect of unearned premium, known outstanding losses that have been
reported to the Subscribing Reinsurer and allocated loss adjustment expense relating thereto,
losses and allocated loss adjustment expense paid by the Company but not recovered from the
Subscribing Reinsurer, plus reserves for losses incurred but not reported as determined by the
Company, as shown in the statement prepared by the Company (hereinafter referred to as
“Subscribing Reinsurer Obligations”) by Letters of Credit unless the method of funding is
determined by applicable law, statute, or regulation.

The Subscribing Reinsurer agrees to apply for and secure timely delivery to the Company of clean,
irrevocable, and unconditional Letters of Credit issued by a bank that is a qualified U.S.
financial institution and containing provisions acceptable to the insurance regulatory authorities
having jurisdiction over the Company’s reserves in an amount equal to the Subscribing Reinsurer’s
proportion of said reserves. At the Company’s request, Subscribing Reinsurer will agree to provide
separate Letters of Credit for any distinct legal entities within the Company covered under this
Agreement. Such Letters 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 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 Letters of Credit extended for any additional
period.

					
	 	 	 	 	 
	Agreement No. RAM Re BSGCX — 2006
	 	22.
	 	 

 

 

The Subscribing Reinsurer and Company agree that the Letters of Credit provided by the Subscribing
Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time,
notwithstanding any other provision of this Agreement, and be utilized by the Company or any
successor, by operation of law, of the Company, including without limitation, any liquidator,
rehabilitator, receiver, or conservator of the Company, without diminution because of the
insolvency of the Company or the Subscribing Reinsurer for one or more of the following purposes:

	A.	 	To reimburse the Company for the Subscribing Reinsurer’s share of premiums returned to the
owners of Policies reinsured under this Agreement because of cancellations of the Policies;

	B.	 	To reimburse the Company for the Subscribing Reinsurer’s share of surrenders and benefits or
losses paid by the Company under provisions of the Policies reinsured under this Agreement;

	C.	 	To fund an account with the Company in an amount, at least, equal to the deduction for
reinsurance ceded from the Company liabilities for Policies ceded under this Agreement. The
account shall include, but not be limited to, amounts for Policy reserves, claims and losses
incurred (including losses incurred but not reported), loss adjustment expenses, and unearned
premium reserves; and

	D.	 	To pay any other amounts the Company claims are due under this Agreement.

The issuing bank shall have no responsibility whatsoever in connection with the propriety of
withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that
withdrawals are made only upon the order of properly authorized representatives of the Company.

At annual intervals or more frequently as agreed, but never more frequently than quarterly, the
Company shall prepare a specific statement of the Subscribing Reinsurer’s Obligations, for the
sole purpose of amending the Letters of Credit, in the following manner:

	A.	 	If the statement shows that the Subscribing Reinsurer’s Obligations exceed the balance of
credit as of the statement date, the Subscribing Reinsurer shall, within 30 days after
receipt of notice of such excess, secure delivery to the Company of an amendment to the
Letters of Credit increasing the amount of credit by the amount of such difference.

	B.	 	If, however, the statement shows that the Subscribing Reinsurer’s Obligations are less
than the balance of credit as of the statement date, the Company shall, within 30 days after
receipt of written request from the Subscribing 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.

ARTICLE XXX — SERVICE OF SUIT

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

This Service of Suit Article will 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.

					
	 	 	 	 	 
	Agreement No. RAM Re BSGCX — 2006
	 	23.
	 	 

 

 

In the event of the failure of the Subscribing Reinsurer to pay any amount claimed to be due
hereunder, the Subscribing Reinsurer, at the request of the Company, will submit to the
jurisdiction of a Court of competent jurisdiction within the United States. Nothing in this
Article constitutes or should be understood to constitute a waiver of the Subscribing Reinsurer’s
right 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 Subscribing
Reinsurer, once the appropriate Court is selected, whether such court is the one originally chosen
by the Company and accepted by the Subscribing Reinsurer or is determined by removal, transfer, or
otherwise, as provided for above, will comply with all requirements necessary to give said Court
jurisdiction and, in any suit instituted against any of them upon this Agreement, will 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
Subscribing 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 Subscribing Reinsurer hereby
designates the Superintendent, Commissioner, or Director of Insurance, or other officer specified
for that purpose in the statute, or their successor(s) 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 XXXI — CONFIDENTIALITY CLAUSE

Confidential Information. The submission materials, and any Policy, financial,
underwriting, accounting, and claims information, data statements, representations, and other
materials provided by the Company and received by the Subscribing Reinsurer in the course of an
audit, inspection, or otherwise, represent confidential or proprietary information (“Confidential
Information”). This Confidential Information is intended for the sole use of the Subscribing
Reinsurer (and its retrocessionaires, respective auditors and legal counsel) as may be necessary
in analyzing and/or accepting a participation in and/or executing its responsibilities under or
related to this Agreement. Subscribing Reinsurer acknowledges and agrees that with respect to any
review of Confidential Information by Subscribing Reinsurer, and/or discussion of Confidential
Information, Company does not waive and does not intend to waive any available privilege or
protection. The review of Confidential information by Subscribing Reinsurer and/or discussion of
Confidential Information with Company shall not destroy, waive, or otherwise impair the
proprietary and/or protected status of any Confidential Information or any information revealed in
such discussion with Company personnel, whether reviewed by and/or discussed with Subscribing
Reinsurer intentionally or inadvertently, nor does the review of the Confidential Information
and/or discussion of Confidential Information with Company constitute an estoppels or waiver of
Company’s rights to assert the attorney-client or work-product privileges, or any other applicable
privilege or protection, over certain documents contained in the Company files and/or certain
information.

The Company and Subscribing Reinsurer agree that no confidentiality obligations will apply to
Confidential Information to the extent such Confidential Information: (1) is or becomes available
to the public, other than as a result of impermissible disclosure by the Subscribing Reinsurer, (2)
was or became available lawfully to Subscribing Reinsurer from a source, other than Company or its
personnel, that is not subject to a confidentiality obligation, (3) was developed independently by
Subscribing Reinsurer prior to disclosure by Company or its personnel, as demonstrated by
Subscribing Reinsurer’s records, or (4) is required to be disclosed by law, regulation, court, or
regulatory agency action.

					
	 	 	 	 	 
	Agreement No. RAM Re BSGCX — 2006
	 	24.
	 	 

 

 

Subscribing Reinsurer agrees to preserve all confidentiality and privilege pertaining to all
Confidential Information provided by Company and all knowledge and information gained through its
review of Confidential Information or discussions with Company personnel. Subscribing Reinsurer
further agrees not to disclose any such Confidential Information to any other person or entity
except as such disclosure may be necessary to its retrocessionaires, accountants, attorneys, or as
otherwise required by law. Subscribing Reinsurer agrees that no Confidential Information is to be
copied and/or removed from Company’s premises without the express permission of Company.

Non-Public Personally Identifiable Information. Additionally, any disclosure of non-public
personally identifiable information shall comply with all state and federal statutes and
regulations governing the disclosure of non-public personally identifiable information.
“Non-public personally identifiable information” is financial or medical information of or concerning a private person which either has been
obtained from sources which are not available to the general public or obtained from the person
who is the subject and which information is included in data files exchanged by the parties
hereto. For the purposes hereof, the terms shall include data elements such as names and addresses
of individuals. 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.

Third-Party Demand. Should Subscribing Reinsurer receive a third-party demand pursuant to
subpoena, summons, or court or governmental order, to disclose Confidential Information (including
Non-public personally identifiable information) that has been provided by the Company, the
Subscribing Reinsurer shall make commercially reasonable efforts to notify the Company promptly
upon receipt of the demand and prior to disclosure of the Confidential Information and provide the
Company a reasonable opportunity to object to the disclosure. If the Company timely objects to the
release of the Confidential Information, the Subscribing Reinsurer will comply with the reasonable
requests of the Company in connection with the Company’s efforts to resist release of the
Confidential Information. The Company shall bear the cost of resisting the release of the
Confidential Information.

Survival. The parties agree that the obligations contained in this Article shall survive
the expiration or termination of this Agreement.

ARTICLE XXXII — 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.

ARTICLE XXXIII — SEVERABILITY

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

ARTICLE XXXIV — INTEREST PENALTY

The interest amounts provided for in this Article shall apply to the Subscribing Reinsurer or to
the Company in the following circumstances:

					
	 	 	 	 	 
	Agreement No. RAM Re BSGCX — 2006
	 	25.
	 	 

 

 

	A.	 	If a loss payment owed by the Subscribing Reinsurer to the Company is not received within
45 calendar days following the date of presentation to the Subscribing Reinsurer of
information necessary to approve payment of the claim, and/or
	 
	B.	 	If any premium payment owed by the Company to the Subscribing Reinsurer is not received
within 45 calendar days following the date on which payment is due, and/or
	 
	C.	 	If any premium adjustment, agreed by either party to the other, is not received within 150
calendar days following the expiry or anniversary of this Agreement, and/or
	 
	D.	 	If any return of premiums, commissions, profit sharing, or any amounts not provided in
paragraphs A, B, and C above, are not received in accordance with the date specified in this
Agreement or if no date is specified, within 90 calendar days following the date the debtor
party received the billing.

Failure by the Subscribing Reinsurer or Company to comply with their respective payment
obligations within the time periods as herein provided shall, as of that date, be subject to an
interest payment computed by multiplying the amount due by a variable rate consisting of the U.S.
Prime Rate as published in the Eastern Edition of The Wall Street Journal on the first day of the
calendar month in which the amount became past due, plus 2%. The variable rate shall be adjusted
monthly thereafter to equal the U.S. Prime Rate as published in the Eastern Edition of The Wall
Street Journal on the first day of each successive month during which the amount due remains
unpaid, plus 2%. The product shall then be multiplied by 1/365 for each day after the due date
that the amount due and the interest amount remain unpaid. Any interest that occurs pursuant to
this Article shall be calculated by the party to which it is owed.

The validity of any claim or payment may be contested under the provisions of this Agreement. If
the debtor party prevails in an arbitration or any other proceeding with respect to the amounts in
dispute, there shall be no interest penalty due. If the creditor party wholly or partially
prevails on any of the amounts in dispute, the interest penalty shall be awarded as outlined
above. Such interest penalty shall be calculated from the date the monies were due and owing to
the date of resolution of the arbitration or proceeding, and shall be payable as of the date of
resolution of the arbitration or proceeding.

If a Subscribing Reinsurer advances the entire or partial payment of any claim it is contesting,
and wholly or partially prevails in the contest, the Company shall promptly return the applicable
amount of such payment. The arbitrator(s) hearing such dispute shall determine if interest shall
be added to the amount returned by the Company.

Any interest owing pursuant to this Article may be waived by the party to which it is owed.
Further, any interest calculated pursuant to this Article that is $100 or less shall be waived. Any
waiver of any interest pursuant to this paragraph, however, shall not affect the waiving party’s
right to claim and/or pursue interest for any other failure by the other party to make payment when
due under this Article.

ARTICLE XXXV — ASSIGNMENT

This Agreement shall be binding upon and inure to the benefit of the Company and the Subscribing
Reinsurer and their respective successors and assigns provided, however, that this Agreement may
not be assigned by either the Company or the Subscribing Reinsurer without the prior written
consent of the other. In the event of any assignment, the assignor shall remain liable.

					
	 	 	 	 	 
	Agreement No. RAM Re BSGCX — 2006
	 	26.
	 	 

 

 

ARTICLE XXXVI — ENTIRE AGREEMENT

This Agreement shall constitute the entire agreement between the Company and the Subscribing
Reinsurer with respect to the subject matter of this Agreement and shall supersede all prior
understandings, negotiations and discussions, whether oral or written, by or between the Company
and the Subscribing Reinsurer related to the subject matter hereof. There are no general or
specific warranties, representations or other agreements by or among the Company and the
Subscribing Reinsurer in connection with entering into this Agreement except as specifically set
forth in this Agreement. Notwithstanding the foregoing, this Agreement may be amended or modified
only by a writing signed by both the Company and the Subscribing Reinsurer.

					
	 	 	 	 	 
	Agreement No. RAM Re BSGCX — 2006
	 	27.
	 	 

 

 

EXHIBIT A

FIRST EXCESS OF LOSS

IS ATTACHED TO AND

FORMS PART OF

REINSURANCE AGREEMENT NO. RAM Re BSGCX — 2006

 

 

EXHIBIT A — FIRST EXCESS OF LOSS

	 	 	 	 	 
	SECTION	 	SUBJECT	 	PAGE
	1

	 	LIMIT AND RETENTION
	 	A-1
	2

	 	REINSTATEMENT
	 	A-1
	3

	 	DEFINITION
	 	A-1
	4

	 	REINSURANCE PREMIUM
	 	A-1

 

 

EXHIBIT A — FIRST EXCESS OF LOSS (ACCOUNTING CODE RAM Re BSGCX — 2006)

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

All States other than Multi-State Business

	A.	 	The Company shall retain the first $2,000,000 of Ultimate Net Loss as respects any one Loss
Occurrence. The Subscribing Reinsurer shall then be liable for the amount by which the
Company’s Ultimate Net Loss exceeds the Company’s retention of $2,000,000 but the liability of
the Subscribing Reinsurer shall never exceed $3,000,000 any one loss occurrence.

	B.	 	Notwithstanding the foregoing, Subscribing Reinsurer’s liability arising out of an Act of
Terrorism shall be limited to only $3,000,000 for all coverages combined, for any one
Agreement Year.

SECTION 2 — REINSTATEMENT

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.

SECTION 3 — DEFINITION

	A.	 	An “Act of Terrorism” for purposes of this Agreement shall mean:

	 	1.	 	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,
(b) intimidating, coercing or putting in fear a civilian population or section thereof
for the purpose of establishing or advancing a specific ideological, religious or
political system of thought, perpetrated by a specific individual or group directly or
indirectly through agents acting on behalf of said individual or group or (c) retaliating
against any country for direct or vicarious support by that country of any other
government or political system.
	 
	 	2.	 	Any act deemed or declared by the Federal Office of Homeland Security to be
terrorism or a terrorist act shall also be considered an “Act of Terrorism” for purposes
of this Agreement.

	B.	 	The term “Agreement Year” shall mean each consecutive twelve month period commencing January
1 and ending December 31 and shall include any run-off period.

SECTION 4 — REINSURANCE PREMIUM

	 	 	 	 	 
	 	 	Rate applied to
	Cover	 	Subject Earned Premium
	Umbrella (Commercial)
	 	 	19.79	%
	Worker’s Compensation
	 	 	2.23	%
	CMPL
	 	 	0.45	%

Exhibit A-1

 

 

EXHIBIT B

SECOND EXCESS OF LOSS

IS ATTACHED TO AND

FORMS PART OF

REINSURANCE AGREEMENT NO. RAM Re BSGCX — 2006

 

 

EXHIBIT B — SECOND EXCESS OF LOSS

	 	 	 	 	 
	SECTION	 	SUBJECT	 	PAGE
	 
	1

	 	LIMIT AND RETENTION
	 	B-1
	 
	 	 	 	 
	2

	 	REINSTATEMENT
	 	B-1
	 
	 	 	 	 
	3

	 	DEFINITION
	 	B-1
	 
	 	 	 	 
	4

	 	REINSURANCE PREMIUM
	 	B-2

 

 

EXHIBIT B — SECOND EXCESS OF LOSS (ACCOUNTING CODE RAM Re BSGCX — 2006)

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

All States other than Multi-State Business

	A.	 	The Company shall retain the first $5,000,000 of Ultimate Net Loss as respects any one Loss
Occurrence. The Subscribing Reinsurer shall then be liable for the amount by which the
Company’s Ultimate Net Loss exceeds the retention of $5,000,000 but the liability of the
Subscribing Reinsurer shall never exceed $5,000,000 any one Loss Occurrence and shall be
further limited in each Agreement Year during the term of this Agreement to an aggregate
liability of the Legal Entities used by the Liberty Mutual Agency Markets Group of Profit
Centers as defined in Appendix A arising out of Workers’ Compensation losses only of
$30,000,000. The recovery shall be allocated to the Company based on its contribution to the
aggregate liability arising out of Workers’ Compensation losses.

	B.	 	Notwithstanding the foregoing, Subscribing Reinsurer’s liability arising out of an Act of
Terrorism shall be limited to only $5,000,000 in the aggregate for all coverages combined for
any one Agreement Year.

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.

	B.	 	For each Agreement year during the term of this Agreement the first four reinstatements shall
be provided without payment of additional premium and the fifth and sixth reinstatement shall
be provided for an additional premium being pro rata only as to the fraction of the limit of
liability of this Agreement (i.e., the fraction of 100% of $5,000,000) so reinstated and 100%
as to the term.

SECTION 3 — DEFINITION

	A.	 	An “Act of Terrorism” for purposes of this Agreement shall mean:

	 	1.	 	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,
(b) intimidating, coercing or putting in fear a civilian population or section thereof
for the purpose of establishing or advancing a specific ideological, religious or
political system of thought, perpetrated by a specific individual or group directly or
indirectly through agents acting on behalf of said individual or group or (c) retaliating
against any country for direct or vicarious support by that country of any other
government or political system.
	 
	 	2.	 	Any act deemed or declared by the Federal Office of Homeland Security to be
terrorism or a terrorist act shall also be considered an “Act of Terrorism” for purposes
of this Agreement.

	B.	 	The term “Agreement Year” shall mean each consecutive twelve month period commencing January
1 and ending December 31 and shall include any run-off period.

