Document:

Exhibit 10.11
  SPECIALTY
PROGRAM BUSINESS POOLING AGREEMENT
  This Specialty Program Business Pooling Agreement (“Pooling Agreement”)
by and between Tower Insurance Company of New York (“TICNY”), an insurance
company domiciled in New York, and CastlePoint Insurance Company (“CPIC”), an
insurance company domiciled in New York, is made effective as of 12:01 a.m., January
1, 2007,  (the “Effective Date”).
  WHEREAS, TICNY and CPIC are each authorized to transact, and do transact, a
multiple line property and casualty insurance business; and
  WHEREAS, TICNY and CPIC desire to pool their respective Specialty Program
Business (defined below) in order to make more efficient use of available
surplus and achieve other operating efficiencies; and
  WHEREAS, CPIC will act as the manager of such pool pursuant to a separate Pool
Management Agreement (“Pool Management Agreement”), attached hereto as Exhibit
A;
  NOW, THEREFORE, for mutual considerations, the sufficiency
and receipt of which is hereby acknowledged, TICNY and CPIC agree as follows:
  ARTICLE I                                   Definitions
  In addition to the terms defined elsewhere in this Agreement, the
following terms, whenever used herein, shall have the following meanings:
  “Existing Reinsurance” shall mean reinsurance ceded by a Participating
Company that is in effect on the Effective Date, to the extent that such
reinsurance relates to the Specialty Program Business of such Participating
Company.
  “Management
Fees” shall mean the management fees payable by TICNY to CPIC pursuant to the
Pool Management Agreement.
  “Net
Liability” shall mean the loss and loss adjustment expense liability remaining
after the application of Existing Reinsurance and, with respect to CPIC, Pool
Reinsurance, in each case to the

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    extent collectible; provided,
however, that “Net Liability” shall not include liability with respect
to losses and loss adjustment expenses incurred prior to the Effective Date.
  “Net
Loss Ratio” shall mean, for any period of time, the ratio of Net Losses plus
loss adjustment expenses incurred during such period to Net Premium Earned for
such period.
  “Net Losses” shall mean, for any period of time, any and all amounts
that a Participating Company is required to pay to or on behalf of insureds for
insurance claims made under its Policies, after the application of any
applicable reinsurance but not including loss adjustment expenses.
  “Net Premium Earned” shall mean, for any period of time, the earned
portion of premiums written by a Participating Company after payment for
reinsurance, if any.
  “Net
Written Premium” shall mean direct premium written on the Policies covered by
this Agreement plus additions, less refunds and return premium for
cancellations and reductions (but not dividends) and less premium paid or
payable for reinsurance that inures to the benefit of the Participating
Companies.
  “Participating Companies” shall mean TICNY and CPIC.
  “Policies”
shall mean all policies, certificates, binders, contracts and agreements of
insurance covering Specialty Program Business issued or renewed on or after the
Effective Date by or on behalf of TICNY or CPIC, as the case may be, all of
which shall be subject to this Pooling Agreement, comprising all lines of
business written as Specialty Program Business.
  “Pool
Reinsurance” shall mean property catastrophe and excess of loss reinsurance
ceded by CPIC to an insurer that is not a Participating Company that inures to
the benefit of the Specialty Program Business Pool.
  “Pooling
Percentages” shall be those percentages set forth on Schedule 1 attached, as
amended from time to time.
  “Program
Business” shall mean narrowly defined classes of business that are underwritten
on an individual policy basis by Program Underwriting Agents on behalf of
insurance companies.

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    “Program Underwriting Agent” means an insurance intermediary that
aggregates business from retail and general agents and manages business on
behalf of insurance companies, including functions such as risk selection and
underwriting, premium collection, policy form design and client service.
  “Specialty Program Business” shall mean all Program Business other than
Traditional Program Business or Traditional Program Business that TICNY and
CPIC agree shall be deemed Specialty Program Business.
  “Specialty
Program Business Pool” shall mean Specialty Program Business written by or on
behalf of the Participating Companies or assumed by a Participating Company
(including such business assumed by TICNY from its affiliates), that is pooled
and allocated to each of the Participating Companies based upon their Pooling
Percentage as set forth in this Pooling Agreement.
  “Traditional
Program Business” shall mean blocks of Program Business in excess of $5 million
in gross written premium that TICNY has historically underwritten, consisting
of non-auto related personal lines and the following commercial lines of
business: retail stores and wholesale trades, commercial and residential real
estate, restaurants, grocery stores, office and service industries, and artisan
contractors.
  ARTICLE
II                               Cessions to Specialty Program
Business Pool
  TICNY shall automatically and obligatorily cede to CPIC as reinsurance,
and CPIC shall be obligated to accept as assumed reinsurance, one hundred
percent (100%) of the Premium and Net Liabilities with respect to Policies
issued or assumed by TICNY, to be combined with the Premium and Net Liabilities
of CPIC under Policies issued or assumed by CPIC, provided, however, that the
total combined gross written premium share of TICNY after pooling shall not
exceed $25 million for the twelve (12) month period ending March 31, 2007,
subject to a growth factor of 25% per each twelve (12) month period thereafter,
unless otherwise agreed by the parties.
  ARTICLE III                           Participation in Specialty
Program Business Pool
  CPIC
shall establish the Specialty Program Business Pool, which shall consist of the
Premium and Net Liability under all Specialty Program Business written or
assumed by CPIC and TICNY

