Document:

exv10w30

Exhibit
10.30

WORKERS’ COMPENSATION EXCESS OF LOSS

REINSURANCE AGREEMENT

GIC-003/2007

(hereinafter referred to as the “Agreement”)

between

GUARANTEE INSURANCE COMPANY, NAIC #11398,

FORT MILL, SOUTH CAROLINA

(hereinafter referred to as the “Reinsured”)

and

THE SUBSCRIBING REINSURERS SPECIFIED

IN THE INTERESTS AND LIABILITIES AGREEMENT

ATTACHED TO THIS AGREEMENT

(hereinafter referred to as the “Reinsurer”)

ARTICLE I — BUSINESS COVERED

All statutory benefits payable under a standard Workers’ Compensation Policy in respect to all
business insured by the Reinsured unless specifically excluded by the terms of this Agreement.

This Agreement is to indemnify the Reinsured as set forth herein in respect of the net excess
liability which may accrue to the Reinsured under all policies, Agreements, binders and other
evidences of insurance or reinsurance, whether oral or written (hereinafter called “policies”),
classified by the Reinsured as Workers’ Compensation in force at and becoming effective on and
after the inception date of this Agreement, including renewals.

ARTICLE II — EXCLUSIONS

This Agreement excludes all Ultimate Net Loss arising from the following:

	 	1.	 	Assumed Reinsurance, except business fronted by insurance companies
for licensing purposes.
	 
	 	2.	 	Business excluded by the attached Nuclear Incident Exclusion Clause –
Liability – Reinsurance – U.S.A., No. 08-31-1.
	 
	 	3.	 	Pools, associations and syndicates.
	 
	 	4.	 	Terrorism NMA 2929.
	 
	 	5.	 	Insolvency Funds Exclusion — It is agreed that this agreement excludes
all liability of the Reinsured arising by contract, operation of law,
or otherwise, from its participation or membership, whether voluntary
or involuntary, in any insolvency fund. “Insolvency Fund” including
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 the
Reinsured of part or all of any claim, debt, charge, fee, or other
obligation of an insured, 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.
	 
	 	6.	 	Financial guarantee and insolvency.

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	 	7.	 	Occupational Disease/Cumulative Trauma except when from a “Sudden and Accidental”
event of 48 hours or less. For the purpose of this Contract, “Sudden and Accidental”
shall mean that the first and last exposure to the causative agent to each and every
individual contributing to the loss shall fall within a single and continuous 48 hour
period.
	 
	 	8.	 	Commercial airline crews.
	 
	 	9.	 	Operations requiring coverage under the Defense Base Act, Admiralty Act or any other
Federal act including but not limed to the Jones Act, FELA, or USL&H, except where
incidental, (“incidental” to be defined as less than 10% of an individual
insurer’s premium).
	 
	 	10.	 	Risks involving known exposure to the following substances: Dioxin. Polychlorinated
biphenyl (PCB’s), Asbestos.
	 
	 	11.	 	Underground mining.
	 
	 	12.	 	Construction of bridges, tunnels or dams.
	 
	 	13.	 	Employers Liability.
	 
	 	14.	 	Losses in Excess of Policy Limits.
	 
	 	15.	 	All business classified as NCCI — Hazard Group IV as of 1/1/06.
	 
	 	16.	 	Fire fighters and police officers.
	 
	 	17.	 	Railroads, except scenic railways, and access lines and industrial aid owner
operations when written as an incidental part of an insured’s overall operations.
	 
	 	18.	 	No known wrecking or demolition of buildings of structures in excess of three stories.
	 
	 	19.	 	Manufacturing, packing, handling, shipping, or storage of explosives,
substances intended for use as an explosive, ammunitions, fuses, arms, magnesium,
propellant charges, detonating devices, fireworks, nitroglycerine, celluloid, or
pyroxylin; however, this exclusion shall not apply to the incidental packing,
handling, or storage of same in connection with the sale or transportation by owner
operators of such substances.
	 
	 	20.	 	Trucking hauling explosive or ammunition (local or long distance hauling) —  all
employees.
	 
	 	21.	 	Manufacturing, packing, handling, shipping or storage of natural or artificial fuel
gasses, butane, propane, gasoline, or liquefied petroleum gas; however, this
exclusion shall not apply to the incidental packing, handling or storage of same in
connection with the sale of such substances.
	 
	 	22.	 	Gas or oil burner installation NOC.
	 
	 	23.	 	Tank installation gasoline service stations.
	 
	 	24.	 	Blasting of rock.
	 
	 	25.	 	Sewer construction all operations.
	 
	 	26.	 	Gas main, steam main, or water main construction or connection construction.

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	 	27.	 	Boat manufacturing F classes.
	 
	 	28.	 	Banks and trust company employees of contracting agencies in bank
service: guards, patrol, messengers and armored car crews.
	 
	 	29.	 	Detective agency.
	 
	 	30.	 	Patrol agency only in regard to armed guard services.
	 
	 	31.	 	Losses arising directly or indirectly from Earthquake with the exception
of risks written in the State of Missouri.
	 
	 	32.	 	Professional sports teams.
	 
	 	33.	 	Work and navigation of any commercial vessel.
	 
	 	34.	 	All mining or quarrying operations.
	 
	 	35.	 	Chemical/petrochemical manufacturers of highly toxic materials.
	 
	 	36.	 	Blasting or excavating operations over 25 feet in depth.
	 
	 	37.	 	Tunnel or subway construction.
	 
	 	38.	 	Marine wrecking, including repair, cleaning, or demolition of commercial
vessels or barges.
	 
	 	39.	 	Underground, offshore or submarine operation including underground mining.
	 
	 	40.	 	Construction and/or maintenance of cofferdams.
	 
	 	41.	 	Stevedoring.
	 
	 	42.	 	Assigned risks.
	 
	 	43.	 	Losses arising from nuclear, biological, chemical and radiological events.

ARTICLE III — PERIOD AND CANCELLATION

This
Contract shall take effect 12:01 a.m. Local Standard Time at place of loss, January 1,
2007 and ending 12:01 a.m., Local Standard Time at place of loss, January 1, 2008 and shall
apply to all losses occurring during that period in respect of in force, new renewal and
anniversary business.

ARTICLE IV — AMOUNT OF COVER

The
Reinsured shall retain and be liable for the first USD 5,000,000 of Ultimate Net Loss
(regardless of the number of policies or number of insureds under which such loss is
payable) arising out of each Loss Occurrence. The Reinsurer shall then be liable for the
amount by which such Ultimate Net Loss exceeds the Reinsured’s retention, but the liability
of the Reinsurer shall not exceed USD 5,000,000 as respects any one Loss Occurrence, nor
shall the Reinsurer’s aggregate liability exceed USD 10,000,000.

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ARTICLE V — TERRITORY

Worldwide in respect to business domiciled in the United States, Puerto Rico and U.S. territories
and possessions.

ARTICLE
VI — DEFINITIONS

	 	•	 	The term “Occurrence” shall mean any one accident, disaster or
casualty or series of accidents, disasters or casualties arising
out of one event.
	 
	 	•	 	Gross Net Earned Premium — manual premium adjusted for experience
modification. State/NCCI Safety Credit, premium discount, expense
discount, expense constants and policy fees, less returns and
cancellations.
	 
	 	•	 	“Extra contractual obligations” shall mean 90% of any punitive,
exemplary, compensatory or consequential damages, other than loss
in excess of policy limits, paid or payable by the Reinsured as a
result of an action against it by its negligence or bad faith on the
part of the Reinsured in handling a claim under a policy subject
to the Agreement. An extra contractual obligation shall be deemed
to have occurred on the same date as the loss covered or alleged to
be covered under the policy.
	 
	 	•	 	Notwithstanding anything stated herein, the Agreement shall not
apply to any extra contractual obligation incurred by the
Reinsured as a result of any fraudulent and/or criminal act by any
officer or director of the Reinsured acting individually or
collectively or in collusion with any individual or corporation or
any organization or party involved in the presentation, defense or
settlement of any claim covered hereunder.
	 
	 	•	 	“Loss adjustment expense” as used herein shall mean expenses
allocable to the investigation, defense and/or settlement of
specific claims, including litigation expenses and post-judgment
interest, but not including any legal expenses and cost incurred by
the Reinsured in connection with coverage, questions and legal
actions connected thereto, office expenses or salaries of the
Reinsured’s regular employees.

ARTICLE VII — ULTIMATE NET LOSS

The term “Ultimate Net Loss” as used in this Agreement shall mean the actual gross loss
sustained by the Reinsured, including extra contractual obligations, structured settlements
with claimants or outside insurers, such loss to include all expenses incurred by the Reinsured
in connection with the settlement of losses; resistance to or negotiations concerning losses;
excluding, however, any part of the office expenses of the Reinsured and salaries of employees
other than salary charges for staff adjuster, fieldsmen, or other employees while actually
engaged in the settlement of the losses.

Salvages and recoveries, whether recovered or received prior or subsequent to loss settlement
under this Agreement, but not including amounts recoverable under all facultative reinsurances,
shall be applied as if recovered or received prior to the aforesaid settlement and shall be
first deducted from the actual loss sustained to arrive at the amount of Ultimate Net Loss.
Nothing, however, in this Article shall be construed to mean losses are not recoverable
hereunder until the Ultimate Net Loss to the Reinsured has been ascertained.

ARTICLE VIII — RATE AND PREMIUM

As premium for the reinsurance provided hereunder, the Reinsured shall pay the Reinsurer 1.06%
of its Subject Earned Manual Premium for the term of this Contract, subject to a minimum
premium of USD 685,000.

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The
Reinsured shall pay the Reinsurer a deposit premium of USD 740,000 in four equal installments
of USD 185,000 within 30 days of the January 1, 2007,
April 1, 2007, July 1, 2007 and October 1,
2007.

Within 45 days after the expiration of this Agreement, the Reinsured shall calculate and report to
the Reinsurer the adjusted premium, based on the Reinsured’s Subject Earned Manual Premium for the
term of this Agreement computed in accordance with the first paragraph, and any additional premium
due the Reinsurer or return premium due the Reinsured shall remitted promptly.

ARTICLE IX — REINSTATEMENT

Each claim hereon reduces the amount of indemnity under this Agreement from the time of occurrence
of the loss but such amount is hereby reinstated from the time of occurrence of the loss in
consideration of the payment by the type in original - “Reinsured” of an additional
premium calculated by applying to
the Premium hereon, the percentage of the face amount of this Contract so reinstated.
Nevertheless, the Reinsurer’s liability hereunder shall never
exceed USD 5,000,000 for any one
loss occurrence and USD 10,000,000 for all loss occurrences during the term of this Agreement.

If the loss settlement is made prior to the adjustment of premium the reinstatement premium shall
be calculated provisionally on the deposit premium subject to adjustment when the reinsurance
premium hereon is finally established.

