Document:

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                                                                   EXHIBIT 10.12

                        REINSTATEMENT PREMIUM PROTECTION
                              REINSURANCE CONTRACT
                             EFFECTIVE: JULY 1, 2004

                                    issued to

                         Philadelphia Insurance Company
                            Bala Cynwyd, Pennsylvania
                    Philadelphia Indemnity Insurance Company
                            Bala Cynwyd, Pennsylvania
                                       and
                    any and all other companies which are now
                   or may hereafter become member companies of
                        Philadelphia Insurance Companies

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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
ARTICLE                                                                                                   PAGE
<S>                                                                                                       <C>
    I         Coverage                                                                                      1

   II         Term                                                                                          1

  III         Concurrency of Conditions                                                                     2

   IV         Premium                                                                                       2

    V         Loss Notices and Settlements                                                                  2

   VI         Late Payments                                                                                 2

  VII         Offset (BRMA 36D)                                                                             4

 VIII         Access to Records (BRMA 1D)                                                                   4

   IX         Errors And Omissions (BRMA 14F)                                                               4

    X         Currency (BRMA 12A)                                                                           4

   XI         Taxes (BRMA 50C)                                                                              4

  XII         Federal Excise Tax (BRMA 17A)                                                                 5

 XIII         Unauthorized Reinsurers                                                                       5

  XIV         Insolvency                                                                                    6

   XV         Arbitration                                                                                   7

  XVI         Service of Suit                                                                               8

 XVII         Agency Agreement                                                                              8

XVIII         Governing Law                                                                                 9

  XIX         Confidentiality                                                                               9

   XX         Severability                                                                                  9

  XXI         Intermediary (BRMA 23A)                                                                       9

              Schedule A
</TABLE>

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                        REINSTATEMENT PREMIUM PROTECTION
                              REINSURANCE CONTRACT
                             EFFECTIVE: JULY 1, 2004

                                    issued to

                         Philadelphia Insurance Company
                            Bala Cynwyd, Pennsylvania
                    Philadelphia Indemnity Insurance Company
                            Bala Cynwyd, Pennsylvania
                                       and
                    any and all other companies which are now
                   or may hereafter become member companies of
                        Philadelphia Insurance Companies
             (hereinafter referred to collectively as the "Company")

                                       by

                   The Subscribing Reinsurer(s) Executing the
                     Interests and Liabilities Agreement(s)
                                 Attached Hereto
                  (hereinafter referred to as the "Reinsurer")

ARTICLE I - COVERAGE

By this Contract the Reinsurer agrees to indemnify the Company for 100% of any
reinstatement premium which the Company pays or becomes liable to pay as a
result of loss occurrences commencing during the term of this Contract under the
provisions of the Company's Underlying Excess Catastrophe Reinsurance Contract,
effective July 1, 2004 and Excess Catastrophe Reinsurance Contract, effective
June 1, 2004 (hereinafter referred to as the "Underlying Contracts" and
described in Schedule A attached to and forming part of this Contract), subject
to the terms and conditions set forth herein. However, the liability of the
Reinsurer shall not exceed $9,165,000 during the term of this Contract.

ARTICLE II - TERM

A.    This Contract shall become effective on July 1, 2004, with respect to
      reinstatement premium payable by the Company under the provisions of the
      Underlying Contracts as a result of losses arising out of loss occurrences
      commencing on or after that date, and shall remain in force until May 31,
      2005, both days inclusive.

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

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ARTICLE III - CONCURRENCY OF CONDITIONS

A.    It is agreed that this Contract will follow the terms, conditions,
      exclusions, definitions, warranties and settlements of the Company under
      the Underlying Contracts which are not inconsistent with the provisions of
      this Contract.

B.    The Company shall advise the Reinsurer of any material changes in the
      Underlying Contracts which may affect the liability of the Reinsurer under
      this Contract.

ARTICLE IV - PREMIUM

A.    As premium for the reinsurance provided hereunder, the Company shall pay
      the Reinsurer the following:

      1.    As respects the Underlying Excess Catastrophe Reinsurance Contract,
            effective July 1, 2004, $319,410; and

      2.    As respects the Excess Catastrophe Reinsurance Contract, effective
            June 1, 2004, $420,000 for the first excess layer, $331,250 for the
            second excess layer, $133,000 for the third excess layer and
            $103,000 for the Fourth layer.

B.    The Company shall pay the Reinsurer the sum of the amounts set forth in
      subparagraphs 1 and 2 of paragraph A above in four equal installments of
      $326,665 on July 1, September 1 and December 1 of 2004 and March 1, 2005.

ARTICLE V - LOSS NOTICES AND SETTLEMENTS

A.    Whenever reinstatement premium settlements made by the Company under the
      Underlying Contracts appear likely to result in a claim hereunder, the
      Company shall notify the Reinsurer. The Company will advise the Reinsurer
      of all subsequent developments relating to such claims that, in the
      opinion of the Company, may materially affect the position of the
      Reinsurer.

B.    All reinstatement premium settlements made by the Company under the
      Underlying Contracts, provided they are within the terms of the Underlying
      Contracts and within the terms of this Contract, shall be binding upon the
      Reinsurer, and the Reinsurer agrees to pay all amounts for which it may be
      liable upon receipt of reasonable evidence of the amount paid (or
      scheduled to be paid) by the Company.

ARTICLE VI - LATE PAYMENTS

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

B.    In the event any premium, loss or other payment due either party is not
      received by the intermediary named in Article XXI (hereinafter referred to
      as the "Intermediary") by the payment due date, the party to whom payment
      is due may, by notifying the Intermediary in writing, require the debtor
      party to pay, and the debtor party agrees to pay, an interest

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      penalty on the amount past due calculated for each such payment on the
      last business day of each month as follows:

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

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

      3.    The amount past due, including accrued interest.

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

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

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

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

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

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

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

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      party shall reimburse the debtor party for any such excess payment made
      plus interest on the excess amount calculated in accordance with this
      Article.

E.    Interest penalties arising out of the application of this Article that are
      $100 or less from any party shall be waived unless there is a pattern of
      late payments consisting of three or more items over the course of any
      12-month period.

ARTICLE VII - OFFSET (BRMA 36D)

The Company and the Reinsurer, each at its option, may offset any balance or
balances, whether on account of premiums, claims and losses, loss expenses or
salvages due from one party to the other under this Contract; provided, however,
that in the event of the insolvency of a party hereto, offsets shall only be
allowed in accordance with applicable statutes and regulations.

ARTICLE VIII - ACCESS TO RECORDS (BRMA 1D)

The Reinsurer or its designated representatives shall have access at any
reasonable time to all records of the Company which pertain in any way to this
reinsurance.

ARTICLE IX - ERRORS AND OMISSIONS (BRMA 14F)

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

ARTICLE X - CURRENCY (BRMA 12A)

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

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

ARTICLE XI - TAXES (BRMA 50C)

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

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ARTICLE XII - FEDERAL EXCISE TAX (BRMA 17A)

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

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

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

ARTICLE XIII - UNAUTHORIZED REINSURERS

A.    If the Reinsurer is unauthorized in any state of the United States of
      America or the District of Columbia, the Reinsurer agrees to fund, on or
      before December 31, 2004, its share of the Company's ceded United States
      outstanding loss reserves (being the sum of all reinstatement premiums
      paid by the Company under the Underlying Contracts but not yet recovered
      from the Reinsurer, plus the Company's reserves for reinstatement premiums
      due under the Underlying Contracts, if any) by:

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

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

      3.    Cash advances;

      if, without such funding, a penalty would accrue to the Company on any
      financial statement it is required to file with the insurance regulatory
      authorities involved. The Reinsurer, at its sole option, may fund in other
      than cash if its method and form of funding are acceptable to the
      insurance regulatory authorities involved.

