Document:

Exhibit 107 Excess Catastrophe Reinsurance Contract

		
			Excess Catastrophe Reinsurance Contract
		

		
			Effective:  July 1, 2017
		

		
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			Federated National Insurance Company
		

		
			Sunrise, Florida
		

		
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			_______________________ 
		

		
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			*****Portions of this document omitted pursuant to an application for an order for confidential treatment pursuant to Rule 24b-2 under the Exchange Act. Confidential portions of this document have been filed separately with the Securities and Exchange Commission. 
		

		
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						17\F7V1054

					

					

						

				

		

			 

		

 

		Table of Contents
		

		
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						Article

					
					
						 

					
					
						 

					
					
						Page

				
	1 
					
					
						 

					
					
						Classes of Business Reinsured

					1 
				
	2 
					
					
						 

					
					
						Commencement and Termination

					1 
				
	3 
					
					
						 

					
					
						Territory

					3 
				
	4 
					
					
						 

					
					
						Exclusions

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	5 
					
					
						 

					
					
						Retention and Limit

					4 
				
	6 
					
					
						 

					
					
						Florida Hurricane Catastrophe Fund

					5 
				
	7 
					
					
						 

					
					
						Other Reinsurance

					5 
				
	8 
					
					
						 

					
					
						Reinstatement

					6 
				
	9 
					
					
						 

					
					
						Definitions

					6 
				
	10 
					
					
						 

					
					
						Loss Occurrence

					8 
				
	11 
					
					
						 

					
					
						Loss Notices and Settlements

					10 
				
	12 
					
					
						 

					
					
						Cash Call

					10 
				
	13 
					
					
						 

					
					
						Salvage and Subrogation

					10 
				
	14 
					
					
						 

					
					
						Reinsurance Premium

					11 
				
	15 
					
					
						 

					
					
						Sanctions

					12 
				
	16 
					
					
						 

					
					
						Late Payments

					12 
				
	17 
					
					
						 

					
					
						Offset

					13 
				
	18 
					
					
						 

					
					
						Access to Records

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	19 
					
					
						 

					
					
						Liability of the Reinsurer

					14 
				
	20 
					
					
						 

					
					
						Net Retained Lines (BRMA 32E)

					14 
				
	21 
					
					
						 

					
					
						Errors and Omissions (BRMA 14F)

					14 
				
	22 
					
					
						 

					
					
						Currency (BRMA 12A)

					15 
				
	23 
					
					
						 

					
					
						Taxes (BRMA 50B)

					15 
				
	24 
					
					
						 

					
					
						Federal Excise Tax (BRMA 17D)

					15 
				
	25 
					
					
						 

					
					
						Foreign Account Tax Compliance Act

					15 
				
	26 
					
					
						 

					
					
						Reserves

					15 
				
	27 
					
					
						 

					
					
						Insolvency

					17 
				
	28 
					
					
						 

					
					
						Arbitration

					17 
				
	29 
					
					
						 

					
					
						Service of Suit (BRMA 49C)

					18 
				
	30 
					
					
						 

					
					
						Severability (BRMA 72E)

					19 
				
	31 
					
					
						 

					
					
						Governing Law (BRMA 71B)

					19 
				
	32 
					
					
						 

					
					
						Confidentiality

					19 
				
	33 
					
					
						 

					
					
						Non-Waiver

					20 
				
	34 
					
					
						 

					
					
						Notices and Contract Execution

					20 
				
	35 
					
					
						 

					
					
						Intermediary

					21 
				
	
					
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						Schedule A

					
					
						 

				

		
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						17\F7V1054

					

					

						

				

		

			 

		

 

		Excess Catastrophe Reinsurance Contract
		

		
			Effective: July 1, 2017
		

		
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			entered into by and between 
		

		
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			Federated National Insurance Company
		

		
			Sunrise, Florida
		

		
			(hereinafter referred to as the "Company")
		

		
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			and
		

		
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			The Subscribing Reinsurer(s) Executing the
		

		
			Interests and Liabilities Agreement(s)
		

		
			Attached Hereto
		

		
			(hereinafter referred to as the "Reinsurer")
		

		
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			Article 1 - Classes of Business Reinsured
		

		
			By this Contract the Reinsurer agrees to reinsure the excess liability which may accrue to the Company under its policies in force at the effective time and date hereof or issued or renewed at or after that time and date, and classified by the Company as Property business, including but not limited to, Dwelling Fire, Inland Marine, Mobile Home, Commercial and Homeowners business (including any business assumed from Citizens Property Insurance Corporation), subject to the terms, conditions and limitations set forth herein and in Schedule A attached hereto.
		

		
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			Article 2 - Commencement and Termination
		

		
			A.   This Contract shall become effective at 12:01 a.m., Eastern Standard Time, July 1, 2017, with respect to losses arising out of loss occurrences commencing at or after that time and date, and shall remain in force until 12:01 a.m., Eastern Standard Time, July 1, 2018.
		

		
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			B.   Notwithstanding the provisions of paragraph A above, the Company may terminate a Subscribing Reinsurer's percentage share in this Contract at any time by giving written notice to the Subscribing Reinsurer in the event any of the following circumstances occur:
		

		
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			1.   The Subscribing Reinsurer's policyholders' surplus (or its equivalent under the Subscribing Reinsurer's accounting system) at the inception of this Contract has been reduced by 20.0% or more of the amount of surplus (or the applicable equivalent) 12 months prior to that date; or
		

		
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			2.   The Subscribing Reinsurer's policyholders' surplus (or its equivalent under the Subscribing Reinsurer's accounting system) at any time during the term of this Contract has been reduced by 20.0% or more of the amount of surplus (or the applicable equivalent) at the date of the Subscribing Reinsurer's most recent financial 
		

		 

			

					

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			statement filed with regulatory authorities and available to the public as of the inception of this Contract; or
		

		
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			3.   The Subscribing Reinsurer's A.M. Best's rating has been assigned or downgraded below A- and/or Standard & Poor's rating has been assigned or downgraded below BBB+; or
		

		
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			4.   The Subscribing Reinsurer has become, or has announced its intention to become, merged with, acquired by or controlled by any other entity or individual(s) not controlling the Subscribing Reinsurer's operations previously; or
		

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

		
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			6.   The Subscribing Reinsurer has become insolvent or has been placed into liquidation, receivership, supervision, administration, winding-up or under a scheme of arrangement, or similar proceedings (whether voluntary or involuntary) or proceedings have been instituted against the Subscribing Reinsurer for the appointment of a receiver, liquidator, rehabilitator, supervisor, administrator, conservator or trustee in bankruptcy, or other agent known by whatever name, to take possession of its assets or control of its operations; or
		

		
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			7.   The Subscribing Reinsurer has reinsured its entire liability under this Contract without the Company's prior written consent; or
		

		
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			8.   The Subscribing Reinsurer has ceased assuming new or renewal property or casualty treaty reinsurance business; or
		

		
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			9.   The Subscribing Reinsurer has hired an unaffiliated runoff claims manager that is compensated on a contingent basis or is otherwise provided with financial incentives based on the quantum of claims paid; or
		

		
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			10. The Subscribing Reinsurer has failed to comply with the funding requirements set forth in the Reserves Article.
		

		
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			C.   The "term of this Contract" as used herein shall mean the period from 12:01 a.m., Eastern Standard Time, July 1, 2017 to 12:01 a.m., Eastern Standard Time, July 1, 2018.  However, if this Contract is terminated, the "term of this Contract" as used herein shall mean the period from 12:01 a.m., Eastern Standard Time, July 1, 2017 to the effective time and date of termination.
		

		
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			D.   If this Contract is terminated or expires while a loss occurrence covered hereunder is in progress, the Reinsurer's liability hereunder shall, subject to the other terms and conditions of this Contract, be determined as if the entire loss occurrence had occurred prior to the termination or expiration of this Contract, provided that no part of such loss occurrence is claimed against any renewal or replacement of this Contract.
		

		 

			

					

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			Article 3 - Territory
		

		
			The territorial limits of this Contract shall be identical with those of the Company's policies.
		

		
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			Article 4 - Exclusions
		

		
			A.   This Contract does not apply to and specifically excludes the following:
		

		
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			1.   Reinsurance assumed by the Company under obligatory reinsurance agreements, except business assumed by the Company from Citizens Property Insurance Corporation.
		

		
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			2.   Hail damage to growing or standing crops.
		

		
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			3.   Business rated, coded or classified as Flood insurance or which should have been rated, coded or classified as such.
		

		
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			4.   Business rated, coded or classified as Mortgage Impairment and Difference in Conditions insurance or which should have been rated, coded or classified as such.
		

		
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			5.   Title insurance and all forms of Financial Guarantee, Credit and Insolvency.
		

		
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			6.   Aviation, Ocean Marine, Boiler and Machinery, Fidelity and Surety, Accident and Health, Animal Mortality and Workers Compensation and Employers Liability.
		

		
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			7.   Errors and Omissions, Malpractice and any other type of Professional Liability insurance. 
		

		
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			8.   Loss and/or damage and/or costs and/or expenses arising from seepage and/or pollution and/or contamination, other than contamination from smoke.  Nevertheless, this exclusion does not preclude payment of the cost of removing debris of property damaged by a loss otherwise covered hereunder, subject always to a limit of 25.0% of the Company's property loss under the applicable original policy.
		

		
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			9.   Loss or liability as excluded under the provisions of the "War Exclusion Clause" attached to and forming part of this Contract.
		

		
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			10. Nuclear risks as defined in the "Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance (U.S.A.)" attached to and forming part of this Contract.
		

		
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			11. Loss or liability excluded by the Pools, Associations and Syndicates Exclusion Clause (Catastrophe) attached to and forming part of this Contract and any assessment or similar demand for payment related to the FHCF or Citizens Property Insurance Corporation.
		

		
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			12. Loss or liability of the Company arising by contract, operation of law, or otherwise, from its participation or membership, whether voluntary or involuntary, in any insolvency fund.  "Insolvency fund" includes any guaranty fund, insolvency fund, plan, pool, association, fund or other arrangement, however denominated, established or 
		

		 

			

					

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			governed, which provides for any assessment of or payment or assumption by the Company of part or all of any claim, debt, charge, fee or other obligation of an insurer, or its successors or assigns, which has been declared by any competent authority to be insolvent, or which is otherwise deemed unable to meet any claim, debt, charge, fee or other obligation in whole or in part.
		

		
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			13. Losses in the respect of overhead transmission and distribution lines other than those on or within 150 meters (or 500 feet) of the insured premises.
		

		
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			14. Mold, unless resulting from a peril otherwise covered under the policy involved.
		

		
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			15. Loss or liability as excluded under the provisions of the "Terrorism Exclusion" attached to and forming part of this Contract.
		

		
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			16. All property loss, damage, destruction, erasure, corruption or alteration of Electronic Data from any cause whatsoever (including, but not limited to, Computer Virus) or loss of use, reduction in functionality, cost, expense or whatsoever nature resulting therefrom, unless resulting from a peril otherwise covered under the policy involved.
		

		
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			"Electronic Data" as used herein means facts, concepts and information converted to a form usable for communications, interpretation or processing by electronic and electromechanical data processing or electronically-controlled equipment and includes programs, software and other coded instructions for the processing and manipulation of data or the direction and manipulation of such equipment. 
		

		
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			"Computer Virus" as used herein means a set of corrupting, harmful or otherwise unauthorized instructions or code, including a set of maliciously-introduced, unauthorized instructions or code, that propagate themselves through a computer system network of whatsoever nature.
		

		
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			However, in the event that a peril otherwise covered under the policy results from any of the matters described above, this Contract, subject to all other terms and conditions, will cover physical damage directly caused by such listed peril.
		

		
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			Article 5 - Retention and Limit
		

		
			A.   The Company shall retain and be liable for the first $25,100,000 of ultimate net loss arising out of each loss occurrence.  The Reinsurer shall then be liable, as respects each excess layer, for the amount by which such ultimate net loss exceeds the Company's retention, but the liability of the Reinsurer under each excess layer shall not exceed the amount, shown as "Reinsurer's Per Occurrence Limit" for that excess layer in Schedule A attached hereto, as respects any one loss occurrence.
		

		
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			Whether a loss occurrence results in an ultimate net loss under one or more of the excess layers set forth in Schedule A attached hereto, the Company's retention will not exceed the first $25,100,000 of ultimate net loss arising out of such loss occurrence.
		

		
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			B.   Recoveries shall always be made, in the first instance, under the lowest excess layer that is not entirely exhausted.  If there is any amount of ultimate net loss arising out of a loss 
		

		 

			

					

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			occurrence in excess of the Company's retention under the lowest excess layer that has not been recovered thereunder, such amount shall be recovered under the next or subsequent excess layer or layers, as appropriate.  Recoveries under each excess layer set forth in Schedule A attached to and forming part of this Contract shall inure as follows:
		

		
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			1.   Recoveries under the First Excess layer shall inure to the benefit of the Second Excess layer; 
		

		
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			2.   Recoveries under the First and Second Excess layers shall inure to the benefit of the Third Excess layer; and
		

		
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			3.   Recoveries under the First, Second and Third Excess layers shall inure to the benefit of the Fourth Excess layer.
		

		
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			4.   Recoveries under the First, Second, Third and Fourth Excess layers shall inure to the benefit of the Fifth Excess layer.
		

		
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			It is understood, however, that any fully exhausted excess layer or the exhausted portion of any excess layer shall no longer inure to the benefit of any subsequent excess layer(s).
		

		
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			C.   Notwithstanding the provisions above, no claim shall be made hereunder as respects losses arising out of loss occurrences commencing during the term of this Contract unless at least two risks insured or reinsured by the Company are involved in such loss occurrence.  For purposes hereof, the Company shall be the sole judge of what constitutes "one risk."
		

		
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			Article 6 - Florida Hurricane Catastrophe Fund
		

		
			The Company has purchased 75.0% of the FHCF mandatory layer of coverage and shall be deemed to inure to the benefit of this Contract.  Further, any FHCF loss reimbursement shall be deemed to be paid to the Company in accordance with the FHCF reimbursement contract at the full payout level set forth therein and will be deemed not to be reduced by any reduction or exhaustion of the FHCF's claims-paying capacity as respects the mandatory FHCF coverage.
		

		
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			Article 7 - Other Reinsurance
		

		
			A.   The Company shall be permitted to carry other reinsurance, recoveries under which shall inure solely to the benefit of the Company and be entirely disregarded in applying all of the provisions of this Contract.
		

		
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			B.   Any loss reimbursement received under the Company's FHCF Supplement Layer Reinsurance Contract (17\F7V1085), which shall be deemed to be placed at 15.771%, shall be deemed to inure to the benefit of this Contract.
		

		 

			

					

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			Article 8 - Reinstatement
		

		
			A.   In the event all or any portion of the reinsurance under any excess layer of reinsurance coverage provided by this Contract is exhausted by ultimate net loss, the amount so exhausted shall be reinstated immediately from the time the loss occurrence commences hereon.  For each amount so reinstated the Company agrees to pay additional premium equal to the product of the following:
		

		
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			1.   The percentage of the occurrence limit for the excess layer reinstated (based on the ultimate net loss paid by the Reinsurer under that excess layer); times
		

		
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			2.   The earned reinsurance premium for the excess layer reinstated for the term of this Contract (exclusive of reinstatement premium).
		

		
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			B.   Whenever the Company requests payment by the Reinsurer of any ultimate net loss under any excess layer hereunder, the Company shall submit a statement to the Reinsurer of reinstatement premium due the Reinsurer for that excess layer.  If the earned reinsurance premium for any excess layer for the term of this Contract has not been finally determined as of the date of any such statement, the calculation of reinstatement premium due for that excess layer shall be based on the amount, shown as "Annual Deposit Premium" for that excess layer in Schedule A attached hereto, and shall be readjusted when the earned reinsurance premium for that excess layer for the term of this Contract has been finally determined.  Any reinstatement premium shown to be due the Reinsurer for any excess layer as reflected by any such statement (less prior payments, if any, for that excess layer) shall be payable by the Company concurrently with payment by the Reinsurer of the requested ultimate net loss for that excess layer.  Any return reinstatement premium shown to be due the Company shall be remitted by the Reinsurer as promptly as possible after receipt and verification of the Company's statement.
		