ARTICLE X — REPORTS

The Reinsured shall advise the Reinsurer of all events that in its opinion may result in a claim
under this Agreement for which the Reinsured has reserves in excess of fifty percent (50%) of its
retention under this Agreement, and of all subsequent developments thereto that may affect the
position of the Reinsurer. Inadvertent omission or oversight in dispatching advice of notice shall
not affect the liability of the Reinsurer; however, this exception shall not apply with respect to
conditions as provided for in the Sunset Article of this Agreement.

Subject always to the terms and conditions of this Agreement, the reinsurance provided under this
Agreement shall be subject to the written terms, limits, and conditions of the original policies
that represent, as set forth in Article 1, the Business Covered and to all interpretations,
modifications, waivers, and alterations thereon. All loss settlements made by the Reinsured,
whether under the original policy terms and conditions or by way of compromise, excluding ex
gratia payments, shall be binding upon the Reinsurer, and the Reinsurer shall allow or pay, as the
case may be, its proportion of each such settlement in accordance with the terms of this
Agreement. It is the true intent of this Agreement the Reinsurer will follow settlements of the
Reinsured in all respects.

The Reinsured will advise the Reinsurer promptly of all losses and any subsequent developments
pertaining thereto, which may in its opinion develop into losses involving reinsurance hereunder
and/or incurred amount penetrates 50% of retention. Inadvertent omission or oversight in
dispatching such advises shall in no way affect the liability of the Reinsurer under this
Agreement, but the Reinsured shall inform the Reinsurer of such omission or oversight upon
discovery.

ARTICLE XI — CLAIMS AND MONETARY CRITERIA

The Reinsured shall promptly advise the Reinsurer in full detail (per suggested Claims Reserve
Worksheet) of all bodily injury claims or losses involving any of the following:

	 	A)	 	Any claim or loss reserved at 50% or more of the Reinsured’s
retention under this Agreement.
	 
	 	B)	 	Any claim involving any of the following injuries:

	 	1)	 	Fatality.
	 
	 	2)	 	Spinal Cord Injuries (e.g., quardriplegia, paraplegia).

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	 	3)	 	Brain Damage (e.g., seizure, coma or physical/mental impairment).
	 
	 	4)	 	Severe burns injuries resulting in disfigurement or scarring.
	 
	 	5)	 	Total or partial blindness in one or both eyes.
	 
	 	6)	 	Major organ, (e.g. heart, lungs).
	 
	 	7)	 	Amputation of a limb or multiple fractures.
	 
	 	8)	 	Environmentally related damage or injury (e.g., pollution, waste
site or common cause claims, such as Agent Orange, asbestos or
DES).
	 
	 	9)	 	Occupational disease or other disability relating to working
conditions or job related factors.

ARTICLE XII — TAXES

In consideration of the terms under which this Agreement is issued, the Reinsured undertakes not
to claim any deduction of the premium hereon when making tax returns, other than income or
profits tax returns, to any state or territory of the United States of America or to the
District of Columbia.

ARTICLE XIII — FEDERAL EXCISE TAX

(Applicable to those reinsurers, excepting Underwriters at Lloyd’s London and other reinsurers
exempt from Federal Excise Tax, who are domiciled outside the United States of America.)

	 	A)	 	The Reinsurer has agreed to allow for the purpose of paying the
Federal Excise Tax the applicable  percentage of the premium payable
hereon (as imposed under Section 4371 of the Internal Revenue Code)
to the extent such premium is subject to the Federal Excise Tax.
	 
	 	B)	 	In the event of any return of premium becoming due hereunder, the
Reinsurer will deduct the applicable percentage from the return
premium payable hereon and the Reinsured or its agent should take
steps to recover the tax from the United States Government.

ARTICLE XIV — CURRENCY

All retentions and limits hereunder are expressed in United States Dollars, and all premium and
loss payments shall be made in United States Currency.

ARTICLE XV — INSPECTION OF RECORDS

The Reinsurer or its duly authorized representative shall have the right at any reasonable time
upon five (5) working days prior notice during or at any time after the expiration of this
Agreement, and as frequently as deemed necessary by the Reinsurer, to visit the office of the
Reinsured (or of any affiliate or representative of the Reinsured involved with the Business
Covered under this Agreement) to inspect, examine, audit, and verify any of the policy or claim
files, accounts, documents, books reports, or work papers (“records”) relating to the business
reinsured under this Agreement whether or not those records are co-mingled with any unrelated
business records. Reinsurer or its representative shall have the right to make copies, at its own
expense, or extracts of any records related specifically to the Business Covered under this
agreement only.

ARTICLE XVI — OFFSET CLAUSE

All
amounts due either the Reinsured or the Reinsurer, whether by reason
of reinsurance premium,
Ultimate Net Loss, or any other amount due under this Agreement shall be subject to the right of
recoupment and offset and upon the exercise of the same, only the net balance shall be due. All
claims for amounts of reinsurance premium, Ultimate Net Loss, or any other amount due under this
Agreement, whether or not fixed in amount at the time of the insolvency of any party to this
Agreement, arising from coverage placed in effect under this Agreement prior to the insolvency of
any party to this Agreement shall be deemed pre-liquidation debts and subject to this Article. In
the event of insolvency of the Reinsured, offset shall be in accordance with applicable law.

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ARTICLE XVII — ARBITRATION (BRMA6C)

As a condition precedent to any right of action hereunder, any dispute or difference between the
Reinsured and any Reinsurer relating to the interpretation or performance of this Contract,
including is formation or validity, or any transaction under this Contract, whether arising before
or after termination, shall be submitted to arbitration.

If more than one reinsurer is involved in the same dispute, all such reinsurers shall constitute
and act as one party for purposes of this clause provided that communication shall be made by the
Reinsured to each of the reinsurers constituting the one party, and provided, however, that
nothing therein shall impair the rights of such reinsurers to assert several, rather than joint,
defenses or claims, nor be construed as changing the liability of the Reinsurer under the terms of
this Contract from several to joint.

Upon written request of any party, each party shall choose an arbitrator and the two chosen shall
select a third arbitrator. If either party refuses or neglects to appoint an arbitrator within
thirty (30) days after receipt of the written request for arbitration, the requesting party may
appoint a second Arbitrator. If the two arbitrators fail to agree on the selection of a third
arbitrator within thirty (30) days of their appointment, the Reinsured shall petition the American
Arbitration Association to appoint the third arbitrator. If the American Arbitration Association
fails to appoint the third arbitrator within thirty (30) days after it has been requested to do
so, either party may request a justice of a Court of general jurisdiction of the state in which
the arbitration is to be held to appoint the third arbitrator. All arbitrators shall be active or
retired officers of insurance or reinsurance companies, or Lloyd’s London Underwriters, and
disinterested in the outcome of the arbitration. Each party shall submit its case to the
arbitrators within thirty (30) days of the appointment of the third arbitrator. The parties hereby
waive all objections to the method of selection of the arbitrators, it being the intention of both
sides that all the arbitrators be chosen from those submitted by the parties.

The parties hereby waive all objections to the method of selection of the arbitrators, it being
the intention of both sides that all the arbitrators be chosen from those submitted by the
parties.

The Arbitrators shall have the power to determine all procedural rules for the holding of the
arbitration including but not limited to inspection of documents, examination of witnesses and any
other matter relating to the conduct of the arbitration. The arbitrators shall interpret this
Contract as an honorable engagement and not as merely a legal obligation; they are relieved of all
judicial formalities and may abstain from following the strict rules of law. The arbitrators may
award interest and costs. Each party shall bear the expense of its own arbitrator and shall share
equally with the other party the expenses of the third arbitrator and of the arbitration. The
decision in writing of the majority of the arbitrators shall be final and binding upon both
parties. Judgment may be entered upon the final decision of the arbitrators in any court having
jurisdiction.

The
arbitration shall take place in the city where the Reinsured’s
principal office is located,
unless otherwise mutually agreed between the Reinsured and the Reinsurer.

This article shall remain in full force and the effect in the event any other provision of this
Contract shall be found invalid or non-binding.

ARTICLE XVIII — INSOLVENCY

In the event of the insolvency of the Reinsured or the Reinsurer (the “Insolvent Party”), premiums
and losses shall be payable directly to the Insolvent Party or its liquidator, receiver,
conservator or statutory successor on the basis of the liability of the Insolvent Party without
diminution because of the insolvency of the Insolvent Party. The liquidator, receiver, conservator
or statutory successor of the Insolvent Party shall give written notice to the other party hereto
of the pendency of a claim against the Insolvent Party, indicating the Policy reinsured which claim
would involve a possible liability on the part of the other party hereto within reasonable time
after such claim is filed in the conservation, liquidation, or receivership

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proceedings, and that during the pendency of such claim the other party hereto may investigate
such claim and interpose, at its own expense, in the proceeding where such claim is to be
adjudicated any defense or defenses that it may deem available to the Insolvent Party or its
liquidator, receiver, conservator or statutory successor. The expense thus incurred by the other
party shall be chargeable, subject to he approval of the court, against the Insolvent Party as
part of the expense of conservation, liquidation or receivership to the extent of a pro rata share
of the benefit which may accrue to the Insolvent Party solely as a result of the defense
undertaken by the other party.

ARTICLE XIX — INSOLVENCY FUND EXCLUSION

It is agreed that this Agreement excludes all liability of the Reinsured arising by contract,
operation of law, or otherwise, from its participation or membership, whether voluntary or
involuntary, in any insolvency fund. “Insolvency Fund” includes any guaranty fund, insolvency fund,
plan, pool, association, fund or other arrangement, however denominated, established or governed,
which provides for any assessment of or payment or assumption by the Reinsured of part or all of
any claim, debt, charge, fee or other obligations 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.

ARTICLE XX — ERRORS AND OMISSIONS

Except for the conditions as provided for in the Sunset Article of this Agreement, any isolated
and inadvertent administrative act, neglect, delay, omission, or error by either party to this
Agreement, will not be held to relieve either party to this Agreement from any liability that
would attach to it under this Agreement if that act, neglect, delay, omission, or error had not
been made, providing that such act, neglect, delay, omission, or error is not prejudicial to the
other party and is rectified immediately upon discovery without prejudice to the other party.

ARTICLE XXI — SERVICE OF SUIT

(This Article only applies to reinsurers domiciled outside of the United States and/or not
approved, qualified, authorized or accredited in any state, territory, or district of the United
States having jurisdiction over the Reinsured.)