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    (including business assumed
by CPIC pursuant to this Pooling Agreement). 
CPIC shall automatically and obligatorily cede to TICNY, and retain for
CPIC’s own account, the applicable Pooling Percentages of such Net Liability
and TICNY shall automatically and obligatorily accept such cessions. CPIC’s and
TICNY’s share shall be as set forth on Schedule 1 hereto, as amended from time
to time. Such Pooling Percentages shall be applied to all Specialty Program
Business written by the Participating Companies.  Any change in the Pooling Percentages shall
be made only by a written amendment to Schedule 1 to this Pooling Agreement
signed by the parties hereto or as otherwise set forth in Article XVI of this
Pooling Agreement.  The Participating
Companies acknowledge that, following the acceptance or retention of a
percentage of the Specialty Program Business Pool by a Participating Company,
such pooled business shall be subject to such reinsurance as may be entered
into by such Participating Company on or after the Effective Date that is for
the benefit of such Participating Company as to its participation in the
Specialty Program Business Pool and does not inure to the benefit of the Specialty
Program Business Pool.
  ARTICLE IV                          Reinsurance
  CPIC, as pool manager, shall negotiate,
obtain and maintain such Pool Reinsurance as it deems appropriate with respect
to the liabilities of the Specialty Program Business Pool, which reinsurance
shall inure to the benefit of the Participating Companies according to their
respective Pooling Percentages. CPIC shall purchase property and casualty
excess of loss reinsurance and property catastrophe excess of loss reinsurance
from third party reinsurers to protect the net exposure of the Participating
Companies. The property catastrophe excess of loss reinsurance purchased by
CPIC may provide for up to approximately 10% of the combined surplus of TICNY
and CPIC to be retained by the pool prior to reinsurance by third party
reinsurance companies (“Pooled Retention”). Any of the Participating Companies
also shall have the right, in its discretion, to require CPIC to increase the
Pooled Retention by an additional amount of up to 10% of the surplus of
CastlePoint Reinsurance Company, Ltd. (“CPRe”) with such additional reinsurance
to be purchased from CPRe.

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    ARTICLE V                              Losses and Loss Adjustment
Expenses
  A.                                   All loss settlements made by CPIC with
regards to the Specialty Program Business, whether under strict policy
conditions or by way of compromise, shall be unconditionally binding upon TICNY.
  B.                                     Each Participating Company shall be liable
for its percentage share per Schedule 1 of loss and loss adjustment expenses
incurred under or in connection with the Policies and shall be credited with
its percentage share per Schedule 1 of any recoveries of such expense.
  C.                                     If a Participating Company pays or is held
liable to pay any punitive, exemplary, compensatory, or consequential damages
(hereinafter called “Extra Contractual Obligations”) because of alleged or
actual negligence on its part in handling a claim under a Policy, one hundred
percent (100%) of such Extra Contractual Obligations (to the extent permitted
by law) shall be added to the Net Liability, if any, of such Participating
Company under the Policy involved, and the sum thereof shall be subject to this
Pooling Agreement; provided, however, that no such payment of Extra Contractual
Obligations shall be permitted if such payment is contrary to New York law.
  D.                                    If a Participating Company pays or is held
liable to pay in connection with any loss, amounts in excess of the limit of
its original Policy, such loss in excess of that limit having been incurred
because of its failure to settle within the Policy limit or by reason of
alleged or actual negligence in rejecting an offer of settlement or in the
preparation of the defense or in the trial of any action against the original
insured or reinsured or in the preparation or prosecution of an appeal
consequent upon such action (hereinafter called an “Excess of Policy Limits
Loss”), one hundred percent (100%) of such Excess of Policy Limits Loss (to the
extent permitted by law) shall be added to the Net Liability, if any, of such
Participating Company under the Policy involved, and the sum thereof shall be
subject to this Pooling Agreement.

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    ARTICLE VI                          Salvage and Subrogation
  Each of the Participating Companies shall be credited with its
proportionate share of salvage and subrogation on account of losses under the
Policies.
  ARTICLE VII                      Original Conditions Apply
  All
reinsurance under this Pooling Agreement shall be subject to the same rates,
terms, conditions and waivers, and to the same modifications and alterations as
the respective Policies.  Each of the
Participating Companies shall be credited with the proportion equal to its
Pooling Percentage of the original premiums received under the Policies issued
on or after the Effective Date, but after deduction of premiums, if any, ceded
under Existing Reinsurance and Pool Reinsurance.
  ARTICLE
VIII                  Ceding Commission
  Each of the Participating Companies shall be charged with a ceding
commission in an amount equal to such Participating Company’s Pooling
Percentage of actual commissions paid to agents or brokers, premium taxes,
guarantee fund assessments, fees and assessments for boards, bureaus and
associations, fees and assessments for industry and residual markets, and other
similar expenses incurred by the Participating Companies on all premiums ceded
hereunder, but after deduction of ceding commissions or expense reimbursement
amounts recovered under Existing Reinsurance and Pool Reinsurance.
  ARTICLE IX                          Remittances and Reports
  A.                                   As soon as practicable consistent with its
standard financial reporting practices, but no later than thirty (30) days
after the end of each calendar month, CPIC shall submit a pooling report to
TICNY setting forth the following information as regards the Specialty Program
Business Pool:
  1.                      Net Written Premium received during the
month;
  2.                      Net Premium Earned received during the month
  3.                      Ceding commission thereon;
  4.                      Losses and loss adjustment expenses paid
during the month;

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    5.               Salvage
and subrogation recoveries received;
  6.               Recoverables
under inuring reinsurance; and
  7.               Expenses
paid under the Pool Management Agreement.
  B.                                     The balance shown to be due a Participating
Company shall be remitted within fifteen (15) days after the issuance of the
reports by CPIC on a collected basis; provided that CPIC may retain, as manager,
a reserve out of amounts otherwise due TICNY for the payment of amounts
reasonably estimated by CPIC to be payable during the next sixty (60) days by
the Specialty Program Business Pool and allocable to TICNY hereunder.  Such balance shall be remitted in cash or in
readily marketable securities (valued at fair market value) in an amount equal
to such balance.  Should discrepancies
arise in the process of the verification of any report, such differences, once
resolved, should be remitted promptly.
  C.                                     As soon as practicable consistent with its
financial reporting practices, but no later than thirty (30) days after the end
of each calendar quarter, CPIC shall report to TICNY ceded unearned premium
reserves and ceded outstanding loss and loss adjustment expense reserves as
regards the Specialty Program Business as of the end of such quarter.
  ARTICLE X                              Offset
   