		
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			C.   Notwithstanding anything stated herein, the liability of the Reinsurer for ultimate net loss under any excess layer of reinsurance coverage provided by this Contract shall not exceed either of the following:
		

		
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			1.   The amount, shown as "Reinsurer's Per Occurrence Limit" for that excess layer in Schedule A attached hereto, as respects loss or losses arising out of any one loss occurrence; or
		

		
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			2.   The amount, shown as "Reinsurer's Term Limit" for that excess layer in Schedule A attached hereto, in all during the term of this Contract.
		

		
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			Article 9 - Definitions
		

		
			A.   "Loss adjustment expense," regardless of how such expenses are classified for statutory reporting purposes, as used in this Contract shall mean all costs and expenses allocable to a specific claim that are incurred by the Company in the investigation, appraisal, adjustment, settlement, litigation, defense or appeal of a specific claim, including court costs and costs of supersedeas and appeal bonds, and including a) pre-judgment interest, unless included as part of the award or judgment; b) post-judgment interest; c) legal expenses and costs incurred in connection with coverage questions and legal actions 
		

		 

			

					

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			connected thereto, including Declaratory Judgment Expense; and d) expenses and a pro rata share of salaries of the Company field employees, and expenses of other Company employees who have been temporarily diverted from their normal and customary duties and assigned to the field adjustment of losses covered by this Contract.
		

		
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			Loss adjustment expense as defined above does not include unallocated loss adjustment expense.  Unallocated loss adjustment expense includes, but is not limited to, salaries and expenses of employees, other than in (d) above, and office and other overhead expenses.
		

		
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			B.   "Loss in excess of policy limits" and "extra contractual obligations" as used in this Contract shall mean:
		

		
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			1.   "Loss in excess of policy limits" shall mean 90.0% of any amount paid or payable by the Company in excess of its policy limits, but otherwise within the terms of its policy, such loss in excess of the Company's policy limits having been incurred because of, but not limited to, failure by the Company to settle within the policy limits or by reason of the Company's alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of an action against its insured or reinsured or in the preparation or prosecution of an appeal consequent upon such an action.  Any loss in excess of policy limits that is made in connection with this Contract shall not exceed 25.0% of the actual catastrophe loss.
		

		
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			2.   "Extra contractual obligations" shall mean 90.0% of any punitive, exemplary, compensatory or consequential damages paid or payable by the Company, not covered by any other provision of this Contract and which arise from the handling of any claim on business subject to this Contract, such liabilities arising because of, but not limited to, failure by the Company to settle within the policy limits or by reason of the Company's alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of an action against its insured or reinsured or in the preparation or prosecution of an appeal consequent upon such an action.  An extra contractual obligation shall be deemed, in all circumstances, to have occurred on the same date as the loss covered or alleged to be covered under the policy.  Any extra contractual obligations that are made in connection with this Contract shall not exceed 25.0% of the actual catastrophe loss.
		

		
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			Notwithstanding anything stated herein, this Contract shall not apply to any loss in excess of policy limits or any extra contractual obligation incurred by the Company as a result of any fraudulent and/or criminal act by any officer or director of the Company acting individually or collectively or in collusion with any individual or corporation or any other organization or party involved in the presentation, defense or settlement of any claim covered hereunder.
		

		
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			C.   "Policies" as used in this Contract shall mean all policies, contracts and binders of insurance or reinsurance.
		

		
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			D.   "Ultimate net loss" as used in this Contract shall mean the sum or sums (including loss in excess of policy limits, extra contractual obligations and loss adjustment expense, as defined herein) paid or payable by the Company in settlement of claims and in satisfaction of judgments rendered on account of such claims, after deduction of all salvage, all recoveries and all claims on inuring insurance or reinsurance, whether collectible or not.
		

		 

			

					

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			Nothing herein shall be construed to mean that losses under this Contract are not recoverable until the Company's ultimate net loss has been ascertained.
		

		
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			Article 10 - Loss Occurrence
		

		
			A.   The term "loss occurrence" shall mean the sum of all individual losses directly occasioned by any one disaster, accident or loss or series of disasters, accidents or losses arising out of one event which occurs within the area of one state of the United States or province of Canada and states or provinces contiguous thereto and to one another.  However, the duration and extent of any one "loss occurrence" shall be limited to all individual losses sustained by the Company occurring during any period of 168 consecutive hours arising out of and directly occasioned by the same event, except that the term "loss occurrence" shall be further defined as follows:
		

		
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			1.   As regards a named storm, all individual losses sustained by the Company occurring during any period (a) from and after 12:00 a.m. Eastern Standard Time on the date a watch, warning, advisory, or other bulletin (whether for wind, flood or otherwise) for such named storm is first issued by the National Hurricane Center ("NHC") or its successor or any other division of the National Weather Service ("NWS"), (b) continuing for a time period thereafter during which such named storm continues, regardless of its category rating or lack thereof and regardless of whether the watch, warning, or advisory or other bulletin remains in effect for such named storm and (c) ending 96 hours following the issuance of the last watch, warning or advisory or other bulletin for such named storm or related to such named storm by the NHC or its successor or any other division of the NWS.  "Named storm" shall mean any storm or storm system that has been declared by the NHC or its successor or any other division of the NWS to be a named storm at any time, which may include, by way of example and not limitation, hurricane, wind, gusts, typhoon, tropical storm, hail, rain, tornados, cyclones, ensuing flood, storm surge, water damage, fire following, sprinkler leakage, riots, vandalism, and collapse, and all losses and perils (including, by way of example and not limitation, those mentioned previously in this sentence) in each case arising out of, caused by, occurring during, occasioned by or resulting from such storm or storm system, including by way of example and not limitation the merging of one or more separate storm(s) or storm system(s) into a combined storm surge event.  However, the named storm need not be limited to one state or province or states or provinces contiguous thereto.
		

		
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			2.   As regards storm or storm systems that are not a named storm, including, by way of example and not limitation, ensuing wind, gusts, typhoon, tropical storm, hail, rain, tornados, cyclones, ensuing flood, storm surge, fire following, sprinkler leakage, riots, vandalism, collapse and water damage, all individual losses sustained by the Company occurring during any period of 144 consecutive hours arising out of, caused by, occurring during, occasioned by or resulting from the same event.  However, the event need not be limited to one state or province or states or provinces contiguous thereto.
		

		
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			3.   As regards riot, riot attending a strike, civil commotion, vandalism and malicious mischief, all individual losses sustained by the Company occurring during any period of 96 consecutive hours within the area of one municipality or county and the 
		

		 

			

					

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			municipalities or counties contiguous thereto arising out of and directly occasioned by the same event.  The maximum duration of 96 consecutive hours may be extended in respect of individual losses which occur beyond such 96 consecutive hours during the continued occupation of an assured's premises by strikers, provided such occupation commenced during the aforesaid period.
		

		
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			4.   As regards earthquake (the epicenter of which need not necessarily be within the territorial confines referred to in the introductory portion of this paragraph) and fire following directly occasioned by the earthquake, only those individual fire losses which commence during the period of 168 consecutive hours may be included in the Company's loss occurrence.
		

		
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			5.   As regards freeze, only individual losses directly occasioned by collapse, breakage of glass and water damage (caused by bursting frozen pipes and tanks) may be included in the Company's loss occurrence.
		

		
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			6.   As regards firestorms, brush fires and any other fires or series of fires, irrespective of origin (except as provided in subparagraphs 3 and 4 above), all individual losses sustained by the Company which commence during any period of 168 consecutive hours within the area of one state of the United States or province of Canada and states or provinces contiguous thereto and to one another may be included in the Company's loss occurrence.
		

		
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			B.   For all loss occurrences hereunder, the Company may choose the date and time when any such period of consecutive hours commences, provided that no period commences earlier than the date and time of the occurrence of the first recorded individual loss sustained by the Company arising out of that disaster, accident, or loss or series of disasters, accidents, or losses.  Furthermore:
		

		
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			1.   For all loss occurrences other than those referred to in subparagraphs A.1., A.2., and A.3. above, only one such period of 168 consecutive hours shall apply with respect to one event.
		

		
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			2.   As regards those loss occurrences referred to in subparagraphs A.1. and A.2., only one such period of consecutive hours (as set forth therein) shall apply with respect to one event, regardless of the duration of the event.  
		

		
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			3.   As regards those loss occurrences referred to in subparagraph A.3. above, if the disaster, accident, or loss or series of disasters, accidents, or losses occasioned by the event is of greater duration than 96 consecutive hours, then the Company may divide that disaster, accident, or loss or series of disasters, accidents, or losses into two or more loss occurrences, provided that no two periods overlap and no individual loss is included in more than one such period.
		

		
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			C.   It is understood that losses arising from a combination of two or more perils as a result of the same event may be considered as having arisen from one loss occurrence.  Notwithstanding the foregoing, the hourly limitations as stated above shall not be exceeded as respects the applicable perils, and no single loss occurrence shall encompass a time period greater than 168 consecutive hours, except as regards those loss occurrences referred to in subparagraphs A.1., A.4. and A.6. above.
		

		 

			

					

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			Article 11 - Loss Notices and Settlements
		

		
			A.   Whenever losses sustained by the Company are reserved by the Company for an amount greater than 50.0% of the Company's retention under any excess layer hereunder and/or appear likely to result in a claim under such excess layer, the Company shall notify the Subscribing Reinsurers under that excess layer and shall provide updates related to development of such losses.  The Reinsurer shall have the right to participate in the adjustment of such losses at its own expense.
		

		
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			B.   All loss settlements made by the Company, provided they are within the terms of this Contract and the terms of the original policy (with the exception of loss in excess of policy limits or extra contractual obligations coverage, if any, under this Contract), shall be binding upon the Reinsurer, and the Reinsurer agrees to pay all amounts for which it may be liable upon receipt of reasonable evidence of the amount paid by the Company.
		

		
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			Article 12 - Cash Call
		

		
			Notwithstanding the provisions of the Loss Notices and Settlements Article, upon the request of the Company, the Reinsurer shall pay any amount with regard to a loss settlement or settlements that are scheduled to be made (including any payments projected to be made) within the next 20 days by the Company, subject to receipt by the Reinsurer of a satisfactory proof of loss.  Such agreed payment shall be made within 10 days from the date the demand for payment was transmitted to the Reinsurer.
		

		
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			Article 13 - Salvage and Subrogation
		

		
			The Reinsurer shall be credited with salvage (i.e., reimbursement obtained or recovery made by the Company, less the actual cost, excluding salaries of officials and employees of the Company and sums paid to attorneys as retainer, of obtaining such reimbursement or making such recovery) on account of claims and settlements involving reinsurance hereunder.  Salvage thereon shall always be used to reimburse the excess carriers in the reverse order of their priority according to their participation before being used in any way to reimburse the Company for its primary loss.  The Company hereby agrees to enforce its rights to salvage or subrogation relating to any loss, a part of which loss was sustained by the Reinsurer, and to prosecute all claims arising out of such rights, if, in the Company's opinion, it is economically reasonable to do so.
		

		 

			

					

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			Article 14 - Reinsurance Premium
		

		
			A.   As premium for each excess layer of reinsurance coverage provided by this Contract, the Company shall pay the Reinsurer a premium equal to the product of the following (or a pro rata portion thereof in the event the term of this Contract is less than 12 months), subject to a minimum premium of the amount, shown as "Minimum Premium" for that excess layer in Schedule A attached hereto (or a pro rata portion thereof in the event the term of this Contract is less than 12 months):
		

		
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			1.   The amount, shown as "Annual Deposit Premium" for that excess layer in Schedule A attached hereto; times 
		

		
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			2.   The percentage calculated by dividing (a) the actual Average Annual Loss ("AAL") determined by the Company's wind insurance in force on September 30, 2017, by (b) the original AAL of the amount, shown as "AAL" for that excess layer in Schedule A attached hereto.
		

		
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			However, if the difference between the amount, shown as "Annual Deposit Premium" for that excess layer in Schedule A attached hereto, and the premium calculated in accordance with this paragraph A for the excess layer is less than a 10.0% increase or decrease, the premium due the Reinsurer shall equal the amount, shown as "Annual Deposit Premium" for that excess layer in Schedule A attached hereto.  If the difference between the amount, shown as "Annual Deposit Premium" for that excess layer in Schedule A attached hereto, and the premium calculated above for the excess layer is greater than a 10.0% increase or 10.0% decrease, the premium due the Reinsurer for the excess layer shall equal the following:
		

		
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			1.   For an increase of more than 10.0% the premium due for that excess layer shall be equal to the amount, shown as "Annual Deposit Premium" for that excess layer in Schedule A attached hereto, plus an additional premium equal to the amount by which the premium computed in accordance with paragraph A above for that excess layer exceeds 110% of the amount shown as "Annual Deposit Premium" for that excess layer in Schedule A attached hereto; or
		

		
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			2.   For a decrease of more than 10.0% the premium due for that excess layer shall be equal to the amount, shown as "Annual Deposit Premium" for that excess layer in Schedule A attached hereto, less the difference between 90.0% of the amount shown as "Annual Deposit Premium" for that excess layer in Schedule A attached hereto, and the premium computed in accordance with paragraph A above for that excess layer, subject to the amount shown as "Minimum Premium" for that excess layer in Schedule A attached hereto.
		

		
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			The Company's AAL shall be derived by averaging the applicable data produced by Applied Insurance Research (AIR) Touchstone v4 and Risk Management Solutions (RMS) RiskLink v16 catastrophe modeling software, in the long-term perspective, including secondary uncertainty and loss amplification, but excluding storm surge.  It is understood that the calculation of the actual AAL shall be based on the amount, shown as "Reinsurer's Per Occurrence Limit" for that excess layer in Schedule A attached hereto, net of (1) the FHCF mandatory layer of coverage purchased by the Company using the current estimates of the mandatory FHCF coverage of 75.0% of $1,024,755,000 excess of $317,055,000, 
		

		 

			

					

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			and of (2) the Company's FHCF Supplement Layer Reinsurance Contract (17\F7V1085), which shall be deemed to be placed at 15.771%.
		

		
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			B.   The Company shall pay the Reinsurer an annual deposit premium for each excess layer of the amount, shown as "Annual Deposit Premium" for that excess layer in Schedule A attached hereto, in four equal installments of the amount, shown as "Deposit Premium Installment" for that excess layer in Schedule A attached hereto, on July 1 and October 1 of 2017, and on January 1 and April 1 of 2018.  However, in the event this Contract is terminated, there shall be no deposit premium installments due after the effective date of termination.
		

		
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			C.   On or before June 30, 2018, the Company shall provide a report to the Reinsurer setting forth the premium due hereunder for each excess layer for the term of this Contract, computed in accordance with paragraph A above, and any additional premium due the Reinsurer or return premium due the Company for each such excess layer shall be remitted promptly.
		

		
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			Article 15 - Sanctions
		

		
			Neither the Company nor any Subscribing Reinsurer shall be liable for premium or loss under this Contract if it would result in a violation of any mandatory sanction, prohibition or restriction under United Nations resolutions or the trade or economic sanctions, laws or regulations of the European Union, United Kingdom or United States of America that are applicable to either party.
		

		
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			Article 16 - Late Payments
		

		
			A.   The provisions of this Article shall not be implemented unless specifically invoked, in writing, by one of the parties to this Contract.
		

		
			﻿
		

		
			B.   In the event any premium, loss or other payment due either party is not received by the intermediary named in the Intermediary Article (hereinafter referred to as the "Intermediary") by the payment due date, the party to whom payment is due may, by notifying the Intermediary in writing, require the debtor party to pay, and the debtor party agrees to pay, an interest charge on the amount past due calculated for each such payment on the last business day of each month as follows:
		

		
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			1.   The number of full days which have expired since the due date or the last monthly calculation, whichever the lesser; times
		

		
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			2.   1/365ths of the six-month United States Treasury Bill rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made; times
		

		
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			3.   The amount past due, including accrued interest.
		