It is agreed that in the event of the failure of the Reinsurer hereon to pay any amount claimed to
be due hereunder, the Reinsurer hereon, at the request of the Reinsured, will submit, first, to
arbitration as provided for above and, failing that, to the jurisdiction of a court of competent
jurisdiction within the United States. Nothing in this Article constitutes or should be understood
to constitute a waiver of the Reinsurer’s rights to commence an action in arbitration or, if
appropriate, any court of competent jurisdiction within the United States. Nothing in this Article
constitutes or should be understood to constitute a waiver of the Reinsurer’s rights to commence
an action in arbitration or, if appropriate, in any court of competent jurisdiction in the United
States, to remove an action to a United States District Court, or to seek a transfer of a case to
another court as permitted by the laws of the United States or of any state in the United States.
It is further agreed that service of process in such suit may be made upon Messrs. Mendes and
Mount, 750 Seventh Avenue, New York, New York, 10019 (hereinafter, “agent for service of process”)
and that in any suit instituted, the Reinsurer will abide by the final decision of such court or
of any appellate court in the event of an appeal.

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

Further, pursuant to any statute of any state, territory or district of the United States which
makes provision therefore, the Reinsurer hereon hereby designates the Superintendent, Commissioner
or Director of Insurance or other officer specified for that purpose in the statute, or his
successor or successors in office, as its true and lawful attorney upon who may be served any
lawful process in any action, suit or proceeding

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instituted by or on behalf of the Reinsured or any beneficiary hereunder arising out of this
Agreement, hereby designates the above-named as the person to who the said officer is authorized
to mail such process or a true copy thereof.

ARTICLE XXII — SUNSET CLAUSE

Notwithstanding the provisions of the Errors and Omissions Article of this Agreement, coverage
hereunder shall apply only to Event(s) notified by Reinsured to Reinsurer, with full
particulars, within twelve (12) months from the expiry of this Agreement. However this
notification period shall be increased to eighty four (84) months from the commencement of the
Term of this Agreement should the Reinsured decline to commute this Agreement at twelve (12)
months from expiry. Notice of and Event shall include;

	 	1.	 	The approximate time and location of the Event.
	 
	 	2.	 	The date of loss as established under this Agreement.
	 
	 	3.	 	The names of any original insureds that have been identified by Reinsured, at the
time of notice, as being involved in the Event.
	 
	 	4.	 	The current indemnity, medical and expense reserves
delineated by original insured.
	 
	 	5.	 	The total payments made by the Reinsured, delineated by original insured.

ARTICLE XXIII — MANDATORY COMMUTATION CLAUSE

This Agreement shall be subject to Mandatory loss free, complete and Final Commutation at twelve
(12) months from the expiry of this Agreement. However, in the event that the Reinsured does not
wish to Commute at twelve (12) months from expiry, Reinsurers hereon agree not to enforce the
above Commutation but only in return for payment of an additional premium of 40% (.424%) of the
developed reinsurance premium, subject to a minimum of USD 296,000 net. If this option is taken
up, Mandatory Commutation shall apply not later than eighty-four (84) months after the
commencement of the Term of this Agreement. At which time the Reinsured shall advise Reinsurer
of the amount of all Ultimate Net Loss for all claims from Business Covered from any Event, both
reported and unreported, both paid and not finally settled, that is the subject of this
Agreement. Reinsured and Reinsurer or their respective
representatives shall, within sixty (60)
days thereafter by mutual agreement, determine and capitalize (i.e. reduce to a net present
value) the total of such Ultimate Net Loss for each Event.

If the mutually agreed capitalized value of the Ultimate Net Loss for any Event is in excess of
Reinsured’s retention for that Event, Reinsurer shall pay Reinsured the amount, subject to the
coverage provided under this Agreement, of capitalized Ultimate Net Loss in excess of
Reinsured’s retention for that Event less any amounts of Ultimate Loss previously paid by
Reinsurer to Reinsured for that Event.

If mutual agreement cannot be reached, then any difference shall be settled by an appraisal made
by a panel of three actuaries, one to be chosen by each party and the third by the two so
chosen. If either party refuses or neglects to appoint an actuary within thirty (30) days of a
written request from the other party to appoint an actuary, the other party may appoint two
actuaries. If the two actuaries fail to agree on the selection of a third actuary within thirty
(30) days of their appointment, each of them shall name two, of whom the other shall decline one
and the decision shall be made by drawing lots.

All the actuaries shall be regularly engaged in the valuation of Workers’ Compensation claims
and shall be Fellows of the Casualty Actuarial Society or Members of the American Academy of
Actuaries. None of the actuaries shall be under the control of either party to this Agreement.

Each party shall submit its case to its chosen actuary within thirty (30) days of the
appointment of the third actuary. The decision in writing of any two appointed actuaries, when
filed with the parties hereto, shall be final and binding on all parties participating in the
appraisal and judgment may be entered hereon in any court of competent jurisdiction.

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The expense of the actuaries and of their appraisal shall be equally divided between the
Reinsured and the Reinsurer. The appraisal shall take place in New York City unless some other
place is mutually agreed upon by Reinsured and Reinsurer.

Payment by Reinsurer of the amount of capitalized Ultimate Net Loss in excess of Reinsured’s
retention for any Event less any amounts of Ultimate Net Loss previously paid by Reinsurer to
Reinsured for that Event, whether determined by mutual agreement or by the appraisal procedure
set forth above, shall constitute a complete and final release of Reinsurer of all claims by
Reinsured for Ultimate Net Loss, both reported and unreported, paid and incurred, for that
Event. If the capitalized Ultimate Net Loss for any Event is determined to be below the
retention, whether by mutual agreement or the appraisal procedure set forth above, such
determination shall constitute a complete and final release of Reinsurer for all claims by
Reinsured for Ultimate Net Loss, both reported and unreported, paid and incurred, for that
Event.

ARTICLE XXIV — UNAUTHORIZED REINSURANCE (BRMA551)

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

As regards polices or bonds issued by the Reinsured coming within the scope of this Contract,
the Reinsured agrees that when it shall file with the insurance regulatory authority or set up
on it books reserves for losses covered hereunder which it shall be required by law to set up,
it will forward to the Reinsurer a statement showing the proportion of such reserves which is
applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure
delivery to the Reinsured of a clean, irrevocable and unconditional Letter of Credit, issued
by a bank, and containing provisions acceptable to the insurance regulatory authorities having
jurisdiction over the Reinsured’s reserves in an mount equal to the Reinsurer’s proportion of
reserves in respect of known outstanding losses that have been reported to the Reinsurer and
allocated loss adjustment expense relating thereto, and losses and allocated loss adjustment
expense paid by the Reinsured by not recovered from the Reinsurer, as shown in the statement
prepared by the Reinsured (hereinafter referred to as “Reinsurer’s Obligations”). Under no
circumstances shall any amount relating to reserves in respect of incurred but not reported
losses by included in the amount of the Letter of Credit.

The Letter of Credit shall be issued for a period of not less than one year, and shall be
automatically extended for one year from its date of expiration or any future expiration date
unless thirty (30) days prior to any expiration date the issuing bank shall notify the
Reinsured by certified or registered mail that the issuing bank elects not to consider the
Letter of Credit extended for any additional period.

The Reinsurer and Reinsured agree that the Letters of Credit provided by the Reinsurer
pursuant to the provision of this Contract may be drawn upon at any time, notwithstanding any
other provision of this Contract, and be utilized by the Reinsured or any successor, by
operation of law, of the Reinsured including, without limitation, any liquidator,
rehabilitator, receiver or conservator of the Reinsured for the following purposes, unless
otherwise provide for in a separate Trust Agreement:

	 	(a)	 	to reimburse the Reinsured for the Reinsurer’s Obligations, the
payment of which is due under the terms of this Contract and which
has not been otherwise paid;
	 
	 	(b)	 	to make refund of nay sum which is in excess of the actual amount
required to pay the Reinsurer’s Obligations under this Contract;
	 
	 	(c)	 	to fund an account with the Reinsured for the Reinsurer’s
Obligations, plus reserves for incurred but not reported losses.
Such cash deposit shall be held in an interest bearing account
separate from the Reinsured’s other assets, and interest thereon
not in excess of the prime rate shall accrue to the benefit of the
Reinsurer.

In the event the amount drawn by the Reinsured on any Letter of Credit is in excess of the
actual amount required for (a) or (c), the Reinsured shall promptly return to the Reinsurer
the excess amount so drawn. All of the foregoing shall be applied without diminution because
of insolvency on the part of the Reinsured or the Reinsurer.

$5M xs $5M

2007 Agreement Wording

January 31, 2007

Page 10 of 14

 

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

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

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

ARTICLE XXV – NET RETAINED LINES

This Agreement applies only to that portion of any insurance or reinsurance which the Reinsured
and/or its agents retains net for its own account, inclusive of underlying insurance or
reinsurance. In calculating the amount of any loss hereunder, and also in computing the amount or
amounts in excess of which this Agreement attaches, only loss or losses in respect of that portion
of any insurance or reinsurance which the Reinsured retains net for its own account, inclusive of
underlying insurance or reinsurance, shall be included.

The amount of the Reinsurer’s liability hereunder in respect of any loss or losses shall not be
increased by reason of the inability of the Reinsured to collect from any other reinsurers, whether
specific or general, any amount which may have become due from them, whether such inability arise
from the insolvency of such other reinsurers or otherwise.

ARTICLE XXVI – SUBROGATION

Reinsurer shall be credited with subrogation (i.e. reimbursement obtained or recoveries made by
Reinsured, less the actual cost, excluding salaries of officers and employees of the Reinsured and
sums paid to attorneys as retainer, of obtaining such reimbursement or making such recoveries) on
any claims or settlements involving this Agreement. Subrogation and salvage shall always be used
to reimburse the excess Reinsurers in the reverse order of their priority according to their
participation in the Ultimate Net Loss before being used in any way to reimburse Reinsured for its
portion of the Ultimate Net Loss under its retention. Reinsured will reasonably enforce its rights
to subrogation and salvage and will reasonably prosecute all claims arising out of those rights.
In the event Reinsured shall refuse or neglect to enforce its rights to salvage or subrogation,
Reinsurer is authorized and empowered to bring any appropriate action in the name of Reinsured or
its policyholder or otherwise to enforce those rights and Reinsured shall cooperate fully with
Reinsurer enforcing those rights. Reinsured and Reinsurer shall share in the cost and expense of
any unsuccessful subrogation efforts in the same proportion that Reinsured and Reinsurer shared
the Ultimate Net Loss giving rise to those subrogation efforts.

ARTICLE XXVII – INTERMEDIARY

Patriot Re International, Inc. 400 Northampton St., Easton, PA 18042, is hereby recognized as the
Intermediary negotiating this Agreement for all business hereunder. All communications (including,
but not limited to, notices, statements, premiums, return salvages and loss settlements) relating
hereto shall be transmitted to the Reinsured or the Reinsurer through Patriot Re International,
Inc., of 400 Northampton

$5M xs $5M

2007 Agreement Wording

January 31, 2007

Page 11 of 14

 

 

Street, Easton, PA 18042. Payments by the Reinsured to the Intermediary shall constitute payment
to the Reinsurer to the extent of such payments. Payments by the Reinsurer to the intermediary
shall constitute payment to the Reinsured only to the extent that such payments are actually
received by the Reinsured.

