Document:

Termination of Quota Share Agreement with Chubb

Exhibit
10.12

Termination
Agreement and Release 

Between

Coast
National Insurance Company ("Coast National")

And

Security
National Insurance Company ("Security National")

And

Bristol
West Insurance Company ("Bristol West")

And

Bristol
West Casualty Insurance Company ("Bristol West Casualty")

And

Chubb Re
(Bermuda) Ltd. (formerly Chubb Atlantic Reinsurance Specialists Ltd.) on behalf
of Federal Insurance Company ("Subscribing Reinsurer")

WHEREAS,
Coast National, Security National, Bristol West and Bristol West Casualty
(together the "Company") and the Subscribing Reinsurer entered into an Interests
and Liabilities Agreement with an effective date of January 1, 2002 (the
"I&L") whereby the Subscribing Reinsurer took a 10% share in the interests
and liabilities of the "Reinsurer" as set forth in a Quota Share Reinsurance
Agreement issued to Company with an effective date of January 1, 2002 and any
amendments thereto (the "Contract");

WHEREAS,
the Company commuted the Contract on a cut-off basis effective January 1,
2005.

WHEREAS,
the Company and the Subscribing Reinsurer wish to fully and finally settle all
obligations and liabilities under the I&L Agreement and the Contract (the
I&L Agreement and the Contract attached hereto as Exhibit A);

NOW,
THEREFORE, IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES HERETO
THAT:

	
      1
	
      The
      Subscribing Reinsurer shall pay to Coast National, on behalf of the
      Company, the sum of Nineteen Million Six Hundred Seventy Five Thousand
      Five Hundred Seventy Eight Dollars ($19,675,578) such amount being equal
      to the profit commission in accordance with Article IX of the Contract.
      Such payment shall be made by the Subscribing Reinsurer to Coast National
      no later than January 21, 2005, in accordance with the letter agreement
      dated July 23, 2004 and attached hereto as Exhibit
B.

	
      2
	
      The
      Company shall accept the sum set forth in Paragraph 1 above as the total
      amount due in full and final settlement of any and all amounts due from
      the Subscribing Reinsurer to the Company under the I&L Agreement and
      the Contract.

 

	
      3
	
      Effective
      upon the receipt of payment set forth in Paragraph 1 above, the Company
      does hereby, on behalf of itself, its successor and assigns, parents,
      affiliates, subsidiaries release and discharge the Subscribing Reinsurer,
      its past, present and future directors, officers, employees, consultants,
      attorneys, agents, administrators, successors, assigns, parents,
      affiliates, subsidiaries and receivers from any and all past, present and
      future claims, causes, causes of action, liabilities and obligations
      arising under or related directly or indirectly to the I&L Agreement
      and the Contract, whether known or unknown, reported or unreported, and
      whether currently existing or arising in the future, including but not
      limited to: any and all past, present and future payment obligations,
      adjustments, setoffs, actions, omissions, causes of action, suits, debts,
      sums of money, accounts demands, covenants, controversies, bonds, bills,
      promises, damages, judgments, claims, costs, expenses, losses,
      representations and warranties whatsoever related directly or indirectly
      to the I&L Agreement and the Contract; it being the intention of the
      parties that this Agreement shall operate as a full and final settlement
      of the Subscribing Reinsurer's past, current and future liabilities to the
      Company related to the I&L Agreement and the Contract. The Company
      acknowledges the aforementioned payment as a complete accord,
      satisfaction, settlement and commutation of all the Subscribing
      Reinsurer's liabilities and obligations under the I&L Agreement and
      the Contract and agrees to indemnify and hold the Subscribing Reinsurer
      harmless from and against any and all liabilities, costs, damages and
      expenses, including without limitation, attorney's fees, incurred in
      connection with any and all claims or actions against the Company or the
      Subscribing Reinsurer, or either of their successors or assigns, arising
      out of or related to the I&L Agreement and the
    Contract.