Exhibit B-1

 

 

SECTION 4 — REINSURANCE PREMIUM

	 	 	 	 	 
	 	 	Rate applied to
	Cover	 	Subject Earned Premium
	Umbrella (Commercial)
	 	 	2.71	%
	Worker’s Compensation
	 	 	0.31	%
	CMPL
	 	 	0.06	%

Exhibit B-2

 

 

EXHIBIT C

THIRD EXCESS OF LOSS

IS ATTACHED TO AND

FORMS PART OF

REINSURANCE AGREEMENT NO. RAM Re BSGCX — 2006

 

 

EXHIBIT C — THIRD EXCESS OF LOSS

	 	 	 	 	 
	SECTION	 	SUBJECT	 	PAGE
	 
	 	 	 	 
	1

	 	LIMIT AND RETENTION
	 	C-1
	 
	 	 	 	 
	2

	 	REINSTATEMENT
	 	C-1
	 
	 	 	 	 
	3

	 	DEFINITION
	 	C-1
	 
	 	 	 	 
	4

	 	REINSURANCE PREMIUM
	 	C-2

 

 

EXHIBIT C — THIRD EXCESS OF LOSS (ACCOUNTING CODE RAM Re BSGCX — 2006)

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

All States other than Multi-State Business

	A 	 	The Company shall retain the first $10,000,000 of Ultimate Net Loss as respects any
one Loss Occurrence. The Subscribing Reinsurer shall then be liable for the amount by
which the Company’s Ultimate Net Loss exceeds the retention of $10,000,000 but the
liability of the Subscribing Reinsurer shall never exceed $15,000,000 any one Loss
Occurrence and shall be further limited in each Agreement Year during the term of
this Agreement to an aggregate liability of the Legal Entities used by the Liberty
Mutual Agency Markets Group of Profit Centers as defined in Appendix A of
$15,000,000. The recovery shall be allocated to the Company based on its contribution
to the aggregate liability.
	 
	B.	 	Notwithstanding the foregoing, Subscribing Reinsurer’s liability arising out of an Act of
Terrorism shall be limited to only $5,000,000 in the aggregate as respects all coverages
combined for any one Agreement Year.

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.	 	For each amount so reinstated 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.

	C.	 	Nevertheless, the Subscribing Reinsurer’s liability hereunder shall never exceed $15,000,000
in respect of any one Loss Occurrence and shall be further limited in all to $30,000,000 in
each Agreement Year during the term of this Agreement.

SECTION 3 — DEFINITION

	A.	 	An “Act of Terrorism” for purposes of this Agreement shall mean:

	 	1.	 	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,
(b) intimidating, coercing or putting in fear a civilian population or section thereof
for the purpose of establishing or advancing a specific ideological, religious or
political system of thought, perpetrated by a specific individual or group directly or
indirectly through agents acting on behalf of said individual or group or (c) retaliating
against any country for direct or vicarious support by that country of any other
government or political system.
	 
	 	2.	 	Any act deemed or declared by the Federal Office of Homeland Security to be
terrorism or a terrorist act shall also be considered an “Act of Terrorism” for purposes
of this Agreement.

Exhibit C-1

 

 

	B.	 	The term “Agreement Year” shall mean each consecutive twelve month period commencing
January 1 and ending December 31 and shall include any run-off period.

SECTION 4 — REINSURANCE PREMIUM

	 	 	 	 	 
	 	 	Rate applied to
	Cover	 	Subject Earned Premium
	Umbrella
(Commercial)
	 	 	1.14	%
	Worker’s Compensation
	 	 	0.13	%
	CMPL
	 	 	0.03	%

Exhibit C-2

 

 

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 Profit Centers of Liberty Mutual Agency Markets
(LMAM).

	 	 	 	 	 
	 	 	 	 	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 LMAM and produced by
this Profit Center only
	 
	 	 	 	 
	 

	 	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. 

Liberty Mutual Fire Insurance Co. 

LM Insurance Corp. 

Liberty Insurance Corp.

The First Liberty Insurance Corp. 

Liberty County Mutual Insurance Co.
	 	All states other than

multi-state business in

the other Profit Centers
	 
	 	 	 	 
	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 Insurance Co.
	 	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 Insurance Co.
	 	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

 

 

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:
	 	 	 	 
	 

	 	One Beacon Insurance Co. Cession to

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

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

	 	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, MI, OH, TN
	 

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

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

	 	One Beacon Insurance Co. Cession to

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

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

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

	 	Globe American Casualty Co.
	 	All States
	 

	 	National Insurance Association
	 	All States
	 
	 	 	 	 
	 

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

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

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

	 	Liberty Northwest insurance Corp.
	 	All States
	 

	 	North Pacific insurance Company
	 	All States
	 

	 	Oregon Automobile Insurance Co.
	 	All States
	 
	 	 	 	 
	 

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

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

	 	Merchants and Business Men’s
Mutual Insurance Co.
	 	
For business classified as
LMAM and produced by this
Profit Center only
	 
	 	 	 	 
	 

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

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

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

	 	Bridgefield Casualty Insurance Co. 

Bridgefield Employers Insurance Co.
	 	All states, for WC and
Employers Liability
business, classified as
LMAM
and produced by this Profit
Center only
	 
	 	 	 	 
	 

	 	Business Solutions Group*
	 	(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.

 

 

Appendix B

	 	 	 

	“Fortune’s Global 500” list

	 	(Version 2004-July-26/ valid until further notice)

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Revenues
	Company	 	Country	 	Rank	 	[USD mio]
	3M

	 	U.S.
	 	 	281	 	 	 	18’232	 
	A.P. Møller-Maersk Group

	 	Denmark
	 	 	201	 	 	 	23’888	 
	ABB

	 	Switzerland
	 	 	207	 	 	 	23’079	 
	Abbey National

	 	Britain
	 	 	494	 	 	 	11’041	 
	Abbott Laboratories

	 	U.S.
	 	 	254	 	 	 	19’681	 
	ABN AMRO Holding

	 	Netherlands
	 	 	101	 	 	 	37’682	 
	Accenture

	 	U.S.
	 	 	460	 	 	 	11’818	 
	Adecco

	 	Switzerland
	 	 	278	 	 	 	18’391	 
	Aegon

	 	Netherlands
	 	 	131	 	 	 	32’175	 
	AEON

	 	Japan
	 	 	140	 	 	 	31’161	 
	Aetna

	 	U.S.
	 	 	289	 	 	17’976

	AFLAC

	 	U.S.
	 	 	477	 	 	 	11’447	 
	Agricultural Bank of China

	 	China
	 	 	412	 	 	 	13’303	 
	Air France Group

	 	France
	 	 	375	 	 	 	14’510	 
	Aisin Seiki

	 	Japan
	 	 	384	 	 	 	14’211	 
	Akzo Nobel

	 	Netherlands
	 	 	365	 	 	 	14’771	 
	Albertson’s

	 	U.S.
	 	 	111	 	 	 	35’436	 
	Alcan

	 	Canada
	 	 	404	 	 	 	13’652	 
	Alcatel

	 	France
	 	 	385	 	 	 	14’162	 
	Alcoa

	 	U.S.
	 	 	229	 	 	 	21’728	 
	Alliance Unichem

	 	Britain
	 	 	379	 	 	 	14’385	 
	Allianz

	 	Germany
	 	 	11	 	 	 	114’950	 
	Allstate

	 	U.S.
	 	 	132	 	 	 	32’149	 
	Almanij

	 	Belgium
	 	 	252	 	 	 	19’746	 
	Alstom

	 	France
	 	 	255	 	 	 	19’627	 
	Altria Group

	 	U.S.
	 	 	40	 	 	 	60’704	 
	Amerada Hess

	 	U.S.
	 	 	378	 	 	 	14’408	 
	American Electric Power

	 	U.S.
	 	 	347	 	 	 	15’441	 
	American Express

	 	U.S.
	 	 	183	 	 	 	25’866	 
	American International Group

	 	U.S.
	 	 	20	 	 	 	81’303	 
	AmerisourceBergen

	 	U.S.
	 	 	63	 	 	 	49’657	 
	AMP

	 	Australia
	 	 	405	 	 	 	13’516	 
	AMR

	 	U.S.
	 	 	296	 	 	 	17’440	 
	Anglo American

	 	Britain
	 	 	275	 	 	 	18’637	 
	Anheuser-Busch

	 	U.S.
	 	 	387	 	 	 	14’147	 
	Anthem

	 	U.S.
	 	 	315	 	 	 	16’771	 
	Arcelor

	 	Luxembourg
	 	 	148	 	 	 	29’339	 
	Archer Daniels Midland

	 	U.S.
	 	 	145	 	 	 	30’708	 
	Asahi Kasel

	 	Japan
	 	 	491	 	 	 	11’098	 
	Asahi Mutual Life Insurance

	 	Japan
	 	 	470	 	 	 	11’551	 
	Assicurazionl Generali

	 	Italy
	 	 	29	 	 	 	66’755	 

 

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Revenues
	Company	 	Country	 	Rank	 	[USD mio]
	AstraZeneca

	 	Britain
	 	 	269	 	 	 	18’849	 
	AT&T

	 	U.S.
	 	 	116	 	 	 	34’529	 
	AT&T Wireless Services

	 	U.S.
	 	 	317	 	 	 	16’695	 
	AutoNation

	 	U.S.
	 	 	258	 	 	 	19’381	 
	Aventis

	 	France
	 	 	248	 	 	 	20’162	 
	Aviva

	 	Britain
	 	 	42	 	 	 	59’719	 
	AXA

	 	France
	 	 	13	 	 	 	111’912	 
	BAE Systems

	 	Britain
	 	 	399	 	 	 	13’711	 
	Banca Intesa

	 	Italy
	 	 	291	 	 	 	17’789	 
	Banco Bilbao Vizcaya Argentaria

	 	Spain
	 	 	264	 	 	 	19’145	 
	Banco Bradesco

	 	Brazil
	 	 	353	 	 	 	15’180	 
	Banco Do Brasil

	 	Brazil
	 	 	363	 	 	 	14’844	 
	Bank of America Corp.

	 	U.S.
	 	 	71	 	 	 	48’065	 
	Bank Of China

	 	China
	 	 	358	 	 	 	15’022	 
	Bank of Nova Scotia

	 	Canada
	 	 	453	 	 	 	11’960	 
	Bank One Corp.

	 	U.S.
	 	 	233	 	 	 	21’454	 
	Barclays

	 	Britain
	 	 	142	 	 	 	30’843	 
	BASF

	 	Germany
	 	 	100	 	 	 	37’757	 
	Bayer

	 	Germany
	 	 	129	 	 	 	32’331	 
	Bayerische Landesbank

	 	Germany
	 	 	343	 	 	 	15’549	 
	BCE

	 	Canada
	 	 	388	 	 	 	14’119	 
	BellSouth

	 	U.S.
	 	 	216	 	 	 	22’635	 
	Berkshire Hathaway

	 	U.S.
	 	 	35	 	 	 	63’859	 
	Berteismann

	 	Germany
	 	 	266	 	 	 	19’015	 
	Best Buy

	 	U.S.
	 	 	192	 	 	24’901

	Bharat Petroleum

	 	India
	 	 	450	 	 	 	12’054	 
	BHP Billiton

	 	Australia
	 	 	341	 	 	 	15’608	 
	BMW

	 	Germany
	 	 	74	 	 	 	46’997	 
	BNP Paribas

	 	France
	 	 	48	 	 	 	57’272	 
	Boeing

	 	U.S.
	 	 	62	 	 	 	50’485	 
	Bombardier

	 	Canada
	 	 	310	 	 	 	16’996	 
	Bouygues

	 	France
	 	 	194	 	 	 	24’697	 
	BP

	 	Britain
	 	 	2	 	 	 	232’571	 
	Bridgestone

	 	Japan
	 	 	250	 	 	 	19’877	 
	Bristol-Myers Squibb

	 	U.S.
	 	 	239	 	 	 	20’894	 
	British Airways

	 	Britain
	 	 	423	 	 	 	12’806	 
	British American Tobacco

	 	Britain
	 	 	253	 	 	 	19’684	 
	BT

	 	Britain
	 	 	136	 	 	 	31’669	 
	Bunge

	 	U.S.
	 	 	223	 	 	 	22’345	 
	Canadian Imperial Bank of
Commerce

	 	Canada
	 	 	459	 	 	 	11’864	 
	Canon

	 	Japan
	 	 	165	 	 	27’592

	Cardinal Health

	 	U.S.
	 	 	50	 	 	 	56’830	 
	Carrefour

	 	France
	 	 	22	 	 	 	79’774	 
	Caterpillar

	 	U.S.
	 	 	209	 	 	 	22’763	 
	Cathay Life

	 	Taiwan
	 	 	395	 	 	 	13’805	 
	Cendant

	 	U.S.
	 	 	282	 	 	 	18’192	 
	Central Japan Railway

	 	Japan
	 	 	442	 	 	 	12’253	 
	Centrica

	 	Britain
	 	 	150	 	 	 	29’313	 
	Cepsa

	 	Spain
	 	 	432	 	 	 	12’589	 
	ChevronTexaco

	 	U.S.
	 	 	12	 	 	 	112’937	 
	China Construction Bank

	 	China
	 	 	331	 	 	 	15’825	 

 

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Revenues
	Company	 	Country	 	Rank	 	[USD mio]
	China Life Insurance

	 	China
	 	 	241	 	 	 	20’782	 
	China Mobile Communications

	 	China
	 	 	242	 	 	 	20’765	 
	China National Petroleum

	 	China
	 	 	73	 	 	 	47’047	 
	China Telecommunications

	 	China
	 	 	257	 	 	 	19’465	 
	Christian Dior

	 	France
	 	 	390	 	 	 	14’109	 
	Chubb

	 	U.S.
	 	 	479	 	 	 	11’394	 
	Chubu Electric Power

	 	Japan
	 	 	277	 	 	 	18’601	 
	Cigna

	 	U.S.
	 	 	272	 	 	 	18’808	 
	Cisco Systems

	 	U.S.
	 	 	268	 	 	 	18’878	 
	Citigroup

	 	U.S.
	 	 	18	 	 	 	94’713	 
	CNP Assurances

	 	France
	 	 	143	 	 	 	30’806	 
	Coca-Cola

	 	U.S.
	 	 	237	 	 	 	21’044	 
	Coca-Cola Enterprises

	 	U.S.
	 	 	299	 	 	 	17’330	 
	COFCO

	 	China
	 	 	415	 	 	 	13’290	 
	Coles Mver

	 	Australia
	 	 	324	 	 	 	16’043	 
	Comcast

	 	U.S.
	 	 	235	 	 	 	21’263	 
	Commerzbank

	 	Germany
	 	 	300	 	 	 	17’316	 
	Compass Group

	 	Britain
	 	 	286	 	 	 	18’072	 
	Computer Sciences

	 	U.S.
	 	 	366	 	 	 	14’768	 
	ConAgra Foods

	 	U.S.
	 	 	226	 	 	 	22’053	 
	ConocoPhillips

	 	U.S.
	 	 	14	 	 	 	99’468	 
	Continental

	 	Germany
	 	 	419	 	 	 	13’054	 
	Corus Group

	 	Britain
	 	 	420	 	 	 	13’001	 
	Cosmo Oil

	 	Japan
	 	 	427	 	 	 	12’692	 
	Costco Wholesale

	 	U.S.
	 	 	88	 	 	 	42’546	 
	Countrywide Financial

	 	U.S.
	 	 	401	 	 	 	13’660	 
	Credit Agricole

	 	France
	 	 	78	 	 	 	45’928	 
	Credit Suisse

	 	Switzerland
	 	 	45	 	 	 	58’957	 
	CRH

	 	Ireland
	 	 	444	 	 	 	12’194	 
	CVS

	 	U.S.
	 	 	175	 	 	 	26’588	 
	Dai Nippon Printing

	 	Japan
	 	 	451	 	 	 	11’988	 
	Dalei

	 	Japan
	 	 	294	 	 	 	17’518	 
	Dai-ichi Mutual Life Insurance

	 	Japan
	 	 	79	 	 	 	45’066	 
	DaimierChrysler

	 	Germany
	 	 	7	 	 	 	156’602	 
	Daiwa House Industry

	 	Japan
	 	 	497	 	 	 	10’842	 
	Danske Bank Group

	 	Denmark
	 	 	476	 	 	 	11’479	 
	Deere

	 	U.S.
	 	 	344	 	 	 	15’535	 
	Delhaize Group

	 	Belgium
	 	 	230	 	 	 	21’720	 
	Dell

	 	U.S.
	 	 	93	 	 	 	41’444	 
	Delphi

	 	U.S.
	 	 	160	 	 	 	28’096	 
	Delta Air Lines

	 	U.S.
	 	 	413	 	 	 	13’303	 
	Denso

	 	Japan
	 	 	213	 	 	 	22’685	 
	Dentsu

	 	Japan
	 	 	345	 	 	 	15’485	 
	Deutsche Bahn

	 	Germany
	 	 	133	 	 	 	31’947	 
	Deutsche Bank

	 	Germany
	 	 	67	 	 	 	48’670	 
	Deutsche Post

	 	Germany
	 	 	75	 	 	 	46’651	 
	Deutsche Telekom

	 	Germany
	 	 	38	 	 	 	63’196	 
	Dexia Group

	 	Belgium
	 	 	267	 	 	 	18’889	 
	Diageo

	 	Britain
	 	 	472	 	 	 	11’538	 
	Dominion Resources

	 	U.S.
	 	 	449	 	 	 	12’078	 
	Dow Chemical

	 	U.S.
	 	 	125	 	 	 	32’632	 

 

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Revenues
	Company	 	Country	 	Rank	 	[USD mio]
	Duke Energy