ARTICLE
XXIII – ENTIRE AGREEMENT CLAUSE

The entire agreement between the Reinsured and the Reinsurer is contained in this Agreement,
including the Reinsuring agreements, exclusions and conditions.

IN
WITNESS WHEREOF, the parties hereto have hereunto set their hands
and seals this 07 day of
June, 2007.

	 	 	 	 	 	 	 
	GUARANTEE INSURANCE COMPANY

	 	 	 	REINSURERS LISTED IN INTERESTS AND

LIABILITIES AGREEMENT:
	By:

	 	/s/ Steven M. Mariano	 	 	 	 
	 

	 	 

     Steven M. Mariano
	 	 
	 	 
	Title:

	 	CEO	 	 	 	 

$5M xs $5M

2007 Agreement Wording

January 31, 2007

Page 12 of 14

 

 

EXHIBIT A

(Nuclear Risk Exclusion)

This Agreement does not apply to “Ultimate Net Loss” arising from, whether directly or indirectly,
whether proximate or remote:

	 	a)	 	Any Nuclear Facility, Nuclear Hazard or Nuclear Reactor:
	 
	 	b)	 	Any Nuclear Material, Radioactive Material, Nuclear Reaction, Nuclear Radiation or
radioactive contamination, all whether controlled or uncontrolled; or
	 
	 	c)	 	Any Nuclear Material, Radioactive Material, Nuclear Reaction, Nuclear Radiation or
radioactive contamination, all whether controlled or uncontrolled, caused directly or
indirectly by contributed to or aggravated by an Event;
	 
	 	d)	 	Any Spent Fuel or Waste;
	 
	 	e)	 	Any Fissionable Substance; or
	 
	 	f)	 	Any nuclear device or bomb.

As used in this Exclusion:

“Fissionable Substance” means;

any prescribe substance that is, or from which can be obtained, a substance capable of
releasing atomic energy by nuclear fission.

“Nuclear Facility” means;

any Nuclear Reactor;

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;

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;

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;

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 nay
one or more of them if at any time the total amount of such material in the custody of the
Insured at the premised 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;

any structure, basin, excavation, premises or place prepared or used for the storage or
disposal of Waste or Radioactive Material, and includes the site on which any of the
foregoing is located, all operations conducts on such site and all premises used for such
operations;

$5M xs $5M

2007 Agreement Wording

January 31, 2007

Page 13 of 14

 

 

“Nuclear Hazard” means: the radioactive, toxic, explosive or other hazardous properties of
Radioactive Material or Nuclear Material.

“Nuclear Material” means Source Material, Special Nuclear Material or Byproduct Material.

“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.

“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.

“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 the Nuclear Reactor.

“Waste” means any waste material (i) containing Byproduct Material and (ii) resulting from the
operation by any person or organization of any Nuclear Facility.

$5M xs $5M

2007 Agreement Wording

January 31, 2007

Page 14 of 14

 

 

INTERESTS AND LIABILITIES AGREEMENT

Workers Compensation Excess of Loss Contract

$5,000,000 excess $5,000,000

(hereinafter referred to as the “Contract”)

between

Guarantee Insurance Company

(hereinafter referred to as the “Company”)

and

Max Re Ltd

(hereinafter referred to as the “Subscribing Reinsurer”)

Under the terms of the Contract, which is attached to this Agreement, the Subscribing Reinsurer
agrees to participate in a 50% share of the interests and liabilities of the Reinsurer(s)
described in the Contract. The participation of the Subscribing Reinsurer shall be several and not
joint with any other Reinsurers participation in the Contract

This Agreement shall become effective at 12.01 a.m., Local Standard Time, at the place of loss,
January 1st, 2007 and ending at 12.01 a.m., Local Standard Time, at the place of loss,
January 1st, 2008 with respect to losses occurring on in force, new, renewal and
anniversary business occurring during that period in accordance with the provision of the attached
Agreement.

Signed in duplicate

In Hamilton, Bermuda this 14th day of September, 2007

Max Re, Ltd

	 	 	 	 	 
	By

	 	/s/ David Kla [Illegible]	 	 
	 

	 	 

	 	 
	Title

	 	 Sup. BOD RSF # 14711	 	 

Signed in duplicate

In Fort Lauderdale, FL this ___ day of                     ,   ___

Guarantee Insurance Company

	 	 	 	 	 
	By

	 	/s/ Steven M. Mariano	 	 
	 

	 	 

	 	 
	Title

	 	CEO	 	 

 

 

N076241

INTERESTS AND LIABILITIES AGREEMENT

It is hereby agreed by and between

GUARANTEE INSURANCE COMPANY

FORT MILL, SOUTH CAROLINA

(hereinafter referred to as the “Reinsured”)

Various Lloyd’s Underwriters

(hereinafter referred to as the “Reinsurer”)

The Reinsurer shall have a 30.55% part of 50.00% share of the Interests and Liabilities of the
“Reinsurer” as set forth in the attached Agreement entitled:

WORKERS COMPENSATION EXCESS OF LOSS

REINSURANCE AGREEMENT

Effective: January 1st, 2007

This Agreement shall become effective at 12.01 a.m., Local Standard Time, at the place of loss,
January lst 2007 and ending at 12.01 a.m., Local Standard Time, at the place of loss,
January 1st 2008 with respect to losses occurring on in force, new, renewal and
anniversary business occurring during that period in accordance with the provisions of the
attached Agreement.

The share of the Reinsurer in the interests and liabilities with respect to said Agreement shall
be separate and apart from the share of the other Reinsurers and the interests and liabilities of
the Reinsurer shall not be joint with those of the other Reinsurers and the Reinsurers shall in no
event participate in the interests and liabilities of the other Reinsurers. This Agreement
contains a binding arbitration provision which may be enforced by the parties.

(SEAL)

 

 

SIGNING SCHEDULE

ATTACHING TO AND FORMING PART OF THE

WORKERS COMPENSATION EXCESS OF LOSS

REINSURANCE AGREEMENT NO. N076241

EFFECTIVE: LOCAL STANDARD TIME, JANUARY 1, 2007

In the name of

GUARANTEE INSURANCE COMPANY

	 	 	 	 	 
	BUREAU REFERENCE
	 	61472 29/01/07
	 	BROKER NUMBER 0518
	 	 	 	 	 
	PROPORTION

%
	 	SYNDICATE 
	 	UNDERWRITER’S

REFERENCE
	 	 	 	 	 
	11.11
	 	435
	 	96959200
	8.33
	 	4472
	 	1149080107FL
	11.11
	 	2987
	 	BA442S07A000
	 	 	 	 	 
	TOTAL LINE 

30.55
	 	No. OF SYNDICATES

3
	 	  

THE LIST OF UNDERWRITING MEMBERS

OF LLOYDS IS IN RESPECT OF 2007

YEAR OF ACCOUNT

BUREAU
USE ONLY

USE3 44   7894

Page 1 of 1

 

IN WITNESS WHEREOF, the parties hereto by their respective duly authorised officers have executed
this Agreement in duplicate as of the date under mentioned at:

 

this      day of          2007

For and on behalf of: THE REINSURED

 

and at London, England,

this     day of          2007

For and on behalf of: VARIOUS.......... UNDERWRITERS.

(as per Schedule attached)

(SEAL)

Page 2 of 10

 

N076241

INTERESTS AND LIABILITIES AGREEMENT

It is hereby agreed by and between

GUARANTEE INSURANCE COMPANY

FORT MILL, SOUTH CAROLINA

(hereinafter referred to as the “Reinsured”)

Aspen Insurance UK Ltd

(hereinafter referred to as the “Reinsurer”)

The Reinsurer shall have a 19.45% part of 50.00% share of the Interests and Liabilities of the
“Reinsurer” as set forth in the attached Agreement entitled:

WORKERS COMPENSATION EXCESS OF LOSS

REINSURANCE AGREEMENT

Effective: January 1st, 2007

This Agreement shall become effective at 12.01 a.m., Local Standard Time, at the place of loss,
January 1st 2007 and ending at 12.01 a.m., Local Standard Time, at the place of loss,
January 1st 2008 with respect to losses occurring on in force, new, renewal and
anniversary business occurring during that period in accordance with the provisions of the
attached Agreement.

The share of the Reinsurer in the interests and liabilities with respect to said Agreement shall
be separate and apart from the share of the other Reinsurers and the interests and liabilities of
the Reinsurer shall not be joint with those of the other Reinsurers and the Reinsurers shall in
no event participate in the interests and liabilities of the other Reinsurers. This Agreement
contains a binding arbitration provision which may be enforced by the parties.

(SEAL)

 

 

IN WITNESS WHEREOF, the parties hereto by their respective duly authorised officers have executed
this Agreement in duplicate as of the date under mentioned at:

this     day of          2007

For and on behalf of: THE REINSURED

and at London, England,

this     day of          2007

For and on behalf of: VARIOUS......... UNDERWRITERS.

(as per Schedule attached)

(SEAL)

Page 2 of 10

 

	 	 	 	 	 
	BUREAU REFERENCE

	 	0701290003576	 
	 
	 	 	 	 
	PROPORTION       CODE

	 	MEMBER COMPANY AND REFERENCE

	          %
	 	 	 	 
	 
	 	 	 	 
	    19.4500000          A8408

	 	ASPEN INSURANCE UK LIMITED

U07433507A0Q

(SEAL)

	 	 	 
	    19.4500000 %     TOTAL

	 	Page 1 of 1

0|0|03

(

We, the Reinsurers, hereby severally agree to reinsure the Reinsured in the manner and proportions
set forth in this reinsurance contract.

The subscribing Reinsurers’ obligations under this contract are several and not joint and
are limited solely to the extent of their individual signed subscriptions. The subscribing
Reinsurers are not responsible for the subscription of any co-subscribing Reinsurer who for
any reason does not satisfy all or part of its obligations.

In witness whereof the name of the Managing Director of Ins-sure Services Limited is
subscribed on behalf of each of the Reinsurers in accordance with the provisions of the
Services Agreement that each of the Reinsurers has with London Processing Centre Limited (a
wholly owned subsidiary of Ins-sure Services Limited).

(SIGNATURE)         Managing Director

This wording is not valid unless it bears the signature of the Managing Director of Ins-sure
Services Limited.

 

 

	 	 	 	 	 
		 	Arthur J. Gallagher (UK) Limited                                         
	 

	 	 	 	Gallagher Global Risks

Page 1 of 1

	 	 	 
	Patriot Re International Inc

	 	17th December 2007
	400 Northampton Street
	 	 
	Eastern
	 	 
	Pennsylvania 18042
	 	 
	U.S.A.
	 	 

