Document:

Exhibit 10.12

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                                    SUBLEASE

                                     between

       INSPIRE INSURANCE SOLUTIONS, INC., debtor and debtor-in-possession,

                                       And

                    ARROWHEAD GENERAL INSURANCE AGENCY, INC.

                            Dated as of May 14, 2002

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<PAGE>

                                    SUBLEASE

         This Sublease ("Sublease") is made and entered into as of May 14, 2002,
by and between INSPIRE INSURANCE SOLUTIONS, INC., a Texas corporation and debtor
and  debtor-in-possession   (hereafter   "Sublessor"),   and  Arrowhead  General
Insurance Agency, Inc., a Minnesota corporation  (hereafter  "Sublessee"),  with
reference to the following facts:

                                    RECITALS
              A.  Sublessor,  as   successor-in-interest  to  Arrowhead  General
Insurance Agency, Inc., and Kilroy Realty, L.P., a Delaware limited partnership,
as successor-in-interest to ADI Arrow Partners, L.P ("Master Landlord"), entered
into a Lease dated as of April 10, 1996 (the "Master  Lease"),  attached to this
Sublease as Exhibit "B" and incorporated  herein by reference.  The Master Lease
covers the building containing approximately 93,000 rentable square feet located
at 6055 Lusk Boulevard, San Diego, California ("Building" or "Master Premises"),
as more  particularly  described in Exhibit "A",  attached to this  Sublease and
incorporated herein by reference..

              B. On February 15, 2002,  Sublessor filed a voluntary petition for
relief under Chapter 11 of the United  States  Bankruptcy  Doe (the  "Bankruptcy
Code") in the United States Bankruptcy Court for the Northern District of Texas,
Fort Worth Division (the "Bankruptcy  Court"),  under Case No. 02-41228-DML (the
"Bankruptcy Case").

              C. Sublessor  desires to assume the Master Lease in the Bankruptcy
Court pursuant to Section 365 of the Bankruptcy Code.

              D.  Sublessor and Sublessee  desire to enter into this Sublease in
order  for   Sublessee  to  sublease  a  portion  of  the  Building   containing
approximately  40,000 rentable square feet and as depicted on Exhibit A attached
hereto (the "Premises"), on the terms and conditions set forth herein.

              E.  Sublessor  and Sublesee are also  entering  into various other
agreements in conjunction with this Sublease,  including,  but not limited to, a
Software License Agreement, a Policy Processing and Administration  Agreement, a
Claims Administration  Agreement,  a Professional  Services Agreement,  an Asset
Purchase Agreement and a Comprehensive Preferred Escrow Agreement (collectively,
the "Other Agreements").

              F. Sublessor and Sublessee  desire that this Sublease,  as well as
the  other  agreements  referenced  in the  preceding  Recital,  shall  only  be
effective  and binding on them if (1) all of such  agreements  are approved by a
final order of the Bankruptcy Court as provided for herein,  and (2) Sublessor's
rejection of the Policy Administration Agreement is approved by a final order of
the Bankruptcy Court acceptable in form and substance to Sublessee.

         NOW,  THEREFORE,  in consideration  of the mutual  agreements set forth
herein  and  for  other  good  and  valuable  consideration,   the  receipt  and
sufficiency  of which are hereby  acknowledged,  the parties  agree as set forth
below.

         1. DEFINED  TERMS.  Terms with initial  capital  letters not  otherwise
defined herein shall have the respective meanings set forth in the Master Lease.

                                       2
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         2.  PREMISES.  Sublessor  hereby  subleases to Sublessee  and Sublessee
hereby  hires  from  Sublessor,  on and  subject to the  terms,  conditions  and
covenants  hereinafter  set forth,  the  Premises.  Sublessee  agrees to use the
Premises  solely for the office uses and for no other use or purpose without the
prior  written  consent of Master  Landlord.  Sublessor  agrees to  deliver  the
Premises in a clean and orderly state to Sublessee.  This shall include  cleaned
carpets, items removed from walls and any holes in walls repaired.

         3.  WARRANTY  BY  SUBLESSOR.   Sublessor  warrants  and  represents  to
Sublessee that Sublessor is not now, and as of the  commencement of the Term (as
defined  below)  will  not be,  in  default  or  material  breach  of any of the
provisions  of the Master  Lease,  and the Sublessor has received no notice from
Master  Landlord that Sublessor is in default or breach of any of the provisions
of the Master Lease.  Sublessor further  represents and warrants that (a) a true
and correct copy of the Master Lease,  as amended to date, is attached hereto as
Exhibit B, (b) the Master Lease has not been otherwise  amended or modified,  is
in full force and effect,  and represents the entire agreement between Sublessor
and Master Landlord  relating to the Premises and (c) to the best of Sublessor's
actual  knowledge,  Master Landlord is not in default with respect to the Master
Lease. From and after the date of this Agreement,  Sublessor agrees that it will
not amend or terminate  the Master Lease in any way that affects the Premises or
Sublessee's  rights  under this  Sublease  without  the  written  consent of the
Sublessee,  which shall not be unreasonably withheld or delayed. Sublessor shall
perform  all  obligations  under the  Master  Lease  except to the  extent  such
obligations  are expressly  required to be performed by the Sublessee under this
Sublease.  Sublessor  shall seek to assume the  Master  Lease in the  Bankruptcy
Case,  pursuant  to Section  365 of the  Bankruptcy  Code.  Sublessor  agrees to
indemnify,  defend and hold sublessee harmless from any and all claims, damages,
liabilities, costs and expenses (including reasonable attorneys' fees and costs)
arising  from or  relating  to any  breach of  Sublessor's  representations  and
warranties or breach of any or its other obligations under this section.

         4. TERM.  The term of this Sublease  shall  commence on the 5th day (or
such sooner or later day as the parties may agree) after this  sublease has been
approved by a final order of the Bankruptcy  Court  ("Commencement  Date"),  and
shall  expire  on April 13,  2007,  unless  sooner  terminated  pursuant  to the
provisions hereof.

         5. RENT. Sublessee shall pay to Sublessor $60,000 per month as rent for
the  Premises  ("Rent"),  at the address for  Sublessor  set forth in Section 21
below,  or at such other place as Sublessor shall designate from time to time by
written notice to Sublessee,  in advance on the first day of each calendar month
of the  term  of this  Sublease,  starting  on the  Commencement  Date,  without
deduction, offset, prior notice or demand.

                  5.1 FULL SERVICE RATE.  The Rent is on a "full service  gross"
basis and  Sublessee  shall not be  responsible  for any charges for  Additional
Rent,  including,  without  limitation,  any  Impositions,  insurance  premiums,
utility costs or any other operating expenses; provided, however, that Sublessor
shall  have the  right to  increase  the Rent by an  amount  equal to 43% of any
unforeseen  increases in electricity  costs  applicable  during the term of this
Sublease to the extent such increases  result in the  electricity  costs for the
Premises exceeding one hundred five percent (105%) of such electricity costs for
the prior calendar year, on a cumulative basis.

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                  5.2 SECURITY DEPOSIT. Upon obtaining Master Landlord's consent
to this Sublease,  Sublessee shall deliver into an escrow account in the name of
Sublessor a security  deposit in the amount of $60,000,  which  amount  shall be
funded in equal payments over the course of five (5) months ($12,000 per month).
Sublessee  shall retain the interest  payments from the escrow  account.  In the
event of a  default  on the  part of  Sublessee,  funds  shall  be  released  to
Sublessor  to the extent of the default and  Sublessee  shall,  within three (3)
business  days  replenish  the  escrow  account  with the  amount  withdrawn  by
Sublessor.  The security deposit shall not constitute the last months rent; such
funds  shall be  dispersed  to  Sublessee  within  thirty  (30)  days  after the
expiration or termination of this Sublease.

                  5.3 INTEREST ON PAYMENTS DUE. Any sum due  Sublessor  pursuant
to this  Agreement  that is not paid by the date on which  payment  is due shall
bear  interest  from that date  until the date such sum is paid at the lesser of
1.5 % per month or the  maximum  rate of  interest  allowed by  applicable  law.
Sublessee  will  also  pay  Sublessor  for any  reasonable  expenses,  including
attorney's fees,  incurred by Sublessor in the collection of any amounts due and
payable under this Agreement.

                  5.4  ELECTRONIC   FUNDS   TRANSFER.   Sublessor  will  provide
Sublessee bank routing information.  All payments are to be via Electronic Funds
Transfer (EFT),  unless  otherwise  agreed to in writing by the parties,  to the
account specified in writing by Sublessor.

                  5.5 PAYMENT OF UNDISPUTED  AMOUNTS. In the event that there is
an amount in dispute, Sublessee is still obligated to pay all undisputed amounts
on all invoices.

         6. OTHER  PROVISIONS  OF  SUBLEASE.  This  Sublease is made subject and
subordinate  to all of the  terms  and  conditions  of  the  Master  Lease.  All
applicable  terms and conditions of the Master Lease are  incorporated  into and
made a part of  this  Sublease  as if  Sublessor  were  the  lessor  thereunder,
Sublessee the lessee thereunder,  and the Premises the Master Premises, but only
to the extent relating to the Premises and  Sublessee's use thereof,  except for
the  following  ("Excluded  Provisions"):  Sections  1.1 and  1.2,  Article  II,
Sections 3.1 through 3.6, inclusive, Article V, Sections 6.1, 6.2(b) and 6.2(c),
Article VII,  Section 8.2,  Section 9.3,  Section 11.1,  Article  XIII,  Article
XVIII, and Sections 20.8 and 20.20.  Sublessee assumes and agrees to perform the
Tenant's obligations under the Master Lease (other than the Excluded Provisions)
during  the term of this  Sublease  to the  extent  that  such  obligations  are
applicable  to the  Premises,  except that the  obligation to pay rent to Master
Landlord  under the Master Lease shall be  considered  performed by Sublessee to
the  extent and in the  amount  Rent is paid to  Sublessor  in  accordance  with
Section 5 of this  Sublease.  Sublessee  shall not  commit or suffer  any act or
omission that will violate or cause  Sublessor to violate any of the  provisions
of the Master  Lease.  Sublessor  shall  exercise due diligence in attempting to
cause Master Landlord to perform its obligations  under the Master Lease for the
benefit of  Sublessee.  If the Master  Lease  terminates,  this  Sublease  shall
terminate  and the  parties  shall  be  relieved  of any  further  liability  or
obligation under this Sublease, unless such termination is due to Sublessor's or
Sublessee's default or breach. Sublessee shall be entitled to all rights against
Sublessor under this Sublease as Sublessor  enjoys against Master Landlord under
the  Master  Lease,  and  Sublessor  shall be  entitled  to all  rights  against
Sublessee under this Sublease as Master Landlord enjoys against  Sublessor under
the Master Lease.

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                  6.1 ATTORNMENT.  At the Master Landlord's option, in the event
of  cancellation  or  termination  of the Master  Lease for any reason,  whether
voluntarily,  involuntarily,  by  operation  of law or  otherwise,  prior to the
expiration  of this  Sublease,  Sublessee  shall  attorn to the Landlord for the
balance of the Term.