	 	U.S.
	 	 	204	 	 	 	23’483	 
	DuPont

	 	U.S.
	 	 	164	 	 	 	27’730	 
	DZ Bank

	 	Germany
	 	 	156	 	 	 	28’663	 
	E.ON

	 	Germany
	 	 	66	 	 	 	48’709	 
	EADS

	 	Netherlands
	 	 	118	 	 	 	34’104	 
	East Japan Railway

	 	Japan
	 	 	219	 	 	 	22’507	 
	Eastman Kodak

	 	U.S.
	 	 	411	 	 	 	13’317	 
	Edison International

	 	U.S.
	 	 	448	 	 	 	12’156	 
	El Paso

	 	U.S.
	 	 	429	 	 	 	12’653	 
	Electricite De France

	 	France
	 	 	61	 	 	 	50’838	 
	Electrolux

	 	Sweden
	 	 	349	 	 	 	15’361	 
	Electronic Data Systems

	 	U.S.
	 	 	232	 	 	 	21’596	 
	Eli Lilly

	 	U.S.
	 	 	433	 	 	 	12’583	 
	Emerson Electric

	 	U.S.
	 	 	392	 	 	 	13’999	 
	Endesa

	 	Spain
	 	 	273	 	 	 	18’768	 
	Enel

	 	Italy
	 	 	110	 	 	 	35’444	 
	ENL

	 	Italy
	 	 	43	 	 	 	59’304	 
	Eurohypo

	 	Germany
	 	 	473	 	 	 	11’536	 
	Exelon

	 	U.S.
	 	 	333	 	 	 	15’812	 
	Express Scripts

	 	U.S.
	 	 	414	 	 	 	13’295	 
	Exxon Mobil

	 	U.S.
	 	 	3	 	 	 	222’883	 
	Fannie Mae

	 	U.S.
	 	 	56	 	 	 	53’767	 
	Federated Department Stores

	 	U.S.
	 	 	352	 	 	 	15’264	 
	FedEx

	 	U.S.
	 	 	221	 	 	 	22’487	 
	Fiat

	 	Italy
	 	 	57	 	 	 	53’500	 
	FirstEnergy

	 	U.S.
	 	 	441	 	 	 	12’318	 
	FleetBoston Financial

	 	U.S.
	 	 	376	 	 	 	14’442	 
	Flextronics International

	 	Singapore
	 	 	374	 	 	 	14’530	 
	Fonciere Euris

	 	France
	 	 	172	 	 	 	27’005	 
	Ford Motor

	 	U.S.
	 	 	6	 	 	 	164’505	 
	Fortis

	 	Belgium/Netherlands
	 	 	51	 	 	 	56’695	 
	Fortum

	 	Finland
	 	 	422	 	 	 	12’893	 
	France Telecom

	 	France
	 	 	58	 	 	 	52’198	 
	Franz Haniel

	 	Germany
	 	 	180	 	 	 	26’074	 
	Freddie Mac

	 	U.S.
	 	 	104	 	 	 	36’839	 
	Fuji Heavy Industries

	 	Japan
	 	 	426	 	 	 	12’744	 
	Fuji Photo Film

	 	Japan
	 	 	214	 	 	 	22’667	 
	Fujitsu

	 	Japan
	 	 	90	 	 	 	42’201	 
	Gap

	 	U.S.
	 	 	329	 	 	 	15’854	 
	Gasunie

	 	Netherlands
	 	 	421	 	 	 	12’973	 
	Gaz de France

	 	France
	 	 	271	 	 	 	18’841	 
	Gazprom

	 	Russia
	 	 	167	 	 	 	27’527	 
	General Dynamics

	 	U.S.
	 	 	318	 	 	 	16’617	 
	General Electric

	 	U.S.
	 	 	9	 	 	 	134’187	 
	General Motors

	 	U.S.
	 	 	5	 	 	 	195’324	 
	George Weston

	 	Canada
	 	 	240	 	 	 	20’838	 
	Georgia-Pacific

	 	U.S.
	 	 	246	 	 	 	20’255	 
	GlaxoSmithKline

	 	Britain
	 	 	114	 	 	 	35’051	 
	Goldman Sachs Group

	 	U.S.
	 	 	202	 	 	 	23 ’623	 
	Goodyear Tire & Rubber

	 	U.S.
	 	 	356	 	 	 	15’119	 
	Great Atlantic & Pacific Tea

	 	U.S.
	 	 	495	 	 	 	11’034	 

 

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Revenues
	Company	 	Country	 	Rank	 	[USD mio]
	Groupama

	 	France
	 	 	283	 	 	 	18’156	 
	Groupe Auchan

	 	France
	 	 	127	 	 	 	32’488	 
	Groupe Calsse D’Epargne

	 	France
	 	 	208	 	 	 	23’078	 
	Groupe Danone

	 	France
	 	 	321	 	 	 	16’377	 
	Groupe Pinault-Printemps

	 	France
	 	 	166	 	 	 	27’571	 
	GUS

	 	Britain
	 	 	425	 	 	 	12’785	 
	Halliburton

	 	U.S.
	 	 	322	 	 	 	16’271	 
	Hanwha

	 	South Korea
	 	 	323	 	 	 	16’182	 
	Hartford Financial Services

	 	U.S.
	 	 	274	 	 	 	18’733	 
	HBOS

	 	Britain
	 	 	107	 	 	 	36’024	 
	HCA

	 	U.S.
	 	 	228	 	 	 	21’808	 
	Health Net

	 	U.S.
	 	 	492	 	 	 	11’063	 
	Hewlett-Packard

	 	U.S.
	 	 	24	 	 	 	73’061	 
	Hilton Group

	 	Britain
	 	 	369	 	 	 	14’599	 
	Hindustan Petroleum

	 	India
	 	 	462	 	 	 	11’751	 
	Hitachi

	 	Japan
	 	 	23	 	 	 	76’423	 
	Hochtief

	 	Germany
	 	 	454	 	 	 	11’922	 
	Home Depot

	 	U.S.
	 	 	34	 	 	 	64’816	 
	Honda Motor

	 	Japan
	 	 	25	 	 	 	72’264	 
	Honeywell International

	 	U.S.
	 	 	206	 	 	 	23’103	 
	HSBC Holdings

	 	Britain
	 	 	47	 	 	 	57’608	 
	Humana

	 	U.S.
	 	 	443	 	 	 	12’226	 
	Hutchison Whampoa

	 	China
	 	 	407	 	 	 	13’474	 
	HVB Group

	 	Germany
	 	 	161	 	 	 	28’083	 
	Hyundai Motor

	 	South Korea
	 	 	98	 	 	 	39’101	 
	Iberdrola

	 	Spain
	 	 	490	 	 	 	11’111	 
	Idemitsu Kosan

	 	Japan
	 	 	292	 	 	 	17’670	 
	Indian Oil

	 	India
	 	 	189	 	 	 	25’316	 
	Industrial & Commercial Bank of
China

	 	China
	 	 	243	 	 	 	20’757	 
	ING Group

	 	Netherlands
	 	 	17	 	 	 	95’893	 
	Ingram Micro

	 	U.S.
	 	 	218	 	 	 	22’613	 
	Intel

	 	U.S.
	 	 	146	 	 	 	30’141	 
	International Business Machines

	 	U.S.
	 	 	19	 	 	 	89’131	 
	International Paper

	 	U.S.
	 	 	191	 	 	 	25’179	 
	Isuzu Motors

	 	Japan
	 	 	428	 	 	 	12’663	 
	Itochu

	 	Japan
	 	 	348	 	 	 	15’393	 
	Ito-Yokado

	 	Japan
	 	 	149	 	 	 	29’333	 
	J. Sainsbury

	 	Britain
	 	 	152	 	 	 	29’035	 
	J.C. Penney

	 	U.S.
	 	 	123	 	 	 	32’923	 
	J.P. Morgan Chase & Co.

	 	U.S.
	 	 	81	 	 	 	44’363	 
	Japan Airlines System

	 	Japan
	 	 	306	 	 	 	17’102	 
	Japan Post

	 	Japan
	 	 	297	 	 	 	17’431	 
	Japan Tobacco

	 	Japan
	 	 	290	 	 	 	17’881	 
	JFE Holdings

	 	Japan
	 	 	227	 	 	 	21’900	 
	Johnson & Johnson

	 	U.S.
	 	 	92	 	 	 	41’862	 
	Johnson Controls

	 	U.S.
	 	 	215	 	 	 	22’646	 
	Kajima

	 	Japan
	 	 	380	 	 	 	14’358	 
	Kansal Electric Power

	 	Japan
	 	 	220	 	 	 	22’488	 
	KarstadtQuelle

	 	Germany
	 	 	302	 	 	 	17’283	 
	KDDI

	 	Japan
	 	 	190	 	 	 	25’197	 
	KFW Bankengruppe

	 	Germany
	 	 	383	 	 	 	14’240	 

 

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Revenues
	Company	 	Country	 	Rank	 	[USD mio]
	Kimberly-Clark

	 	U.S.
	 	 	381	 	 	 	14’348	 
	Kingfisher

	 	Britain
	 	 	373	 	 	 	14’536	 
	Kintetsu

	 	Japan
	 	 	474	 	 	 	11’490	 
	Kmart Holding

	 	U.S.
	 	 	203	 	 	 	23’485	 
	Kookmin Bank

	 	South Korea
	 	 	357	 	 	 	15’112	 
	Korea Electric Power

	 	South Korea
	 	 	265	 	 	 	19’114	 
	Kroger

	 	U.S.
	 	 	55	 	 	 	53’791	 
	KT

	 	South Korea
	 	 	406	 	 	 	13’485	 
	Kuraya Sanseido

	 	Japan
	 	 	480	 	 	 	11’367	 
	Kyushu Electric Power

	 	Japan
	 	 	439	 	 	 	12’321	 
	L.M. Ericsson

	 	Sweden
	 	 	370	 	 	 	14’577	 
	La Poste

	 	France
	 	 	244	 	 	 	20’376	 
	Lafarge

	 	France
	 	 	346	 	 	 	15’458	 
	Lagardere Groupe

	 	France
	 	 	364	 	 	 	14’791	 
	Landesbank Baden-Wfrttemberg

	 	Germany
	 	 	260	 	 	 	19’271	 
	Lear

	 	U.S.
	 	 	336	 	 	 	15’747	 
	Legal & General Group

	 	Britain
	 	 	338	 	 	 	15’730	 
	Lehman Brothers Holdings

	 	U.S.
	 	 	301	 	 	 	17’287	 
	LG Electronics

	 	South Korea
	 	 	147	 	 	 	29’874	 
	Liberty Mutual Insurance Group

	 	U.S.
	 	 	311	 	 	 	16’914	 
	Lloyds TSB Group

	 	Britain
	 	 	188	 	 	 	25’378	 
	Lockheed Martin

	 	U.S.
	 	 	134	 	 	 	31’844	 
	Loews

	 	U.S.
	 	 	334	 	 	 	15’810	 
	L’Oréal

	 	France
	 	 	327	 	 	 	15’878	 
	Lowe’s

	 	U.S.
	 	 	139	 	 	 	31’263	 
	Lufthansa Group

	 	Germany
	 	 	287	 	 	 	18’060	 
	Lukoll

	 	Russia
	 	 	259	 	 	 	19’345	 
	Magna International

	 	Canada
	 	 	328	 	 	 	15’870	 
	MAN Group

	 	Germany
	 	 	309	 	 	 	17’000	 
	Manpower

	 	U.S.
	 	 	445	 	 	 	12’185	 
	Manulife Financial

	 	Canada
	 	 	458	 	 	 	11’887	 
	Marathon Oil

	 	U.S.
	 	 	102	 	 	 	37’137	 
	Marks & Spencer

	 	Britain
	 	 	391	 	 	 	14’062	 
	Marsh & McLennan

	 	U.S.
	 	 	467	 	 	 	11’588	 
	Marubenl

	 	Japan
	 	 	196	 	 	 	24’560	 
	Masco

	 	U.S.
	 	 	489	 	 	 	11’134	 
	Mass, Mutual Life Insurance

	 	U.S.
	 	 	236	 	 	 	21’076	 
	Matsushita Electric Industrial

	 	Japan
	 	 	31	 	 	 	66’218	 
	May Department Stores

	 	U.S.
	 	 	409	 	 	 	13’343	 
	Mazda Motor

	 	Japan
	 	 	184	 	 	 	25’817	 
	MBNA

	 	U.S.
	 	 	465	 	 	 	11’684	 
	McDonald’s

	 	U.S.
	 	 	305	 	 	 	17’141	 
	MCI

	 	U.S.
	 	 	168	 	 	 	27’331	 
	McKesson

	 	U.S.
	 	 	26	 	 	 	69’506	 
	Medco Health Solutions

	 	U.S.
	 	 	117	 	 	 	34’265	 
	Meiji Yasuda Life Insurance

	 	Japan
	 	 	82	 	 	 	44’064	 
	Merck

	 	U.S.
	 	 	222	 	 	 	22’486	 
	Merrill Lynch

	 	U.S.
	 	 	163	 	 	 	27’745	 
	MetLife

	 	U.S.
	 	 	106	 	 	 	36’261	 
	Metro

	 	Germany
	 	 	41	 	 	 	60’657	 
	Michelln

	 	France
	 	 	288	 	 	 	18’048	 

 

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Revenues
	Company	 	Country	 	Rank	 	[USD mio]
	Microsoft

	 	U.S.
	 	 	130	 	 	 	32’187	 
	Migros

	 	Switzerland
	 	 	362	 	 	 	14’880	 
	Millea Holdings

	 	Japan
	 	 	195	 	 	 	24’574	 
	Mitsubishi

	 	Japan
	 	 	389	 	 	 	14’116	 
	Mitsubishi Chemical

	 	Japan
	 	 	308	 	 	 	17’045	 
	Mitsubishi Electric

	 	Japan
	 	 	151	 	 	 	29’300	 
	Mitsubishi Heavy Industries

	 	Japan
	 	 	238	 	 	 	21’012	 
	Mitsubishi Motors

	 	Japan
	 	 	224	 	 	 	22’305	 
	Mitsubishi Tokyo Financial Group

	 	Japan
	 	 	217	 	 	 	22’621	 
	Mitsui

	 	Japan
	 	 	177	 	 	 	26’385	 
	Mitsui Life Insurance

	 	Japan
	 	 	440	 	 	 	12’319	 
	Mitsui Sumitomo Insurance

	 	Japan
	 	 	279	 	 	 	18’295	 
	Mizuho Financial Group

	 	Japan
	 	 	159	 	 	 	28’335	 
	Morgan Stanley

	 	U.S.
	 	 	115	 	 	 	34’933	 
	Motorola

	 	U.S.
	 	 	171	 	 	 	27’058	 
	Munich Re Group

	 	Germany
	 	 	44	 	 	 	59’083	 
	National Australia Bank

	 	Australia
	 	 	332	 	 	 	15’820	 
	National Grid Transco

	 	Britain
	 	 	351	 	 	 	15’301	 
	Nationwide

	 	U.S.
	 	 	313	 	 	 	16’803	 
	NEC

	 	Japan
	 	 	85	 	 	 	43’440	 
	Nestle

	 	Switzerland
	 	 	33	 	 	 	65’415	 
	New York Life Insurance

	 	U.S.
	 	 	185	 	 	 	25’700	 
	News Corp.

	 	Australia
	 	 	295	 	 	 	17’494	 
	Nippon Express

	 	Japan
	 	 	367	 	 	 	14’758	 
	Nippon Life Insurance

	 	Japan
	 	 	36	 	 	 	63’841	 
	Nippon Mining Holdings

	 	Japan
	 	 	342	 	 	 	15’551	 
	Nippon Oil

	 	Japan
	 	 	157	 	 	 	28’561	 
	Nippon Steel

	 	Japan
	 	 	182	 	 	 	25’903	 
	Nippon Tëlegraph & Telephone

	 	Japan
	 	 	16	 	 	 	98’229	 
	Nippon Yusen

	 	Japan
	 	 	436	 	 	 	12’379	 
	Nissan Motor

	 	Japan
	 	 	32	 	 	 	65’771	 
	Nokia

	 	Finland
	 	 	122	 	 	 	33’336	 
	Nordea Bank

	 	Sweden
	 	 	416	 	 	 	13’194	 
	Norsk Hydro

	 	Norway
	 	 	199	 	 	 	24’276	 
	Northrop Grumman

	 	U.S.
	 	 	155	 	 	 	28’686	 
	Northwestern Mutual

	 	U.S.
	 	 	307	 	 	 	17’080	 
	Novartis

	 	Switzerland
	 	 	193	 	 	 	24’864	 
	Obayashi

	 	Japan
	 	 	455	 	 	 	11’919	 
	Office Depot

	 	U.S.
	 	 	437	 	 	 	12’359	 
	Old Mutual

	 	Britain
	 	 	304	 	 	 	17’145	 
	Onex

	 	Canada
	 	 	438	 	 	 	12’353	 
	Otto Versand

	 	Germany
	 	 	400	 	 	 	13’708	 
	PacifiCare Health Systems

	 	U.S.
	 	 	496	 	 	 	11’009	 
	PDVSA

	 	Venezuela
	 	 	76	 	 	 	46’000	 
	Pemex

	 	Mexico
	 	 	65	 	 	 	49’240	 
	PepsiCo

	 	U.S.
	 	 	173	 	 	 	26’971	 
	Petrabras

	 	Brazil
	 	 	144	 	 	 	30’797	 
	Petronas

	 	Malaysia
	 	 	186	 	 	 	25’661	 
	Peugeot

	 	France
	 	 	39	 	 	 	61’385	 
	Pfizer

	 	U.S.
	 	 	77	 	 	 	45’950	 
	PG&E Corp.