  Each of the Participating
Companies shall have and may exercise at any time, and from time to time, the
right to offset any balance or balances whether on account of premiums, losses
or amounts otherwise due from one Participating Company to the other under the
terms of this Pooling Agreement, subject to the provision of applicable law,
and as specifically permitted by Sections 1308 and 7427 of the New York
Insurance Law.
  ARTICLE XI                          Errors and Omissions
  Inadvertent delays, errors
or omissions made in connection with this Pooling Agreement or any transaction
hereunder shall not relieve any Participating Company from any liability that
would have attached had such delay, error or omission not occurred, provided
always that such error or omission will be rectified as soon as possible after
discovery.

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    ARTICLE XII                      Access to Records
  The files and records of
each Participating Company with respect to this Pooling Agreement and the Specialty
Program Business subject hereto shall be open to examination by any officer or
director of each of the other Participating Companies or their duly authorized
representatives during normal business hours.
  ARTICLE XIII                  Term
  A.                                   This Pooling Agreement will become effective
on the Effective Date.  A Participating
Company may terminate their respective participation in the Specialty Program
Business Pool as of the date forty eight (48) months after the Effective Date
and thereafter as of the close of a calendar quarter by giving at least six (6)
months prior written notice to the other party by certified or registered mail.
  B.                                     CPIC shall have the right to terminate its
participation in the Specialty Program Business Pool at any time on or after
twenty four (24) months after the Effective Date and thereafter by giving sixty
(60) days prior written notice by certified or registered mail to TICNY if the
sum of the cumulative Net Loss Ratio for the Specialty Program Business Pool
plus the Management Fee Percentage (as defined in the Pool Management Agreement)
equals or exceeds 99 % for the period from the Effective Date to the end of the
calendar quarter immediately preceding the date of such notice. If the
Participating Companies cannot agree as to the calculation of the Net Loss
Ratio or Management Fee Percentage, within 30 days of receiving the appropriate
report, the calculation shall be arbitrated. The actuarial firm of Towers
Perrin shall furnish an arbiter for TICNY, and CPIC will choose another
actuarial firm to furnish its arbiter. Those two arbiters will select a third
independent actuarial firm to furnish the third arbiter.
  C.                                     Notwithstanding paragraphs A and B above, this
Pooling Agreement may be terminated immediately with respect to new or renewal
business (a) at any time by mutual consent in writing by each of the
Participating Companies or (b) as of the close of a calendar quarter, upon
not less than sixty (60) days, prior written notice by a Participating Company
to the other Participating Companies of such

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    Participating Company’s
exercise of its right to terminate its participation in the Specialty Program
Business Pool.
  D.                                    If this Pooling Agreement is terminated
pursuant to this Article XIII, all rights and obligations of the Participating
Companies with respect to Specialty Program Business ceded pursuant to this
Pooling Agreement prior to such termination shall continue to be governed by
the terms of this Pooling Agreement.
  ARTICLE XIV                 Reinsurance Credit
  A.                                   If any Participating Company is unauthorized
or otherwise unqualified in any state or other United States jurisdiction, and
if, without such security, a financial penalty to an other Participating
Company, hereinafter in this Article XIV called the “Reinsured Participating Company”,
would result on any statutory statement or report it is required to make or
file with insurance regulatory authorities or a court of law in the event of
insolvency, the Participating Company will timely secure its share of
Obligations under this Agreement in a manner, form, and amount acceptable to the
reinsured Participating Company and to all applicable insurance regulatory
authorities in accordance with this Article.
  B.                                          The Participating Company shall secure such
Obligations by either:
  1.                                       Clean,
irrevocable, and unconditional evergreen letter(s) of credit (“Letter(s) of
Credit”) meeting the requirements of New York Insurance Regulation 133; and/or
  2.                                       A
trust account meeting the requirements of New York Regulation 114.
  C.                                     The “Obligations” referred to herein means
the then current (as of the end of each calendar quarter) sum of:
  1.                                       The
amount of the ceded unearned premium reserve for which the Participating
Company is responsible to the Reinsured Participating Company;
  2.                                       The
amount of Losses and Loss Adjustment Expenses and other amounts paid by the Reinsure
Participating Company for which the Participating Company is responsible to the
Reinsured Participating Company but has not yet paid;

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    3.                                       The
amount of ceded reserves for Losses and Loss Adjustment Expenses (including,
ceded reserves for losses incurred but not reported) for which the
Participating Company is responsible to the Reinsured Participating Company;
and
  4.                                       The
amount of return and refund premiums paid by the Reinsured Participating Company
for which the Participating Company is responsible to the Reinsured
Participating Company but has not yet paid.
  D.                                    To
the extent that the Participating Company elects to provide Letter(s) of
Credit, the following shall apply:
  1.                                       Each
Letter of Credit 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 Reinsured Participating Company not less than 30
days prior to said expiration date.
  2.                                       The
Letter of Credit must be issued or confirmed by a bank which is authorized to
issue letters of credit, which is either a member of the Federal Reserve System
or is a New York State chartered bank, and which in all other respects
satisfies the definition of a "Qualified Bank" under Section 79.1(e)
of New York Insurance Regulation 133.  If
the Letter of Credit is issued by a bank authorized to issue letters of credit
but which is not such a "Qualified Bank", then the Letter of Credit
must be confirmed by such a bank and the Letter of Credit must meet all of the
conditions set forth in Section 79.4 of New York Insurance Regulation 133.
  3.                                       The
Participating Company and the Reinsured Participating Company agree that the
Reinsured Participating Company may draw upon the Letter(s) of Credit at any
time, notwithstanding any other provisions in the Agreement, provided such
assets are applied and utilized by the Reinsured Participating Company or any
successor of the Reinsured Participating Company by operation of law,
including, without limitation, any liquidator, rehabilitator, receiver or
conservator of the Reinsured