ADDENDUM NO. 1 TO COVER NOTE NO. N076241

	 	 	 
	TYPE:

	 	Excess of Loss Reinsurance - $5m xs $5m Layer
	 
	 	 
	REINSURED:*

	 	Guarantee Insurance Company
	 
	 	 
	ORIGINAL PERIOD:

	 	12 months at 1st January 2007

In accordance with your instructions, coverage evidenced by Cover Note No: N076241 has been
amended as set out herein.

It is hereby noted and agreed by Reinsurers hereon, that this contract of Reinsurance is
extended to expire 1st July 2008 and will therefore cover losses occurring during the
period commencing 12.01 am LST at the place of loss 1st January 2007 and ending 12.01 am LST at the place of loss, 1st July 2008.

In consideration of the aforementioned extension, an Additional Deposit Premium of USD 477,000
is due payable 50% at 1st January 2008 and 50% 1st April 2008, and is
subject to adjustment at existing terms and conditions.

The early Commutation provision as contained herein will now apply, if invoked, at 12 months
from the revised expiry date.

Information

Estimated Subject Gross Net Earned Premium Income for the extended period (i.e. 1st
Jan 2008 to 1st July 2008 inclusive) is USD 45,000,000.

All other terms, clauses and conditions shall remain unaltered.

Please examine this Addendum carefully and advise us immediately if it is incorrect or does not
meet with your requirements. You are reminded that the Duty of Disclosure applicable to this
contract is equally applicable to any Addendum.

For and on behalf of

Arthur J. Gallagher (UK) Ltd.

	 	 	 
	
	 	
	Authorised Signatory
	 	Authorised Signatory

 

 

ADDENDUM NO. 1 TO GIC-003/2007

Workers Compensation Excess of Loss Contract

(hereinafter referred to as the “Contract”)

between

Guarantee Insurance Company

(hereinafter referred to as the “Company”)

and

Max Re Ltd

(hereinafter referred to as the “Reinsurer”)

	 	 	 
	Limit

	 	$5,000,000 xs $5,000,000 Layer
	Contract Period

	 	Losses occurring 12 months at January 1, 2007 - 12.01 am Local
Standard Time

It is hereby noted and agreed by Reinsurers hereon, that this contract of Reinsurance is extended
to expire July 1, 2008 and will therefore cover losses occurring during the period commencing 12.01
am Local Standard Time at the place of loss January 1, 2007 and ending 12.01 am Local Standard
Time at the place of loss, July 1, 2008

In consideration of the aforementioned extension, an Additional Deposit Premium of $477,000 is due
and payable 50% at January 1, 2008 and 50% at April 1, 2008, and is subject to adjustment at
existing terms and conditions

The early Commutation provision as contained herein will now apply, if invoked, at 12 months from
the revised expiry date.

All other terms, clauses and conditions shall remain
unaltered.

Signed in duplicate

In Hamilton, Bermuda this 18th day of January, 2008

Max Re, Ltd

	 	 	 	 	 
	By

	 	/s/ John [Illegible]
	 	 
	
Title

	 	 

SVP EVP Ret # 14711
	 	 

Signed in duplicate

In Fort Lauderdale, Florida this _____ day of                                         , 2008

Guarantee Insurance Company

	 	 	 	 	 
	By
	 	 	 	 
	 

	 	 

	 	 
	Titleexv10w31

Exhibit 10.31

WORKERS’ COMPENSATION EXCESS OF LOSS

REINSURANCE AGREEMENT

(hereinafter referred to as the “Agreement”)

between

GUARANTEE INSURANCE COMPANY

FORT MILL, SOUTH CAROLINA

(hereinafter referred to as the “Reinsured”)

and

THE SUBSCRIBING REINSURERS SPECIFIED

IN THE INTERESTS AND LIABILITIES AGREEMENT

ATTACHED TO THIS AGREEMENT

(hereinafter referred to as the “Reinsurer”)

ARTICLE I — BUSINESS COVERED

All statutory benefits payable under a standard Workers’ Compensation Policy in respect to all
business insured by the Reinsured unless specifically excluded by the terms of this Agreement.

This Agreement is to indemnify the Reinsured as set forth herein in respect of the net excess
liability which may accrue to the Reinsured under all policies, Agreements, binders and other
evidences of insurance or reinsurance, whether oral or written (hereinafter called “policies”),
classified by the Reinsured as Workers’ Compensation in force at and becoming effective on and
after the inception date of this Agreement, including renewals.

ARTICLE II — EXCLUSIONS

This Agreement excludes all Ultimate Net Loss arising from the following:

	1.	 	Assumed Reinsurance, except business fronted by insurance companies for licensing purposes.
	 
	2.	 	Business excluded by the attached Nuclear Incident Exclusion Clause — Liability — Reinsurance
— U.S.A., No. 08-31-1.
	 
	3.	 	Pools, associations and syndicates.
	 
	4.	 	War and Terrorism NMA 2929.
	 
	5.	 	Insolvency Funds Exclusion — It is agreed that this agreement excludes all liability Of the
Reinsured arising by contract, operation of law, or otherwise, from its participation or
membership, whether voluntary or involuntary, in any insolvency fund. “Insolvency Fund” including
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 the

 Page 3 of 19 

 

	 	 	Reinsured of part or all of any claim, debt, charge, fee, or other obligation of an insured, 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.
	 
	6.	 	Financial guarantee and insolvency.
	 
	7.	 	Occupational Disease/Cumulative Trauma except when from a “Sudden and Accidental” event of 48
hours or less. For the purpose of this Contract, “Sudden and Accidental” shall mean that the first
and last exposure to the causative agent to each and every individual contributing to the loss
shall fall within a single and continuous 48 hour period.
	 
	8.	 	Commercial airline crews.
	 
	9.	 	Operations requiring coverage under the Defense Base Act, Admiralty Act or any other Federal act
including but not limed to the Jones Act, FELA, or USL&H, except where incidental. (“incidental” to
be defined as less than 10% of an individual insurer’s premium).
	 
	10.	 	Risks involving known exposure to the following substances: Dioxin, Polychlorinated biphenyl
(PCB’s), Asbestos.
	 
	11.	 	Underground mining.
	 
	12.	 	Construction of bridges, tunnels or dams.
	 
	13.	 	Employers Liability.
	 
	14.	 	Losses in Excess of Policy Limits.
	 
	15.	 	All business classified as NCCI — Hazard Group IV as of 1/1/06.
	 
	16.	 	Fire fighters and police officers.
	 
	17.	 	Railroads, except scenic railways, and access lines and industrial aid owner operations when
written as an incidental part of an insured’s overall operations.
	 
	18.	 	No known wrecking or demolition of buildings of structures in excess of three stories.
	 
	19.	 	Manufacturing, packing, handling, shipping, or storage of explosives, substances intended for
use as an explosive, ammunitions, fuses, arms, magnesium, propellant charges, detonating devices,
fireworks, nitroglycerine, celluloid, or pyroxylin; however, this
exclusion shall not apply to the
incidental packing, handling, or storage of same in connection with the sale or transportation by
owner operators of such substances.
	 
	20.	 	Trucking hauling explosive or ammunition (local or long distance hauling) — all employees.

 Page 4 of 19 

 

	21.	 	Manufacturing, packing, handling, shipping or storage of natural or artificial fuel gasses,
butane, propane, gasoline, or liquefied petroleum gas; however, this exclusion shall not apply to
the incidental packing, handling or storage of same in connection with the sale of such substances.
	 
	22.	 	Gas or oil burner installation NOC.
	 
	23.	 	Tank installation gasoline service stations.
	 
	24.	 	Blasting of rock.
	 
	25.	 	Sewer construction all operations.
	 
	26.	 	Gas main, steam main, or water main construction or connection construction.
	 
	27.	 	Boat manufacturing F classes.
	 
	28.	 	Banks and trust company employees of contracting agencies in bank service: guards, patrol,
messengers and armored car crews.
	 
	29.	 	Detective agency.
	 
	30.	 	Patrol agency only in regard to armed guard services.
	 
	31.	 	Losses arising directly or indirectly from Earthquake with the exception of risks written in
the State of Missouri.
	 
	32.	 	Professional sports teams.
	 
	33.	 	Work and navigation of any commercial vessel.
	 
	34.	 	All mining or quarrying operations.
	 
	35.	 	Chemical/petrochemical manufacturers of highly toxic materials.
	 
	36.	 	Blasting or excavating operations over 25 feet in depth.
	 
	37.	 	Tunnel or subway construction.
	 
	38.	 	Marine wrecking, including repair, cleaning, or demolition of commercial vessels or barges.
	 
	39.	 	Underground, offshore or submarine operation including underground mining.
	 
	40.	 	Construction and/or maintenance of cofferdams.
	 
	41.	 	Stevedoring.
	 
	42.	 	Assigned risks.

 Page 5 of 19 

 

	43.	 	Losses arising from nuclear, biological, chemical and radiological events.

ARTICLE III — PERIOD AND CANCELLATION

This Contract shall take effect 12.01am, Local Standard Time at place of loss, 1st
January 2007 and ending 12.0l am, Local Standard Time at
place of loss, lst
January 2008 and shall apply to all losses occurring during that period in respect of in force,
new, renewal and anniversary business.

ARTICLE IV — AMOUNT OF COVER

The Reinsured shall retain and be liable for the first USD 10,000,000 of Ultimate Net Loss
(regardless of the number of policies or number of insureds under which such loss is payable)
arising out of each Loss Occurrence. The Reinsurer shall then be liable for the amount by which
such Ultimate Net Loss exceeds the Reinsured’s retention, but the liability of the Reinsurer shall
not exceed USD 10,000,000 as respects any one Loss Occurrence, nor shall the Reinsurer’s aggregate
liability exceed USD 20,000,000.

ARTICLE V — EXPRESS WARRANTY

It is hereby warranted that the Maximum Any One Life accruing to the Ultimate Net Loss shall be USD
10,000,000

ARTICLE VI — TERRITORY

Worldwide in respect to business principally domiciled in the United States, its territories and
possessions.

ARTICLE
VII — DEFINITIONS

	-	 	The term “Occurrence” shall mean any one accident, disaster or
casualty or series of accidents, disaster or casualties arising out of
one event.
	 
	-	 	Gross Net Earned Premium — manual premium adjusted for experience
modification, State/NCCI Safety Credit, premium discount, expense
constants and policy fees, less returns and cancellations.
	 
	-	 	“Extra contractual obligations” shall mean 90% of any punitive,
exemplary, compensatory or consequential damages, other than loss in
excess of policy limits, paid or payable by the Reinsured as a result
of an action against it by its negligence or bad faith on the part of
the Reinsured in handling a claim under a policy subject to the
Agreement. An extra contractual obligation shall be deemed to have
occurred on the same date as the loss covered or alleged to be covered
under the policy.

