Document:

exv10w154

EXHIBIT
10.154

ALL LINES CASUALTY EXCESS OF LOSS

REINSURANCE CONTRACT

No. 2000260

EFFECTIVE JANUARY 1, 2007

between

PEERLESS INSURANCE COMPANY

Keene, New Hampshire

and

The reinsurers subscribing to the respective

Interests and Liabilities Agreements attached to

and forming part of this Contract

2007 All Lines Casualty XOL Contract

CAS0700001

 

 

ALL LINES CASUALTY EXCESS OF LOSS REINSURANCE CONTRACT No. 2000260

	 	 	 	 	 	 	 
	ARTICLE	 	CONTENTS	 	PAGE
	 	 	 
	 	 	 	 
	I
	 	BUSINESS COVERED

	 	 	1	 
	II
	 	EFFECTIVE DATE AND TERMINATION

	 	 	3	 
	III
	 	TERRITORY

	 	 	4	 
	IV
	 	LIMIT AND RETENTION

	 	 	4	 
	V
	 	WARRANTIES

	 	 	5	 
	VI
	 	ULTIMATE NET LOSS

	 	 	5	 
	VII
	 	LOSS IN EXCESS OF POLICY LIMITS

	 	 	6	 
	VIII
	 	EXTRA CONTRACTUAL OBLIGATIONS

	 	 	6	 
	IX
	 	EXCLUSIONS

	 	 	7	 
	X
	 	SPECIAL ACCEPTANCES

	 	 	12	 
	XI
	 	LOSS OCCURRENCE

	 	 	12	 
	XII
	 	REINSURANCE PREMIUM

	 	 	14	 
	XIII
	 	REPORTS AND REMITTANCES

	 	 	14	 
	XIV
	 	LOSS ADJUSTMENTS AND SETTLEMENTS

	 	 	15	 
	XV
	 	SALVAGE AND SUBROGATION

	 	 	15	 
	XVI
	 	FEDERAL TERRORISM EXCESS RECOVERY CLAUSE

	 	 	16	 
	XVII
	 	ACCESS TO RECORDS

	 	 	16	 
	XVIII
	 	DIVIDENDS AND TAXES

	 	 	17	 
	XIX
	 	FEDERAL EXCISE TAX

	 	 	17	 
	XX
	 	GOVERNING LAW

	 	 	18	 
	XXI
	 	CURRENCY

	 	 	18	 
	XXII
	 	OFFSET

	 	 	18	 
	XXIII
	 	ERRORS OR OMISSIONS

	 	 	18	 
	XXIV
	 	INSOLVENCY

	 	 	18	 
	XXV
	 	MEDIATION

	 	 	19	 
	XXVI
	 	ARBITRATION

	 	 	20	 
	XXVII
	 	SPECIAL CONDITIONS

	 	 	23	 
	XXVIII
	 	THIRD PARTIES

	 	 	25	 
	XXIX
	 	UNAUTHORIZED REINSURENCE

	 	 	25	 
	XXX
	 	SERVICE OF SUIT

	 	 	26	 
	XXXI
	 	CONFIDENTIALITY CLAUSE

	 	 	27	 
	XXXII
	 	AMENDMENTS

	 	 	28	 
	XXXIII
	 	SEVERABILITY

	 	 	28	 
	XXXIV
	 	INTEREST PENALTY

	 	 	28	 
	XXXV
	 	ASSIGNMENT

	 	 	29	 
	XXXVI
	 	ENTIRE AGREEMENT

	 	 	29	 

ATTACHMENTS:

APPENDIX A — DEFINITION OF PROFIT CENTER

APPENDIX B — PHARMACEUTICAL/MEDICAL RISKS

INSOLVENCY FUNDS EXCLUSION CLAUSE

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

NUCLEAR INCIDENT EXCLUSION CLAUSE — LIABILITY — REINSURANCE — CANADA. N.M.A. 1979

NUCLEAR INCIDENT EXCLUSION CLAUSE — REINSURANCE — NO. 4.

2007 All Lines Casualty XOL Contract

 

 

ALL LINES CASUALTY EXCESS OF LOSS

REINSURANCE CONTRACT

No. 2000260

(hereinafter referred to as the “Contract”)

between

PEERLESS INSURANCE COMPANY

Keene, New Hampshire

(hereinafter referred to as the “Company”)

and

The reinsurers subscribing to the respective

Interests and Liabilities Agreements attached to

and forming part of this Contract

(hereinafter referred to as the “Subscribing Reinsurer”)

ARTICLE I — BUSINESS COVERED

	A.	 	The Subscribing Reinsurer shall indemnify the Company on an excess of loss basis in respect
of the Ultimate Net Loss paid or to be paid by the Company and the Legal Entities (as defined
below) as a result of losses occurring or claims made during the term of the Contract for
Policies in force as of January 1, 2007, and new and renewal Policies becoming effective on or
after said date, subject to the terms and conditions contained herein.
	 
	C.	 	The term “Policies” shall mean each of the Company’s or a Legal Entity’s binders, policies
and contracts of insurance or reinsurance on the business covered hereunder.
	 
	D.	 	Under this Contract, the indemnity for reinsured loss applies only to the following Annual
Statement Lines of Business and Classes of Insurance written by the Company or ceded to the
Company directly or indirectly by a legal entity listed below (each, a “Legal Entity” and,
collectively, the “Legal Entities”)
	 
	 	 	American Ambassador Casualty Company, Lisle, Illinois

America First Insurance Company, Keene, New Hampshire,

America First Lloyd’s Insurance Company, Richardson, Texas,

Colorado Casualty Insurance Company, Englewood, Colorado,

Consolidated Insurance Company, Indianapolis, Indiana,

Excelsior Insurance Company, Keene, New Hampshire,

Globe American Casualty Company, Loveland, Ohio,

Golden Eagle Insurance Corporation, San Diego, California,

Hawkeye-Security Insurance Company, Waukesha, Wisconsin,

Indiana Insurance Company, Indianapolis, Indiana,

Liberty Mutual Mid-Atlantic Insurance Company, Camp Hill, Pennsylvania, for business written
by the Liberty Mutual Agency Markets Profit Centers covered under this Contract as defined in
Appendix A

Liberty Northwest Insurance Corporation, Portland, Oregon,

Mid-American Fire and Casualty Company, Loveland, Ohio,

Montgomery Mutual Insurance Company, Columbia, Maryland,

National Insurance Association, Indianapolis, Indiana,

2007 All Lines Casualty XOL Contract

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North Pacific Insurance Company, Portland, Oregon,

Oregon Automobile Insurance Company, Portland, Oregon,

Peerless Indemnity Insurance Company, Lisle, Illinois,

The Midwestern Indemnity Company, Loveland, Ohio,

The Netherlands Insurance Company, Keene, New Hampshire,

Employers Insurance Company of Wausau, Wausau, Wisconsin, and

Wausau General Insurance Company, Wausau, Wisconsin, and

Wausau Underwriters Insurance Company, Wausau, Wisconsin, and

Wausau Business Insurance Company, Wausau, Wisconsin, for business classified as Business
Solutions Group or Wausau Business Unit only,

Liberty Mutual Insurance Company, Boston, Massachusetts (on behalf of The First Liberty Insurance
Corporation, LM Insurance Corporation, both of West Des Moines, Iowa, Liberty Insurance
Corporation, South Burlington, Vermont, Liberty Mutual Fire Insurance Company, Wausau, Wisconsin,
for business classified as Business Solutions Group only)

Bridgefield Employers Insurance Company, Lakeland, Florida

Bridgefield Casualty Insurance Company, Lakeland, Florida

Liberty County Mutual Insurance Company, Irving, Texas, for business written by the Liberty Mutual
Agency Markets Profit Centers covered under this Contract as defined in Appendix A

OneBeacon Insurance Company, Boston, Massachusetts, for Policies subject to the rewritten Indemnity
Reinsurance Agreement by and between Peerless Insurance Company and OneBeacon Insurance Company,
collectively identified as Liberty Mutual Agency Markets Profit Centers covered under this Contact
as defined in Appendix A except as excluded under Article IX — Exclusions of this Contract.

	 	 	 
	NAIC	 	 
	CODE:	 	LINES OF BUSINESS:
	 
	 	 
	03

	 	Farmowners (Section II only)
	 
	 	 
	04

	 	Homeowners (Section II only)
	 
	 	 
	05.2

	 	Commercial Multiple Peril (Section II only)
	 
	 	 
	16

	 	Workers Compensation
	 
	 	 
	17

	 	Other Liability
	 
	 	 
	18

	 	Products Liability
	 
	 	 
	19.1, 19.2

	 	Private Passenger Automobile Liability
	 
	 	 
	19.3, 19.4

	 	Commercial Automobile Liability
	 
	 	 
	21

	 	Automobile Physical Damage (Auto Physical Damage Collision, only)

Coverage is provided, as respects the Profit Centers’ Underwriting Guidelines as follows:

	 	1.	 	Automobile Liability includes; Bodily Injury Liability, Property Damage Liability,
Medical Payments, Uninsured Motorists, Underinsured Motorists, No-Fault Coverage and Auto
Physical Damage Collision.
	 
	 	2.	 	Other Liability including Professional Liability, Bodily Injury Liability, Property
Damage Liability, Personal and Advertising Injury Liability and Medical Payments Coverage
when written as part of a Commercial or Personal Package Policy or on a monoline basis.
However, Advertising Injury Liability shall only apply to this Agreement when written as
part of a Commercial Package Policy or a Commercial General Liability Coverage Form.

2007 All Lines Casualty XOL Contract

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	 	3.	 	Workers Compensation and Employers Liability.
	 
	 	4.	 	Personal and Commercial Umbrella Liability.
	 
	 	5.	 	Clash of multiple Policies involved in the same occurrence.

ARTICLE II — EFFECTIVE DATE AND TERMINATION

	A.	 	This Contract shall become effective at 12:01 a.m., Local Standard Time, with respect to
Policies in force at 12:01 a.m., Local Standard Time, January 1, 2007, and new and renewal
Policies becoming effective on or after said date. Subject to Article XXVII — Special
Conditions below, this Contract may be terminated at the close of any calendar year by either
party giving to the other 90 days prior written notice by certified mail of its intention to
do so.
	 
	B.	 	This Contract shall apply to loss occurrence and claims made Policies in accordance with
the following provisions:

	 	1.	 	As respects Policies written on an occurrence basis:
	 
	 	 	 	This Contract shall apply with respect to losses occurring on or after the inception
date of this Contract.
	 
	 	2.	 	As respects Policies written on a claims made basis:
	 
	 	 	 	“Claims Made” shall be understood to mean losses arising under Policies in which the date when the
claim is made determines under which Policy the loss is collectible. Such losses are covered
hereunder irrespective of the date on which the loss occurs provided that the date the  claim is
made falls within the period of this Contract.
	 
	 	 	 	For the purposes of the foregoing, the date a claim is first made shall be the date
applicable to the entire loss and the Reinsurers shall be liable for their proportion
of the entire loss irrespective of the expiry date of the Contract, provided that such
date falls within the period of this Contract.
	 
	 	 	 	In the event of a Loss Occurrence arising hereunder which involves Policies (or
sections thereof) which respond on both a losses occurring and Claims Made basis, the
date of the Loss Occurrence will be deemed to be the earlier of the dates, namely the
date of the occurrence of the loss.

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

	 	1.a.  	 	As respects Policies written on an occurrence basis:
	 
	 	 	 	Upon termination of this Contract, all Policies covered hereunder and in force at the
date of termination of this Contract shall continue until their natural expiry,
cancellation or next anniversary of such business, whichever first occurs; but in no
case shall this reinsurance be extended for longer than one year, plus odd time not
exceeding 18 months in all, after the termination date.
	 
	 	1.b.  	 	As respects Policies written on a claims made basis:

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	 	 	 	Upon termination of this Contract, the Subscribing Reinsurer shall continue to be
liable for claims received or recorded by the Company or by the insured with respect to
Policies in force at the date of termination for the full original policy period until
the natural expiry, cancellation or next anniversary of such Policies, not to exceed
one year, whichever comes first. However, if the Company or a Legal Entity, as
applicable, has provided an Extended Reporting Period within one year after the date of
termination on Policies in force at the date of termination or if the Extended
Reporting Period is in force at the date of termination, the Subscribing Reinsurer
shall continue to be liable for such extended reporting period.
	 
	 	2.a.  	 	As respects Policies written on an occurrence basis:
	 
	 	 	 	Upon termination of this Contract, the Subscribing Reinsurer shall be liable for losses
occurring prior to the date of termination; however, the Subscribing Reinsurer shall
have no liability for losses occurring subsequent to the termination of this Contract.
	 
	 	2.b.  	 	As respects Policies written on a claims made basis:
	 
	 	 	 	Upon termination of this Contract, the Subscribing Reinsurer shall not be liable for
claims received or recorded by the Company or a Legal Entity, as applicable, or insured
after the effective date of termination unless such claim is received and recorded by
the Company or a Legal Entity, as applicable, or the insured during an Extended
Reporting Endorsement Period in force at the date of termination.

ARTICLE III — TERRITORY

The territorial limits of this Contract shall be identical with those of the original Policies.

ARTICLE IV — LIMIT AND RETENTION

	A.	 	The Company shall retain the first $10,000,000 of Ultimate Net Loss as respects any one Loss
Occurrence. The Subscribing Reinsurer shall then be liable for the amount by which the
Ultimate Net Loss exceeds the Company’s retention of $10,000,000 but the Subscribing Reinsurer
shall never exceed $15,000,000 any one Loss Occurrence.
	 
	B.	 	Notwithstanding the foregoing, the Subscribing Reinsurer’s liability arising out of an Act of
Terrorism shall be limited to $15,000,000 in the aggregate.
	 
	B.	 	The Company’s retention and the Subscribing Reinsurer’s limit of liability for each Loss
Occurrence, shall apply irrespective of the number of Policies affected or number of hazards
in one Policy and regardless of the number of Lines of Business involved.
	 
	D.	 	An “Act of Terrorism” for purposes of this Contract shall mean:

	 	1.	 	Any actual or threatened violent act or act harmful to human life, tangible or
intangible property or infrastructure directed towards or having the effect of (a)
intimidating, coercing or putting in fear a civilian population or section thereof for the
purpose of establishing or advancing a specific ideological, religious or political system
of thought, perpetrated by a specific individual or group directly or indirectly through
agents acting on behalf of said individual or group or (c) retaliating against any country
for direct or vicarious support by that country of any other government or political
system.

2007 All Lines Casualty XOL Contract

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	 	2.	 	Any act deemed or declared by the Federal Office of Homeland Security to be terrorism or
a terrorist act shall also be considered an “Act of Terrorism” for purposes of this
Contract.

	E.	 	Reinsurance of the Company’s retention, set forth in each Exhibit, shall not be deducted in
arriving at the Ultimate Net Loss herein,

ARTICLE V — WARRANTIES

Notwithstanding any other provision of this Contract, the maximum amount included in the Ultimate
Net Loss under this Contract shall be:

	1.	 	$10,000,000 each Life as respects for Workers’ Compensation business

	2.	 	$10,000,000 each Insured’s Umbrella Policy and Other Underlying Policy (ies), excluding
Workers’ Compensation, combined.

ARTICLE VI — ULTIMATE NET LOSS

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

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

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

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

2007 All Lines Casualty XOL Contract

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

ARTICLE VII — LOSS IN EXCESS OF POLICY LIMITS

This Contract shall protect the Company within the limits hereof, for 90% of any Loss in excess of
the original Policy limit where Loss in excess of the limit has been incurred because of a failure
by the Company, a Legal Entity or by a third-party claims administrator to settle within the
Policy limit or by reason of alleged or actual negligence, fraud, or bad faith in rejecting an
offer of settlement or in defending or prosecuting litigation, including appeals, arbitration, or
any alternative dispute resolution or settlement discussions involving any claim.

However, the above paragraph shall not apply where the Loss has been incurred due to the fraud of
a member of the Board of Directors or a Corporate Officer of the Company or a Legal Entity acting
individually or collectively or in collusion with any individual or corporation or any other
organization or party involved in the presentation, defense or settlement of any claim covered
hereunder.

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

The amount of any Loss in excess of the Policy limit arising out of an original accident, casualty
disaster or Loss Occurrence covered by more than one Policy to the same insured will be apportioned
to each such Policy on a pro rata basis in the same proportion that the limit of each Policy bears
to the total limit of coverage provided by all such Policies for the original accident, casualty,
disaster or Loss Occurrence.

ARTICLE VIII — EXTRA CONTRACTUAL OBLIGATIONS

This Contract shall protect the Company within the limits hereof for 90% of Extra Contractual
Obligations. “Extra Contractual Obligations” are defined as those liabilities not covered under
any other provision of this Contract, 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, a Legal Entity or by a third party claims administrator to settle
within the Policy limit, or by reason of alleged or actual negligence, fraud or bad faith in
rejecting an offer of settlement or in defending or prosecuting litigation, including appeals,
arbitration, or any alternative dispute resolution or settlement discussions involving any
claim.

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

2007 All Lines Casualty XOL Contract

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

ARTICLE IX — EXCLUSIONS

THIS AGREEMENT DOES NOT COVER:

	A.	 	THE FOLLOWING GENERAL CATEGORIES

	 	1.	 	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.
	 
	 	2.	 	Reinsurance assumed by the Company, except intercompany reinsurance.
	 
	 	3.	 	Business derived from any Pool, Association, including Joint Underwriting
Association, Syndicate, Exchange, Plan, Fund or other facility directly as a member,
subscriber or participant, or indirectly by way of reinsurance or assessments; provided
this exclusion shall not apply to Automobile liability or Workers Compensation assigned
risks which may be currently or subsequently covered hereunder.
	 
	 	4.	 	Pollution Liability, to the extent excluded in the original Policies and
endorsements, except when a judicial entity invalidates the Policies’ exclusion or in any
jurisdiction whose regulatory authorities have prohibited the exclusion.
	 
	 	5.	 	Insolvency Funds as per the attached Insolvency Funds Exclusion Clause.
	 
	 	6.	 	Pharmaceutical/Medical Risks per the attached Appendix B
	 
	 	7	 	Nuclear Incident Exclusion Clauses which are attached and made part of this Agreement:

	 	a.	 	Nuclear Incident Exclusion Clause — Liability — Reinsurance — U.S.A. N.M.A. 1590
	 
	 	b.	 	Nuclear Incident Exclusion Clause — Liability — Reinsurance — Canada N.M.A. 1979
	 
	 	c.	 	Nuclear Incident Exclusion Clause — Reinsurance — No. 4.

	 	8.	 	Risks with umbrella coverage in excess of $200,000,000

	B.	 	THE FOLLOWING INSURANCE COVERAGES

	 	1.	 	Fiduciary Liability.
	 
	 	2.	 	Surety and Credit insurance.
	 
	 	3.	 	Fidelity Bonds.
	 
	 	4.	 	Credit and Financial Guarantee.

2007 All Lines Casualty XOL Contract

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	 	5.	 	Securities and Exchange Liability.
	 
	 	6.	 	Malpractice insurance, Directors and Officers Liability insurance or any form of
Errors and Omissions or Professional Liability insurance, except as provided for under
the Profit Centers’ Underwriting Guidelines
	 
	 	7.	 	Advertisers’, Broadcasters’ and Telecasters’ Liability as respects Personal Injury
Liability except as provided for under the Profit Centers’ Underwriting Guidelines.
	 
	 	8.	 	Kidnap, Extortion and Ransom Liability.
	 
	 	9.	 	Protection and Indemnity (Ocean Marine) except for hulls under 50 feet.
	 
	 	10.	 	Media business, defined as Feature Film and Major Motion Picture Studios,
Commercial Negative Film Coverages, Cast Coverage, Completion Bond and Television
Productions, with annual gross receipts greater than $25,000,000.
	 
	 	11.	 	Asbestos liability to the extent excluded in the original Policies and endorsements
except when a judicial entity invalidates the Policies’ exclusion or in any jurisdiction
whose regulatory authorities have prohibited the exclusion.

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

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

	D.	 	THE FOLLOWING AS RESPECTS LIABILITY OTHER THAN AUTOMOBILE

	 	1.	 	Liability as respects Products and Completed
Operations:

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

	 	(i)	 	Drugs or Pharmaceuticals.
	 
	 	(ii)	 	Cosmetics, defined as:

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	 	(1)	 	articles intended to be rubbed, poured, sprinkled or sprayed on, introduced
into,
or otherwise applied to the human body or any part thereof for cleansing,
beautifying, promoting attractiveness, or altering the appearance, and
	 
	 	(2)	 	articles intended for use as a component of any such article; except that such
term shall not include soap, and
	 
	 	(3)	 	and other cosmetic within the meaning of Section 201(i) of the Federal Food,
Drug and Cosmetic Act (21 U.S.C. 321(i)).

	 	(iii)	 	Herbicides, insecticides or pesticides, except as respects risks
involved in a farming operation.

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

	 	2.	 	All railway operations except Railroad Protective Liability coverage as respects jobs which
do not involve track work or service disruptions.
	 
	 	3.	 	Amusement parks, carnivals or circuses, except county or country fairs, incidental family fun
centers, ice or roller skating rinks, miniature golf courses and excursions to camps or parks.
	 
	 	4.	 	Public assembly exposure in excess of 5,000 except for schools and colleges.
	 
	 	5.	 	Gas or electric companies.
	 
	 	6.	 	Subaqueous operations.
	 
	 	7.	 	Mining and quarrying operations, if blasting is involved
	 
	 	8.	 	Demolition of buildings or structures in excess of three stories or 50 feet in height
	 
	 	9.	 	Shoring, underpinning or moving of buildings or structures.
	 
	 	10.	 	Manufacture, sale, rental, lease or repair of scaffolds. This exclusion shall not apply to
incidental exposure on construction risks.
	 