         7.  ASSIGNMENT  AND  SUBLETTING.  Sublessee  shall  have  the  right to
sub-sublease  any portion of their  Premises  or to assign this  Sublease to any
related entity,  subsidiary,  or purchaser of  substantially  all of Sublessee's
assets  or equity  ("Affiliate"),  subject  to the  Sublessor's  consent,  which
consent  shall not be  unreasonably  withheld,  conditioned  or delayed,  and to
Master Landlord's  consent.  Any such sub-sublease or assignment to an Affiliate
shall not relieve Sublessee from liability under this Sublease.  In the event of
any  sub-subleasing or assignment to a party other than an Affiliate,  Sublessor
shall have the right to re-capture the Premises as provided below and shall have
the right to fifty percent  (50%) of any rents payable by any such  sublessee or
assignee  in excess of (a) the Rent under this  Sublease,  plus (b)  Sublessee's
reasonable costs of sub-subleasing or assigning,  including, without limitation,
commissions,   legal  fees,  tenant   improvements  and  any  other  concessions
reasonably  required to induce a sub-subtenant  or assignee,  and the balance of
such excess  rents may be retained by  Sublessee.  Sublessor  may  exercise  its
recapture  right by delivering  written notice  thereof to Sublessee  within ten
(10) days after  Sublessee  requests  Sublessor's  consent to a sub-sublease  or
assignment to a party other than an Affiliate. If Sublessor timely exercises its
recapture  right,  then this Sublease  shall  terminate and the parties shall be
released  from all further  liabilities  and  obligations  hereunder;  provided,
however,  that,  if Sublessee  withdraws its request for consent to the proposed
sub-sublease  or assignment  within ten (10) days after  receipt of  Sublessor's
election to exercise its recapture  right,  then this  Sublease  shall remain in
full force and effect and  Sublessor  shall not be  entitled  to  recapture  the
Premises.

         8. SIGNAGE.  To the extent permitted under the Master Lease,  Sublessee
shall be allowed to install  outside  building  signage on the  Building  and to
display  Sublessee's  logo  in  the  main  suite  entrance  to the  Building  at
Sublessee's sole expense. The costs associated with the purchase,  installation,
maintenance  and eventual  removal of such signage  shall be borne by Sublessee.
All  such  signage  shall  conform  to  all  zoning  requirements  and  existing
conditions,  covenants and  restrictions  affecting the Building.  Sublessor and
Master Landlord shall have the right to review and approve Sublessee's  signage,
which approval by Sublessor shall not be unreasonably  withheld,  conditioned or
delayed.

         9. PARKING.  Sublessee shall, at no additional  charge,  be entitled to
one hundred thirty (130) parking  spaces during the term of this Sublease.  Such
parking  spaces shall be used on a  non-exclusive  basis,  except that Sublessee
shall have the right to  designate  ten (10) of such parking  spaces  behind the
Premises for use  exclusively by Sublessee and its employees and invitees.  Such
parking  spaces shall be located on the Land in a location  adjacent to the back
entrance to the Premises and  reasonably  acceptable to Sublessor and Sublessee.
Sublessee shall be allowed to share with Sublessor the parking spaces designated
as Visitor in the front of the Premises.  If Sublessee needs additional  parking
spaces  due to  growth,  Sublessor  will work with  Sublessee  to reach a mutual
agreement to provide additional spaces.

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         10. RIGHT OF FIRST OFFER.  During the term of this Sublease,  Sublessor
hereby grants to Sublessee a right of first offer ("First  Right") to lease,  on
the same terms and conditions as this Sublease,  including the Rent, any portion
of the Master Premises adjacent to the Premises within the Building that becomes
available  from time to time.  Prior to marketing  any such space,  or making or
accepting any offers to sublease  such space,  Sublessor  shall deliver  written
notice to Sublessee of any such space becoming available for sublease. Sublessee
may exercise its First Right with  respect to such space by  delivering  written
notice to Sublessor within seven (7) business days after delivery of Sublessor's
notice that such space is available.  If Sublessee so exercises the First Right,
then Sublessor  shall sublease to Sublessee,  and Sublessee  shall sublease from
Sublessor, the space described in Sublessor's notice on the terms and conditions
set  forth in this  Sublease,  including  payment  of the same  rent per  square
footage for the additional  space that Sublessee is paying at the time the First
Right is exercised.  In addition,  Sublessee shall increase its security deposit
by a like amount per square foot of such additional space.

         11.  FURNITURE.  Sublessor agrees that,  within thirty (30) days of the
Commencement  Date,  it shall remove at its sole expense all furniture and other
various  assets owned or controlled by Sublessor not attached as fixtures to the
Premises.

         12.  INSURANCE.  In  addition to  Sublessee  maintaining  insurance  as
required by Section 6.2(a) of the Master Lease,  Sublessee will name both Master
Landlord and Sublessor as additional  insureds  under such  liability  insurance
policy,  and Sublessor and Sublessee each hereby release and relieve each other,
and waive their entire right of recovery  against the other,  for loss or damage
arising  out of or  incident  to the perils  insured  against  by any  insurance
policies  maintained  or  required by this  Sublease  or the Master  Lease to be
maintained by the waiving party, which perils occur in, on or about the Premises
or the  Master  Premises.  Sublessee  and  Sublessor  shall  give  notice to its
insurance company of such release and waiver of subrogation contained herein.

         13. DAMAGE OR  DESTRUCTION/CONDEMNATION.  If the Premises, the Building
or the common areas are  materially  damaged or destroyed or taken pursuant to a
condemnation (or a conveyance  under threat  thereof),  all applicable terms and
conditions  of the  Master  Lease  concerning  the  parties  rights  in any such
event(s)  shall are  incorporated  into and made a part of this  Sublease  as if
Sublessor were the lessor thereunder,  Sublessee the lessee thereunder,  and the
Premises the Master  Premises,  but only to the extent  relating to the Premises
and Sublessee's use thereof.

         14.  ATTORNEYS'_FEES.  In the event any action or proceeding is brought
by either party against the other relating to or arising from the subject matter
of this  Sublease,  the prevailing  party shall be entitled,  in addition to any
other relief granted  therein,  to recover from the other party  attorneys' fees
and costs incurred in connection therewith.

         15. SUCCESSORS_AND  ASSIGNS. This Sublease and all terms and conditions
contained  herein,  subject to the  provisions  as to assignment or sublease set
forth herein,  shall be binding upon and inure to the benefit of the  successors
and assigns of all parties  hereto,  including but not limited to any Chapter 11
trustee or Chapter 7 trustee appointed in the Bankruptcy Case.

                                       6
<PAGE>

         16.  AUTOMATIC  STAY. The automatic stay under the Bankruptcy Code will
not in any way  limit or  restrict  Sublessee  from  exercising  its  rights  or
remedies upon default, expiration or termination of this Agreement.

         17.  NO_BROKERS.  Sublessor  and  Sublessee  each hereby  represent and
warrant that they have had no dealings  with any broker or agents in  connection
with the  negotiation of this Sublease.  Each party agrees to indemnify,  defend
and hold harmless the other from any and all claims, costs,  expenses,  damages,
liabilities  (including but not limited to reasonable  attorneys'  fees) arising
from or in  connection  with any claim by any  broker or agent,  whether  or not
licensed,  for a commission or fee or other amount due in  connection  with this
Sublease based upon the action of the indemnifying party.

         18.  PRIOR_AGREEMENTS.  This Sublease and the Master Lease contains all
of the  agreements of the parties  hereto with respect to any matter  covered in
this Sublease,  and no prior agreements or understanding  pertaining to any such
matter shall be effective for any purpose. No provisions of this Sublease may be
amended or added to except by and  agreement  in writing  signed by the  parties
hereto.

         19. COMMON AREAS.  Sublessee shall have the non-exclusive  right to use
all common areas,  including  the reception  area,  break room,  gymnasium,  and
bathrooms and conference  rooms provided such use does not materially  interfere
with Sublessor's right to use such common areas.

         20. JANITOR & MAINTENANCE SERVICES. Janitorial and maintenance services
for the Premises shall be provided to the satisfaction of Sublessee by Sublessor
at no additional cost.

         21. NOTICES.  All notices or demands of any kind required or desired to
be given by Sublessor or  Sublessee  hereunder  shall be in writing and shall be
deemed  delivered  upon  personal  delivery or two (2)  business  days after the
depositing  the  notice  or demand  in the  United  States  mail,  certified  or
registered,  postage  prepaid,  or one (1) business day after timely  sending by
Federal Express or other reputable overnight delivery service,  addressed to the
Sublessor or Sublessee, respectively, at the address set forth below, or to such
other address as Sublessor and  Sublessee  may, from time to time,  designate to
the other in writing.

         For Sublessee:             Attn: Chief Executive Officer
                                    Arrowhead General Insurance Agency, Inc.
                                    402 West Broadway, Suite 1600
                                    San Diego, CA  92101

         For Sublessor:             INSpire Insurance Solutions, Inc.
                                    300 Burnett Street
                                    Fort Worth, TX 76102
                                    Attention:  Don Bohannon

                                       7
<PAGE>

         With copy to:              Steven L. Leshin
                                    Jenkens & Gilchrist, P.C.
                                    1445 Ross Avenue, Suite 3200
                                    Dallas, Texas  75202

         22.  LANDLORD'S  CONSENT.  This  Sublease  and the  obligations  of the
parties  hereunder are conditioned upon Sublessor  obtaining  Master  Landlord's
consent hereto by Master  Landlord  executing the Consent of Master  Landlord at
the  end of  this  Sublease.  If  such  consent  is not  obtained  prior  to the
Commencement Date, either party shall have the right to terminate this Sublease,
in which case  neither  party  shall have any rights or  obligations  under this
Sublease.

         23. BANKRUPTCY COURT APPROVAL. This Sublease and the obligations of the
parties hereunder are further expressly  conditioned upon Sublessor  obtaining a
final order from the Bankruptcy  Court approving (a)  Sublessor's  assumption of
the Master  Lease under  Section 365 of the  Bankruptcy  Code,  (b)  Sublessor's
assumption  of the  Sublease  dated  January  11,  2002  between  Sublessor  and
Arrowhead  Claims  Management,  Inc.,  and  (c)  this  Sublease  and  the  Other
Agreements,  all without  amendment or  modification,  unless such  amendment or
modification  is approved in writing by both  Sublessor  and  Sublessee,  within
forty-five  (45) days after this  Sublessee is entered  into. If the court order
approving  this  Sublease  is not  obtained  within  the  time  specified,  this
Agreement and all of its terms and provisions are and shall be null and void.

         IN WITNESS WHEREOF,  this Sublease is executed as of the date first set
forth above.

                                    SUBLESSEE:

                                    ARROWHEAD GENERAL INSURANCE AGENCY, INC.,
                                    a Minnesota corporation

                                    By:________________________________________
                                            Kieran A. Sweeney, President & CEO

                                    SUBLESSOR:

                                    INSPIRE INSURANCE SOLUTIONS, INC.,
                                    a Texas corporation debtor and
                                    debtor-in-possession

                                    By:________________________________________
                                            Richard Marxen, President & CEO

                                       8
<PAGE>

                           CONSENT OF MASTER LANDLORD

                           The  undersigned  hereby  consents  to the  foregoing
Sublease.

                             KILROY REALTY, L.P., a Delaware limited partnership

                                  By:  Kilroy Realty Corporation,
                                       a Maryland corporation,
                                           general partner

                                       By:  ______________________________

                                       Its:   ____________________________

                                       9
<PAGE>

                                   Exhibit "A"

                                    Premises

                                [To Be Attached]

<PAGE>

                                   Exhibit "B"

                                  Master Lease

                                [To Be Attached]Exhibit 10.13

                               SERVICES AGREEMENT
                      (hereinafter called the "Agreement")

                                      among

         INSPIRE INSURANCE SOLUTIONS, INC., a Texas corporation ("IIS")

         INSPIRE CLAIMS MANAGEMENT, INC., A Delaware corporation ("ICM")
       (IIS and ICM are collectively referred to hereinafter as "Inspire")

                                       and

      CLARENDON NATIONAL INSURANCE COMPANY, a New Jersey corporation ("CN")

                HARBOR SPECIALTY INSURANCE COMPANY, a New Jersey
             corporation ("HS") (CN and HS are collectively referred
                         to hereinafter as "Clarendon")

                     made as of the 22 day of August, 2002.

                                    RECITALS

     A. Clarendon is an insurer writing and  administering  its business through
independent general agents and claims administrators.