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Participating Company, without diminution because of the insolvency of
the Reinsured Participating Company or the Participating Company, only for the
following purposes:

(i)        to
reimburse the Reinsured Participating Company for the Participating Company’s share
of premiums returned to the owners of policies reinsured under this Agreement
on account of cancellations of such policies;

(ii)       to
reimburse the Reinsured Participating Company for the Participating Company’s
share of surrenders and benefits or losses paid by the Reinsured Participating
Company under the terms and provisions of the policies reinsured under this
Agreement;

(iii)      to
fund an account with the Reinsured Participating Company in an amount at least
equal to the deduction, for reinsurance ceded, from the Reinsured Participating
Company’s liabilities for policies ceded under this Agreement.  Such amount shall include, but not be limited
to, amounts for policy reserves for claims and losses incurred (including
losses incurred but not reported), loss adjustment expenses, and unearned
premiums; and

(iv)      to
pay any other amounts the Reinsured Participating Company claims are due under
this Agreement.

4.     The
Reinsured Participating Company shall immediately return to the Participating
Company any amounts drawn down on the Letter of Credit that are subsequently
determined not to be due.

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

E.     To the extent that the
Participating Company elects to establish a trust account, the following shall
apply.

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1.     It
is agreed that the Participating Company shall enter into a trust agreement
(the “Trust Agreement”) in a form acceptable to the Reinsured Participating
Company and establish a trust account (the “Trust Account”) for the sole benefit
of the Reinsured Participating Company with a trustee (the “Trustee”), which
shall be at the time the Trust is established, and shall continue to be, either
a member of the Federal Reserve System or a New York state chartered bank and
which shall not be a parent, subsidiary or affiliate of the Participating
Company or the Reinsured Participating Company.

2.     The
Participating Company agrees to deposit and maintain in said Trust Account
assets to be held in trust by the Trustee for the benefit of the Reinsured
Participating Company as security for the payment of the Participating Company’s
Obligations to the Reinsured Participating Company under the Agreement.  Such assets shall be maintained in the Trust
Account by the Participating Company as long as the Participating Company
continues to remain liable for such Obligations.

3.     The
Participating Company agrees that the assets deposited into the Trust Account
shall be valued according to their current fair market value and shall consist
only of currency of the United States of America, certificates of deposit
issued by a United States bank and payable in United States legal tender, and
investments of the types specified in paragraphs (1), (2), (3), (8) and (10) of
Section 1404(a) of the New York Insurance Law, provided such investments are
issued by an institution that is not the parent, subsidiary or affiliate of
either the Grantor or the Beneficiary (“Authorized Investments”).

4.     The
Participating Company, prior to depositing assets with the Trustee, shall
execute all assignments and endorsements in blank, and shall transfer legal
title to the Trustee of all shares, obligations or any other assets requiring
assignments, in order that the Reinsured Participating Company, or the Trustee
upon direction of the Reinsured Participating Company, may whenever necessary
negotiate any such assets without consent or signature from the Participating
Company or any other entity.

5.     All
settlements of account under the Trust Agreement between the Reinsured
Participating Company and Participating Company shall be made in cash or its
equivalent.

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6.     The
Participating Company and the Reinsured Participating Company agree that the
assets in the Trust Account may be withdrawn by the Reinsured Participating
Company at any time, notwithstanding any other provisions in the Agreement,
provided such assets are applied and utilized by the Reinsured Participating
Company or any successor of the Reinsured Participating Company by operation of
law, including, without limitation, any liquidator, rehabilitator, receiver or
conservator of the Reinsured Participating Company, without diminution because
of the insolvency of the Reinsured Participating Company or the Participating
Company, only for the following purposes:

(i)        to
reimburse the Reinsured Participating Company for the Participating Company’s
share of any Losses and Loss Adjustment Expenses paid by the Reinsured
Participating Company but not received from the Participating Company or for
unearned premiums due to the Reinsured Participating Company but not otherwise
paid by the Participating Company under the Agreement; or

(ii)       to
make payment to the Participating Company of any amounts held in the Trust
Account that exceed 102% of the Participating Company’s Obligations (less the
balance of credit available under any Letter(s) of Credit) hereunder; or

(iii)      where
the Reinsured Participating Company has received notification of termination of
the Trust Account, and where the Participating Company’s entire Obligations
under the Agreement remain unliquidated and undischarged ten (10) days prior to
such termination, to withdraw amounts equal to such Obligations (less the
balance of credit available under any Letter(s) of Credit) and deposit such
amounts in a separate account, in the name of the Reinsured Participating
Company, in any United States bank or trust company, apart from its general
assets, in trust for such uses and purposes specified in sub-paragraphs (i) and
(ii) above as may remain executory after such withdrawal and for any period
after such termination.

7.     The
Participating Company shall have the right to seek the Reinsured Participating
Company’s approval to withdraw all or any part of the assets from the Trust
Account and transfer such

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assets to the Participating Company, provided that the withdrawal
conforms to the following requirements:

(i)        the
Participating Company shall, at the time of withdrawal, replace the withdrawn
assets with other Authorized Investments having a market value equal to the
market value of the assets withdrawn,

(ii)       after
such withdrawal and transfer, the market value of the Trust Account is no less
than 102% of the Participating Company’s Obligations (less the balance of
credit available under any Letter(s) of Credit).