B.    If the Reinsurer is unauthorized in any province or jurisdiction of
      Canada, the Reinsurer agrees to fund, on or before December 31, 2004, 115%
      of its share of the Company's ceded Canadian outstanding loss reserves
      (being the sum of all reinstatement premiums paid by the Company under the
      Underlying Contracts but not yet recovered from the Reinsurer, plus the
      Company's reserves for reinstatement premiums due under the Underlying
      Contracts, if any) by:

      1.    A clean, irrevocable and unconditional letter of credit issued and
            confirmed, if confirmation is required by the insurance regulatory
            authorities involved, by a Canadian bank or banks meeting the NAIC
            Securities Valuation Office credit standards for issuers of letters
            of credit and acceptable to said insurance regulatory authorities,
            for no more than 15/115ths of the total funding required; and/or

      2.    Cash advances for the remaining balance of the funding required;

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      if, without such funding, a penalty would accrue to the Company on any
      financial statement it is required to file with the insurance regulatory
      authorities involved.

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

       1.   To reimburse itself for the Reinsurer's share of reinstatement
            premiums paid by the Company under the terms of the Underlying
            Contracts, unless paid in cash by the Reinsurer;

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

       3.   To fund a cash account in an amount equal to the Reinsurer's share
            of any ceded outstanding loss reserves funded by means of a letter
            of credit which is under non-renewal notice, if said letter of
            credit has not been renewed or replaced by the Reinsurer 10 days
            prior to its expiration date;

       4.   To refund to the Reinsurer any sum in excess of the actual amount
            required to fund the Reinsurer's share of the Company's ceded
            outstanding loss reserves, if so requested by the Reinsurer.

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

ARTICLE XIV - INSOLVENCY

A.    In the event of the insolvency of one or more of the reinsured companies,
      this reinsurance shall be payable directly to the company or to its
      liquidator, receiver, conservator or statutory successor on the basis of
      the liability of the company without diminution because of the insolvency
      of the company or because the liquidator, receiver, conservator or
      statutory successor of the company has failed to pay all or a portion of
      any claim. It is agreed, however, that the liquidator, receiver,
      conservator or statutory successor of the company shall give written
      notice to the Reinsurer of the pendency of a claim against the company
      indicating the policy or bond reinsured which claim would involve a
      possible liability on the part of the Reinsurer within a reasonable time
      after such claim is filed in the conservation or liquidation proceeding or
      in the receivership, and that during the pendency of such claim, the
      Reinsurer may investigate such claim and interpose, at its own expense, in
      the proceeding where such claim is to be adjudicated, any defense or
      defenses that it may deem available to the company or its liquidator,
      receiver, conservator or statutory

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      successor. The expense thus incurred by the Reinsurer shall be chargeable,
      subject to the approval of the Court, against the company as part of the
      expense of conservation or liquidation to the extent of a pro rata share
      of the benefit which may accrue to the company solely as a result of the
      defense undertaken by the Reinsurer.

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

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

ARTICLE XV - ARBITRATION

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

B.    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 provided that communication shall be made by the Company to each
      of the reinsurers constituting the one party, and provided, however, that
      nothing therein shall impair the rights of such reinsurers to assert
      several, rather than joint, defenses or claims, nor be construed as
      changing the liability of the Reinsurer under the terms of this Contract
      from several to joint.

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

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

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

F.    The decision in writing of the majority of the arbitrators shall be final
      and binding upon both parties. Judgment may be entered upon the final
      decision of the arbitrators in any court having jurisdiction. The
      arbitration shall take place in Bala Cynwyd, Pennsylvania, unless
      otherwise mutually agreed between the Company and the Reinsurer.

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

H.    All time limitations stated in this Article may be amended by mutual
      consent of the parties, and will be amended automatically to the extent
      made necessary by any circumstances beyond the control of the parties.

ARTICLE XVI - SERVICE OF SUIT

(Applicable if the Reinsurer is not domiciled in the United States of America,
and/or is not authorized in any State, Territory or District of the United
States where authorization is required by insurance regulatory authorities. This
Article is not intended to conflict with or override the parties' obligations to
arbitrate their disputes in accordance with Article XV).

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

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

ARTICLE XVII - AGENCY AGREEMENT

If more than one reinsured company is named as a party to this Contract, the
first named company shall be deemed the agent of the other reinsured companies
for purposes of sending

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or receiving notices required by the terms and conditions of this Contract, and
for purposes of remitting or receiving any monies due any party.

ARTICLE XVIII - GOVERNING LAW

This Contract shall be governed as to performance, administration and
interpretation by the laws of the State of Pennsylvania exclusive of the rules
with respect to conflicts of law, except as to rules with respect to credit for
reinsurance in which case the applicable rules of all states shall apply.

ARTICLE XIX - CONFIDENTIALITY

The Reinsurer, except with the express prior written consent of the Company,
shall not directly or indirectly, communicate, disclose or divulge to any third
party, any knowledge or information that may be acquired either directly or
indirectly as a result of the inspection of the Company's books, records and
papers. The restrictions as outlined in this Article shall not apply to
communication or disclosures that the Reinsurer is required to make to its
statutory auditors, retrocessionaires, legal counsel, arbitrators involved in
any arbitration procedures under this Contract or disclosures required upon
subpoena or other dully-issued order of a court or other governmental agency or
regulatory authority.

ARTICLE XX - SEVERABILITY

If any provision of this Contract should be invalid under applicable laws, the
latter shall control but only to the extent of the conflict without affecting
the remaining provisions of this Contract.

ARTICLE XXI - INTERMEDIARY (BRMA 23A)

Benfield, Inc. is hereby recognized as the Intermediary negotiating this
Contract for all business hereunder. All communications (including but not
limited to notices, statements, premium, return premium, commissions, taxes,
losses, loss adjustment expense, salvages and loss settlements) relating thereto
shall be transmitted to the Company or the Reinsurer through Benfield, Inc.
Payments by the Company to the Intermediary shall be deemed to constitute
payment to the Reinsurer. Payments by the Reinsurer to the Intermediary shall be
deemed to constitute payment to the Company only to the extent that such
payments are actually received by the Company.

IN WITNESS WHEREOF, the Company by its duly authorized representative has
executed this Contract as of the date undermentioned at:

Bala Cynwyd, Pennsylvania, this ________ day of _________________ in the year
________.