	 	11.	 	Construction of bridges unless the span is less than 75 feet between pillars, and tunnels or
dams.
	 
	 	12.	 	a.      Manufacturers or importers of fireworks, fuses, or any substance, as defined and noted
below, intended for use as an explosive.

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

NOTE: An explosive substance is defined as any substance manufactured for the express purpose
of exploding as differentiated from commodities used industrially and which are only
incidentally explosive.

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	 	13.	 	Manufacture, production, refining, storage, wholesale distribution or transportation
of natural or
artificial fuel gas, butane, propane or liquefied petroleum gases or gasoline, except
when
written as incidental coverage, as defined in the Profit Centers’ Underwriting
Guidelines, or
when operations are within a 500 mile radius. This exclusion is not to apply to the
construction
and maintenance of such exposures which shall include, but not be limited to,
landscaping,
road construction, excavation, water hauling, plumbing and electrical services.
	 
	 	14.	 	Onshore and offshore gas and oil drilling operations. This exclusion is not to
apply to the
construction and maintenance of such exposures which shall include, but not be limited
to,
landscaping, road construction, excavation, water hauling, plumbing and electrical
services.
	 
	 	15.	 	Ownership, maintenance, use or entrustment of any aircraft, owned, operated, rented
or loaned
including fueling, or any device or machine intended for and/or aiding in the achievement
of
atmospheric flight, projection or orbit, to the extent provided in the original Policies
or
endorsements.
	 
	 	16.	 	Municipalities except for those with a population less than 100,000.

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

	 	1.	 	For all Profit Centers other than Liberty Northwest Profit center, operations
under the
jurisdiction of the U.S. Longshoremen’s and Harbor Workers’ Act, the Jones Act and the
Maritime Employers Liability Act except when written as incidental coverages as defined
in the
Profit Centers’ Underwriting Guidelines
	 
	 	2.	 	For the Liberty Northwest Profit Center, operations under the jurisdiction of the
Jones Act and
the Maritime Employers Liability Act except when written as incidental coverages as
defined in
their Underwriting Guidelines.
	 
	 	3.	 	Operation of docks or wharves, other than small marinas or pleasure docks.
	 
	 	4.	 	The manufacturing, mining, refining, processing, distribution,
installation, removal or
encapsulment of asbestos.
	 
	 	5.	 	Risks involving known exposure to asbestos.
	 
	 	6.	 	All railway operations except sidetrack agreements.
	 
	 	7.	 	Amusement parks, carnivals or circuses, except county or country fairs, incidental
family fun
centers, ice or roller skating rinks, miniature golf courses and excursions to camps or
parks.
	 
	 	8.	 	Subaqueous operations.
	 
	 	9.	 	Mining and quarrying operations, if blasting is involved
	 
	 	10.	 	Demolition of buildings or structures in excess of three stories or 50 feet in height.
	 
	 	11.	 	Shoring, underpinning or moving of buildings or structures.
	 
	 	12.	 	Manufacture, sale, rental, lease, erection or repair of scaffolds. This exclusion
shall not apply to incidental exposure on construction risks.

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	 	13.	 	Construction of bridges unless with a span of less than 75 feet between pillars, and
tunnels or dams.
	 
	 	14.	 	a.    Manufacturers or importers of fireworks, fuses, or any substance, as defined and
noted below, intended for use as an explosive.

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

	 	 	 	NOTE: An explosive substance is defined as any substance manufactured for the express
purpose of exploding as differentiated from commodities used industrially and which are
only incidentally explosive.
	 
	 	15.	 	Manufacture, production, refining, storage, wholesale distribution or
transportation of natural or
artificial fuel gas, butane, propane or liquefied petroleum gases or gasoline, except
when
written as incidental coverages as defined in the Profit Centers’ Underwriting
Guidelines. This
exclusion is not to apply to the construction and maintenance of such exposures which
shall
include, but not be limited to, landscaping, road construction, plumbing and electrical
services.
	 
	 	16.	 	Onshore and offshore gas and oil drilling operations. This exclusion is not to
apply to the
construction and maintenance of such exposures which shall include, but not be limited
to,
landscaping, road construction, plumbing and electrical services.
	 
	 	17.	 	Ownership, maintenance or use or entrustment of any airport or aircraft, owned,
operated,
rented or loaned including fueling, or any device or machine intended for and/or aiding
in the
achievement of atmospheric flight, projection or orbit except as respects corporate owned
aircraft up to six passengers and to the extent excluded in the original
Policies and
endorsements.
	 
	 	18.	 	Municipalities, except for those with a population less than 100,000.

	F.	 	THE FOLLOWING RISKS AS RESPECTS TERRORISM
	 
	 	 	Terrorism losses arising from Airports, Bridges, Government Buildings, Nuclear Facilities,
Office Buildings over 25 stories, Security Services, Stadiums and Tunnels, Nuclear, Biological
and Chemical exposures, Explosive Manufacturing risks, Fertilizer mixing plants, Railroads,
Amusement/Theme parks with greater than 5,000 person capacity, Distribution and manufacturing
of weapons/munitions.

	G.	 	The Company and the Subscribing Reinsurer have agreed on the Profit Centers’ Underwriting
Guidelines, as respects Policies covered under this Agreement. The Company shall advise the
Subscribing Reinsurer of any change in such Underwriting Guidelines.
	 
	H.	 	In the event the Company or a Legal Entity is inadvertently bound on any risk which is
excluded under this Agreement, the reinsurance provided under this Agreement shall apply to
such risk until discovery by the Company within its Home Office of the existence of such risk
and for 45 days

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thereafter or for the period required by statutes, and shall then cease unless within such
period, the Company has received from the Subscribing Reinsurer written notice of its
approval of such risk.

ARTICLE X — SPECIAL ACCEPTANCES

	A.	 	Risks which are beyond the terms, conditions or limitations of this Contract submitted to
each Subscribing Reinsurer identified on the attached Interests and Liabilities Agreement for
special acceptance hereunder. Upon receipt of approval from all Subscribing Reinsurers, such
acceptance shall bind each Subscribing Reinsurer for its respective share in the interests
and liabilities of said risk
	 
	B.	 	When a risk is specially accepted, such risk shall be covered under the terms and conditions
of this Contract, except as such terms shall be modified by such acceptance. Premiums and
losses derived from any special acceptance shall be included with other data for rating
purposes of this Contract. Once a risk has been accepted under the provisions of this Article,
it will automatically be included at renewal unless there have been material changes to the
risk, in which case the risk will be resubmitted.

ARTICLE XI — LOSS OCCURRENCE

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

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

The term “Loss Occurrence” shall mean any accident, disaster, casualty or happening or series of
accidents, disasters, casualties or happenings arising out of or following the same cause or a
series of similar causes. The term “Loss Occurrence” shall be held to include.

	A.	 	As respects Products Bodily Injury and Products Property Damage Liability, injuries to all
persons and all damage to property of others occurring during a Policy Period and proceeding
from or traceable to the same cause or series of similar causes, shall be deemed to arise out
of one Loss Occurrence, and the date of such Loss Occurrence shall be deemed to be the
commencing date of the Policy Period. For the purpose of this provision, each annual period of
a Policy which continues in force for more than one year shall be deemed to be a separate
Policy Period.
	 
	B.	 	As respects Bodily Injury Liability (other than Automobile and Products), said term shall
also be understood to mean, as regards each original assured, injuries to one or more than
one person resulting from infection, contagion, poisoning, or contamination proceeding from
or traceable to the same cause or series of similar causes.
	 
	C.	 	As respects Property Damage Liability (other than Automobile and Products), Loss Occurrence
shall also, subject to provisions 1. and 2. below, be understood to mean loss or losses caused
by a series of operations, events, or occurrences arising out of operations at one specific
site and which cannot be attributed to any single one of such operations, events or
occurrences, but rather to the cumulative effect of the same. In assessing each and every Loss
Occurrence within the foregoing definition, it is understood and agreed that:

	 	1.	 	The series of operations, events or occurrences shall not extend over a period
longer than 12 consecutive months; and

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	 	2.	 	The Company may elect the date on which the period of not exceeding 12
consecutive months shall be deemed to have commenced.

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

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

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

	A.	 	The term “Loss Occurrence” shall mean each claim or series of claims made to the Company or a
Legal Entity, or the insured, during the term of this Contract arising out of or following the
same
cause or series of similar causes.
	 
	B.	 	As respects a Loss Occurrence involving one or more Policies written on a claims made basis,
the
date of Loss Occurrence for purposes of reinsurance, shall be considered the earliest date
when
notice of claims is first received and recorded by the Company or a Legal Entity or the
insured,
whichever comes first, and any related claims reported subsequent to such date shall be
included in
such loss. However, if notice of claims is first received and recorded by the Company or a
Legal
Entity or the insured during an Extended Reporting Period, the date of occurrence shall be
deemed
to be the last day of the policy period.

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

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

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ARTICLE XII — REINSURANCE PREMIUM

	A.	 	The Company shall pay to the Reinsurer a rate of .1374% of the Subject Earned Premium for the
Business Covered hereunder, as stated in Paragraph D. of Article I — Business Covered.
	 
	B.	 	The term “ Earned Premium” as used herein is equal to the sum of the Net Premiums Written on
the
business covered hereunder during the period under consideration, plus the unearned premium
reserve as respects premiums in force at the beginning of such period, less the unearned
premium
reserve as respects premiums in force at the end of the period, said unearned premium is to be
calculated on a monthly pro rata basis.
	 
	C.	 	The term “Net Premiums Written” shall mean gross premiums written less returns, allowances
and
reinsurances which inure to the benefit of the Subscribing Reinsurer.
	 
	D.	 	The term “Subject Earned Premium” shall mean the Earned Premium times the rates noted below.

	 	 	 	 	 
	ASLOB	 	Percentage
	Homeowners
	 	 	10	%
	Farmowners
	 	 	10	%
	Commercial Multiple Peril (liability)
	 	 	100	%
	Workers Compensation
	 	 	100	%
	Other Liability
	 	 	100	%
	Products Liability
	 	 	100	%
	Private Passenger & Commercial
Auto Liability
	 	 	10	%
	Private Passenger & Commercial
Auto Physical Damage
	 	 	10	%

	E.	 	The following percentages of the Company’s and the Legal Entity’s indivisible premium shall
be allocated to the business covered under this Contract: 35% — Businessowners.
	 
	F.	 	Each claim reduces the amount of indemnity from the time the loss occurred by the sum paid.
Any
amount exhausted is reinstated form the time the Loss Occurrence begins. Reinstatement will
be
provided at one at 100% and the additional premium will be calculated pro rata of the annual
premium, as to the fraction of the limit of liability reinstated and 100% as to the term.

ARTICLE XIII — REPORTS AND REMITTANCES

	A.	 	The Company shall furnish the Subscribing Reinsurer with all necessary data respecting
premiums
and losses for as long as one of the parties hereto has a claim against the other arising from
this
Contract.
	 
	B.	 	Quarterly Deposit Premiums equal to 1⁄4 of the 100% of Annual Deposit Premium will be remitted
on
January 15, May 15, August 15 and November 15, according to the schedule below. The Company
shall submit finalized accounts to the Subscribing Reinsurer on February 15, of the subsequent year,
summarizing the actual subject earned premium for the previous Contract Year. The difference
between the deposit premium and the actual subject earned premium will be settled to/from the
Company within 15 days of February 15. However, in no event shall the annual adjusted premium
be less than the Annual Minimum Premium for each layer, set forth below:

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	Annual	 	Annual	 	Quarterly
	Minimum	 	Deposit	 	Deposit
	$4,875,000

	 	$4,875,000
	 	$1,218,750

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

ARTICLE XIV — LOSS ADJUSTMENT AND SETTLEMENT (LM-01500-2006.09.07-A)

The Company shall give notice, as soon as practicable, to the Subscribing Reinsurer of any claim
that it has reason to believe could involve this Contract. The Company shall keep the Subscribing
Reinsurer informed of significant developments likely to affect the cost of any claim or claims
hereunder.

The Company or a Legal Entity may commence, continue, defend, settle, or withdraw from actions,
suits, or prosecutions and, generally, do all such things relating to any claim or loss in which
the Subscribing Reinsurer is interested as, in the Company’s or a Legal Entity’s judgment, may be
beneficial or expedient to the Company and the Subscribing Reinsurer. The Company and the Legal
Entities shall be the sole judge as to what claims are covered under their Policies. All of the
Ultimate Net Loss (and Loss Occurrences), as well as all loss settlements made and judgments paid
by the Company or a Legal Entity, provided they are within the terms and conditions of the
original policies and within the terms and conditions of this Contract either under the strict
conditions of the Policies or by way of compromise, shall be unconditionally binding upon the
Subscribing Reinsurer, who agrees to pay all amounts for which they are liable immediately upon
reasonable evidence of the amount due being furnished to the Subscribing Reinsurer by the Company.
The true intent of this Contract is that the Subscribing Reinsurer shall, in every case to which
this Contract applies, follow the settlements of the Company and the Legal Entities.

The Company shall advise the Subscribing Reinsurer of all claims which:

	 	1.	 	Are reserved by the Company for an amount in excess of 50% of its retention.

ARTICLE XV — SALVAGE AND SUBROGATION (LM-01800-2006.09.12-A)

The Reinsurers shall be credited with their share of salvage and/or subrogation in respect of
claims and settlements under this Contract, less their share of recovery expense. Unless the
Company and the Reinsurers agree to waive such rights in the settlement of a disputed claim, or
the Company and Reinsurers agree to the contrary, the Company and the Legal Entities shall enforce
the right to salvage and/or subrogation and shall prosecute all claims arising out of such right.
Should the Company or the Legal Entities refuse or neglect to enforce this right, the Reinsurers
are hereby empowered and authorized to institute appropriate action in the name of the Company or
the Legal Entities, as applicable.

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

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ARTICLE XVI — FEDERAL TERRORISM EXCESS RECOVERY CLAUSE (LM-01100-2006.04.14-A)

Any loss reimbursement the Company receives from the United States Government under the
Terrorism Risk Insurance Act of 2002 (“TRIA”) as amended by the Terrorism Risk Insurance Extension
Act of 2005 (“TRIEA”), as a result of Loss Occurrences commencing during the term of this Contract
shall apply as follows:

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

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

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

For purposes of this Article, “Insured Loss (es)” shall have the same meaning as set forth in
definitions section 102(5) of TRIA.

ARTICLE XVII — ACCESS TO RECORDS (LM-00100-2005.11.01-A)

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

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

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

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

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

ARTICLE XVIII — DIVIDENDS AND TAXES (LM-00600-2005.06.02-A)

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

ARTICLE XIX — FEDERAL EXCISE TAX

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

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

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In the event of any return of premium, the Subscribing Reinsurer shall deduct the aforesaid
percentage from the return premium payable hereon and the Company or its agent shall recover such
tax from the United States Government.

ARTICLE XX — GOVERNING LAW

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

ARTICLE XXI — CURRENCY

Whenever a reference to a monetary currency appears in this Contract, it shall be construed to
mean United States Dollars (“USD”). However, in those cases where the Policies are issued by the
Company using Canadian Dollars (“CAD”), it shall mean Canadian Dollars. All payments made by
either party shall be made in United States Dollars except that payments made involving Policies
issued using Canadian Dollars shall be made in Canadian Dollars. All amounts paid or received by
the Company in any other currency shall be converted into United States Dollars at the rate of
exchange on the date at which it is entered on the books of the Company.

ARTICLE XXII — OFFSET

Each party to this Contract together with their successors or assigns shall have and may exercise,
at any time, the right to offset any balance(s) due the other under this Contract, provided
however, that in the event of insolvency of a party hereto, offsets shall only be allowed in
accordance with the provisions of the applicable law, statute, or regulation governing such
offset.

ARTICLE XXIII — ERRORS AND OMISSIONS

Any inadvertent delay, omission, or error in complying with the terms and conditions of this
Contract shall not be held to relieve either party hereto from any liability, which would
attach to it hereunder if such delay, omission, or error had not been made, provided such
delay, omission, or error is rectified upon discovery and provided no liability shall be
imposed on either party greater than would have attached hereunder had such delay, error or
omission not occurred.

ARTICLE XXIV — INSOLVENCY

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

In the event of the insolvency of the Company, reinsurance under this Contract shall be payable on
demand, with reasonable provision for verification, on the basis of claims allowed against the
insolvent Company by any court of competent jurisdiction or by any liquidator, receiver,
conservator, or statutory successor of the Company having authority to allow such claims, without
diminution because of such insolvency or because such liquidator, receiver, conservator, or
statutory successor has failed to pay all

2007 All Lines Casualty XOL Contract

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or a portion of any claims Such payments by the Subscribing Reinsurer shall be made directly to the
Company or its liquidator, receiver, conservator, or statutory successor, except to the extent
Section 4118(a) of the New York Insurance Law applies, or except (a) where the Contract
specifically provides another payee of such reinsurance in the event of the insolvency of the
Company, or (b) where the Subscribing Reinsurer with the consent of the direct insured or insureds
has assumed such Policy obligations of the Company as direct obligations of the Subscribing
Reinsurer to the payees under such Policies and in substitution for the obligations of the Company
to such payees.

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

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

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

ARTICLE XXV — MEDIATION

In the event of any dispute or difference of opinion arising out of or relating to this Contract,
including but not limited to the formation, interpretation, performance or breach of this
Contract, whether such dispute arises before or after the expiration of this Contract, the Company
and the Subscribing Reinsurer may mutually agree in writing that, prior to or at any time during
an arbitration proceeding, they will submit such dispute or difference of opinion to non-binding
mediation which will be held at a location mutually agreed by the parties. The parties agree that
any non-binding mediation conducted during any stage of an arbitration process shall be conducted
concurrently with such arbitration process, and that the arbitration process or proceedings shall
not be stayed unless both the Company and the Subscribing Reinsurer otherwise agree.

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

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

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

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

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

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

ARTICLE XXVI — ARBITRATION

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

	 	1.	 	Qualifications of the arbitrators and umpires shall be in accordance with
Alternative
section 6.2 of the Procedures.
	 
	 	2.	 	The Parties hereby designate the umpire list maintained by ARIAS (U.S.) as the
list to be
used in the event that section 6.7(a) of the Procedures is invoked.
	 
	 	3.	 	Unless otherwise mutually agreed, the members of the Panel shall be impartial
and
disinterested. The members of the Panel may not be: (1) in the control of any Party or its
parent, affiliate, or agent, (2) a former director or officer of any Party or its parent, affiliate,
or agent, or (3) a likely witness in the arbitration. The requirement of impartiality means
that all members of the Panel shall have the same obligation to approach the Panel’s
duties and decisions with fairness and without consideration for the fact that Panel
members may have been appointed by one of the Parties. The requirement of impartiality

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

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

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	D.	 	Hearing Location. The hearing shall be held in Boston, Massachusetts, unless
the Parties
mutually agree to a different location.
	 
	E.	 	Confirmation. Either Party may apply to a court of competent jurisdiction for an
order confirming
any award of the Panel; a judgment of that court shall thereupon be entered on any award.
If
such an order is issued, the Party against whom confirmation is sought shall pay the
attorneys’
fees incurred of the Party who applied for the confirmation order and all court costs of any
such
proceeding.
	 
	F.	 	Equitable Relief from a Court of Law. Nothing herein shall be construed to prevent
any
participating Party from applying to a court of competent jurisdiction to issue a
restraining order or
other equitable relief to maintain the “status quo” of the Parties participating in the
arbitration
pending the decision and award by the Panel.
	 
	G.	 	Consolidated Proceedings.

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

	H.	 	Choice of Law. The law set forth in the Governing Law Article shall apply to this
Arbitration Article. In addition, to the extent the Panel (or the umpire in an Alternative
Streamlined Procedure) looks to applicable law, such Panel or umpire shall apply the law as
set forth in the Governing Law Article of this Contract.
	 
	I.	 	Option to Litigate. Notwithstanding the foregoing provisions of this Article, to the
extent that the
Company has demanded payment of a total amount of at least twenty million dollars
($20,000,000) or the currency equivalent thereof from any Subscribing Reinsurer or from the
Reinsurers, the Company reserves the right to initiate litigation to resolve any disputes
arising from such demand.

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	J.	 	Survival of Article. This Article shall survive the termination or expiration of this
Contract.

ARTICLE XXVII — SPECIAL CONDITIONS

This Article applies only in the event that:

	 	A.	 	A State Insurance Department or other legal authority orders the Subscribing
Reinsurer to
cease writing business or has imposed upon it any other restrictions on or
conditions
relating to the Subscribing Reinsurer’s license or conduct of business in any
jurisdiction;
or
	 
	 	B.	 	The Subscribing Reinsurer has become insolvent or has been placed into
liquidation or
receivership (whether voluntary or involuntary), or there have been instituted
against it
proceedings for the appointment of a receiver, liquidator, rehabilitator,
conservator,
trustee in bankruptcy, or other agent known by whatever name, to take possession of
its
assets or control of its operations; or
	 
	 	C.	 	The Subscribing Reinsurer’s policyholders’ surplus has been reduced by 25% of
the
amount of surplus at the inception of this Contract; or
	 
	 	D.	 	The Subscribing Reinsurer has become merged with, acquired, or controlled by
any
company, corporation, or individual(s) not controlling the Subscribing
Reinsurer’s
operations at the inception of this Contract; or
	 
	 	E.	 	The Subscribing Reinsurer’s A.M. Best Rating has been assigned or downgraded
below
A- or Standard and Poor’s Rating has been assigned or downgraded below A-; or
	 
	 	F.	 	The Subscribing Reinsurer fails to maintain its surplus at a level of at least
200% of the
Subscribing Reinsurer’s Risk-Based Capital; or
	 
	 	G.	 	The Subscribing Reinsurer announces intentions to cease underwriting operations; or
	 
	 	H.	 	The Subscribing Reinsurer voluntarily ceases underwriting operations; or
	 
	 	I.	 	The Subscribing Reinsurer has reinsured its entire liability under this Contract, or has
entered into a novation extinguishing its entire liability under this Contract
without the Company’s prior written consent.