     B. Clarendon has entered into or may enter into general  agency  agreements
and/or claims administration  agreements  (collectively the "Agency Agreements")
with Arrowhead General Insurance Agency, Inc. ("AGIA"), Arrow Claims Management,
Inc.  ("ACM"),   Blanch  Wholesale  Insurance  Services,  Inc.  ("BWI"),  Blanch
Insurance Services, Inc. ("BIS"), Tower Hill Insurance Services, Inc. and/or its
subsidiaries ("Tower"), and Millers American Group, Inc. and/or its subsidiaries
"MAG") (AGIA,  ACM, BWI, BIS, Tower and MAG shall  hereinafter  be  collectively
called "Agents"),  which agreements  provide for, among other things, the Agents
performing certain administrative services for, and on behalf of, Clarendon.

     C. Inspire provides or will provide  services,  directly or indirectly,  to
the  Agents  pursuant  to  separate  service   agreements   ("Inspire   Services
Agreements")  between  Inspire  and  the  Agents,  which  services  include  the
administration of policies written by Clarendon, which policies are administered
under  the  Agency  Agreements,  and  which  administrative  services  have been
subcontracted by the Agents to Inspire.

     D.  Inspire is willing  to agree to the terms and  conditions  set forth in
this  Agreement  in order  to (i)  secure  Clarendon's  consent  to the  Agents'
subcontracting to Inspire of the administration of insurance policies written by
Clarendon,  (ii)  satisfy  regulatory  requirements,  (and  the  parties  hereto
acknowledge that as of the date hereof no notice of any

                                       1

<PAGE>

such  regulatory  violation  is known to have been  received by the parties) and
(iii) promote and extend the relationship between Clarendon and Inspire.

     E. The Agents have consented to the terms hereof.

     IN  CONSIDERATION  OF THE MUTUAL PROMISES  EXCHANGED,  the parties agree as
follows:

                                   ARTICLE 1

                                 ADMINISTRATION

     1.1 Policies Included. This Agreement shall include and cover all insurance
policies  written by Clarendon  and  administered  by Inspire  (hereinafter  the
"Policies").  The Policies may include  insurance  policies written by Clarendon
and which are not  administered  by or associated  with the Agents or the Agency
Agreements.   This  Agreement,  the  Inspire  Services  Agreements,  the  Agency
Agreements and any  agreements to which Inspire is a party and which  agreements
concern Policies written by Clarendon,  shall hereinafter be collectively called
the "Policy  Agreements."  All  definitions in this  Agreement  shall be equally
applicable in the singular and plural forms.

     1.2 Relationships with Agents and the Agent's Agreements with Clarendon. By
this Agreement, Inspire is undertaking certain obligations to Clarendon that may
exceed  or vary from its  obligations  to  Clarendon's  Agents  under  Inspire's
written  agreements with such Agents.  Such  undertakings may also conflict with
the written and any and all oral agreements  between  Clarendon and such Agents.
To protect  Inspire from multiple or  conflicting  claims from  Clarendon or its
agents,  the parties agree that in the event Inspire performs its obligations to
Clarendon and Clarendon  accepts such  performance  as  satisfactory,  then said
performance  shall  constitute  full  and  complete   performance  of  any  such
obligation  under any applicable  agreement  between  Inspire and the Agent.  No
informal or formal  agreement  between  Clarendon  and the Agent shall be deemed
sufficient  to impose any  obligation  on  Inspire in excess of any  performance
accepted by Clarendon.  By consenting to this Agreement,  each such Agent agrees
to be bound by Clarendon's acceptance of Inspire's  performance.  This Agreement
shall not be  effective  and binding  upon  Inspire with respect to the Policies
under the  supervision  of any one of the Agents until  Clarendon has received a
consent from that Agent in form attached hereto as Exhibit A.

     1.3  Standards.  Inspire is  responsible  for  ensuring  that  Policies are
administered  according  to  customary  and usual  customer  service  and policy
administration   standards.   Inspire  shall  promptly   respond  to  inquiries,
correspondence  and  communications,  whether written,  telephone or electronic.
Endorsements and all matters  affecting the issuance and maintenance of Policies
shall be performed in a timely and  competent  manner,  and in  compliance  with
usual insurance industry  regulatory and professional  standards.  Inspire shall
ensure that it has sufficient  staffing and systems to perform all its functions
and obligations hereunder,  and to assist in servicing the Policies, as required
by the Inspire Services  Agreement.  Inspire  acknowledges  that Clarendon is at
risk under,  and has  ultimate  responsibility  for,  the  Policies;  therefore,
Inspire  agrees that  Clarendon has the authority to make the final  decision on
all  matters   pertaining  to  the  Policies.   Notwithstanding   the  foregoing
acknowledgement of

                                       2

<PAGE>

Clarendon's  authority respecting the Policies, no changes shall be requested by
Clarendon  with respect to the handling of said  Policies or claims  unless such
request is reasonable  and  consistent  with industry norms for the servicing of
such policies and claims. If a proposed change causes an increase in the cost of
servicing the Policies, then that cost will be borne by Clarendon.

     1.4 Insurance Coverage to be Maintained by Inspire.

          (a) Inspire shall  maintain an errors and omissions  insurance  policy
     issued by an insurance carrier approved by Clarendon, with policy limits of
     no less than (i) five million dollars  ($5,000,000),  and with a deductible
     no greater than two hundred fifty thousand dollars ($250,000).

          (b) Because the State of New Jersey  requires self  regulation,  if at
     any time during the term of this Agreement  Clarendon makes a determination
     that  Inspire is a  "managing  general  agent" as defined in the New Jersey
     Managing  General  Agent's Act,  Clarendon  shall so notify  Inspire  ("MGA
     Notification")  and Inspire shall within thirty (30) days thereafter obtain
     and maintain a surety bond for the  protection  of  Clarendon  issued by an
     insurance  carrier admitted to transact fidelity and surety business in the
     State of New Jersey and approved by Clarendon, in an amount of no less than
     the  greater of (i) one hundred  thousand  dollars  ($100,000)  or (ii) ten
     percent (10%),  up to $500,00 of gross direct written premium from business
     attributable  to  Clarendon  for  the  previous  calendar  year,  the  bond
     hereunder to be adjusted, if necessary, on or before July 1st of each year.
     The executed bond, as adjusted,  shall be promptly  submitted to Clarendon.
     Inspire  shall  nevertheless  be free to contest  any New  Jersey  statute,
     ruling or regulation that defines Inspire as such managing general agent.

     1.5  Compliance  with Law.  Clarendon  and Inspire  shall each maintain all
licenses and regulatory approvals necessary to conduct the business to which the
Policy  Agreements  refer. If an MGA  Notification  is sent to Inspire,  Inspire
shall as soon as  practicable  thereafter  apply for a license  as an  insurance
producer in the State of New Jersey.  Inspire  shall be and remain in compliance
with,  and shall  ensure that all agents are in  compliance  with,  the laws and
regulations  which affect the binders,  Policies and other  regulated  documents
issued pursuant to the Policy Agreements.  Inspire shall nevertheless retain the
right to contest any such determination in good faith.

                                   ARTICLE 2

                 ADMINISTRATION RECORDS, REPORTS AND PROCEDURES

     2.1 General.  Inspire  shall  prepare and maintain  complete,  accurate and
orderly books,  files,  records and accounts of all  transactions  involving the
Policies and  transacted  pursuant to the Policy  Agreements,  and will maintain
same in accordance with generally accepted  insurance and accounting  practices.
Clarendon's  representatives,  at Clarendon's expense, shall have the right (but
not the  obligation)  from  time to  time,  during  normal  business  hours,  on
reasonable  notice to Inspire,  to inspect,  audit,  copy and make extracts from
Inspire's  books,  files,  records and  accounts  relating to the  Policies  and
transacted pursuant to the Policy Agreements. Such inspections,  audits, copying
and extracting shall be conducted in a reasonable manner, shall not

                                       3

<PAGE>

unreasonably  interfere with the business and operations of Inspire and shall be
not be conducted more often than is reasonable under the circumstances.

     2.2 Reports and Procedures.  All reports and reconciliations to be provided
to  Clarendon  under  this  Article 2  (whether  in hard copy or  maintained  on
computers)  shall be forwarded  to  Clarendon  not later than seven (7) business
days after the end of each month.  The  electronic  files  maintained by Inspire
shall be delivered to Clarendon,  by floppy disk,  compact  disk,  email etc., a
frequently as may be reasonably  requested by Clarendon.  Inspire shall also, at
Clarendon's  request furnish Clarendon with updated copies of Inspire's computer
data base ("Computer Data")  maintained in support of the Policies  administered
pursuant to the Policy  Agreements.  The Computer  Data shall be in a format (i)
acceptable to Clarendon and any entity which requires that  Clarendon  supply it
with the Computer Data,  (ii) readable on Clarendon's or such entity's  computer
system,  and (iii) which complies with the file layout  specifications set forth
on Schedule 1 and  Schedule  2, or any  subsequent  file  layout  specifications
provided to Inspire by Clarendon  provided,  however,,  that (i) Clarendon shall
pay the cost of any file layout  changes and (ii) Inspire  shall not be required
to deliver separate reports, reconciliations, electronic files, or Computer Data
to the Agents if Inspire has supplied all such  reports and  reconciliations  to
Clarendon to Clarendon's  satisfaction.  Clarendon acknowledges that the reports
presently  being  supplied  by  Inspire  comply  with the  current  file  layout
specifications.

     2.3 Regulatory  Inquiries and Complaints.  If Inspire or Clarendon receives
an  inquiry or  complaint  from any  regulatory  authority  having  jurisdiction
concerning a violation of insurance law or regulation,  or a complaint disputing
coverage under any Policy, or any process or litigation  document,  or threat of
litigation,  with respect to any Policy matter covered in the Policy Agreements,
prompt  notice and a true copy shall be given to the other  party.  This section
2.3 shall not supersede or relieve either  Clarendon or Inspire from obligations
under other agreements,  but shall create additional  notification  and/or other
requirements.  In the event Inspire shall have  satisfied its  obligations  with
respect to regulatory inquiries and complaints under this Agreement to Clarendon
to Clarendon's satisfaction,  then Inspire shall be deemed to have complied with
any like provision for  Clarendon's  benefit  contained in Inspire's  agreements
with the Agents. If a response affecting  Clarendon is required,  Inspire shall,
within five (5)  business  days (or such lesser time period as may be allowed by
the applicable  regulatory authority or by any process) after the receipt of the
inquiry,  complaint  or other  notice,  draft a response and submit the draft to
Clarendon for its prior approval before submission of the response.

     2.4 Confidentiality. Inspire shall maintain the confidentiality of all data
supplied to or  developed  under the Policy  Agreements,  and shall not disclose
such data  without  the prior  written  consent of  Clarendon,  or as  otherwise
authorized  by the  provisions of the Policy  Agreements.  Inspire and Clarendon
shall not use the name,  service mark,  logo,  or  authorized  signatures of the
other  party,  or any of its  affiliates,  in  any  advertising  or  promotional
material without the prior written consent of the other party.

     2.5 Third Party  Beneficiary.  Clarendon shall be a third party beneficiary
under  the  Policy  Agreements  and  shall  be  entitled  to  enforce  Inspire's
obligations  thereunder.  Upon the termination of any Policy  Agreement(s),  and
with  respect  to  the  Policies   associated   with  such   terminated   Policy
Agreement(s), sections 4.3(a), 4.3(b), 4.3(c), 4.3(d), and 4.3(e) of this

                                       4

<PAGE>

Agreement  shall control for all such Policies  associated  with such terminated
Policy Agreement(s), irrespective of whether this Agreement has been terminated.