          ______________________________________________________________________
          Philadelphia Insurance Companies (for and on behalf of the "Company")

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                                   SCHEDULE A

                        REINSTATEMENT PREMIUM PROTECTION
                              REINSURANCE CONTRACT
                             EFFECTIVE: JULY 1, 2004

                                    issued to

                         Philadelphia Insurance Company
                            Bala Cynwyd, Pennsylvania
                    Philadelphia Indemnity Insurance Company
                            Bala Cynwyd, Pennsylvania
                                       and

                    any and all other companies which are now
                   or may hereafter become member companies of
                        Philadelphia Insurance Companies

<TABLE>
<CAPTION>
                              UNDERLYING         FIRST            SECOND            THIRD           FOURTH
                                EXCESS           EXCESS           EXCESS            EXCESS          EXCESS
<S>                          <C>              <C>              <C>              <C>              <C>
Company's Retention          $  7,000,000     $ 10,000,000     $ 20,000,000     $ 40,000,000     $ 65,000,000

Reinsurer's Per
Occurrence Limit             $  3,000,000     $ 10,000,000     $ 20,000,000     $ 25,000,000     $ 50,000,000

Reinsurer's Annual Limit     $  6,000,000     $ 20,000,000     $ 40,000,000     $ 50,000,000     $100,000,000

Annual Minimum Premium       $    702,000     $  1,680,000     $  2,000,000     $  1,350,000     $  1,600,000

Premium Rate                        0.457%           1.000%           1.190%           0.810%           0.960%

Annual Deposit Premium       $    877,500     $  2,100,000     $  2,500,000     $  1,687,500     $  2,000,000

Quarterly Deposit Premium    $    219,375     $    525,000     $    625,000     $    421,875     $    500,000
</TABLE>

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                                                                   EXHIBIT 10.13

       UNDERLYING EXCESS CATASTROPHE AND REINSTATEMENT PREMIUM PROTECTION
                              REINSURANCE CONTRACT
                             EFFECTIVE: JULY 1, 2004

                                    issued to

                       Liberty American Insurance Company
                             Pinellas Park, Florida
                          Mobile USA Insurance Company
                             Pinellas Park, Florida
                                       and
                    any and all other companies which are now
                   or may hereafter become member companies of
                     Liberty American Insurance Group, Inc.

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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
 ARTICLE                                                                                                   PAGE
<S>                                                                                                        <C>
     I         Classes of Business Reinsured                                                                 1
    II         Term                                                                                          1
   III         Concurrency of Conditions                                                                     2
    IV         Territory                                                                                     2
     V         Exclusions                                                                                    2
    VI         Retention and Limit                                                                           4
   VII         Reinstatement                                                                                 5
  VIII         Definitions                                                                                   5
    IX         Other Reinsurance                                                                             6
     X         Loss Occurrence                                                                               7
    XI         Loss Notices and Settlements                                                                  8
   XII         Salvage and Subrogation                                                                       8
  XIII         Florida Hurricane Catastrophe Fund                                                            8
   XIV         Reinsurance Premium                                                                           9
    XV         Late Payments                                                                                10
   XVI         Offset (BRMA 36D)                                                                            11
  XVII         Access to Records (BRMA 1D)                                                                  12
 XVIII         Liability of the Reinsurer                                                                   12
   XIX         Net Retained Lines (BRMA 32E)                                                                12
    XX         Errors and Omissions (BRMA 14F)                                                              12
   XXI         Currency (BRMA 12A)                                                                          12
  XXII         Taxes (BRMA 50C)                                                                             13
 XXIII         Federal Excise Tax (BRMA 17A)                                                                13
  XXIV         Unauthorized Reinsurers                                                                      13
   XXV         Insolvency                                                                                   15
  XXVI         Arbitration                                                                                  16
 XXVII         Service of Suit                                                                              17
XXVIII         Agency Agreement                                                                             17
  XXIX         Governing Law                                                                                17
   XXX         Confidentiality                                                                              18
  XXXI         Intermediary (BRMA 23A)                                                                      18
               Schedule A
</TABLE>

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       UNDERLYING EXCESS CATASTROPHE AND REINSTATEMENT PREMIUM PROTECTION
                              REINSURANCE CONTRACT
                             EFFECTIVE: JULY 1, 2004

                                    issued to

                       Liberty American Insurance Company
                             Pinellas Park, Florida
                          Mobile USA Insurance Company
                             Pinellas Park, Florida
                                       and
                    any and all other companies which are now
                   or may hereafter become member companies of
                     Liberty American Insurance Group, Inc.
             (hereinafter referred to collectively as the "Company")

                                       by

                   The Subscribing Reinsurer(s) Executing the
                     Interests and Liabilities Agreement(s)
                                 Attached Hereto
                  (hereinafter referred to as the "Reinsurer")

ARTICLE I - CLASSES OF BUSINESS REINSURED

By this Contract the Reinsurer agrees to reinsure the excess liability which may
accrue to the Company under its policies, contracts and binders of insurance or
reinsurance (hereinafter called "policies") in force at the effective date
hereof or issued or renewed on or after that date, and classified by the Company
as Property business, subject to the terms, conditions and limitations set forth
herein and in Schedule A attached to and forming part of this Contract.

ARTICLE II - TERM

A.    This Contract shall become effective on July 1, 2004, with respect to
      losses arising out of loss occurrences commencing on or after that date,
      and shall remain in force until May 31, 2005, both days inclusive.

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

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ARTICLE III - CONCURRENCY OF CONDITIONS

A.    As respects Section II of Article VI only, it is agreed that this Contract
      shall follow the terms, conditions, exclusions, definitions, warranties
      and settlements of the Company under Section I of Article VI and under the
      Company's Florida Only Excess Catastrophe Reinsurance Contract, effective
      June 1, 2004, and $50,000,000 Excess $90,000,000 Florida Only Catastrophe
      Reinsurance Contract, effective June 1, 2004 (hereinafter referred to
      collectively as the "Underlying Contracts" and described in Schedule A
      attached to and forming part of this Contract) which are not inconsistent
      with the provisions of this Contract.

B.    The Company shall advise the Reinsurer of any material changes in the
      Underlying Contracts which may affect the liability of the Reinsurer under
      this Contract.

ARTICLE IV - TERRITORY

The liability of the Reinsurer shall be limited to losses under policies
covering property located within the territorial limits of the State of Florida
or extra territorial limits of the Company's policies.

ARTICLE V - EXCLUSIONS

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

       1.   Financial guarantee and insolvency.

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

       3.   Loss or damage caused by or resulting from war, invasion,
            hostilities, acts of foreign enemies, civil war, rebellion,
            insurrection, military or usurped power, or martial law or
            confiscation by order of any government or public authority, but
            this exclusion shall not apply to loss or damage covered under a
            standard policy with a standard War Exclusion Clause.

       4.   Loss or liability excluded under the provisions of the "Pools,
            Associations and Syndicates Exclusion Clause" attached to and
            forming part of this Contract.

      5.    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. "Insolvency fund"
            includes any guaranty fund, insolvency fund, plan, pool,
            association, fund or other arrangement, however denominated,
            established or governed, which provides for any assessment of or
            payment or assumption by the Company of part or all of any claim,
            debt, charge, fee or other obligation of an insurer, or its
            successors or assigns, which has been declared by any competent
            authority to be insolvent, or which is otherwise deemed unable to
            meet any claim, debt, charge, fee or other obligation in whole or in
            part.

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       6.   Losses in respect of overhead transmission and distribution lines
            and their supporting structures other than those on or within 300
            meters (or 1,000 feet) of the insured premises. It is understood and
            agreed that public utilities extension and/or suppliers extension
            and/or contingent business interruption coverages are not subject to
            this exclusion, provided that these are not part of a transmitters'
            or distributors' policy.