 

	
      4
	
      Effective
      on the same date on which the Company shall release and discharge the
      Subscribing Reinsurer as provided in Paragraph 3 of this Agreement, the
      Subscribing Reinsurer shall release and discharge the Company, its past,
      present and future directors, officers, employees, consultants, attorneys,
      agents, administrators, successors, assigns and receivers from any and all
      past, present and future claims, causes, causes of action, liabilities and
      obligations arising under or related directly or indirectly to the I&L
      Agreement and the Contract, whether known or unknown, reported or
      unreported, and whether currently existing or arising in the future,
      including but not limited to: any and all past, present and future payment
      obligations, adjustments, setoffs, actions, omissions, causes of action,
      suits, debts, sums of money, accounts, demands, covenants, controversies,
      bonds, bills, promises, damages, judgments, claims, costs, expenses,
      losses representations and warranties whatsoever related directly or
      indirectly to the I&L Agreement and the Contract; it being the
      intention of the parties that this Agreement shall operate as a full and
      final settlement of the Company's past, current and future liabilities to
      the Subscribing Reinsurer under the I&L Agreement and the
      Contract.

	
      5
	
      The
      rights, duties and obligations set forth herein shall inure to the benefit
      of and be binding upon any and all predecessors, successors, affiliates,
      officers, directors, employees, parents, subsidiaries, stockholders,
      receivers and assigns of the parties
hereto.

	
      6
	
      The
      parties hereto expressly warrant and represent that the execution of this
      Agreement is fully authorized by each of them; that the person or persons
      executing this document have the necessary and appropriate authority to do
      so; that there are no pending agreements, transactions, or negotiations to
      which any of them are a party that would render this Agreement or any part
      hereof, void, voidable, or unenforceable. Each of the Company and the
      Subscribing Reinsurer agrees to execute and deliver all such documents and
      agreements and to take such other action as may be reasonably necessary or
      desirable to effectuate the purpose and intent of this
      Agreement.

	
      7
	
      This
      Agreement contains the entire agreement between the parties as respects
      its subject matter. This Agreement shall neither be modified nor amended,
      nor any of its provisions waived, except by a written agreement signed by
      the parties hereto.

	
      8
	
      This
      Agreement shall be interpreted and governed by the laws of New
      York.

	
      9
	
      Any
      party to this Agreement signing on behalf of any affiliates or
      subsidiaries represents and warrants that it has the authority to do so
      and by such signing binds such other affiliates or subsidiaries to this
      agreement.

 

 

	
      For
      and on behalf of
	
      For
      and on behalf of
	 
	
      Chubb
      Re (Bermuda) Ltd.
	
      Coast
      National Insurance Company
	 
	
      on
      behalf of 
	 	 
	
      Federal
      Insurance Company
	 	 
	 	 	 
	
      /s/
      Martin Vezina
	
      
      /s/
      Jeffrey John Dailey

	 
	
      Name:
      Martin Vezina
	
      Name:
      Jeffrey John Dailey
	 
	
      Title:
      Vice President
	
      Title:
      President
	 
	
      Date:
      January 12, 2005
	
      Date:
      January 10, 2005
	 
	 	 	 
	 	 	 
	
      For
      and on behalf of
	
      For
      and on behalf of
	 
	
      Security
      National Insurance Company
	
      Bristol
      West Insurance Company
	 
	 	 	 
	
      /s/
      Simon John Noonan
	
      
      /s/
      Jeffrey John Dailey

	 
	
      Name:
      Simon John Noonan
	
      Name:
      Jeffrey John Dailey
	 
	
      Title:
      President
	
      Title:
      Vice President
	 
	
      Date:
      January 10, 2005
	
      Date:
      January 10, 2005
	 
	 	 	 
	 	 	 
	
      For
      and on behalf of 
	 	 
	
      Bristol
      West Casualty Insurance Company
	 	 
	 	 	 
	
      /s/
      Jeffrey John Dailey
	 	 
	
      Name:
      Jeffrey John Dailey
	 	 
	
      Title:
      Vice President
	 	 
	
      Date:
      January 10, 2005
	 	 

 