                                   ARTICLE 3

                                   INDEMNITIES

     3.1  Inspire's  Indemnity.  Inspire  agrees  to  indemnify  Clarendon,  its
subsidiaries, successors and assigns, and the shareholders, directors, officers,
agents  and  employees  of any of  them  (collectively  "Company  Indemnitees"),
against and in respect of any and all  claims,  demands,  actions,  proceedings,
liability, losses, damages (except consequential damages),  judgments, costs and
expenses,   including   without   limitation,    reasonable   attorneys'   fees,
disbursements  and court costs, and any loss in excess of Policy limits, as well
as  extra-contractual  obligations,  including  but  not  limited  to  punitive,
exemplary,  or  compensatory  damages,  suffered made or  instituted  against or
incurred by Clarendon Indemnitees,  or any of them, and which arise, directly or
indirectly,  out of, or result from; (i) bad faith,  willful misconduct or gross
negligence of Inspire,  or its employees or  representatives  in discharging its
obligations   to   Clarendon   or   to   the   insureds   under   the   Policies
("Policyholders"),  and/or  (ii)  any  failure  by  Inspire,  or its  employees,
representatives, independent adjusters or approved subcontractors to perform its
obligations under or relating to the Inspire Services Agreement,  this Agreement
or any other agreements  respecting the policies to which Inspire is a party. In
the event that Inspire's obligations to Clarendon,  for breach of any obligation
to Clarendon,  causes Clarendon to sustain actual damages in the aggregate which
are less than $100,000 dollars, then Inspire's obligation to indemnify Clarendon
shall be limited to the amount of actual damages attributable to the breach, and
Clarendon  shall not be  entitled  to  recover  any sums  other  than its actual
damages.

     3.2  Company's  Indemnity.  Clarendon  agrees  to  indemnify  Inspire,  its
subsidiaries,  successors and assigns, and the shareholders, directors, officers
and employees of any of them (collectively "Inspire Indemnitee"), against and in
respect of any and all claims, demands, actions, proceedings, liability, losses,
damages (except consequential damages), judgments, costs and expenses, including
without limitation,  reasonable attorneys' fees,  disbursements and court costs,
and  any  loss  in  excess  of  Policy  limits,  as  well  as  extra-contractual
obligations,  including but not limited to punitive,  exemplary, or compensatory
damages,   suffered,   made  or  instituted   against  or  incurred  by  Inspire
Indemnitees, or any of them, and which arise, directly or indirectly, out of, or
result from; (1) bad faith, willful misconduct or gross negligence of Clarendon,
or its employees or representatives in discharging its obligations to Inspire or
to the Policyholders,  and/or (ii) any failure by Clarendon, or its employees or
representatives, to perform its obligations under or relating to this Agreement,
and/or  (iii) any action  taken by Inspire,  at the request of  Clarendon  or as
required  by the terms  hereof or any  action  which  Inspire  declines  to take
because of written instructions given to Inspire by Clarendon.

                                       5

<PAGE>

                                   ARTICLE 4

                              TERM AND TERMINATION

     4.1 Term.  This Agreement  shall  terminate (i) upon the termination of the
applicable  Agency  Agreement,  (ii) by agreement of all the parties hereto,  or
(iii)  pursuant  to  section  4.2  herein.  Upon the  termination  of any Agency
Agreement,  this  Agreement  will  terminate  only with  respect to the Policies
associated with that Agency  Agreement,  but this Agreement shall remain in full
force and effect with respect to all Policies  associated with Agency Agreements
that remain in effect.

     4.2 Termination for Cause. This Agreement shall terminate:

          (a) At the election of Clarendon,  upon notice to Inspire,  if Inspire
     becomes  insolvent,  if it  makes  an  assignment  for the  benefit  of its
     creditors,  (other than grant by Inspire of any assignment of collateral to
     secure  borrowings  from  a  reputable  institutional  lender  that  may be
     incurred by Inspire), if a petition for relief under the Bankruptcy Code is
     filed by or against it, or if a trustee, receiver or other custodian of its
     assets is appointed;

          (b) At the election of Clarendon,  upon notice to Inspire,  if Inspire
     commits any of the following acts or omissions; fraud, gross negligence, or
     willful  misconduct (which includes but is not limited to willful violation
     of Clarendon's  instructions,  given in writing or willful violation of any
     requirements,  applicable law, rule or regulation  governing or relating to
     Inspire's performance of services under the Policy Agreements); or

          (c) At the election of Clarendon,  if Inspire materially  breaches any
     provision of this  Agreement or any other  Agreement to which  Inspire is a
     party  involving  the  Policies,  but only  insofar as such breach  affects
     Clarendon or the Policies, and fails to cure such breach within thirty (30)
     days  after  notice of the breach is given to  Inspire  by  Clarendon.  For
     purposes of this subsection,  routine  differences in accounting methods of
     Inspire and Clarendon which involve less than $100,000 in the aggregate and
     do not involve  recoveries  collected and knowingly withheld by Inspire and
     breaches of any kind involving  less than $100,000 in the aggregate,  shall
     not constitute a material  breach of any such Agreement  provided all items
     in dispute  are paid in  accordance  with the  procedures  set forth in the
     Policy Agreement.

          (d) At the election of Clarendon, if Inspire enters into a subcontract
     or subcontracts  with any other person,  entity or entities in violation of
     the provisions of Section 6.1 of this Agreement.

          (e) In the event that  Clarendon  terminates  this Agreement for cause
     under  subparagraphs  (a),  (b),  (c) or (d) of this Section 4.2, or in the
     event of a material disagreement between the parties as to the propriety of
     such  termination,  Clarendon  shall also be entitled,  at its sole option,
     after  notice to  Inspire  and thirty  (30) days  opportunity  to cure,  to
     suspend Inspire's rights to administer Clarendon policies and claims.

     4.3 Procedures Upon Termination. The following procedures shall be followed
in the event of a termination

                                       6

<PAGE>

of this Agreement  under Section 4.2 hereof,  in the event of the termination of
any  applicable  Agency  Agreement  or in the  event of any  termination  of any
Inspire Services Agreement. In any such event:

          (a) Clarendon shall have either of the following options:

               (i) To assume  control  of such  Policy  files  (whether  open or
          closed) as Clarendon may elect,  in which case Inspire shall  promptly
          transfer  such files to a location  specified  by  Clarendon.  Inspire
          shall  cooperate  fully with  Clarendon to effect a prompt and orderly
          transfer  of the files to  Clarendon  or its  representatives  for the
          purpose,  among  others,  of  preventing  an increase  in  Clarendon's
          liability.  If the termination,  in whole or in part, is the result of
          an event  described  in Section 4.2 of this  agreement,  then  Inspire
          shall pay the cost and expense of  Clarendon  taking  control.  If the
          transfer is the result of any other reason,  then Clarendon shall bear
          said cost and  expense.  If Inspire so  cooperates  and the system and
          software function properly,  Inspire shall be responsible only for the
          costs of  transferring  the data.  If Inspire  contests  the  takeover
          and/or does not cooperate in the takeover, or if the software does not
          function properly,  then in any such event Inspire shall pay all costs
          and  expenses of Clarendon in  enforcing  its rights,  recovering  its
          files and bringing the system to a functional  level or establishing a
          new system and converting the data.  Notwithstanding the foregoing, if
          (1) Inspire  provides  Clarendon  with a tape back up of all  Computer
          Data;  (2) the  software is  delivered  to  Clarendon  pursuant to the
          escrow   agreement;   (3)  Inspire   provides  to  Clarendon  all  the
          specifications  for the hardware,  firmware and software needed to run
          the software  with the  Computer  Data and (4) Inspire  transfers  the
          files to Clarendon and its  representative  following  termination  of
          this Agreement,  then, Inspire shall have no liability to Clarendon or
          any other party for any costs or expenses incurred by Clarendon or its
          designee  in  recovering  its  files,  brining  the  new  system  to a
          functional level, establishing a new system or converting the Computer
          Data, if such costs and expenses are incurred as a result of Clarendon
          or its  designee  failing to comply  with the  hardware,  firmware  or
          software specifications provided by Inspire.

               (ii) To require Inspire to continue to administer to a conclusion
          all  Policies.  In the event  Clarendon  elects to require  Inspire to
          continue,  Clarendon  shall pay to  Inspire  as  compensation  for its
          services  the  then  going  rate for such  services  in the  insurance
          industry.

          (b) If Inspire is unable, or refuses to administer the Policies, or if
     Clarendon elects to assume control of such Policy files pursuant to section
     4.3(a)(i)  herein,  Inspire  shall  promptly  provide to Clarendon  without
     charge a tape back-up of all Computer  Data.  In  addition,  Inspire  shall
     provide to Clarendon a license to use the  software  system used by Inspire
     in  connection  with  the  administration  and  run-off  of  the  Policies,
     including  all  computer  programs  and  updated  source and  object  codes
     ("Software").  Inspire shall deliver the Software, as well as all necessary
     manuals  and  instructions,  to  Clarendon  together  with,  or as  soon as
     practicable after, the delivery of the Computer Data to Clarendon.

          (c) The cost of providing the software to Clarendon  shall be borne as
     follows:  (i) In the event that said assumption of control is the result of
     Inspire's  inability  or  refusal  to  perform,  the  termination  of  this
     Agreement  under  Section  4.2  or the  result  of  the  termination  of an
     applicable  Agency Agreement or Inspire Services  Agreement,  Inspire shall
     provide to Clarendon,  without charge, a license to use the software system
     used by Inspire in connection  with the  administration  and run-off of the
     Policies; (ii) In the event that as of the date of said

                                       7

<PAGE>

     termination,  Inspire  remains ready willing and able to perform its duties
     to  Clarendon  under  this  Agreement,  and  has  not  been  terminated  or
     suspended, then and in such event, Inspire shall be entitled to payment for
     its  software  on a month to month  basis at a rate  equal to 1/12th of the
     annual rate paid by Inspire's then customers for like software licenses.

          (d)  Concurrently  with the execution of this  Agreement,  Inspire and
     Clarendon shall enter into a software source code escrow  agreement with an
     independent escrow agent, at the expense of Clarendon,  under which Inspire
     shall  deposit with the escrow  agent a copy of all  computer  programs and
     updated source and object codes  ("Software") used by Inspire in connection
     with the  Policies,  which  shall be released  to  Clarendon  only upon the
     circumstances  specified  therein.  Inspire shall deliver the Software,  as
     well as all necessary  manuals and  instructions,  to Escrow Agent together
     with or as soon as practicable after, the delivery of the escrow agreement.
     A form  of the  Escrow  Agreement  is  attached  hereto  as  Exhibit  B and
     incorporated herein by reference.

          (e)  Clarendon  acknowledges  and agrees that its use of the  Computer
     Data and Software shall be limited (unless otherwise agreed by the parties)
     to the  administration and run-off of Policies under the Policy Agreements,
     and the  furnishing  of the  Computer  Data and  Software to  Clarendon  by
     Inspire  shall  not be  construed  to  convey  title to  same,  or any part
     thereof,  to  Clarendon,  and shall not be  construed  as  conferring  upon
     Clarendon  any right to sell,  lease,  transfer  or  dispose  of all or any
     portion of the Computer  Data or Software  (except that same may be used by
     Clarendon's  designee,  if  any,  for  the  purpose  of  administering  and
     running-off   the   Policies),   Any  such  designee  shall  enter  into  a
     Confidentiality and Non-Disclosure Agreement governing its use of Inspire's
     software in the form attached as Exhibit C.  Clarendon  further agrees that
     (i) it shall not copy any part of the  Computer  Data or  Software,  or the
     source or object code,  except as may be required to administer and run-off
     the Policies,  and (ii) promptly upon completion of the  administration  of
     the Policies it shall return to Inspire the Computer  Data,  the  Software,
     the source and object codes, and any other documents proprietary to Inspire
     which  were  delivered  to  Clarendon  pursuant  to this  Article 4 (unless
     otherwise agreed by the parties).