       7.   Accident and Health, Casualty, Fidelity and/or Surety business.

       8.   Pollution and seepage coverages excluded under the provisions of the
            "Pollution and Seepage Exclusion Clause (BRMA 39A)" attached to and
            forming part of this Contract.

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

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

            a.    Involves violence against one or more persons; or

            b.    Involves damage to property; or

            c.    Endangers life other than that of the person committing the
                  action; or

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

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

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

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

      10.   Loss or liability in any way or to any extent arising out of the
            actual or alleged presence or actual, alleged or threatened presence
            of fungi including, but not limited to, mold, mildew, mycotoxins,
            microbial volatile organic compounds or other "microbial
            contamination." This includes:

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            a.    Any supervision, instruction, recommendations, warnings or
                  advice given or which should have been given in connection
                  with the above; and

            b.    Any obligation to share damages with or repay someone else who
                  must pay damages because of such injury or damage.

            For purposes of this exclusion, "microbial contamination" means any
            contamination, either airborne or surface, which arises out of or is
            related to the presence of fungi, mold, mildew, mycotoxins,
            microbial volatile organic compounds or spores, including, without
            limitation, Penicillium, Aspergillus, Fusarium, Aspergillus Flavus
            and Stachybotrys chartarum.

            Losses resulting from the above causes do not in and of themselves
            constitute an event unless arising out of one or more of the
            following perils, in which case this exclusion does not apply:

                  Fire, lightning, explosion, aircraft or vehicle impact,
                  falling objects, windstorm, hail, tornado, cyclone, hurricane,
                  earthquake, volcano, tsunami, flood, freeze or weight of snow.

            Notice of any claims for mold-related losses must be given by the
            Company to the Reinsurer, in writing, within 24 months after the
            commencement date of the loss occurrence to which such claims
            relate.

      11.   Loss or liability excluded under the provisions of the "Electronic
            Data Endorsement B" (N.M.A. 2915) attached to and forming part of
            this Contract.

ARTICLE VI - RETENTION AND LIMIT

A. Section I - Underlying Excess Catastrophe Reinsurance:

      1.    The Company shall retain and be liable for the first $3,500,000 of
            ultimate net loss arising out of each loss occurrence. The Reinsurer
            shall then be liable for the amount by which such ultimate net loss
            exceeds the Company's retention, but the liability of the Reinsurer
            shall not exceed $3,500,000 as respects any one loss occurrence.

      2.    No claim shall be made under Section I as respects any one loss
            occurrence unless at least two risks insured or reinsured by the
            Company are involved in such loss occurrence. For purposes of this
            Contract, the Company shall be the sole judge of what constitutes
            one risk.

B.    Section II - Reinstatement Premium Protection Reinsurance

      The Reinsurer shall be liable for any reinstatement premium which the
      Company pays or becomes liable to pay as a result of loss occurrences
      commencing during the term of this Contract under paragraph A above and
      the Underlying Contracts. However, the liability of the Reinsurer shall
      not exceed $12,247,500 for the term of this Contract.

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ARTICLE VII - REINSTATEMENT

A.    As respects Section I of Article VI, in the event all or any portion of
      the reinsurance hereunder is exhausted by loss, the amount so exhausted
      shall be reinstated immediately from the time the loss occurrence
      commences hereon. For each amount so reinstated the Company agrees to pay
      additional premium equal to the product of the following:

      1.    The percentage of the Section I occurrence limit reinstated (based
            on the loss paid by the Reinsurer under Section I); times

      2.    The final adjusted reinsurance premium under Section I, as
            calculated in accordance with paragraph A of Article XIV, for the
            term of this Contract (exclusive of reinstatement premium).

B.    Whenever the Company requests payment by the Reinsurer of any loss under
      Section I, the Company shall submit a statement to the Reinsurer of
      reinstatement premium due the Reinsurer. If the final adjusted reinsurance
      premium under Section I for the term of this Contract has not been
      determined as of the date of any such statement, the calculation of
      reinstatement premium due shall be based on the annual deposit premium
      under Section I and shall be readjusted when the final adjusted
      reinsurance premium under Section I for the term of this Contract has been
      determined. Any reinstatement premium shown to be due the Reinsurer as
      reflected by any such statement (less prior payments, if any) shall be
      payable by the Company concurrently with payment by the Reinsurer of the
      requested loss. Any return reinstatement premium shown to be due the
      Company shall be remitted by the Reinsurer as promptly as possible after
      receipt and verification of the Company's statement.

C.    Notwithstanding anything stated herein, the liability of the Reinsurer
      under Section I of Article VI shall not exceed $3,500,000 as respects loss
      or losses arising out of any one loss occurrence, nor shall it exceed
      $7,000,000 in all during the term of this Contract.

ARTICLE VIII - DEFINITIONS

A.    "Ultimate net loss" as used herein is defined as the sum or sums
      (including loss in excess of policy limits, extra contractual obligations
      and loss adjustment expense, as hereinafter defined) paid or payable by
      the Company in settlement of claims and in satisfaction of judgments
      rendered on account of such claims, after deduction of all salvage, all
      recoveries and all claims on inuring insurance or reinsurance, whether
      collectible or not. Nothing herein shall be construed to mean that losses
      under this Contract are not recoverable until the Company's ultimate net
      loss has been ascertained.

B.    "Loss in excess of policy limits" and "extra contractual obligations" as
      used herein shall be defined as follows:

      1.    "Loss in excess of policy limits" shall mean 90.0% of any amount
            paid or payable by the Company in excess of its policy limits, but
            otherwise within the terms of its policy, such loss in excess of the
            Company's policy limits having been incurred because of, but not
            limited to, failure by the Company to settle within the policy
            limits or by reason of the Company's alleged or actual negligence,
            fraud or bad faith in rejecting an offer of settlement or in the
            preparation of the defense or in the trial of any action against its

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

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

      Notwithstanding anything stated herein, the amount included in the
      ultimate net loss for any one loss occurrence as respects loss in excess
      of policy limits and extra contractual obligations shall not exceed 25.0%
      of the Company's indemnity loss hereunder arising out of that loss
      occurrence.

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

      If any provision of this paragraph B 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.

C.    "Loss adjustment expense" as used herein shall mean expenses assignable to
      the investigation, appraisal, adjustment, settlement, litigation, defense
      and/or appeal of specific claims, regardless of how such expenses are
      classified for statutory reporting purposes. Loss adjustment expense shall
      include, but not be limited to, declaratory judgments, interest on
      judgments, expenses of outside adjusters, and a pro rata share of the
      salaries and expenses of the Company's field employees according to the
      time occupied adjusting such losses and expenses of the Company's
      officials incurred in connection with the losses, but shall not include
      office expenses or salaries of the Company's regular employees.

ARTICLE IX - OTHER REINSURANCE

The Company shall be permitted to carry excess catastrophe reinsurance,
recoveries under which shall inure solely to the benefit of the Company. The
Company shall also carry 15.0% quota share reinsurance on its direct personal
lines business, recoveries under which shall inure to the benefit of this
Contract, or so deemed.

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ARTICLE X - LOSS OCCURRENCE

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

      1.    As regards windstorm, hail, tornado, hurricane, cyclone, including
            ensuing collapse and water damage, all individual losses sustained
            by the Company occurring during any period of 72 consecutive hours
            arising out of and directly occasioned by the same event. However,
            the event need not be limited to one state or province or states or
            provinces contiguous thereto.