 Page 6 of 19 

 

	-	 	“Loss adjustment expense” as used herein shall mean expenses allocable
to the investigation, defense and/or settlement of specific claims,
including litigation expenses and post-judgment interest, but not
including any legal expenses and cost incurred by the Reinsured in
connection with coverage questions and legal actions connected
thereto, office expenses or salaries of the Reinsured’s regular
employees.

ARTICLE VII — ULTIMATE NET LOSS

The term “Ultimate Net Loss” as used in this Agreement shall mean the actual gross loss sustained
by the Reinsured, including extra contractual obligations, structured settlements with claimants or
outside insurers, such loss to include all expenses incurred by the Reinsured in connection with
the settlement of losses, resistance to or negotiations concerning losses; excluding, however, any
part of the office expenses of the Reinsured and salaries of employees other than salary charges for
staff adjuster, fieldsmen, or other employees while actually engaged in the settlement of the
losses.

Salvages and recoveries, whether recovered or received prior or subsequent to loss settlement under
this Agreement, but not including amounts recoverable under all facultative reinsurances, shall be
applied as if recovered or received prior to the aforesaid settlement and shall be first deducted
from the actual loss sustained to arrive at the amount of Ultimate Net Loss. Nothing, however, in
this Article shall be construed to mean losses are not recoverable hereunder until the Ultimate Net
Loss to the Reinsured has been ascertained.

ARTICLE VIII — RATE AND PREMIUM

As premium for the reinsurance provided hereunder, the Reinsured shall pay the Reinsurer 1.06% of
its Subject Earned Manual Premium for the term of this Contract, subject to a minimum premium of
USD 685,000.

The Reinsured shall pay the Reinsurer a deposit premium of USD 740,000 in four equal installments
of USD 185,000 within 30 days of the 1st January 2007, 1st April 2007,
1st July 2007 and 1st October 2007.

Within 45 days after the expiration of this Agreement, the Reinsured shall calculate and report to
the Reinsured the adjusted premium, based on the Reinsured’s Subject Earned Manual Premium for the
term of this Agreement computed in accordance with the first paragraph, and any additional premium
due the Reinsurer or return premium due the Reinsured shall be remitted promptly.

ARTICLE IX — REINSTATEMENT

Each claim hereon reduces the amount of indemnity under this Agreement from the time of occurrence
of the loss but such amount is hereby reinstated from the time of occurrence of the loss in
consideration of the payment by the Reinsured of an additional premium calculated by applying to
the Premium hereon, the percentage of the face amount of this Contract so reinstated. Nevertheless,
the Reinsurer’s

 Page 7 of 19 

 

liability hereunder shall never exceed USD 5,000,000 for any one loss occurrence and USD
10,000,000 for all loss occurrences during the term of this Agreement.

If the loss settlement is made prior to the adjustment of premium the reinstatement premium shall
be calculated provisionally on the deposit premium subject to adjustment when the reinsurance
premium hereon is finally established.

ARTICLE X — REPORTS

The Reinsured shall advise the Reinsurer of all events that in its opinion may result in a claim
under this Agreement for which the Reinsured has reserves in excess of fifty percent (50%) of its
retention under this Agreement, and of all subsequent developments thereto that may affect the
position of the Reinsurer Inadvertent omission or oversight in dispatching advice of notice shall
not affect the liability of the Reinsurer however, this exception shall not apply with respect to
conditions as provided for in the Sunset Article of this Agreement.

Subject always to the terms and conditions of this Agreement, the reinsurance provided under this
Agreement shall be subject to the written terms, limits, and conditions of the original policies
that represent, as set forth in Article 1, the Business Covered and to all interpretations,
modifications, waivers, and alterations thereon. All loss settlements made by the Reinsured,
whether under the original policy terms and conditions or by way of compromise, excluding ex
gratia payments, shall be binding upon the Reinsurer, and the Reinsurer shall allow or pay, as the
case may be, its proportion of each such settlement in accordance with the terms of this Agreement.
It is the true intent of this Agreement the Reinsurer will follow settlements of the Reinsured in
all respects.

The Reinsured will advise the Reinsurer promptly of all losses and any subsequent developments
pertaining thereto, which may in its opinion develop into losses involving reinsurance hereunder
and/or incurred amount penetrates 50% of retention. Inadvertent omission or oversight in
dispatching such advises shall in no way affect the liability of the Reinsurer under this
Agreement, but the Reinsured shall inform the Reinsurer of such omission or oversight upon
discovery.

ARTICLE XI — CLAIMS AND MONETARY CRITERIA

The Reinsured shall promptly advise the Reinsurer in full detail (per suggested Claims Reserve
Worksheet) of all bodily injury claims or losses involving any of the following:

	A)	 	Any claim or loss reserved at 50% or more of the
Reinsured’s retention under this Agreement.
	 
	B)	 	Any claim involving any of the following injuries:

	 	1)	 	Fatality.
	 
	 	2)	 	Spinal Cord Injuries (e.g., quadriplegia, paraplegia).
	 
	 	3)	 	Brain Damage (e.g., seizure, coma or physical/mental impairment).
	 
	 	4)	 	Severe burns injuries resulting in disfigurement or scarring.
	 
	 	5)	 	Total or partial blindness in one or both eyes.

 Page 8 of 19 

 

	 	6)	 	Major organ, (e.g., heart, lungs).
	 
	 	7)	 	Amputation of a limb or multiple fractures.
	 
	 	8)	 	Environmentally related damage or injury (e.g., pollution, waste site or common cause claims,
such as Agent Orange, asbestos or DES).
	 
	 	9)	 	Occupational disease or other disability relating to working conditions or job related factors.

ARTICLE XII — TAXES

In consideration of the terms under which this Agreement is issued, the Reinsured undertakes not to
claim any deduction of the premium hereon when making tax returns, other than income or profits tax
returns, to any state or territory of the United States of America or to the District of Columbia.

ARTICLE XIII — FEDERAL EXCISE TAX

(Applicable to those reinsurers, excepting Underwriters at Lloyd’s London and other reinsurers
exempt from Federal Excise Tax, who are domiciled outside the United
States of America.)

	 	A)	 	The Reinsurer has agreed to allow for the purpose of paying the Federal Excise Tax the
applicable percentage of the premium payable hereon (as imposed under
Section 4371 of the
Internal Revenue Code) to the extent such premium is subject to the Federal Excise Tax.
	 
	 	B)	 	In the event of any return of premium becoming due hereunder, the Reinsurer will deduct the
applicable percentage from the return premium payable hereon and the Reinsured or its agent should
take steps to recover the tax from the United States Government.

ARTICLE XIV — CURRENCY

All retentions and limits hereunder are expressed in United States Dollars, and all premium and
loss payments shall be made in United States Currency.

ARTICLE XV — INSPECTION OF RECORDS

The Reinsurer or its duly authorized representative shall have the right at any reasonable time
upon five (5) working days prior notice during or at any time after the expiration of this
Agreement, and as frequently as deemed necessary by the Reinsurer, to visit the office of the
Reinsured (or of any affiliate or representative of the Reinsured involved with the Business
Covered under this Agreement) to inspect, examine, audit, and verify any of the policy or claim
files, accounts, documents, books reports, or work papers (“records”) relating to the business
reinsured under this Agreement whether or not those records are co-mingled with any unrelated
business records. Reinsurer or its representative shall have the right to make copies, at its own
expense, or extracts of any records related specifically to the Business Covered under this
agreement only.

 Page 9 of 19 

 

ARTICLE XVI — OFFSET CLAUSE

All amounts due either the Reinsured or the Reinsurer, whether by reason of reinsurance premium.
Ultimate Net Loss, or any other amount due under this Agreement shall be subject to the right of
recoupment and offset and upon the exercise of the same, only the net balance shall be due. All
claims for amounts of reinsurance premium, Ultimate Net Loss, or any other amount due under this
Agreement, whether or not fixed in amount at the time of the insolvency of any party to this
Agreement, arising from coverage placed in effect under this Agreement prior to the insolvency of
any party to this Agreement shall be deemed pre-liquidation debts and subject to this Article. In
the event of insolvency of the Reinsured offset shall be in accordance with applicable law.

ARTICLE XVII — ARBITRATION (BRMA6C)

As a condition precedent to any right of action hereunder, any dispute or difference between the
Reinsured and any Reinsurer relating to the interpretation or performance of this Contract,
including its formation or validity, or any transaction under this Contract, whether arising before
or after termination, shall be submitted to arbitration.

If more than one reinsurer is involved in the same dispute, all such reinsurers shall constitute
and act as one party for purposes of this clause provided that communication shall be made by the
Reinsured to each of the reinsurers constituting the one party, and provided, however, that nothing
therein shall impair the rights of such reinsurers to assert several, rather than joint, defenses
or claims, nor be construed as changing the liability of the Reinsurer under the terms of this
Contract from several to joint.

Upon written request of any party, each party shall choose an arbitrator and the two chosen shall
select a third arbitrator. If either party refuses or neglects to appoint an arbitrator within
thirty (30) days after receipt of the written request for arbitration, the requesting party may
appoint a second Arbitrator. If the two arbitrators fail to agree on the selection of a third
arbitrator within thirty (30) days of their appointment, the Reinsured shall petition the American
Arbitration Association to appoint the third arbitrator. If the American Arbitration Association
fails to appoint the third arbitrator within thirty (30) days after it has been requested to do so,
either party may request a justice of a Court of general jurisdiction of the state in which the
arbitration is to be held to appoint the third arbitrator. All arbitrators shall be active or
retired officers of insurance or reinsurance companies, or Lloyd’s London Underwriters, and
disinterested in the outcome of the arbitration. Each party shall submit its case to the
arbitrators within thirty (30) days of the appointment of the third arbitrator.

The parties hereby waive all objections to the method of selection of the arbitrators, it being the
intention of both sides that all the arbitrators be chosen from those submitted by the parties.

The arbitrators shall have the power to determine all procedural rules for the holding of the
arbitration including but not limited to inspection of documents, examination of witnesses and any
other matter relating to the conduct of the arbitration. The arbitrators shall interpret this
Contract as an honorable engagement and not as merely a legal obligation; they are relieved of all
judicial formalities and may abstain from following the strict rules of law. The arbitrators may
award interest and costs. Each party shall bear the expense of its own arbitrator and shall share
equally with the other party the expenses of

 Page 10 of 19 

 

The arbitrators shall have the power to determine all procedural rules for the holding of the
arbitration including but not limited to inspection of documents, examination of witnesses and any
other matter relating to the conduct of the arbitration. The arbitrators shall interpret this
Contract as an honorable engagement and not as merely a legal obligation; they are relieved of all
judicial formalities and may abstain from following the strict rules of law. The arbitrators may
award interest and costs. Each party shall bear the expense of its own arbitrator and shall share
equally with the other party the expenses of the third arbitrator and of the arbitration. The
decision in writing of the majority of the arbitrators shall be final and binding upon both
parties. Judgment may be entered upon the final decision of the arbitrators in any court having
jurisdiction.