     4.4  Non  Consequential  Damages.  In the  event  that  Clarendon  properly
suspends or  terminates  this  Agreement  or the  applicable  Agency  Agreement,
neither Inspire nor any of its employees assigns or  representatives  shall have
or assert any claim against Clarendon, its subsidiaries,  successors or assigns,
or the shareholders,  directors,  officers,  agents or employees of any of them,
for loss of  business,  loss of profits,  or damage to  goodwill  or  reputation
arising out of or relating to said termination or suspension.

     4.5 Improper Termination. In the event that Clarendon improperly terminates
this Agreement, Clarendon agrees to indemnify and hold Inspire harmless from any
and all losses,  claims,  damages and expenses incurred by Inspire to any Agents
arising out of any such improper termination, including, without limitation, any
liability  incurred by Inspire to the Agents arising under any Agency  Agreement
by reason of such termination.

                                       8

<PAGE>

                                   ARTICLE 5

                                     NOTICES

Any notice or other  communication  hereunder  shall be in writing  and shall be
deemed  fully made or given (a) when hand  delivered,  (b) on the  business  day
after it is delivered to a recognized  overnight  courier  service for overnight
delivery to a party at the address of such party  stated below (or to such other
address as such party may have fixed by notice),  or (c) three (3) business days
after it is mailed to a party, postage prepaid, by registered or certified mail,
return  receipt  requested,  addressed to such party at its address stated below
(or to such changed address as such party may have fixed by notice):

                           To Inspire:

                                            Inspire Insurance Solutions, Inc.
                                            300 Burnett Street
                                            Fort Worth, TX  76012
                                            Attn:  Chief Executive Officer

                           To Clarendon:

                                            Clarendon National Insurance Company
                                            1177 Avenue of the Americas
                                            New York, New York  10036
                                            Attn:  President

                                   ARTICLE 6

                                  MISCELLANEOUS

     6.1  Subcontracting.  Inspire  shall be permitted to hire  independent  (i)
adjusters,  (ii)  investigators,  and/or (iii) counsel,  as otherwise  permitted
under the Agency  Agreements for specific claims and on an as needed basis only.
In all other cases,  Inspire may not enter into a subcontract  or a subcontracts
with  another  person,  entity or entities  ("Subcontractors,"  or  individually
"Subcontractor")  pursuant to which any  Subcontractor or  Subcontractors  shall
perform any material  portion of the services or produce any material portion of
the reports to be performed or produced  pursuant to this Agreement (a "material
subcontract"),  unless the identity of any such  Subcontractor  and the form and
content  of any  subcontract  therewith  is  approved  in  advance in writing by
Clarendon.  A  subcontract  or more than one  subcontract  with  vendors for the
performance of such services shall be deemed to be a material subcontract if the
cost  thereof  in the  aggregate  for  any  twelve  consecutive  months  exceeds
$250,000.  Clarendon's consent to such subcontracting  shall not be unreasonably
withheld.  No such subcontract shall relieve Inspire of  responsibility  for the
fulfillment of any of its obligations hereunder or under any Policy Agreements.

     6.2  Assignment.  Inspire  shall not  assign  or  otherwise  transfer  this
Agreement  or  any  rights  hereunder  without  the  prior  written  consent  of
Clarendon.

                                       9

<PAGE>

     6.3 Trust  Funds.  In any  action or  proceeding  brought by  Clarendon  to
recover funds due  Clarendon or the  Policyholders  under the Policy  Agreements
(collectively  "trust funds"),  Inspire shall be obligated to account on its own
records for such trust funds and to pay  Clarendon  all sums for which it cannot
account.  Upon Inspire's accounting to Clarendon for the transfer of trust funds
to any party  authorized by Clarendon,  together with proof of payment  thereof,
including  payments  to any bank  accounts  held in  Clarendon's  name and under
Clarendon's  sole  control,  Inspire will be deemed to have fully  accounted for
such trust funds.  Clarendon shall be entitled to bring any action or proceeding
available at law or equity to recover trust funds and to assert claims  therein,
including without limitation,  claims for an accounting,  for breach of contract
and for  conversion.  In any such action or proceeding it shall be  conclusively
presumed  that Inspire is a fiduciary  of Clarendon  with respect to trust funds
and is liable to  Clarendon  for trust  funds which have not been timely paid to
Clarendon,  the applicable agent or the  Policyholders as required by the Policy
Agreements;  and  Inspire  waives  (i)  any  right  it may  have to  assert  any
counterclaim,  cross-claim, or set-off in the action or proceeding, and (ii) the
right to trial by jury and any claim  that the  forum or situs is  inconvenient.
Inspire  shall  retain  the  right to bring  any  separate  proceeding  it deems
appropriate to recover any claims it may have as a creditor of Clarendon,  or of
any Agent, or otherwise,  but the pendency of such  proceeding  shall not delay,
hinder or defeat  Clarendon's right to promptly recover any trust funds then due
or to levy upon any judgment  therefore.  In the event that the trust funds that
are claimed by  Clarendon  to be due and owing to it and not  received by it are
less than the sum of $100,000,  Clarendon's  rights to seek recovery  under this
Agreement  shall be limited to actual  damages,  not exceeding the amount of the
claimed trust funds,  awarded by a court and any reasonable  attorney's fees and
court costs incurred by Clarendon in enforcing its rights.

     6.4  Governing  Law;  Consent  to  Jurisdiction.  This  Agreement  shall be
governed in all respects, including validity,  interpretation and effect, by the
laws of the State of New York  applicable  to  contracts  to be performed in the
State of New York.  The  parties  agree that any action or  proceeding,  however
characterized, relating to this Agreement may be maintained in the courts of the
State of New York  siting in the Borough of  Manhattan,  City of New York or the
federal  court for the  Southern  District of New York,  and the parties  hereby
irrevocably  submit to the non-exclusive  jurisdiction of any such court for the
purposes of any such action or proceeding and  irrevocably  agree to be bound by
any  judgment  rendered  by any such  court with  respect to any such  action or
proceeding.  The parties  hereby waive any  objection  they may now or hereafter
have to the venue of any such  action or  proceeding  in any such  court and any
claim that such action or proceeding has been brought in an inconvenient  forum.
In the  event  of any  dispute  between  Inspire  and any  Agent or  agents  not
involving  Clarendon as a party,  the terms of the separate  agreements  between
those parties shall be controlling.

     6.5 Waiver of Jury Trial.  TO THE FULLEST EXTENT  PERMITTED BY LAW, EACH OF
THE PARTIES HERETO HEREBY WAIVES THEIR RESPECTIVE  RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION  BASED UPON OR  ARISING  OUT OF THIS  AGREEMENT  OR ANY
DEALINGS  BETWEEN  THEM  RELATING  TO THE  SUBJECT  MATTER  OF THE  TRANSACTIONS
CONTEMPLATED HEREIN. The scope of this waiver is intended to be all-encompassing
of any and all  disputes  that may be filed in any court and that  relate to the
subject  matter  of this  Agreement,  including,  without  limitation,  contract
claims,  tort  claims,  breach  of duty  claims,  and all other  common  law and
statutory  claims.  This  waiver  shall  apply  to  any  subsequent  amendments,
renewals,  supplements or

                                       10

<PAGE>

modifications in this Agreement. This waiver shall not be binding in any dispute
between  Inspire  and any Agent or Agents in which  Clarendon  is not named as a
party.

     6.6 No Waiver. The failure of either party to insist upon strict compliance
with any provision of this  Agreement,  or to exercise any right or remedy under
this Agreement,  shall not constitute a waiver by such party of the provision or
prevent such party from exercising such right or remedy in the future.

     6.7 Entire Agreement. The Policy Agreements and the Schedules attached, set
forth the entire understanding of the parties with regard to its subject matter,
and  supersedes  and  merges  all  prior  discussions,   agreements,   promises,
representations,  warranties and  arrangements  between them with regard to such
subject matter. Neither party shall be bound by any agreement, representation or
warranty  regarding such subject matter other than as expressly set forth in the
Policy  Agreements,  or in a subsequent  writing signed by the party to be bound
thereby.  This  Agreement  may  not be  modified  or  supplemented,  nor may any
provision  be  waived,  except  by a  writing  signed  by the  party to be bound
thereby.

     6.8 Severability.  If any provision of this Agreement is held to be invalid
or unenforceable,  such impediment shall attach only to such provision and shall
not render invalid or unenforceable any other provision of this Agreement.

     6.9 Headings.  The headings used in this  Agreement or in any Schedules are
inserted for convenience only and shall not affect the meaning or interpretation
of the Agreement.

     6.10  Counterparts.   This  Agreement  may  be  executed  in  two  or  more
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall be deemed one and the same instrument.

     6.11 Schedules. The Schedules referred to in this Agreement are an integral
part of, and shall be deemed incorporated in, the Agreement.

     6.12  Benefit  of  Parties.  This  Agreement  shall  bind and  benefit  the
successors and permitted assigns of the parties.

     6.13  Survival.  All  of the  terms,  covenants,  agreements,  obligations,
conditions,  representations  and  warranties set forth in this Agreement and in
any document or other  writing  delivered  pursuant  hereto,  shall  survive the
termination  of this  Agreement  and shall  continue in full force and effect so
long as any  liability or  obligation  under this  Agreement is  outstanding  or
unpaid.

                                       11

<PAGE>

     IN WITNESS  WHEREOF,  the parties have caused this Agreement to be executed
by their duly authorized officers as of the day and year first above written.

<TABLE>
<CAPTION>
<S>                                             <C>
Attest:                                         INSPIRE INSURANCE SOLUTIONS, INC.

__________________________                      By:             /s/ John F. Pergande
                                                      -------------------------------------------------------------
                                                      Title:           Chief Executive Officer

Attest:                                         INSPIRE CLAIMS MANAGEMENT, INC.

__________________________                      By:             /s/ John F. Pergande
                                                      -------------------------------------------------------------
                                                      Title:           President
                                                            -------------------------------------------------------

Attest:                                         HARBOR SPECIALTY INSURANCE COMPANY

__________________________                      By:             /s/ William E. Rode
                                                      -------------------------------------------------------------
                                                      Title:           Senior Vice President
                                                            -------------------------------------------------------

Attest:                                         CLARENDON NATIONAL INSURANCE COMPANY

__________________________                      By:             /s/ William E. Rode
                                                      -------------------------------------------------------------
                                                      Title:           Senior Vice President
                                                            -------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                    SCHEDULE 1