If one or more of the above-stated circumstances occur, the Company shall provide the Subscribing
Reinsurer with a written statement of the Subscribing Reinsurer’s share of all paid recoverables,
case reserves, loss adjustment expenses, incurred but not reported losses, reserves for unearned
premium, and ceding commissions due under this Contract (collectively “Obligations”). Within
fifteen (15) days of the Subscribing Reinsurer’s receipt of such statement, the Subscribing
Reinsurer agrees to fund all Obligations by clean, irrevocable, and unconditional Letters of Credit
payable exclusively to the Company and issued by a bank acceptable to the Company. At the Company’s
request, the Subscribing Reinsurer shall agree to provide separate Letters of Credit for any
distinct legal entities within the Company covered under this Contract. Such Letters of Credit
shall be issued for a period of not less than one year, and shall be automatically extended for one
year from their dates of expiration or any future expiration dates, unless sixty (60) days prior to
any expiration date the issuing bank shall notify the Company by certified mail that the issuing
bank elects not to extend any Letter of Credit for any additional period.

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

	 	A.	 	To pay or reimburse the Company for:

	 	1.	 	The Subscribing Reinsurer’s share under this Contract of
premiums returned,
but not yet recovered from the Subscribing Reinsurer, to the owners of
Policies
reinsured under this Contract due to cancellations of such Policies; and
	 
	 	2.	 	The Subscribing Reinsurer’s share, under this Contract, of
surrenders and
benefits or liabilities paid by the Company, but not yet recovered from the
Subscribing Reinsurer, under the terms and provisions of the Policies
reinsured
under this Contract; and
	 
	 	3.	 	Any other amounts necessary to secure the credit or reduction
from liability for
reinsurance taken by the Company.

	 	B.	 	Where the Letters of Credit will expire without renewal or be reduced or
replaced by
Letters of Credit for a reduced amount and where the Subscribing Reinsurer’s entire
obligations under this Contract remain unliquidated and undischarged ten (10) days
prior to the termination date, to withdraw amounts equal to the Subscribing
Reinsurer’s
share of the liabilities, to the extent that the liabilities have not yet been
funded by the
Subscribing Reinsurer and exceed the amount of any reduced or replacement Letters of
Credit, and deposit those amounts in a separate account in the name of the Company
in
a qualified U.S. financial institution apart from its general assets, in trust for
such uses
and purposes as specified above as may remain after withdrawal and for any period
after the termination date.

At annual intervals, or at the Company’s option, on a quarterly basis, the Company shall prepare
an adjusted statement of the Subscribing Reinsurer’s Obligations, for the sole purpose of amending
the Letters of Credit, in the following manner:

	 	A.	 	If the statement shows that the Subscribing Reinsurer’s Obligations exceed the
balance of
credit as of the statement date, the Subscribing Reinsurer shall, within fifteen
(15) days
after receipt of notice of such excess, secure delivery to the Company of an
amendment
to the Letters of Credit increasing the amount of credit by the amount of such
difference.
	 
	 	B.	 	If, however, the statement shows that the Subscribing Reinsurer’s Obligations
are less
than the balance of credit as of the statement date, the Company shall, within
fifteen (15)
days after receipt of written request from the Subscribing Reinsurer, release such
excess
credit by agreeing to secure an amendment to the Letters of Credit reducing the
amount
of credit available by the amount of such excess credit.

If the Subscribing Reinsurer fails to fund such Obligations by Letters of Credit as described
above, the Company may terminate this Contract at any time by the giving of thirty (30) days prior
written notice to the Subscribing Reinsurer.

The coverage afforded by this Contract shall cease as of the date of termination and the
Subscribing Reinsurer shall return the unearned premium, if any. If coverage hereunder terminates
while a claim covered by this Contract is in progress, the Subscribing Reinsurer shall be liable
subject to all other conditions hereof for its proportion of the entire claim, provided that the
event giving rise to the claim started before such termination.

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ARTICLE XXVIII — THIRD PARTIES

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

ARTICLE XXIX — UNAUTHORIZED REINSURANCE

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

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

The Subscribing Reinsurer agrees to apply for and secure timely delivery to the Company of clean,
irrevocable, and unconditional Letters of Credit issued by a bank that is a qualified U.S.
financial institution and containing provisions acceptable to the insurance regulatory authorities
having jurisdiction over the Company’s reserves in an amount equal to the Subscribing Reinsurer’s
proportion of said reserves. At the Company’s request, the Subscribing Reinsurer will agree to
provide separate Letters of Credit for any Legal Entities and the Company covered under this
Contract. Such Letters of Credit shall be issued for a period of not less than one year, and shall
be automatically extended for one year from their date of expiration or any future expiration date
unless 60 days prior to any expiration date the issuing bank shall notify the Company by certified
mail that the issuing bank elects not to consider the Letters of Credit extended for any
additional period.

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

	 	A.	 	To reimburse the Company for the Subscribing Reinsurer’s share of premiums
returned
to the owners of Policies reinsured under this Contract because of cancellations of
the
Policies;
	 
	 	B.	 	To reimburse the Company for the Subscribing Reinsurer’s share of surrenders and
benefits or losses paid by the Company under provisions of the Policies reinsured
under
this Contract;
	 
	 	C.	 	To fund an account with the Company in an amount, at least, equal to the
deduction for
reinsurance ceded from the Company liabilities for Policies ceded under this Contract.
The account shall include, but not be limited to, amounts for Policy reserves, claims and

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	 	 	 	losses incurred (including losses incurred but not reported), loss adjustment
expenses, and unearned premium reserves; and
	 
	 	D.	 	To pay any other amounts the Company claims are due under this Contract.

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

At annual intervals, or at the Company’s option, on a quarterly basis, the Company shall prepare a
specific statement of the Subscribing Reinsurer’s Obligations, for the sole purpose of amending the
Letters of Credit, in the following manner:

	 	A.	 	If the statement shows that the Subscribing Reinsurer’s Obligations exceed the
balance of
credit as of the statement date, the Subscribing Reinsurer shall, within 30 days
after
receipt of notice of such excess, secure delivery to the Company of an amendment to
the
Letters of Credit increasing the amount of credit by the amount of such difference.
	 
	 	B.	 	If, however, the statement shows that the Subscribing Reinsurer’s Obligations are
less than the balance of credit as of the statement date, the Company shall, within 30
days
after receipt of written request from the Subscribing Reinsurer, release such excess
credit
by agreeing to secure an amendment to the Letters of Credit reducing the amount of
credit available by the amount of such excess credit.

Any and all disputes between the Company and any Subscribing Reinsurer or Reinsurers (“Party”,
individually, or “Parties”, collectively) arising out of, relating to, or concerning this Article
shall be resolved pursuant to the ARIAS-U.S. Newer Arbitrator Program. Unless the Parties otherwise
agree, the ARIAS Newer Arbitrator Program expedited proceeding with a single Newer Arbitrator shall
be used to resolve any such disputes.

ARTICLE XXX — SERVICE OF SUIT

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

This Service of Suit Article will not be read to conflict with or override the obligations of the
parties to arbitrate their disputes as provided for in the Arbitration Article. This Article is
intended as an aid to compelling arbitration or enforcing such arbitration or arbitral award, not
as an alternative to the Arbitration Article for resolving disputes arising out of this Contract.

In the event of the failure of the Subscribing Reinsurer to honor an Arbitration award the
Subscribing Reinsurer, at the request of the Company, will submit to the jurisdiction of a Court
of competent jurisdiction within the United States. Nothing in this Article constitutes or should
be understood to constitute a waiver of the Subscribing Reinsurer’s right to commence an action in
any Court of competent jurisdiction in the United States, to remove an action to a United States
District Court, or to seek a transfer of a case to another Court as permitted by the laws of the
United States or of any state in the United States. The Subscribing Reinsurer, once the
appropriate Court is selected, whether such court is the one originally chosen by the Company and
accepted by the Subscribing Reinsurer or is determined by removal, transfer, or otherwise, as
provided for above, will comply with all requirements necessary to give said Court jurisdiction
and, in any suit instituted against any of them upon this Contract, will abide by the final
decision of such Court or of any Appellate Court in the event of an appeal.

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Service of process in such suit may be made upon: Mendes & Mount, LLP, 750 Seventh Avenue, New
York, NY 10019-6829.)

The above-named are authorized and directed to accept service of process on behalf of the
Subscribing Reinsurer in any such suit. Further, pursuant to any statute of any state, territory,
or district of the United States that makes provision therefore, the Subscribing Reinsurer hereby
designates the Superintendent, Commissioner, or Director of Insurance, or other officer specified
for that purpose in the statute, or their successor(s) in office, as their true and lawful
attorney upon whom may be served any lawful process in any action, suit, or proceedings instituted
by or on behalf of the Company or any beneficiary hereunder arising out of this Contract, and
hereby designate the above-named as the person to whom the said officer is authorized to mail such
process or a true copy thereof.

ARTICLE XXXI — CONFIDENTIALITY CLAUSE

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

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

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

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Non-Public Personally Identifiable Information. Additionally, any disclosure of non-public
personally identifiable information shall comply with all state and federal statutes and
regulations governing the disclosure of non-public personally identifiable information.
“Non-public personally identifiable information” is financial or medical information of or
concerning a private person which either has been obtained from sources which are not available to
the general public or obtained from the person who is the subject and which information is
included in data files exchanged by the parties hereto. For the purposes hereof, the terms shall
include data elements such as names and addresses of individuals. Disclosing or using this
information for any purpose beyond the scope of this Contract, or beyond the exceptions set forth
above, is expressly forbidden without the prior consent of the Company.

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

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

ARTICLE XXXII — AMENDMENTS

This Contract 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 Contract
and binding on the parties hereto.

ARTICLE XXXIII — SEVERABILITY

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.

ARTICLE XXXIV — INTEREST PENALTY

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

	 	A.	 	If a loss payment owed by the Subscribing Reinsurer to the Company is not
received
within 45 calendar days following the date of presentation to the Subscribing
Reinsurer of information necessary to approve payment of the claim, and/or
	 
	 	B.	 	If any premium payment owed by the Company to the Subscribing Reinsurer is not
received within 45 calendar days following the date on which payment is due, and/or

2007 All Lines Casualty XOL Contract

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	 	C.	 	If any premium adjustment, agreed by either Party to the other, is not
received within 150 calendar days following the expiry or anniversary of this
Contract, and/or
	 
	 	D.	 	If any return of premiums, commissions, profit sharing, or any amounts not provided in
paragraphs A, B, and C above, are not received in accordance with the date
specified in this Contract or if no date is specified, within 90 calendar days
following the date the debtor Party received the billing.

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

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

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

Any interest owing pursuant to this Article may be waived by the Party to which it is owed.
Further, any interest calculated pursuant to this Article that is $1,000 or less shall be
waived. Any waiver of any interest pursuant to this paragraph, however, shall not affect the
waiving Party’s right to claim and/or pursue interest for any other failure by the other Party
to make payment when due under this Article.

ARTICLE XXXV — ASSIGNMENT

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

ARTICLE XXXVI — ENTIRE AGREEMENT

This Contract shall constitute the entire agreement between the Company and the Subscribing
Reinsurer with respect to the subject matter of this Contract and shall supersede all prior
understandings, negotiations and discussions, whether oral or written, by or between the
Company and the Subscribing Reinsurer relating to the subject matter hereof. There are no
general or specific warranties, representations or other agreements by or among the Company and
the Subscribing

2007 All Lines Casualty XOL Contract

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Reinsurer in connection with entering into this Contract except as specifically set forth in this
Contract. Notwithstanding the foregoing, this contract may be amended or modified only by a
writing signed by both the Company and the Subscribing Reinsurer.

2007 All Lines Casualty XOL Contract

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Appendix A

Definition of Profit Centers:

For purposes of Article I or any Articles, wherever the word Profit Centers is used, the Profit
Centers are defined to include the following Profit Centers of Liberty Mutual Agency Market (LMAM).

	 	 	 	 	 
	 	 	 	 	Business Produced
	 	 	 	 	By Agents Resident
	Profit Center	 	Legal Entities Used By Profit Center	 	in the Following State
	America First Insurance:

	 	America First Insurance Co.
	 	AK, LA, OK, TX
	 

	 	America First Lloyd’s Insurance Co.
	 	AK, LA, OK, TX
	 

	 	Peerless Insurance Co.
	 	AK, LA, OK, TX
	 
	 	 	 	 
	 

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

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

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

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

	 	Colorado Casualty Insurance Co.
	 	AZ, CO, NM, NV, WY, UT
	 

	 	Golden Eagle Insurance Corp.
	 	AZ, CO, NM, NV, WY, UT
	 

	 	One Beacon Insurance Co. Cession to	 	 
	 

	 	Peerless Insurance Co.
	 	AZ, CO, NM, NV, WY, UT
	 
	 	 	 	 
	 

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

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

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

	 	Golden Eagle Insurance Corp.
	 	CA
	 

	 	One Beacon Insurance Co. Cession to	 	 
	 

	 	Peerless Insurance Co.
	 	CA
	 

	 	Peerless Insurance Co.
	 	CA
	 
	 	 	 	 
	 

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

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

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

	 	Hawkeye-Security Insurance Co.
	 	IA, KS, MN, MO, NE, ND, SD, WI
	 

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

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

	 	One Beacon Insurance Co. Cession to	 	 
	 

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

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

	 	The Midwestern Indemnity Co
	 	IA, KS, MN, MO, NE, ND, SD, WI

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Definition of Profit Centers Continued;

	 	 	 	 	 
	 	 	 	 	Business Produced
	 	 	 	 	By Agents Resident
	Profit Center	 	Legal Entities Used By Profit Center	 	in the Following States
	Hawkeye-Security Continued:
	 	Wausau/Business Solutions Group*
	 	(Multi-State Business**)
	 

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

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

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

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

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

	 	One Beacon Insurance Co. Cession to	 	 
	 

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

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

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

	 	Globe American Casualty Co.
	 	All States
	 

	 	National Insurance Association
	 	All States
	 
	 	 	 	 
	 

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

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

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

	 	Liberty Northwest Insurance Corp.
	 	All States
	 

	 	North Pacific Insurance Company
	 	All States
	 

	 	Oregon Automobile Insurance Co.
	 	All States
	 
	 	 	 	 
	 

	 	Wausau/Business Solutions Group*
	 	(Multi-State Business**)
	 
	 	 	 	 
	Montgomery Insurance:

	 	Montgomery Mutual Insurance Co.
	 	AL, DC, DE, FL, GA, MD, MS, NC, SC, VA, WV
	 

	 	Colorado Casualty Insurance Co.
	 	AL, DC, DE, FL, GA, MD, MS, NC, SC, VA, WV
	 

	 	Excelsior Insurance Co.
	 	AL, DC, DE, FL, GA, MD, MS, NC, SC, VA, WV
	 

	 	One Beacon Insurance Co. Cession to
Peerless Insurance Co.
	 	

AL, DC, DE, FL, GA, MD, MS, NC, SC, VA, WV
	 

	 	Peerless Insurance Co.
	 	AL, DC, DE, FL, GA, MD, MS, NC, SC, VA, WV
	 

	 	The Midwestern Indemnity Co.
	 	AL, DC, DE, FL, GA, MD, MS, NC, SC, VA, WV
	 
	 	 	 	 
	 

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

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

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

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

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

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Definition of Profit Centers Continued;

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

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

	 	One Beacon Insurance Co. Cessions to
Peerless Insurance Co.
	 	CT, MA, ME, NH, NJ, NY, PA, RI, VT
	
	 

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

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

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

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

	 	Bridgefield Casualty Insurance Co.
	 	All states, for WC and
	 

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

	 	Wausau/Business Solutions Group*
	 	(Multi-State Business **)
	 
	 	 	 	 
	Wausau Insurance:

(including Business 

Solutions Group)

	 	Employers Insurance Co. of Wausau 

Wausau General Insurance Co. 

Wausau Underwriters Insurance Co.

Wausau Business Insurance Co. 

Liberty County Mutual Insurance Co. 

Liberty Mutual Insurance Co.
	 	All states, for business
classified as LMAM and
produced by this Profit Center
only, excluding business
classified as Multi-State
business
	 

	 	Liberty Mutual Fire Insurance Co.	 	 
	 

	 	LM Insurance Corp.	 	 
	 

	 	Liberty Insurance Corp.	 	 
	 

	 	The First Liberty Insurance Corp.	 	 

 

			
	*	 	Wausau/Business Solutions Group consists of: Liberty Mutual Insurance Co., Liberty Mutual Fire
Insurance Co., LM Insurance Corp., Liberty Insurance Corp., The First Liberty Insurance Corp.,
Liberty County Mutual Insurance Co., Employers Insurance Co. of Wausau, Wausau General Insurance
Co., Wausau Underwriters Insurance Co., and Wausau Business Insurance Co.
	 
	**	 	Agent responsible for the risk resides in the Profit Center but the risk is located in
multiple states both in and outside of states assigned to the Profit Center.

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Appendix B

			
	Pharmaceutical / medical risks
	 	(Version 2005-Apr)

	 	 	 	 	 
	#	 	Company Name	 	Headquarter location
	1

	 	ABBOTT LABORATORIES
	 	USA
	2

	 	AKZO NOBEL
	 	Netherlands
	3

	 	ALLERGAN
	 	USA
	4

	 	ALPHARMA
	 	USA
	5

	 	ALTANA AG
	 	Germany
	6

	 	AMGEN
	 	USA
	7

	 	AST ELLAS
	 	Japan
	8

	 	ASTRAZENECA
	 	UK
	9

	 	BARR LABORATORIES
	 	USA
	10

	 	BAXTER INTERNATIONAL
	 	USA
	11

	 	BAYER
	 	Germany
	12

	 	BEAUFOUR IPSEN
	 	France
	13

	 	BIOGEN
	 	USA
	14

	 	BIOMET
	 	USA
	15

	 	BOEHRINGER INGELHEIM
	 	Germany
	16

	 	BOSTON SCIENTIFIC CORPORATION
	 	USA
	17

	 	BRISTOL-MYERS SQUIBB
	 	USA
	18

	 	CHIRON
	 	USA
	19

	 	CSL
	 	Australia
	20

	 	DAIICHI PHARMACEUTICAL
	 	Japan
	21

	 	DAINIPPON PHARMACEUTICAL
	 	Japan
	22

	 	EDWARDS LIFESCIENCES
	 	USA
	23

	 	EISAI
	 	Japan
	24

	 	ELAN
	 	Ireland
	25

	 	FOREST LABORATORIES
	 	USA
	26

	 	GENENTECH
	 	USA
	27

	 	GENERAL ELECTRIC Healthcare
	 	USA
	28

	 	GENZYME
	 	USA
	29

	 	GLAXOSMITHKLINE
	 	UK
	30

	 	GUIDANT
	 	USA
	31

	 	HOSPIRA
	 	USA
	32

	 	IVAX
	 	USA
	33

	 	JOHNSON & JOHNSON
	 	USA
	34

	 	KING PHARMACEUTICALS
	 	USA
	35

	 	KYOWA HAKKO KOGYO
	 	Japan
	36

	 	LABORATOIRE SERVIER
	 	France
	37

	 	LILLY (ELI)
	 	USA
	38

	 	LUNDBECK
	 	Denmark
	39

	 	MEDIMMUNE
	 	USA
	40

	 	MEDTRONIC
	 	USA
	41

	 	MERCK & CO
	 	USA
	42

	 	MERCK KGAA
	 	Germany
	43

	 	MINNESOTA MINING & MANUFACTURING
	 	USA
	44

	 	MYLAN LABORATORIES
	 	USA
	45

	 	NOVARTIS
	 	Switzerland
	46

	 	NOVO NORDISK
	 	Denmark
	47

	 	OTSUKA PHARMACEUTlCAL
	 	Japan
	48

	 	PFIZER
	 	USA
	49

	 	PLIVA
	 	Croatia
	50

	 	PROCTER & GAMBLE
	 	USA

2007 All Lines Casualty XOL Contract

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	#	 	Company Name	 	Headquarter location
	51

	 	PURDUE FREDERICK / PRA Holding
	 	USA
	52

	 	ROCHE
	 	Switzerland
	53

	 	SANKYO
	 	Japan
	54

	 	SANOFI-AVENTIS
	 	France
	55

	 	SCHERING AG
	 	Germany
	56

	 	SCHERING-PLOUGH
	 	USA
	57

	 	SCHWARZ PHARMA
	 	Germany
	58

	 	SERONO
	 	Switzerland
	59

	 	SHIONOGI
	 	Japan
	60

	 	SHIRE PHARMACEUTICALS
	 	UK
	61

	 	SMITH & NEPHEW
	 	UK
	62

	 	SOLVAY
	 	Belgium
	63

	 	ST. JUDE MEDICAL
	 	USA
	64

	 	STRYKER
	 	USA
	65

	 	SUMITOMO PHARMACEUTICALS
	 	Japan
	66

	 	SYNTHES-STRATEC
	 	Switzerland
	67

	 	TAKEDA
	 	Japan
	68

	 	TANABE
	 	Japan
	69

	 	TAP Pharmaceutical Products
	 	USA
	70

	 	TEVA PHARMACEUTICAL
	 	Israel
	71

	 	TYCO Healthcare
	 	USA
	72

	 	UCB
	 	Belgium
	73

	 	WATSON PHARMACEUTICAL
	 	USA
	74

	 	WYETH
	 	USA
	75

	 	ZIMMER
	 	USA

2007 All Lines Casualty XOL Contract

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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 contract within the various attachments to the reinsurance contract,
the
term shall be understood to mean Agreement or Contract or Policy or whatever other term is
used to
designate the attached reinsurance contract.
	 