	 	U.S.
	 	 	488	 	 	 	11’221	 

 

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Revenues
	Company	 	Country	 	Rank	 	[USD mio]
	Plains All American Pipeline

	 	U.S.
	 	 	431	 	 	 	12’590	 
	POSCO

	 	South Korea
	 	 	361	 	 	 	14’930	 
	Power Corp. of Canada

	 	Canada
	 	 	487	 	 	 	11’239	 
	Procter & Gamble

	 	U.S.
	 	 	86	 	 	 	43’377	 
	Progressive

	 	U.S.
	 	 	457	 	 	 	11’892	 
	Prudential

	 	Britain
	 	 	109	 	 	 	35’473	 
	Prudential Financial

	 	U.S.
	 	 	162	 	 	 	27’907	 
	PTT

	 	Thailand
	 	 	456	 	 	 	11’905	 
	Public Service Enterprise Group

	 	U.S.
	 	 	481	 	 	 	11’340	 
	Publix Super Markets

	 	U.S.
	 	 	312	 	 	 	16’848	 
	Qwest Communications

	 	U.S.
	 	 	360	 	 	 	14’936	 
	Rabobank

	 	Netherlands
	 	 	200	 	 	 	24’125	 
	RAG

	 	Germany
	 	 	371	 	 	 	14’559	 
	Raytheon

	 	U.S.
	 	 	284	 	 	 	18’109	 
	Reliance Industries

	 	India
	 	 	482	 	 	 	11’328	 
	Reliant Energy

	 	U.S.
	 	 	463	 	 	 	11’707	 
	Renault

	 	France
	 	 	89	 	 	 	42’470	 
	Repsol YPF

	 	Spain
	 	 	91	 	 	 	42’032	 
	Ricoh

	 	Japan
	 	 	335	 	 	 	15’761	 
	Rite Aid

	 	U.S.
	 	 	319	 	 	 	16’600	 
	Robert Bosch

	 	Germany
	 	 	94	 	 	 	41’148	 
	Roche Group

	 	Switzerland
	 	 	205	 	 	 	23’213	 
	Royal & Sun Alliance

	 	Britain
	 	 	262	 	 	 	19’259	 
	Royal Ahold

	 	Netherlands
	 	 	37	 	 	63’456

	Royal Bank of Canada

	 	Canada
	 	 	303	 	 	17’204

	Royal Bank of Scotland

	 	Britain
	 	 	84	 	 	 	43’758	 
	Royal Dutch/Shell Group

	 	Britain/Netherlands
	 	 	4	 	 	 	201’728	 
	Royal KPN

	 	Netherlands
	 	 	377	 	 	 	14’421	 
	Royal Mail Holdings

	 	Britain
	 	 	368	 	 	 	14’623	 
	Royal Philips Electronics

	 	Netherlands
	 	 	124	 	 	 	32’863	 
	RWE

	 	Germany
	 	 	68	 	 	 	48’407	 
	Safeway

	 	U.S.
	 	 	108	 	 	 	35’553	 
	Saint-Gobain

	 	France
	 	 	120	 	 	 	33’489	 
	Samsung

	 	South Korea
	 	 	493	 	 	 	11’051	 
	Samsung Electronics

	 	South Korea
	 	 	54	 	 	 	54’400	 
	Samsung Life Insurance

	 	South Korea
	 	 	263	 	 	 	19’159	 
	San Paolo IMI

	 	Italy
	 	 	402	 	 	 	13’658	 
	Santander Central Hispano Group

	 	Spain
	 	 	174	 	 	 	26’957	 
	Sanyo Electric

	 	Japan
	 	 	225	 	 	 	22’204	 
	Sara Lee

	 	U.S.
	 	 	280	 	 	 	18’291	 
	SBC Communications

	 	U.S.
	 	 	96	 	 	 	40’843	 
	Schlumberger

	 	U.S.
	 	 	382	 	 	 	14’279	 
	Sears Roebuck

	 	U.S.
	 	 	95	 	 	 	41’124	 
	Seiko Epson

	 	Japan
	 	 	435	 	 	 	12’512	 
	Sekisul House

	 	Japan
	 	 	471	 	 	 	11’545	 
	Shanghai Automotive

	 	China
	 	 	461	 	 	 	11’755	 
	Shanghai Baosteel Group

	 	China
	 	 	372	 	 	 	14’548	 
	Sharp

	 	Japan
	 	 	249	 	 	 	19’984	 
	Shimizu

	 	Japan
	 	 	397	 	 	 	13’727	 
	SHV Holdings

	 	Netherlands
	 	 	466	 	 	 	11’625	 
	Siemens

	 	Germany
	 	 	21	 	 	 	80’501	 

 

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Revenues
	Company	 	Country	 	Rank	 	[USD mio]
	Sinochem

	 	China
	 	 	270	 	 	 	18’846	 
	Sinopec

	 	China
	 	 	53	 	 	 	55’062	 
	SK

	 	South Korea
	 	 	119	 	 	 	33’769	 
	Skanska

	 	Sweden
	 	 	320	 	 	 	16’451	 
	SNCF

	 	France
	 	 	187	 	 	 	25’491	 
	Societe Generale

	 	France
	 	 	158	 	 	 	28’557	 
	Sodexho Alliance

	 	France
	 	 	434	 	 	 	12’532	 
	Solectron

	 	U.S.
	 	 	464	 	 	 	11’700	 
	Sompo Japan Insurance

	 	Japan
	 	 	314	 	 	 	16’795	 
	Sony

	 	Japan
	 	 	30	 	 	 	66’366	 
	Southern

	 	U.S.
	 	 	486	 	 	 	11’251	 
	Sprint

	 	U.S.
	 	 	178	 	 	 	26’202	 
	Standard Life Assurance

	 	Britain
	 	 	231	 	 	 	21’712	 
	Staples

	 	U.S.
	 	 	417	 	 	 	13’181	 
	State Farm Insurance Cos.

	 	U.S.
	 	 	52	 	 	 	56’065	 
	State Grid

	 	China
	 	 	46	 	 	 	58’348	 
	Statoil

	 	Norway
	 	 	112	 	 	 	35’242	 
	Stora Enso

	 	Finland
	 	 	396	 	 	 	13’776	 
	Suez

	 	France
	 	 	80	 	 	 	44’843	 
	Sumitomo

	 	Japan
	 	 	355	 	 	 	15’126	 
	Sumitomo Electric Industries

	 	Japan
	 	 	403	 	 	 	13’655	 
	Sumitomo Life Insurance

	 	Japan
	 	 	103	 	 	 	36’913	 
	Sumitomo Mitsui Financial Group

	 	Japan
	 	 	138	 	 	 	31’451	 
	Sun Life Financial

	 	Canada
	 	 	337	 	 	 	15’741	 
	Sun Microsystems

	 	U.S.
	 	 	478	 	 	 	11’434	 
	Sunoco

	 	U.S.
	 	 	326	 	 	 	15’930	 
	Supervalu

	 	U.S.
	 	 	247	 	 	 	20’210	 
	Suzuki Motor

	 	Japan
	 	 	256	 	 	 	19’468	 
	Swiss Life Ins. & Pension

	 	Switzerland
	 	 	325	 	 	 	16’036	 
	Swiss Reinsurance

	 	Switzerland
	 	 	169	 	 	 	27’087	 
	Swisscom

	 	Switzerland
	 	 	498	 	 	 	10’841	 
	Sysco

	 	U.S.
	 	 	179	 	 	 	26’140	 
	Taisei

	 	Japan
	 	 	386	 	 	 	14’152	 
	Taiyo Life Insurance

	 	Japan
	 	 	484	 	 	 	11’275	 
	Target

	 	U.S.
	 	 	70	 	 	 	48’163	 
	Tech Data

	 	U.S.
	 	 	298	 	 	 	17’406	 
	Telecom Italia

	 	Italy
	 	 	113	 	 	 	35’222	 
	Telefónica

	 	Spain
	 	 	137	 	 	 	31’542	 
	Telstra

	 	Australia
	 	 	430	 	 	 	12’642	 
	Tenet Healthcare

	 	U.S.
	 	 	316	 	 	 	16’746	 
	Tesco

	 	Britain
	 	 	59	 	 	 	51’570	 
	Thales Group

	 	France
	 	 	452	 	 	 	11’962	 
	ThyssenKrupp

	 	Germany
	 	 	97	 	 	 	39’188	 
	TIAA-CREF

	 	U.S.
	 	 	181	 	 	 	26’016	 
	Time Warner

	 	U.S.
	 	 	83	 	 	 	43’877	 
	TJX

	 	U.S.
	 	 	410	 	 	 	13’328	 
	Tohoku Electric Power

	 	Japan
	 	 	394	 	 	 	13’835	 
	Tokyo Electric Power

	 	Japan
	 	 	87	 	 	 	42’971	 
	Tokyu

	 	Japan
	 	 	499	 	 	 	10’831	 
	Toppan Printing

	 	Japan
	 	 	475	 	 	 	11’486	 
	Toronto-Dominion Bank

	 	Canada
	 	 	500	 	 	 	10’827	 

 

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Revenues
	Company	 	Country	 	Rank	 	[USD mio]
	Toshiba

	 	Japan
	 	 	64	 	 	 	49’396	 
	Total

	 	France
	 	 	10	 	 	 	118’441	 
	Toyota Motor

	 	Japan
	 	 	8	 	 	 	153’111	 
	Toys ‘R’ Us

	 	U.S.
	 	 	469	 	 	 	11’566	 
	TPG

	 	Netherlands
	 	 	408	 	 	 	13’430	 
	Travelers Property Casualty

	 	U.S.
	 	 	354	 	 	 	15’139	 
	TUI

	 	Germany
	 	 	210	 	 	 	22’730	 
	TXU

	 	U.S.
	 	 	483	 	 	 	11’325	 
	Tyco International

	 	U.S.
	 	 	105	 	 	 	36’801	 
	Tyson Foods

	 	U.S.
	 	 	197	 	 	 	24’549	 
	U.S. Bancorp

	 	U.S.
	 	 	350	 	 	 	15’354	 
	U.S. Postal Service

	 	U.S.
	 	 	27	 	 	 	68’529	 
	UAL

	 	U.S.
	 	 	398	 	 	 	13’724	 
	UBS

	 	Switzerland
	 	 	72	 	 	 	47’741	 
	UFJ Holdings

	 	Japan
	 	 	211	 	 	 	22’723	 
	UniCredito Italiano

	 	Italy
	 	 	285	 	 	 	18’092	 
	Unilever

	 	Britain/Netherlands
	 	 	69	 	 	 	48’318	 
	Union Pacific

	 	U.S.
	 	 	424	 	 	 	12’792	 
	United Parcel Service

	 	U.S.
	 	 	121	 	 	 	33’485	 
	United Technologies

	 	U.S.
	 	 	141	 	 	 	31’034	 
	UnitedHealth Group

	 	U.S.
	 	 	154	 	 	 	28’823	 
	UPM-Kymmene

	 	Finland
	 	 	485	 	 	 	11’259	 
	Valero Energy

	 	U.S.
	 	 	99	 	 	 	37’969	 
	Vattenfall

	 	Sweden
	 	 	393	 	 	 	13’858	 
	Veolla Environnement

	 	France
	 	 	128	 	 	 	32’372	 
	Verizon Communications

	 	U.S.
	 	 	28	 	 	 	67’752	 
	Viacom

	 	U.S.
	 	 	176	 	 	 	26’585	 
	Vinci

	 	France
	 	 	234	 	 	 	21’363	 
	Visteon

	 	U.S.
	 	 	293	 	 	 	17’660	 
	Vivendi Universal

	 	France
	 	 	153	 	 	 	28’840	 
	Vodafone

	 	Britain
	 	 	49	 	 	 	56’845	 
	Volkswagen

	 	Germany
	 	 	15	 	 	 	98’637	 
	Volvo

	 	Sweden
	 	 	212	 	 	 	22’692	 
	Wachovia Corp.

	 	U.S.
	 	 	198	 	 	 	24’474	 
	Walgreen

	 	U.S.
	 	 	126	 	 	 	32’505	 
	Wal-Mart Stores

	 	U.S.
	 	 	1	 	 	 	263’009	 
	Walt Disney

	 	U.S.
	 	 	170	 	 	 	27’061	 
	Washington Mutual

	 	U.S.
	 	 	276	 	 	 	18’629	 
	Waste Management

	 	U.S.
	 	 	468	 	 	 	11’574	 
	WellPoint Health Networks

	 	U.S.
	 	 	245	 	 	 	20’360	 
	Wells Fargo

	 	U.S.
	 	 	135	 	 	 	31’800	 
	Weyerhaeuser

	 	U.S.
	 	 	251	 	 	 	19’873	 
	Whirlpool

	 	U.S.
	 	 	446	 	 	 	12’176	 
	Williams

	 	U.S.
	 	 	261	 	 	 	19’268	 
	Winn-Dixie Stores

	 	U.S.
	 	 	447	 	 	 	12’168	 
	Wolseley

	 	Britain
	 	 	418	 	 	 	13’085	 
	Woolworths

	 	Australia
	 	 	340	 	 	 	15’682	 
	Wyeth

	 	U.S.
	 	 	330	 	 	 	15’851	 
	Xerox

	 	U.S.
	 	 	339	 	 	 	15’701	 
	Yukos

	 	Russia
	 	 	359	 	 	 	14’966	 
	Zurich Financial Services

	 	Switzerland
	 	 	60	 	 	 	51’357	 

 

 

Appendix C

 

 

	 	 	 

	Pharmaceutical / medical risks

	 	(Version 2005-Apr)

	 	 	 	 	 
	#	 	Company Name 	 	Headquarter location 
	1

	 	ABBOTT LABORATORIES
	 	USA
	2

	 	AKZO NOBEL
	 	Netherlands
	3

	 	ALLERGAN
	 	USA
	4

	 	ALPHARMA
	 	USA
	5

	 	ALTANAAG
	 	Germany
	6

	 	AMGEN
	 	USA
	7

	 	ASTELLAS
	 	Japan
	8

	 	ASTRAZENECA
	 	UK
	9

	 	BARR LABORATORIES
	 	USA
	10

	 	BAXTER INTERNATIONAL
	 	USA
	11

	 	BAYER
	 	Germany
	12

	 	BEAUFOUR IPSEN
	 	France
	13

	 	BIOGEN
	 	USA
	14

	 	BIOMET
	 	USA
	15

	 	BOEHRINGER INGELHIEM
	 	Germany
	16

	 	BOSTON SCIENTIFIC CORPORATION
	 	USA
	17

	 	BRISTOL-MYERS SQUIBB
	 	USA
	18

	 	CHIRON
	 	USA
	19

	 	CSL
	 	Australia
	20

	 	DAIICHI PHARMACEUTICAL
	 	Japan
	21

	 	DAINIPPON PHARMACEUTICAL
	 	Japan
	22

	 	EDWARDS LIFESCIENCES
	 	USA
	23

	 	EISAI
	 	Japan
	24

	 	ELAN
	 	Ireland
	25

	 	FOREST LABORATORIES
	 	USA
	26

	 	GENENTECH
	 	USA
	27

	 	GENERAL ELECTRIC Healthcare
	 	USA
	28

	 	GENZYME
	 	USA
	29

	 	GLAXOSMITHKLINE
	 	UK
	30

	 	GUIDANT
	 	USA
	31

	 	HOSPIRA
	 	USA
	32

	 	IVAX
	 	USA
	33

	 	JOHNSON & JOHNSON
	 	USA
	34

	 	KlNG PHARMACEUTICALS
	 	USA
	35

	 	KYOWA HAKKO KOGYO
	 	Japan
	36

	 	LABORATOIRE SERVIER
	 	France
	37

	 	LILLY (ELI)
	 	USA
	38

	 	LUNDBECK
	 	Denmark
	39

	 	MEDIMMUNE
	 	USA
	40

	 	MEDTRONIC
	 	USA
	41

	 	MERCK & CO
	 	USA
	42

	 	MERCK KGAA
	 	Germany
	43

	 	MINNESOTA MINING & MANUFACTURING
	 	USA
	44

	 	MYLAN LABORATORIES
	 	USA
	45

	 	NOVARTIS
	 	Switzerland
	46

	 	NOVO NORDISK
	 	Denmark
	47

	 	OTSUKA PHARMACEUTICAL
	 	Japan
	48

	 	PFIZER
	 	USA
	49

	 	PLIVA
	 	Croatia
	50

	 	PROCTER & GAMBLE
	 	USA

 

 

	 	 	 	 	 
	#	 	Company Name 	 	Headquarter location 
	51

	 	PORDUE FREDERICK / PRA Holding
	 	USA
	52

	 	ROCHE
	 	Switzerland
	53

	 	SANKYO
	 	Japan
	54

	 	SANOFI-AVENTIS
	 	France
	55

	 	SCHERING AG
	 	Germany
	56

	 	SCHERING-PLOUGH
	 	USA
	57

	 	SCHWARZ PHARMA
	 	Germany
	58

	 	SERONO
	 	Switzerland
	59

	 	SHIONOGI
	 	Japan
	60

	 	SHIRE PHARMACEUTICALS
	 	UK
	61

	 	SMITH & NEPHEW
	 	UK
	62

	 	SOLVAY
	 	Belgium
	63

	 	ST. JUDE MEDICAL
	 	USA
	64

	 	STRYKER
	 	USA
	65

	 	SUMITOMO PHARMACEUTICALS
	 	Japan
	66

	 	SYNTHES-STRATEC
	 	Switzerland
	67

	 	TAKEDA
	 	Japan
	68

	 	TANABE
	 	Japan
	69

	 	TAP Pharmaceutical Products
	 	USA
	70

	 	TEVA PHARMACEUTICAL
	 	Israel
	71

	 	TYCO Healthcare
	 	USA
	72

	 	UCB
	 	Belgium
	73

	 	WATSON PHARMACEUTICAL
	 	USA
	74

	 	WYETH
	 	USA
	75

	 	ZIMMER
	 	USA

 

 

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 “Agreement” 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 Agreement 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 Agreement, 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.