In the event that the
Participating Company seeks the Reinsured Participating Company’s approval
hereunder, the Reinsured Participating Company shall not unreasonably or
arbitrarily withhold its approval.

8.     In
the event that the Reinsured Participating Company withdraws assets from the
Trust Account for the purposes set forth in Paragraph (6)(i) above in excess of
actual amounts required to meet the Participating Company’s Obligations to the
Reinsured Participating Company (less the balance of credit available under any
Letter(s) of Credit), or in excess of amounts determined to be due and under
Paragraph (6)(iii) above, the Reinsured Participating Company will return such
excess to the Participating Company.

9.        The Reinsured Participating Company will
prepare and forward at annual intervals or more frequently as determined by the
Reinsured Participating Company, but not more frequently than quarterly to the
Participating Company a statement for the purposes of this Article, showing the
Participating Company’s share of Obligations as set forth above.  If the Participating Company’s share thereof
exceeds the then existing balance of the security provided, the Participating
Company will, within fifteen (15) days of receipt of the Reinsured
Participating Company’s statement, but never later than December 31 of any
year, increase the amount of the letter of credit, or Trust Account to the
required amount of the Participating Company’s share of Obligations set forth
in the Reinsured Participating

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Company’s statement, but never later than December 31 of any year.  If the then existing balance of the security
provided exceeds an amount equal to 102% of the Participating Company’s share
thereof, the Reinsured Participating Company will release the amount in excess
of 102% to the Participating Company upon the Participating Company’s written
request.

F.     The Participating Company
will take any other reasonable steps that may be required for the Reinsured
Participating Company to take full credit on its statutory financial statements
for the reinsurance provided by this Agreement.

ARTICLE XV               Amendments 

This Pooling Agreement may be amended only if
in writing and signed by each Participating Company.

ARTICLE XVI              Adjustments to Participation

CPIC may, in its sole discretion, change the Pooling Percentages as set
forth in Schedule 1 hereto as of the date that is six (6) months following the
Effective Date and, from time to time, as of any six (6) month anniversary of
the Effective Date thereafter, upon not less than thirty (30) days prior
written notice to the other Participating Company, unless such notice is waived
by the other Participating Company, and provided, however, that the CPIC and
the other Participating Company may agree to change the pool participations as
of any calendar quarter; provided, however, that the Pooling Percentage of
TICNY shall at all times during the term of this Pooling Agreement be a minimum
of 15% and a maximum of 50%, and provided further, however, that the total
combined gross written premium share of TICNY assumed under this Pooling
Agreement shall not exceed $25 million for the twelve (12) month period ending
on March 31, 2007, subject to a growth factor of 25% per each twelve (12) month
period thereafter, unless otherwise agreed by the parties.  Each such change shall apply to Policies
issued or renewed after the effective date of such change.  Schedule 1 shall be revised to reflect all
such changes and the effective date of each such change. If the maximum gross
written premium after pooling is attained in any twelve (12) month period
ending March 31 as set forth herein, unless otherwise agreed by the parties as
set forth

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above, then the Pooling Percentage, which
shall apply to all premiums and losses on a pro-rated basis for such period, of
TICNY shall be decreased for that twelve (12) month period, even if such
Pooling Percentage is below 15%.

ARTICLE XVII            Investments

The
investments of the Participating Companies and any income, gains or losses
derived therefrom and expenses related thereto, are not part of, nor are they
subject to the terms of, this Pooling Agreement.

ARTICLE XVIII           Insolvency

A.    In the event of the
insolvency or the appointment of a liquidator, receiver or other statutory
successor of a Participating Company, any amount due such Participating Company
as a ceding party shall be payable by the accepting party on the basis of the
liability of the ceding party under the Policies reinsured without diminution
because of the insolvency of the ceding party. 
Payments by the accepting party shall be made directly to the ceding
party or to the liquidator, receiver or statutory successor, except (a) where
any Policy specifically provides another payee of such reinsurance in the event
of the insolvency of the ceding party, or (b) where the accepting party, with the
consent of the direct insured or insureds, has assumed such Policy obligations
of the ceding party as direct obligations of the accepting party to payees
under such Policies and in substitution for the obligations of the ceding party
to such payees.

B.    The liquidator or receiver
or statutory successor of the ceding party shall give written notice to the
accepting party of the pendency of any claim against the insolvent ceding party
on the Policies reinsured within a reasonable time after such claim is filed in
the insolvency proceeding.  During the
pendency of such claim, the accepting party may investigate the claim and
interpose in the proceeding where the claim is to be adjudicated, at its own
expense, any defense or defenses which it may deem available to the ceding
party or its liquidator or receiver or statutory successor.  The expenses thus

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incurred
by the accepting party shall be chargeable, subject to court approval, against
the insolvent ceding party solely as a result of the defense undertaken by the
accepting party.

ARTICLE XIX              Arbitration

A.    As a condition precedent to
any right of action hereunder, in the event of any dispute or difference of
opinion hereafter arising with respect to this Pooling Agreement (except as set
forth in Article XIII —Term), it is hereby mutually agreed that such dispute or
difference of opinion shall be submitted to arbitration.  One Arbiter shall be chosen by each
Participating Company that is a party to such dispute and an Umpire shall be
chosen by the Arbiters before they enter upon arbitration, all of whom shall be
active or retired disinterested executive officers of insurance or reinsurance
companies or Underwriters at Lloyd’s of London. 
In the event that a Participating Company should fail to choose an
Arbiter within thirty (30) days following a written request by another
Participating Company to do so, the requesting Participating Company’s Arbiter
shall choose a second arbiter before entering upon arbitration.  If the two arbitrators are unable to agree
upon the third arbitrator within thirty (30) days of their appointment, the
third arbitrator shall be selected from a list of six individuals (three named
by each arbitrator) by a judge of the United States District Court having
jurisdiction over the geographical area in which the arbitration is to take
place, or if that court declines to act, the state court having general
jurisdiction in such area.