	C.	 	Wherever the term “Reinsurer” or “Reinsurers” or “Underwriters” or whatever other term is
used to
designate the reinsurer or reinsurers in the various attachments to the reinsurance agreement,
the
term shall be understood to mean Reinsurer or Reinsurers or Underwriters or whatever other
term is
used to designate the reinsuring company or companies.

INSOLVENCY FUNDS EXCLUSION CLAUSE

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

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

	1.	 	This reinsurance does not cover any loss or liability accruing to the Reassured as a member of, or
subscriber to, any association of insurers or reinsurers formed for the purpose of covering nuclear
energy risks or as a direct or indirect reinsurer of any such member, subscriber or association.
	 
	2.	 	Without in any way restricting the operation of paragraph 1. of this Clause it is understood and
agreed that for all purposes of this reinsurance all the original Policies of the Reassured (new,
renewal and replacement) of the classes specified in Clause II. in this paragraph 2. from the time
specified in Clause III. in this paragraph 2. shall be deemed to include the following provision
(specified as the Limited Exclusion Provision):
	 
	 	 	LIMITED EXCLUSION PROVISION*

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

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

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

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	 	 	BROAD EXCLUSION PROVISION*
	 
	 	 	It is agreed that the policy does not apply:

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

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

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

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

	 	IV.	 	As used in this endorsement:

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

2007 All Lines Casualty XOL Contract

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

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

	 	 	 	and includes the site on which any of the foregoing is located, all operations
conducted on such site and all premises used for such operations; “nuclear reactor”
means any apparatus designed or used to sustain nuclear fission in a
self-supporting chain reaction or to contain a critical mass of fissionable
material; with respect to injury to or destruction of property, the word “injury”
or “destruction” includes all forms of radioactive contamination of property;
“property damage” includes all forms of radioactive contamination of property.
	 
	 	V.	 	The inception dates and thereafter of all original Policies affording coverages
specified in this paragraph 3., whether new, renewal or replacement, being Policies
which become effective on or after 1st May, 1960, provided this paragraph 3. shall not
be applicable to

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

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

 

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

2007 All Lines Casualty XOL Contract

Page 39 of 42

 

 

NUCLEAR INCIDENT EXCLUSION CLAUSE — LIABILITY — REINSURANCE — CANADA

	 	 	N.M.A. 1979
	 
	1.	 	This Contract does not cover any loss or liability accruing to the Company as a member of, or
subscriber to, any association of insurers or reinsurers formed for the purpose of covering
nuclear
energy risks or as a direct or indirect reinsurer of any such member, subscriber or
association.
	 
	2.	 	Without in any way restricting the operation of Paragraph 1. of this Clause, it is agreed
that for all
purposes of this Contract all the original liability Contracts of the Company, whether new,
renewal or
replacement, of the following classes, namely,
	 
	 	 	     Personal Liability

     Farmers’ Liability

     Storekeepers’ Liability
	 
	 	 	which become effective on or after 31st December 1984, shall be deemed to include, from their
inception dates and thereafter, the following provision:
	 
	 	 	Limited Exclusion Provision —
	 
	 	 	This Policy does not apply to bodily injury or property damage with respect to which the
Insured is also insured under a Contract of nuclear energy liability insurance (whether the
Insured is unnamed in such Contract and whether or not it is legally enforceable by the
Insured) issued by the Nuclear Insurance Association of Canada or any other group or pool of
insurers or would be an Insured under any such Policy but for its termination upon exhaustion
of its limits of liability.
	 
	 	 	With respect to property, loss of use of such property shall be deemed to be property damage.
	 
	3.	 	Without in any way restricting the operation of Paragraph 1. of this Clause, it is agreed
that for all
purposes of this Contract all the original liability Contracts of the Company, whether new,
renewal or
replacement, of any class whatsoever (other than Personal Liability, Farmers’ Liability,
Storekeepers’
Liability or Automobile Liability Contracts), which become effective on or after 31st December
1984,
shall be deemed to include, from their inception dates and thereafter, the following
provision:
	 
	 	 	Broad Exclusion Provision —
	 
	 	 	It is agreed that this Policy does not apply:

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

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

2007 All Lines Casualty XOL Contract

Page 40 of 42

 

 

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

As used in this Policy:

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

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

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

2007 All Lines Casualty XOL Contract

Page 41 of 42

 

 

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.

2007 All Lines Casualty XOL Contract

Page 42 of 42

 

 

INTEREST AND LIABILITIES AGREEMENT

(hereinafter referred to as the “Agreement”)

to the

ALL LINES CASUALTY EXCESS OF LOSS

REINSURANCE CONTRACT

No. 2000260

between

PEERLESS INSURANCE COMPANY

Keene, New Hampshire

(hereinafter referred to as the “Company”)

and

LIBERTY MUTUAL INSURANCE COMPANY

Boston, Massachusetts

(hereinafter referred to as the “Subscribing Reinsurer”)

It is hereby agreed by and between the Company on the one part and the Subscribing Reinsurer on
the other part that the Subscribing Reinsurer’s share in the interests and liabilities of the
Reinsurers as set forth in the attached All Lines Casualty Excess of Loss Reinsurance Contract No.
2000260 effective 12:01 a.m., Local Standard Time, January 1, 2007, to which this Agreement is
attached hereto shall be 80%.

The share of the Subscribing Reinsurer in the interests and liabilities of all reinsurers
participating in said Contract shall be separate and apart from the shares of such other reinsurers
to the said Contract. The interests and liabilities of the Subscribing Reinsurer shall not be joint
with those of the other reinsurers and in no event shall the Subscribing Reinsurer participate in
the interests and liabilities of the other Reinsurers participating in said Contract.

All Lines Casualty Excess of Loss

Reinsurance Contract

January 1, 2007

Interest & Liabilities Agreement

CAS0700002

Page 1 of 2

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in duplicate, by
their duly authorized representatives.

In Keene, New Hampshire, this 26th day of August, 2007.

	 	 	 

	ATTEST:

	 	PEERLESS INSURANCE COMPANY
	 
	 	 
	/s/ Douglas Benedict

	 	/s/ Nancy C. Callender
	 

	 	 
	Signature

	 	Signature
	 
	 	 
	Douglas Benedict

	 	Nancy C. Callender
	Name

	 	Name
	 
	 	 
	Vice President and Chief Actuary

	 	Asst. Vice President, Reinsurance Mgmt.
	Title

	 	Title

And in Boston, Massachusetts this 13th day of September, 2007.

	 	 	 

	ATTEST:

	 	LIBERTY MUTUAL INSURANCE COMPANY
	 
	 	 
	/s/ John C. MacLean Jr.

	 	/s/ Elaine Caprio Brady
	 

	 	 
	Signature

	 	Signature
	 
	 	 
	John C. MacLean Jr.

	 	Elaine Caprio Brady
	Name

	 	Name
	 
	 	 
	Director — Ceded Reinsurance

	 	Vice President
	Title

	 	Title

All Lines Casualty Excess of Loss

Reinsurance Contract

January 1, 2007

Interest & Liabilities Agreement

Page 2 of 2exv10w155

EXHIBIT
10.155

CASUALTY EXCESS OF LOSS

REINSURANCE AGREEMENT

NO. RAMSumCX — 2005

EFFECTIVE JANUARY 1, 2005

between

BRIDGEFIELD CASUALTY INSURANCE COMPANY

BRIDGEFIELD EMPLOYERS INSURANCE COMPANY

Lakeland, Florida

(hereinafter referred to as the “Company”)

and

PEERLESS INSURANCE COMPANY

Keene, New Hampshire

(hereinafter referred to as the “Reinsurer”)

 

 

     CASUALTY
EXCESS OF LOSS REINSURANCE AGREEMENT NO. RAMSumCX — 2005

	 	 	 	 	 	 	 
	ARTICLE	 	CONTENTS	 	PAGE
	 

	 	PREAMBLE
	 	 	1	 
	I

	 	BUSINESS COVERED
	 	 	1	 
	II

	 	EFFECTIVE DATE AND TERMINATION
	 	 	1	 
	III

	 	TERRITORY
	 	 	2	 
	IV

	 	LIMIT AND RETENTION
	 	 	2	 
	V

	 	WARRANTIES
	 	 	2	 
	VI

	 	ULTIMATE NET LOSS
	 	 	2	 
	VII

	 	LOSS IN EXCESS OF POLICY LIMITS
	 	 	3	 
	VIII

	 	EXTRA CONTRACTUAL OBLIGATIONS
	 	 	3	 
	IX

	 	EXCLUSIONS
	 	 	4	 
	X

	 	SPECIAL ACCEPTANCES
	 	 	7	 
	XI

	 	LOSS OCCURRENCE
	 	 	7	 
	XII

	 	REINSURANCE PREMIUM
	 	 	7	 
	XIII

	 	REPORTS AND REMITTANCES
	 	 	8	 
	XIV

	 	NOTICE OF LOSS AND LOSS SETTLEMENTS
	 	 	8	 
	XV

	 	SALVAGE AND SUBROGATION
	 	 	9	 
	XVI

	 	FEDERAL TERRORISM EXCESS RECOVERY CLAUSE
	 	 	9	 
	XVII

	 	ACCESS TO RECORDS
	 	 	10	 
	XVIII

	 	TAXES
	 	 	10	 
	XIX

	 	CURRENCY
	 	 	10	 
	XX

	 	OFFSET
	 	 	11	 
	XXI

	 	ERRORS OR OMISSIONS
	 	 	11	 
	XXII

	 	INSOLVENCY
	 	 	11	 
	XXIII

	 	DISPUTE RESOLUTION
	 	 	11	 
	XXIV

	 	SPECIAL CONDITIONS
	 	 	13	 
	XXV

	 	RESERVES
	 	 	14	 
	XXVI

	 	SERVICE OF SUIT
	 	 	15	 
	XXVII

	 	CONFIDENTIALITY CLAUSE
	 	 	16	 
	XXVIII

	 	AMENDMENTS
	 	 	16	 
	XXIX

	 	ENTIRE AGREEMENT
	 	 	16	 
	 
	 	 	 	 	 	 
	ATTACHMENTS:

	 	EXHIBIT A — FIRST EXCESS OF LOSS	 	 	 	 
	 

	 	EXHIBIT B — SECOND EXCESS OF LOSS	 	 	 	 
	 

	 	EXHIBIT C — THIRD EXCESS OF LOSS	 	 	 	 
	 

	 	EXHIBIT D — FOURTH EXCESS OF LOSS	 	 	 	 
	 

	 	APPENDIX A — DEFINITION OF COMPANY	 	 	 	 
	 

	 	APPENDIX B — FORTUNE’S GLOBAL 500 LIST	 	 	 	 
	 

	 	APPENDIX C — PHARMACEUTICAL/MEDICAL RISKS	 	 	 	 
	 

	 	INSOLVENCY FUNDS EXCLUSION CLAUSE.	 	 	 	 
	 

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

	 	NUCLEAR INCIDENT EXCLUSION CLAUSE — LIABILITY —
REINSURANCE — CANADA.	 	 	 	 
	 

	 	NUCLEAR INCIDENT EXCLUSION CLAUSE —
REINSURANCE — NO. 4.	 	 	 	 

 

 

CASUALTY EXCESS OF LOSS

REINSURANCE AGREEMENT

No. RAMSumCX — 2005

(hereinafter referred to as the “Agreement”)

between

BRIDGEFIELD CASUALTY INSURANCE COMPANY

BRIDGEFIELD EMPLOYERS INSURANCE COMPANY

Lakeland, Florida

(hereinafter referred to as the “Company”)

and

PEERLESS INSURANCE COMPANY

Keene, New Hampshire

(hereinafter referred to as the “Reinsurer”)

ARTICLE I — BUSINESS COVERED

	A.	 	The Reinsurer shall indemnify the Company on an excess of loss basis in respect of the
Company’s Ultimate Net Loss paid or to be paid by the Company as a result of losses occurring
during the term of the Agreement for Policies in force as of January 1, 2005, and new and
renewal Policies becoming effective on or after said date, subject to the terms and conditions
contained herein.
	 
	B.	 	This Agreement is solely between the Company and the 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.
	 
	C.	 	The term “Policies” shall mean each of the Company’s binders, policies and contracts of
insurance or reinsurance on the business covered hereunder.
	 
	D.	 	Under this Agreement, the indemnity for reinsured loss applies only to Workers Compensation
and Employers Liability business written by the Company or ceded to the Company by:
Bridgefield Casualty Insurance Company and Bridgefield Employers Insurance Company, both of
Lakeland, Florida, except as excluded under Article IX — Exclusions of this Agreement, and
classified as Summit Profit Center, (see Appendix A — Definition of Company).

ARTICLE II — EFFECTIVE DATE AND TERMINATION

	A.	 	This Agreement shall become effective with respect to losses occurring on and after at 12:01
a.m., Local Standard Time, January 1, 2005, and shall remain in full force until terminated.
This Agreement may be terminated at the close of any calendar year by either party giving to
the other 90 days prior written notice by certified mail of its intention to do so.
	 
	B.	 	During the running of such notice as stipulated in Paragraph A. above, the Reinsurer shall
participate in business coming within the terms of this Agreement until the date of
termination of this Agreement.
	 
	C.	 	Upon termination of the Agreement, the Reinsurer shall be liable for the losses occurring
prior to the date of termination; however, the Reinsurer shall have no liability for losses
occurring subsequent to the termination of this Agreement.

1. No. RAMSumCX — 2005

 

 

	D.	 	If this Agreement shall terminate while a loss covered hereunder is in progress, it is
agreed that, subject to the other conditions of this Agreement, the Reinsurer shall indemnify
the Company as if the entire loss had occurred during the time this Agreement is in force
provided the loss covered hereunder started before the date of termination.

ARTICLE
III — TERRITORY

This Agreement applies to Policies issued by the Company within the United States of America, its
territories and possessions, and Canada and shall apply to losses covered hereunder wherever
occurring.

ARTICLE IV — LIMIT AND RETENTION

	A.	 	The limits and retentions provided under this Agreement are as set forth in Exhibits A, B, C
and D attached hereto and made a part of this Agreement.
	 
	B.	 	The Company’s retention and the Reinsurer’s limit of liability for each Loss Occurrence, set
forth in Section I of Exhibits A, B, C and D attached hereto and made part of this Agreement,
shall apply irrespective of the number of Policies affected or number of hazards in one
policy.
	 
	C.	 	Reinsurance of the Company’s retention, set forth in each Exhibit, shall not be deducted in
arriving at the Company’s Ultimate Net Loss herein.

ARTICLE V — WARRANTIES

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

	1.	 	$5,000,000 Maximum Any One Life for Worker’s Compensation;
	 
	2.	 	Maximum Employers Liability limit $2,000,000.

ARTICLE VI — ULTIMATE NET LOSS

	A.	 	The term “Ultimate Net Loss” shall mean the actual sum paid by the Company in settlement of
losses or liability including interest accrued prior to judgment after making deductions for
all recoveries, including subrogation, salvages, and claims upon other reinsurances, whether
collectible or not, which inure to the benefit of the Reinsurer under this Agreement, and
shall include Loss Adjustment Expenses incurred by the Company; provided, however, that in the
event of the insolvency of the Company, Ultimate Net Loss shall mean the amount of loss and
Loss Adjustment Expenses for which the Company is liable, and payment by the Reinsurer shall
be made to the liquidator, receiver, conservator or statutory successor of the Company in
accordance with the provisions of Article XXII — Insolvency of this Agreement.
	 
	B.	 	The term “Ultimate Net Loss” shall include 90% of Loss In Excess of Policy Limits and 90% of
Extra Contractual Obligations, as defined herein, but only as respects business covered under
this Agreement.
	 
	C.	 	The term “Loss Adjustment Expenses” shall mean all expenses incurred by the Company in
connection with the investigation, settlement, defense or litigation, including court costs
and post-judgment interest of any claim or loss covered by the Policies reinsured under this

2. No. RAMSumCX — 2005

 

 

	 	 	Agreement and shall include Declaratory Judgement Expenses. However, the term “Loss
Adjustment Expense” shall not include the salaries and expenses of Company employees, office
expenses and other overhead expenses.
	 
	D.	 	The term “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 covered by
Policies reinsured under this Agreement. In addition, the Company shall promptly notify the
Reinsurer of any Declaratory Judgment Expenses subject to this
Agreement.
	 
	E.	 	All recoveries, salvages or payments recovered or received subsequent to a loss settlement
under this Agreement shall be applied as if recovered or received prior to the aforesaid
settlement and all necessary adjustments to the loss settlement shall be made by the parties
hereto.
	 
	F.	 	Nothing in this Article shall be construed to mean that losses are not recoverable hereunder
until the Ultimate Net Loss of the Company has been ascertained.

ARTICLE VII — LOSS IN EXCESS OF POLICY LIMITS

	A.	 	“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 reinsured or in the preparation or prosecution
of an appeal consequent upon such action.
	 
	B.	 	However, this Article 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.
	 
	C.	 	For the purposes of this Article, 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.
	 
	D.	 	With respect to coverage provided under this Article, recoveries from any insurance or
reinsurance other than this Agreement shall be deducted to arrive at the amount of the
Company’s Ultimate Net Loss.

ARTICLE
VIII — EXTRA CONTRACTUAL OBLIGATIONS

	A.	 	“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 reinsured or in the preparation or
prosecution of an appeal consequent upon such action.

3. No. RAMSumCX — 2005

 

 

	B.	 	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.
	 
	C.	 	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.
	 
	D.	 	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 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.
	 
	E.	 	If any provision of this Article 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 any such provision in any other jurisdiction.

ARTICLE IX — EXCLUSIONS

THIS AGREEMENT DOES NOT COVER:

	A.	 	THE FOLLOWING GENERAL CATEGORIES

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

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

4. No. RAMSumCX — 2005

 

 

	 	b.	 	Nuclear Incident Exclusion Clause — Liability — Reinsurance — Canada.
	 
	 	c.	 	Nuclear Incident Exclusion Clause — Reinsurance — No. 4.

	B.	 	THE FOLLOWING INSURANCE COVERAGES

	 	1.	 	Fiduciary Liability.
	 
	 	2.	 	Surety and Credit insurance.
	 
	 	3.	 	Fidelity Bonds.
	 
	 	4.	 	Credit and Financial Guarantee.
	 
	 	5.	 	Securities and Exchange Liability.
	 
	 	6.	 	Malpractice insurance, Directors and Officers Liability insurance or any form of
Errors and Omissions or Professional Liability insurance, except as provided
for under the Company’s Underwriting Guidelines.
	 
	 	7.	 	Advertisers’, Broadcasters’ and Telecasters’ Liability as respects Personal Injury
Liability except as provided for under the Company’s Underwriting Guidelines.
	 
	 	8.	 	Kidnap, Extortion and Ransom Liability.
	 
	 	9.	 	Protection and Indemnity (Ocean Marine) except for hulls under 50 feet.
	 
	 	10.	 	Entertainment Business, defined as Feature Film and Major Motion Picture Studios,
Commercial Negative Film Coverages, Cast Coverage, Completion Bond and Television
Productions.

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

	 	1.	 	Operations under the jurisdiction of the U.S. Longshoremen’s and Harbor Workers’
Act, the Jones Act and the Maritime Employers Liability Act except when written as
incidental coverages as defined in the Company’s Underwriting Guidelines.
	 
	 	2.	 	Operation of docks or wharves, other than small marinas or pleasure docks.
	 
	 	3.	 	Risks involving known exposure to asbestos.
	 
	 	4.	 	All railway operations except sidetrack agreements.
	 
	 	5.	 	Amusement parks, carnivals or circuses, except county or country fairs.
	 
	 	6.	 	Subaqueous operations.
	 
	 	7.	 	Mining.
	 
	 	8.	 	Demolition of buildings or structures in excess of three stories or 50 feet in height.
	 
	 	9.	 	Shoring, underpinning or moving of buildings or structures.

5. No. RAMSumCX — 2005

 

 

	 	10.	 	Manufacture, sale, rental, lease, erection or repair of scaffolds.
	 
	 	11.	 	Construction of bridges over 50 feet, and tunnels or dams.

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

	 	 	 	NOTE: An explosive substance is defined as any substance manufactured for the express
purpose of exploding as differentiated from commodities used industrially and which are
only incidentally explosive.
	 
	 	13.	 	Manufacture, production, refining, storage, wholesale distribution or transportation
of natural or artificial fuel gas, butane, propane or liquefied petroleum gases or
gasoline, except when written as incidental coverages as defined in the Company’s
Underwriting Guidelines.
	 
	 	14.	 	Onshore and offshore gas and oil drilling operations.
	 
	 	15.	 	Ownership, maintenance or use of any airport or aircraft, including fueling, or any
device or machine intended for and/or aiding in the achievement of atmospheric flight,
projection or orbit except as respects corporate-owned aircraft with capacity of up to
four passengers.
	 
	 	16.	 	Municipalities, except for those with a population less than 25,000.
	 
	 	17.	 	Any actual or alleged liability whatsoever for any claim or claims in respect of loss
or losses directly or indirectly arising out of, resulting from or in consequence of, or
in any way involving asbestos, or any materials containing asbestos in whatever form or
quantity.

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

6. No. RAMSumCX — 2005

 

 

ARTICLE X — SPECIAL ACCEPTANCES

	A.	 	Risks which are beyond the terms, conditions or limitations of this Agreement may be
submitted to the Reinsurer for special acceptance hereunder. Upon receipt of approval from
the Reinsurer, such acceptance shall bind the Reinsurer for all interests and liabilities of
said risk. The Reinsurer’s failure to respond within 2 full business days shall be deemed
approval of a risk submitted for special acceptance.
	 
	B.	 	When a risk is specially accepted, such risk shall be covered under the terms and conditions
of this Agreement, except as such terms shall be modified by such acceptance. Premiums and
losses derived from any special acceptance shall be included with other data for rating
purposes of this Agreement. Once a risk has been accepted under the provisions of this
Article, it will automatically be included at renewal unless there have been material changes
to the risk, in which case the risk will be resubmitted.