 

 

NUCLEAR INCIDENT EXCLUSION CLAUSE — LIABILITY — REINSURANCE — U.S.A. N.M.A.
1590

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

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

LIMITED EXCLUSION PROVISION*

	 	I.	 	It is agreed that the policy does not apply under any liability coverage, to
injury, sickness, disease, death or destruction, bodily injury or property damage with
respect to which an insured under the policy is also an insured under a nuclear energy
liability policy issued by Nuclear Energy Liability Insurance Association, Mutual Atomic
Energy Liability Underwriters or Nuclear Insurance Association of Canada, or would be an
insured under any such policy but for its termination upon exhaustion of its limit of
liability.
	 
	 	II.	 	Family Automobile Policies (liability only), Special Automobile Policies
(private passenger automobiles, liability only), Farmers Comprehensive Personal
Liabilities Policies (liability only), Comprehensive Personal Liability Policies
(liability only) or policies of a similar nature; and the liability portion of
combination forms related to the four classes of policies stated above, such as the
Comprehensive Dwelling Policy and the applicable types of Homeowners Policies.
	 
	 	III.	 	The inception dates and thereafter of all original policies as described in II.
above, whether new, renewal or replacement, being policies which either

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

	3.	 	Except for those classes of policies specified in Clause II. of paragraph 2. and without in
any way restricting the operation of paragraph 1. of this Clause, it is understood and agreed
that for all purposes of this reinsurance the original liability policies of the Reassured
(new, renewal and replacement) affording the following coverages:
	 
	 	 	Owners, Landlords and Tenants Liability, Agreementual Liability, Elevator Liability, Owners
or Agreementors (including railroad) Protective Liability, Manufacturers and Agreementors
Liability, Product Liability, Professional and Malpractice Liability, Storekeepers Liability,
Garage Liability, Automobile Liability (including Massachusetts Motor Vehicle or Garage
Liability)
	 
	 	 	shall be deemed to include with respect to such coverages, from the time specified in Clause
V. of this paragraph 3., the following provision (specified as the Broad Exclusion Provision):
	 
	 	 	BROAD EXCLUSION PROVISION*

N.M.A. 1590

 

 

It is agreed that the policy does not apply:

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

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

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

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

	 	(a)	 	the nuclear material (1) is at any nuclear facility owned by, or operated by or
on behalf of, an insured or (2) has been discharged or dispersed therefrom;
	 
	 	(b)	 	the nuclear material is contained in spent fuel or waste at any time possessed,
handled, used, processed, stored, transported or disposed of by or on behalf of an
insured; or
	 
	 	(c)	 	the injury, sickness, disease, death or destruction, bodily injury or property
damage arises out of the furnishing by an insured of services, materials, parts or
equipment in connection with the planning, construction, maintenance, operation or use
of any nuclear facility, but if such facility is located within the United States of
America, its territories, or possessions or Canada, this exclusion (c) applies only to
injury to or destruction of property at such nuclear facility, property damage to such
nuclear facility and any property threat.

	IV.	 	As used in this endorsement:

“hazardous properties” include radioactive, toxic or explosive properties; “nuclear
material” means source material, special nuclear material or byproduct material;
“source material,” “special nuclear material,” and “byproduct material” have the
meanings given them in the Atomic Energy Act of 1954 or in any law amendatory
thereof; “spent fuel” means any fuel element or fuel component, solid or liquid,
which has been used or exposed to radiation in a nuclear reactor; “waste” means any
waste material (1) containing byproduct material other than the tailings or wastes
produced by the extraction or concentration of uranium or thorium from any ore
processed for its source material

content and (2) resulting from the operation by any person or organization of any
nuclear facility included within the definition of nuclear facility under paragraph
(a) or (b) thereof; “nuclear facility” means

	 	(a)	 	any nuclear reactor,

N.M.A. 1590

 

 

	 	(b)	 	any equipment or device designed or used for (1) separating the isotopes
of uranium or plutonium, (2) processing or utilizing spent fuel, or (3)
handling, processing or packaging waste,
	 
	 	(c)	 	any equipment or device used for the processing, fabricating or
alloying of special nuclear material if at any time the total amount of such
material in the custody of the insured at the premises where such equipment or
device is located consists of or contains more than 25 grams of plutonium or
uranium 233 or any combination thereof, or more than 250 grams of uranium 235,
	 
	 	(d)	 	any structure, basin, excavation, premises or place prepared or
used for the storage or disposal of waste

and includes the site on which any of the foregoing is located, all operations
conducted on such site and all premises used for such operations; “nuclear reactor”
means any apparatus designed or used to sustain nuclear fission in a
self-supporting chain reaction or to contain a critical mass of fissionable
material; with respect to injury to or destruction of property, the word “injury”
or “destruction” includes all forms of radioactive contamination of property;
“property damage” includes all forms of radioactive contamination of property.

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

	 	(i)	 	Garage and Automobile Policies issued by the Reassured on New York risks, or
	 
	 	(ii)	 	Statutory liability insurance required under Chapter 90,
General Laws of Massachusetts, until 90 days following approval of the Broad
Exclusion Provision by the Governmental Authority having jurisdiction thereof.

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

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

N.M.A. 1590

 

 

NUCLEAR INCIDENT EXCLUSION
CLAUSE — LIABILITY — REINSURANCE — CANADA

N.M.A. 1979

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

	2.	 	Without in any way restricting the operation of Paragraph 1. of this Clause, it is agreed
that for all purposes of this Agreement all the original liability Agreements of the Company,
whether new, renewal or replacement, of the following classes, namely,

Personal Liability

Farmers’ Liability

Storekeepers’ Liability

which become effective on or after 31st December 1984, shall be deemed to include, from their
inception dates and thereafter, the following provision:

Limited Exclusion Provision —

This Policy does not apply to bodily injury or property damage with respect to which the
Insured is also insured under a Agreement of nuclear energy liability insurance (whether the
Insured is unnamed in such Agreement and whether or not it is legally enforceable by the
insured) issued by the Nuclear Insurance Association of Canada or any other group or pool of
insurers or would be an Insured under any such policy but for its termination upon exhaustion
of its limits of liability.

With respect to property, loss of use of such property shall be deemed to be property damage.

	3.	 	Without in any way restricting the operation of Paragraph 1. of this Clause, it is agreed
that for all purposes of this Agreement all the original liability Agreements of the Company,
whether new, renewal or replacement, of any class whatsoever (other than Personal Liability,
Farmers’ Liability, Storekeepers’ Liability or Automobile Liability Agreements), which become
effective on or after 31st December 1984, shall be deemed to include, from their
inception dates and thereafter, the following provision:
	 
	 	 	Broad Exclusion Provision —
	 
	 	 	It is agreed that this Policy does not apply:

	 	(a)	 	to liability imposed by or arising under the Nuclear Liability Act; nor
	 
	 	(b)	 	to bodily injury or property damage with respect to which an Insured under this
Policy is also insured under a Agreement of nuclear energy liability insurance (whether
the Insured is unnamed in such Agreement and whether or not it is legally enforceable by
the Insured) issued by the Nuclear Association of Canada or any other insurer or group or
pool of insurers or would be an Insured under any such policy but for its termination
upon exhaustion of its limit of liability; nor
	 
	 	(c)	 	to bodily injury or property damage resulting directly or indirectly from the
nuclear energy hazard arising from:

	 	(i)	 	the ownership, maintenance, operation or use of a nuclear facility by or on behalf
of an Insured;

N.M.A. 1979

 

 

	 	(ii)	 	the furnishing of an Insured of services, materials, parts or equipment in
connection with the planning, construction, maintenance, operation or use of any nuclear
facility; and
	 
	 	(iii)	 	the possession, consumption, use, handling, disposal or transportation of
fissionable substances, or of other radioactive material (except radioactive isotopes,
away from a nuclear facility, which have reached the final stage of fabrication so as to
be usable for any scientific, medical, agricultural, commercial or industrial purpose)
used, distributed, handled or sold by an Insured.

     As used in this Policy:

	 	(1)	 	The term “nuclear energy hazard” means the radioactive, toxic, explosive, or other
hazardous properties of radioactive material;
	 
	 	(2)	 	The term “radioactive material” means uranium, thorium, plutonium,
neptunium, their respective derivatives and compounds, radioactive isotopes of other
elements and any other substances that the Atomic Energy Control Board may, by regulation,
designate as being prescribed substances capable of releasing atomic energy, or as being
requisite for the production, use or application of atomic energy;
	 
	 	(3)	 	The term “nuclear facility” means:

	 	(a)	 	any apparatus designed or used to sustain nuclear fission in a
self-supporting chain reaction or to contain a critical mass of plutonium, thorium
and uranium or any one or more of them;
	 
	 	(b)	 	any equipment or device designed or used for (i) separating the isotopes
of plutonium, thorium and uranium or any one or more of them, (ii) processing or
utilizing spent fuel, or (iii) handling, processing or packaging waste;
	 
	 	(c)	 	any equipment or device used for the processing, fabricating or alloying
of plutonium, thorium or uranium enriched in the isotope uranium 233 or in the
isotope uranium 235, or any one or more of them if at any time the total amount of
such material in the custody of the Insured at the premises where such equipment or
device is located consists of or contains more than 25 grams of plutonium or uranium
233 or any combination thereof, or more than 250 grams of uranium 235;
	 
	 	(d)	 	any structure, basin, excavation, premises or place prepared or used for
the storage or disposal of waste radioactive material; and includes the site on
which any of the foregoing is located, together with all operations conducted
thereon and all premises used for such operations.

	 	(4)	 	The term “fissionable substance” means any prescribed substance that is, or from
which can be obtained, a substance capable of releasing atomic energy by nuclear fission.
	 
	 	(5)	 	With respect to property, loss of use of such property shall be deemed to be property
damage.

N.M.A. 1979

 

 

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 Agreements 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.exv10w149

EXHIBIT
10.149

PROPERTY PER RISK EXCESS OF LOSS

REINSURANCE AGREEMENT

No. RAM Re BSGPX — 2006

EFFECTIVE JANUARY 1, 2006

between

LIBERTY MUTUAL INSURANCE COMPANY

Boston, Massachusetts

(with and on behalf of THE FIRST LIBERTY INSURANCE CORPORATION)

West Des Moines, Iowa

LIBERTY MUTUAL FIRE INSURANCE COMPANY

Boston, Massachusetts

LM INSURANCE CORPORATION

West Des Moines, Iowa

LIBERTY INSURANCE CORPORATION

South Burlington, Vermont

LIBERTY COUNTY MUTUAL INSURANCE COMPANY

Irving, Texas

(for business classified as LMIC Business Solutions Group,)

(hereinafter referred to as the “Company”)

and

PEERLESS INSURANCE COMPANY

Keene, New Hampshire

(herinafter referred to as the “Subscribing Reinsurer”)

Agreement No. RAM Re BSGPX — 2006

PRO06BSG01

 

 

PROPERTY PER RISK EXCESS OF LOSS REINSURANCE AGREEMENT No. RAM Re BSGPX — 2006

	 	 	 	 	 	 	 
	ARTICLE	 	CONTENTS	 	PAGE
	 

	 	PREAMBLE
	 	 	1	 
	I

	 	BUSINESS COVERED
	 	 	1	 
	II

	 	EFFECTIVE DATE AND TERMINATION
	 	 	2	 
	III

	 	TERRITORY
	 	 	2	 
	IV

	 	LIMIT AND RETENTION
	 	 	2	 
	V

	 	ULTIMATE NET LOSS
	 	 	3	 
	VI

	 	LOSS IN EXCESS OF POLICY LIMITS
	 	 	4	 
	VII

	 	EXTRA CONTRACTUAL OBLIGATIONS	 	 	 	 
	VIII

	 	DEFINITION OF RISK
	 	 	4	 
	IX

	 	EXCLUSIONS
	 	 	4	 
	X

	 	SPECIAL ACCEPTANCE
	 	 	6	 
	XI

	 	LOSS OCCURRENCE
	 	 	7	 
	XII

	 	REINSURANCE PREMIUM
	 	 	8	 
	XIII

	 	REPORTS AND REMITTANCES
	 	 	8	 
	XIV

	 	LOSS ADJUSTMENT AND SETTLEMENT
	 	 	9	 
	XV

	 	SALVAGE AND SUBROGATION
	 	 	9	 
	XVI

	 	ACCESS TO RECORDS
	 	 	9	 
	XVII

	 	DIVIDENDS AND TAXES
	 	 	11	 
	XVIII

	 	FEDERAL EXCISE TAX
	 	 	11	 
	XIX

	 	GOVERNING LAWS
	 	 	11	 
	XX

	 	CURRENCY
	 	 	11	 
	XXI

	 	OFFSET
	 	 	11	 
	XXII

	 	ERRORS OR OMISSIONS
	 	 	11	 
	XXIII

	 	INSOLVENCY
	 	 	12	 
	XXIV

	 	MEDIATION
	 	 	12	 
	XXV

	 	ARBITRATION
	 	 	13	 
	XXVI

	 	SPECIAL CONDITIONS
	 	 	15	 
	XXVII

	 	THIRD PARTIES
	 	 	17	 
	XXVIII

	 	UNAUTHORIZED REINSURANCE
	 	 	17	 
	XXVIX

	 	SERVICE OF SUIT
	 	 	18	 
	XXX

	 	CONFIDENTIALITY CLAUSE
	 	 	19	 
	XXXI

	 	AMENDMENTS
	 	 	20	 
	XXXII

	 	SEVERABILITY
	 	 	20	 
	XXXIII

	 	INTEREST PENALTY
	 	 	20	 
	XXXIV

	 	ASSIGNMENT
	 	 	21	 
	XXXV

	 	ENTIRE AGREEMENT
	 	 	21	 

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

Agreement No. RAM Re BSGPX — 2006

 

 

PROPERTY PER RISK EXCESS OF LOSS

REINSURANCE AGREEMENT

No. RAM Re BSGPX — 2006

(hereinafter referred to as the “Agreement”)

between

LIBERTY MUTUAL INSURANCE COMPANY

Boston, Massachusetts

(with and on behalf of THE FIRST LIBERTY INSURANCE CORPORATION

West Des Moines, Iowa

LIBERTY MUTUAL FIRE INSURANCE COMPANY

Wausau, Wisconsin

LM INSURANCE CORPORATION

West Des Moines, Iowa

LIBERTY INSURANCE CORPORATION

South Burlington, Vermont

LIBERTY COUNTY MUTUAL INSURANCE COMPANY

Irving, Texas

(for business classified as Business Solutions Group, only)

(hereinafter referred to as the “Company”)

and

PEERLESS INSURANCE COMPANY

Keene, New Hampshire

(herinafter referred to as the “Subscribing Reinsurer”)

ARTICLE 1 — BUSINESS COVERED

	A.	 	The Subscribing 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, 2006 and new and
renewal
Policies becoming effective on or after said date, for the Company’s Annual Statement Lines of
Business, subject to the terms and conditions contained herein.
	 
	B.	 	This Agreement is solely between the Company and the Subscribing Reinsurer, and nothing
contained in this Agreement shall create any obligations or establish any rights against the
Subscribing Reinsurer in favor of any person or entity not a party hereto.
	 
	C.	 	The term “Policies” shall mean each of the Company’s binders, policies and Agreements of
insurance or reinsurance on business classified by the Company as the Business Solutions Group
Profit Center, only, as defined in Appendix A — Definition of Profit Center..
	 
	D.	 	The Annual Statement Lines of Business shall mean the following lines of business written by
the
Company:

	 	 	 
	NAIC	 	 
	CODE:	 	LINES OF BUSINESS:
	 
	 	 
	01

	 	Fire
	02

	 	Allied Lines
	03

	 	Farmowners (Section I only)

					
	 	 	 	 	 
	Agreement No. RAM Re BSGPX — 2006
	 	1.
	 	 

 

 

	 	 	 
	NAIC	 	 
	CODE:	 	LINES OF BUSINESS:
	04

	 	Homeowners (Section 1 only)
	05

	 	Commercial Multiple Peril (Section 1 only)
	06

	 	Mobile Homeowners (Section 1 only)
	09

	 	Inland Marine
	12

	 	Earthquake
	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, 2006, and shall remain in full force until terminated. Subject
to
Article XXVI — 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 Subscribing
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 Subscribing Reinsurer shall be liable for the losses
occurring prior to the date of termination; however, the Subscribing 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 Subscribing 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 111 — TERRITORY

The territorial limits of this Agreement shall be identical with those of the Company’s Policies.

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 Company’s retention and the Subscribing Reinsurer’s limit of liability for each Risk,
each Loss
Occurrence, set forth in Section 1 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 the Company 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 Company’s retention thereon shall be apportioned to each Property and Casualty loss in the
same proportion that the Company’s Ultimate Net Loss for each such Property and Casualty loss
bears to the Company’s combined Ultimate Net Loss from both losses. The Subscribing Reinsurer

					
	 	 	 	 	 
	Agreement No. RAM Re BSGPX — 2006
	 	2.
	 	 

 

 

	 	 	shall reimburse the Company for the difference between the Company’s first (respective
retention as stated in Section 1 of each Exhibit) Ultimate Net Loss under each Property and
Casualty loss and the Company’s pro rated retention on each Property and Casualty loss.
	 
	D.	 	Reinsurance of the Company’s retention, set forth in each Exhibit, shall not be deducted
in arriving at the Company’s Ultimate Net Loss herein.