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

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

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

      5.    As regards firestorms, brush fires, and other fires or series of
            fires, irrespective of origin (except as provided in subparagraphs 2
            and 3 above), which spread through trees, grassland or other
            vegetation, all individual losses sustained by the Company which
            occur during any period of 168 consecutive hours within a 100-mile
            radius of any one fixed point selected by the Company may be
            included in the Company's "loss occurrence." However, an individual
            loss subject to this subparagraph cannot be included in more than
            one "loss occurrence."

B.    For all those "loss occurrences," other than those referred to in
      subparagraph 2 of paragraph A above, the Company may choose the date and
      time when any such period of consecutive hours commences, provided that it
      is not earlier than the date and time of the occurrence of the first
      recorded individual loss sustained by the Company arising out of that
      disaster, accident or loss, and provided that only one such period of 168
      consecutive hours shall apply with respect to one event, except for any
      "loss occurrence" referred to in

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      subparagraph 1 of paragraph A above where only one such period of 72
      consecutive hours shall apply with respect to one event, regardless of the
      duration of the event.

C.    As respects those "loss occurrences" referred to in subparagraph 2 of
      paragraph A above, if the disaster, accident or loss occasioned by the
      event is of greater duration than 72 consecutive hours, then the Company
      may divide that disaster, accident or loss into two or more "loss
      occurrences," provided no two periods overlap and no individual loss is
      included in more than one such period and provided that no period
      commences earlier than the date and time of the occurrence of the first
      recorded individual loss sustained by the Company arising out of that
      disaster, accident or loss.

D.    No individual losses occasioned by an event that would be covered by 72
      hours clauses may be included in any "loss occurrence" claimed under the
      168 hours provision.

ARTICLE XI - LOSS NOTICES AND SETTLEMENTS

A.    Whenever losses sustained by the Company appear likely to result in a
      claim hereunder, the Company shall notify the Reinsurer, and the Reinsurer
      shall have the right to participate in the adjustment of such losses at
      its own expense.

B.    All loss settlements made by the Company, provided they are within the
      terms of this Contract, shall be binding upon the Reinsurer, and the
      Reinsurer agrees to pay all amounts for which it may be liable upon
      receipt of reasonable evidence of the amount paid (or scheduled to be
      paid) by the Company.

ARTICLE XII - SALVAGE AND SUBROGATION

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

ARTICLE XIII - FLORIDA HURRICANE CATASTROPHE FUND

A.    Any loss reimbursement paid or payable to the Company under the Florida
      Hurricane Catastrophe Fund (FHCF) as a result of loss occurrences
      commencing during the term of this Contract shall inure to the benefit of
      this Contract. Further, any FHCF loss reimbursement shall be deemed to be
      paid to the Company in accordance with the reimbursement contract between
      the Company and the State Board of Administration of the State of Florida
      at the full payout level set forth therein and will be deemed not to be
      reduced by any reduction or exhaustion of the FHCF's claims paying
      capacity.

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B.    Prior to the determination of the Company's FHCF retention and payout, if
      any, under the reimbursement contract, the Reinsurer's liability hereunder
      will be determined provisionally based on the projected payout, determined
      in accordance with the provisions of the reimbursement contract. Following
      determination of the payout under the reimbursement contract, the ultimate
      net loss under this Contract will be recalculated. If, as a result of such
      calculation, the loss to the Reinsurer in any one loss occurrence is less
      than the amount previously paid by the Reinsurer, the Company shall
      promptly remit the difference to the Reinsurer. If the loss to the
      Reinsurer in any one loss occurrence is greater than the amount previously
      paid by the Reinsurer, the Reinsurer shall promptly remit the difference
      to the Company.

C.    If an FHCF reimbursement amount is based on the Company's losses in more
      than one loss occurrence and the FHCF does not designate the amount
      allocable to each loss occurrence, the FHCF reimbursement amount shall be
      prorated in the proportion that the Company's losses in each loss
      occurrence bear to the Company's total losses arising out of all loss
      occurrences to which the FHCF reimbursement applies.

D.    Any reimbursement premiums or emergency assessment paid by the Company
      under the FHCF shall be deemed to be premiums paid for inuring
      reinsurance.

ARTICLE XIV - REINSURANCE PREMIUM

A.    As respects Section I:

      1.    As premium for reinsurance coverage provided under Section I, the
            Company shall pay the Reinsurer the greater of a minimum premium of
            $1,050,000 or the sum of the following:

            a.    1.637% of the Company's gross earned premium for Condominium,
                  Dwelling and Homeowners business during the term of this
                  Contract; and

            b.    2.062% of the Company's gross earned premium for Manufactured
                  Homeowners business during the term of this Contract.

      2.    The Company shall pay the Reinsurer a deposit premium of $1,312,500
            in four equal installments of $328,125 on July 1, September 1 and
            December 1 of 2004 and March 1, 2005.

      3.    Within 45 days after the expiration of this Contract, the Company
            shall provide a report to the Reinsurer setting forth the premium
            due under Section I, computed in accordance with paragraph A, and
            any additional premium due the Reinsurer or return premium due the
            Company shall be remitted promptly.

      4.    "Gross earned premium" as used herein is defined as earned premium
            of the Company for the classes of business reinsured hereunder,
            before the deduction of any premiums ceded by the Company for
            reinsurance which inures to the benefit of this Contract. Gross
            earned premium will not include the Company's earned premium for
            Homeowners, Manufactured Homeowners, Dwelling and Condominium
            policies that include a "No Wind/No Water" exclusion. It is
            understood that gross earned

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            premium shall include catastrophe fees, but shall exclude MGA fees,
            DRST fees and policy surcharges to recoup residual market deficit
            assessments.

B. As respects Section II:

       1.   As premium for the reinsurance provided under Section II, the
            Company shall pay the Reinsurer the sum of the following:

            a.    As respects Section I of this Contract, $437,500.

            b.    As respects the Florida Only Excess Catastrophe Reinsurance
                  Contract, effective June 1, 2004, $1,105,650 for the First
                  layer, $582,750 for the Second layer, $223,200 for the Third
                  layer and $116,000 for the Fourth layer.

            c.    As respects the $50,000,000 excess $90,000,000 Florida Only
                  Catastrophe Reinsurance Contract, effective June 1, 2004,
                  $54,250.

       2.   The Company shall pay the Reinsurer the sum of the amounts in (a)
            through (c) of subparagraph 1 above in four equal installments of
            $629,837.50 on July 1, 2004, September 1, 2004, December 1, 2004 and
            March 1, 2005.

ARTICLE XV - LATE PAYMENTS

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

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

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

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

       3.   The amount past due, including accrued interest.

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

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

       1.   As respects the payment of routine deposits and premiums due the
            Reinsurer, the due date shall be as provided for in the applicable
            section of this Contract. In the event a

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            due date is not specifically stated for a given payment, it shall be
            deemed due 30 days after the date of transmittal by the Intermediary
            of the initial billing for each such payment.

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

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

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

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

E.    Interest penalties arising out of the application of this Article that are
      $100 or less from any party shall be waived unless there is a pattern of
      late payments consisting of three or more items over the course of any
      12-month period.