ARTICLE XI — LOSS OCCURRENCE

	 	A.	 	The term “Loss Occurrence” as used herein is defined as an accident or occurrence
or series of accidents or occurrences arising out of or caused by one event, except that
as respects occupational disease and cumulative trauma:
	 
	 	B.	 	As respects an occupational or other disease or cumulative injury under Workers
Compensation and Employers Liability, each case of an employee contracting any disease
for which the Company may be liable shall be considered a separate and distinct
occurrence and the date of each occurrence shall be deemed to be as follows:

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

ARTICLE XII — REINSURANCE PREMIUM

The rates set forth in Section 3 of the attached Exhibits A, B. C and D, shall be applied to the
Company’s Subject Earned Premium for the business covered as stated in Paragraph D. of Article I
-Business Covered.

	A.	 	The term “Subject Earned Premium” as used herein will be based on Standard Premium less
approved premium discounts.

7. No. RAMSumCX — 2005

 

 

	B.	 	The term “Standard Premium” is determined as
defined in NCCI’s Basic Manual. It is
determined on the basis of authorized rates, disease loadings, nonrateable elements, aircraft
seat surcharges, premium for increase limits of liability, experience rating modification,
applicable schedule rating modifications, minimum premiums and other approved rate
modifications. It excludes expense constant, Terrorism Risk Insurance Act of 2002,
retrospective rating plan adjustments and premium discounts.

ARTICLE XIII — REPORTS AND REMITTANCES

	A.	 	The Company shall furnish the Reinsurer with all necessary data respecting premiums and
losses for as long as one of the parties hereto has a claim against the other arising from
this Agreement.
	 
	B.	 	Quarterly Deposit premiums equal to 1/4
 of the 100% of Annual Deposit Premium will be
remitted on January 15, May 15, August 15 and November 15, 2005 according to the schedule
below. The Company shall submit finalized accounts to the Reinsurer on February 15, 2006,
summarizing the actual Subject Earned premium for the January 1, 2005 through December 31,
2005 coverage period. The difference between the deposit premium and actual subject earned
premium will be settled to/from the Company within 15 days of February 15, 2006. However, in
no event shall the annual adjusted premium be less than the Annual Minimum Premium for each
layer, set forth below.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Layer — States	 	Annual Minimum	 	Annual Deposit	 	Quarterly Deposit
	1. Non-Florida States
	 	$	2,222,069	 	 	$	2,777,586	 	 	$	694,397	 
	2. Non-Florida States
	 	$	1,365,759	 	 	$	1,707,199	 	 	$	426,800	 
	Florida States
	 	$	6,285,012	 	 	$	7,856,266	 	 	$	1,964,066	 
	3. All States
	 	$	1,113,594	 	 	$	1,391,993	 	 	$	347,998	 
	4. All States
	 	$	1,164,212	 	 	$	1,455,265	 	 	$	363,816	 

	C.	 	Payment by the Reinsurer of its portion of loss and Loss Adjustment Expenses paid by the
Company shall be made by the Reinsurer to the Company within 15 days after proof of payment
is received by the Reinsurer.

ARTICLE XIV — NOTICE OF LOSS AND LOSS SETTLEMENT

	A.	 	The Company shall advise the Reinsurer promptly, but in no event later than 30 days, of all
losses which, in the opinion of the Company, may result in a claim hereunder and of all
subsequent developments thereto which, in the opinion of the Company, may materially affect
the position of the Reinsurer. Notwithstanding the foregoing, the Company shall give notice
to the Reinsurer once a claim exceeds the retention of the primary company or has the
potential to exceed the retention.
	 
	B.	 	The Company shall advise the Reinsurer of all claims which:

	 	1.	 	Are reserved by the Company for an amount in excess of 50% of its retention;
	 
	 	2.	 	Originate from fatal injuries;

8. No. RAMSumCX — 2005

 

 

	 	3.	 	Originate from the following kinds of bodily injury:

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

	C.	 	All loss settlements made by the Company, provided they are within the terms of this
Contract, shall be unconditionally binding upon the Reinsurer, who agrees to pay all amounts
for which they may be liable immediately, but in no event later than 15, days, upon being
furnished by the Company with reasonable evidence of the amount due.
	 
	D.	 	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
or control 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.

ARTICLE XV — SALVAGE AND SUBROGATION

	A.	 	In the event of the payment of any indemnity by the Reinsurer under this Agreement, the
Reinsurer shall be subrogated, to the extent of such payment, to all of the rights of the
Company against any person or entity legally responsible for damages of the loss. The
Company agrees to enforce such rights; but, in case the Company refuses or neglects to do so,
the Reinsurer is hereby authorized and empowered to bring any appropriate action in the name
of the Company or their policyholders or otherwise to enforce such rights.
	 
	B.	 	From any amount recovered by subrogation, salvage or other means, there shall first be
deducted the expenses incurred in effecting the recovery. The balance shall then be used to
reimburse the excess carriers in the inverse order to that in which their respective
liabilities attached, before being used to reimburse the Company for its primary loss.

ARTICLE XVI — FEDERAL TERRORISM RECOVERY CLAUSE

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

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

If one or more loss occurrences commencing during the term of this Agreement result(s) in
reinsurance recoveries to the Company under this Agreement and reimbursement under TRIA, and such
amounts, together with any other reinsurance recoveries to the Company for said loss
occurrence(s), exceed the total amount of “Insured Losses” to the Company, any amount in excess

9. No. RAMSumCX — 2005

 

 

thereof shall be held by the Company. The Company shall then reimburse the Reinsurer a portion of
such excess recovery in an amount equal to the proportion that the Reinsurer’s payment under this
Agreement bears to the total treaty reinsurance recoveries to the Company for Insured Losses for
said loss occurrence(s). Provided, however, that in no event shall such reimbursement exceed the
amount paid by the Reinsurer to the Company under this Agreement.

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

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

ARTICLE XVII — 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 XVIII — TAXES

	A.	 	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 territorial taxing authority.
	 
	B.	 	The Reinsurer shall allow for the purpose of paying 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 such tax. In the event of any return
premium, the Reinsurer shall deduct the aforesaid percentage from the return premium payable
hereon and the Company or its agent shall recover such tax from the United Stated Government.

ARTICLE XIX — CURRENCY

Wherever the word “dollars” or the “$” symbol is used in this Agreement, it shall mean dollars of
the United States of America, excepting in those cases where the Policy is issued by the Company in
Canadian dollars, in which case it shall mean dollars of Canada. In the event the Company is
involved in a toss requiring payment in United States and Canadian currency, the Company’s
retention and the limit of liability of the Reinsurer shall be apportioned between the two
currencies in the same proportion as the amount of net loss in each currency bears to the total
amount of net loss paid by the Company. For the purposes of this Agreement, where the Company
receives premiums or pays losses in currencies other than United States or Canadian currency, such
premiums and losses shall be converted into United States dollars at the actual rates of exchange
at which the premiums and losses are entered in the Company’s books.

10. No. RAMSumCX — 2005

 

 

ARTICLE XX — 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 and any other
agreements heretofore or hereafter entered into between the parties 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 the applicable law, statute or regulation governing such offset.

ARTICLE XXI — ERRORS OR OMISSIONS

Errors or omissions of an administrative nature on the part of the Company shall not invalidate
the reinsurance under this Agreement provided such errors or omissions are corrected promptly, but
not later than 30 days after discovery thereof; but the liability of the Reinsurer under this
Agreement or any exhibits, addenda, or endorsements attached hereto shall in no event exceed the
limits specified herein nor be extended to cover any risks, perils, lines of business or classes
of insurance generally or specifically excluded herein.

ARTICLE
XXII — INSOLVENCY

In the event of insolvency and the appointment of a conservator, liquidator, or statutory successor
of the Company the portion of any risk or obligation assumed by the Reinsurer shall be payable to
the conservator, liquidator, or statutory successor on the basis of claims allowed against the
insolvent Company by any court of competent jurisdiction or by any conservator, liquidator, or
statutory successor of the Company having authority to allow such claims, without diminution
because of that insolvency, or because the conservator, liquidator, or statutory successor has
failed to pay all or a portion of any claims. Payments by the Reinsurer shall be made directly to
the Company or to its conservator, liquidator, or statutory successor, except where the contract of
insurance or reinsurance specially provides another payee of such reinsurance in the event of the
insolvency of the Company. The conservator, liquidator, or statutory successor of the Company shall
give written notice of the pendency of a claim against the Company indicating the policy or bond
reinsured, within a reasonable time after such claim is filed and the Reinsurer may interpose, at
its own expense, in the proceeding where such claim is to be adjudicated, any defense or defenses
which it may deem available to the Company or its conservator, liquidator, or statutory successor.
The expense thus incurred by the Reinsurer shall be payable subject to court approval out of the
estate of the insolvent Company as part of the expense of conservation or liquidation to the extent
of a proportionate share of the benefit which may accrue to the Company in conservation or
liquidation, solely as a result of the defense undertaken by the Reinsurer.

ARTICLE XXIII — DISPUTE RESOLUTION

Part I — Choice Of Law And Forum

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

Part II — Mediation

If a dispute between the Company and the Reinsurer, arising out of the provisions of this Agreement

11. No. RAMSumCX — 2005

 

 

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. The parties shall
choose a mediator within thirty (30) days of a written demand by either party for mediation under
Part II of this Article XXIII. The mediator shall be a disinterested current or retired insurance
or reinsurance officer knowledgeable in reinsurance matters. The parties shall have sixty (60)
days from the selection of the mediator in which to mediate the dispute to resolution. In the
event that mediation fails to resolve the dispute, the parties shall proceed to arbitration in
accordance with Part III of this Article XXIII.

Part III — Arbitration

	A.	 	Resolution of Disputes — As a condition precedent to any right 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. The mediator from Part II many not be an arbitrator or an umpire.
	 
	C.	 	Appointment of Arbitrators — The members of the arbitration panel shall be chosen from
disinterested current or retired insurance or reinsurance officers knowledgeable in
reinsurance matters. 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, to the other party (hereinafter referred to as the
“respondent”) together with his 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. 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.	 	Involvement of Other Reinsurers — If more than one reinsurer is involved in the same dispute,
all such reinsurers shall constitute and act as one party for purposes of this Article and
communications shall be made by the Company to each of the reinsurers constituting the one
party; provided, however, nothing herein shall impair the right of such reinsurers to assert
several, rather than joint, defenses or claims, nor be construed as changing the liability of
the reinsurers under the terms of this Agreement from several to joint.
	 
	F.	 	If the Company is involved in a dispute under the terms of this Agreement and in one or more
separate disputes with one or more other reinsurers in which common questions of law or fact
are in issue, the Company or the Reinsurer, at its option, may join with such other reinsurers
in a common arbitration proceeding under the terms of this Article. If the Company and such
other reinsurers have commenced arbitration, the Reinsurer may at its option join such
proceeding for the determination of the dispute between the Company and the Reinsurer.

12. No. RAMSumCX — 2005

 

 

	G.	 	Submission of Dispute to Panel — Unless otherwise extended by the arbitration panel or
agreed to by the parties, each party shall submit its case to the panel within 30 days after
the selection of the umpire.
	 
	H.	 	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 proceeding. In reaching any decision,
the panel shall give due consideration to the customs and usages of the insurance and
reinsurance business.
	 
	I.	 	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.
	 
	J.	 	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 XXIV — SPECIAL CONDITIONS

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

	A.	 	A State Insurance Department or other legal authority orders the Reinsurer to cease
writing business; or
	 
	B.	 	The Reinsurer has become insolvent or has been placed into liquidation or receivership
(whether voluntary or involuntary), or there have been instituted against it proceedings for
the appointment of a receiver, liquidator, rehabilitator, conservator, trustee in bankruptcy
or other agent known by whatever name, to take possession of its assets or control of its
operations; or
	 
	C.	 	The Reinsurer’s policyholders’ surplus has been reduced by 25% of the amount of surplus at
the inception of this Contract; or
	 
	D.	 	The Reinsurer has become merged with, acquired or controlled by any company, corporation or
individual(s) not controlling the Reinsurer’s operations at the inception of this Contract.
	 
	E.	 	The Reinsurer’s A.M. Best Rating has been assigned or downgraded below A- or Standard and
Poor’s rating has been assigned or downgraded below A-.

The coverage afforded by this Contract shall cease as of the date of termination and the Reinsurer
shall return the unearned premium net of ceding commission, if any. If coverage hereunder
terminates while a claim covered by this Contract is in progress, the Reinsurer shall be liable
subject to all other conditions hereof for its proportion of the entire claim, provided that the
event giving rise to the claim started before such termination.

If the Company chooses to effect termination, it shall have the option to commute the Reinsurer’s
liability for loss(es), whether reported or unreported, on policies covered by this Contract as of
the effective date of termination. The Company shall submit a statement of valuation of the
outstanding claim or claims showing the elements considered reasonable to establish the “ultimate
net loss,” and the Reinsurer shall pay the amount requested. In the event the Company and the
Reinsurer cannot agree on the statement of valuation of the Reinsurer’s liability under such
policies, either party may request in writing that the difference be settles by a panel of three
actuaries. Each party shall appoint

13. No. RAMSumCX — 2005

 

 

an actuary to access such liability within 15 days after receipt of the written request for
commutation. Upon such appointment, the two actuaries shall appoint a third actuary. If the two
actuaries fail to agree on the third actuary within 30 days of their appointment, each of them
shall nominate three individuals, of whom the other shall decline two, and the final decision
shall be made by drawing lots. The actuaries shall then investigate and capitalize such loss(es)
within 30 days. As used herein, capitalize shall mean to determine the present value of ultimate
net losses, without regard to the Reinsurer’s ability to pay such losses. The panel shall meet in
Boston, Massachusetts, unless the Company and Reinsurer agree otherwise.

All actuaries shall be disinterested in the outcome of the commutation and shall be Fellows of the
Society of Actuaries/Fellows of the Casualty Actuarial Society. Except as stated below, the
expense of the actuaries and of the commutation shall be equally divided between the parties of
the commutation.

The decision in writing of the actuaries, when filed with the parties hereto, shall be final and
binding, except that if the Company does not agree with the capitalized value of the loss(es), the
Company shall have no obligation to commute. In the event the Company does not agree with the
capitalized value of the loss(es) and does not move forward with commutation, the expense of the
actuaries [including reasonable expense of the actuary appointed by the Reinsurer] will be paid by
the Company. If the Contract is commuted, payment by the Reinsurer to the Company or any other
third party mutually agreed upon by the Reinsurer and the Company shall constitute a complete and
final release of the Reinsurer in respect to its liability under this Contract.

ARTICLE XXV — RESERVES

	A.	 	If a jurisdiction of the United States will not permit the Reassured, in the statements
required to be filed with its regulatory authority(ies), to receive full credit as admitted
reinsurance for any Reinsurer’s share of obligations, the Reassured shall forward to such
Reinsurer a statement of the Reinsurer’s share of such obligations. Upon receipt of such
statement the Reinsurer’s share of such obligations. Upon receipt of such statement the
Reinsurer shall promptly apply for, and provide the Reassured with, a “clean,” unconditional
and irrevocable Letter of Credit, in the amount specified in the statement submitted, with
terms and bank acceptable to the regulatory authority(ies) having jurisdiction over the
Reassured.
	 
	B.	 	“Obligations,” as used in this Article, shall mean the sum of losses paid and allocated loss
adjustment expenses paid by the Reassured but not yet recovered from the Reinsurer, plus
reserves for reported losses, allocated loss adjustment expenses and losses incurred but not
reported.
	 
	C.	 	The Reinsurer hereby agrees that the Letter of Credit will provide for automatic extension of
the Letter of Credit without amendment for one year from the date of expiration of said Letter
or any future expiration date unless thirty (30) days prior to any expiration the issuing bank
shall notify the Reassured by registered mail that the issuing bank elects not to consider the
Letter of Credit renewed for any additional period. An issuing bank, not a “qualified bank” as
defined by Regulation No. 133 promulgated by the Insurance Department of the State of New
York, shall provide sixty (60) days notice to the Reassured prior to any expiration.
	 
	D.	 	Notwithstanding any other provision of this Contract, the Reassured or any successor by
operation of law of the Reassured including, without limitation, any Liguidator,
rehabilitator, receiver or conservator of the Reassured may draw upon such credit, without
diminution because of the insolvency of any party hereto, at any time and undertakes to use
and apply such credit for one or more of the following purposes only:

14. No. RAMSumCX — 2005

 

	 	1.	 	To pay the Reinsurer’s share or to reimburse the Reassured for the Reinsurer’s share
of any obligations, as stipulated in the statement submitted by the Reassured to the
Reinsurer, which is due to the Reassured and not otherwise paid by the Reinsurer.
	 
	 	2.	 	In the event the Reassured has received effective notice of non-renewal of the
Letter of Credit and the Reinsurer’s liability remains unliquidated and undischarged
thirty (30) days prior to the expiry date of the Letter of Credit and place such sums in
an interest bearing trust account to secure the continuing liabilities of the Reinsurer
under this Contract until a renewal Letter of Credit acceptable to the regulatory
authority(ies) having jurisdiction over the Reassured, or a substitute in lieu thereof
acceptable to the regulatory authority(ies) having jurisdiction over the Reassured, has
been received by the Reassured. The Reassured shall provide to the Reinsurer payment of
any interest thereon accruing from such account.
	 
	 	3.	 	To make refund of any sum which is in excess of the actual amount required for
Sections 1. and 2. of this paragraph.

	E.	 	At annual intervals or more frequently as determined by the Reassured, but never more
frequently than quarterly, the Reassured shall prepare a specific statement, for the sole
purpose of amending the Letter of Credit, of the Reinsurer’s share of any obligations. If
the statement shows that the Reinsurer’s share of obligations exceeds the balance of credit as
of the statement date, the Reinsurer shall, within thirty (30) days after receipt of notice of
such excess, secure delivery to the Reassured of an amendment of the Letter of Credit
increasing the amount of credit by the amount of such difference. If the statement shows,
however, that the Reinsurer’s share of obligations is less than the balance of credit as of
the statement date, the Reassured shall, within thirty (30) days after receipt of a written
request from the Reinsurer, release such excess credit by agreeing to secure an amendment to
the Letter of Credit reducing the amount of credit available by the amount of such excess
credit.
	 
	F.	 	The bank shall have no responsibility whatsoever in connection with the propriety of
withdrawals made by the Reassured or the disposition of funds withdrawn, except to assure that
withdrawals are made only upon the order of properly authorized representatives of the
Reassured. The Reassured shall incur no obligation to the bank in acting upon the credit,
other than as appears in the express terms thereof.

ARTICLE XXVI — SERVICE OF SUIT

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

This Service of Suit Article will not be read to conflict with or override the obligations of the
parties to arbitrate their disputes as provided for in the Arbitration Article. This Article is
intended as an aid to compelling arbitration or enforcing such arbitration or arbitral award, not
as an alternative to the Arbitration Article for resolving disputes arising out of this Agreement.

In the event of the failure of the Reinsurers to pay any amount claimed to be due hereunder, the
Reinsurers, 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 Reinsurers’ rights to commence an action in any Court of competent
jurisdiction in the United States, to remove an action to a United States District Court, or to
seek a transfer of a case to another Court as permitted by the laws of the United States or of any
state in the

15. No. RAMSumCX — 2005

 

United States. The Reinsurers, once the appropriate Court is selected, whether such court is the
one originally chosen by the company and accepted by Reinsurers or is determined by removal,
transfer, or otherwise, as provided for above, will comply with all requirements necessary to give
said Court jurisdiction and, in any suit instituted against any of them upon this Agreement, will
abide by the final decision of such Court or of any Appellate Court in the event of an appeal.

Service of process in such suit may be made upon Mendes & Mount, LLP, 750 7th Avenue,
New York, NY 10019-6829.

The above-named are authorized and directed to accept service of process on behalf of Reinsurers
in any such suit.

Further, pursuant to any statute of any state, territory or district of the United States that
makes provision therefor, the Reinsurers hereby designate 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 their true and lawful attorney upon whom may be served any
lawful process in any action, suit or proceedings instituted by or on behalf of the Company or any
beneficiary hereunder arising out of this Agreement, and hereby designate the above-named as the
person to whom the said officer is authorized to mail such process or a true copy thereof.

ARTICLE XXVII — CONFIDENTIALITY CLAUSE

All terms and conditions of this Agreement, any materials and any non-public personally
identifiable information provided in the course of inspection shall be kept confidential by the
Reinsurer as against third parties, unless the disclosure is required pursuant to process of law
or unless the disclosure is to Reinsurer’s retrocessionaires, financial auditors, governing
regulatory bodies or other entities with which Reinsurer may from time to time contract in
accordance with the fulfillment of the terms of this Agreement and which disclosure shall comply
with all state and federal statutes and regulations governing the disclosure of non-public
personally identifiable information. “Non-public personally identifiable information” is financial
or medical information of or concerning a public or obtained from the person who is the subject
and which information is included in data files exchanged by the parties hereto. For the purposes
hereof, the terms shall include data elements such as names and addresses of individuals.
Disclosing or using this information for any purpose beyond the scope of this Agreement, or beyond
the exceptions set forth above, is expressly forbidden without the prior consent of the Company.

ARTICLE
XXVIII — AMENDMENTS

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

ARTICLE XXVIX — ENTIRE AGREEMENT

This written Contract and the underwriting information provided for its formation and mutually
agreed letters of intent, clarification and/or understanding, if any, constitute the entire
agreement between the parties. However, in no event shall there be any provision that provides a
guarantee of profit, directly or indirectly, from the Reinsurer to the Company or from the Company
to the Reinsurer.