ARTICLE V — ULTIMATE NET LOSS

The term “Ultimate Net Loss” as used in this Agreement shall mean: (1) all amounts paid or due
and payable by the Company in the investigation, appraisal, adjustment, settlement, litigation,
defense or appeal, or payment of claims or judgments arising from each and every loss, and/or
Loss Occurrence for which the Company is or may be found liable under the Policies, less salvages
and subrogation recoveries and amounts recovered or recoverable under pooling agreements or other
reinsurances, whether collectible, or not “Ultimate Net Loss” includes, but is not limited to,
the following paid or due and payable amounts: loss adjustment expenses, defense costs, court
costs, supersedeas and appeal bond costs, Post or Prejudgment Interest and Delayed Damages,
Attorneys Fees and Expenses, Claim-Specific Declaratory Judgment Expenses, a pro rata share of
salaries and expenses of the Company’s field employees according to the time occupied in
adjusting, defending, and settling such loss, and expenses of all of the Company’s officers and
employees incurred in connection with the loss; (except that salaries of officers and employees
engaged in general management and located in the home office of the Company and any office
expense of the Company shall not be included), and all other costs of investigation or
litigation, (2) Extra Contractual Obligations (as defined in the Extra Contractual Obligations
Article, and (3) loss in excess of original Policy limits (as described in the Loss in Excess of
Original Policy Limits Article).

“Claim-Specific Declaratory Judgment Expenses” shall be defined as fees and expenses incurred in
actions brought to determine whether the Company has a defense and/or indemnification obligation
for individual claims presented against Policies covered under this Agreement. Any Claim-Specific
Declaratory Judgment Expense shall be deemed to have been fully incurred on the same date as the
insured’s original loss (if any) giving rise to the action, unless otherwise provided for within
this Agreement.

The term “Attorneys’ Fees and Expenses” as used above, means the fees and expenses of attorneys,
including the fees and expenses of the Company’s in-house attorneys providing legal advice on
coverage questions and/or defending the Company in coverage litigation, and fees and expenses of
staff counsel in the defense of policyholder claims. Such Attorneys’ Fees and Expenses for
in-house attorneys and staff counsel shall be calculated at the rate for such attorneys plus the
expenses incurred by such attorneys, but excluding office expenses of the Company and salaries and
expenses of its other employees.

“Post or Prejudgment Interest or Delayed Damages” shall mean interest or damages added to a
settlement, verdict, award, or judgment based on the period of time prior to or after the
settlement, verdict, award, or Judgment whether or not made part of the settlement, verdict,
award, or judgment.

Nothing in this Article shall be construed to mean that losses under this Agreement are not
recoverable until the Company’s Ultimate Net Loss has been ascertained. In the event a verdict or
judgment is reduced by an appeal or a settlement subsequent to the entry of the judgment, thereby
resulting in an ultimate saving on such verdict or judgment, or in the event a judgment is
reversed outright, the loss adjustment expense incurred in securing such final reduction or
reversal shall be prorated between the Reinsurers and the Company in the proportion that each
benefits from such reduction or reversal, and the expenses incurred up to the time of the original
verdict or judgment shall be added to the Ultimate Net Loss. In the event there is no reduction or
reversal of a verdict or judgment, the loss adjustment expense incurred in attempting to secure
such reduction or reversal shall be added to the Ultimate Net Loss

					
	 	 	 	 	 
	Agreement No. RAM Re BSGPX — 2006
	 	3.
	 	 

 

 

ARTICLE VI —  LOSS IN EXCESS OF POLICY LIMITS

This Agreement shall protect the Company within the limits hereof, for 90% of any Loss in excess
of the Company’s original Policy limit where Loss in excess of the limit has been incurred
because of a failure by the Company or by a third-party claims administrator 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 defending or prosecuting litigation, including appeals, arbitration, or
any alternative dispute resolution or settlement discussions involving any claim.

However, the above paragraph 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.

With regard to excess of Policy limits, the word “Loss” shall mean any amounts for which the
Company would have been contractually liable to pay had it not been for the limit of the original
Policy. The date on which any Loss in excess of the Company’s original Policy limit is incurred by
the Company shall be deemed, in all circumstances, to be the date of the original Occurrence,
accident, casualty, disaster, loss occurrence or loss, as selected by the Company.

ARTICLE VII — EXTRA CONTRACTUAL OBLIGATIONS

This Agreement shall protect the Company within the limits hereof for 90% of Extra Contractual
Obligations. “Extra Contractual Obligations” are defined as those liabilities not covered under
any other provision of this Agreement, 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 or by a third party claims administrator 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 defending or prosecuting litigation, including appeals, arbitration, or any alternative dispute
resolution or settlement discussions involving any claim.

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

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

ARTICLE VIII — DEFINITION OF RISK

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

ARTICLE IX — EXCLUSIONS

THIS AGREEMENT DOES NOT COVER:

					
	 	 	 	 	 
	Agreement No. RAM Re BSGPX — 2006
	 	4.
	 	 

 

 

	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 intercompany reinsurance.
	 
	 	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.

					
	 	 	 	 	 
	Agreement No. RAM Re BSGPX — 2006
	 	5.
	 	 

 

 

	 	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.
	 
	 	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.
	 
	E.	 	Business classified as multi-state business written on behalf of other Profit Centers
as defined in
Appendix A  —  Definition of Profit Center.

ARTICLE X — SPECIAL ACCEPTANCE

					
	 	 	 	 	 
	Agreement No. RAM Re BSGPX — 2006
	 	6.
	 	 

 

 

	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.
	 
	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.

					
	 	 	 	 	 
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	C.	 	However, as respects those Loss Occurrences referred to in 1. and 2. above, if the disaster,
accident
or loss occasioned by the event is of greater duration than 72 consecutive hours, 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
Company’s Subject Earned Premium for all classes of Business Covered hereunder, as stated in
Paragraph D. of Article I - Business Covered, however the Company’s Subject Earned Premium shall
not included multi-state business.

	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 Subscribing 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:

	 	 	 	 	 
	SEP LOB	 	Percentage
	051 — CMPP
(Includes BOP @ 65%)
	 	 	100	%
	Other CL Property
	 	 	100	%
	010 — CL Fire
	 	 	 	 
	020 — CL Allied
	 	 	 	 
	090 — CL Inland Marine
	 	 	 	 
	120 — CL Earthquake
	 	 	 	 
	260 — CL B&T
	 	 	 	 

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

ARTICLE XIII — REPORTS AND REMITTANCES

	A.	 	The Company shall furnish the Subscribing 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.

					
	 	 	 	 	 
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	B.	 	Quarterly Deposit Premiums equal to 1/4 of the 100% of Annual Deposit Premium will be
remitted on January 15, May 15, August 15 and November 15, according to the schedule below.
The Company shall submit finalized accounts to the Subscribing Reinsurer on February 15, of
the subsequent year, summarizing the actual subject earned premium for the previous Agreement
Year. 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. However, in no event shall the
annual adjusted premium be less than the Annual Minimum Premium for each layer, set forth
below:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	SEP LOB	 	Deposit	 	 	Minimum	 	 	Quarterly	 
	CMPP
	 	$	392,738	 	 	$	314,191	 	 	$	98,185	 
	Other CL Property
	 	$	7,558	 	 	$	6,046	 	 	$	1,889	 
	 
	 	 	 	 	 	 	 	 	 
	Total
	 	$	400,296	 	 	$	320,237	 	 	$	100,074	 

	C.	 	Payment by the Subscribing Reinsurer of its portion of loss and Loss Adjustment Expenses
paid by the Company shall be made by the Subscribing Reinsurer to the Company immediately
upon reasonable evidence of the amount due or to be deemed being furnished by the Company.

ARTICLE XIV — LOSS ADJUSTMENT AND SETTLEMENT

The Company shall give notice, as soon as practicable, to the Subscribing Reinsurer of any claim
that it has reason to believe could involve this Agreement. The Company shall keep the
Subscribing Reinsurer informed of significant 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
Subscribing Reinsurer is interested as, in the Company’s judgment, may be beneficial or expedient
to the Company and the Subscribing Reinsurer. The Company shall be the sole judge as to what
claims are covered under its Policies. All of the Company’s Ultimate Net Loss (and loss
occurrences), as well as all loss settlements made and judgments paid by the Company, provided
they are within the terms of this Agreement either under the strict conditions of the Company’s
Policies or by way of compromise, shall be unconditionally binding upon the Subscribing Reinsurer,
who agrees to pay all amounts for which they are liable immediately upon reasonable evidence of
the amount due being furnished to the Subscribing Reinsurer by the Company. The true intent of
this Agreement is that the Subscribing Reinsurer shall, in every case to which this Agreement
applies, follow the settlements of the Company.

ARTICLE XV — SALVAGE AND SUBROGATION

The Reinsurers shall be credited with their share of salvage and/or subrogation in respect of
claims and settlements under this Agreement, less their share of recovery expense. Unless the
Company and Reinsurers agree to the contrary, the Company shall enforce its right to salvage
and/or subrogation and shall prosecute all claims arising out of such right. Should the Company
refuse or neglect to enforce this right, the Reinsurers are hereby empowered and authorized to
institute appropriate action in the name of the Company.

Amounts recovered from salvage and/or subrogation shall always be used to reimburse the excess
Reinsurers (and the Company, should it carry a portion of excess coverage net) in the reverse
order of their participation in the loss before being used in any way to reimburse the Company for
its primary loss. If the amount recovered exceeds the recovery expense, the recovery expense shall
be borne by each party in proportion to its benefit from the recovery. If the recovery expense
exceeds the amount recovered, the amount recovered (if any) shall be applied to the reimbursement
of recovery expense and the remaining expense, as well as any originally incurred loss expense,
shall be added to the Ultimate Net

					
	 	 	 	 	 
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Loss. If no amount is recovered from salvage and/or subrogation, the expense incurred in
attempting such recovery shall be deemed loss expense and shall be added to the Ultimate Net
Loss.

ARTICLE XVI — ACCESS TO RECORDS

Except as otherwise provided in this Article, the Subscribing Reinsurer, or its duly authorized
representative, may upon reasonable prior written notice to the Company, at Subscribing
Reinsurer’s own expense, examine at the offices of the Company, during normal office hours, the
Company’s Policy, accounting, underwriting, or claim records and files, or any such additional
relevant records and files, as they exist in the Company’s possession or reasonable control,
relating to business ceded under this Agreement. The Subscribing Reinsurer’s notice shall
reasonably describe the nature of the inspection that it wishes to conduct, the persons
conducting the inspection and upon notice of available files from the Company, the files that it
wishes to review. Subject to the limitations expressed in this Article, this right of inspection
shall survive termination or expiration of this Agreement and shall continue as long as either
Party has any rights or obligations under this Agreement.

The Company reserves the right to deny the Subscribing Reinsurer access to records or files
concerning any particular claim(s) if the Subscribing Reinsurer has not disputed liability for
payment of such claim(s), and payment of such claim(s) is more than ninety (90) days overdue
according to the Company’s records. The Company shall, however, prior to an arbitration demand
that may be instituted by either party, continue to respond to reasonable specific requests for
information and questions raised by the Subscribing Reinsurer concerning such claims; and nothing
in this Article shall restrict the right or ability of the Subscribing Reinsurer to seek
discovery of relevant information in an arbitration proceeding pursuant to the Arbitration
Article of this Agreement.

As a condition precedent to access to records under this Article, the Subscribing Reinsurer, its
personnel and any authorized third party representative of the Subscribing Reinsurer shall agree
to the provisions of the Confidentiality Article of this Agreement.

The Company reserves the right to withhold any documents from Subscribing Reinsurer (a) concerning
Trade Secrets of the Company, (b) subject to the terms of a third party non-disclosure agreement
with the Company requiring third party consent to disclosure, (c) subject to the Work Product
Privilege or Attorney-Client Privilege or (d) concerning individual private information that as a
matter of law cannot be disclosed by the Company (hereinafter referred to in the Agreement as
“Privileged Documents”). The Company shall reasonably try to exempt the Reinsurers from any third
party non-disclosure agreement or obtain consent from the third party to disclose to the
Subscribing Reinsurer.

Notwithstanding the foregoing, the Company shall permit and not object to the Subscribing
Reinsurer’s access to Privileged Documents in connection with the underlying claim reinsured
hereunder following final settlement or final adjudication of the case or cases involving such
claim, with prejudice against all claimants, and all parties to such adjudications; provided that
the Company, may defer release of such Privileged Documents if there are subrogation,
contribution, or other third party actions with respect to that claim or case, which might
jeopardize the Company’s defense by release of such Privileged Documents. In the event that the
Company shall seek to defer release of such Privileged Documents, it will in consultation with
the Subscribing Reinsurer take other steps as reasonably necessary to provide the Subscribing
Reinsurer with the information it reasonably requires to indemnify the Company without causing a
loss of such privileges. The Subscribing Reinsurer, however, shall not have access to Privileged
Documents relating to any dispute between the Company and the Subscribing Reinsurer.

For purposes of this Article, “Trade Secrets” shall have the meaning provided in Section 1839 of
the United States Economic Espionage Act of 1996. “Attorney-Client Privilege” shall mean
communications of a confidential nature between a) the Company, or anyone retained or in the
control of the Company, or its in-house or outside legal counsel, or anyone in the control of such
legal counsel, and b) any in-house or

					
	 	 	 	 	 
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outside legal counsel which relate to legal advice being sought by the Company and/or which
contains legal advice being provided to the Company. “Work Product Privilege” shall mean
communications, written materials and tangible things prepared by or for in-house or outside
counsel, or prepared by or for the Company, in anticipation of or in connection with litigation,
arbitration, or other dispute resolution proceedings.

ARTICLE XVII — DIVIDENDS AND TAXES

In consideration of the terms of this Agreement, the Company shall not claim any deduction in
respect of any amount paid as dividends or as reinsurance premium when making tax returns, other
than income or profits tax returns to any State or to the District of Columbia.

ARTICLE XVIll — FEDERAL EXCISE TAX

This Article is applicable to any Subscribing Reinsurer who is domiciled outside of the United
States of America, except for any Subscribing Reinsurer exempt from Federal Excise Tax. A
Subscribing Reinsurer that claims exempt status from Federal Excise Tax shall provide to the
Company, upon its request, proof that the exempt status adequately satisfies the demands of the
U.S. Internal Revenue Agency and/or other applicable U.S. government authority.

Each Subscribing Reinsurer shall allow the applicable percentage of the premium payable hereon (as
imposed under Section 4371 of the Internal Revenue Code) for the purpose of paying Federal Excise
Tax to the extent such premium is subject to such tax.

In the event of any return of premium, the Subscribing 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 XIX — GOVERNING LAW

The validity and interpretation of this Agreement shall be governed by and construed in accordance
with the law of the State of New Hampshire.

ARTICLE XX — CURRENCY

Whenever a reference to a monetary currency appears in this Agreement, it shall be construed to
mean United States Dollars (“USD”). However, in those cases where the Policies are issued by the
Company using Canadian Dollars (“CAD”), it shall mean Canadian Dollars. All payments made by
either party shall be made in United States Dollars except that payments made involving Policies
issued using Canadian Dollars shall be made in Canadian Dollars.

ARTICLE XXI — 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(s) due the other (or, if more than one, any
other). Such offset may include balances due under this Agreement, and any other agreements
between the parties, whether such balances arises from premium, losses, or otherwise, and
regardless of the capacity of any party, whether as assuming and/or ceding insurer, under the
various reinsurance agreements involved, provided

					
	 	 	 	 	 
	Agreement No. RAM Re BSGPX — 2006
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however, that in the event of insolvency of a party hereto, offsets shall only be allowed in
accordance with the provisions of the applicable law, statute, or regulation governing such
offset.

ARTICLE XXII — ERRORS AND OMISSIONS

Any inadvertent delay, omission, or error in complying with the terms and conditions of this
Agreement shall not be held to relieve either party hereto from any liability, which would attach
to it hereunder if such delay, omission, or error had not been made, provided such delay,
omission, or error is rectified upon discovery.

ARTICLE XXIII — INSOLVENCY

(If more than one reinsured company is referenced within the definition of “Company” in the
Preamble to this Agreement, this Article shall apply severally to each such company. Further,
this Article and the laws of the domiciliary state shall apply in the event of the insolvency of
any company intended to be covered hereunder. In the event of a conflict between any provision of
this Article and the laws of the domiciliary state of any company intended to be covered
hereunder, that domiciliary state’s laws shall prevail.)

In the event of the insolvency of the Company, reinsurance under this Agreement shall be payable
on demand, with reasonable provision for verification, on the basis of claims allowed against the
insolvent Company by any court of competent jurisdiction or by any liquidator, receiver,
conservator, or statutory successor of the Company having authority to allow such claims, without
diminution because of such insolvency or because such liquidator, receiver, conservator, or
statutory successor has failed to pay all or a portion of any claims. Such payments by the
Subscribing Reinsurer shall be made directly to the Company or its liquidator, receiver,
conservator, or statutory successor, except to the extent Section 4118(a) of the New York
Insurance Law applies, or except (a) where the Agreement specifically provides another payee of
such reinsurance in the event of the insolvency of the Company, or (b) where the Subscribing
Reinsurer with the consent of the direct insured or insureds has assumed such Policy obligations
of the Company as direct obligations of the Subscribing Reinsurer to the payees under such
Policies and in substitution for the obligations of the Company to such payees.

It is agreed, however, that the liquidator, receiver, conservator, or statutory successor of the
insolvent Company shall give written notice to the Subscribing Reinsurer of the pendency of a
claim against the insolvent Company on the Policy or Policies reinsured within a reasonable time
after such claim is filed in the insolvency proceeding and that during the pendency of such claim
the Subscribing Reinsurer may investigate such claim and interpose, at its own expense, in the
proceeding where such claim is to be adjudicated, any defense or defenses which it may deem
available to the Company or its liquidator, receiver, conservator, or statutory successor. The
expense thus incurred by the Subscribing 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 Subscribing Reinsurer.