		
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			It is agreed that interest shall accumulate until payment of the original amount due plus interest charges have been received by the Intermediary.
		

		 

			

					

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			C.   The establishment of the due date shall, for purposes of this Article, be determined as follows:
		

		
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			1.   As respects the payment of routine deposits and premiums due the Reinsurer, the due date shall be as provided for in the applicable section of this Contract.  In the event a due date is not specifically stated for a given payment, it shall be deemed due 30 days after the date of transmittal by the Intermediary of the initial billing for each such payment.
		

		
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			2.   Any claim or loss payment due the Company hereunder shall be deemed due 10 days after the proof of loss or demand for payment is transmitted to the Reinsurer.  If such loss or claim payment is not received within the 10 days, interest will accrue on the payment or amount overdue in accordance with paragraph B above, from the date the proof of loss or demand for payment was transmitted to the Reinsurer.
		

		
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			3.   As respects any payment, adjustment or return due either party not otherwise provided for in subparagraphs 1 and 2 of this paragraph C, the due date shall be as provided for in the applicable section of this Contract.  In the event a due date is not specifically stated for a given payment, it shall be deemed due 10 days following transmittal of written notification that the provisions of this Article have been invoked.
		

		
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			For purposes of interest calculations only, amounts due hereunder shall be deemed paid upon receipt by the Intermediary.
		

		
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			D.   Nothing herein shall be construed as limiting or prohibiting a Subscribing Reinsurer from contesting the validity of any claim, or from participating in the defense of any claim or suit, or prohibiting either party from contesting the validity of any payment or from initiating any arbitration or other proceeding in accordance with the provisions of this Contract.  If the debtor party prevails in an arbitration or other proceeding, then any interest charges due hereunder on the amount in dispute shall be null and void.  If the debtor party loses in such proceeding, then the interest charge on the amount determined to be due hereunder shall be calculated in accordance with the provisions set forth above unless otherwise determined by such proceedings.  If a debtor party advances payment of any amount it is contesting, and proves to be correct in its contestation, either in whole or in part, the other party shall reimburse the debtor party for any such excess payment made plus interest on the excess amount calculated in accordance with this Article.
		

		
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			E.   Interest charges arising out of the application of this Article that are $1,000 or less from any party shall be waived unless there is a pattern of late payments consisting of three or more items over the course of any 12-month period.
		

		
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			Article 17 - Offset
		

		
			The Company and the Reinsurer may offset any balance or amount due from one party to the other under this Contract or any other contract heretofore or hereafter entered into between the Company and the Reinsurer, whether acting as assuming reinsurer or ceding company.  The provisions of this Article shall not be affected by the insolvency of either party.
		

		 

			

					

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			Article 18 - Access to Records
		

		
			The Reinsurer or its designated representatives shall have access at any reasonable time to all records of the Company which pertain in any way to this reinsurance, provided the Reinsurer gives the Company at least 15 days prior notice of request for such access.  However, a Subscribing Reinsurer or its designated representatives shall not have any right of access to the records of the Company if it is not current in all undisputed payments due the Company.  "Undisputed" as used herein shall mean any amount that the Subscribing Reinsurer has not contested in writing to the Company specifying the reason(s) why the payments are disputed.  
		

		
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			Article 19 - Liability of the Reinsurer
		

		
			A.   The liability of the Reinsurer shall follow that of the Company in every case and be subject in all respects to all the general and specific stipulations, clauses, waivers and modifications of the Company's policies and any endorsements thereon.  However, in no event shall this be construed in any way to provide coverage outside the terms and conditions set forth in this Contract.
		

		
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			B.   Nothing herein shall in any manner create any obligations or establish any rights against the Reinsurer in favor of any third party or any persons not parties to this Contract.
		

		
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			Article 20 - Net Retained Lines (BRMA 32E)
		

		
			A.   This Contract applies only to that portion of any policy which the Company retains net for its own account (prior to deduction of any underlying reinsurance specifically permitted in this Contract), and in calculating the amount of any loss hereunder and also in computing the amount or amounts in excess of which this Contract attaches, only loss or losses in respect of that portion of any policy which the Company retains net for its own account shall be included.
		

		
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			B.   The amount of the Reinsurer's liability hereunder in respect of any loss or losses shall not be increased by reason of the inability of the Company to collect from any other reinsurer(s), whether specific or general, any amounts which may have become due from such reinsurer(s), whether such inability arises from the insolvency of such other reinsurer(s) or otherwise.
		

		
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			Article 21 - Errors and Omissions (BRMA 14F)
		

		
			Inadvertent delays, errors or omissions made in connection with this Contract or any transaction hereunder shall not relieve either party from any liability which would have attached had such delay, error or omission not occurred, provided always that such error or omission is rectified as soon as possible after discovery.
		

		 

			

					

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			Article 22 - Currency (BRMA 12A)
		

		
			A.   Whenever the word "Dollars" or the "$" sign appears in this Contract, they shall be construed to mean United States Dollars and all transactions under this Contract shall be in United States Dollars.
		

		
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			B.   Amounts paid or received by the Company in any other currency shall be converted to United States Dollars at the rate of exchange at the date such transaction is entered on the books of the Company.
		

		
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			Article 23 - Taxes (BRMA 50B)
		

		
			In consideration of the terms under which this Contract is issued, the Company will not claim a deduction in respect of the premium hereon when making tax returns, other than income or profits tax returns, to any state or territory of the United States of America or the District of Columbia.
		

		
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			Article 24 - Federal Excise Tax (BRMA 17D)
		

		
			A.   The Reinsurer has agreed to allow for the purpose of paying the Federal Excise Tax the applicable percentage of the premium payable hereon (as imposed under Section 4371 of the Internal Revenue Code) to the extent such premium is subject to the Federal Excise Tax.
		

		
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			B.   In the event of any return of premium becoming due hereunder the Reinsurer will deduct the applicable percentage from the return premium payable hereon and the Company or its agent should take steps to recover the tax from the United States Government.
		

		
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			Article 25 - Foreign Account Tax Compliance Act
		

		
			A.   To the extent the Reinsurer is subject to the deduction and withholding of premium payable hereon as set forth in the Foreign Account Tax Compliance Act (Sections 1471-1474 of the Internal Revenue Code), the Reinsurer shall allow such deduction and withholding from the premium payable under this Contract. 
		

		
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			B.   In the event of any return of premium becoming due hereunder, the return premium shall be determined and paid in full without regard to any amounts deducted or withheld under paragraph A of this Article.  In the event the Company or its agent recovers such premium deductions and withholdings on the return premium from the United States Government, the Company or its agent shall reimburse the Reinsurer for such amounts.
		

		
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			Article 26 - Reserves
		

		
			A.   The Reinsurer agrees to fund its share of amounts, including but not limited to, the Company's ceded unearned premium and outstanding loss and loss adjustment expense reserves (including all case reserves plus any reasonable amount estimated to be 
		

		 

			

					

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			unreported from known loss occurrences) (hereinafter referred to as "Reinsurer's Obligations") by:
		

		
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			1.   Clean, irrevocable and unconditional letters of credit issued and confirmed, if confirmation is required by the insurance regulatory authorities involved, by a bank or banks meeting the NAIC Securities Valuation Office credit standards for issuers of letters of credit and acceptable to said insurance regulatory authorities; and/or
		

		
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			2.   Escrow accounts for the benefit of the Company; and/or
		

		
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			3.   Cash advances;
		

		
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			if the Reinsurer:
		

		
			﻿
		

		
			1.   Is unauthorized in any state of the United States of America or the District of Columbia having jurisdiction over the Company and if, without such funding, a penalty would accrue to the Company on any financial statement it is required to file with the insurance regulatory authorities involved; or
		

		
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			2.   Has an A.M. Best Company's rating equal to or below B++ at the inception of this Contract.
		

		
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			The Reinsurer, at its sole option, may fund in other than cash if its method and form of funding are acceptable to the insurance regulatory authorities involved.
		

		
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			B.   With regard to funding in whole or in part by letters of credit, it is agreed that each letter of credit will be in a form acceptable to insurance regulatory authorities involved, will be issued for a term of at least one year and will include an "evergreen clause," which automatically extends the term for at least one additional year at each expiration date unless written notice of non-renewal is given to the Company not less than 30 days prior to said expiration date.  The Company and the Reinsurer further agree, notwithstanding anything to the contrary in this Contract, that said letters of credit may be drawn upon by the Company or its successors in interest at any time, without diminution because of the insolvency of the Company or the Reinsurer, but only for one or more of the following purposes:
		

		
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			1.   To reimburse itself for the Reinsurer's share of unearned premiums returned to insureds on account of policy cancellations, unless paid in cash by the Reinsurer;
		

		
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			2.   To reimburse itself for the Reinsurer's share of losses and/or loss adjustment expense paid under the terms of policies reinsured hereunder, unless paid in cash by the Reinsurer;
		

		
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			3.   To reimburse itself for the Reinsurer's share of any other amounts claimed to be due hereunder, unless paid in cash by the Reinsurer;
		

		
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			4.   To fund a cash account in an amount equal to the Reinsurer's share of amounts, including but not limited to, the Reinsurer's Obligations as set forth above, funded by means of a letter of credit which is under non-renewal notice, if said letter of credit has not been renewed or replaced by the Reinsurer 10 days prior to its expiration date;
		

		 

			

					

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			5.   To refund to the Reinsurer any sum in excess of the actual amount required to fund the Reinsurer's share of amounts, including but not limited to, the Reinsurer's Obligations as set forth above, if so requested by the Reinsurer.
		

		
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			In the event the amount drawn by the Company on any letter of credit is in excess of the actual amount required for B(1), B(2) or B(4), or in the case of B(3), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.
		

		
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			Article 27 - Insolvency
		

		
			A.   In the event of the insolvency of the Company, this reinsurance shall be payable directly to the Company or to its liquidator, receiver, conservator or statutory successor on the basis of the liability of the Company without diminution because of the insolvency of the Company or because the liquidator, receiver, conservator or statutory successor of the Company has failed to pay all or a portion of any claim.  It is agreed, however, that the liquidator, receiver, conservator or statutory successor of the Company shall give written notice to the Reinsurer of the pendency of a claim against the Company indicating the policy or bond reinsured which claim would involve a possible liability on the part of the Reinsurer within a reasonable time after such claim is filed in the conservation or liquidation proceeding or in the receivership, and that during the pendency of such claim, the Reinsurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated, any defense or defenses that it may deem available to the Company or its liquidator, receiver, conservator or statutory successor.  The expense thus incurred by the Reinsurer shall be chargeable, subject to the approval of the Court, against the Company as part of the expense of conservation or liquidation to the extent of a pro rata share of the benefit which may accrue to the Company solely as a result of the defense undertaken by the Reinsurer.
		

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

		
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			C.   It is further understood and agreed that, in the event of the insolvency of the Company, the reinsurance under this Contract shall be payable directly by the Reinsurer to the Company or to its liquidator, receiver or statutory successor, except as provided by Section 4118(a) of the New York Insurance Law or except (1) where this Contract specifically provides another payee of such reinsurance in the event of the insolvency of the Company or (2) where the Reinsurer with the consent of the direct insured or insureds has assumed such policy obligations of the Company as direct obligations of the Reinsurer to the payees under such policies and in substitution for the obligations of the Company to such payees.
		

		
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			Article 28 - Arbitration
		

		
			A.   As a condition precedent to any right of action hereunder, in the event of any dispute or difference of opinion hereafter arising with respect to this Contract, it is hereby mutually agreed that such dispute or difference of opinion shall be submitted to arbitration.  One 
		

		 

			

					

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			Arbiter shall be chosen by the Company, the other by the Reinsurer, and an Umpire shall be chosen by the two Arbiters before they enter upon arbitration, all of whom shall be active or retired disinterested executive officers of insurance or reinsurance companies or Lloyd's London Underwriters.  In the event that either party should fail to choose an Arbiter within 30 days following a written request by the other party to do so, the requesting party may choose two Arbiters who shall in turn choose an Umpire before entering upon arbitration.  If the two Arbiters fail to agree upon the selection of an Umpire within 30 days following their appointment, each Arbiter shall nominate three candidates within 10 days thereafter, two of whom the other shall decline, and the decision shall be made by drawing lots.
		

		
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			B.   Each party shall present its case to the Arbiters within 30 days following the date of appointment of the Umpire.  The Arbiters shall consider this Contract as an honorable engagement rather than merely as a legal obligation and they are relieved of all judicial formalities and may abstain from following the strict rules of law.  The decision of the Arbiters shall be final and binding on both parties; but failing to agree, they shall call in the Umpire and the decision of the majority shall be final and binding upon both parties.  Judgment upon the final decision of the Arbiters may be entered in any court of competent jurisdiction.
		

		
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			C.   If more than one Subscribing Reinsurer is involved in the same dispute, all such Subscribing Reinsurers shall, at the option of the Company, constitute and act as one party for purposes of this Article and communications shall be made by the Company to each of the Subscribing Reinsurers constituting one party, provided, however, that nothing herein shall impair the rights of such Subscribing Reinsurers to assert several, rather than joint, defenses or claims, nor be construed as changing the liability of the Subscribing Reinsurers participating under the terms of this Contract from several to joint.
		

		
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			D.   Each party shall bear the expense of its own Arbiter, and shall jointly and equally bear with the other the expense of the Umpire and of the arbitration.  In the event that the two Arbiters are chosen by one party, as above provided, the expense of the Arbiters, the Umpire and the arbitration shall be equally divided between the two parties.
		

		
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			E.   Any arbitration proceedings shall take place at a location mutually agreed upon by the parties to this Contract, but notwithstanding the location of the arbitration, all proceedings pursuant hereto shall be governed by the law of the state in which the Company has its principal office.
		

		
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			Article 29 - Service of Suit (BRMA 49C)
		

		
			(Applicable if the Reinsurer is not domiciled in the United States of America, and/or is not authorized in any State, Territory or District of the United States where authorization is required by insurance regulatory authorities)
		

		
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			A.   It is agreed that in the event the Reinsurer fails to pay any amount claimed to be due hereunder, the Reinsurer, at the request of the Company, will submit to the jurisdiction of a court of competent jurisdiction within the United States.  Nothing in this Article constitutes or should be understood to constitute a waiver of the Reinsurer's rights to commence an action in any court of competent jurisdiction in the United States, to remove an action to a 
		

		 

			

					

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			United States District Court, or to seek a transfer of a case to another court as permitted by the laws of the United States or of any state in the United States.
		

		
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			B.   Further, pursuant to any statute of any state, territory or district of the United States which makes provision therefor, the Reinsurer hereby designates the party named in its Interests and Liabilities Agreement, or if no party is named therein, the Superintendent, Commissioner or Director of Insurance or other officer specified for that purpose in the statute, or his successor or successors in office, as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Company or any beneficiary hereunder arising out of this Contract.
		

		
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			Article 30 - Severability (BRMA 72E)
		

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

		
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			Article 31 - Governing Law (BRMA 71B)
		

		
			This Contract shall be governed by and construed in accordance with the laws of the State of Florida.
		

		
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			Article 32 - Confidentiality
		

		
			A.   The Reinsurer hereby acknowledges that the documents, information and data provided to it by the Company, whether directly or through an authorized agent, in connection with the placement and execution of this Contract, including all information obtained through any audits and any claims information between the Company and the Reinsurer, and any submission or other materials relating to any renewal (hereinafter referred to as "Confidential Information") are proprietary and confidential to the Company.  
		

		
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			B.   Except as provided for in paragraph C below, the Reinsurer shall not disclose any Confidential Information to any third parties, including but not limited to the Reinsurer's subsidiaries and affiliates, other insurance companies and their subsidiaries and affiliates, underwriting agencies, research organizations, any unaffiliated entity engaged in modeling insurance or reinsurance data, and statistical rating organizations.  
		