ARTICLE XVI - OFFSET (BRMA 36D)

The Company and the Reinsurer, each at its option, may offset any balance or
balances, whether on account of premiums, claims and losses, loss expenses or
salvages due from one party to the other under this Contract; provided, however,
that in the event of the insolvency of a party hereto, offsets shall only be
allowed in accordance with applicable statutes and regulations.

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                                    Page 11

<PAGE>

ARTICLE XVII - ACCESS TO RECORDS (BRMA 1D)

The Reinsurer or its designated representatives shall have access at any
reasonable time to all records of the Company which pertain in any way to this
reinsurance.

ARTICLE XVIII - LIABILITY OF THE REINSURER

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

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

ARTICLE XIX - NET RETAINED LINES (BRMA 32E)

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

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

ARTICLE XX - ERRORS AND OMISSIONS (BRMA 14F)

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

ARTICLE XXI - CURRENCY (BRMA 12A)

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

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

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<PAGE>

ARTICLE XXII - TAXES (BRMA 50C)

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

ARTICLE XXIII - FEDERAL EXCISE TAX (BRMA 17A)

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

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

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

ARTICLE XXIV - UNAUTHORIZED REINSURERS

A.    If the Reinsurer is unauthorized in any state of the United States of
      America or the District of Columbia, the Reinsurer agrees to fund, on or
      before December 31, 2004, as respects Section I of Article VI, its share
      of the Company's ceded United States unearned premium and outstanding loss
      and loss adjustment expense reserves (including all case reserves plus any
      reasonable amount estimated to be unreported, as determined by the
      Company, from known loss occurrences) and, as respects Section II of
      Article VI, its share of the Company's ceded United States unearned
      premium and outstanding loss reserves (being the sum of all reinstatement
      premiums paid by the Company under the Underlying Contracts but not yet
      recovered from the Reinsurer, plus the Company's reserves for
      reinstatement premiums due under the Underlying Contracts, if any) by:

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

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

      3.    Cash advances;

      if, without such funding, a penalty would accrue to the Company on any
      financial statement it is required to file with the insurance regulatory
      authorities involved. The Reinsurer, at its sole option, may fund in other
      than cash if its method and form of funding are acceptable to the
      insurance regulatory authorities involved.

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                                    Page 13

<PAGE>

B.    If the Reinsurer is unauthorized in any province or jurisdiction of
      Canada, the Reinsurer agrees to fund, on or before December 31, 2004, as
      respects Section I of Article VI, 115% of its share of the Company's ceded
      Canadian unearned premium and outstanding loss and loss adjustment expense
      reserves (including all case reserves plus any reasonable amount estimated
      to be unreported, as determined by the Company, from known loss
      occurrences) and, as respects Section II of Article VI, 115% of its share
      of the Company's ceded Canadian unearned premium and outstanding loss
      reserves (being the sum of all reinstatement premiums paid by the Company
      under the Underlying Contracts but not yet recovered from the Reinsurer,
      plus the Company's reserves for reinstatement premiums due under the
      Underlying Contracts, if any) by:

      1.    A clean, irrevocable and unconditional letter of credit issued and
            confirmed, if confirmation is required by the insurance regulatory
            authorities involved, by a Canadian bank or banks meeting the NAIC
            Securities Valuation Office credit standards for issuers of letters
            of credit and acceptable to said insurance regulatory authorities,
            for no more than 15/115ths of the total funding required; and/or

      2.    Cash advances for the remaining balance of the funding required;

      if, without such funding, a penalty would accrue to the Company on any
      financial statement it is required to file with the insurance regulatory
      authorities involved.

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

      1.    As respects Section I , to reimburse itself for the Reinsurer's
            share of unearned premiums returned to insureds on account of policy
            cancellations and, as respects Section II, to reimburse itself for
            the Reinsurer's share of reinstatement premiums paid by the Company
            under the terms of the Underlying Contracts, unless paid in cash by
            the Reinsurer;

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

       3.   As respects Sections I and II, to reimburse itself for the
            Reinsurer's share of any other amounts claimed to be due hereunder,
            unless paid in cash by the Reinsurer;

      4.    To fund a cash account in an amount equal to the Reinsurer's share,
            as respects Section I, of any ceded unearned premium and/or
            outstanding loss and loss adjustment expense reserves (including all
            case reserves plus any reasonable amount estimated to be unreported,
            as determined by the Company, from known loss

                                                                 [BENFIELD LOGO]

                                    Page 14

<PAGE>

            occurrences) and as respects Section II, any ceded outstanding loss
            reserves (being the sum of all reinstatement premiums paid by the
            Company under the Underlying Contracts but not yet recovered from
            the Reinsurer, plus the Company's reserves for reinstatement premium
            due under the Underlying Contracts, if any) funded by means of a
            letter of credit which is under non-renewal notice, if said letter
            of credit has not been renewed or replaced by the Reinsurer 10 days
            prior to its expiration date;

      5.    To refund to the Reinsurer any sum in excess of the actual amount
            required to fund the Reinsurer's share, as respects Section I, of
            the Company's ceded unearned premium and/or outstanding loss and
            loss adjustment expense reserves (including all case reserves plus
            any reasonable amount estimated to be unreported, as determined by
            the Company, from known loss occurrences) and, as respects Section
            II, the Reinsurer's share of the Company's ceded unearned premium
            and/or outstanding loss reserves (being the sum of all reinstatement
            premiums paid by the Company under the Underlying Contracts but not
            yet recovered from the Reinsurer, plus the Company's reserves for
            reinstatement premium due under the Underlying Contracts, if any) if
            so requested by the Reinsurer.

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

ARTICLE XXV - INSOLVENCY

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

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

C.    It is further understood and agreed that, in the event of the insolvency
      of one or more of the reinsured companies, the reinsurance under this
      Contract shall be payable directly by the Reinsurer to the company or to
      its liquidator, receiver or statutory successor, except as

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                                    Page 15

<PAGE>

      provided by Section 4118(a) of the New York Insurance Law or except (1)
      where this Contract specifically provides another payee of such
      reinsurance in the event of the insolvency of the company or (2) where the
      Reinsurer with the consent of the direct insured or insureds has assumed
      such policy obligations of the company as direct obligations of the
      Reinsurer to the payees under such policies and in substitution for the
      obligations of the company to such payees.

ARTICLE XXVI - ARBITRATION

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

B.    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 provided that communication shall be made by the Company to each
      of the reinsurers constituting the one party, and provided, however, that
      nothing therein shall impair the rights of such reinsurers to assert
      several, rather than joint, defenses or claims, nor be construed as
      changing the liability of the Reinsurer under the terms of this Contract
      from several to joint.

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

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

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

F.    The decision in writing of the majority of the arbitrators shall be final
      and binding upon both parties. Judgment may be entered upon the final
      decision of the arbitrators in any court

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<PAGE>

      having jurisdiction. The arbitration shall take place in Pinellas Park,
      Florida, unless otherwise mutually agreed between the Company and the
      Reinsurer.

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

H.    All time limitations stated in this Article may be amended by mutual
      consent of the parties, and will be amended automatically to the extent
      made necessary by any circumstances beyond the control of the parties.

ARTICLE XXVII - SERVICE OF SUIT

(Applicable if the Reinsurer is not domiciled in the United States of America,
and/or is not authorized in any State, Territory or District of the United
States where authorization is required by insurance regulatory authorities. This
Article is not intended to conflict with or override the parties obligations to
arbitrate their disputes in accordance with Article XXVI.)