Exhibit A
(incorporated by reference to Exhibit 10.2 of Registrant's Registration
Statement (File No. 333-111259) on Form S-1

	 	
      Exhibit
      B

	 	 
	 	
      July
      23, 2004

 

Alexis
Oster

Bristol
West Insurance Group

6150 Oak
Tree Boulevard, Suite 400

Independence,
OH 44131

Dear
Alexis:

Reference
is made to the Quota Share Reinsurance Agreement effective as of January 1,
2002, by and among Coast National Insurance Company, Security National Insurance
Company, Bristol West Insurance Company, Bristol West Casualty Insurance Company
and Chubb Re (Bermuda) Ltd., as amended to the date hereof (the "Quota Share
Agreement"). Capitalized terms used herein without definition shall have the
same meanings herein as set forth in the Quota Share Agreement.

Notwithstanding
any provision in Article IX of the Quota Share Agreement to the contrary, Chubb
Re (Bermuda) Ltd. hereby agrees to pay to the Company the Profit Commission
described in such Article IX not later than January 21, 2005, provided that the
parties to the Quota Share Agreement have executed a commutation agreement in
form and substance acceptable to such parties, and all conditions to
effectiveness set forth therein have been satisfied, on or before January 7,
2005; provided, further, that any such commutation agreement shall be deemed
effective as of January 1, 2005.

The
execution, delivery and performance of this letter agreement shall not, except
as expressly provided herein, constitute a waiver of any provision of, or
operate as a waiver of any right, power or remedy of Chubb Re (Bermuda) Ltd.
under the Quota Share Agreement.

Chubb
Re (Bermuda) Ltd. (formerly Chubb Atlantic Reinsurance Specialists
Ltd.)

On
behalf of Federal Insurance Company

Martin
Vezina

Vice-President

S/O/F

COAST
NATIONAL INSURANCE COMPANY

Alexis S.
Oster

Corporate
Counsel

August
13, 2004

S/O/F

SECURITY
NATIONAL INSURANCE COMPANY

Alexis S.
Oster

Corporate
Counsel

August
13, 2004

S/O/F

BRISTOL
WEST INSURANCE COMPANY

Alexis S.
Oster

Corporate
Counsel

August
13, 2004

S/O/F

BRISTOL
WEST CASUALTY INSURANCE COMPANY

Alexis S.
Oster

Corporate
Counsel

August
13, 2004

S/O/FTermination of Quota Share Agreement with Inter-Ocean

Exhibit
10.13

 

COMMUTATION
AND RELEASE AGREEMENT

This
Commutation and Release Agreement (hereinafter called "Commutation") is entered
into by and between COAST NATIONAL INSURANCE COMPANY, a California corporation,
SECURITY NATIONAL INSURANCE COMPANY, a Florida corporation, BRISTOL WEST
INSURANCE COMPANY of Philadelphia, Pennsylvania and BRISTOL WEST CASUALTY
INSURANCE COMPANY OF Independence, Ohio (hereinafter and thereinafter
collectively referred to as "Company") and INTER-OCEAN REINSURANCE (IRELAND)
LIMITED, of Dublin, Ireland (hereinafter and thereinafter referred to as
"Reinsurer").

WHEREAS,
the Reinsurer and the Company have entered into an Aggregate Excess of Loss
Reinsurance Agreement (hereinafter called the "Reinsurance Agreement") under
which the Company ceded business and the Reinsurer accepted such
business;

WHEREAS,
Reinsurer and Company desire to fully and finally settle and commute, effective
March 18, 2004 all rights, obligations and liabilities, known and unknown, of
each other with respect to the Reinsurer's Participation under the Reinsurance
Agreement;

NOW,
THEREFORE, in order to effect said commutation and mutual release, the parties
hereto agree to the following terms and conditions:

	 	
      1.
	