Policy Master Fields Listings
Following are field descriptions, attributes, maximum lengths and definitions for the Policy Record
<S>                     <C>          <C>       <C>         <C>               <C>
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Master           Type         Length    Required              Sample  Definitions
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Program ID              Number              6         Yes                34  Numeric Code provided by CNIC
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Group Number            Character          20          No          20000001  An  alphanumeric  code to identify a Group for Workers
                                                                             Comp and A & H
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Number           Character          30         Yes          00000001  An  alphanumeric  code used by the  program  to
                                                                             identify a policy
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Effective Date          Date               10         Yes        10/10/1997  Effective date of the policy in year 2000 format
                                                                             MM/DD/YYYY
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Expiration Date         Date               10         Yes        10/10/1998  Expiration   date  of  the  policy  in  year  2000
                                                                             format MM/DD/YYYY
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Cancellation Date       Date               10          No        10/10/1998  Cancellation  date  of  the  policy  in  year  2000
                                                                             format MM/DD/YYYY; required if policy is cancelled
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Insured Name            Character          40         Yes        Ford Motor  Name of the insured
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Insured Address         Character          50         Yes        123 Watson  Street address of the insured
                                                                     Street
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Insured City            Character          30         Yes       Painesville  Insured City
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Insured State           Character           2         Yes                ND  Insured State
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Insured Zip             Character          10         Yes        12345-1234  Insured Zip Code
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Insured County          Character          25          No              Lake  Insured County
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Territory Code          Character           3          No                19  ISO Territory Code
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Risk State              Character           2         Yes                ND  State listed on a policy in location of risk-
                                                                             not billing
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Risk Zip Code           Character          10         Yes        43535-9875  Zip code listed on a policy in location of risk-
                                                                             not billing
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
System Date             Date               10         Yes        10/23/1997  A date  assigned to a  transaction  by the system in a
                                                                             year 2000 format, MM/DD/YYYY
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Accounting Date         Date               10         Yes        10/31/1997  A day, month,  and year the transaction was sent to
                                                                             company in year 2000 format, MM/DD/YYYY
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
Policy Premium by Line Fields Listing
Following are field  descriptions,  attributes,  maximum  lengths and  definitions  for the Policy  Premium by Line
Record
<S>                     <C>          <C>       <C>         <C>               <C>
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Premium by Line  Type         Length    Required              Sample  Definitions
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Program ID              Number              6         Yes                34  Numeric code provided by CNIC
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Number           Character          30         Yes          00000001  An  alphanumeric  code used by the  program  to
                                                                             identify a policy
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Premium Type            Number              2         Yes                10  Numeric code provided by CNIC
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
AS Line                 Character           5         Yes              21.1  Annual  Statement Line.  Refer to "Annual  Statement
                                                                             Yellow Book"
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Agent's     Line    of  Character          40         Yes         Collision  To  distinguish  multiple  lines  from an annual
Business                                                                     statement line*
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Premium    Transaction  Number              2         Yes                10  Numeric code provided by CNIC
Code
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Written Premium         Number             22         Yes              4525  Amount of Written Premium
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Limits                  Character          30         Yes      1,000,000.00  Policy limits for this line of business.  If N/A
                                                                             place 0.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Deductibles             Number             22         Yes          5,000.00  Dollar  deductible  for this line of business on this
                                                                             risk.  If N/A place.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Effective Date   Date               10         Yes        10/10/1997  Effective date of the policy in year 2000 format
                                                                             MM/DD/YYYY
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Transaction  Effective  Date               10         Yes        10/23/1997  A date when a transaction is effective
Date
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------

                                       13
<PAGE>

System Date             Date               10         Yes        10/23/1997  A date  assigned to a  transaction  by the system in a
                                                                             year 2000 format, MM/DD/YYYY
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Accounting Date         Date               10         Yes        10/31/1997  The last day of an  accounting  period in year 2000
                                                                             format, MM/DD/YYYY
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Risk State       Character           2          No                ND  State listed on a policy in location of risk-
                                                                             not billing
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Policy In-Force Premium Fields Listing
Following are field descriptions, attributes, maximum lengths and definitions
for the Policy In-force Premium by Line Record
<S>                     <C>          <C>       <C>         <C>               <C>
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy In-force         Type         Length    Required              Sample  Definitions
Premium
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Program ID              Number              6         Yes                34  Numeric code provided by CNIC
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Number           Character          30         Yes          00000001  An  alphanumeric  code used by the  program  to
                                                                             identify a policy
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Premium Type            Number              2         Yes                10  Numeric code provided by CNIC
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
AS Line                 Character           5         Yes              19.4  Annual  Statement Line.  Refer to "Annual  Statement
                                                                             Yellow Book"
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Agent's     Line    of  Character          40         Yes         Collision  To  distinguish  multiple  lines  from an annual
Business                                                                     statement line*
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
End of Month Date       Date               10         Yes        10/31/1999  The last day of an  accounting  period in year 2000
                                                                             format, MM/DD/YYYY
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
In-force Premium        Number             22         Yes              4525  Full  term  amount  of  premium  In-force  as of  end
                                                                             of an accounting period.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Unearned Premium        Number             22         Yes              4525  Amount of unearned premium as of end of an accounting
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Effective Date   Date               10         Yes        10/10/1997  Effective date of the policy in year 2000 format
                                                                             MM/DD/YYYY
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Risk State       Character           2          No                ND  State listed on a policy in location of risk-not
                                                                             billing
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
<S>                     <C>          <C>       <C>         <C>               <C>
Policy Billing Transactions Fields Listing
Following are field descriptions,  attributes,  maximum lengths and definitions for the Policy Billing Transactions
Record

----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Billing          Type         Length    Required              Sample  Definitions
Transactions
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Program ID              Number              6         Yes                34  Numeric code provided by CNIC
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Number           Character          30         Yes          00000001  An  alphanumeric  code used by the  program  to
                                                                             identify a policy
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Billing Type            Number              2         Yes    11-Installment  Numeric code provided by CNIC
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Billing Date            Date               10         Yes          10/31/99  Date the insured was billed
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Billed Amount           Number             22         Yes          1,380.00  Current  amount  billed  on  policy  transaction,   net
                                                                             of commissions*
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Premium Billed Amount   Number             22         Yes          1,680.00  Current premium amount billed on policy  transactions,
                                                                             not net of commissions*
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Commission      Billed  Number             22         Yes            300.00  Current  commission  amount  billed on policy
Amount                                                                       transaction.  If N/A place 0*
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
System Date             Date               10         Yes          10/31/99  A date  assigned to a  transaction  by the system in a
                                                                             year 2000 format; MM/DD/YYYY
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Accounting Date         Date               10         Yes        10/31/1999  The last day of an  accounting  period in year 2000
                                                                             format, MM/DD/YYYY
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Effective Date   Date               10         Yes        10/10/1997  Effective   date  of  the  policy  in  year  2000
                                                                             format, MM/DD/YYYY
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Risk State       Character           2          No                ND  State listed on a policy in location of risk-not
                                                                             billing
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
</TABLE>

* If there is no Commission Billed Amount then Billed Amount and Premium Billed
Amount are the same. Otherwise, Billed Amount is equal to Premium Amount less
Commission Billed Amount.

                                       14

<PAGE>
<TABLE>
<CAPTION>
Policy Cash Transactions Fields Listing
Following are field descriptions,  attributes,  maximum lengths and definitions for the Policy Billing Transactions
Record
<S>                     <C>          <C>       <C>         <C>               <C>
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Billing          Type         Length    Required              Sample  Definitions
Transactions
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Program ID              Number              6         Yes                34  Numeric code provided by CNIC
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Number           Character          30         Yes          00000001  An  alphanumeric  code used by the  program  to
                                                                             identify policy
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Payment ID              Character          15         Yes              6754  Record number on method of payment
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Cash Received Date      Date               10         Yes          11/12/99  Date actual payment posted to Account Receivable
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Billing Type            Number              2         Yes    11-Installment  Method of payment in which cash is received
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Collected Amount        Number             22         Yes             1,134  An  actual  dollar  value  of  payment  received,   net
                                                                             of commissions
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Premium      Collected  Number             22         Yes          1,380.00  An actual  dollar  value of gross  commission  paid,
Amount                                                                       if NA place 0.*
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Commission   Collected  Number             22         Yes               246  An actual  dollar  value of gross  commission  paid,
Amount                                                                       if NA place 0.*
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Payment Comments        Character          40          No  Payment           Used  to  note   offsets-partials-credit   transfers
                                                           comments and/or   from another policy, etc.
                                                           notes
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
System Date             Date               10         Yes          10/31/99  A date  assigned to a  transaction  by the system in a
                                                                             year 2000 format; MM/DD/YYYY
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Accounting Date         Date               10         Yes        10/31/1999  The last day of an  accounting  period in year 2000
                                                                             format, MM/DD/YYYY
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Effective Date   Date               10         Yes        10/10/1997  Effective   date  of  the  policy  in  year  2000
                                                                             format, MM/DD/YYYY
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Risk State       Character           2          No                ND  State listed on a policy in location of risk-not
                                                                             billing
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>

Aged Policy Receivables Fields Listing
Following are field descriptions,  attributes,  maximum lengths and definitions for the Policy Billing Transactions
Record
<S>                     <C>          <C>       <C>         <C>               <C>
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Aged Policy             Type         Length    Required              Sample  Definitions
Receivables
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Program ID              Number              6         Yes                34  Numeric code provided by CNIC
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Number           Character          30         Yes          00000001  An  alphanumeric  code used by the  program  to
                                                                             identify policy
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Total Amount Due        Number             22         Yes          3,420.00  Total  amount  due on a  policy,  if NA place 0, the
                                                                             sum of all current due
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Advance Premium         Number             22         Yes                    Total cash received in advance
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Total  Current  Amount  Number             22         Yes               300  Total  current  amount due on a policy,  if NA place 0,
Due                                                                          the sum of all current due
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Amount due 0-30 days    Number             22         Yes               300  Current amount due in 30 days on a policy
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Amount due 31-60 days   Number             22         Yes                    Current amount due between 31-60 days on a policy
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Amount due 61-90 days   Number             22         Yes                    Current amount due between 61-90 days on a policy
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Amounts  due  over  90  Number             22         Yes                    Current amount due over 30 days on a policy
days
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Amount Deferred         Number             22         Yes          3,120.00  Amount deferred on policy transaction, if N/A place
                                                                             0.**
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
End of Month Date       Date               10         Yes        10/31/1999  The last day of an  accounting  period in year 2000
                                                                             format, MM/DD/YYYY
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
</TABLE>

                                       15
<TABLE>
<CAPTION>
<S>                     <C>          <C>       <C>         <C>               <C>
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Effective Date   Date               10         Yes        10/10/1997  Effective   date  of  the  policy  in  year  2000
                                                                             format, MM/DD/YYYY
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Risk State       Character           2          No                ND  State listed on a policy in location of risk--not
                                                                             billing
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------

Total Amount Due = Sum(PremiumByLine[Written Premium])-PolicyCash[Premium Collected Amount]

Total Current Amount Due = PolicyBilling[Premium Billed Amount]-PolicyCash [Premium Collected Amount]

Amount Deferred = Total Due - Total Current Due or
Sum(PremiumByLine[Written Premium]-PolicyBilling[PremiumBilledAmount])

Advanced Premium = Premium Collected Amount Cash Received per Policy Cash
Listing when no billing exists yet.

Amount Due 0-30 days + Amount Due 31-60 days + Amount Due 61-90 days + Amount Due Over 90 Days = Total Current Amount Due.