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

ARTICLE XXIV — MEDIATION

	A.	 	In the event of any dispute or difference of opinion arising out of or relating to this
Agreement, including but not limited to the formation, interpretation, performance or breach
of this Agreement, whether such dispute arises before or after the expiration of this
Agreement, the Company and the

					
	 	 	 	 	 
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	 	 	Subscribing Reinsurer may mutually agree in writing that, prior to proceeding with
arbitration, they will submit such dispute or difference of opinion to non-binding mediation
which will be held at a location mutually agreed by the parties.
	 
	B.	 	Each party shall submit a list of not more than four (4) potential mediators to the other
party within
the fourteen (14) days of reaching such mutual agreement. The two parties shall then agree on
the
appointment on one (1) mediator from the combined lists within seven (7) days. The mediator
shall
be a neutral, impartial third party, without past employment or directorial relationships with
the parties
to the mediation. Such mediator shall make full disclosure of all past partisan relationships
with either
the Company or Subscribing Reinsurer to the parties within seven (7) days of his or her
notification
that he or she has been selected as a Mediator.
	 
	C.	 	If the Company and the Subscribing Reinsurer cannot agree on a mediator within twenty one
(21)
days from the date of a mutual agreement to mediate, then arbitration proceedings may commence
in accordance with the Arbitration Article.
	 
	D.	 	The mediator will schedule an initial mediation session within thirty (30) days of his or her
appointment and will be responsible for the formulation of an agenda to be distributed to the
parties
involved in the mediation not less than five (5) days before the mediation commences.
	 
	E.	 	The mediator will not have the power of enforcement of any agreement between the parties nor
will
the mediator have any right to assess any damages, including punitive damages, to either party
participating in the mediation.
	 
	F.	 	If, in the opinion of the mediator, the parties cannot resolve the dispute or difference of
opinion,
Arbitration proceedings may commence in accordance with the Arbitration Article. In any event,
the
mediation shall conclude within sixty (60) days of its referral to the mediator. Should the
mediation
not be resolved in sixty (60) days, then arbitration proceedings may commence in accordance
with
the Arbitration Article.
	 
	G.	 	Each party shall bear the expense of its own representatives and shall jointly and
equally bear with the other party the expenses of the mediator and the place of mediation.

ARTICLE XXV — ARBITRATION

	A.	 	Disputes to be Arbitrated. With the exception of any dispute resolution procedures
regarding
commutation that are otherwise contained in this Agreement and any mutual agreement to
initially
mediate any dispute pursuant to the Mediation Article, any and all disputes between the
Company
and any Subscribing Reinsurer or Reinsurers (“Party” individually or “Parties” collectively)
arising out
of, relating to, or concerning this Agreement, whether sounding in contract or tort and
whether arising
during or after this Agreement’s formation, or after its termination, including disputes as to
whether
the Agreement was validly formed or is voidable, shall be submitted to the decision of an
arbitration
panel (“Panel”). The Panel shall consist of an umpire and two party-appointed arbitrators
unless a
Party meets the requirements of Paragraph C of this Article and demands arbitration pursuant
thereto, in which case the Panel would consist of an umpire only.
	 
	B.	 	Procedures. Except as provided herein, any arbitration shall be based upon the
Procedures for the
resolution of U.S. Insurance and Reinsurance Disputes, Regular Panel Version, dated April 2004
(the
“Procedures”), developed by the Insurance and Reinsurance Dispute Resolution Task Force,
subject
to the following modifications:

	 	1.	 	Qualifications of the arbitrators and umpires shall be in accordance with
Alternative section 6.2 of the Procedures.

					
	 	 	 	 	 
	Agreement No. RAM Re BSGPX — 2006
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	 	2.	 	The Parties hereby designate the umpire list maintained by ARIAS (U.S.) as the list to be
used
in the event that section 6.7(a) of the Procedures is invoked.
	 
	 	3.	 	Unless otherwise mutually agreed, the members of the Panel shall be impartial
and
disinterested. The members of the Panel may not be: (1) in the control of any Party or its
parent, affiliate, or agent, (2) a former director or officer of any Party or its parent,
affiliate, or
agent, or (3) a likely witness in the arbitration. The requirement of impartiality means
that all
members of the Panel shall have the same obligation to approach the Panel’s duties and
decisions with fairness and without consideration for the fact that Panel members may have
been appointed by one of the Parties. The requirement of impartiality does not mean that any
arbitrator can have no previous knowledge of or experience with respect to issues involved
in
the dispute or disputes.
	 
	 	4.	 	The first sentence of Section 10.4 of the Procedures shall be replaced by the following
sentence: “The Panel shall require that each Party submit concise written statements of
position, including summaries of the facts and evidence a Party intends to present,
discussion
of the applicable law and the basis for the requested Award or denial of relief sought.”
	 
	 	5.	 	Once the Panel has been constituted, no Party (or anyone acting for a Party) shall have any
communications concerning the arbitration or any of the issues before the Panel with any
member of the Panel that is not also disclosed to all other Parties and all members of the
Panel. Each Panel member shall have a continuing duty to disclose promptly to all Parties
and all Panel members any violation of this prohibition and the specifics of any improper
communications that occurred. This prohibition shall remain in place until all challenges
to any arbitration awards and decisions have been either waived or finally concluded.
	 
	 	6.	 	Section 11.1 of the Procedures shall be replaced by the following provision: “The
Parties may
propound discovery seeking disclosure of such information and/or documents relevant to the
dispute or necessary for the proper resolution of the dispute.”
	 
	 	7.	 	Position statements may be amended at any reasonable time, but not later than the close
of
discovery without a showing to the Panel that the amending Party could not reasonably have
raised the new claim or issue at an earlier time.
	 
	 	8.	 	The Panel shall hold an evidentiary hearing, if one is necessary, within one year of
the
arbitration demand, unless the Parties otherwise agree. Should a Party seek a reasonable
extension to this time frame for good cause shown, the other Party’s agreement shall not be
unreasonably withheld.
	 
	 	9.	 	To the extent permitted by the law, the Panel shall have the authority to issue
subpoenas and
other orders to enforce its decisions.
	 
	 	10.	 	The Panel may award reasonable attorneys’ fees and arbitration costs to the
prevailing Party, as
determined by the Panel.
	 
	 	11.	 	Section 14.3 of the Procedures shall be replaced by the following provision: “The
Panel shall
make a decision and issue an award with regard to the terms expressed in this Agreement, and
the custom and practice of the property and casualty insurance and reinsurance business. The
Panel shall not be obligated to follow the strict rules of law and evidence.”

					
	 	 	 	 	 
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	C.	 	Alternative Streamlined Procedures. Notwithstanding the foregoing provisions of
this Article, the
Alternative Streamlined Procedures set forth in section 16 of the Procedures, as modified by
sections
B3, B4, and B9 through B11 of this Article, shall apply in the event that, in a consolidated
proceeding
or otherwise, the Party initiating arbitration is seeking payment of a total amount that is no
greater
than one million dollars ($1,000,000), or the currency equivalent thereof. Sections 16.1,
16.2, 16.3
and the second sentence of section 16.4 of the Alternative Streamlined Procedures shall not
apply.
The Parties agree to comply with section 6.7 of the Procedures to appoint a single umpire, and
hereby designate the umpire list maintained by ARIAS (U.S.) as the list to be used in section
6.7(a).
	 
	D.	 	Hearing Location. The hearing shall be held in Boston, Massachusetts, unless the
Parties mutually
agree to a different location.
	 
	E.	 	Confirmation. Either Party may apply to a court of competent jurisdiction for an
order confirming any award of the Panel; a judgment of that court shall thereupon be entered
on any award. If such an order is issued, the Party against whom confirmation is sought
shall pay the attorneys’ fees incurred of the Party who applied for the confirmation order
and all court costs of any such proceeding.
	 
	F.	 	Equitable Relief from a Court of Law. Nothing herein shall be construed to prevent
any participating
Party from applying to a court of competent jurisdiction to issue a restraining order or other
equitable
relief to maintain the “status quo” of the Parties participating in the arbitration pending the
decision
and award by the Panel.
	 
	G.	 	Consolidated Proceedings.

	 	1.	 	Same agreement, single Subscribing Reinsurer. Both the Company and any single
Subscribing
Reinsurer on this Agreement have the right to combine any and all disputes between them
that
concern this Agreement (including any renewal of this Agreement or any agreement for which
this
Agreement is a renewal) into a single arbitration proceeding before a single Panel, except
that the
standard for determining whether a Party may add a new issue, claim, or dispute to an
arbitration
proceeding shall be the standard for amending a Position statement, as set forth in
Paragraph B7
of this Article.
	 
	 	2.	 	Multiple agreements, single Subscribing Reinsurer. The Company has the right to
combine any
and all disputes between the Company and a single Subscribing Reinsurer into a single
arbitration
proceeding before a single Panel where such disputes involve this Agreement and any
additional
agreements between the two Parties, except that the standard for determining whether a
Party
may add a new issue, claim, or dispute to an arbitration proceeding shall be the standard
for
amending a Position statement, as set forth in Paragraph B7 of this Article.
	 
	 	3.	 	Same agreement, multiple Reinsurers. At the Company’s option, if more than one
Subscribing
Reinsurer is involved in arbitration relating to this Agreement, where there are common
questions
of law or fact and a possibility of conflicting awards or inconsistent results, 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 Party; provided,
however,
that the Reinsurers shall have the right to assert several, rather than joint defenses or
claims, and
to be represented by separate counsel. This provision shall not change the liability of
each of the Reinsurers under the terms of this Agreement from several to joint.

	H.	 	Choice of Law. The law set forth in the Governing Law Article shall apply to this
Arbitration Article. In addition, to the extent the Panel (or the umpire in an Alternative
Streamlined Procedure) looks to applicable law, such Panel or umpire shall apply the law as
set forth in the Governing Law Article of this Agreement.

	I.	 	Survival of Article. This Article shall survive the termination or
expiration of this Agreement.

					
	 	 	 	 	 
	Agreement No. RAM Re BSGPX — 2006
	 	15.
	 	 

 

 

ARTICLE XXVI — SPECIAL CONDITIONS

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

	A.	 	A State Insurance Department or other legal authority orders the Subscribing Reinsurer to
cease
writing business; or
	 
	B.	 	The Subscribing 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 Subscribing Reinsurer’s policyholders’ surplus has been reduced by 25% of the amount of
surplus
at the inception of this Agreement; or
	 
	D.	 	The Subscribing 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; or
	 
	E.	 	The Subscribing Reinsurer’s A.M. Best Rating has been assigned or downgraded below A- or
Standard and Poor’s Counterparty Credit and Financial Strength rating has been assigned or
downgraded below A-.

The coverage afforded by this Agreement shall cease as of the date of termination and the
Subscribing Reinsurer shall return the unearned premium, if any. If coverage hereunder terminates
while a claim covered by this Agreement is in progress, the Subscribing 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 elects to terminate this Agreement, the Company shall have the option to commute
the Subscribing Reinsurer’s liability for loss(es), whether reported or unreported, comprising
the sum total of the present value of the ceded (1) case reserves and allocated loss adjustment
expense, (2) projected ultimate losses, (3) any unearned premium reserve, and (4) undiscounted
outstanding paid claims (hereinafter the “Commutation Losses”), on Policies covered by this
Agreement as of the effective date of termination.

	A.	 	The Company shall submit a statement of valuation showing the elements considered
reasonable to establish the Commutation Losses, and the Subscribing Reinsurer shall pay the
amount requested. In the event the Company and the Subscribing Reinsurer cannot agree on the
statement of valuation of the Subscribing 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 Commutation Loss (es) within 30 days. As used herein,
“capitalize” shall mean to determine the present value of Commutation Losses, without regard
to the Subscribing Reinsurer’s ability to pay such losses. The panel shall meet in Boston
Massachusetts, unless the Company and Subscribing Reinsurer agree otherwise.

					
	 	 	 	 	 
	Agreement No. RAM Re BSGPX — 2006
	 	16.
	 	 

 

 

	B.	 	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.
	 
	C.	 	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 Commutation
Loss(es),
the Company shall have no obligation to commute. In the event the Company does not agree with
the capitalized value of the Commutation Loss(es) and does not move forward with commutation,
the expense of the actuaries [including reasonable expense of the actuary appointed by the
Subscribing Reinsurer] will be paid by the Company. If the Agreement is commuted, payment by
the Subscribing Reinsurer to the Company or any other third party mutually agreed upon by the
Subscribing Reinsurer and the Company shall constitute a complete and final release of the
Subscribing Reinsurer in respect to its liability under this Agreement.
	 
	Termination under the
terms of this Article can be made after the date of expiration of this Agreement.

ARTICLE XXVII — THIRD PARTIES

This Agreement shall not be deemed to give any right or remedy to any third party whatsoever
unless said right or remedy is specifically granted to such third party by the terms of this
Agreement.

ARTICLE XXVIII — UNAUTHORIZED REINSURANCE

(Applies only to a Subscribing Reinsurer who does not qualify for full credit with any insurance
regulatory authority having jurisdiction over the Company’s reserves.)

As regards Policies or bonds issued by the Company coming within the scope of this Agreement, the
Company agrees that when it shall file with the insurance regulatory authority or set up on its
books reserves for unearned premium and losses covered hereunder which it shall be required by law
to set up, it will forward to the Subscribing Reinsurer a statement showing the proportion of such
reserves which is applicable to the Subscribing Reinsurer. The Subscribing Reinsurer hereby agrees
to fund such reserves in respect of unearned premium, known outstanding losses that have been
reported to the Subscribing Reinsurer and allocated loss adjustment expense relating thereto,
losses and allocated loss adjustment expense paid by the Company but not recovered from the
Subscribing Reinsurer, plus reserves for losses  incurred but not reported as determined by the Company, as shown in the statement prepared by the
Company (hereinafter referred to as “ Subscribing Reinsurer Obligations”) by Letters of Credit
unless the method of funding is determined by applicable law, statute, or regulation.

The Subscribing Reinsurer agrees to apply for and secure timely delivery to the Company of clean,
irrevocable, and unconditional Letters of Credit issued by a bank that is a qualified U.S.
financial institution and containing provisions acceptable to the insurance regulatory authorities
having jurisdiction over the Company’s reserves in an amount equal to the Subscribing Reinsurer’s
proportion of said reserves. At the Company’s request, Subscribing Reinsurer will agree to provide
separate Letters of Credit for any distinct legal entities within the Company covered under this
Agreement. Such Letters 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 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 Letters of Credit extended for any
additional period.

					
	 	 	 	 	 
	Agreement No. RAM Re BSGPX — 2006
	 	17.
	 	 

 

 

The Subscribing Reinsurer and Company agree that the Letters of Credit provided by the
Subscribing Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any time,
notwithstanding any other provision of this Agreement, and be utilized by the Company or any
successor, by operation of law, of the Company, including without limitation, any liquidator,
rehabilitator, receiver, or conservator of the Company, without diminution because of the
insolvency of the Company or the Subscribing Reinsurer for one or more of the following purposes:

	A.	 	To reimburse the Company for the Subscribing Reinsurer’s share of premiums returned to the
owners
of Policies reinsured under this Agreement because of cancellations of the Policies;
	 
	B.	 	To reimburse the Company for the Subscribing Reinsurer’s share of surrenders and benefits or
losses
paid by the Company under provisions of the Policies reinsured under this Agreement;
	 
	C.	 	To fund an account with the Company in an amount, at least, equal to the deduction for
reinsurance
ceded from the Company liabilities for Policies ceded under this Agreement. The account shall
include, but not be limited to, amounts for Policy reserves, claims and losses incurred
(including
losses incurred but not reported), loss adjustment expenses, and unearned premium reserves; and
	 
	D.	 	To pay any other amounts the Company claims are due under this Agreement.

The issuing bank shall have no responsibility whatsoever in connection with the propriety of
withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that
withdrawals are made only upon the order of properly authorized representatives of the Company.

At annual intervals or more frequently as agreed, but never more frequently than quarterly, the
Company shall prepare a specific statement of the Subscribing Reinsurer’s Obligations, for the
sole purpose of amending the Letters of Credit, in the following manner:

	A.	 	If the statement shows that the Subscribing Reinsurer’s Obligations exceed the balance of
credit as of the statement date, the Subscribing Reinsurer shall, within 30 days after
receipt of notice of such excess, secure delivery to the Company of an amendment to the
Letters of Credit increasing the amount of credit by the amount of such difference.

	B.	 	If, however, the statement shows that the Subscribing Reinsurer’s Obligations are less
than the balance of credit as of the statement date, the Company shall, within 30 days after
receipt of written request from the Subscribing 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.

ARTICLE XXVIX — SERVICE OF SUIT

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

This Service of Suit Article will 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.

					
	 	 	 	 	 
	Agreement No. RAM Re BSGPX — 2006
	 	18.
	 	 