		
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			C.   Confidential Information may be used by the Reinsurer only in connection with the performance of its obligations or enforcement of its rights under this Contract and will only be disclosed when required by (1) retrocessionaires subject to the business ceded to this Contract, (2) regulators performing an audit of the Reinsurer's records and/or financial condition, (3) external auditors performing an audit of the Reinsurer's records in the normal course of business, or (4) the Reinsurer's legal counsel; provided that the Reinsurer advises such parties of the confidential nature of the Confidential Information and their obligation to maintain its confidentiality.  The Company may require that any third-party representatives of the Reinsurer agree, in writing, to be bound by this Confidentiality Article 
		

		 

			

					

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			or by a separate written confidentiality agreement, containing terms no less stringent than those set forth in this Article.  If a third-party representative of the Reinsurer is not bound, in writing, by this Confidentiality Article or by a separate written confidentiality agreement, the Reinsurer shall be responsible for any breach of this provision by such third-party representative of the Reinsurer.
		

		
			﻿
		

		
			D.   Notwithstanding the above, in the event that the Reinsurer is required by court order, other legal process or any regulatory authority to release or disclose any or all of the Confidential Information, the Reinsurer agrees to provide the Company with written notice of same at least 10 days prior to such release or disclosure, to the extent legally permissible, and to use its best efforts to assist the Company in maintaining the confidentiality provided for in this Article.
		

		
			﻿
		

		
			E.   Any disclosure of Non-Public Personally Identifiable Information shall comply with all state and federal statutes and regulations governing the disclosure of Non-Public Personally Identifiable Information.  "Non-Public Personally Identifiable Information" shall be defined as this term or a similar term is defined in any applicable state, provincial, territory, or federal law.  Disclosing or using this information for any purpose not authorized by applicable law is expressly forbidden without the prior consent of the Company.
		

		
			﻿
		

		
			F.   The parties agree that any information subject to privilege, including the attorney-client privilege or attorney work product doctrine (collectively "Privilege") shall not be disclosed to the Reinsurer until, in the Company's opinion, such Privilege is deemed to be waived or otherwise compromised by virtue of its disclosure pursuant to this Contract.  Furthermore, the Reinsurer shall not assert that any Privilege otherwise applicable to the Confidential Information has been waived or otherwise compromised by virtue of its disclosure pursuant to this Contract.  
		

		
			﻿
		

		
			G.   The provisions of this Article shall extend to the officers, directors and employees of the Reinsurer and its affiliates, and shall be binding upon their successors and assigns.
		

		
			﻿
		

		
			﻿
		

		
			Article 33 - Non-Waiver
		

		
			The failure of the Company or Reinsurer to insist on compliance with this Contract or to exercise any right, remedy or option hereunder shall not:  (1) constitute a waiver of any rights contained in this Contract, (2) prevent the Company or Reinsurer from thereafter demanding full and complete compliance, (3) prevent the Company or Reinsurer from exercising such remedy in the future, nor (4) affect the validity of this Contract or any part thereof.
		

		
			﻿
		

		
			﻿
		

		
			Article 34 - Notices and Contract Execution
		

		
			A.   Whenever a notice, statement, report or any other written communication is required by this Contract, unless otherwise specified, such notice, statement, report or other written communication may be transmitted by certified or registered mail, nationally or internationally recognized express delivery service, personal delivery, electronic mail, or facsimile.  With the exception of notices of termination, first class mail is also acceptable.
		

		 

			

					

						20

					

					

						 

				
	

					

						17\F7V1054

					

						Page 20

					

					

						

				

		

			 

		

 

		
		

		
			B.   The use of any of the following shall constitute a valid execution of this Contract or any amendments thereto:
		

		
			﻿
		

		
			1.   Paper documents with an original ink signature;
		

		
			﻿
		

		
			2.   Facsimile or electronic copies of paper documents showing an original ink signature; and/or
		

		
			﻿
		

		
			3.   Electronic records with an electronic signature made via an electronic agent.  For the purposes of this Contract, the terms "electronic record," "electronic signature" and "electronic agent" shall have the meanings set forth in the Electronic Signatures in Global and National Commerce Act of 2000 or any amendments thereto.
		

		
			﻿
		

		
			C.   This Contract may be executed in one or more counterparts, each of which, when duly executed, shall be deemed an original.
		

		
			﻿
		

		
			﻿
		

		
			Article 35 - Intermediary
		

		
			Aon Benfield Inc., or one of its affiliated corporations duly licensed as a reinsurance intermediary, is hereby recognized as the Intermediary negotiating this Contract for all business hereunder.  All communications (including but not limited to notices, statements, premiums, return premiums, commissions, taxes, losses, loss adjustment expense, salvages and loss settlements) relating to this Contract will be transmitted to the Company or the Reinsurer through the Intermediary.  Payments by the Company to the Intermediary will be deemed payment to the Reinsurer.  Payments by the Reinsurer to the Intermediary will be deemed payment to the Company only to the extent that such payments are actually received by the Company.
		

		
			﻿
		

		
			﻿
		

		
			In Witness Whereof, the Company by its duly authorized representative has executed this Contract as of the date specified below:
		

		
			﻿
		

		
			This ________________ day of ____________________________ in the year ____________.
		

		
			﻿
		

		
			Federated National Insurance Company
		

		
			﻿
		

		
			/s/ Michael H. Braun______________________________________
		

		
			﻿
		

		
			 
		

		 

			

					

						21

					

					

						 

				
	

					

						17\F7V1054

					

						Page 21

					

					

						

				

		

			 

		

 

		
			Schedule A
		

		
			Excess Catastrophe Reinsurance Contract
		

		
			Effective:  July 1, 2017
		

		
			﻿
		

		
			Federated National Insurance Company
		

		
			Sunrise, Florida
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

			
					
						﻿

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						﻿

					
					
						First

					
						Excess

					
					
						Second

					
						Excess

					
					
						Third

					
						Excess

					
					
						Fourth

					
						Excess

					
					
						Fifth

					
						Excess

				
	
					
						﻿

					
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Reinsurer's Per Occurrence Limit

					$103,500,000 
					$200,000,000 
					$110,000,000 
					$116,000,000 
					$79,400,000 
				
	
					
						Reinsurer's Term Limit

					$207,000,000 
					$400,000,000 
					$220,000,000 
					$232,000,000 
					$158,800,000 
				
	
					
						Minimum Premium

					
					
						*****

					
					
						*****

					
					
						*****

					
					
						*****

					
					
						*****

				
	
					
						AAL

					
					
						*****

					
					
						*****

					
					
						*****

					
					
						*****

					
					
						*****

				
	
					
						Annual Deposit Premium

					
					
						*****

					
					
						*****

					
					
						*****

					
					
						*****

					
					
						*****

				
	
					
						Deposit Premium Installments

					
					
						*****

					
					
						*****

					
					
						*****

					
					
						*****

					
					
						*****

				

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			The figures listed above for each excess layer shall apply to each Subscribing Reinsurer in the percentage share for that excess layer as expressed in its Interests and Liabilities Agreement attached hereto.
		

		
			 
		

		

		

		 

			

					

						 

					

					

						 

				
	

					

						17\F7V1054

					

						Schedule A

					

					

						

				

		

			 

		

 

		War Exclusion Clause
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			As regards interests which at time of loss or damage are on shore, no liability shall attach hereto in respect of any loss or damage which is occasioned by war, invasion, hostilities, acts of foreign enemies, civil war, rebellion, insurrection, military or usurped power, or martial law or confiscation by order of any government or public authority.
		

		
			﻿
		

		
			 
		

		

		

		 

		

			17\F7V1054

		

 

		Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance (U.S.A.)
		

		
			﻿
		

		
			﻿
		

		
			1.   This Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly and whether as Insurer or Reinsurer, from any Pool of Insurers or Reinsurers formed for the purpose of covering Atomic or Nuclear Energy risks.
		

		
			﻿
		

		
			2.   Without in any way restricting the operation of paragraph (1) of this Clause, this Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly and whether as Insurer or Reinsurer, from any insurance against Physical Damage (including business interruption or consequential loss arising out of such Physical Damage) to:
		

		
			﻿
		

		
			I.   Nuclear reactor power plants including all auxiliary property on the site, or
		

		
			﻿
		

		
			II.   Any other nuclear reactor installation, including laboratories handling radioactive materials in connection with reactor installations, and "critical facilities" as such, or
		

		
			﻿
		

		
			III.   Installations for fabricating complete fuel elements or for processing substantial quantities of "special nuclear material," and for reprocessing, salvaging, chemically separating, storing or disposing of "spent" nuclear fuel or waste materials, or
		

		
			﻿
		

		
			IV.   Installations other than those listed in paragraph (2) III above using substantial quantities of radioactive isotopes or other products of nuclear fission.
		

		
			﻿
		

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

		
			﻿
		

		
			(a)   where Reassured does not have knowledge of such nuclear reactor power plant or nuclear installation, or
		

		
			﻿
		

		
			(b)   where said insurance contains a provision excluding coverage for damage to property caused by or resulting from radioactive contamination, however caused.  However on and after 1st January 1960 this sub-paragraph (b) shall only apply provided the said radioactive contamination exclusion provision has been approved by the Governmental Authority having jurisdiction thereof.
		

		
			﻿
		

		
			4.   Without in any way restricting the operations of paragraphs (1), (2) and (3) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, when such radioactive contamination is a named hazard specifically insured against.
		

		
			﻿
		

		
			5.   It is understood and agreed that this Clause shall not extend to risks using radioactive isotopes in any form where the nuclear exposure is not considered by the Reassured to be the primary hazard.
		

		
			﻿
		

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

		
			﻿
		

		
			7.   Reassured to be sole judge of what constitutes:
		

		
			﻿
		

		
			(a)   substantial quantities, and
		

		
			﻿
		

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

		
			﻿
		

		
			Note.-Without in any way restricting the operation of paragraph (1) hereof, it is understood and agreed that
		

		
			﻿
		

		
			(a)   all policies issued by the Reassured on or before 31st December 1957 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.
		

		
			﻿
		

		
			(b)   with respect to any risk located in Canada policies issued by the Reassured on or before 31st December 1958 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.
		

		
			﻿
		

		
			12/12/57
		

		
			N.M.A. 1119
		

		
			BRMA 35B
		

		
			 
		

		

		

		 

		

			17\F7V1054

		

 

		Pools, Associations and Syndicates Exclusion Clause
		

		
			(Catastrophe)
		

		
			﻿
		

		
			﻿
		

		
			It is hereby understood and agreed that:
		

		
			﻿
		

		
			A.   This Contract excludes loss or liability arising from:
		

		
			﻿
		

		
			1.   Business derived directly or indirectly from any pool, association, or syndicate which maintains its own reinsurance facilities.  This subparagraph 1 shall not apply with respect to:
		

		
			﻿
		

		
			a.   Residual market mechanisms created by statute.  This Contract shall not extend, however, to afford coverage for liability arising from the inability of any other participant or member in the residual market mechanism to meet its obligations, nor shall this Contract extend to afford coverage for liability arising from any claim against the residual market mechanism brought by or on behalf of any insolvency fund (as defined in the Insolvency Fund Exclusion Clause incorporated in this Contract).  For the purposes of this Clause, the California Earthquake Authority shall be deemed to be a "residual market mechanism."
		

		
			﻿
		

		
			b.   Inter-agency or inter-government joint underwriting or risk purchasing associations (however styled) created by or permitted by statute or regulation.
		

		
			﻿
		

		
			2.    Those perils insured by the Company that the Company knows, at the time the risk is bound, to be insured by or in excess of amounts insured or reinsured by any pool, association or syndicate formed for the purpose of insuring oil, gas, or petro-chemical plants; oil or gas drilling rigs; and/or aviation risks.  This subparagraph 2 shall not apply:
		

		
			﻿
		

		
			a.   If the total insured value over all interests of the risk is less than $250,000,000.
		

		
			﻿
		

		
			b.   To interests traditionally underwritten as Inland Marine or Stock or Contents written on a blanket basis.
		

		
			﻿
		

		
			c.   To Contingent Business Interruption liability, except when it is known to the Company, at the time the risk is bound, that the key location is insured by or through any pool, association or syndicate formed for the purpose of insuring oil, gas, or petro-chemical plants; oil or gas drilling rigs; and/or aviation risks; unless the total insured value over all interests of the risk is less than $250,000,000.
		

		
			﻿
		

		
			B.   With respect to loss or liability arising from the Company's participation or membership in any residual market mechanism created by statute, the Company may include in its ultimate net loss only amounts for which the Company is assessed as a direct consequence of a covered loss occurrence, subject to the following provisions:
		

		
			﻿
		

		
			1.   Recovery is limited to perils otherwise protected hereunder.
		

		
			﻿
		

		
			2.   In the event the terms of the Company's participation or membership in any such residual market mechanism permit the Company to recoup any such direct 
		

		 

		

			17\F7V1054

		

		

			Page 1 of 2

		

 

		
		

		
			assessment attributed to a loss occurrence by way of a specific policy premium surcharge or similar levy on policyholders, the amount received by the Company as a result of such premium surcharge or levy shall reduce the Company's ultimate net loss for such loss occurrence.
		

		
			﻿
		

		
			3.   The result of any rate increase filing permitted by the terms of the Company's participation or membership in any such residual market mechanism following any assessment shall have no effect on the Company's ultimate net loss for any covered loss occurrence.
		

		
			﻿
		

		
			4.   The result of any premium tax credit filing permitted by the terms of the Company's participation or membership in any such residual market mechanism following any assessment shall reduce the Company's ultimate net loss for any covered loss occurrence.
		

		
			﻿
		

		
			5.   The Company may not include in its ultimate net loss any amount resulting from an assessment that, pursuant to the terms of the Company's participation or membership in the residual market mechanism, the Company is required to pay only after such assessment is collected from the policyholder.
		

		
			﻿
		

		
			6.   The ultimate net loss hereunder shall not include any monies expended to purchase or retire bonds as a consequence of being a member of a residual market mechanism nor any fines or penalties imposed on the Company for late payment.
		

		
			﻿
		

		
			7.   If, however, a residual market mechanism only provides for assessment based on an aggregate of losses in any one contract or plan year of said mechanism, then the amount of that assessment to be included in the ultimate net loss for any one loss occurrence shall be determined by multiplying the Company's share of the aggregate assessment by a factor derived by dividing the Company's ultimate net loss (net of the assessment) with respect to the loss occurrence by the total of all of its ultimate net losses (net of assessments) from all loss occurrences included by the mechanism in determining the assessment. 
		

		
			﻿
		

		
			8/1/2012
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			 
		

		

		

		 

		

			17\F7V1054

		

		

			Page 2 of 2

		

 

		Terrorism Exclusion
		

		
			(Property Treaty Reinsurance)
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			Notwithstanding any provision to the contrary within this Contract or any amendment thereto, it is agreed that this Contract excludes loss, damage, cost or expense directly or indirectly caused by, contributed to by, resulting from or arising out of or in connection with any act of terrorism, as defined herein, regardless of any other cause or event contributing concurrently or in any other sequence to the loss.
		

		
			﻿
		

		
			An act of terrorism includes any act, or preparation in respect of action, or threat of action designed to influence the government de jure or de facto of any nation or any political division thereof, or in pursuit of political, religious, ideological or similar purposes to intimidate the public or a section of the public of any nation by any person or group(s) of persons whether acting alone or on behalf of or in connection with any organization(s) or government(s) de jure or de facto, and which:
		

		
			﻿
		

		
			1.   Involves violence against one or more persons, or
		

		
			﻿
		

		
			2.   Involves damage to property; or
		

		
			﻿
		

		
			3.   Endangers life other than the person committing the action; or
		

		
			﻿
		

		
			4.   Creates a risk to health or safety of the public or a section of the public; or
		

		
			﻿
		

		
			5.   Is designed to interfere with or disrupt an electronic system.
		

		
			﻿
		

		
			This Contract also excludes loss, damage, cost or expense directly or indirectly caused by, contributed to by, resulting from or arising out of or in connection with any action in controlling, preventing, suppressing, retaliating against or responding to any act of terrorism.
		

		
			﻿
		

		
			Notwithstanding the above and subject otherwise to the terms, conditions, and limitations of this Contract, in respect only of personal lines, this Contract will pay actual loss or damage (but not related cost and expense) caused by any act of terrorism provided such act is not directly or indirectly caused by, contributed to by, resulting from or arising out of or in connection with radiological, biological, chemical, or nuclear pollution or contamination.
		