Aging bucket for Amount Due determined by End of Month Date - Original Billing Date.
</TABLE>

<TABLE>
<CAPTION>
Gross Policy Collected and Change in Receivables Fields Listing
Following are field  descriptions,  attributes,  maximum lengths and  definitions for the Gross Policy  Receivables
Record
<S>                     <C>          <C>       <C>         <C>               <C>
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Gross Policy            Type         Length    Required              Sample  Definitions
Receivables
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Program ID              Number              6         Yes                34  Numeric code provided by CNIC
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Number           Character          30         Yes          00000001  An  alphanumeric  code used by the  program  to
                                                                             identify policy
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Monthly        Written  Number             22         Yes              4500  Total premium  written  transferred to accounts
Premium                                                                      receivable for this month, including policy fees.*
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Monthly   Policy  Fees  Number             22         Yes                25  Total policy fee collected for this month.
Collected
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Monthly      Collected  Number             22         Yes              1380  Total dollars gross premium received, if NA place 0.**
Premium
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Service Charge Amount   Number             22         Yes                25  Total service charge collected for this month.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Inspection Fee          Number             22         Yes                75  Total inspection fee collected for this month.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Installment Fee         Number             22         Yes                 0  Total installment fee collected for this month.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Late Fee                Number             22         Yes                 0  Total late fees collected for this month.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
MVR Fee                 Number             22         Yes                 0  Total MVR fees collected for this month.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
NSF Fee                 Number             22         Yes                 0  Total NSF fees collected for this month.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Expense       Constant  Number             22          No                55  Pertains  to workers  compensation,  expense  constant
Amount                                                                       fee collected per policy.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Security Deposit        Number             22         Yes                 0  Total security deposit collected for this month.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Municipal Tax State 1   Character           2          No                KY  The state of  municipal  tax charged to  Clarendon
                                                                             that is recovered from the insured.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Municipal Tax Amount 1  Number             22         Yes                55  Total municipal tax collected for this month.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Municipal Tax State 2   Character           2          No                    The state of  municipal  tax charged to  Clarendon
                                                                             that is recoverable from the insured.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Municipal Tax Amount 2  Number             22         Yes                 0  Total municipal tax collected for this month.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Municipal Tax State 3   Character           2          No                    The state of  municipal  tax charged to  Clarendon that
                                                                             is recoverable from the insured.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Municipal Tax Amount 3  Number             22         Yes                 0  Total municipal tax collected for this month.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
                                       16
<PAGE>

Municipal Tax State 4   Character           2          No                    The state of  municipal  tax charged to  Clarendon that
                                                                             is recoverable from the insured.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Municipal Tax Amount 4  Number             22         Yes                 0  Total municipal tax collected for this month.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Municipal Tax State 5   Character           2          No                    The state of  municipal  tax charged to  Clarendon that
                                                                             is recoverable from the insured.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Municipal Tax Amount 5  Number             22         Yes                 0  Total municipal tax collected for this month.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Surcharge Type 1        Character          30          No                NJ  The  type  of  surcharge   charged  to  Clarendon  that
                                                                             is recoverable from the insured.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Surcharge 1             Number             22         Yes                55  Total surcharge dollars for the specified surcharge
                                                                             type.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Surcharge Type 2        Character          30          No                    The  type  of  surcharge   charged  to  Clarendon  that
                                                                             is recoverable from the insured.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Surcharge 2             Number             22         Yes                 0  Total surcharge dollars for the specified surcharge
                                                                             type.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Surcharge Type 3        Character          30          No                    The  type  of  surcharge   charged  to  Clarendon  that
                                                                             is recoverable from the insured.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Surcharge 3             Number             22         Yes                 0  Total surcharge dollars for the specified surcharge
                                                                             type.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Surcharge Type 4        Character          30          No                    The  type  of  surcharge   charged  to  Clarendon  that
                                                                             is recoverable from the insured.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Surcharge 4             Number             22         Yes                 0  Total surcharge dollars for the specified surcharge
                                                                             type.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Surcharge Type 5        Character          30          No                    The  type  of  surcharge   charged  to  Clarendon  that
                                                                             is recoverable from the insured.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Surcharge 5             Number             22         Yes                 0  Total surcharge dollars for the specified surcharge
                                                                             type.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Other Premium Charges   Number             22         Yes                10  Total other charges collected for this month.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Change    in    Policy  Number             22         Yes              4800  Total dollars  transferred to accounts  receivable for
Receivable                                                                   this month.***
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Commissionable          Number             22         Yes              1080  Total  dollars  transferred  to  accounts  payable for
Collected Premium                                                            this month.***
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
End Of Month Date       Date               10         Yes        10/31/1999  The last day of an  accounting  period if year 2000
                                                                             format, MM/DD/YYYY
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Effective Date   Date               10         Yes        10/31/1999  Effective date of the policy in year 2000 format
                                                                             MM/DD/YYYY
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Risk State       Character           2          No                ND  State listed on a policy in location of risk-not
                                                                             billing
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------

* Written Premium = Sum(PremiumByLine[Written Premium]), which includes Policy Fees.

** Monthly Collected Premium = Sum(PolicyCashTransactions[Premium Collection amount])

*** Change in Policy Receivable = Monthly Written Premium - Monthly Collected Premium

**** Commissionable Collected Premium - Monthly Collected Premium - (Monthly Policy Fees + Inspection Fee + Installment Fee
+ Late Fee + MVR Fee + NFS Fee + Service Charge + Expense Constant + Security Deposit + Municipal Tax 1 + Municipal Tax 2
+ Municipal Tax 3 + Municipal Tax 4 + Municipal Tax 5 +Surcharge 1 + Surcharge 2 + Surcharge 3 + Surcharge 4 + Surcharge 5 +
Other Premium Charges)
</TABLE>
                                      17

<PAGE>
<TABLE>
<CAPTION>
Policy Premium by Category Fields Listing
Workers Compensation
Following are field descriptions, attributes, maximum lengths and definitions
for the Policy Premium by Category Record.
<S>                     <C>          <C>       <C>         <C>               <C>
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Premium by       Type         Length    Required              Sample  Definitions
Category
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Program ID              Number              6         Yes                34  Numeric code provided by CNIC.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Group Number            Number             10         Yes          20000001  An  alphanumeric  code to identify a Group for Workers
                                                                             Comp and A & H.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Number           Character          30         Yes          00000001  An  alphanumeric  code used by the  program  to
                                                                             identify a policy.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Manual Premium          Number             22         Yes             6,800  The NAIC Manual premium.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Modified Premium        Number             22         Yes             5,800  The NAIC Manual  premium less the  Experience
                                                                             Modification Factor.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Standard Premium        Number             22         Yes             4,800  The  modified  premium  less  additional  credits.
                                                                             Actual Premium Written.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Experience              Number             22         Yes             1,000  Credit  used  to  calculate   Manual  Premium  to
Modification Credit                                                          Modified Premium.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Schedule Credits        Number             22         Yes               143  Credit  used to  calculate  Modified  Premium  to
                                                                             Standard Premium.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Drug Free Credits       Number             22         Yes               143  Credit  used to  calculate  Modified  Premium  to
                                                                             Standard Premium.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Managed Care Credits    Number             22         Yes               143  Credit  used to  calculate  Modified  Premium  to
                                                                             Standard Premium.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Premium       Discount  Number             22         Yes               143  Credit  used to  calculate  Modified  Premium  to
Credits                                                                      Standard Premium.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Contracting    Premium  Number             22         Yes               143  Credit  used to  calculate  Modified  Premium  to
Credit                                                                       Standard Premium.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Safety Premium Credit   Number             22         Yes               143  Credit  used to  calculate  Modified  Premium  to
                                                                             Standard Premium.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Other Credits           Number             22         Yes               143  Credit  used to  calculate  Modified  Premium  to
                                                                             Standard Premium.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Other Debits            Number             22         Yes               143  Debits  used to  calculate  Modified  Premium  to
                                                                             Standard Premium.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Accounting Date         Date               10         Yes        10/31/1997  The last day of an  accounting  period if year 2000
                                                                             format, MM/DD/YYYY.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
System Date             Date               10         Yes        10/23/1997  A date  assigned to a  transaction  by the system in a
                                                                             year 2000 format, MM/DD/YYYY.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Effective Date   Date               10         Yes        10/10/1997  Effective   date  of  the   policy  in  year  2000
                                                                             format, MM/DD/YYYY.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Risk State       Character           2          No                ND  State listed on a policy in location of risk-not
                                                                             billing
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Policy Facultative by Line Listing
Following are field  descriptions,  attributes,  maximum lengths and definitions for the Policy Premium by Category
Record
<S>                     <C>          <C>       <C>         <C>               <C>
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Premium by       Type         Length    Required              Sample  Definitions
Category
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Program ID              Number              6         Yes                34  Numeric code provided by CNIC.
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Number           Character          30         Yes          00000001  An  alphanumeric  code used by the  program  to
                                                                             identify a policy
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Effective Date   Date               10         Yes        10/10/1997  Effective date of the policy in year 2000 format
                                                                             MM/DD/YYYY
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Facultative             Character          30         Yes          GR567123  An Alphanumeric  code used by the program to identify a
Certificate #                                                                Fac Policy
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Facultative             Date               10         Yes        10/10/1997  Effective Date of the Fac Cert.
Certificate  Effective
Date
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Facultative             Date               10         Yes        10/10/1998  Expiration Date of the Fac Cert.
Certificate
Expiration Date
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Facultative             Date               10          No        04/10/1998  Expiration Date of the Fac Cert., required if cancelled
Certificate
Cancellation Date
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Facultative      Gross  Number             22         Yes         20,000.00  Amount of the Fac Written Premium
Premium
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Facultative         GA  Number             22          No          2,000.00  General Agent's portion of Fac Commission
Commission
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Facultative     Broker  Number             22          No          1,000.00  Broker's portion of Fac Commission
Commission
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Facultative     Ceding  Number             22          No          6,000.00  Total Ceding Commission to CNIC on Fac Policy
Commission
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Policy Risk State       Character           2          No                NY  State listed on a policy in location of risk-not
                                                                             billing
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Transaction  Effective  Date               10         Yes        10/23/1997  A  date  when a  transaction  is  effective  in  year
Date                                                                         2000 format, MM/DD/YYYY
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
System Date             Date               10         Yes        10/23/1997  A date  assigned to a  transaction  by the system in a
                                                                             year 2000 format, MM/DD/YYYY
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Accounting Date         Date               10         Yes        10/31/1997  The last day of an  accounting  period in year 2000
                                                                             format, MM/DD/YYYY
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
NAIC #                  Number              5         Yes             12345  Five Digit Insurer / Reinsurer NAIC Code
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
FEIN #                  Character          10         Yes        12-3456789  Nine Digit, 10 Character Federal Tax Identification
                                                                             Number of Reinsurer
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Domiciliary             Character          25         Yes       Chicago, IL  City,  State  of  Reinsurer  Domiciled  (City,  Country
Jurisdiction                                                                 if Foreign Reinsurer)
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------
Reinsurer   Authorized  Character           3         Yes               Yes  See Comment Below for State of Authorization
in State of Insurer
----------------------- ------------ --------- ----------- ----------------- -------------------------------------------------------

Note on State of Authorization. The following is a list of Clarendon Insurance Group Insurance Companies, and their corresponding
                                state of Domicile:

Clarendon National Insurance Company            -         New Jersey
Clarendon America Insurance Company             -         New Jersey
Harbor Specialty Insurance Company              -         New Jersey
Lion Insurance Company                          -         Florida
Clarendon Select Insurance Company              -         Florida
Redland Insurance Company                       -         Iowa
</TABLE>
                                       19
<PAGE>
<TABLE>
<CAPTION>
                                                    SCHEDULE 2

Claim Master Fields Listing
Following are field descriptions, attributes, maximum lengths and definitions for the Claim Record
<S>                     <C>          <C>       <C>         <C>               <C>
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Claim Master            Type         Length    Required               Sample  Definitions
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Program ID              Number              6         Yes                 34  Program  number is the number  assigned to this
                                                                              program by CNIC
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Claim Number            Character          30         Yes     12345678901234  Alphanumeric code used by a program to identify a
                                                                              claim
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Policy Number           Character          30         Yes           00000001  An  alphanumeric  code used by a  program  to
                                                                              a policy
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Policy Effective Date   Date               10         Yes         10/10/1997  Effective  date of the policy  that the claim
                                                                              attaches in year 2000 format MM/DD/YYYY*
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Accident Date           Date               10         Yes         05/10/1997  Date/Time of an accident, MM/DD/YYYY
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Report Date             Date               10         Yes         10/09/1997  Date  reported  to  agent-company  in  year  2000
                                                                              format, MM/DD/YYYY
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Close Date              Date               10          No         09/30/2000  Date  claim  closed  in  year  2000  format,
                                                                              MM/DD/YYYY; required if claim is closed
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Reopen Date             Date               10          No         11/30/1997  Date  claim is reopen  for a loss  payment  and or
                                                                              reserve set up in year 2000 format, MM/DD/YYYY
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
System Date             Date               10         Yes         10/23/1997  A date assigned to a  transaction  by the system in a
                                                                              year 2000 format, MM/DD/YYYY
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Accounting Date         Date               10         Yes         10/31/1997  The last day of an accounting  period in year 2000
                                                                              format, MM/DD/YYYY
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Comments                Character          40          No       Gen. Com. On  Comments about this record
                                                                      Clmnt.
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Policy Risk Sate        Character           2          No                 ND  State listed on a policy in location of risk-not
----------------------- ------------ --------- ----------- ------------------ billing ----------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Catastrophe    Number/  Character          50          No               0002  Must be used  if  multiple  claims  are  paid on the
Occurrence Code                                                               same event.  E.g.   (Hurricane,   Earthquake, Building
                                                                              Fire, Factory Explosion...)
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Type of Loss            Character           2  No (Yes                    WC  See WC Type of Loss Code Listing, Appendix F
                                                     WC)*
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Body Part               Number              2  No (Yes                    01  See NCCI Body Part Code Listing, Appendix F
                                                     WC)*
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Nature of Injury        Number              2  No (Yes                    02  See NCCI Nature of Injury Code Listing, Appendix F
                                                     WC)*
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Cause of Injury         Number              2  No (Yes                    03  See NCCI Cause of Injury Code Listing, Appendix F
                                                     WC)*
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------