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

 17
 

C.    Each Participating Company
that is a party to the dispute shall bear the expense of its own Arbiter, and
shall jointly and equally bear with the other the expense of the Umpire and of
the arbitration.  In the event that the
two Arbiters are chosen by the requesting Participating Company, as above
provided, the expense of the Arbiters, the Umpire and the arbitration shall be
equally divided between the Participating Companies that are parties to the
arbitration.

ARTICLE XX               Miscellaneous Provisions

A.    Headings used herein are not
a part of this Pooling Agreement and shall not affect the terms hereof.

B.    All notices, requests,
demands and other communications under this Pooling Agreement must be in
writing and will be deemed to have been duly given or made as follows:  (a) if sent by registered or certified mail
in the United States return receipt requested, upon receipt; (b) if sent by
reputable overnight air courier, two business days after mailing; (c) if sent
by facsimile transmission, with a copy mailed on the same day in the manner
provided in (a) or (b) above, when transmitted and receipt is confirmed by
telephone; or (d) if otherwise actually personally delivered, when delivered.

C.    This Pooling Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors, permitted assigns and legal representatives.  Neither this Pooling Agreement, nor any right
or obligation hereunder, may be assigned by any party without the prior written
consent of the other party hereto.

D.    This Pooling Agreement may
be executed by the parties hereto in any number of counterparts, and by each of
the parties hereto in separate counterparts, each of which counterparts, when
so executed and delivered, shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.

E.     This Pooling Agreement will
be construed, performed and enforced in accordance with the laws of the State
of New York without giving effect to its principles or rules of conflict of
laws thereof to

 18
 

the
extent such principles or rules would require or permit the application of the
laws of another jurisdiction.

F.     This Pooling Agreement
constitutes the entire agreement between the parties hereto relating to the
subject matter hereof and supersedes all prior and contemporaneous agreements,
understandings, statements, representations and warranties, negotiations and
discussions, whether oral or written, of the parties and there are no general
or specific warranties, representations or other agreements by or among the
parties in connection with the entering into of this Pooling Agreement or the
subject matter hereof except as specifically set forth or contemplated herein.
If any provision of this Pooling Agreement is held to be void or unenforceable,
in whole or in part, (i) such holding shall not affect the validity and
enforceability of the remainder of this Pooling Agreement, including any other
provision, paragraph or subparagraph, and (ii) the parties agree to
attempt in good faith to reform such void or unenforceable provision to the
extent necessary to render such provision enforceable and to carry out its
original intent.

G.    No consent or waiver,
express or implied, by any party to or of any breach or default by any other
party in the performance by such other party of its obligations hereunder shall
be deemed or construed to be a consent or waiver to or of any other breach or
default in the performance of obligations hereunder by such other party
hereunder.  Failure on the part of any
party to complain of any act or failure to act of any other party or to declare
any other party in default, irrespective of how long such failure continues,
shall not constitute a waiver by such first party of any of its rights
hereunder.  The rights and remedies
provided are cumulative and are not exclusive of any rights or remedies that
any party may otherwise have at law or equity.

H.    Except as expressly provided
for in the insolvency provisions above, nothing in this Pooling Agreement will
confer any rights upon any person that is not a party or a successor or
permitted assignee of a party to this Pooling Agreement.

I.      Wherever the words “include,”
“includes” or “including” are used in this Pooling Agreement, they shall be
deemed to be followed by the words “without limitation.”

 19
 

J.     This Article XX shall
survive the termination of this Pooling Agreement.

IN WITNESS WHEREOF, the Participating Companies have caused
this Pooling Agreement to be executed as of the day and year first above
written, subject to the satisfaction of New York Insurance Law § 1505,
including any conditions such regulators may impose on the terms of this
Agreement subsequent to the date hereof.

 

	
  

  	
  TOWER
  INSURANCE COMPANY OF NEW YORK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  

  	
  By:

  	
  /s/ Francis M. Colalucci

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Francis M. Colalucci

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President & Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  January 11, 2007

  
					

 

 

	
  

  	
  CASTLEPOINT
  INSURANCE COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  

  	
  By:

  	
  /s/ Joel S. Weiner

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Joel S. Weiner

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President & Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  January 11, 2007

  
					

 

 20Exhibit 10.12

BROKERAGE
BUSINESS POOL MANAGEMENT AGREEMENT

This Brokerage Business Pool Management Agreement (“Pool Management
Agreement”) by and between Tower Insurance Company of New York (“TICNY”), an
insurance company domiciled in New York and CastlePoint Insurance Company (“CPIC”),
an insurance company domiciled in New York, is made effective as of 12:01 a.m.,
January 1, 2007,  (the “Effective Date”).

WHEREAS, TICNY and CPIC are each authorized to transact, and do transact, a
multiple line property and casualty insurance business; and

WHEREAS, TICNY and CPIC desire to pool their respective Brokerage Business
(defined below) in order to make more efficient use of available surplus and
achieve other operating efficiencies; and

WHEREAS,
TICNY and CPIC have entered into the Brokerage Business Pooling Agreement (“Brokerage
Pooling Agreement”) to which this Pool Management Agreement is attached; and

WHEREAS, the pool participants desire TICNY to be the manager of such pool, in
view of its expertise in Brokerage Business;

NOW, THEREFORE, for mutual considerations, the sufficiency
and receipt of which is hereby acknowledged, TICNY and CPIC agree as follows:

ARTICLE I            Definitions

The following terms, whenever used herein, shall have the following
meanings:

“Brokerage Business” shall mean broad classes of business that are
underwritten on an individual policy basis by an insurance company’s
underwriting staff through wholesale and retail agents, and for which most or
all of the services are provided by the insurance company as part of the
overall product offering.