 

 

In the event of the failure of the Subscribing Reinsurer to pay any amount claimed to be due
hereunder, the Subscribing Reinsurer, at the request of the Company, will submit to the
jurisdiction of a Court of competent jurisdiction within the United States. Nothing in this
Article constitutes or should be understood to constitute a waiver of the Subscribing Reinsurer’s
right 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
Subscribing Reinsurer, once the appropriate Court is selected, whether such court is the one
originally chosen by the Company and accepted by the Subscribing Reinsurer or is determined by
removal, transfer, or otherwise, as provided for above, will comply with all requirements
necessary to give said Court jurisdiction and, in any suit instituted against any of them upon
this Agreement, will 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
Subscribing 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 Subscribing Reinsurer hereby
designates the Superintendent, Commissioner, or Director of Insurance, or other officer specified
for that purpose in the statute, or their successor(s) 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 XXX — CONFIDENTIALITY CLAUSE

Confidential Information. The submission materials, and any Policy, financial,
underwriting, accounting, and claims information, data statements, representations, and other
materials provided by the Company and received by the Subscribing Reinsurer in the course of an
audit, inspection, or otherwise, represent confidential or proprietary information (“Confidential
Information”). This Confidential Information is intended for the sole use of the Subscribing
Reinsurer (and its retrocessionaires, respective auditors and legal counsel) as may be necessary
in analyzing and/or accepting a participation in and/or executing its responsibilities under or
related to this Agreement. Subscribing Reinsurer acknowledges and agrees that with respect to any
review of Confidential Information by Subscribing Reinsurer, and/or discussion of Confidential
Information, Company does not waive and does not intend to waive any available privilege or
protection. The review of Confidential Information by Subscribing Reinsurer and/or discussion of
Confidential Information with Company shall not destroy, waive, or otherwise impair the
proprietary and/or protected status of any Confidential Information or any information revealed in
such discussion with Company personnel, whether reviewed by and/or discussed with Subscribing
Reinsurer intentionally or  inadvertently, nor does the review of the Confidential Information and/or discussion of
Confidential Information with Company constitute an estoppel or waiver of Company’s rights to
assert the attorney-client or work-product privileges, or any other applicable privilege or
protection, over certain documents contained in the Company files and/or certain information.

The Company and Subscribing Reinsurer agree that no confidentiality obligations will apply to
Confidential Information to the extent such Confidential Information: (1) is or becomes available
to the public, other than as a result of impermissible disclosure by the Subscribing Reinsurer,
(2) was or became available lawfully to Subscribing Reinsurer from a source, other than Company or
its personnel, that is not subject to a confidentiality obligation, (3) was developed
independently by Subscribing Reinsurer prior to disclosure by Company or its personnel, as
demonstrated by Subscribing Reinsurer’s records, or (4) is required to be disclosed by law,
regulation, court, or regulatory agency action.

					
	 	 	 	 	 
	Agreement No. RAM Re BSGPX — 2006
	 	19.
	 	 

 

 

Subscribing Reinsurer agrees to preserve all confidentiality and privilege pertaining to all
Confidential Information provided by Company and all knowledge and information gained through its
review of Confidential Information or discussions with Company personnel. Subscribing Reinsurer
further agrees not to disclose any such Confidential Information to any other person or entity
except as such disclosure may be necessary to its retrocessionaires, accountants, attorneys, or
as otherwise required by law. Subscribing Reinsurer agrees that no Confidential Information is to
be copied and/or removed from Company’s premises without the express permission of Company.

Non-Public Personally Identifiable Information. Additionally, any disclosure of
non-public personally identifiable information shall comply with all state and federal statutes
and regulations governing the disclosure of non-public personally identifiable information.
“Non-public personally identifiable information” is financial or medical information of or
concerning a private person which either has been obtained from sources which are not available
to the general public or obtained from the person who is the subject and which information is
included in data files exchanged by the parties hereto. For the purposes hereof, the terms shall include data elements such as names and addresses of individuals. 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.

Third-Party Demand. Should Subscribing Reinsurer receive a third-party demand pursuant to
subpoena, summons, or court or governmental order, to disclose Confidential Information (including
Non-public personally identifiable information) that has been provided by the Company, the
Subscribing Reinsurer shall make commercially reasonable efforts to notify the Company promptly
upon receipt of the demand and prior to disclosure of the Confidential Information and provide the
Company a reasonable opportunity to object to the disclosure. If the Company timely objects to the
release of the Confidential Information, the Subscribing Reinsurer will comply with the reasonable
requests of the Company in connection with the Company’s efforts to resist release of the
Confidential Information. The Company shall bear the cost of resisting the release of the
Confidential Information.

Survival. The parties agree that the obligations contained in this Article shall survive
the expiration or termination of this Agreement.

ARTICLE XXXI — 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.

ARTICLE XXXII — SEVERABILITY

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

ARTICLE XXXIII — INTEREST PENALTY

The interest amounts provided for in this Article shall apply to the Subscribing Reinsurer or to
the Company in the following circumstances:

					
	 	 	 	 	 
	Agreement No. RAM Re BSGPX — 2006
	 	20.
	 	 

 

 

	A.	 	If a loss payment owed by the Subscribing Reinsurer to the Company is not received within
45
calendar days following the date of presentation to the Subscribing Reinsurer of information
necessary to approve payment of the claim, and/or
	 
	B.	 	If any premium payment owed by the Company to the Subscribing Reinsurer is not received
within
45 calendar days following the date on which payment is due, and/or
	 
	C.	 	If any premium adjustment, agreed by either party to the other, is not received within 150
calendar
days following the expiry or anniversary of this Agreement, and/or
	 
	D.	 	If any return of premiums, commissions, profit sharing, or any amounts not provided in
paragraphs A, B, and C above, are not received in accordance with the date specified in this
Agreement or if no date is specified, within 90 calendar days following the date the debtor
party
received the billing.

Failure by the Subscribing Reinsurer or Company to comply with their respective payment
obligations within the time periods as herein provided shall, as of that date, be subject to an
interest payment computed by multiplying the amount due by a variable rate consisting of the U.S.
Prime Rate as published in the Eastern Edition of The Wall Street Journal on the first day of the
calendar month in which the amount became past due, plus 2%. The variable rate shall be adjusted
monthly thereafter to equal the U.S. Prime Rate as published in the Eastern Edition of The Wall
Street Journal on the first day of each successive month during which the amount due remains
unpaid, plus 2%. The product shall then be multiplied by 1/365 for each day after the due date
that the amount due and the interest amount remain unpaid. Any interest that occurs pursuant to
this Article shall be calculated by the party to which it is owed.

The validity of any claim or payment may be contested under the provisions of this Agreement. If
the debtor party prevails in an arbitration or any other proceeding with respect to the amounts
in dispute, there shall be no interest penalty due. If the creditor party wholly or partially
prevails on any of the amounts in dispute, the interest penalty shall be awarded as outlined
above. Such interest penalty shall be calculated from the date the monies were due and owing to
the date of resolution of the arbitration or proceeding, and shall be payable as of the date of
resolution of the arbitration or proceeding.

If a Subscribing Reinsurer advances the entire or partial payment of any claim it is contesting,
and wholly or partially prevails in the contest, the Company shall promptly return the applicable
amount of such payment. The arbitrator(s) hearing such dispute shall determine if interest shall
be added to the amount returned by the Company.

Any interest owing pursuant to this Article may be waived by the party to which it is owed.
Further, any interest calculated pursuant to this Article that is $100 or less shall be waived.
Any waiver of any interest pursuant to this paragraph, however, shall not affect the waiving
party’s right to claim and/or pursue interest for any other failure by the other party to make
payment when due under this Article.

ARTICLE XXXIV — ASSIGNMENT

This Agreement shall be binding upon and inure to the benefit of the Company and the Subscribing
Reinsurer and their respective successors and assigns provided, however, that this Agreement may
not be assigned by either the Company or the Subscribing Reinsurer without the prior written
consent of the other. In the event of any assignment, the assignor shall remain liable.

					
	 	 	 	 	 
	Agreement No. RAM Re BSGPX — 2006
	 	21.
	 	 

 

 

ARTICLE XXXV — ENTIRE AGREEMENT

This Agreement shall constitute the entire agreement between the Company and the Subscribing
Reinsurer with respect to the subject matter of this Agreement and shall supersede all prior
understandings, negotiations and discussions, whether oral or written, by or between the Company
and the Subscribing Reinsurer related to the subject matter hereof. There are no general or
specific warranties, representations or other agreements by or among the Company and the
Subscribing Reinsurer in connection with entering into this Agreement except as specifically set
forth in this Agreement. Notwithstanding the foregoing, this Agreement may be amended or modified
only by a writing signed by both the Company and the Subscribing Reinsurer.

					
	 	 	 	 	 
	Agreement No. RAM Re BSGPX — 2006
	 	22.
	 	 

 

 

EXHIBIT A

FIRST EXCESS OF LOSS

IS ATTACHED TO AND

FORMS PART OF

REINSURANCE AGREEMENT No. RAM Re BSGPX — 2006

 

 

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)

All States other than Multi-State Business

As respects one or more than one Line of Business covered under this Agreement, the Company shall
retain the first $2,000,000 of Ultimate Net Loss as respects each risk in any one Loss Occurrence.
The Reinsurer shall then be liable for the amount by which the Company’s Ultimate Net Loss exceeds
the Company’s retention of $2,000,000, but the liability of the Reinsurer shall never exceed
$3,000,000 each risk any one Loss Occurrence, nor shall the Reinsurer’s liability from all risks
in each Loss Occurrence exceed $9,000,000.

SECTION 2 — REINSTATEMENT

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.

SECTION 3 — REINSURANCE PREMIUM

	 	 	 	 	 
	SEP LOB	 	Rate
	CMPP
	 	 	1.642	%
	Other CL Property
	 	 	0.747	%

A-1

 

EXHIBIT B

SECOND EXCESS OF LOSS

IS ATTACHED TO AND

FORMS PART OF

REINSURANCE AGREEMENT No. RAM Re BSGPX — 2006

 

 

EXHIBIT B — SECOND EXCESS OF LOSS

	 	 	 	 	 
	SECTION	 	SUBJECT	 	PAGE
	 
	 	 	 	 
	1

	 	LIMIT AND RETENTION
	 	B-1
	 
	 	 	 	 
	2

	 	REINSTATEMENT
	 	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)

All States other than Multi-State Business

As respects one or more than one Line of Business covered under this Agreement, the Company shall
retain the first $5,000,000 of Ultimate Net Loss as respects each risk in any one Loss Occurrence.
The Reinsurer shall then be liable for the amount by which the Company’s Ultimate Net Loss exceeds
the Company’s retention of $5,000,000, but the liability of the Reinsurer shall never exceed
$5,000,000 each risk any one Loss Occurrence, nor shall the Reinsurer’s liability from all risks
in each Loss Occurrence exceed $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.	 	The first reinstatement is provided at no additional premium.
	 
	C.	 	For each subsequent reinstatement, the Company agrees to pay an additional premium
calculated 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 $5,00,000 so reinstated
and
100% as to term.)
	 
	D.	 	Notwithstanding the foregoing, the Reinsurer’s liability hereunder shall be limited to an
aggregate of $25,000,000, 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

	 	 	 	 	 
	SEP LOB	 	Rate
	CMPP
	 	 	0.674	%
	Other CL Property
	 	 	0.307	%

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 Profit Centers of Liberty Mutual Agency Markets
(LMAM).

	 	 	 	 	 
	 	 	 	 	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 LMAM
and produced by this
Profit Center only
	 
	 	 	 	 
	 

	 	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.

Liberty Mutual Fire Insurance Co.

LM Insurance Corp.

Liberty Mutual Insurance Corp.

The First Liberty Insurance Corp.

Liberty County Mutual Insurance Co.
	 	All states other than

multi-state business

in the other Profit

Centers
	 
	 	 	 	 
	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 Insurance Co.
	 	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 Insurance Co.
	 	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

 

 

Definition of Profit Centers Continued;

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

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

	 	One Beacon Insurance Co.
Cession to

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

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

	 	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, MI, OH, TN
	 

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

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

	 	One Beacon Insurance Co.
Cession to

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

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

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

	 	Globe American Casualty Co.
	 	All States
	 

	 	National Insurance Association
	 	All States
	 
	 	 	 	 
	 

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

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

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

	 	Liberty Northwest Insurance Corp.
	 	All States
	 

	 	North Pacific Insurance Company
	 	All States
	 

	 	Oregon Automobile Insurance Co.
	 	All States
	 
	 	 	 	 
	 

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

 

 

Definition of Profit Centers Continued;

	 	 	 	 	 
	 	 	 	 	Business Produced
	 	 	 	 	By Agents Resident
	Profit Center	 	Legal Entities Used By Profit Center	 	in the Following States
	Montgomery Insurance Continued:	 	 
	 

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

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

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

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

	 	Merchants and Business Men’s 

Mutual Insurance Co.
	 	
For business classified as
LMAM and produced by
this Profit Center only
	 
	 	 	 	 
	 

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

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

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

	 	Bridgefield Casualty Insurance Co.

Bridgefield Employers Insurance Co.
	 	AH states, for WC and
Employers Liability
business, classified as
LMAM and produced by
this Profit Center only
	 
	 	 	 	 
	 

	 	Business Solutions Group*
	 	(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 “Agreement” 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 Agreement 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 Agreement, 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:

	 	(a)	 	substantial quantities, and

-2-

 

	 	(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
	 
	 	b.	 	the extent of installation, plant or site.

-2-

 

	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 Agreements of the Company whether new,
renewal or replacement which become effective on or after December 31, 1984.

N.M.A. 1980

-3-

 

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 Agreements 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 (LM-02300-2005.06.27-A)

This Agreement does not apply to and specifically excludes terrorism-related losses as
follows:

	A.	 	For risks located in the United States of America, its territories and possessions, and at
the premises of any United States mission as such terms are intended to apply under the
terms of the Terrorism Risk Insurance Act of 2002, as it may be amended from time-to-time:
	 
	1.	 	“Insured Losses” resulting, directly or indirectly, from a “Certified Act of Terrorism” under
the terms of the Terrorism Risk Insurance Act of 2002 as it may be amended from time-
to-time.
	 
	2.	 	Loss or damage, directly or indirectly, arising out of or in connection with nuclear,
chemical, biological, or radiological explosion, pollution, or contamination resulting from
any Other Act of Terrorism. Notwithstanding the foregoing, this Agreement shall extend
to cover insured physical loss or damage, excluding all time-element coverages and
extensions, incurred as a direct and immediate consequence of an Other Act of Terrorism
employing any non-nuclear weapon or device designed to disperse chemical, biological,
or radiological contaminants; but, no coverage shall be afforded for any ensuing chemical,
biological, or radiological contamination or pollution resulting from an Other Act of
Terrorism employing such weapon or device.

“Other Act of Terrorism” as used in this subparagraph A.2. above shall mean any violent act or act
that is dangerous to human life, property, or infrastructure that results in physical loss or
damage that is committed by an individual or individuals acting on behalf of any person or
interest as part of an effort to coerce the civilian population of the United States or to
influence the policy or affect the conduct of the United States government by coercion, which is
not a “Certified Act of Terrorism” under the terms of TRIA.

	B.	 	For risks located within the United Kingdom, this Agreement shall not cover:
	 
	1.	 	Loss, destruction, or damage in Great Britain (being England, Wales, and Scotland)
occasioned by or happening through or as a direct or indirect consequence of an Act of
Terrorism.
	 
	2.	 	Loss, destruction, or damage in Northern Ireland within the meaning of the Northern
Ireland (Emergency Provisions) Act 1973 or successors thereof.

In the event of an occurrence giving rise to a loss or losses payable by the Company not being
certified by Her Majesty’s government or Her Majesty’s Treasury or any successor relevant
Authority to have been an Act of Terrorism and solely by reason thereof the Company is unable to
recover such loss or losses in whole or in part from Pool Reinsurance Company Limited, the
Reinsurers accept that this subparagraph B.1. above does not apply to such loss or losses.

For the purpose of this paragraph B:

“Act of Terrorism” means an act of persons acting on behalf of or in connection with any
organization that carries out activities directed towards the overthrowing or influencing by
force or violence of Her Majesty’s government in the United Kingdom.

This paragraph B shall not, however, apply to goods in transit or goods in temporary storage
while in transit.

 

 

Notwithstanding the foregoing, this paragraph B excludes loss or damage directly or indirectly
arising out of or in connection with nuclear, chemical, biological, or radiological explosion,
pollution, or contamination resulting from any Act of Terrorism. This Agreement shall extend,
however, to cover insured physical loss or damage, excluding all time-element coverages and
extensions, incurred as a direct and immediate consequence of an Act of Terrorism employing any
non-nuclear weapon or device designed to disperse chemical, biological, or radiological
contaminants; but, no coverage shall be afforded for any ensuing chemical, biological, or
radiological contamination or pollution resulting from an Act of Terrorism employing such weapon
or device.

	C.	 	For risks located in all other sovereignties not subject to paragraphs A or B above:

Loss or damage, directly or indirectly, caused by, contributed to by, resulting from, or arising
out of or in connection with any Act of Terrorism, as defined in this paragraph C, regardless of
any other cause or event contributing concurrently or in any other sequence to the loss.

For the purpose of this paragraph C:

“Act of Terrorism” shall mean any violent act or act that is dangerous to human life, property, or
infrastructure that results in physical loss or damage that is committed by an individual or
individuals acting on behalf of any person or interest as part of an effort to coerce the civilian
population of any nation or to influence the policy or affect the conduct of the government of any
such sovereign nation by coercion.

Where an occurrence falling within the definition of Act of Terrorism in this paragraph C,
involving risks insured or reinsured in Consorcio, Gareat, Extremus, the Australian Terrorism Pool
{or any similar scheme formed during the term of this Agreement) gives rise to a loss or losses
payable by the Company and such occurrence is not certified by the individual authority acting
respectively for Consorcio, Gareat, Extremus, the Australian Terrorism Pool (or any similar scheme
formed during the term of this Agreement) having responsibility to make such judgment, or any
successor authority, as an Act of Terrorism, the reinsurers accept that this exclusion does not
apply to such loss(es).

Notwithstanding the foregoing, this paragraph C excludes loss or damage, directly or indirectly,
arising out of or in connection with nuclear, chemical, biological, or radiological explosion,
pollution, or contamination resulting from any Act of Terrorism. This Agreement shall extend,
however, to cover insured physical loss or damage, excluding all time-element coverages and
extensions, incurred as a direct and immediate consequence of an Act of Terrorism employing any
non-nuclear weapon or device designed to disperse chemical, biological, or radiological
contaminants; but, no coverage shall be afforded for any ensuing chemical, biological, or
radiological contamination or pollution resulting from an Act of Terrorism employing such weapon
or device.

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