      In
      consideration of the payment by the Reinsurer to the Company of
      $10,640,753.91 that which shall be paid by the Reinsurer on March 18, 2004
      by wire transfer, and upon receipt by the Company of a signed copy of this
      Commutation, a mutual release of each party to the other, as of March 18,
      2004, shall be effected in accordance with paragraphs A and B
      below:

	 	
      A.
	
      The
      Company does hereby agree to release and discharge the Reinsurer, its
      affiliates, officers directors an shareholders, and their heirs,
      executors, administrators, successors and assigns from all adjustments,
      obligations, offsets, liability for payment of interest, actions, causes
      of action, suits, debts, sums of money, accounts, reckonings, bonds,
      bills, covenants, contracts, controversies, agreements, promises, damages,
      judgments, claims and demands whatsoever, all whether known or unknown,
      which the Company and the Company's successors and assigns ever had, now
      have or hereafter may have against the Reinsurer, or any of them, arising
      out of the Reinsurance Agreement.

	 	
      B.
	
      The
      Reinsurer, in consideration of Company's execution of this Agreement, does
      hereby release and discharge the Company, it's officers, directors an
      shareholders, and their heirs, executors, administrators, successors and
      assigns from all adjustments, obligations, offsets, liability for payment
      of interest, actions, causes of action, suits, debts, sums of money,
      accounts, premium payments, reckonings, bonds, bills, covenants,
      contracts, controversies, agreements, promises, damages, judgments, claims
      and demands whatsoever, all whether known or unknown, which the Company
      and the Company's successors and assigns ever had, now have or hereafter
      may have against the Reinsurer, or any of them, arising out of the
      Reinsurance Agreement.

 

 

	 	
      2.
	
      The
      rights, duties and obligations set forth herein shall inure to the benefit
      of and be binding upon any and all predecessors, successors, liquidators,
      receivers or assigns of the parties hereto.

	 	
      3.
	
      The
      parties hereto expressly warrant and represent that they are corporations
      in good standing in their respective places of domicile, that the
      execution of this Commutation is fully authorized by each of them and that
      the person or persons executing this Commutation have the necessary and
      appropriate authority to do so; that there are no pending agreements,
      transactions, or negotiations to which any of them are a party that would
      render this Commutation or any part thereof void, voidable, or
      unenforceable, that no authorization, consent or approval of any
      government entity is required to make this Commutation valid and binding
      upon them; and that no claim or loss being paid or settled under this
      Commutation has been previously assigned, sold or transferred to any other
      person or entity.

	 	
      4.
	
      This
      Commutation shall be interpreted under and governed by the laws of the
      State of New York, U.S.A.

	 	
      5.
	
      Each
      party hereto has had the opportunity to negotiate the terms hereof and
      modify the draftsmanship of this Commutation. Therefore, the terms of this
      Commutation shall be considered and interpreted without any presumption,
      inference or rule requiring construction or interpretation of any
      provision of this Commutation against the interest of the drafter of this
      Commutation.

	 	
      6.
	
      This
      Commutation contains the entire agreement between the parties as respects
      the subject matter. All discussions and agreements previously entertained
      between the parties concerning the subject matter of the Commutation are
      merged into this Commutation. This commutation may not be modified or
      amended, nor any of its provisions waived, except by an instrument in
      writing, signed by duly authorized officers of the parties
      hereto.

IN
WITNESS WHEREOF the parties hereto have caused this Commutation to be executed
in quadruplicate by their duly authorized representatives.

ACCEPTED:

COAST
NATIONAL INSURANCE COMPANY

SECURITY
NATIONAL INSURANCE COMPANY

BRISTOL
WEST INSURANCE COMPANY

BRISTOL
WEST CASUALTY INSURANCE COMPANY

By:
/s/ Randy Sutton

Title:
Chief Financial Officer

Date:
March 16, 2004

Print
Name: Randy Sutton

Attested:
/s/ Kathleen Mazotas

INTER-OCEAN
REINSURANCE (IRELAND) LIMITED

By:
/s/ Brian Lehane

Title:
authorised signatory

Date:
18th March
2004

Print
Name: Brian Lehane

Attested:
/s/ Caroline Carroll

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