*      The "Type of Loss", "Body Part", "Nature of Injury" and "Cause of Injury" fields are required for Worker's Compensation
       Programs only.
</TABLE>
<TABLE>
<CAPTION>
Claimant Master Fields Listing
Following are field descriptions, attributes, maximum lengths and definitions for the Claimant Record
<S>                     <C>          <C>       <C>         <C>               <C>
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Claim Master            Type         Length    Required               Sample  Definitions
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Program ID              Number              6         Yes                 34  Program  number is the number  assigned to this
                                                                              program by CNIC
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Claim Number            Character          30         Yes     12345678901234  Alphanumeric code used by a program to identify a
                                                                              claim
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Claimant Number         Number              6         Yes                 12  Number assigned claimant on claim file
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
AS Line                 Character           4         Yes                     AS Line Code refer to "Annual Statement Yellow Book"
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Agent's     Line    of  Character          40         Yes          Collision  To  distinguish  multiple  lines from an annual
Business                                                                      statement line*
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------

                                       20
<PAGE>

----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Deductibles             Number             22         Yes          10,000.00  A dollar  deductible  on this  line of  business  for
                                                                              this risk.  If N/A place 0
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Indemnity Paid          Number             22         Yes           5,000.00  Monthly  paid  loss  dollars  on  this  claimant.  If
                                                                              N/A place 0
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Indemnity Reserves      Number             22         Yes         234,000.00  As of reporting  date loss reserves on this  claimant.
                                                                              If N/A place 0
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Medical Paid            Number             22         Yes            1000.00  Monthly paid loss dollars on this  claimant.  If N/A
                                                                              place 0
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Medical Reserves        Number             22         Yes             500.00  As of reporting  date loss reserves on this  claimant.
                                                                              if N/A place 0
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Expense/Other     Paid  Number             22         Yes          67,890.00  Monthly paid loss dollars on this  claimant.  If N/A
(Legal)                                                                       place 0
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
End of Month Date       Date               10         Yes         10/31/1997  The last day of an accounting  period in year 2000
                                                                              format, MM/DD/YYYY
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Comments                Character          40          No       Gen. Com. On  Comments about this record
                                                                      Clmnt.
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Expense       Reserves  Number             22         Yes         1000000.00  As of  reporting  date LAE reserves on this  claimant.
(Legal)                                                                       If N/A place 0
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Unallocated    Expense  Number             22         Yes            1000.00  Monthly paid loss dollars on this  claimant.  If N/A
Paid                                                                          place 0
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Unallocated    Expense  Number             22         Yes            2000.00  As of reporting  date loss reserves on this  claimant.
Reserves                                                                      If N/A place 0
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Claimant Name           Character          30         Yes   Alfred E. Newman  Claimant Name
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Payment Master Fields Listing
Following are field descriptions, attributes, maximum lengths and definitions for the Payment Record
<S>                     <C>          <C>       <C>         <C>               <C>
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Payment Master          Type         Length    Required               Sample  Definitions
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Program ID              Number              6         Yes                 34  Program  number is the number assigned to this program
                                                                              by CNIC
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Claim Number            Character          30         Yes     12345678901234  Alphanumeric code used by a program to identify a
                                                                              claim
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Claimant Number         Number              6                             12  Number assigned claimant on claim file
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Payment    Transaction  Number              2         Yes                 10  Numeric code provided by CNIC
Code
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
1099 Flag               Character           3         Yes             Yes/No  Option must be filled in
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Federal ID              Character          11          No                     If 1099 is yes - must be filled in
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Payee Name 1            Character          40         Yes        John O. Doe  Name of payee
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Payee Name 2            Character          40          No                     Name of payee-additional space
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Payee Address 1         Character          40         Yes    125 Bay Parkway  Address of payee
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Payee Address 2         Character          40          No                     Address of payee-additional space
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Payee City              Character          20         Yes           Brooklyn  City of payee
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Payee State             Character           2         Yes                 NY  State of payee
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Payee Zip               Character          10          No         11214-1234  Full zip code of payee if available
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Check Number            Character          10          No          L-1589723  Check number on payment*
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Check Date              Date               10          No         12/31/2000  Date on check in year 2000 format, MM/DD/YYYY*
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Check Amount            Number             22          No          56,468.00  Total amount of payment*
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Indemnity Paid Amount   Number             22         Yes           1,234.00  Payment made on this claim.  If N/A place 0
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Medical Paid Amount     Number             22         Yes          54,000.00  Payment made on this claim.  If N/A place 0
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Expense/Other     Paid  Number             22         Yes           1,234.00  Payment made on this claim.  If N/A place 0
Amount
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------

                                       21
<PAGE>

----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
System Date             Date               10         Yes         10/23/1997  A date assigned to a  transaction  by the system in a
                                                                              year 2000 format, MM/DD/YYYY
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Accounting Date         Date               10         Yes         10/31/1997  The last day of an accounting  period in year 2000
                                                                              format, MM/DD/YYYY
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Comments                Character          40          No       Gen. Com. On  Comments about this record
                                                                      Clmnt.
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------

*      The Check Number, Check Date and Check Amount fields are optional if the Payment Transaction Code field is 11, 12, 13, 14,
       18, 19, 20, 21, 28, 29, 30, 31, 32, 33, 34, 35, 37, 38. Otherwise, these fields are required.
</TABLE>
<TABLE>
<CAPTION>
Start Month Reserves Fields Listing
Following are field descriptions, attributes, maximum lengths and definitions for the Start Month Reserves Record
<S>                     <C>          <C>       <C>         <C>               <C>
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Start Month Reserves    Type         Length    Required               Sample  Definitions
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Program ID              Number              6         Yes                 34  Program  number is the number assigned to this program
                                                                              by CNIC
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Claim Number            Character          30         Yes     12345678901234  Alphanumeric code used by a program to identify a
                                                                              claim
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Claimant Number         Number              6         Yes                 12  Number assigned claimant on claim file
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Indemnity Reserves      Number             22         Yes             234.00  As of reporting  date loss reserves on this  claimant.
                                                                              If N/A place 0
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Medical Reserves        Number             22         Yes             456.00  As of reporting  date loss reserves on this  claimant.
                                                                              If N/A place 0
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Expense/Other Reserves  Number             22         Yes             345.00  As of reporting  date loss reserves on this  claimant.
                                                                              If N/A place 0
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Start Of Month Date     Date               10         Yes         10/01/1997  The  first  day  of an  accounting  period  in  year
                                                                              2000 format, MM/DD/YYYY
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Comments                Character          40          No       Gen. Com. On  Comments about this record
                                                                      Clmnt.
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
End Month Reserves Fields Listing
Following are field descriptions, attributes, maximum lengths and definitions for the End Monthly Reserves Records
<S>                     <C>          <C>       <C>         <C>               <C>
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
End Month Reserves      Type         Length    Required               Sample  Definitions
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Program ID              Number              6         Yes                 34  Program  number is the number assigned to this program
                                                                              by CNIC
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Claim Number            Character          30         Yes     12345678901234  Alphanumeric code used by a program to identify a
                                                                              claim
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Claimant Number         Number              6         Yes                 12  Number assigned claimant on claim file
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Indemnity Reserves      Number             22         Yes           44,44.00  As of reporting  date loss reserves on this  claimant.
                                                                              If N/A place 0
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Medical Reserves        Number             22         Yes          44,444.00  As of reporting  date loss reserves on this  claimant.
                                                                              If N/A place 0
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Expense/Other Reserves  Number             22         Yes             345.00  As of reporting  date loss reserves on this  claimant.
                                                                              If N/A place 0
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
End of Month Date       Date               10         Yes         10/31/1997  The last day of an accounting  period in year 2000
                                                                              format, MM/DD/YYYY
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Comments                Character          40          No       Gen. Com. On  Comments about this record
                                                                      Clmnt.
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
</TABLE>
                                       22

<PAGE>
<TABLE>
<CAPTION>

Outstanding Checks Fields Listing
Following are field descriptions, attributes, maximum lengths and definitions for the Outstanding Checks Record
<S>                     <C>          <C>       <C>         <C>               <C>
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Outstanding Checks      Type         Length    Required               Sample  Definitions
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Program ID              Number              6         Yes                 34  Program number is the number assigned to this program
                                                                              by CNIC
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Check Number            Character          15         Yes          L-1589723  Check number on payment
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Check Amount            Number             22         Yes          36,896.00  Total amount of payment.  If N/A place 0
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
Check Date              Date               10         Yes         12/31/2000  Date on check in year 2000 format, MM/DD/YYYY
----------------------- ------------ --------- ----------- ------------------ ------------------------------------------------------
</TABLE>

                                       23

<PAGE>

                                    EXHIBIT A

                                CONSENT OF AGENT

                                       24

<PAGE>

                                                  August 16, 2001

TO:      Inspire Insurance Services, Inc.
         Inspire Claims Management, Inc.
         Clarendon National Insurance Company
         Harbor Specialty Insurance Company

                  RE: CONSENT TO SERVICES AGREEMENT AMONG INSPIRE
                      INSURANCE SOLUTIONS, INC., INSPIRE CLAIMS
                      MANAGEMENT, INC. AND CLARENDON NATIONAL
                      INSURANCE COMPANY, WITH HARBOR SPECIALTY
                      INSURANCE COMPANY, MADE AS OF THE ___ DAY OF
                       _____________, 2001

Sirs:

     This is to confirm that we are an Agent for  Clarendon  National  Insurance
Company,  Harbor Specialty  Insurance  Company or other members of the Clarendon
Insurance Group, that we have reviewed the above Services  Agreement between the
parties named therein and hereby consent to it.

     We hereby further agree, pursuant to Section 1.2 of said agreement that, in
the event Inspire performs its obligations to Clarendon thereunder and Clarendon
accepts such performance as satisfactory, then said performance shall constitute
full and  complete  performance  of any such  obligations  under any  applicable
agreement between Inspire and the Agent. No informal or formal agreement between
Clarendon and the Agent shall be deemed  sufficient to impose any  obligation on
Inspire in excess of any  performance  accepted by  Clarendon.  By consenting to
this Agreement,  each such Agent agrees to be bound by Clarendon"  acceptance of
Inspire's performance.

                                Very truly yours,

                                ARROWHEAD GENERAL INSURANCE AGENCY, INC.

                                BY:     _____________________________________

                                ARROW CLAIMS MANAGEMENT, INC.

                                BY:     _____________________________________

                                       25
<PAGE>

                                    EXHIBIT B

                                ESCROW AGREEMENT

                                       26
<PAGE>

                                    EXHIBIT C

                             NONDISCLOSURE AGREEMENT

                                       27

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