		
			﻿
		

		

		

		 

		

			17\F7V1054

		

 

		
		

		
			The Interests and Liabilities Agreements, constituting 71 pages in total, have been omitted in accordance with Rule 24b-2 under the Exchange Act.  These pages have been filed separately with the Securities and Exchange Commission.
		

		
			﻿
		

		 

		

			17\F7V1054Exhibit 108 Swiss Reinsurance

		

			

		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			NET QUOTA SHARE REINSURANCE AGREEMENT
		

		
			NO. POR1238172
		

		
			﻿
		

		
			﻿
		

		
			EFFECTIVE: JULY 1, 2017
		

		
			﻿
		

		
			﻿
		

		
			between
		

		
			﻿
		

		
			﻿
		

		
			FEDERATED NATIONAL INSURANCE COMPANY
		

		
			Sunrise, Florida
		

		
			﻿
		

		
			and
		

		
			﻿
		

		
			﻿
		

		
			SWISS REINSURANCE AMERICA CORPORATION
		

		
			Armonk, New York
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			_______________________ 
		

		
			﻿
		

		
			*****Portions of this document omitted pursuant to an application for an order for confidential treatment pursuant to Rule 24b-2 under the Exchange Act. Confidential portions of this document have been filed separately with the Securities and Exchange Commission. 
		

		
			﻿
		

		
			 
		

		

		

		 

		

			EFFECTIVE: JULY 1, 2017

		

		

			P17-0089

		

		

			8/21/2017 9:54 AM.v5

		

 

		

			

		

		NET QUOTA SHARE REINSURANCE AGREEMENT 
		

		
			NO. POR1238172
		

		
			﻿
		

			
					
						﻿

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE

					
					
						CONTENTS

					
					
						 

					
					
						PAGE

				
	
					
						﻿

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						﻿

					
					
						 

					
					
						PREAMBLE

					
					
						 

					1 
				
	
					
						I

					
					
						 

					
					
						BUSINESS COVERED

					
					
						 

					1 
				
	
					
						II

					
					
						 

					
					
						EFFECTIVE DATE AND TERMINATION

					
					
						 

					3 
				
	
					
						III

					
					
						 

					
					
						TERRITORY

					
					
						 

					3 
				
	
					
						IV

					
					
						 

					
					
						RETENTION

					
					
						 

					4 
				
	
					
						V

					
					
						 

					
					
						DEFINITIONS

					
					
						 

					4 
				
	
					
						VI

					
					
						 

					
					
						EXCLUSIONS

					
					
						 

					8 
				
	
					
						VII

					
					
						 

					
					
						SPECIAL ACCEPTANCE

					
					
						 

					11 
				
	
					
						VIII

					
					
						 

					
					
						INTERNATIONAL TRADE CONTROLS

					
					
						 

					
					
						 

				
	
					
						﻿

					
					
						 

					
					
						    AND ECONOMIC SANCTIONS

					
					
						 

					11 
				
	
					
						IX

					
					
						 

					
					
						REINSURANCE PREMIUM

					
					
						 

					11 
				
	
					
						X

					
					
						 

					
					
						SLIDING SCALE COMMISSION

					
					
						 

					12 
				
	
					
						XI

					
					
						 

					
					
						LOSSES, LOSS ADJUSTMENT EXPENSES

					
					
						 

					
					
						 

				
	
					
						﻿

					
					
						 

					
					
						    AND SALVAGES

					
					
						 

					13 
				
	
					
						XII

					
					
						 

					
					
						REPORTS AND REMITTANCES

					
					
						 

					14 
				
	
					
						XIII

					
					
						 

					
					
						ACCESS TO RECORDS

					
					
						 

					17 
				
	
					
						XIV

					
					
						 

					
					
						TAXES

					
					
						 

					17 
				
	
					
						XV

					
					
						 

					
					
						OFFSET

					
					
						 

					17 
				
	
					
						XVI

					
					
						 

					
					
						DISPUTE RESOLUTION

					
					
						 

					17 
				
	
					
						XVII

					
					
						 

					
					
						INSOLVENCY

					
					
						 

					19 
				
	
					
						XVIII

					
					
						 

					
					
						AMENDMENTS

					
					
						 

					20 
				
	
					
						﻿

					
					
						 

					
					
						SIGNATURES

					
					
						 

					21 
				
	
					
						﻿

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						﻿

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						ATTACHMENTS:

					
					
						INSOLVENCY FUNDS EXCLUSION CLAUSE

					
					
						 

					
					
						 

				
	
					
						﻿

					
					
						 

					
					
						POOLS, ASSOCIATIONS AND SYNDICATES EXCLUSION CLAUSE

				
	
					
						﻿

					
					
						 

					
					
						POLLUTION AND SEEPAGE EXCLUSION CLAUSE

				
	
					
						﻿

					
					
						 

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

				
	
					
						﻿

					
					
						 

					
					
						NUCLEAR INCIDENT EXCLUSION CLAUSE - REINSURANCE - NO. 4

				
	
					
						﻿

					
					
						 

					
					
						POLLUTION LIABILITY EXCLUSION CLAUSE - REINSURANCE

				
	
					
						﻿

					
					
						 

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

				
	
					
						﻿

					
					
						 

					
					
						TERRORISM EXCLUSION CLAUSE (USA) – REINSURANCE (PROPERTY)

				
	
					
						﻿

					
					
						 

					
					
						TERRORISM EXCLUSION CLAUSE (USA) – REINSURANCE (CASUALTY)

				

		
			﻿
		

		
			﻿
		

		
			 
		

		

		

		 

		

			EFFECTIVE: JULY 1, 2017

		

		

			P17-0089

		

		

			8/21/2017 9:54 AM.v5

		

 

		

			

		

		﻿
		

		
			﻿
		

		
			NET QUOTA SHARE REINSURANCE AGREEMENT
		

		
			NO. POR1238172
(hereinafter referred to as the "Agreement")
		

		
			﻿
		

		
			between
		

		
			﻿
		

		
			FEDERATED NATIONAL INSURANCE COMPANY
		

		
			Sunrise, Florida
		

		
			 (hereinafter referred to as the "Company")
		

		
			﻿
		

		
			and
		

		
			﻿
		

		
			SWISS REINSURANCE AMERICA CORPORATION
Armonk, New York
(hereinafter referred to as the "Reinsurer")
		

		
			﻿
		

		
			﻿
		

		
			ARTICLE I - BUSINESS COVERED
		

		
			﻿
		

		
			A.        By this Agreement the Company obligates itself to cede to the Reinsurer and the Reinsurer obligates itself to accept from the Company a 10% Quota Share participation of the Company's Ultimate Net Liability for Policies in force as of July 1, 2017, and new and renewal Policies becoming effective on or after said date as respects losses occurring on or after July 1, 2017, subject to Paragraph B.  This Quota Share is subject to the maximum cession limits set forth below:
		

		
			﻿
		

		
			1.        Property Business
		

		
			﻿
		

		
			$100,000 each risk (10% share of the Company's Ultimate Net Liability of $1,000,000), but in no event shall the Reinsurer's liability from all risks in any one Loss Occurrence exceed ***** (10% of *****) during the term of this Agreement.
		

		
			﻿
		

		
			Notwithstanding the limits stated above, the Reinsurer's liability shall not exceed ***** (10% of *****) as respects all Loss Occurrences taking place during the term of this Agreement. 
		

		
			﻿
		

		
			2.        Casualty Business
		

		
			﻿
		

		
			$100,000 each Policy each Loss Occurrence (10% share of the Company's Ultimate Net Liability of $1,000,000.)  
		

		
			﻿
		

		
			﻿
		

		
			B.        The cession percentage set forth in Paragraph A. of this Article may  be adjusted once during the Agreement Year, subject to the following:  
		

		 

			

					

						 

					

					

						 

					

					

						 

				
	

					

						EFFECTIVE: JULY 1, 2017   

					

					

						1.

					

					

						 

				
	

					

						P17-0089

					

					

						 

					

					

						POR1238172

				
	

					

						8/21/2017 9:54 AM.v5

					

					

						 

					

					

						 

				

		

			 

		

 

		

			

		

		
		

		
			1.        The Company has provided the Reinsurer no less than 45 day's written notice prior to the end of any calendar quarter during the Agreement Year, of its desire to adjust the cession percentage prospectively.  
		

		
			﻿
		

		
			2.        The adjusted cession percentage shall not be less than 10% nor greater than 20%. 
		

		
			﻿
		

		
			3.        The cession adjustment is to take effect as respects in force, new and renewal business on a prospective basis on the last day of the calendar quarter in which such notice was given as respects Loss Occurrences taking place on or after such date;
		

		
			﻿
		

		
			4.        Such cession adjustment shall be at the election of the Company only if the Loss Ratio from Agreement inception through the end of the quarter in which such notice was given is less than or equal to 30%.
		

		
			﻿
		

		
			5.        If such Loss Ratio is greater than 30%, any such cession adjustment must be mutually agreed by both parties. 
		

		
			﻿
		

		
			6.        Mutual agreement of the parties to any cession adjustment is evidenced by addendum to this Agreement signed by both parties.
		

		
			﻿
		

		
			For purposes of this Paragraph B., "Loss Ratio" shall mean the actual ratio of Incurred Losses to Earned Premiums from Agreement inception to the end of the calendar quarter for which calculation is being made.  The terms "Incurred Losses" and "Earned Premiums" shall be defined as they are under Article X  - Sliding Scale Commission, provided however, as respects Incurred Losses, there will be no Incurred But Not Reported ("IBNR") losses included.
		

		
			﻿
		

		
			C.        Loss Adjustment Expenses and any loss arising under this Agreement with respect to Loss In Excess of Policy Limits and Extra Contractual Obligations, as defined herein, shall be recovered in the same proportion as the contractual loss recoverable hereunder; provided such contractual loss plus Loss Adjustment Expenses, Loss In Excess of Policy Limits and Extra Contractual Obligations shall never exceed the maximum cession limit set forth under Paragraph A. above.
		

		
			﻿
		

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

		
			﻿
		

		
			E.        The performance of obligations by both parties under this Agreement shall be in accordance with a fiduciary standard of good faith and fair dealing.
		

		
			﻿
		

		
			F.        Under this Agreement, the indemnity for reinsured loss applies only to the following Property and Casualty Business except as excluded under Article VI - Exclusions of this Agreement.
		

		
			﻿
		

		
			PROPERTY LINES OF BUSINESS
		

		
			﻿
		

		
			Homeowners (Section I only)
		

		 

			

					

						 

					

					

						 

					

					

						 

				
	

					

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			Dwelling Fire (Section I only)
		

		
			﻿
		

		
			CASUALTY LINES OF BUSINESS
		

		
			﻿
		

		
			Homeowners (Section II only)
		

		
			Dwelling Fire (Section II only)
		

		
			﻿
		

		
			﻿
		

		
			ARTICLE II - EFFECTIVE DATE AND TERMINATION
		

		
			﻿
		

		
			A.        This Agreement shall become effective at 12:01 a.m., Eastern Standard  Time, July 1, 2017, and shall terminate at 12:01 a.m., Eastern Standard  Time on July 1, 2018.
		

		
			 
		

		
			B.       Upon termination of this Agreement: 
		

		
			﻿
		

		
			1.         All reinsurance hereunder shall be automatically cancelled as of the date of termination and the Reinsurer shall be released of all liability as respects losses occurring on or after the date of termination.  The Reinsurer shall return to the Company the unearned premiums on the business in force hereunder at the date of termination, less the commission allowed thereon.
		

		
			﻿
		

		
			2.         Alternatively, at the Company's option, and provided written notice of the Company's election of such option is given to the Reinsurer by certified mail, electronic mail or by a courier service each producing evidence of receipt by the Reinsurer prior to the date of termination, this Agreement will terminate on a "Run-off" basis and the Reinsurer shall be liable for losses occurring on or after to the date of termination for all Policies covered hereunder and in force at the date of termination of this Agreement until their natural expiry, cancellation or next anniversary of such business, whichever first occurs; but in no case shall the Reinsurer be liable for losses occurring more than 12 months after the termination date unless the Company is required by statute or regulation to continue coverage on a Policy.  In such case, the Reinsurer shall continue to be liable for losses occurring subsequent to the date of termination until the earliest date on which the Company may cancel such Policy.  The Reinsurer shall return to the Company the unearned premiums, if any, less commissions applicable, for the unexpired periods.
		

		
			﻿
		

		
			﻿
		

		
			ARTICLE III – TERRITORY
		

		
			﻿
		

		
			 As respects Property Business, this Agreement applies to risks located in Florida.
		

		
			﻿
		

		
			As respects Casualty Business, the Agreement applies to Policies issued by the Company within Florida and shall apply to losses covered hereunder wherever occurring.
		

		 

			

					

						 

					

					

						 

					

					

						 

				
	

					

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			ARTICLE iV - RETENTION
		

		
			﻿
		

		
			A.        The Company warrants that it shall retain net for its own account and not reinsure in any way, 90% of its Ultimate Net Liability. 
		

		
			﻿
		

		
			B.        In the event there is a cession adjustment pursuant to Paragraph B. of Article I – Business Covered, the Company's net retention shall be revised to reflect the difference between the revised cession percentage and 100% as of the effective date of the change.
		

		
			﻿
		

		
			﻿
		

		
			ARTICLE V – DEFINITIONS
		

		
			﻿
		

		
			A.        AGREEMENT YEAR
		

		
			﻿
		

		
			"Agreement Year" shall mean the 12 month period commencing July 1, 2017 and continuing through  June 30, 2018.
		

		
			﻿
		

		
			B.        DECLARATORY JUDGMENT EXPENSES
		

		
			﻿
		

		
			"Declaratory Judgment Expenses" shall mean all legal expenses incurred in the representation of the Company in litigation brought to determine the Company's defense and/or indemnification obligations that are allocable to any specific claim or loss applicable to Policies subject to this Agreement.  In addition, the Company shall promptly notify the Reinsurer of any Declaratory Judgment Expenses subject to this Agreement.
		

		
			﻿
		

		
			C.        EXTRA CONTRACTUAL OBLIGATIONS
		

		
			﻿
		

		
			1.         "Extra Contractual Obligations" are defined as those liabilities not covered under any other provision of this Agreement and which arise from the handling of any claim on business covered hereunder, such liabilities arising because of, but not limited to, the following: failure by the Company to settle within the Policy limit, or by reason of alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of any action against its insured or in the preparation or prosecution of an appeal consequent upon such action.
		

		
			  
		

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

		 

			

					

						 

					

					

						 

					

					

						 

				
	

					

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

		
			 
		

		
			4.         Recoveries, collectibles or retention from any other form of insurance or reinsurance including deductibles or self-insured retention which protect the Company against Extra Contractual Obligations, whether collectible or not, shall inure to the benefit of the Reinsurer and shall be deducted from the total amount of Extra Contractual Obligations for purposes of determining the loss hereunder.
		

		
			﻿
		

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

		
			﻿
		

		
			D.        GROSS PREMIUMS WRITTEN
		

		
			﻿
		

		
			"Gross“ shall mean the written premiums for subject business less return premiums.
		

		
			﻿
		

		
			E.        LOSS ADJUSTMENT EXPENSES
		

		
			﻿
		

		
			"Loss Adjustment Expenses" shall mean all expenses paid by the Company in connection with the investigation, settlement, defense or litigation, including court costs and postjudgment interest, of any claim or loss which is the subject matter of Policies covered under this Agreement and shall include Declaratory Judgment Expenses.  However, "Loss Adjustment Expenses" shall not include the salaries and expenses of Company employees, office expenses, and other overhead expenses.
		

		
			﻿
		

		
			F.        LOSS IN EXCESS OF POLICY LIMITS
		

		
			﻿
		

		
			1.         "Loss in Excess of Policy Limits" is defined as loss in excess of the limit of the original Policy, such loss in excess of the limit having been incurred because of failure by the Company to settle within the Policy limit or by reason of alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of any action against its insured or in the preparation or prosecution of an appeal consequent upon such action.
		