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

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

ARTICLE XXVIII - AGENCY AGREEMENT

If more than one reinsured company is named as a party to this Contract, the
first named company shall be deemed the agent of the other reinsured companies
for purposes of sending or receiving notices required by the terms and
conditions of this Contract, and for purposes of remitting or receiving any
monies due any party.

ARTICLE XXIX - GOVERNING LAW

This Contract shall be governed as to performance, administration and
interpretation by the laws of the State of Florida exclusive of the rules with
respect to conflicts of law, except as to rules with respect to credit for
reinsurance in which case the applicable rules of all the states shall apply.

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                                    Page 17

<PAGE>

ARTICLE XXX - CONFIDENTIALITY

The Reinsurer, except with the express prior written consent of the Company,
shall not directly or indirectly communicate, disclose or divulge to any third
party any knowledge or information that may be acquired either directly or
indirectly as a result of the inspection of the Company's books, records and
papers. The restrictions as outlined in this Article shall not apply to
communication or disclosures that the Reinsurer is required to make to its
statutory auditors, retrocessionaires, legal counsel, arbitrators involved in
any arbitration procedures under this Contract or disclosures required upon
subpoena or other duly-issued order of a court or other governmental agency or
regulatory authority.

ARTICLE XXXI - INTERMEDIARY (BRMA 23A)

Benfield Inc. is hereby recognized as the Intermediary negotiating this Contract
for all business hereunder. All communications (including but not limited to
notices, statements, premium, return premium, commissions, taxes, losses, loss
adjustment expense, salvages and loss settlements) relating thereto shall be
transmitted to the Company or the Reinsurer through Benfield Inc. Payments by
the Company to the Intermediary shall be deemed to constitute payment to the
Reinsurer. Payments by the Reinsurer to the Intermediary shall be deemed to
constitute payment to the Company only to the extent that such payments are
actually received by the Company.

IN WITNESS WHEREOF, the Company by its duly authorized representative has
executed this Contract as of the date undermentioned at:

Pinellas Park, Florida, this ________ day of _______________________ in the year
________.

     ___________________________________________________________________________
     Liberty American Insurance Group, Inc. (for and on behalf of the "Company")

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<PAGE>

                                   SCHEDULE A

                        UNDERLYING EXCESS CATASTROPHE AND
                        REINSTATEMENT PREMIUM PROTECTION
                              REINSURANCE CONTRACT
                             EFFECTIVE: JULY 1, 2004

                                    issued to

                       Liberty American Insurance Company
                             Pinellas Park, Florida
                          Mobile USA Insurance Company
                             Pinellas Park, Florida
                                       and
                    any and all other companies which are now
                   or may hereafter become member companies of
                     Liberty American Insurance Group, Inc.

<TABLE>
<CAPTION>
                                                                                                                           $50M
                                         UNDERLYING           FIRST         SECOND            THIRD         FOURTH        EXCESS
                                           EXCESS             EXCESS        EXCESS            EXCESS        EXCESS         $90M
<S>                                      <C>              <C>            <C>              <C>            <C>           <C>
Company's Retention                      $  3,500,000     $  7,000,000   $ 20,000,000     $ 35,000,000   $ 50,000,000  $ 90,000,000

Reinsurer's Per Occurrence Limit         $  3,500,000     $ 13,000,000   $ 15,000,000     $ 15,000,000   $ 40,000,000  $ 50,000,000

Reinsurer's Annual Limit                 $  7,000,000     $ 26,000,000   $ 30,000,000     $ 30,000,000   $ 80,000,000  $100,000,000

Annual Minimum Premium                   $  1,050,000     $  2,808,000   $  2,220,000     $  1,200,000   $  1,280,000  $  1,240,000

Condominium, Dwelling and
 Homeowners Premium Rate                        1.637%           4.203%         3.323%           1.796%         1.916%        1.856%

Manufactured Homeowners Premium Rate            2.062%           5.046%         3.990%           2.157%         2.300%        2.228%

Annual Deposit Premium                   $  1,312,500     $  3,510,000   $  2,775,000     $  1,500,000   $  1,600,000  $  1,550,000

Quarterly Deposit Premium                $    328,125     $    877,500   $    693,750     $    375,000   $    400,000  $    387,500
</TABLE>

                                                                 [BENFIELD LOGO]

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

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

7.    Reassured to be sole judge of what constitutes:

      (a)   substantial quantities, and

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

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

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

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

12/12/57
N.M.A. 1119
BRMA 35B

<PAGE>

   NUCLEAR INCIDENT EXCLUSION CLAUSE - PHYSICAL DAMAGE - REINSURANCE (CANADA)

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

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

      (a)   nuclear reactor power plants including all auxiliary property on the
            site, or

      (b)   any other nuclear reactor installation, including laboratories
            handling radioactive materials in connection with reactor
            installations, and critical facilities as such, or

      (c)   installations for fabricating complete fuel elements or for
            processing substantial quantities of radioactive materials, and for
            reprocessing, salvaging, chemically separating, storing or disposing
            of spent nuclear fuel or waste materials, or

      (d)   installations other than those listed in (c) above using substantial
            quantities of radioactive isotopes or other products of nuclear
            fission.

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

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

      (b)   where the said insurance contains a provision excluding coverage for
            damage to property caused by or resulting from radioactive
            contamination, however caused.

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

5.    This clause shall not extend to risks using radioactive isotopes in any
      form where the nuclear exposure is not considered by the Reinsured to be
      the primary hazard.

6.    The term "radioactive material" means uranium, thorium, plutonium,
      neptunium, their respective derivatives and compounds, radioactive
      isotopes of other elements and any other substances which may be
      designated by or pursuant to any law, act or statute, or any law
      amendatory thereof as being prescribed substances capable of releasing
      atomic energy, or as being requisite for the production, use or
      application of atomic energy.

7.    Reinsured to be sole judge of what constitutes:

      (a)   substantial quantities, and

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

8.    Without in any way restricting the operation of paragraphs 1, 2, 3 and 4
      of this clause, this Agreement does not cover any loss or liability
      accruing to the Reinsured, directly or indirectly, and whether as Insurer
      or Reinsurer, caused:

      (1)   by any nuclear incident, as defined in or pursuant to the Nuclear
            Liability Act or any other nuclear liability act, law or statute, or
            any law amendatory thereof or nuclear explosion, except for ensuing
            loss or damage which results directly from fire, lightning or
            explosion of natural, coal or manufactured gas;

      (2)   by contamination by radioactive material.

NOTE:    Without in any way restricting the operation of paragraphs 1, 2, 3 and
         4 of this clause, paragraph 8 of this clause shall only apply to all
         original contracts of the Reinsured, whether new, renewal or
         replacement, which become effective on or after December 31, 1992.

N.M.A. 1980a (1/4/96)

<PAGE>

               POOLS, ASSOCIATIONS AND SYNDICATES EXCLUSION CLAUSE

SECTION A:

Excluding:

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

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

SECTION B:

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

         Industrial Risk Insurers,
         Associated Factory Mutuals,
         Improved Risk Mutuals,
         Any Pool, Association or Syndicate formed for the purpose of writing
            Oil, Gas or Petro-Chemical Plants and/or Oil or Gas Drilling Rigs,
         United States Aircraft Insurance Group,
         Canadian Aircraft Insurance Group,
         Associated Aviation Underwriters,
         American Aviation Underwriters.