“Brokerage
Business Pool” shall mean Brokerage Business written by or on behalf of the
Participating Companies or assumed by a Participating Company (including such
business assumed by TICNY from its affiliates), that is pooled and allocated to
each of the Participating Companies based upon

their Pooling Percentage as
set forth in the Brokerage Business Pooling Agreement to which this Pool
Management Agreement is attached, as may be amended from time to time.

“Existing
Reinsurance” shall have the same meaning it has in the Brokerage Business
Pooling Agreement.

“Management Fees” shall mean the management fees payable by CPIC to
TICNY pursuant to Article III.

“Net
Liability” shall have the same meaning it has in the Brokerage Business Pooling
Agreement.

“Net
Loss Ratio” shall have the same meaning it has in the Brokerage Pool Agreement.

“Net Premium Earned” shall have the same meaning it has in the
Brokerage Business Pooling Agreement.

“Net
Written Premium” shall have the same meaning it has in the Brokerage Business
Pooling Agreement.

“Participating
Companies” shall mean TICNY and CPIC.

“Policies”
shall have the same meaning that it has in the Brokerage Business Pooling
Agreement.

“Pooling
Percentages” shall be those percentages set forth on Schedule 1 attached to the
Brokerage Business Pooling Agreement, as amended from time to time.

“Pool
Reinsurance” shall have the same meaning that it has in the Brokerage Business
Pooling Agreement.

ARTICLE II          Term

A.        This Pool Management
Agreement will become effective on the Effective Date.  Any Participating Company may terminate its
respective participation in this Pool Management Agreement as of the date
forty-eight (48) months after the Effective Date and thereafter as of the close
of a calendar quarter by giving at least six (6) months prior written notice to
the other party by certified or registered mail.

B.        Notwithstanding
paragraph A above, this Pool Management Agreement may be terminated immediately
with respect to new or renewal business (a) at any time by mutual consent in
writing by each

of
the Participating Companies or (b) as of the close of a calendar quarter,
upon not less than sixty (60) days prior written notice by a Participating
Company to the other Participating Company of such Participating Company’s
exercise of its right to terminate its participation in the Brokerage Business
Pool.

C.        If this Pool Management
Agreement is terminated pursuant to this Article II, all rights and obligations
of the Participating Companies under this Pool Management Agreement prior to
such termination shall continue to be governed by the terms of this Pool
Management Agreement.

ARTICLE III         Pool
Management

TICNY shall be the manager
of the Brokerage Business Pool and provide management services which shall
include, but not be limited to, the following:

	
  1.

  	
   

  	
  Marketing,
  underwriting and issuance of Policies;

  
	
  2.

  	
   

  	
  Determining
  premium rates and other underwriting terms and conditions with respect to the
  issuance of Policies;

  
	
  3.

  	
   

  	
  Establishing
  commissions and fees to be paid to producers and/or brokers in connection
  with the underwriting of Policies;

  
	
  4.

  	
   

  	
  Establishing
  commissions and fees to be paid to service providers by or for the account of
  the Brokerage Business Pool;

  
	
  5.

  	
   

  	
  Collecting
  premiums and other amounts due under Policies;

  
	
  6.

  	
   

  	
  Adjusting
  settling, defending and paying claims under Policies;

  
	
  7.

  	
   

  	
  Perform all
  administrative and policyholder services in connection with the issuance of
  Policies;

  
	
  8.

  	
   

  	
  Purchasing,
  managing and administering Existing Reinsurance and Pool Reinsurance as
  defined and set forth in the Brokerage Business Pooling Agreement;

  
	
  9.

  	
   

  	
  Underwriting
  audit and control, product development and state filings;

  
	
  10.

  	
   

  	
  Loss
  prevention/premium audit;

  
	
  11.

  	
   

  	
  Information
  technology;

  
	
  12.

  	
   

  	
  Accounting and
  cash management;

  
	
  13.

  	
   

  	
  Human resources
  and other administrative functions; and

  
	
  14.

  	
   

  	
  Remitting and
  Reporting as set forth in Article IX of the Pooling Agreement.

  

 

Expenses incurred in connection with the foregoing services excluding
loss adjustment expense included in the Net Loss Ratio (the “Management
Expenses”) shall be shared between the Participating Companies based upon their
respective Pooling Percentages.

CPIC shall pay to TICNY management fees for the
foregoing services (“Management Fees”) during each calendar year of this Pool
Management Agreement (or part thereof) equal to (i) (A) the management fee
percentage for such year (as set forth below) (the “Management Fee Percentage”)
times

(B) their respective Pooling Percentage of the gross written premium of
the Brokerage Business for such year, net of return premiums and net of ceded
reinsurance premiums for Pool Reinsurance less (ii) their Pooling Percentage of
(A) ceding commissions set forth in Article VIII of the Brokerage Business
Pooling Agreement and (B) the shared Management Expenses as set forth above and
less (iii) loss adjustment expenses included in the Net Loss Ratio. The
Management Fee Percentage for the Brokerage Business shall be 34% (which shall
be applied during each year as to premium written during the year) until April
1, 2007 and be adjusted based on Net
Loss Ratio of the pooled business.