		
			﻿
		

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

		 

			

					

						 

					

					

						 

					

					

						 

				
	

					

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

		
			﻿
		

		
			4.         With respect to coverage provided under this paragraph, recoveries from any insurance or reinsurance other than this Agreement, whether collectible or not, shall be deducted to arrive at the amount of the Company's Ultimate Net Liability.
		

		
			﻿
		

		
			G.       loss occurrence
		

		
			As respects Property Business covered under this Agreement:
		

		
			﻿
		

		
			1.         The term "Loss Occurrence" shall mean the sum of all individual losses directly occasioned by any one disaster, accident or loss or series of disasters, accidents or losses arising out of one event which occurs within the state of Florida.  However, the duration and extent of any one Loss Occurrence shall be limited to all individual losses sustained by the Company occurring during any period of 168 consecutive hours arising out of and directly occasioned by the same event except that the term "Loss Occurrence" shall be further defined as follows:
		

		
			﻿
		

		
			a.         As regards windstorm, other than Named Windstorms, hail, tornado, hurricane, cyclone, including ensuing collapse and water damage, all individual losses sustained by the Company occurring during any period of 120 consecutive hours arising out of and directly occasioned by the same event. 
		

		
			﻿
		

		
			b.         As regards riot, riot attending a strike, civil commotion, vandalism and malicious mischief, all individual losses sustained by the Company, occurring during any period of 72 consecutive hours within the area of one municipality or county and the municipalities or counties contiguous thereto arising out of and directly occasioned by the same event.  The maximum duration of 72 consecutive hours may be extended in respect of individual losses which occur beyond such 72 consecutive hours during the continued occupation of an assured's premises by strikers, provided such occupation commenced during the aforesaid period.
		

		
			﻿
		

		
			c.         As regards earthquake (the epicentre of which need not necessarily be within the territorial confines referred to in the opening paragraph of this Article) and fire following directly occasioned by the earthquake, only those individual fire losses which commence during the period of 168 consecutive hours may be included in the Company's Loss Occurrence.
		

		 

			

					

						 

					

					

						 

					

					

						 

				
	

					

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			d.         As regards Freeze, only individual losses directly occasioned by collapse, breakage of glass and water damage (including but not limited to those caused by freezing and/or melting of ice, snow and sleet, or ice damming on a structure or bursting of frozen pipes and tanks) may be included in the Company's Loss Occurrence.
		

		
			﻿
		

		
			2.         For all Loss Occurrences the Company may choose the date and time when any such period of consecutive hours commences provided that it is not earlier than the date and time of the occurrence of the first recorded individual loss sustained by the Company arising out of that disaster, accident or loss and provided that only one such period of 168 consecutive hours shall apply with respect to one event except for those Loss Occurrences referred to in a. and b. above, where only one such period of 72 consecutive hours shall apply with respect to one event, regardless of the duration of the event.
		

		
			﻿
		

		
			3.         No individual losses occasioned by an event that would be covered by 72 hours clauses may be included in any Loss Occurrence claimed under the 168 hours provision.
		

		
			As respects Casualty Business covered under this Agreement:
		

		
			"Loss Occurrence" shall mean any accident or occurrence or series of accidents or occurrences arising out of any one event and happening within the term and scope of this Agreement. 
		

		
			﻿
		

		
			H.       Named WINDStorms
		

		
			﻿
		

		
			"Named Windstorms" shall mean a storm and all other atmospheric perils arising out of such storm that are identified and named as a Tropical Storm or Hurricane by the National Hurricane Center of the National Weather Service, operated by the National Oceanographic Administration of the U.S. Government ("NHC").  The duration of such Named Windstorm shall be  deemed to be as follows:
		

		
			﻿
		

		
			1.         Beginning at the time a Named Windstorm warning is issued  by the NHC for any part of each state in which the Company writes the business reinsured hereunder;
		

		
			﻿
		

		
			2.         Continuing  for the time period which the Named Windstorm conditions exist anywhere in such state; and
		

		
			 
		

		
			3.         Ending 72 hours following termination of the last Named Windstorm warning by NHC for any part of such state.
		

		
			﻿
		

		
			I.        Policies
		

		
			﻿
		

		
			"Policies" shall mean each of the Company's binders, policies and contracts of insurance on the business covered hereunder.
		

		 

			

					

						 

					

					

						 

					

					

						 

				
	

					

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			J.        RISK
		

		
			﻿
		

		
			The Company shall be the sole judge of what constitutes one risk provided, however, that:
		

		
			﻿
		

		
			1.         A risk shall never be less than all insurable values within exterior walls and under one roof regardless of fire divisions, the number of Policies involved, and whether there is a single, multiple or unrelated named insureds involved in such risk.
		

		
			﻿
		

		
			2.         When two or more buildings are situated at the same general location, the Company shall identify on its records at the time of acceptance by the Company, those individual buildings and all insurable values contained therein that are considered to constitute each risk.  If such identification is not made, each building and all insurable values contained therein shall be considered to be a separate risk.
		

		
			 
		

		
			3.         A risk shall be determined from the standpoint of the predominant peril and such peril shall be noted in the Company's records.
		

		
			﻿
		

		
			K.        ULTIMATE NET LIABILITY
		

		
			﻿
		

		
			"Ultimate Net Liability" shall mean the remaining portion of the Company's gross liability on each Policy reinsured under this Agreement after deducting recoveries from all other reinsurance, whether specific or general and whether collectible or not.
		

		
			﻿
		

		
			﻿
		

		
			ARTICLE vi - EXCLUSIONS
		

		
			﻿
		

		
			I.        AS RESPECTS PROPERTY BUSINESS COVERED UNDER THIS AGREEMENT
		

		
			﻿
		

		
			THIS AGREEMENT DOES NOT COVER:
		

		
			﻿
		

		
			﻿
		

		
			A.        THE FOLLOWING GENERAL CATEGORIES
		

		
			﻿
		

		
			1.         All Lines of Business not specifically listed in Article I - Business Covered.
		

		
			﻿
		

		
			2.         Reinsurance assumed.
		

		
			﻿
		

		
			3.         Ex-gratia Payments.
		

		 

			

					

						 

					

					

						 

					

					

						 

				
	

					

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			4.         Loss or damage occasioned by war, invasion, revolution, bombardment, hostilities, acts of foreign enemies, civil war, rebellion, insurrection, military or usurped power, martial law, or confiscation by order of any government or public authority, but not excluding loss or damage which would be covered under a standard form of Policy containing a standard war exclusion clause.
		

		
			﻿
		

		
			5.         Insolvency Funds as per the attached Insolvency Funds Exclusion Clause, which is made part of this Agreement.
		

		
			﻿
		

		
			6.         Pool, Syndicate and Association business as per the attached Pools, Associations and Syndicates Exclusion Clause, which is made part of this Agreement.
		

		
			﻿
		

		
			7.         Any statutory or regulatory fine or penalty imposed upon the Company on account of any unfair trade or claim practice. 
		

		
			﻿
		

		
			B.        THE FOLLOWING PERILS
		

		
			﻿
		

		
			1.         Flood and/or Earthquake when written on a stand-alone basis.
		

		
			﻿
		

		
			2.         Pollution and Seepage as per the attached Pollution and Seepage Exclusion Clause which is made part of this Agreement.
		

		
			﻿
		

		
			3.         Nuclear Incident Exclusion Clauses which are attached and made part of this Agreement:
		

		
			﻿
		

		
			a.         Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance - U.S.A.
		

		
			﻿
		

		
			b.         Nuclear Incident Exclusion Clause - Reinsurance - No. 4.
		

		
			﻿
		

		
			4.         a.         Loss, damage or expense of whatsoever nature caused directly or indirectly by any of the following, regardless of any other cause or event contributing concurrently or in any other sequence to the loss: nuclear reaction or radiation, or radioactive contamination, however caused.
		

		
			﻿
		

		
			b.         However, if nuclear reaction or radiation, or radioactive contamination results in fire it is specifically agreed herewith that this Agreement will pay for such fire loss or damage subject to all of the terms, conditions and limitations of this Agreement.
		

		
			﻿
		

		
			c.         This exclusion shall not apply to loss, damage or expense originating from and occurring at risks using radioactive isotopes in any form where the nuclear exposure is not considered by the Company to be the primary hazard.
		

		 

			

					

						 

					

					

						 

					

					

						 

				
	

					

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			5.         Terrorism as per the attached Terrorism Exclusion Clause (USA) – Reinsurance (Property), which is made part of this Agreement.
		

		
			6.         Loss, damage or expense of whatsoever nature arising from Named Windstorms.
		

		
			﻿
		

		
			II.        AS RESPECTS CASUALTY BUSINESS COVERED UNDER THIS AGREEMENT
		

		
			﻿
		

		
			THIS AGREEMENT DOES NOT COVER:
		

		
			﻿
		

		
			1.         All Lines of Business not specifically listed in Article I - Business Covered.
		

		
			﻿
		

		
			2.         Ex-gratia payments.
		

		
			﻿
		

		
			3.         Loss or damage caused directly or indirectly by: (a) enemy attack by armed forces including action taken by military, naval or air forces in resisting an actual or an immediately impending enemy attack; (b) invasion; (c) insurrection; (d) rebellion; (e) revolution; (f) intervention; (g) civil war; and (h) usurped power.
		

		
			﻿
		

		
			4.        Reinsurance assumed by the Company.
		

		
			﻿
		

		
			5.         Business derived from any Pool, Association, including Joint Underwriting Association, Syndicate, Exchange, Plan, Fund or other facility directly as a member, subscriber or participant, or indirectly by way of reinsurance or assessments. 
		

		
			﻿
		

		
			6.         Pollution Liability as per the attached Pollution Liability Exclusion Clause - Reinsurance.
		

		
			﻿
		

		
			7.         Insolvency Funds as per the attached Insolvency Funds Exclusion Clause.
		

		
			﻿
		

		
			8.         Nuclear Incident Exclusion Clauses which are attached and made part of this Agreement:
		

		
			﻿
		

		
			a.        Nuclear Incident Exclusion Clause - Liability - Reinsurance - U.S.A.
		

		
			b.        Nuclear Incident Exclusion Clause - Reinsurance - No. 4.
		

		
			﻿
		

		
			9.         Any statutory or regulatory fine or penalty imposed upon the Company on account of any unfair trade or claim practice.
		

		
			10.       Terrorism as per the attached Terrorism Exclusion Clause (USA) – Reinsurance (Casualty), which is made part of this Agreement.
		

		
			﻿
		

		
			11.       Any actual or alleged liability whatsoever for any claim or claims in respect of loss or losses, directly or indirectly arising out of, resulting from, or in consequence of asbestos, in whatever form or quantity. 
		

		 

			

					

						 

					

					

						 

					

					

						 

				
	

					

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			ARTICLE viI - SPECIAL ACCEPTANCE
		

		
			﻿
		

		
			Risks and/or Policies which are beyond the terms, conditions or limitations of this Agreement may be submitted to the Reinsurer for special acceptance hereunder; and such risks and/or Policies, if accepted in writing by the Reinsurer, shall be subject to all of the terms, conditions and limitations of this Agreement, except as modified by the special acceptance.  Premiums and losses derived from any special acceptance shall be included with other data for purposes of this Agreement.
		

		
			﻿
		

		
			﻿
		

		
			ARTICLE VIII - INTERNATIONAL TRADE CONTROLS AND ECONOMIC SANCTIONS
		

		
			﻿
		

		
			No Reinsurer shall be deemed to provide cover and no Reinsurer shall be liable to pay any claim or pay any benefit hereunder to the extent that the provision of such cover, payment of such claim or provision of such benefit would expose that Reinsurer to any sanction, prohibition or restriction under United Nations resolutions or the trade or economic sanctions, laws or regulations of any jurisdiction applicable to that Reinsurer.
		

		
			﻿
		

		
			﻿
		

		
			ARTICLE IX - REINSURANCE PREMIUM
		

		
			﻿
		

		
			A.        The Company shall cede to the Reinsurer 10% of the Company's unearned premiums on its Ultimate Net Liability in force as of July 1, 2017 on the business covered hereunder.
		

		
			﻿
		

		
			B.        The Company shall cede to the Reinsurer 10% of the Company's Gross  Premiums  Written applicable to new and renewal Policies becoming effective on or after July 1, 2017, with respect to its  Ultimate Net Liability on the business covered hereunder.  
		

		
			﻿
		

		
			C.        The Reinsurer will allow the Company an allowance for other reinsurance equal to ***** of the premiums ceded under Paragraphs A. and B. above.  Other reinsurance includes but is not limited to Property Per Risk Reinsurance, Florida Hurricane Catastrophe Mandatory Coverage Layer and Property Catastrophe Excess of Loss Reinsurance.
		

		
			﻿
		

		
			D.        In the event there is a cession adjustment pursuant to Paragraph B. of Article I – Business Covered, the percentage of the Company's Gross Premiums Written to be ceded to the Reinsurer commencing on the  effective date of  such cession change shall be the newly revised cession percentage and any resulting difference in unearned premiums shall be debited or credited to the appropriate party. 
		

		 

			

					

						 

					

					

						 

					

					

						 

				
	

					

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			article x – SLIDING SCALE COMMISSION 
		

		
			﻿
		

		
			A.        The Reinsurer shall make to the Company a provisional commission allowance of ***** of the Gross Premiums Written ceded hereunder.  Such provisional commission allowance shall also apply to  the Company's unearned premiums ceded hereunder as respects business in force as of July 1, 2017. The Company shall debit the Reinsurer with the provisional commission allowance; such provisional commission shall be adjusted as provided hereafter.  On all return premiums the Company shall return to the Reinsurer the provisional commission allowance of 30.60%. Such commission allowance includes provision for all brokerage and commission, premium taxes of all kinds, all board, bureau and exchange assessments and any other expenses whatsoever except Loss Adjustment Expenses. 
		

		
			﻿
		

		
			 B.        The adjusted commission allowance which the Reinsurer shall make to the Company shall be in accordance with the following formula and computed and paid on Earned Premiums.  All intermediate and final calculations shall be rounded to two decimal places.
		

		
			﻿
		

			
					
						﻿

					
					
						 

					
					
						 

				
	
					
						﻿

					
					
						If the actual ratio of Incurred

					
					
						The adjusted com mission

				
	
					
						﻿

					
					
						Losses to Earned Premiums is:

					
					
						shall be:

				
	
					
						﻿

					
					
						 

					
					
						 

				
	
					
						﻿

					
					
						***** or less

					
					
						***** Maximum

				
	
					
						﻿

					
					
						 

					
					
						 

				
	
					
						﻿

					
					
						Higher than ***** but

					
					
						***** less ***** of

				
	
					
						﻿

					
					
						not exceeding *****

					
					
						the difference between

				
	
					
						﻿

					
					
						 

					
					
						the actual loss ratio

				
	
					
						﻿

					
					
						 

					
					
						and  *****

				
	
					
						﻿

					
					
						 

					
					
						 

				
	
					
						﻿

					
					
						***** or higher

					
					
						***** Minimum

				

		
			﻿
		

		
			C.        The term "Incurred Losses" means all losses and Loss Adjustment Expenses paid less recoveries, including salvage and subrogation, during the current Period for which computation is being made plus all losses and Loss Adjustment Expenses outstanding at the end of the current Period plus a reserve for IBNR losses at the end of the current Period, as determined by the Company, less all losses and Loss Adjustment Expenses outstanding and IBNR, determined by the Company, at the close of the preceding period.
		

		
			﻿
		

		
			D.        The term "Earned Premiums" means the total of the Gross Premiums Written, ceded during the current Period plus the unearned premiums as respects premiums in force at the beginning of such Period, less the unearned premiums at the close of the current Period, provided that in the event of a Run-off termination, only those unearned premiums applicable to any  unexpired periods shall be deducted.
		

		
			﻿
		

		
			Said unearned premiums to be calculated on an actual daily basis or in accordance with the Company's methodology, as agreed.
		

		 

			

					

						 

					

					

						 

					

					

						 

				
	

					

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			E.        The term "Period" means the actual time covered by each adjustment of commission.
		