The
arbitration shall take place in the city where the Reinsured’s principal office is located,
unless otherwise mutually agreed between the Reinsured and the Reinsurer.

This article shall remain in full force and effect in the event any other provision of this
Contract shall be found invalid or non-binding.

ARTICLE XIX — INSOLVENCY

In the event of the insolvency of the Reinsured or the Reinsurer (the “Insolvent Party”), premiums
and losses shall be payable directly to the Insolvent Party or its liquidator, receiver,
conservator or statutory successor on the basis of the liability of the Insolvent Party without
diminution because of the insolvency of the Insolvent Party. The liquidator, receiver, conservator
or statutory successor of the Insolvent Party shall give written notice to the other party hereto
of the pendency of a claim against the Insolvent Party, indicating the Policy reinsured which claim
would involve a possible liability on the part of the other party hereto within reasonable time
after such claim is filed in the conservation, liquidation, or receivership proceedings, and that
during the pendency of such claim the other party hereto may investigate such claim and interpose,
at its own expense, in the proceeding where such claim is to be adjudicated any defense or defenses
that it may deem available to the Insolvent Party or its liquidator, receiver, conservator or
statutory successor. The expense thus incurred by the other party shall be chargeable, subject to
he approval of the court, against the Insolvent Party as part of the expense of conservation,
liquidation or receivership to the extent of a pro rata share of the benefit which may accrue to
the Insolvent Party solely as a result of the defense undertaken by the other party.

ARTICLE XX — INSOLVENCY FUND EXCLUSION

It is agreed that this Agreement excludes all liability of the Reinsured arising by contract,
operation of law, or otherwise, from its participation or membership, whether voluntary or
involuntary, in any insolvency fund. “Insolvency Fund” includes any guaranty fund, insolvency fund,
plan, pool, association, fund or other arrangement, however denominated, established or governed,
which provides for any assessment of or payment or assumption by the Reinsured of part or all of
any claim, debt, charge, fee or other obligations 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.

 Page 11 of 19 

 

ARTICLE XXI — ERRORS AND OMISSIONS

Except for the conditions as provided for in the Sunset Article of this Agreement, any isolated and
inadvertent administrative act, neglect, delay, omission, or error by either party to this
Agreement, will not be held to relieve either party to this Agreement from any liability that would
attach to it under this Agreement if that act, neglect, delay, omission, or error had not been
made, providing that such act, neglect, delay, omission, or error is not prejudicial to the other
party and is rectified immediately upon discovery without prejudice to the other party.

ARTICLE XXII — SERVICE OF SUIT

(This Article only applies to reinsurers domiciled outside of the United States and/or not
approved, qualified, authorized or accredited in any state, territory, or district of the United
States having jurisdiction over the Reinsured.)

It is agreed that in the event of the failure of the Reinsurer hereon to pay any amount claimed to
be due hereunder, the Reinsurer hereon, at the request of the Reinsured, will submit, first, to
arbitration as provided for above and, failing that, to the jurisdiction of a court of competent
jurisdiction within the United States. Nothing in this Article constitutes or should be understood
to constitute a waiver of the Reinsurer’s rights to commence an action in arbitration or, if
appropriate, any court of competent jurisdiction within the United States. Nothing in this Article
constitutes or should be understood to constitute a waiver of the Reinsurer’s rights to commence an
action in arbitration or, if appropriate, in any court of competent jurisdiction in the United
States, to remove an action to a United States District Court, or to seek a transfer of a case to
another court as permitted by the laws of the United States or of any state in the United States.
It is further agreed that service of process in such suit may be made
upon Messrs. Mendes and
Mount, 750 Seventh Avenue, New York, New York, 10019 (hereinafter, “agent for service of process”)
and that in any suit instituted, the Reinsurer will abide by the final decision of such court or of
any appellate court in the event of an appeal.

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

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

 Page 12 of 19 

 

ARTICLE XXIII — SUNSET CLAUSE

Notwithstanding the provisions of the Errors and Omissions Article of this Agreement, coverage
hereunder shall apply only to Event(s) notified by Reinsured to Reinsurer, with full particulars,
within eighty four (84) months from the commencement of the Term of this Agreement. Notice of an
Event shall include:

	 	1.	 	The approximate time and location of the Event.
	 
	 	2.	 	The date of loss as established under this Agreement.
	 
	 	3.	 	The names of any original insureds that have been identified by Reinsured, at the time of
notice, as being involved in the Event.
	 
	 	4.	 	The current indemnity, medical and expense reserves delineated by original insured.
	 
	 	5.	 	The total payments made by the Reinsured, delineated by original insured.

ARTICLE XXIV— MANDATORY COMMUTATION CLAUSE

Not later than eighty-four (84) months after the commencement of the Term of this Agreement.
Reinsured shall advise Reinsurer of the amount of all Ultimate Net Loss for all claims from
Business Covered from any Event, both reported and unreported, both paid and not finally settled,
that is the subject of this Agreement. Reinsured and Reinsurer or their respective representatives
shall, within sixty (60) days thereafter by mutual agreement, determine and capitalize (i.e. reduce
to a net present value) the total of such Ultimate Net Loss for each Event.

If the mutually agreed capitalized value of the Ultimate Net Loss for any Event is in excess of
Reinsured’s retention for that Event, Reinsurer shall pay Reinsured the amount, subject to the
coverage provided under this Agreement, of capitalized Ultimate Net Loss in excess of Reinsured’s
retention for that Event less any amounts of Ultimate Loss previously paid by Reinsurer to
Reinsured for that Event.

If mutual agreement cannot be reached, then any difference shall be settled by an appraisal made by
a panel of three actuaries, one to be chosen by each party and the third by the two so chosen. If
either party refuses or neglects to appoint an actuary within thirty (30) days of a written request
from the other party to appoint an actuary, the other party may appoint two actuaries. If the two
actuaries fail to agree on the selection of a third actuary within thirty (30) days of their
appointment, each of them shall name two, of whom the other shall decline one and the decision
shall be made by drawing lots.

All the
actuaries shall be regularly engaged in the valuation of Workers’ Compensation claims and
shall be Fellows of the Casualty Actuarial Society or Members of the American Academy of Actuaries.
None of the actuaries shall be under the control of either party to this Agreement.

Each party shall submit its case to its chosen actuary within thirty (30) days of the appointment
of the third actuary. The decision in writing of any two appointed actuaries, when filed with the
parties hereto, shall be final and binding on all parties participating in the appraisal and
judgment may be entered hereon in any court of competent jurisdiction.

 Page 13 of 19 

 

The expense of the actuaries and of their appraisal shall be equally divided between the Reinsured
and the Reinsurer. The appraisal shall take place in New York City unless some other place is
mutually agreed upon by Reinsured and Reinsurer.

Payment by Reinsurer of the amount of capitalized Ultimate Net Loss in excess of Reinsured’s
retention for any Event less any amounts of Ultimate Net Loss previously paid by Reinsurer to
Reinsured for that Event, whether determined by mutual agreement or by the appraisal procedure set
forth above, shall constitute a complete and final release of Reinsurer of all claims by Reinsured
for Ultimate Net Loss, both reported and unreported, paid and incurred, for that Event. If the
capitalized Ultimate Net Loss for any Event is determined to be below the retention, whether by
mutual agreement or the appraisal procedure set forth above, such determination shall constitute a
complete and Final release of Reinsurer for all claims by Reinsured for Ultimate Net Loss, both
reported and unreported, paid and incurred, for that Event.

ARTICLE XXV — UNAUTHORIZED REINSURANCE (BRMA55I)

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

As regards policies or bonds issued by the Reinsured coming within the scope of this Contract, the
Reinsured agrees that when it shall file with the insurance regulatory authority or set up on its
books reserves for losses covered hereunder which it shall be required by law to set up, it will
forward to the Reinsurer a statement showing the proportion of such reserves which is applicable
to the Reinsurer. The Reinsurer hereby agrees that it will apply for and secure delivery to the
Reinsured of a clean, irrevocable and unconditional Letter of Credit, issued by a bank, and
containing provisions acceptable to the insurance regulatory authorities having jurisdiction over
the Reinsured’s reserves in an amount equal to the Reinsurer’s proportion of reserves in respect
of known outstanding losses that have been reported to the Reinsurer and allocated loss adjustment
expense relating thereto, and losses and allocated loss adjustment expense paid by the Reinsured
but not recovered from the Reinsurer, as shown in the statement prepared by the Reinsured
(hereinafter referred to as “Reinsurer’s Obligations”). Under no circumstances shall any amount
relating to reserves in respect of incurred but not reported losses be included in the amount of
the Letter of Credit.

The Letter of Credit shall be issued for a period of not less than one year, and shall be
automatically extended for one year from its date of expiration or any future expiration date
unless thirty (30) days prior to any expiration date the issuing bank shall notify the Reinsured
by certified or registered mail that the issuing bank elects not to consider the Letter of Credit
extended for any additional period.

The Reinsurer and Reinsured agree that the Letters of Credit provided by the Reinsurer pursuant to
the
provisions of this Contract may be drawn upon at any time, notwithstanding any other provision of
this
Contract, and be utilized by the Reinsured or any successor, by operation of law, of the Reinsured
including, without limitation, any liquidator, rehabilitator, receiver or conservator of the
Reinsured for
the following purposes, unless otherwise provided for in a separate Trust Agreement:

	(a)	 	to reimburse the Reinsured for the Reinsurer’s Obligations, the payment of which is due under the
terms of this Contract and which has not been otherwise paid;

Page 14 of 19

 

ARTICLE XXVIl — SUBROGATION

Reinsurer shall be credited with subrogation (i.e. reimbursement obtained or recoveries made by
Reinsured, less the actual cost, excluding salaries of officers and employees of the Reinsured and
sums paid to attorneys as retainer, of obtaining such reimbursement or making such recoveries) on
any claims or settlements involving this Agreement. Subrogation and salvage shall always be used
to reimburse the excess Reinsurers in the reverse order of their priority according to their
participation in the Ultimate Net Loss before being used in any way to reimburse Reinsured for its
portion of the Ultimate Net Loss under its retention. Reinsured will reasonably enforce its rights
to subrogation and salvage and will reasonably prosecute all claims arising out of those rights.
In the event Reinsured shall refuse or neglect to enforce its rights to salvage or subrogation,
Reinsurer is authorized and empowered to bring any appropriate action in the name of Reinsured or
its policyholder or otherwise to enforce those rights and Reinsured shall cooperate fully with
Reinsurer enforcing those rights. Reinsured and Reinsurer shall share in the cost and expense of
any unsuccessful subrogation efforts in the same proportion that Reinsured and Reinsurer shared
the Ultimate Net Loss giving rise to those subrogation efforts.