16. No. RAMSumCX — 2005

 

IN WITNESS WHEREOF, the parties hereto have caused this Contract to be executed by their duly
authorized representative.

In Lakeland, Florida, this 29th day of September, 2005.

	 	 	 

	ATTEST:

	 	BRIDGEFIELD CASUALTY INSURANCE COMPANY

BRIDGEFIELD EMPLOYERS INSURANCE COMPANY

	/s/  

	 	/s/  
	 

	 	 

And in Keene, New Hampshire, this 29th day of September, 2005.

	 	 	 

	ATTEST:

	 	PEERLESS INSURANCE COMPANY

	/s/ Diana L Kelly

	 	/s/ Nancy C. Callender
	 

	 	 

17. No. RAMSumCX - 2005

 

EXHIBIT A

FIRST EXCESS OF LOSS

IS ATTACHED TO AND

FORMS PART OF

REINSURANCE AGREEMENT No. RAMSumCX — 2005

 

 

EXHIBIT A — FIRST EXCESS OF LOSS

	 	 	 	 	 
	SECTION	 	SUBJECT	 	PAGE
	1	 	LIMIT AND RETENTION
	 	A-1
	2	 	REINSTATEMENT
	 	A-1
	3	 	REINSURANCE PREMIUM
	 	A-1

 

 

EXHIBIT A — FIRST EXCESS OF LOSS

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

The Company shall retain the first $1,000,000 of Ultimate Net Loss as respects any one loss
occurrence in non-Florida states. The Reinsurers shall then be liable for the amount by which the
Companies’ Ultimate Net Loss exceeds the Company’s retention of $1,000,000 but the liability of the
Reinsurers shall never exceed $1,000,000 any one loss occurrence in non-Florida states.

SECTION 2 — REINSTATEMENT

	A.	 	It is understood and agreed that each claim hereunder reduces the amount of indemnity from
the time of occurrence of the loss by the sum paid, but any amount so exhausted is hereby
reinstated from the time the Loss Occurrence commences hereon and shall be limited in all
during the term of this Agreement to an annual aggregate liability of $10,000,000.

	B.	 	Notwithstanding the foregoing, Reinsurers’ liability for losses arising out of an act of
Terrorism shall be limited to $1,000,000 and part of the annual aggregate for non-Florida
states, any one Agreement Year.

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

	 	1.	 	Any actual or threatened violent act or act harmful to human life, tangible
or intangible property or infrastructure directed towards or having the effect of (a)
influencing or protesting against any de jure or de facto government or policy
thereof, (b) intimidating, coercing or putting in fear a civilian population or
section thereof for the purpose of establishing or advancing a specific ideological,
religious or political system of thought, perpetrated by a specific individual or
group directly or indirectly through agents acting on behalf of said individual or
group or (c) retaliating against any country for direct or vicarious support by that
country of any other government or political system.
	 
	 	2.	 	Any act declared pursuant to the Terrorism Risk Insurance Act of 2002 shall
also be considered an “Act of Terrorism” for purposes of this Agreement.

	D.	 	The term “Agreement Year” shall mean each consecutive twelve month period commencing January
1 and ending December 31.

SECTION 3 — REINSURANCE PREMIUM

	 	 	 	 	 
	States	 	Rate applied to
 Subject Earned Premium
	 
	 	 	 	 
	Non-Florida
	 	 	2.050	%
	 
	 	 	 	 
	Total Subject Premium to the Layer:
	 	$	135,492,000	 
	Estimated Subject Net Earned Premium:
	 	$	2,777,586	 

A-1

 

EXHIBIT B

SECOND EXCESS OF LOSS

IS ATTACHED TO AND

FORMS PART OF

REINSURANCE AGREEMENT No. RAMSumCX — 2005

 

 

EXHIBIT B — SECOND EXCESS OF LOSS

	 	 	 	 	 
	SECTION	 	SUBJECT	 	PAGE
	1	 	LIMIT AND RETENTION
	 	B-1
	2	 	REINSTATEMENT
	 	B-1
	3	 	REINSURANCE PREMIUM
	 	B-1

 

 

EXHIBIT B — SECOND EXCESS OF LOSS

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

The Company shall retain the first $2,000,000 of ultimate net loss as respects any one loss
occurrence. The Reinsurer shall then be liable for the amount by which the Companies’ ultimate net
loss exceeds the Company’s retention of $2,000,000 but the liability of the Reinsurer shall never
exceed $3,000,000 any one loss occurrence.

SECTION 2 — REINSTATEMENT

	A.	 	It is understood and agreed that each claim hereunder reduces the amount of indemnity from
the time of occurrence of the loss by the sum paid, but any amount so exhausted is hereby
reinstated from the time the Loss Occurrence commences and shall be limited to an annual
aggregate liability of losses in the state of Florida of $30,000,000 and losses in non-Florida
states of $9,000,000.

	B.	 	Notwithstanding the foregoing, Reinsurers’ liability for losses arising out of an act of
Terrorism shall be limited to $3,000,000 occurrence limit in the aggregate for the state of
Florida and $3,000,000 occurrence limit in the aggregate for all other states, any one
Agreement Year.
	 
	C.	 	An “Act of Terrorism” for purposes of this Agreement shall mean:

	 	1.	 	Any actual or threatened violent act or act harmful to human life, tangible or
intangible property or infrastructure directed towards or having the effect of (a)
influencing or protesting against any de jure or de facto government or policy thereof,
(b) intimidating, coercing or putting in fear a civilian population or section thereof
for the purpose of establishing or advancing a specific ideological, religious or
political system of thought, perpetrated by a specific individual or group directly or
indirectly through agents acting on behalf of said individual or group or (c) retaliating
against any country for direct or vicarious support by that country of any other
government or political system.
	 
	 	2.	 	Any act declared pursuant to the Terrorism Risk Insurance Act of 2002 shall also be
considered an “Act of Terrorism” for purposes of this Agreement.

	D.	 	The term “Agreement Year” shall mean each consecutive twelve month period commencing January
1 and ending December 31.

SECTION 3 — REINSURANCE PREMIUM

	 	 	 	 	 
	States	 	Rate applied to
 Subject Earned Premium
	 
	 	 	 	 
	Non-Florida
	 	 	1.260	%
	Florida
	 	 	1.580	%
	 
	 	 	 	 
	Total
Subject Premium to the Layer — Non-Florida:
	 	$	135,492,000	 
	Total Subject Premium to the Layer — Florida:
	 	$	497,232,000	 
	Estimated Subject Net Earned Premium — Non-Florida:
	 	$	1,707,199	 
	Estimated Subject Net Earned Premium — Florida:
	 	$	7,856,266	 

B-1

 

EXHIBIT C

THIRD EXCESS OF LOSS

IS ATTACHED TO AND

FORMS PART OF

REINSURANCE AGREEMENT No. RAMSumCX — 2005

 

 

EXHIBIT C — THIRD EXCESS OF LOSS

	 	 	 	 	 
	SECTION	 	SUBJECT	 	PAGE
	1
	 	LIMIT AND RETENTION
	 	C-1
	2	 	REINSTATEMENT
	 	C-1
	3	 	REINSURANCE PREMIUM
	 	C-1

 

 

EXHIBIT C — THIRD EXCESS OF LOSS

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

The Company shall retain the first $5,000,000 of ultimate net loss as respects any one loss
occurrence. The Reinsurer shall then be liable for the amount by which the Companies’ ultimate net
loss exceeds the Company’s retention of $5,000,000 but the liability of the Reinsurer shall never
exceed $5,000,000 any one loss occurrence.

SECTION 2 — REINSTATEMENT

	A.	 	It is understood and agreed that each claim hereunder reduces the amount of indemnity from
the time of occurrence of the loss by the sum paid, but any amount so exhausted is hereby
reinstated from the time the Loss Occurrence commences hereon. Three such
reinstatements shall be provided under this Exhibit.

	B.	 	The first and the second reinstatement shall be provided without payment of an additional
premium. The third reinstatement shall be provided for an additional premium calculated at
pro rata of the annual premium hereon, being pro rata only as to the limit of liability of
this Exhibit so reinstated and 100% as to the annual premium.

	C.	 	Notwithstanding the foregoing, Reinsurers’ liability for losses arising out of an act of
Terrorism shall be limited to only $5,000,000 in the aggregate for all states, any one
Agreement Year.
	 
	D.	 	An “Act of Terrorism” for purposes of this Agreement shall mean:

	 	1.	 	Any actual or threatened violent act or act harmful to human life, tangible or
intangible property or infrastructure directed towards or having the effect of (a)
influencing or protesting against any de jure or de facto government or policy thereof,
(b) intimidating, coercing or putting in fear a civilian population or section thereof
for the purpose of establishing or advancing a specific ideological, religious or
political system of thought, perpetrated by a specific individual or group directly or
indirectly through agents acting on behalf of said individual or group or (c) retaliating
against any country for direct or vicarious support by that country of any other
government or political system.
	 
	 	2.	 	Any act declared pursuant to the Terrorism Risk Insurance Act of 2002 shall also be
considered an “Act of Terrorism” for purposes of this Agreement.

	E.	 	The term “Agreement Year” shall mean each consecutive twelve month period commencing January
1 and ending December 31.

SECTION 3 — REINSURANCE PREMIUM

	 	 	 	 	 
	 	 	Rate applied to
	States	 	Subject Earned Premium
	 
	 	 	 	 
	All States
	 	 	0.220	%
	 
	 	 	 	 
	Total Subject Premium to the Layer:
	 	$	632,724,000	 
	Estimated Subject Net Earned Premium:
	 	$	1,391,993	 

C-1

 

EXHIBIT D

FOURTH EXCESS OF LOSS

IS ATTACHED TO AND

FORMS PART OF

REINSURANCE AGREEMENT No. RAMSumCX — 2006

 

 

EXHIBIT D — FOURTH EXCESS OF LOSS

	 	 	 	 	 
	SECTION	 	SUBJECT	 	PAGE
	1	 	LIMIT AND RETENTION
	 	D-1
	2	 	REINSTATEMENT
	 	D-1
	3	 	REINSURANCE PREMIUM
	 	D-1

 

 

EXHIBIT D — FOURTH EXCESS OF LOSS

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

The Company shall retain the first $10,000,000 of ultimate net loss as respects any one loss
occurrence. The Reinsurer shall then be liable for the amount by which the Companies’ ultimate net
loss exceeds the Company’s retention of $10,000,000 but the liability of the Reinsurer shall never
exceed $15,000,000 any one loss occurrence.

SECTION 2 — REINSTATEMENT

	A.	 	It is understood and agreed that each claim hereunder reduces the amount of indemnity from
the time of occurrence of the loss by the sum paid, but any amount so exhausted is hereby
reinstated from the time the Loss Occurrence commences hereon. One such reinstatement shall be
provided under this Exhibit for an additional premium calculated at pro rata of the annual
premium hereon, being pro rata only as to the limit of liability of this Exhibit so
reinstated and 100% as to the annual premium.

	B.	 	Notwithstanding the foregoing, Reinsurers’ liability for losses arising out of an act of
Terrorism shall be limited to only $5,000,000 in the aggregate for all states, any one
Agreement Year.
	 
	C.	 	An “Act of Terrorism” for purposes of this Agreement shall mean:

	 	1.	 	Any actual or threatened violent act or act harmful to human life, tangible or
intangible property or infrastructure directed towards or having the effect of (a)
influencing or protesting against any de jure or de facto government or policy thereof,
(b) intimidating, coercing or putting in fear a civilian population or section thereof
for the purpose of establishing or advancing a specific ideological, religious or
political system of thought, perpetrated by a specific individual or group directly or
indirectly through agents acting on behalf of said individual or group or (c) retaliating
against any country for direct or vicarious support by that country of any other
government or political system.
	 
	 	2.	 	Any act declared pursuant to the Terrorism Risk Insurance Act of 2002 shall also be
considered an “Act of Terrorism” for purposes of this Agreement.

	D.	 	The term “Agreement Year” shall mean each consecutive twelve month period commencing January
1 and ending December 31.

SECTION 3 — REINSURANCE PREMIUM

	 	 	 	 	 
	 	 	Rate applied to
	States	 	Subject Earned Premium
	 
	 	 	 	 
	All States
	 	 	0.230	%
	 
	 	 	 	 
	Total Subject Premium to the Layer:
	 	$	632,724,000	 
	Estimated Subject Net Earned Premium:
	 	$	1,455,265	 

D-1

 

APPENDIX A

Definition of Company:

For purposes of Article I or any Articles, wherever the word “Company” is used, the Company is
defined to include the following Profit Center.

	 	 	 
	Profit Center	 	Legal Entities
	 
	 	 
	Summit:

	 	Bridgefield Casualty Insurance Company, and Bridgefield
Employers insurance Company, WC only, all States

 

 

APPENDIX B  —  Fortune’s Global 500” list

	 	 	 	 	 	 	 	 	 
	Company	 	Rank	 	Revenues [USD mio]
	3M
	 	 	316	 	 	 	16 079	 
	ABB
	 	 	194	 	 	 	23 726	 
	Abbey National
	 	 	280	 	 	 	17 798	 
	Abbott Laboratories
	 	 	309	 	 	 	16 285	 
	ABN AMRO Holding
	 	 	90	 	 	 	39 703	 
	Accenture
	 	 	380	 	 	 	13 348	 
	Adecco
	 	 	313	 	 	 	16 147	 
	AdvancePCS
	 	 	387	 	 	 	13 107	 
	Aegon
	 	 	146	 	 	 	28 562	 
	AEON
	 	 	196	 	 	 	23 621	 
	Aetna
	 	 	178	 	 	 	25 191	 
	Agricultural Bank of China
	 	 	471	 	 	 	10 657	 
	Air France Group
	 	 	454	 	 	 	11 076	 
	Akzo Nobel
	 	 	407	 	 	 	12 636	 
	Albertson’s
	 	 	100	 	 	 	37 931	 
	Alcan
	 	 	408	 	 	 	12 626	 
	Alcatel
	 	 	207	 	 	 	22 704	 
	Alcoa
	 	 	205	 	 	 	22 859	 
	Allegheny Energy
	 	 	488	 	 	 	10 379	 
	Alliance Unichem
	 	 	478	 	 	 	10 533	 
	Allianz
	 	 	18	 	 	 	85 929	 
	Allstate
	 	 	144	 	 	 	28 865	 
	Almanij
	 	 	272	 	 	 	18 055	 
	Alstom
	 	 	228	 	 	 	20 734	 
	Amerada Hess
	 	 	376	 	 	 	13 413	 
	American Electric Power
	 	 	36	 	 	 	61 257	 
	American Express
	 	 	209	 	 	 	22 582	 
	American Intl. Group
	 	 	34	 	 	 	62 402	 
	AmerisourceBergen
	 	 	319	 	 	 	15 823	 
	AMR
	 	 	258	 	 	 	18 963	 
	Anglo American
	 	 	341	 	 	 	14 786	 
	Anheuser-Busch
	 	 	397	 	 	 	12 912	 
	Anthem
	 	 	486	 	 	 	10 445	 
	AOL Time Warner
	 	 	98	 	 	 	38 234	 
	Aquila
	 	 	87	 	 	 	40 377	 
	Arbed
	 	 	448	 	 	 	11 195	 
	Arcelor
	 	 	391	 	 	 	13 005	 
	Archer Daniels Midland
	 	 	240	 	 	 	20 051	 
	Arrow Electronics
	 	 	498	 	 	 	10 128	 
	Asahi Glass
	 	 	499	 	 	 	10 103	 
	Asahi Mutual Life Insurance
	 	 	119	 	 	 	33 143	 
	Assicurazioni Generali
	 	 	50	 	 	 	51 394	 
	AstraZeneca
	 	 	301	 	 	 	16 480	 
	AT&T
	 	 	40	 	 	 	59 142	 
	AutoNation
	 	 	241	 	 	 	19 989	 

B-1

 

	 	 	 	 	 	 	 	 	 
	Company	 	Rank	 	Revenues [USD mio]
	Aventis
	 	 	230	 	 	 	20 544	 
	Aviva
	 	 	48	 	 	 	52 318	 
	Avnet
	 	 	402	 	 	 	12 814	 
	AXA
	 	 	30	 	 	 	65 580	 
	BAE Systems
	 	 	390	 	 	 	13 020	 
	Banco Bilbao Vizcaya Argentaria
	 	 	192	 	 	 	23 848	 
	Banco Bradesco
	 	 	337	 	 	 	14 953	 
	Banco Do Brasil
	 	 	437	 	 	 	11 685	 
	Bank of America Corp.
	 	 	47	 	 	 	52 641	 
	Bank Of China
	 	 	277	 	 	 	17 869	 
	Bank of Montreal
	 	 	449	 	 	 	11 185	 
	Bank of Nova Scotia
	 	 	366	 	 	 	13 673	 
	Bank One Corp.
	 	 	186	 	 	 	24 527	 
	Bankgesellschaft Berlin
	 	 	473	 	 	 	10 618	 
	Barclays
	 	 	154	 	 	 	27 569	 
	BASF
	 	 	142	 	 	 	29 103	 
	Bayer
	 	 	158	 	 	 	27 111	 
	Bayerische Landesbank
	 	 	320	 	 	 	15 795	 
	BCE
	 	 	339	 	 	 	14 873	 
	BellSouth
	 	 	189	 	 	 	24 130	 
	Berkshire Hathaway
	 	 	101	 	 	 	37 668	 
	Bertelsmann
	 	 	276	 	 	 	17 887	 
	Best Buy
	 	 	247	 	 	 	19 597	 
	BHP Billiton
	 	 	281	 	 	 	17 789	 
	BMW
	 	 	112	 	 	 	34 444	 
	BNP Paribas
	 	 	44	 	 	 	55 044	 
	Boeing
	 	 	42	 	 	 	58 198	 
	Bombardier
	 	 	360	 	 	 	13 896	 
	Bouygues
	 	 	266	 	 	 	18 334	 
	BP
	 	 	4	 	 	 	174 218	 
	Bridgestone
	 	 	285	 	 	 	17 566	 
	Bristol-Myers Squibb
	 	 	218	 	 	 	21 717	 
	British Airways
	 	 	428	 	 	 	11 943	 
	British American Tobacco
	 	 	271	 	 	 	18 144	 
	BT
	 	 	139	 	 	 	29 958	 
	Canadian Imperial Bank of Commerce
	 	 	361	 	 	 	13 889	 
	Canon
	 	 	190	 	 	 	23 936	 
	Cardinal Health
	 	 	61	 	 	 	47 948	 
	Carrefour
	 	 	35	 	 	 	62 225	 
	Carso Global Telecom
	 	 	430	 	 	 	11 890	 
	Caterpillar
	 	 	232	 	 	 	20 450	 
	Cathay Life
	 	 	440	 	 	 	11 591	 
	Central Japan Railway
	 	 	460	 	 	 	10 933	 
	Centrica
	 	 	270	 	 	 	18 161	 
	ChevronTexaco
	 	 	14	 	 	 	99 699	 
	China Construction Bank
	 	 	389	 	 	 	13 083	 
	China Mobile Communications
	 	 	287	 	 	 	17 406	 
	China National Petroleum
	 	 	81	 	 	 	41 499	 

B-2

 

	 	 	 	 	 	 	 	 	 
	Company	 	Rank	 	Revenues [USD mio]
	China Telecommunications
	 	 	214	 	 	 	22 272	 
	Chinese Petroleum
	 	 	467	 	 	 	10 781	 
	Chubu Electric Power
	 	 	279	 	 	 	17 826	 
	Cigna
	 	 	254	 	 	 	19 115	 
	Cinergy
	 	 	396	 	 	 	12 923	 
	Circuit City Stores
	 	 	403	 	 	 	12 792	 
	Cisco Systems
	 	 	213	 	 	 	22 293	 
	Citigroup
	 	 	11	 	 	 	112 022	 
	CMS Energy
	 	 	393	 	 	 	12 977	 
	CNP Assurances
	 	 	238	 	 	 	20 099	 
	Coca-Cola
	 	 	239	 	 	 	20 092	 
	Coca-Cola Enterprises
	 	 	322	 	 	 	15 700	 
	COFCO
	 	 	392	 	 	 	13 004	 
	Coles Myer
	 	 	406	 	 	 	12 643	 
	Commerzbank
	 	 	193	 	 	 	23 778	 
	Compaq Computer
	 	 	117	 	 	 	33 554	 
	Compass Group
	 	 	409	 	 	 	12 552	 
	Computer Sciences
	 	 	443	 	 	 	11 426	 
	ConAgra
	 	 	156	 	 	 	27 194	 
	Conoco
	 	 	122	 	 	 	32 795	 
	Consignia
	 	 	425	 	 	 	12 040	 
	Corus Group
	 	 	452	 	 	 	11 087	 
	Cosmo Oil
	 	 	474	 	 	 	10 612	 
	Costco Wholesale
	 	 	111	 	 	 	34 797	 
	Credit Agricole
	 	 	107	 	 	 	35 669	 
	Credit Lyonnais
	 	 	259	 	 	 	18 848	 
	Credit Suisse
	 	 	31	 	 	 	64 205	 
	CVS
	 	 	215	 	 	 	22 241	 
	Dai Nippon Printing
	 	 	480	 	 	 	10 492	 
	Daido Life Insurance
	 	 	479	 	 	 	10 527	 
	Daiei
	 	 	237	 	 	 	20 113	 
	Dai-ichi Mutual Life Insurance
	 	 	76	 	 	 	43 145	 
	DaimlerChrysler
	 	 	7	 	 	 	136 897	 
	Daiwa Bank Holdings
	 	 	463	 	 	 	10 888	 
	Dana
	 	 	484	 	 	 	10 469	 
	Danske Bank Group
	 	 	461	 	 	 	10 912	 
	Deere
	 	 	382	 	 	 	13 293	 
	Delhaize ‘Le Lion’
	 	 	245	 	 	 	19 629	 
	Dell Computer
	 	 	131	 	 	 	31 168	 
	Delphi
	 	 	166	 	 	 	26 088	 
	Delta Air Lines
	 	 	362	 	 	 	13 879	 
	Denso
	 	 	252	 	 	 	19 203	 
	Dentsu
	 	 	348	 	 	 	14 311	 
	Deutsche Bahn
	 	 	356	 	 	 	14 079	 
	Deutsche Bank
	 	 	27	 	 	 	66 840	 
	Deutsche Post
	 	 	130	 	 	 	31 302	 
	Deutsche Telekom
	 	 	75	 	 	 	43 261	 
	Dexia Group
	 	 	256	 	 	 	19 050	 