		
			﻿
		

		
			F.        Within 90 days after the close of each Period, the Reinsurer shall calculate the commission adjustment on the Earned Premiums during the Period. The first adjustment of commission shall be made as of September 30, 2018, for the Period from July 1, 2017, through June 30, 2018 and annually thereafter.  If the adjusted commission on the Earned Premiums during the Period exceeds the provisional commission already allowed on the Earned Premiums, the Reinsurer shall pay the difference to the Company.  If the provisional commission already allowed on the  Earned Premiums exceeds the adjusted commission on the Earned Premiums, the difference shall be refunded by the Company to the Reinsurer.  In addition, the difference in commission adjustment shall be paid by the debtor party within 30 days after the Company's verification of the Reinsurer's calculations.
		

		
			﻿
		

		
			G.        In the event reserves for losses and Loss Adjustment Expenses used in any previous calculation of adjusted commission shall have been underestimated or overestimated, as proven by subsequent developments, such previous calculations shall be revised at the request of either party.  The Company shall refund to the Reinsurer, or the Reinsurer shall pay to the Company, such amount as will give effect to the revision(s).
		

		
			﻿
		

		
			H.        After the first commission adjustment, as noted in Paragraph F. above, all subsequent adjustments of commission shall be made every September 30th  until the expiration of all liability and the settlement of all losses covered under this Agreement.
		

		
			﻿
		

		
			﻿
		

		
			ARTICLE XI - LOSSES, LOSS ADJUSTMENT EXPENSES AND SALVAGES
		

		
			﻿
		

		
			A.        The Reinsurer shall pay its pro rata share of losses including prejudgment interest paid by the Company arising under Policies covered under this Agreement, subject to Article I – Business Covered, and the Reinsurer shall benefit proportionately in all recoveries, including salvage and subrogation.
		

		
			﻿
		

		
			B.        The Reinsurer shall pay its pro rata share of Loss Adjustment Expenses paid by the Company, subject to Article I – Business Covered.  
		

		
			﻿
		

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

		 

			

					

						 

					

					

						 

					

					

						 

				
	

					

						EFFECTIVE: JULY 1, 2017   

					

					

						13.

					

					

						 

				
	

					

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			ARTICLE XII - REPORTS AND REMITTANCES
		

		
			﻿
		

		
			A.         The Company shall provide the Reinsurer with a quarterly account and bordereaux, as well as quarterly and annual reports, in accordance with the provisions set forth in Paragraphs C., E., F. and G. below.
		

		
			﻿
		

		
			B.         Portfolio Assumption - Within 45 days after July 1, 2017, the Company shall pay to the Reinsurer the Reinsurer's pro rata share of the Company's unearned premium reserve segregated by Line of Business on the business in force as of said date.
		

		
			﻿
		

		
			C.         Quarterly Account - Within 30 days after the close of each calendar quarter, the Company shall forward a quarterly account summarizing the following transactions under this Agreement during such quarter:
		

		
			﻿
		

		
			1.         Gross Premiums Written ceded segregated by Line of Business specifically identifying the current cession rate in the event there has been a cession change pursuant to Paragraph B. of Article I – Business Covered; 
		

		
			﻿
		

		
			2.         30% allowance for reinsurance;
		

		
			﻿
		

		
			3.         Provisional Commissions;
		

		
			﻿
		

		
			4.         Loss and Loss Adjustment Expenses paid less recoveries, including salvage and subrogation, segregated by Line of Business, by year of loss. 
		

		
			﻿
		

		
			The balance due either party shall be paid within 45 days after the close of each for the transactions during such quarter.
		

		
			﻿
		

		
			D.         In respect of Paragraph C. above:
		

		
			﻿
		

		
			1.         All quarterly Account Statements shall be sent to the Reinsurer at:
		

		
			﻿
		

		
			a.         E-Mail/Word, Excel, PDF, or TIF Formats, or other scanned documents:
		

		
			﻿
		

		
			*****, or
		

		
			b.         Standard Mail:
		

		
			﻿
		

		
			Swiss Reinsurance America Corporation
		

		
			P.O. Box 74008504
		

		
			Chicago, IL  60674-8504
		

		
			﻿
		

		
			2.         All checks and supporting documentation shall be sent to the Reinsurer through one of the options set forth below and shall identify the applicable Reinsurer Agreement Number(s):
		

		 

			

					

						 

					

					

						 

					

					

						 

				
	

					

						EFFECTIVE: JULY 1, 2017   

					

					

						14.

					

					

						 

				
	

					

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			a.        WIRE TRANSFER
		

		
			﻿
		

		
			(i)         All wires shall be sent to:
		

		
			﻿
		

		
			Bank of America
		

		
			655 Grant Street
		

		
			Concord, CA  94520
		

		
			Account Name:  Swiss Reinsurance America Corporation
		

		
			Account Address:  175 King Street Armonk, NY  10504
		

		
			Account Number:  *****
		

		
			Wire ABA Number:  *****
		

		
			ACH ABA Number:  *****
		

		
			SWIFT:  *****
		

		
			﻿
		

		
			(ii)        All supporting documentation shall be sent to:
		

		
			﻿
		

		
			(a)       E-Mail/Word, Excel, PDF, or TIF Formats, or other scanned documents:
		

		
			﻿
		

		
			*****, or
		

		
			﻿
		

		
			(b)       Standard Mail:
		

		
			﻿
		

		
			Swiss Reinsurance America Corporation
		

		
			P.O. Box 74008504
		

		
			Chicago, IL  60674-8504
		

		
			﻿
		

		
			b.         Courier or Overnight Carrier
		

		
			﻿
		

		
			Both checks and supporting documentation shall be sent to:
		

		
			Bank of America Lockbox Services 
		

		
			Swiss Reinsurance America Corporation
		

		
			540 West Madison, 4th Floor
		

		
			Chicago, IL  60661
		

		
			Re:  Lockbox 8504
		

		
			﻿
		

		
			c.         STANDARD MAIL
		

		
			﻿
		

		
			Both checks and supporting documentation shall be sent to:
		

		
			﻿
		

		
			Swiss Reinsurance America Corporation
		

		
			P.O. Box 74008504
		

		
			Chicago, IL  60674-8504
		

		
			﻿
		

		
			E.         Premium Bordereau as respects each Policy covered under this Agreement - Within 30 days after the close of each quarter, the Company shall submit a premium bordereau to the Reinsurer segregated by underwriting year, the following information as respects each Policy covered under this Agreement:
		

		 

			

					

						 

					

					

						 

					

					

						 

				
	

					

						EFFECTIVE: JULY 1, 2017   

					

					

						15.

					

					

						 

				
	

					

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			1.        Name of Insured,
		

		
			﻿
		

		
			2.        Policy Number,
		

		
			﻿
		

		
			3.        Effective and Expiration Dates,
		

		
			﻿
		

		
			4.        Line of Business.
		

		
			﻿
		

		
			F.         Loss Bordereau as respects each Policy covered under this Agreement - Within 30 days after the close of each quarter, the Company shall submit a loss bordereau to the Reinsurer segregating by underwriting year of loss the following information as respects each loss covered under this Agreement:
		

		
			﻿
		

		
			1.       Name of Insured,
		

		
			﻿
		

		
			2.       Policy Number,
		

		
			﻿
		

		
			3.       Policy Limits,
		

		
			﻿
		

		
			4.       Effective and Expiration Dates,
		

		
			﻿
		

		
			5.       Claim Number,
		

		
			﻿
		

		
			6.       Date of Loss,
		

		
			﻿
		

		
			7.       Line of Business.
		

		
			﻿
		

		
			G.         Quarterly Report - The Company shall furnish the Reinsurer within 30 days after the close of each quarter the following information as respects the business ceded hereunder:
		

		
			﻿
		

		
			1.         Unearned premium reserves segregated by Line of Business at the end of the quarter and calculated on the actual daily basis or in accordance with the Company's methodology, as agreed.
		

		
			﻿
		

		
			2.         Estimated loss and Loss Adjustment Expense reserves outstanding at the end of the quarter segregated by Line of Business, by year of loss. 
		

		
			﻿
		

		
			H.         Annual Report - The Company shall furnish the Reinsurer, within 45 days after the termination date of this Agreement, and annually thereafter, a summary of the business ceded hereunder:
		

		
			﻿
		

		
			1.      Gross Premiums Written ceded from inception to date, segregated by Line of Business; provided that in the event there was a cession change under the Agreement, pursuant to Paragraph B. of Article I- Business Covered, such report shall provide separately the Gross Premiums Written ceded during the year as respects the initial 10% cession and the Gross Premiums Written ceded during the year as respects the revised cession percentage, specifically identifying the new percentage.
		

		 

			

					

						 

					

					

						 

					

					

						 

				
	

					

						EFFECTIVE: JULY 1, 2017   

					

					

						16.

					

					

						 

				
	

					

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			2.      Unearned premium reserves segregated by Line of Business;
		

		
			﻿
		

		
			3.      Losses and Loss Adjustment Expenses paid, less recoveries, including salvage and subrogation, from inception to date;
		

		
			﻿
		

		
			4.      Losses and Loss Adjustment Expenses outstanding, segregated by Line of Business;
		

		
			﻿
		

		
			5.      IBNR, as determined by the Company, as of each June 30th.
		

		
			﻿
		

		
			ARTICLE XIII - ACCESS TO RECORDS
		

		
			﻿
		

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

		
			﻿
		

		
			﻿
		

		
			ARTICLE XIV - TAXES
		

		
			﻿
		

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

		
			﻿
		

		
			﻿
		

		
			ARTICLE XV - OFFSET
		

		
			﻿
		

		
			Each party to this Agreement together with their successors or assigns shall have and may exercise, at any time, the right to offset any balance or balances due the other (or, if more than one, any other).  Such offset may include balances due under this Agreement regardless of whether such balances arise from premiums, losses or otherwise, and regardless of capacity of any party, whether as assuming insurer and/or ceding insurer, under the various agreements involved; provided however, that in the event of insolvency of a party hereto, offsets shall only be allowed in accordance with the provisions of any applicable Florida law, statute or regulation governing such offset. 
		

		
			﻿
		

		
			﻿
		

		
			ARTICLE XVI - DISPUTE RESOLUTION
		

		
			﻿
		

		
			Part I - Choice Of Law And Forum
		

		
			﻿
		

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

		
			﻿
		

		
			Part II – Mediation
		

		 

			

					

						 

					

					

						 

					

					

						 

				
	

					

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			If a dispute between the Company and the Reinsurer, arising out of the provisions of this Agreement or concerning its interpretation or validity and whether arising before or after termination of this Agreement has not been settled through negotiation, both parties agree to try in good faith to settle such dispute by nonbinding mediation, before resorting to arbitration.
		

		
			﻿
		

		
			Part III - Arbitration
		

		
			﻿
		

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

		
			﻿
		

		
			B.          Composition of Panel - Unless the parties agree upon a single arbitrator within 15 days after the receipt of a notice of intention to arbitrate, all disputes shall be submitted to an arbitration panel composed of two arbitrators and an umpire chosen in accordance with Paragraph C. hereof. 
		

		
			﻿
		

		
			C.          Appointment of Arbitrators - The members of the arbitration panel shall be chosen from disinterested persons with at least 10 years' experience in the insurance and reinsurance business.  Unless a single arbitrator is agreed upon, the party requesting arbitration (hereinafter referred to as the "claimant") shall appoint an arbitrator and give written notice thereof by certified mail or by a courier service producing evidence of receipt by the receiving party, to the other party (hereinafter referred to as the "respondent") together with its notice of intention to arbitrate.  Within 30 days after receiving such notice, the respondent shall also appoint an arbitrator and notify the claimant thereof by certified mail or by a courier service producing evidence of receipt by the receiving party.  Before instituting a hearing, the two arbitrators so appointed shall choose an umpire.  If, within 20 days after the appointment of the arbitrator chosen by the respondent, the two arbitrators fail to agree upon the appointment of an umpire, each of them shall nominate three individuals to serve as umpire, of whom the other shall decline two and the umpire shall be chosen from the remaining two by drawing lots.  The name of the individual first drawn shall be the umpire.
		

		
			﻿
		

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

		
			﻿
		

		
			E.          Submission of Dispute to Panel – Within 30 days after the notice of appointment of all arbitrators, the panel shall meet, and determine a timely period for discovery, discovery procedures and schedules for hearings.
		

		
			﻿
		

		
			F.          Procedure Governing Arbitration - All proceedings before the panel shall be informal and the panel shall not be bound by the formal rules of evidence.  The panel shall have the power to fix all procedural rules relating to the arbitration 
		

		 

			

					

						 

					

					

						 

					

					

						 

				
	

					

						EFFECTIVE: JULY 1, 2017   

					

					

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			proceeding. In reaching any decision, the panel shall give due consideration to the customs and usages of the insurance and reinsurance business.
		

		
			﻿
		

		
			G.          Arbitration Award - The arbitration panel shall render its decision within 60 days after termination of the proceeding, which decision shall be in writing, stating the reasons therefor.  The decision of the majority of the panel shall be final and binding on the parties to the proceeding. In no event, however, will the panel be authorized to award punitive, exemplary or consequential damages of whatsoever nature in connection with any arbitration proceeding concerning this Agreement.
		

		
			﻿
		

		
			H.          Cost of Arbitration - Unless otherwise allocated by the panel, each party shall bear the expense of its own arbitrator and shall jointly and equally bear with the other parties the expense of the umpire and the arbitration.
		

		
			﻿
		

		
			﻿
		

		
			ARTICLE XVII - INSOLVENCY
		

		
			﻿
		

		
			A.        In the event of insolvency of the Company, the reinsurance provided by this Agreement shall be payable by the Reinsurer on the basis of the liability of the Company as respects Policies covered hereunder, without diminution because of such insolvency, directly to the Company or its liquidator, receiver, conservator or statutory successor except as provided in Sections 4118(a)(1)(A) and 1114(c) of the New York Insurance Law.
		

		
			﻿
		

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

		
			﻿
		

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

		
			﻿
		

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

		 

			

					

						 

					

					

						 

					

					

						 

				
	

					

						EFFECTIVE: JULY 1, 2017   

					

					

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			ARTICLE XVIII - AMENDMENTS
		

		
			﻿
		

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

		
			﻿
		

		
			﻿
		

		
			IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the following dates:
		

		
			﻿
		

		

		

		 

			

					

						 

					

					

						 

					

					

						 

				
	

					

						EFFECTIVE: JULY 1, 2017   

					

					

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			FEDERATED NATIONAL INSURANCE COMPANY
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

			
					
						﻿

					
					
						 

					
					
						 

				
	
					
						/s/ Michael H. Braun

					
					
						 

					
					
						/s/ Ronald A. Jordan

				
	
					
						Signature

					
						 

					
						 Michael H. Braun

					
					
						 

					
					
						Signature

					
						 

					
						Ronald A. Jordan

				
	
					
						Print Name

					
						 

					
						 CEO and President

					
					
						 

					
					
						Print Name

					
						 

					
						CFO

				
	
					
						Title

					
						 

					
					
						 

					
					
						Title

				
	
					
						 8/22/2017

					
					
						 

					
					
						8/22/2017

				
	
					
						Date:

					
						 

					
						 

					
					
						 

					
					
						Date:

					
						 

				

		
			﻿
		

		
			﻿
		

		
			SWISS REINSURANCE AMERICA CORPORATION
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

			
					
						﻿

					
					
						 

					
					
						 

				
	
					
						/s/ Daryl Polenz

					
					
						 

					
					
						/s/ Thomas Smith

				
	
					
						Signature

					
						 

					
						Vice President

					
					
						 

					
					
						Signature

					
						 

					
						Vice President

				
	
					
						Title

					
						 

					
						08/21/2017

					
					
						 

					
					
						Title

					
						 

					
						08/21/2017

				
	
					
						Date

					
					
						 

					
					
						Date

				

		
			 
		

		

		

		 

			

					

						 

					

					

						 

					

					

						 

				
	

					

						EFFECTIVE: JULY 1, 2017   

					

					

						21.