ARTICLE XXVIII — INTERMEDIARY

Patriot Re International Inc., of 400 Northampton Street, Easton, Pennsylvania 18042, is hereby
recognized as the Intermediary negotiating this Agreement for all business hereunder. All
communications (including, but not limited to, notices, statements, premiums, return salvages and
loss settlements relating hereto shall be transmitted to the Reinsured or the Reinsurer through
Patriot Re International Inc., of 400 Northampton Street, Easton, Pennsylvania 18042. Payments by
the Reinsured to the Intermediary shall constitute payment to the Reinsurer to the extent of such
payments. Payments by the Reinsurer to the Intermediary shall constitute payment to the Reinsured
only to the extent that such payments are actually received by the Reinsurerd.

ARTICLE XXIX — ENTIRE AGREEMENT CLAUSE

The entire agreement between the Reinsured and the Reinsurer is contained in this Agreement,
including the Reinsuring agreements, exclusions and conditions.

Page 16 of 19

 

IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals this                      day of                     ,
2007.

REINSURERS LISTED IN INTERESTS AND LIABILITIES AGREEMENT:

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	 

	 	Name of Officer	 	 
	 
	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 

	 	 

Page 17 of 19

 

EXHIBT A

(Nuclear Risk Exclusion)

This Agreement does not apply to “Ultimate Net Loss” arising from, whether directly or indirectly,
whether proximate or remote:

	 	a)	 	Any Nuclear Facility, Nuclear Hazard or Nuclear Reactor;
	 
	 	b)	 	Any Nuclear Material, Radioactive Material, Nuclear Reaction, Nuclear Radiation or
radioactive contamination, all whether controlled or uncontrolled; or
	 
	 	c)	 	Any Nuclear Material, Radioactive Material, Nuclear Reaction, Nuclear Radiation or
radioactive contamination, all whether controlled or uncontrolled, caused directly
or indirectly by, contributed to or aggravated by an Event;
	 
	 	d)	 	Any Spent Fuel or Waste;
	 
	 	e)	 	Any Fissionable Substance; or
	 
	 	f)	 	Any nuclear device or bomb.

     As used in this Exclusion:

     “Fissionable Substance” means;

any prescribe substance that is, or from which can be obtained, a substance capable of
releasing atomic energy by nuclear fission.

     “Nuclear Facility’’ means;

any Nuclear Reactor,

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;

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;

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,

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 nay
one or more of

Page 18 of 19

 

them if at any time the total amount of such material in the custody of the Insured at the
premised 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;

any structure, basin, excavation, premises or place prepared or used for the storage or
disposal of Waste or Radioactive Material, and includes the site on which any of the
foregoing is located, all operations conducts on such site and all premises used for such
operations;

“Nuclear Hazard” means: the radioactive, toxic, explosive or other hazardous properties of
Radioactive Material or Nuclear Material.

“Nuclear Material” means Source Material, Special Nuclear Material or Byproduct Material.

“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.

“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.

“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 sued or
exposed to radiation in the Nuclear Reactor.

“Waste” means any waste material (i) containing Byproduct Material and (ii) resulting from the
operation by any person or organization of any Nuclear Facility.

Page 19 of 19

 

N076242

INTERESTS AND LIABILITIES AGREEMENT

It is hereby agreed by and between

GUARANTEE INSURANCE COMPANY

FORT MILL, SOUTH CAROLINA

(hereinafter referred to as the “Reinsured”)

Various Lloyd’s Underwriters

(hereinafter referred to as the “Reinsurer”)

The Reinsurer shall have a 75.00% part of 100.00% share of the Interests and
Liabilities of the “Reinsurer” as set forth in the attached Agreement entitled:

WORKERS COMPENSATION EXCESS OF LOSS

REINSURANCE AGREEMENT

Effective: January 1st, 2007

This Agreement shall become effective at 12.01 a.m., Local Standard Time, at the place of loss,
January lst 2007 and ending at 12.01 a.m., Local Standard Time, at the place of loss, January
lst 2008 with respect to losses occurring on in force, new, renewal and anniversary
business occurring during that period in accordance with the provisions of the attached
Agreement.

The share of the Reinsurer in the interests and liabilities with respect to said Agreement shall be separate and apart from the share of the other Reinsurers and the
interests and liabilities of the Reinsurer shall not be joint with those of the other
Reinsurers and the Reinsurers shall in no event participate in the interests and
liabilities of the other Reinsurers. This Agreement contains a binding arbitration
provision which may be enforced by the parties.

(SEAL)

 

 

IN WITNESS WHEREOF, the parties hereto by their respective duly authorised officers have executed
this Agreement in duplicate as of the date under mentioned at:

   

  	 	 	 
	 	 
         	 
	 	 	 	 	 
	 this 	day of 	2007
	 	 	 
	 	For and on behalf of: THE REINSURED 	 
	 

 

and at London, England,

	 	 	 	 	 
	this

	 	day of
	 	2007

For and on behalf of: VARIOUS                      UNDERWRITERS.

(as per Schedule attached)

(SEAL)

Page 2 of 19

 

SIGNING SCHEDULE

ATTACHING TO AND FORMING PART OF THE

WORKERS COMPENSATION EXCESS OF LOSS

REINSURANCE AGREEMENT NO. N076242

EFFECTIVE: LOCAL STANDARD TIME, JANUARY 1, 2007

In the name of

GUARANTEE INSURANCE COMPANY

BUREAU REFERENCE 61912 26/01/07 BROKER NUMBER 0518

	 	 	 	 	 	 	 
	PROPORTION	 	 	 	 	 	UNDERWRITER'S
	%	 	SYNDICATE	 	REFERENCE
	14.29
	 	 	435	 	 	80494453
	10.71
	 	 	4472	 	 	1149090107FC
	14.29
	 	 	2987	 	 	BA442S07B000
	  7.14
	 	 	2003	 	 	CH4000126284
	  7.14
	 	 	570	 	 	W2XQHDU07AXX
	  7.14
	 	 	1084	 	 	49616V07AA
	14.29
	 	 	1200	 	 	1406507AR000
	TOTAL LINE
	 	No. OF SYNDICATES	 	 
	75.00
	 	 	7	 	 	 

THE LIST OF UNDERWRITING MEMBERS

OF LLOYDS IS IN RESPECT OF 2007

YEAR OF ACCOUNT

Page 1 of 1

 

N076242

INTERESTS AND LIABILITIES AGREEMENT

It is hereby agreed by and between

GUARANTEE INSURANCE COMPANY

FORT MILL, SOUTH CAROLINA

(hereinafter referred to as the “Reinsured”)

Aspen Insurance UK Ltd

(hereinafter referred to as the “Reinsurer”)

The Reinsurer shall have a 25.00% part of 100.00% share of the Interests and
Liabilities of the “Reinsurer” as set forth in the attached Agreement entitled;

WORKERS COMPENSATION EXCESS OF LOSS

REINSURANCE AGREEMENT

Effective: January 1st, 2007

This Agreement shall become effective at 12.01 a.m., Local Standard Time, at the
place of loss, January 1st 2007 and ending at 12.01 a.m., Local Standard Time, at the
place of loss, January 1st 2008 with respect to losses occurring on in force, new,
renewal and anniversary business occurring during that period in accordance with the
provisions of the attached Agreement.

The share of the Reinsurer in the interests and liabilities with respect to said
Agreement shall be separate and apart from the share of the other Reinsurers and the
interests and liabilities of the Reinsurer shall not be joint with those of the other
Reinsurers and the Reinsurers shall in no event participate in the interests and
liabilities of the other Reinsurers. This Agreement contains a binding arbitration
provision which may be enforced by the parties.

(SEAL)

 

 

IN WITNESS WHEREOF, the parties hereto by their respective duly authorised officers have executed
this Agreement in duplicate as of the date under mentioned at:

	 	 	 	 	 	 
	 	 	 	 	 	 
	this

	 	day of
	 	2007	
	

 

	For and on behalf of: REINSURED

 

and at London, England,

	 	 	 	 	 
	this                 day of                                       2007	
 	 
	For and on behalf of: VARIOUS                      UNDERWRITERS.	 	 
	(as per Schedule attached)	 	 

(SEAL)

Page 2 of 19

 

SIGNING SCHEDULE

ATTACHING TO AND FORMING PART OF THE

WORKERS COMPENSATION EXCESS OF LOSS

REINSURANCE AGREEMENT NO. N076242

EFFECTIVE: LOCAL STANDARD TIME, JANUARY 1, 2007

In the name of

GUARANTEE INSURANCE COMPANY

BUREAU REFERENCE 0701260003747

	 	 	 	 	 	 	 
	PROPORTION	 	 	 	 
	%	 	CODE	 	MEMBER COMPANY AND REFERENCE
	 
	 	 	 	 	 	 
	25.0000000

	 	 	A8408	 	 	ASPEN INSURANCE UK LIMITED

U07433607A0X
	25.0000000

	 	 	%	 	 	TOTAL

Page 1 of 1

 

Arthur J. Gallagher (UK) Limited                     

Gallagher Global Risks

Page 1 of 1

	 	 	 
	Patriot Re International Inc

	 	17th December 2007
	400 Northampton Street
	 	 
	Eastern
	 	 
	Pennsylvania 18042
	 	 
	U.S.A.
	 	 

ADDENDUM NO. 1 TO COVER NOTE NO. N076242

	 	 	 
	TYPE:

	 	Excess of Loss Reinsurance — $10m xs $10m Layer
	 
	 	 
	REINSURED:*

	 	Guarantee Insurance Company
	 
	 	 
	ORIGINAL PERIOD:

	 	12 months at 1st January 2007

In accordance with your instructions, coverage evidenced by Cover Note No: N076242 has been
amended as set out herein.

It is hereby noted and agreed by Reinsurers hereon, that this contract of Reinsurance is extended
to expire 1st July 2008 and will therefore cover losses occurring during the period
commencing 12.01am LST at the place of loss 1st January 2007 and ending 12.01 am LST at
the place of loss, 1st July 2008.

In consideration of the aforementioned extension, an Additional Deposit Premium of USD 310,500 is
due payable 50% at 1st January 2008 and 50% 1st April 2008, and is subject
to adjustment at existing terms and conditions.

The early Commutation provision as contained herein will now apply, if invoked, at 12 months from
the revised expiry date.

Information

Estimated Subject Gross Net Earned Premium Income for the extended period (i.e. 1st Jan
2008 to 1st July 2008 inclusive) is USD 45,000,000.

All other terms, clauses and conditions shall remain unaltered.

Please examine this Addendum carefully and advise us immediately if it is incorrect or does not
meet with your requirements. You are reminded that the Duty of Disclosure applicable to this
contract is equally applicable to any Addendum.

For and on behalf of

Arthur J. Gallagher (UK) Ltd.

	 	 	 
	

	 	
	Authorised Signatory

	 	Authorised Signatory

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