B-3

 

	 	 	 	 	 	 	 	 	 
	Company	 	Rank	 	Revenues [USD mio]
	Diageo
	 	 	262	 	 	 	18 605	 
	Dior (Christian )
	 	 	446	 	 	 	11 254	 
	Dominion Resources
	 	 	477	 	 	 	10 558	 
	Dow Chemical
	 	 	152	 	 	 	27 805	 
	Duke Energy
	 	 	39	 	 	 	59 503	 
	DuPont de Nemours (E.I.)
	 	 	172	 	 	 	25 370	 
	Dynegy
	 	 	78	 	 	 	42 242	 
	DZ Bank
	 	 	168	 	 	 	25 987	 
	E. ON
	 	 	28	 	 	 	66 453	 
	EADS
	 	 	153	 	 	 	27 580	 
	East Japan Railway
	 	 	233	 	 	 	20 341	 
	Eastman Kodak
	 	 	383	 	 	 	13 234	 
	Edison
	 	 	353	 	 	 	14 140	 
	Edison International
	 	 	420	 	 	 	12 184	 
	El Paso
	 	 	43	 	 	 	57 475	 
	Électricité De France
	 	 	102	 	 	 	36 461	 
	Electrolux
	 	 	386	 	 	 	13 131	 
	Electronic Data Systems
	 	 	221	 	 	 	21 543	 
	Eli Lilly
	 	 	441	 	 	 	11 543	 
	Emerson Electric
	 	 	326	 	 	 	15 480	 
	Endesa
	 	 	358	 	 	 	13 948	 
	Enel
	 	 	169	 	 	 	25 773	 
	ENI
	 	 	71	 	 	 	44 637	 
	Enron
	 	 	6	 	 	 	138 718	 
	Exelon
	 	 	333	 	 	 	15 140	 
	Exxon Mobil
	 	 	2	 	 	 	191 581	 
	Fannie Mae
	 	 	52	 	 	 	50 803	 
	Farmland Industries
	 	 	434	 	 	 	11 763	 
	Federated Dept. Stores
	 	 	292	 	 	 	16 895	 
	FedEx
	 	 	246	 	 	 	19 629	 
	Fiat
	 	 	49	 	 	 	51 944	 
	FleetBoston
	 	 	253	 	 	 	19 190	 
	Fleming
	 	 	325	 	 	 	15 628	 
	Flextronics International
	 	 	388	 	 	 	13 105	 
	Foncière Euris
	 	 	231	 	 	 	20 490	 
	Ford Motor
	 	 	5	 	 	 	162 412	 
	Fortis
	 	 	85	 	 	 	40 529	 
	France Télécom
	 	 	97	 	 	 	38 530	 
	Franz Haniel
	 	 	269	 	 	 	18 213	 
	Freddie Mac
	 	 	108	 	 	 	35 523	 
	Fuji Heavy Industries
	 	 	462	 	 	 	10 897	 
	Fuji Photo Film
	 	 	251	 	 	 	19 203	 
	Fujitsu
	 	 	88	 	 	 	40 044	 
	Gap
	 	 	363	 	 	 	13 848	 
	Gaz de France
	 	 	400	 	 	 	12 857	 
	Gazprom
	 	 	236	 	 	 	20 148	 
	General Dynamics
	 	 	421	 	 	 	12 163	 
	General Electric
	 	 	9	 	 	 	125 913	 

B-4

 

	 	 	 	 	 	 	 	 	 
	Company	 	Rank	 	Revenues [USD mio]
	General Motors
	 	 	3	 	 	 	177 260	 
	George Weston
	 	 	318	 	 	 	15 923	 
	Georgia-Pacific
	 	 	173	 	 	 	25 309	 
	GlaxoSmithKline
	 	 	140	 	 	 	29 506	 
	Goldman Sachs Group
	 	 	132	 	 	 	31 138	 
	Goodyear Tire & Rubber
	 	 	352	 	 	 	14 147	 
	Great Atl. & Pacific Tea
	 	 	458	 	 	 	10 973	 
	Groupama
	 	 	417	 	 	 	12 264	 
	Groupe Auchan
	 	 	199	 	 	 	23 450	 
	Groupe Caisse d’Épargne
	 	 	297	 	 	 	16 693	 
	Groupe Danone
	 	 	394	 	 	 	12 958	 
	Groupe Pinault-Printemps
	 	 	181	 	 	 	24 894	 
	Halliburton
	 	 	377	 	 	 	13 405	 
	Hartford Fin. Services
	 	 	332	 	 	 	15 147	 
	HBOS
	 	 	150	 	 	 	27 839	 
	HCA
	 	 	275	 	 	 	17 953	 
	Henkel
	 	 	436	 	 	 	11 695	 
	Hewlett-Packard
	 	 	70	 	 	 	45 226	 
	Hitachi
	 	 	32	 	 	 	63 931	 
	Home Depot
	 	 	46	 	 	 	53 553	 
	Honda Motor
	 	 	41	 	 	 	58 882	 
	Honeywell Intl.
	 	 	195	 	 	 	23 652	 
	Household International
	 	 	359	 	 	 	13 916	 
	HSBC Holding PLC
	 	 	64	 	 	 	46 424	 
	Humana
	 	 	493	 	 	 	10 195	 
	HypoVereinsbank
	 	 	91	 	 	 	39 405	 
	Hyundai
	 	 	219	 	 	 	21 702	 
	Hyundai Motor
	 	 	133	 	 	 	30 864	 
	Idemitsu Kosan
	 	 	323	 	 	 	15 679	 
	Indian Oil
	 	 	226	 	 	 	20 916	 
	Industrial & Commercial Bank of China
	 	 	243	 	 	 	19 828	 
	ING Group
	 	 	20	 	 	 	82 999	 
	Ingram Micro
	 	 	179	 	 	 	25 187	 
	Intel
	 	 	162	 	 	 	26 539	 
	International Paper
	 	 	163	 	 	 	26 363	 
	IntesaBci
	 	 	242	 	 	 	19 946	 
	Intl. Business Machines
	 	 	19	 	 	 	85 866	 
	Isuzu Motors
	 	 	404	 	 	 	12 778	 
	Itausa
	 	 	492	 	 	 	10 239	 
	Itochu
	 	 	17	 	 	 	91 177	 
	Ito-Yokado
	 	 	161	 	 	 	26 823	 
	J. Sainsbury
	 	 	184	 	 	 	24 575	 
	J.C. Penney
	 	 	124	 	 	 	32 557	 
	J.P. Morgan Chase
	 	 	54	 	 	 	50 429	 
	Japan Airlines
	 	 	399	 	 	 	12 866	 
	Japan Energy
	 	 	385	 	 	 	13 203	 
	Japan Postal Service
	 	 	234	 	 	 	20 281	 
	Japan Telecom
	 	 	368	 	 	 	13 628	 

B-5

 

	 	 	 	 	 	 	 	 	 
	Company	 	Rank	 	Revenues [USD mio]
	Japan Tobacco
	 	 	307	 	 	 	16 331	 
	Johnson & Johnson
	 	 	121	 	 	 	33 004	 
	Johnson Controls
	 	 	264	 	 	 	18 427	 
	Kajima
	 	 	302	 	 	 	16 478	 
	Kansai Electric Power
	 	 	224	 	 	 	21 207	 
	KarstadtQuelle
	 	 	347	 	 	 	14 388	 
	KDDI
	 	 	208	 	 	 	22 664	 
	Kimberly-Clark
	 	 	345	 	 	 	14 524	 
	Kingfisher
	 	 	314	 	 	 	16 142	 
	Kmart
	 	 	104	 	 	 	36 151	 
	Korea Electric Power
	 	 	324	 	 	 	15 674	 
	Kreditanstalt für Wiederaufbau
	 	 	481	 	 	 	10 484	 
	Kroger
	 	 	56	 	 	 	50 098	 
	KT
	 	 	413	 	 	 	12 349	 
	Kyushu Electric Power
	 	 	438	 	 	 	11 661	 
	L.M. Ericsson
	 	 	210	 	 	 	22 416	 
	La Poste
	 	 	329	 	 	 	15 249	 
	Lafarge
	 	 	416	 	 	 	12 267	 
	Lagardère Groupe
	 	 	429	 	 	 	11 906	 
	Landesbank Baden-Wurttemberg
	 	 	294	 	 	 	16 877	 
	Lear
	 	 	369	 	 	 	13 625	 
	Legal & General
	 	 	374	 	 	 	13 541	 
	Lehman Brothers Hldgs.
	 	 	212	 	 	 	22 392	 
	LG Electronics
	 	 	202	 	 	 	23 137	 
	LG International
	 	 	248	 	 	 	19 516	 
	Liberty Mutual Group
	 	 	349	 	 	 	14 256	 
	Lloyds TSB Group
	 	 	206	 	 	 	22 823	 
	Lockheed Martin
	 	 	182	 	 	 	24 793	 
	Loews
	 	 	260	 	 	 	18 799	 
	L’Oréal
	 	 	415	 	 	 	12 305	 
	Lowe’s
	 	 	216	 	 	 	22 111	 
	Lucent Technologies
	 	 	180	 	 	 	25 132	 
	Lufthansa Group
	 	 	338	 	 	 	14 946	 
	Lukoil
	 	 	422	 	 	 	12 106	 
	LVMH
	 	 	459	 	 	 	10 951	 
	Magna International
	 	 	456	 	 	 	11 026	 
	Man Group
	 	 	343	 	 	 	14 552	 
	Manpower
	 	 	482	 	 	 	10 484	 
	Manulife Financial
	 	 	483	 	 	 	10 480	 
	Marathon Oil
	 	 	110	 	 	 	35 041	 
	Marks & Spencer
	 	 	439	 	 	 	11 650	 
	Marriott International
	 	 	496	 	 	 	10 152	 
	Marubeni
	 	 	25	 	 	 	71 757	 
	Mass. Mutual Life Ins.
	 	 	249	 	 	 	19 340	 
	Matsushita Electric Industrial
	 	 	45	 	 	 	54 997	 
	May Dept. Stores
	 	 	351	 	 	 	14 175	 
	Mazda Motor
	 	 	296	 	 	 	16 754	 
	MBNA
	 	 	497	 	 	 	10 145	 

B-6

 

	 	 	 	 	 	 	 	 	 
	Company	 	Rank	 	Revenues [USD mio]
	McDonald’s
	 	 	340	 	 	 	14 870	 
	McKesson
	 	 	57	 	 	 	50 006	 
	Meiji Life Insurance
	 	 	176	 	 	 	25 296	 
	Merck
	 	 	62	 	 	 	47 716	 
	Merrill Lynch
	 	 	95	 	 	 	38 793	 
	MetLife
	 	 	128	 	 	 	31 928	 
	Metro
	 	 	72	 	 	 	44 347	 
	Michelin
	 	 	342	 	 	 	14 566	 
	Microsoft
	 	 	175	 	 	 	25 296	 
	Migros
	 	 	427	 	 	 	11 955	 
	Mirant
	 	 	129	 	 	 	31 502	 
	Mitsubishi
	 	 	12	 	 	 	105 814	 
	Mitsubishi Chemical
	 	 	350	 	 	 	14 239	 
	Mitsubishi Electric
	 	 	141	 	 	 	29 183	 
	Mitsubishi Heavy Industries
	 	 	204	 	 	 	22 905	 
	Mitsubishi Motors
	 	 	171	 	 	 	25 598	 
	Mitsubishi Tokyo Financial Group
	 	 	165	 	 	 	26 091	 
	Mitsui
	 	 	13	 	 	 	101 206	 
	Mitsui Mutual Life Insurance
	 	 	220	 	 	 	21 656	 
	Mitsui Sumitomo Insurance
	 	 	330	 	 	 	15 206	 
	Mizuho Holdings
	 	 	82	 	 	 	41 445	 
	Morgan Stanley
	 	 	73	 	 	 	43 727	 
	Motorola
	 	 	138	 	 	 	30 004	 
	Munich Re Group
	 	 	79	 	 	 	41 894	 
	National Australia Bank
	 	 	303	 	 	 	16 450	 
	Nationwide
	 	 	334	 	 	 	15 118	 
	NEC
	 	 	84	 	 	 	40 796	 
	Nestlé
	 	 	55	 	 	 	50 192	 
	New York Life Insurance
	 	 	170	 	 	 	25 678	 
	News Corp.
	 	 	364	 	 	 	13 755	 
	Nichimen
	 	 	305	 	 	 	16 437	 
	Nippon Express
	 	 	367	 	 	 	13 661	 
	Nippon Life Insurance
	 	 	33	 	 	 	63 827	 
	Nippon Mitsubishi Oil
	 	 	197	 	 	 	23 521	 
	Nippon Steel
	 	 	229	 	 	 	20 645	 
	Nippon Telegraph & Telephone
	 	 	16	 	 	 	93 425	 
	Nissan Motor
	 	 	58	 	 	 	49 555	 
	Nissho Iwai
	 	 	74	 	 	 	43 703	 
	NKK
	 	 	384	 	 	 	13 224	 
	Nokia
	 	 	147	 	 	 	27 931	 
	Norddeutsche Landesb.
	 	 	475	 	 	 	10 604	 
	Nordea
	 	 	419	 	 	 	12 209	 
	Norinchukin Bank
	 	 	395	 	 	 	12 939	 
	Norsk Hydro
	 	 	291	 	 	 	16 999	 
	Nortel Networks
	 	 	263	 	 	 	18 507	 
	Northrop Grumman
	 	 	373	 	 	 	13 558	 
	Northwestern Mutual
	 	 	310	 	 	 	16 212	 
	Novartis
	 	 	257	 	 	 	18 986	 

B-7

 

	 	 	 	 	 	 	 	 	 
	Company	 	Rank	 	Revenues [USD mio]
	Obayashi
	 	 	447	 	 	 	11 226	 
	Occidental Petroleum
	 	 	355	 	 	 	14 126	 
	Office Depot
	 	 	450	 	 	 	11 154	 
	Old Mutual
	 	 	453	 	 	 	11 076	 
	Olivetti
	 	 	145	 	 	 	28 670	 
	Onex
	 	 	327	 	 	 	15 369	 
	Oracle
	 	 	464	 	 	 	10 860	 
	Otto Versand
	 	 	372	 	 	 	13 564	 
	PacifiCare Health Sys.
	 	 	433	 	 	 	11 844	 
	PDVSA
	 	 	66	 	 	 	46 250	 
	Pemex
	 	 	92	 	 	 	39 400	 
	PepsiCo
	 	 	159	 	 	 	26 935	 
	Petrobrás
	 	 	185	 	 	 	24 549	 
	Petronas
	 	 	284	 	 	 	17 679	 
	Peugeot
	 	 	65	 	 	 	46 264	 
	Pfizer
	 	 	127	 	 	 	32 259	 
	PG&E Corp.
	 	 	203	 	 	 	22 959	 
	Pharmacia
	 	 	250	 	 	 	19 299	 
	Philip Morris
	 	 	24	 	 	 	72 944	 
	Phillips Petroleum
	 	 	188	 	 	 	24 189	 
	POSCO
	 	 	494	 	 	 	10 162	 
	Power Corp. of Canada
	 	 	432	 	 	 	11 855	 
	Procter & Gamble
	 	 	93	 	 	 	39 244	 
	Prudential
	 	 	106	 	 	 	35 821	 
	Prudential Financial
	 	 	157	 	 	 	27 177	 
	Publix Super Markets
	 	 	328	 	 	 	15 284	 
	Qwest Communications
	 	 	244	 	 	 	19 743	 
	Rabobank
	 	 	225	 	 	 	21 141	 
	RAG
	 	 	365	 	 	 	13 691	 
	Raytheon
	 	 	295	 	 	 	16 867	 
	Reliant Energy
	 	 	67	 	 	 	46 226	 
	Renault
	 	 	125	 	 	 	32 552	 
	Repsol YPF
	 	 	94	 	 	 	39 091	 
	Ricoh
	 	 	379	 	 	 	13 375	 
	Rite Aid
	 	 	331	 	 	 	15 171	 
	Robert Bosch
	 	 	135	 	 	 	30 473	 
	Roche Group
	 	 	288	 	 	 	17 282	 
	Royal & Sun Alliance
	 	 	222	 	 	 	21 525	 
	Royal Ahold
	 	 	38	 	 	 	59 634	 
	Royal Bank of Canada
	 	 	299	 	 	 	16 536	 
	Royal Bank of Scotland
	 	 	115	 	 	 	33 831	 
	Royal Dutch/Shell Group
	 	 	8	 	 	 	135 211	 
	Royal KPN
	 	 	451	 	 	 	11 119	 
	Royal Philips Electronics
	 	 	143	 	 	 	28 960	 
	Rwe
	 	 	53	 	 	 	50 664	 
	Safeway
	 	 	113	 	 	 	34 301	 
	Safeway
	 	 	418	 	 	 	12 258	 
	Saint-Gobain
	 	 	155	 	 	 	27 214	 

B-8

 

	 	 	 	 	 	 	 	 	 
	Company	 	Rank	 	Revenues [USD mio]
	Samsung
	 	 	118	 	 	 	33 212	 
	Samsung Electronics
	 	 	105	 	 	 	35 969	 
	Samsung Life Insurance
	 	 	286	 	 	 	17 503	 
	Santander Central Hispano Group
	 	 	136	 	 	 	30 422	 
	Sanyo Electric
	 	 	293	 	 	 	16 892	 
	Sara Lee
	 	 	282	 	 	 	17 747	 
	SBC Communications
	 	 	69	 	 	 	45 908	 
	Schlumberger
	 	 	357	 	 	 	13 988	 
	Sears Roebuck
	 	 	83	 	 	 	41 078	 
	Sekisui House
	 	 	472	 	 	 	10 631	 
	Sharp
	 	 	346	 	 	 	14 426	 
	Shimizu
	 	 	405	 	 	 	12 669	 
	Showa Shell Sekiyu
	 	 	490	 	 	 	10 362	 
	Siemens
	 	 	22	 	 	 	77 359	 
	Sinochem
	 	 	311	 	 	 	16 164	 
	Sinopec
	 	 	86	 	 	 	40 388	 
	SK
	 	 	120	 	 	 	33 008	 
	SK Global
	 	 	289	 	 	 	17 214	 
	Skanska
	 	 	317	 	 	 	15 948	 
	SNCF
	 	 	274	 	 	 	18 026	 
	Société Générale
	 	 	191	 	 	 	23 924	 
	Sodexho Alliance
	 	 	476	 	 	 	10 579	 
	Solectron
	 	 	261	 	 	 	18 692	 
	Sony
	 	 	37	 	 	 	60 608	 
	Southern
	 	 	495	 	 	 	10 155	 
	Sprint
	 	 	167	 	 	 	26 071	 
	Standard Life Assurance
	 	 	265	 	 	 	18 416	 
	Staples
	 	 	469	 	 	 	10 744	 
	State Farm Insurance
	 	 	63	 	 	 	46 705	 
	State Power
	 	 	60	 	 	 	48 375	 
	Statoil
	 	 	164	 	 	 	26 286	 
	Stora Enso
	 	 	423	 	 	 	12 097	 
	Suez
	 	 	99	 	 	 	37 933	 
	Sumitomo
	 	 	23	 	 	 	77 140	 
	Sumitomo Electric Industries
	 	 	431	 	 	 	11 877	 
	Sumitomo Life Insurance
	 	 	126	 	 	 	32 549	 
	Sumitomo Metal Industries
	 	 	466	 	 	 	10 793	 
	Sumitomo Mitsui Banking
	 	 	137	 	 	 	30 229	 
	Sun Life Financial Services
	 	 	465	 	 	 	10 857	 
	Sun Microsystems
	 	 	268	 	 	 	18 250	 
	Sunoco
	 	 	412	 	 	 	12 402	 
	Suntory
	 	 	485	 	 	 	10 445	 
	Supervalu
	 	 	227	 	 	 	20 909	 
	Suzuki Motor
	 	 	381	 	 	 	13 342	 
	Swiss Life Ins. & Pension
	 	 	375	 	 	 	13 511	 
	Swiss Reinsurance
	 	 	235	 	 	 	20 210	 
	Sysco
	 	 	217	 	 	 	21 785	 
	Taisei
	 	 	378	 	 	 	13 387	 

B-9

 