					

					

						 

				
	

					

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		﻿
		

		
			﻿
		

		
			﻿
		

		
			SUPPLEMENT TO THE ATTACHMENTS
		

		
			﻿
		

		
			﻿
		

		
			DEFINITION OF IDENTIFICATION TERMS USED WITHIN THE ATTACHMENTS
		

		
			﻿
		

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

		
			﻿
		

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

		
			﻿
		

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

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			﻿
		

		
			 
		

		

		

		 

			

					

						 

					

					

						 

					

					

						 

				
	

					

						EFFECTIVE: JULY 1, 2017   

					

					

						1.

					

					

						 

				
	

					

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		﻿
		

		
			INSOLVENCY FUNDS EXCLUSION CLAUSE
		

		
			﻿
		

		
			﻿
		

		
			This Agreement excludes all liability of the Company arising by contract, operation of law, or otherwise from its participation or membership, whether voluntary or involuntary, in any insolvency fund or from reimbursement of any person for any such liability.  "Insolvency fund" includes any guaranty fund, insolvency fund, plan, pool, association, fund or other arrangement, howsoever denominated, established or governed, which provides for any assessment of or payment or assumption by any person of part or all of any claim, debt, charge, fee, or other obligation of an insurer, or its successors or assigns, which has been declared by any competent authority to be insolvent or which is otherwise deemed unable to meet any claim, debt, charge, fee or other obligation in whole or in part.
		

		
			﻿
		

		
			﻿
		

		
			 
		

		

		

		 

			

					

						 

					

					

						 

					

					

						 

				
	

					

						EFFECTIVE: JULY 1, 2017   

					

					

						1.

					

					

						 

				
	

					

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		POOLS, ASSOCIATIONS AND SYNDICATES EXCLUSION CLAUSE
		

		
			SECTION A
		

		
			Excluding:
		

		
			(a)    All Business derived directly or indirectly from any Pool, Association or Syndicate which maintains its own reinsurance facilities.
		

		
			(b)    Any Pool or Scheme (whether voluntary or mandatory) formed after March 1, 1968, for the purpose of insuring Property whether on a country-wide basis or in respect of designated areas.  This Exclusion shall not apply to so-called Automobile Insurance Plans or other Pools formed to provide coverage for Automobile Physical Damage.
		

		
			SECTION B
		

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

		
			Industrial Risk Insurers (successor to Factory Insurance Association and Oil Insurance Association); Associated Factory Mutuals.
		

		
			Any Pool, Association or Syndicate formed for the purpose of writing Oil, Gas or Petro-Chemical Plants and/or Oil or Gas Drilling Rigs.
		

		
			United States Aircraft Insurance Group, Canadian Aircraft Insurance Group, Associated Aviation Underwriters, American Aviation Underwriters.
		

		
			SECTION B does not apply:
		

		
			(a)    Where the Total Insured Value over all interests of the risk in question is less than $350,000,000.
		

		
			(b)    To interests traditionally underwritten as Inland Marine or Stock and/or Contents written on a Blanket basis.
		

		
			(c)    To Contingent Business Interruption, except when the Company is aware that the key location is known at the time to be insured in any Pool, Association or Syndicate named above.
		

		
			(d)    To risks as follows: Offices, Hotels, Apartments, Hospitals, Educational Establishments, Public Utilities (other than Railroad Schedules) and Builders Risks on the classes of risks specified in this subsection (d) only.
		

		
			﻿
		

		
			 
		

		

		

		 

			

					

						 

					

					

						 

					

					

						 

				
	

					

						EFFECTIVE: JULY 1, 2017   

					

					

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		POLLUTION AND SEEPAGE EXCLUSION CLAUSE
		

		
			﻿
		

		
			This Reinsurance does not apply to:
		

		
			﻿
		

		
			1.      Pollution, seepage, contamination or environmental impairment (hereinafter collectively referred to as "pollution") insurances, however styled;
		

		
			﻿
		

		
			2.      Loss or damage caused directly or indirectly by pollution, unless said loss or damage follows as a result of a loss caused directly by a peril covered hereunder;
		

		
			﻿
		

		
			3.      Expenses resulting from any governmental direction or request that material present in or part of or utilized on an insured's property be removed or modified, except as provided in 5. below;
		

		
			﻿
		

		
			4.      Expenses incurred in testing for and/or monitoring pollutants;
		

		
			﻿
		

		
			5.      Expenses incurred in removing debris, unless (A) the debris results from a loss caused directly by a peril covered hereunder, and (B) the debris to be removed is itself covered hereunder, and (C) the debris is on the insured's premises, subject, however, to a limit of $5,000 plus 25% of (i) the property damage loss, any risk, any one location, any one original insured, and (ii) any deductible applicable to the loss;
		

		
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			6.      Expenses incurred to extract pollutants from land or water at the insured's premises unless (A) the release, discharge, or dispersal of pollutants results from a loss caused directly by a peril covered hereunder, and (B) such expenses shall not exceed $10,000;
		

		
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			7.      Loss of income due to any increased period of time required to resume operations resulting from enforcement of any law regulating the prevention, control, repair, clean-up or restoration of environmental damage;
		

		
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			8.      Claims under 5. and/or 6. above, unless notice thereof is given to the Company by the insured within 180 days after the date of the loss occurrence to which such claims relate.
		

		
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			"Pollutants" means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.  Waste includes materials to be recycled, reconditioned or reclaimed.
		

		
			Where no pollution exclusion has been accepted or approved by an insurance regulatory authority for use in a policy that is subject to this Agreement or where a pollution exclusion that has been used in a policy is overturned, either in whole or in part, by a court having jurisdiction, there shall be no recovery for pollution under this Agreement unless said pollution loss or damage follows as a result of a loss caused directly by a peril covered hereunder.
		

		
			Nothing herein shall be deemed to extend the coverage afforded by this reinsurance to property or perils specifically excluded or not covered under the terms and conditions of the original policy involved.
		

		
			 
		

		

		

		 

			

					

						 

					

					

						 

					

					

						 

				
	

					

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

		
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			N.M.A. 1119
		

		
			1.     This Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any Pool of Insurers or Reinsurers formed for the purpose of covering Atomic or Nuclear Energy risks.
		

		
			2.     Without in any way restricting the operation of paragraph 1. of this Clause, this Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any insurance against Physical Damage (including business interruption or consequential loss arising out of such Physical Damage) to:
		

		
			I.        Nuclear reactor power plants including all auxiliary property on the site, or
		

		
			II.        Any other nuclear reactor installation, including laboratories handling radioactive materials in connection with reactor installations, and critical facilities as such, or
		

		
			III.       Installations for fabricating complete fuel elements or for processing substantial quantities of "special nuclear material," and for reprocessing, salvaging, chemically separating, storing or disposing of spent nuclear fuel or waste materials, or
		

		
			IV.      Installations other than those listed in paragraph 2. III. above using substantial quantities of radioactive isotopes or other products of nuclear fission.
		

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

		
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			(a)    where the Reassured does not have knowledge of such nuclear reactor power plant or nuclear installation, or
		

		
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			(b)    where the said insurance contains a provision excluding coverage for damage to property caused by or resulting from radioactive contamination, however caused.  However, on and after 1st January, 1960, this sub-paragraph (b) shall only apply provided the said radioactive contamination exclusion provision has been approved by the Governmental Authority having jurisdiction thereof.
		

		
			4.     Without in any way restricting the operation of paragraphs 1., 2. and 3. of this Clause, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, when such radioactive contamination is a named hazard specifically insured against.
		

		
			5.     It is understood and agreed this Clause shall not extend to risks using radioactive isotopes in any form where the nuclear exposure is not considered by the Reassured to be the primary hazard.
		

		
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			N.M.A. 1119
		

		 

			

					

						 

					

					

						 

					

					

						 

				
	

					

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

		
			7.     Reassured to be sole judge of what constitutes:
		

		
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			(a)    substantial quantities, and
		

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

		
			NOTE: - Without in any way restricting the operation of paragraph 1. hereof, it is understood and agreed that
		

		
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			(a)    all policies issued by the Reassured on or before 31st December, 1957 shall be free from the application of the other provisions of this Clause until expiry date or 31st December, 1960 whichever first occurs whereupon all the provisions of this Clause shall apply,
		

		
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			(b)    with respect to any risk located in Canada policies issued by the Reassured on or before 31st December, 1958 shall be free from the application of the other provisions of this Clause until expiry date or 31st December, 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.
		

		
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		NUCLEAR INCIDENT EXCLUSION CLAUSE - REINSURANCE - NO. 4
		

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

		
			2.     Without in any way restricting the operations of Nuclear Incident Exclusion Clauses, - Liability, - Physical Damage, - Boiler and Machinery and paragraph 1. of this Clause, it is understood and agreed that for all purposes of the reinsurance assumed by the Reinsurer from the Reinsured, all original insurance policies or contracts of the Reinsured (new, renewal and replacement) shall be deemed to include the applicable existing Nuclear Clause and/or Nuclear Exclusion Clause(s) in effect at the time and any subsequent revisions thereto as agreed upon and approved by the Insurance Industry and/or a qualified Advisory or Rating Bureau.
		

		
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		POLLUTION LIABILITY EXCLUSION CLAUSE - REINSURANCE
		

		
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			This Reinsurance excludes:
		

		
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			(1)    Any loss occurrence arising out of the actual, alleged or threatened discharge, dispersal, release or escape of pollutants:
		

		
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			a)     At or from premises owned, rented or occupied by an original assured; or
		

		
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			b)     At or from any site or location used for the handling, storage, disposal, processing or treatment of waste; or
		

		
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			c)     Which are at any time transported, handled, stored, treated, disposed of, or processed as waste; or
		

		
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			d)     At or from any site or location on which any original assured is performing operations:
		

		
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			(i)        If the pollutants are brought on or to the site or location in connection  with such operations; or
		

		
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			(ii)       If the operations are to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize the pollutants.
		

		
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			(2)    Any liability, loss, cost or expense arising out of any governmental direction or request to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize pollutants.
		

		
			"Pollutants" means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.  Waste includes materials to be recycled, reconditioned or reclaimed.
		

		
			Subparagraphs a) and d)(i) of paragraph (1) of this exclusion do not apply to loss occurrences caused by heat, smoke or fumes from a hostile fire. As used herein, "hostile fire" means one which becomes uncontrollable or breaks out from where it was intended to be.
		

		
			"Original assured" as used herein means all insureds as defined in the policy issued by the Company.
		

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

		
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			N.M.A. 1590
		

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

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

		
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			LIMITED EXCLUSION PROVISION*
		

		
			    I.           It is agreed that the policy does not apply under any liability  coverage, to injury, sickness, disease, death or destruction, bodily injury or property damage with respect to which an insured under the policy is also an insured under a nuclear energy liability policy issued by Nuclear Energy Liability Insurance Association, Mutual Atomic Energy Liability Underwriters or Nuclear Insurance Association of Canada, or would be an insured under any such policy but for its termination upon exhaustion of its limit of liability.
		

		
			   II.           Family Automobile Policies (liability only), Special Automobile Policies (private passenger automobiles, liability only), Farmers Comprehensive Personal Liabilities Policies (liability only), Comprehensive Personal Liability Policies (liability only) or policies of a similar nature; and the liability portion of combination forms related to the four  classes of policies stated above, such as the Comprehensive Dwelling Policy and the applicable types of Homeowners Policies.
		

		
			  III.           The inception dates and thereafter of all original policies as described in II. above, whether new, renewal or replacement, being policies which either
		

		
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			(a)          become effective on or after 1st May, 1960, or
		

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

		
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			3.     Except for those classes of policies specified in Clause II. of paragraph 2. and without in any way restricting the operation of paragraph 1. of this Clause, it is understood and agreed that for all purposes of this reinsurance the original liability policies of the Reassured (new, renewal and replacement) affording the following coverages:
		

		
			2012 JULY 1
		

		 

			

					

						 

					

					

						 

					

					

						 

				
	

					

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			Owners, Landlords and Tenants Liability, Contractual Liability, Elevator Liability, Owners or Contractors (including railroad) Protective Liability, Manufacturers and Contractors Liability, Product Liability, Professional and Malpractice Liability, Storekeepers Liability, Garage Liability, Automobile Liability (including Massachusetts Motor Vehicle or Garage Liability)
		

		
			shall be deemed to include with respect to such coverages, from the time specified in Clause V. of this paragraph 3., the following provision (specified as the Broad Exclusion Provision):
		

		
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			BROAD EXCLUSION PROVISION*
		

		
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			It is agreed that the policy does not apply:
		

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

		
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			(a)        with respect to which an insured under the policy is also an insured under nuclear energy liability policy issued by Nuclear Energy Liability Insurance Association, Mutual Atomic Energy Liability Underwriters or Nuclear Insurance Association of Canada, or would be an insured under any such policy but for its termination upon exhaustion of its limit of liability; or
		

		
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			(b)        resulting from the hazardous properties of nuclear material and with respect to which (1) any person or organization is required to maintain financial protection pursuant to the Atomic Energy Act of 1954, or any law amendatory thereof, or (2) the insured is, or had this policy not been issued would be, entitled to indemnity from the United States of America, or any agency thereof, under any agreement entered into by the United States of America, or any agency thereof, with any person or organization.
		

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

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

		
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			(a)         the nuclear material (1) is at any nuclear facility owned by, or operated by or on behalf of, an insured or (2) has been discharged or dispersed therefrom;
		

		
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			(b)         the nuclear material is contained in spent fuel or waste at any time possessed, handled, used, processed, stored, transported or disposed of by or on behalf of an insured; or
		

		 

			

					

						 

					

					

						 

					

					

						 

				
	

					

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			(c)         the injury, sickness, disease, death or destruction, bodily injury or property damage arises out of the furnishing by an insured of services, materials, parts or equipment in connection with the planning, construction, maintenance, operation or use of any nuclear facility, but if such facility is located within the United States of America, its territories, or possessions or Canada, this exclusion (c) applies only to injury to or destruction of property at such nuclear facility, property damage to such nuclear facility and any property thereat.
		

		
			 IV.           As used in this endorsement:
		

		
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			"hazardous properties" include radioactive, toxic or explosive properties; "nuclear material" means source material, special nuclear material or byproduct material; "source material," "special nuclear material," and "byproduct material" have the meanings given them in the Atomic Energy Act of 1954 or in any law amendatory thereof; "spent fuel" means any fuel element or fuel component, solid or liquid, which has been used or exposed to radiation in a nuclear reactor; "waste" means any waste material (1) containing byproduct material other than the tailings or wastes produced by the extraction or concentration of uranium or thorium from any ore processed for its source material content and (2) resulting from the operation by any person or organization of any nuclear facility included within the definition of nuclear facility under paragraph (a) or (b) thereof; "nuclear facility" means
		

		
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			(a)         any nuclear reactor,
		

		
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			(b)         any equipment or device designed or used for (1) separating the isotopes of uranium or plutonium, (2) processing or utilizing spent fuel, or (3) handling, processing or packaging waste,
		

		
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			(c)         any equipment or device used for the processing, fabricating or alloying of special nuclear material if at any time the total amount of such material in the custody of the insured at the premises where such equipment or device is located consists of or contains more than 25 grams of plutonium or uranium 233 or any combination thereof, or more than 250 grams of uranium 235,
		

		
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			(d)         any structure, basin, excavation, premises or place prepared or used for the storage or disposal of waste
		

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

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

		
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			(i)     Garage and Automobile Policies issued by the Reassured on New York risks, or
		

		 

			

					

						 

					

					

						 

					

					

						 

				
	

					

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			(ii)        Statutory liability insurance required under Chapter 90, General Laws of Massachusetts,
		

		
			until 90 days following approval of the Broad Exclusion Provision by the Governmental Authority having jurisdiction thereof.
		

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

		
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						*NOTE:

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

				

		
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		TERRORISM EXCLUSION CLAUSE (USA) – REINSURANCE (PROPERTY)
		

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

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

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

		
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			TERRUSA-PROP
		

		
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			TERRORISM EXCLUSION CLAUSE (USA) – REINSURANCE (CASUALTY)
		

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

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

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

		
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			TERRUSA-CAS
		

		
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Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00276-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00276-of-00352.parquet"}]]