Section B does not apply:

      (a)   Where The Total Insured Value over all interests of the risk in
            question is less than $250,000,000.

      (b)   To interests traditionally underwritten as Inland Marine or stock
            and/or contents written on a blanket basis.

      (c)   To Contingent Business Interruption, except when the Company is
            aware that the key location is known at the time to be insured in
            any Pool, Association or Syndicate named above, other than as
            provided for under Section B(a).

      (d)   To risks as follows:

            Offices, Hotels, Apartments, Hospitals, Educational Establishments,
            Public Utilities (other than railroad schedules) and builder's risks
            on the classes of risks specified in this subsection (d) only.

Where this clause attaches to Catastrophe Excesses, the following Section C is
added:

SECTION C:

Nevertheless the Reinsurer specifically agrees that liability accruing to the
Company from its participation in residual market mechanisms including but not
limited to:

      (1)   The following so-called "Coastal Pools":

            Alabama Insurance Underwriting Association
            Louisiana Insurance Underwriting Association
            Mississippi Windstorm Underwriting Association
            North Carolina Insurance Underwriting Association
            South Carolina Windstorm and Hail Underwriting Association
            Texas Windstorm Insurance Association

AND

      (2)   All "Fair Plan" and "Rural Risk Plan" business

                                  Page 1 of 2

<PAGE>

AND

      (3)   Citizens Property Insurance Corporation ("CPIC") and the California
            Earthquake Authority ("CEA")

for all perils otherwise protected hereunder shall not be excluded, except,
however, that this reinsurance does not include any increase in such liability
resulting from:

      (i)   The inability of any other participant in such "Coastal Pool" and/or
            "Fair Plan" and/or "Rural Risk Plan" and/or Residual Market
            Mechanisms to meet its liability.

      (ii)  Any claim against such "Coastal Pool" and/or "Fair Plan" and/or
            "Rural Risk Plan" and/or Residual Market Mechanisms, or any
            participant therein, including the Company, whether by way of
            subrogation or otherwise, brought by or on behalf of any insolvency
            fund (as defined in the Insolvency Fund Exclusion Clause
            incorporated in this Contract).

SECTION D:

      (1)   Notwithstanding Section C above, in respect of the CEA, where an
            assessment is made against the Company by the CEA, the Company may
            include in its Ultimate Net Loss only that assessment directly
            attributable to each separate loss occurrence covered hereunder. The
            Company's initial capital contribution to the CEA shall not be
            included in the Ultimate Net Loss.

      (2)   Notwithstanding Section C above, in respect of CPIC, where an
            assessment is made against the Company by CPIC, the maximum loss
            that the Company may include in the Ultimate Net Loss in respect of
            any loss occurrence hereunder shall not exceed the lesser of:

            (a)   The Company's assessment from CPIC for the accounting year in
                  which the loss occurrence commenced, or

            (b)   The product of the following:

                  (i)   The Company's percentage participation in CPIC for the
                        accounting year in which the loss occurrence commenced;
                        and

                  (ii)  CPIC's total losses in such loss occurrence.

Any assessments for accounting years subsequent to that in which the loss
occurrence commenced may not be included in the Ultimate Net Loss hereunder.
Moreover, notwithstanding Section C above, in respect of CPIC, the Ultimate Net
Loss hereunder shall not include any monies expended to purchase or retire bonds
as a consequence of being a member of CPIC. For the purposes of this Contract,
the Company may not include in the Ultimate Net Loss any assessment or any
percentage assessment levied by CPIC to meet the obligations of an insolvent
insurer member or other party, or to meet any obligations arising from the
deferment by CPIC of the collection of monies.

NOTES: Wherever used herein the terms:

           "Company"       shall be understood to mean "Company," "Reinsured,"
                           "Reassured" or whatever other term is used in the
                           attached reinsurance document to designate the
                           reinsured company or companies.

           "Agreement"     shall be understood to mean "Agreement," "Contract,"
                           "Policy" or whatever other term is used to designate
                           the attached reinsurance document.

           "Reinsurers"    shall be understood to mean "Reinsurers,"
                           "Underwriters" or whatever other term is used in the
                           attached reinsurance document to designate the
                           reinsurer or reinsurers.

                                  Page 2 of 2

<PAGE>

                     POLLUTION AND SEEPAGE EXCLUSION CLAUSE

This Contract excludes loss and/or damage and/or costs and/or expenses arising
from seepage and/or pollution and/or contamination, other than contamination
from smoke. Nevertheless, this exclusion does not preclude payment of the cost
of removing debris of property damaged by a loss otherwise covered hereunder,
subject always to a limit of 25% of the Company's property loss under the
applicable original policy.

BRMA 39A

<PAGE>

                          ELECTRONIC DATA ENDORSEMENT B

1.    ELECTRONIC DATA EXCLUSION

      Notwithstanding any provision to the contrary within the Contract or any
      endorsement thereto, it is understood and agreed as follows:-

      a)    This Contract does not insure loss, damage, destruction, distortion,
            erasure, corruption or alteration of ELECTRONIC DATA from any cause
            whatsoever (including but not limited to COMPUTER VIRUS) or loss of
            use, reduction in functionality, cost, expense of whatsoever nature
            resulting therefrom, regardless of any other cause or event
            contributing concurrently or in any other sequence to the loss.

            ELECTRONIC DATA means facts, concepts and information converted to a
            form useable for communications, interpretation or processing by
            electronic and electromechanical data processing or electronically
            controlled equipment and includes programs, software and other coded
            instructions for the processing and manipulation of data or the
            direction and manipulation of such equipment.

            COMPUTER VIRUS means a set of corrupting, harmful or otherwise
            unauthorized instructions or code including a set of maliciously
            introduced unauthorized instructions or code, programmatic or
            otherwise, that propagate themselves through a computer system or
            network of whatsoever nature. COMPUTER VIRUS includes but is not
            limited to "Trojan Horses," "worms" and "time or logic bombs."

      b)    However, in the event that a peril listed below results from any of
            the matters described in paragraph a) above, this Contract, subject
            to all its terms, conditions and exclusions, will cover physical
            damage occurring during the Contract period to property insured by
            this Contract directly caused by such listed peril.

            Listed Perils

            Fire
            Explosion

2.    ELECTRONIC DATA PROCESSING MEDIA VALUATION

      Notwithstanding any provision to the contrary within the Contract or any
      endorsement thereto, it is understood and agreed as follows:-

      Should electronic data processing media insured by this Contract suffer
      physical loss or damage insured by this Contract, then the basis of
      valuation shall be the cost of the blank media plus the costs of copying
      the ELECTRONIC DATA from back-up or from originals of a previous
      generation. These costs will not include research and engineering nor any
      costs of recreating, gathering or assembling such ELECTRONIC DATA. If the
      media is not repaired, replaced or restored the basis of valuation shall
      be the cost of the blank media. However this Contract does not insure any
      amount pertaining to the value of such ELECTRONIC DATA to the Assured or
      any other party, even if such ELECTRONIC DATA cannot be recreated,
      gathered or assembled.

N.M.A. 2915 (25.1.01)
Form approved by Lloyd's Underwriters' Non-Marine Association Limited

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