	 	 	 	 	 	 	 	 	 
	Company	 	Rank	 	Revenues [USD mio]
	Taiyo Mutual Life Insurance
	 	 	401	 	 	 	12 824	 
	Takenaka
	 	 	500	 	 	 	10 096	 
	Target
	 	 	89	 	 	 	39 888	 
	Tech Data
	 	 	290	 	 	 	17 198	 
	Telefónica
	 	 	151	 	 	 	27 808	 
	Telstra
	 	 	411	 	 	 	12 415	 
	Tenet Healthcare
	 	 	424	 	 	 	12 053	 
	Tesco
	 	 	114	 	 	 	33 916	 
	Textron
	 	 	414	 	 	 	12 321	 
	Thyssen Krupp
	 	 	116	 	 	 	33 796	 
	TIAA-CREF
	 	 	187	 	 	 	24 231	 
	TJX
	 	 	470	 	 	 	10 709	 
	Tohoku Electric Power
	 	 	371	 	 	 	13 574	 
	Tokio Marine & Fire Insurance
	 	 	312	 	 	 	16 156	 
	Tokyo Electric Power
	 	 	80	 	 	 	41 752	 
	Tomen
	 	 	255	 	 	 	19 073	 
	Toppan Printing
	 	 	489	 	 	 	10 367	 
	Toronto-Dominion Bank
	 	 	370	 	 	 	13 585	 
	Toshiba
	 	 	77	 	 	 	43 139	 
	Total Fina Elf
	 	 	15	 	 	 	94 312	 
	Toyota Motor
	 	 	10	 	 	 	120 814	 
	Toyota Tsusho
	 	 	273	 	 	 	18 040	 
	Toys ‘R’ Us
	 	 	457	 	 	 	11 019	 
	TransCanada Pipelines
	 	 	435	 	 	 	11 715	 
	TRW
	 	 	306	 	 	 	16 383	 
	TUI
	 	 	223	 	 	 	21 253	 
	TXU
	 	 	148	 	 	 	27 927	 
	Tyco International
	 	 	103	 	 	 	36 389	 
	Tyson Foods
	 	 	468	 	 	 	10 751	 
	U.S. Bancorp
	 	 	304	 	 	 	16 443	 
	U.S. Postal Service
	 	 	29	 	 	 	65 834	 
	UAL
	 	 	315	 	 	 	16 138	 
	UBS
	 	 	59	 	 	 	48 503	 
	UFJ Holdings
	 	 	174	 	 	 	25 300	 
	UniCredito Italiano
	 	 	321	 	 	 	15 791	 
	Unilever
	 	 	68	 	 	 	46 131	 
	Union Pacific
	 	 	426	 	 	 	11 973	 
	United Parcel Service
	 	 	134	 	 	 	30 646	 
	United Technologies
	 	 	149	 	 	 	27 897	 
	UnitedHealth Group
	 	 	198	 	 	 	23 454	 
	Valero Energy
	 	 	336	 	 	 	14 988	 
	Verizon Communications
	 	 	26	 	 	 	67 190	 
	Viacom
	 	 	200	 	 	 	23 223	 
	Vinci
	 	 	308	 	 	 	16 291	 
	Visteon
	 	 	278	 	 	 	17 843	 
	Vivendi Universal
	 	 	51	 	 	 	51 366	 
	Vodafone
	 	 	123	 	 	 	32 713	 
	Volkswagen
	 	 	21	 	 	 	79 287	 

B-10

 

	 	 	 	 	 	 	 	 	 
	Company	 	Rank	 	Revenues [USD mio]
	Volvo
	 	 	267	 	 	 	18 301	 
	Wachovia Corp.
	 	 	211	 	 	 	22 396	 
	Walgreen
	 	 	183	 	 	 	24 623	 
	Wal-Mart Stores
	 	 	1	 	 	 	219 812	 
	Walt Disney
	 	 	177	 	 	 	25 269	 
	Washington Mutual
	 	 	283	 	 	 	17 692	 
	Waste Management
	 	 	444	 	 	 	11 322	 
	WellPoint Health Netwks.
	 	 	410	 	 	 	12 429	 
	Wells Fargo
	 	 	160	 	 	 	26 891	 
	Westdeutsche Landesbank
	 	 	201	 	 	 	23 139	 
	Weyerhaeuser
	 	 	344	 	 	 	14 545	 
	Whirlpool
	 	 	491	 	 	 	10 343	 
	Williams
	 	 	455	 	 	 	11 055	 
	Winn-Dixie Stores
	 	 	398	 	 	 	12 903	 
	Wolseley
	 	 	487	 	 	 	10 384	 
	Woolworths
	 	 	442	 	 	 	11 502	 
	WorldCom
	 	 	109	 	 	 	35 179	 
	Wyeth
	 	 	354	 	 	 	14 129	 
	Xcel Energy
	 	 	335	 	 	 	15 028	 
	Xerox
	 	 	300	 	 	 	16 502	 
	Yasuda Fire & Marine Insurance
	 	 	445	 	 	 	11 306	 
	Yasuda Mutual Life Insurance
	 	 	298	 	 	 	16 575	 
	Zurich Financial Services
	 	 	96	 	 	 	38 650	 

B-11

 

			
	 	 	 
	Pharmaceutical / Medical risks — APPENDIX C
	 	(Version 2002-Aug) (Page 1 of 2)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Net Sales	 	Pharm /
	 	 	 	 	 	 	 	 	or	 	Medical
	 	 	 	 	 	 	 	 	Revenues	 	sales
	 	 	 	 	 	 	 	 	2001	 	of
	#	 	Company Name	 	Country	 	Internet Address	 	(USD mio)	 	Total
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	1
	 	ABBOTT LABORATORIES	 	USA	 	www.abbott.com	 	 	16,285	 	 	 	100	%
	2
	 	AKZO NOBEL	 	Netherlands	 	www.akzonobel.com	 	 	12,609	 	 	 	30	%
	3
	 	ALLERGAN	 	USA	 	www.allergan.com	 	 	1,746	 	 	 	100	%
	4
	 	ALPHARMA	 	USA	 	www.alpharma.com	 	 	1,200	 	 	 	80	%
	5
	 	ALTANA AG	 	Germany	 	www.altana.com	 	 	2,077	 	 	 	70	%
	6
	 	AMERISOURCE BERGEN	 	USA	 	www.amerisourcebergen.net	 	 	39,132	 	 	 	90	%
	7
	 	AMERSHAM	 	UK	 	www.nycomed-amersham.com	 	 	2,175	 	 	 	100	%
	8
	 	AMGEN	 	USA	 	www amgen.com	 	 	4,016	 	 	 	100	%
	9
	 	ASTRAZENECA	 	UK	 	www.astrazeneca.com	 	 	16,431	 	 	 	100	%
	10
	 	AVENTIS	 	France	 	www.aventis.com	 	 	20,500	 	 	 	100	%
	11
	 	BARR LABORATORIES	 	USA	 	www.barrlabs.com	 	 	510	 	 	 	100	%
	12
	 	BAXTER INTERNATIONAL	 	USA	 	www.baxter.com	 	 	7,663	 	 	 	100	%
	13
	 	BAYER	 	Germany	 	www.bayer.com	 	 	27,248	 	 	 	35	%
	14
	 	BEAUFOUR IPSEN	 	France	 	www.beaufour-ipsen.com	 	 	634	 	 	 	90	%
	15
	 	BECTON, DICKINSON AND COMPANY	 	USA	 	www.bd.com	 	 	3,754	 	 	 	50	%
	16
	 	BOEHRINGER INGELHEIM KG	 	Germany	 	www.boehringer-ingelheim.com	 	 	6,025	 	 	 	95	%
	17
	 	BOSTON SCIENTIFIC CORPORATION	 	USA	 	www.bsci.com	 	 	2,673	 	 	 	100	%
	18
	 	BRISTOL-MYERS SQUIBB	 	USA	 	www bms.com	 	 	19,423	 	 	 	70	%
	19
	 	CARDINAL HEALTH	 	USA	 	www.cardinal.com	 	 	47,948	 	 	 	80	%
	20
	 	CELLTECH (former MEDEVA)	 	UK	 	www.celltechgroup.com	 	 	439	 	 	 	100	%
	21
	 	CENTERPULSE (former SULZER MEDICA)	 	Switzerland	 	www.centerpulse.com	 	 	855	 	 	 	100	%
	22
	 	CHUGAI PHARMACEUTICAL	 	Japan	 	www.chugai-pharm.co.jp	 	 	1,608	 	 	 	95	%
	23
	 	DAIICHI PHARMACEUTICAL	 	Japan	 	www.daiichipharm.co.jp	 	 	2,511	 	 	 	95	%
	24
	 	DAINIPPON PHARMACEUTICAL	 	Japan	 	www.dainippon-pharm.co.jp	 	 	1,258	 	 	 	85	%
	25
	 	EDWARDS LIFESCIENCES	 	USA	 	www.edwards.com	 	 	692	 	 	 	100	%
	26
	 	EISAI	 	Japan	 	www.eisai. co. jp	 	 	2,865	 	 	 	90	%
	27
	 	FOREST LABORATORIES	 	USA	 	www.frx.com	 	 	1,205	 	 	 	100	%
	28
	 	FUJISAWA PHARMACEUTICAL	 	Japan	 	www.fujisawa. co. jp	 	 	2,356	 	 	 	90	%
	29
	 	GENENTECH	 	USA	 	www.gene.com	 	 	2,212	 	 	 	75	%
	30
	 	GLAXOSMITHKLINE	 	UK	 	www.gsk.com	 	 	29,408	 	 	 	95	%
	31
	 	GUIDANT	 	USA	 	www.guidant.com	 	 	2,708	 	 	 	100	%
	32
	 	IMMUNEX	 	USA	 	www.immunex.com	 	 	986	 	 	 	100	%
	33
	 	IVAX	 	USA	 	www.ivax.com.	 	 	1,214	 	 	 	100	%
	34
	 	JOHNSON & JOHNSON	 	USA	 	www.jnj. com.	 	 	33,004	 	 	 	50	%
	35
	 	KYOWA HAKKO KOGYO	 	Japan	 	www.kyowa.co.jp	 	 	2,975	 	 	 	40	%
	36
	 	LABORATOIRE FOURNIER	 	France	 	www.groupe-fournier.com	 	 	675	 	 	 	90	%
	37
	 	LABORATOIRE SERVIER	 	France	 	www.servier.com	 	 	1,593	 	 	 	100	%
	38
	 	LILLY (ELI)	 	USA	 	www.lilly.com	 	 	11,543	 	 	 	100	%
	39
	 	MEDTRONIC	 	USA	 	www.medtronic.com	 	 	5,552	 	 	 	100	%
	40
	 	MERCK & CO	 	USA	 	www.merck.com	 	 	47,716	 	 	 	90	%
	41
	 	MERCK KGAA	 	Germany	 	www.merck.de	 	 	6,727	 	 	 	50	%

 

 

			
	 	 	 
	Pharmaceutical / Medical risks
	 	(Version 2002-Aug) (Page 2 of 2)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	NetvSales	 	Pharm /
	 	 	 	 	 	 	 	 	or	 	medical
	 	 	 	 	 	 	 	 	Revenues	 	sales
	 	 	 	 	 	 	 	 	2001	 	of
	#	 	Company Name	 	Country	 	Internet Address	 	(USD mio)	 	Total
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	43
	 	MITSUBISHI PHARMACEUTICAL	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	(former WELFIDE)	 	Japan	 	www.m-pharma.co.jp	 	 	1,437	 	 	 	85	%
	44
	 	MYLAN LABORATORIES	 	USA	 	www.mylan.com	 	 	847	 	 	 	100	%
	45
	 	NOVARTIS	 	Switzerland	 	www.novartis.com	 	 	18,570	 	 	 	80	%
	46
	 	NOVO NORDISK	 	Denmark	 	www.novonordisk.com	 	 	2,845	 	 	 	100	%
	47
	 	OTSUKA PHARMACEUTICAL	 	Japan	 	www.otsuka.co. jp	 	 	2,700	 	 	 	50	%
	48
	 	PFIZER	 	USA	 	www. pfizer.com	 	 	32,259	 	 	 	81	%
	49
	 	PHARMACIA	 	USA	 	www.pharmacia.com	 	 	13,837	 	 	 	100	%
	50
	 	PIERRE FABRE	 	France	 	www.pierre-fabre.com	 	 	1,200	 	 	 	100	%
	51
	 	PROCTER & GAMBLE	 	USA	 	www.pg.com	 	 	39,244	 	 	 	10	%
	52
	 	PURDUE FREDERICK PRA HOLDING	 	USA	 	www.purduepharma.com	 	 	1,500	 	 	 	100	%
	53
	 	ROCHE	 	Switzerland	 	www.roche.com	 	 	16,903	 	 	 	85	%
	54
	 	SANKYO	 	Japan	 	www.sankyo.co.jp	 	 	4,317	 	 	 	80	%
	55
	 	SANOFI-SYNTHELABO	 	France	 	www.sanofi-synthelabo.fr	 	 	5,798	 	 	 	95	%
	56
	 	SCHERING AG	 	Germany	 	www.schering.de	 	 	4,327	 	 	 	100	%
	57
	 	SCHERING-PLOUGH	 	USA	 	www.schering-plough.com	 	 	9,802	 	 	 	95	%
	58
	 	SCHWARZ PHARMA	 	Germany	 	www.schwarzpharma.com	 	 	686	 	 	 	100	%
	59
	 	SERONO	 	Switzerland	 	www.serono.com	 	 	1,349	 	 	 	100	%
	60
	 	SHIONOGI	 	Japan	 	www.shionogi.co.jp	 	 	3,268	 	 	 	90	%
	61
	 	SHIRE PHARMACEUTICALS	 	UK	 	www.shire.com	 	 	859	 	 	 	100	%
	62
	 	SMITH & NEPHEW	 	UK	 	www.smith-nephew.com	 	 	1,681	 	 	 	100	%
	63
	 	SOLVAY	 	Belgium	 	www.solvay.com	 	 	7,801	 	 	 	20	%
	64
	 	STRYKER	 	USA	 	www.strykercorp.com	 	 	2,602	 	 	 	60	%
	65
	 	SUMITOMO PHARMACEUTICALS	 	Japan	 	www.sumitomopharm.com	 	 	862	 	 	 	100	%
	66
	 	SYNTHES-STRATEC	 	Switzerland	 	www.stratec.com	 	 	907	 	 	 	100	%
	67
	 	TAKEDA CHEMICAL INDUSTRIES	 	Japan	 	www.takeda.com	 	 	7,631	 	 	 	75	%
	68
	 	TANABE	 	Japan	 	www.tanabe.co.jp	 	 	1,537	 	 	 	90	%
	69
	 	TAP Pharmaceutical Products	 	USA	 	www.tap.com	 	 	3,300	 	 	 	100	%
	70
	 	TEVA PHARMACEUTICAL	 	Israel	 	www.tevapharm.com	 	 	2,077	 	 	 	85	%
	71
	 	UCB	 	Belgium	 	www.ucb-group.com	 	 	2,216	 	 	 	50	%
	72
	 	WATSON PHARMACEUTICAL	 	USA	 	www.watsonpharm.com	 	 	1,161	 	 	 	100	%
	73
	 	WYETH (former American Home Products)	 	USA	 	www.ahp.com	 	 	14,129	 	 	 	90	%
	74
	 	YAMANOUCHI PHARMACEUTICAL	 	Japan	 	www.yamanouchi.com	 	 	3,627	 	 	 	80	%
	75
	 	ZIMMER USA www.zimmer.com	 	USA	 	www.zimmer.com	 	 	1,179	 	 	 	100	%

 

 

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.

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.

 

 

	 	 	NUCLEAR INCIDENT EXCLUSION CLAUSE — LIABILITY — REINSURANCE — U.S.A.
	 
	 	 	N.M.A. 1590
	 
	1.	 	This reinsurance does not cover any loss or liability accruing to the Reassured as a member
of, or subscriber to, any association of insurers or reinsurers formed for the purpose of
covering nuclear energy risks or as a direct or indirect reinsurer of any such member,
subscriber or association.
	 
	2.	 	Without in any way restricting the operation of paragraph 1. of this Clause it is understood
and agreed that for all purposes of this reinsurance all the original policies of the
Reassured (new, renewal and replacement) of the classes specified in Clause II. in this
paragraph 2. from the time specified in Clause III. in this paragraph 2. shall be deemed to
include the following provision (specified as the Limited Exclusion Provision):
	 
	 	 	LIMITED EXCLUSION PROVISION*

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

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

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

					
	 	 	 	 	 
	N.M.A. 1590
	 	
	 	 

-5-

 

	 	 	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):
	 
	 	 	BROAD EXCLUSION PROVISION*
	 
	 	 	It is agreed that the policy does not apply:

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

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

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

	 	(a)	 	the nuclear material (1) is at any nuclear facility owned by,
or operated by or on behalf of, an insured or (2) has been discharged or
dispersed therefrom;
	 
	 	(b)	 	the nuclear material is contained in spent fuel or waste at
any time possessed, handled, used, processed, stored, transported or disposed
of by or on behalf of an insured; or
	 
	 	(c)	 	the injury, sickness, disease, death or destruction, bodily
injury or property damage arises out of the furnishing by an insured of
services, materials, parts or equipment in connection with the
planning, construction, maintenance, operation or use of any nuclear facility,
but if such facility is located within the United States of America, its
territories, or possessions or Canada, this exclusion (c0 applies only to
injury to or

					
	 	 	 	 	 
	N.M.A. 1590
	 	
	 	 

-6-

 

	 	 	 	destruction of property at such nuclear facility, property damage to such
nuclear facility and any property threat.

	 	IV.	 	As used in this endorsement:

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

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

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

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

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

					
	 	 	 	 	 
	N.M.A. 1590
	 	
	 	 

-7-

 

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

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

					
	 	 	 	 	 
	N.M.A. 1590
	 	
	 	 

-8-

 

	 	 	NUCLEAR INCIDENT EXCLUSION CLAUSE — LIABILITY — REINSURANCE — CANADA
	 
	 	 	N.M.A. 1979
	 
	1.	 	This Agreement does not cover any loss or liability accruing to the Company as a member of,
or subscriber to, any association of insurers or reinsurers formed for the purpose of covering
nuclear energy risks or as a direct or indirect reinsurer of any such member, subscriber or
association.
	 
	2.	 	Without in any way restricting the operation of Paragraph 1. of this Clause, it is agreed
that for all purposes of this Agreement all the original liability contracts of the Company,
whether new, renewal or replacement, of the following classes, namely,

	 	 	 	Personal Liability

Farmers’ Liability

Storekeepers’ Liability

	 	 	which become effective on or after 31st December 1984, shall be deemed to include, from their
inception dates and thereafter, the following provision:
	 
	 	 	Limited Exclusion Provision -
	 
	 	 	This Policy does not apply to bodily injury or property damage with respect to which the
Insured is also insured under a contract of nuclear energy liability insurance (whether the
Insured is unnamed in such contract and whether or not it is legally enforceable by the
Insured) issued by the Nuclear Insurance Association of Canada or any other group or pool of
insurers or would be an Insured under any such policy but for its termination upon exhaustion
of its limits of liability.
	 
	 	 	With respect to property, loss of use of such property shall be deemed to be property damage.
	 
	3.	 	Without in any way restricting the operation of Paragraph 1. of this Clause, it is agreed
that for all purposes of this Agreement all the original liability contracts of the Company,
whether new, renewal or replacement, of any class whatsoever (other than Personal Liability,
Farmers’ Liability, Storekeepers’ Liability or Automobile Liability contracts), which become
effective on or after 31st December 1984, shall be deemed to include, from their inception
dates and thereafter, the following provision:
	 
	 	 	Broad Exclusion Provision -
	 
	 	 	It is agreed that this Policy does not apply:

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

					
	 	 	 	 	 
	N.M.A. 1979
	 	
	 	 

-9-

 

	 	(c)	 	to bodily injury or property damage resulting directly or indirectly from the
nuclear energy hazard arising from:

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

	 	 	As used in this Policy:

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

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

	 	 	 	and includes the site on which any of the foregoing is located, together with all
operations conducted thereon and all premises used for such operations.

					
	 	 	 	 	 
	N.M.A. 1979
	 	
	 	 

-10-

 

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

					
	 	 	 	 	 
	N.M.A. 1979
	 	
	 	 

-11-

 

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.

 

 

ENDORSEMENT NO. 1

to the

INTERESTS AND LIABILITIES CONTRACT

(hereinafter referred to as the “Contract”)

of the

CASUALTY EXCESS OF LOSS

REINSURANCE AGREEMENT

No. RAMSumCX — 2005

between

BRIDGEFIELD CASUALTY INSURANCE COMPANY

BRIDGEFIELD EMPLOYERS INSURANCE COMPANY

Lakeland, Florida

(hereinafter referred to as the “Company”)

and

PEERLESS INSURANCE COMPANY

Keene, New Hampshire

(hereinafter referred to as the “Reinsurer”)

It is understood and agreed that Addendum No. 1 to the Casualty Excess of Loss Reinsurance
Agreement No. RAMSumCX — 2005 is attached hereto and made a part of said Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Endorsement to be executed In duplicate, by
their duly authorized representatives.

In
Lakeland, Florida, this 13th day of November, 2007.

	 	 	 	 	 	 	 

	ATTEST:

	 	 
	 	BRIDGEFIELD CASUALTY INSURANCE COMPANY

BRIDGEFIELD EMPLOYERS INSURANCE COMPANY
	 	 
	 
	 	 	 	 	 	 
	/s/  

 

	 	 	 	/s/

 
	 	 
	 
	 	 	 	 	 	 
	And in Keene, New Hampshire, this 29th day of October, 2007.
	 
	 	 	 	 	 	 
	ATTEST:

	 	 	 	PEERLESS INSURANCE COMPANY	 	 
	 
	 	 	 	 	 	 
	/s/  

 

	 	 	 	/s/ Nancy C. Callender

 
	 	 

No. RAMSumCX — 2005

Endorsement No. 1

 

 

ADDENDUM NO. 1

to the

CASUALTY EXCESS OF LOSS

REINSURANCE AGREEMENT

No. RAMSumCX — 2005

(hereinafter referred to as the “Agreement”)

between

BRIDGEFIELD CASUALTY INSURANCE COMPANY

BRIDGEFIELD EMPLOYERS INSURANCE COMPANY

Lakeland, Florida

(hereinafter referred to as the “Company”)

and

PEERLESS INSURANCE COMPANY

Keene, New Hampshire

(hereinafter referred to as the “Reinsurer”)

It is understood and agreed that effective 12:01 a.m., Local Standard Time, January 1, 2006, this
Agreement is terminated in accordance with the provisions of Article II — Effective Date and
Termination.

No. RAMSumCX — 2005

Endorsement No. 1

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