The Management Fee Percentage shall, on each six
month anniversary of the Effective Date, increase nine-tenths of a percentage
point for every percentage point by which the Net Loss Ratio is below 61% up to
a maximum Management Fee Percentage of 36%, and decrease nine-tenths of a
percentage point for every percentage point by which the Net Loss Ratio exceeds
61%, subject to a minimum Management Fee Percentage of 31% as follows:

	
  Net Loss Ratio

  	
   

  	
  Management Fee Percentage

  
	
   

  	
   

  	
   

  
	
  64.33% or higher

  	
   

  	
  31.0

  
	
  64

  	
   

  	
  31.3

  
	
  63

  	
   

  	
  32.2

  
	
  62

  	
   

  	
  33.1

  
	
  61

  	
   

  	
  34.0

  
	
  60

  	
   

  	
  34.9

  
	
  59

  	
   

  	
  35.8

  
	
  58.78 or lower

  	
   

  	
  36.0

  

 

Such Management Fee
Percentage shall remain provisional until all losses for a given year have been
settled (or deemed settled as set forth below). 
Within sixty (60) days following the end of each year, TICNY shall
calculate the Net Loss Ratio for each year that remains open and shall forward
copies of such calculations to CPIC.  The
Participating Companies will settle amounts due within ten (10) days
thereafter.  The Net Loss Ratio for each
year shall be deemed to be finalized six (6) years following the close of such
year or at any time before six (6) years by mutual agreement of the
Participating Companies. However, in recognition that regulatory authorities
may not approve an intercompany transaction containing these management fees,
the Participating Companies shall use their best good faith

effort to structure the transaction for the Participating Companies in
order that the sum of the Net Loss Ratio plus Management Fees equals 95% for
the Brokerage Business Pool.

ARTICLE IV         Amendments

This Pool Management Agreement may be amended
only if in writing and signed by each Participating Company.

 ARTICLE V         Arbitration

A.        As a condition precedent to any right of action hereunder, in
the event of any dispute or difference of opinion hereafter arising with
respect to this Pool Management Agreement, it is hereby mutually agreed that
such dispute or difference of opinion shall be submitted to arbitration.  One Arbiter shall be chosen by each
Participating Company that is a party to such dispute and an Umpire shall be
chosen by the Arbiters before they enter upon arbitration, all of whom shall be
active or retired disinterested executive officers of insurance or reinsurance
companies or Underwriters at Lloyd’s of London. 
In the event that a Participating Company should fail to choose an
Arbiter within thirty (30) days following a written request by another
Participating Company to do so, the requesting Participating Company’s Arbiter
shall choose a second arbiter before entering upon arbitration.  If the two arbitrators are unable to agree
upon the third arbitrator within thirty (30) days of their appointment, the
third arbitrator shall be selected from a list of six individuals (three named
by each arbitrator) by a judge of the United States District Court having
jurisdiction over the geographical area in which the arbitration is to take
place, or if that court declines to act, the state court having general
jurisdiction in such area.

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

C.        Each Participating Company that is a party to the dispute
shall bear the expense of its own Arbiter, and shall jointly and equally bear
with the other the expense of the Umpire and of the arbitration.  In the event that the two Arbiters are chosen
by the requesting Participating Company, as above provided, the expense of the
Arbiters, the Umpire and the arbitration shall be equally divided between the
Participating Companies that are parties to the arbitration.

ARTICLE VI         Miscellaneous
Provisions

A.        Headings used herein are
not a part of this Pool Management Agreement and shall not affect the terms
hereof.

B.        All notices, requests,
demands and other communications under this Pool Management Agreement must be
in writing and will be deemed to have been duly given or made as follows:  (a) if sent by registered or certified mail
in the United States return receipt requested, upon receipt; (b) if sent by
reputable overnight air courier, two business days after mailing; (c) if sent
by facsimile transmission, with a copy mailed on the same day in the manner
provided in (a) or (b) above, when transmitted and receipt is confirmed by
telephone; or (d) if otherwise actually personally delivered, when delivered.

C.        This Pool Management
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors, permitted assigns and legal
representatives.  Neither this Pool
Management Agreement, nor any right or obligation hereunder, may be assigned by
any party without the prior written consent of the other party hereto.

D.        This Pool Management
Agreement may be executed by the parties hereto in any number of counterparts,
and by each of the parties hereto in separate counterparts, each of which
counterparts, when so executed and delivered, shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.

E.         This Pool Management
Agreement will be construed, performed and enforced in accordance with the laws
of the State of New York without giving effect to its principles or rules of
conflict of laws thereof to the extent such principles or rules would require
or permit the application of the laws of another jurisdiction.

F.         This Pool Management
Agreement constitutes the entire agreement between the parties hereto relating
to the subject matter hereof and supersedes all prior and contemporaneous
agreements, understandings, statements, representations and warranties,
negotiations and discussions, whether oral or written, of the parties and there
are no general or specific warranties, representations or other agreements by or
among the parties in connection with the entering into of this Pool Management
Agreement or the subject matter hereof except as specifically set forth or
contemplated herein. If any provision of this Pool Management Agreement is held
to be void or unenforceable, in whole or in part, (i) such holding shall
not affect the validity and enforceability of the remainder of this Pool
Management Agreement, including any other provision, paragraph or subparagraph,
and (ii) the parties agree to attempt in good faith to reform such void or
unenforceable provision to the extent necessary to render such provision
enforceable and to carry out its original intent.

G.        No consent or waiver,
express or implied, by any party to or of any breach or default by any other
party in the performance by such other party of its obligations hereunder shall
be deemed or construed to be a consent or waiver to or of any other breach or
default in the performance of obligations hereunder by such other party
hereunder.  Failure on the part of any
party to complain of any act or failure to act of any other party or to declare
any other party in default, irrespective of how long such failure continues,
shall not constitute a waiver by such first party of any of its rights
hereunder.  The rights and remedies
provided are cumulative and are not exclusive of any rights or remedies that
any party may otherwise have at law or equity.

H.        Except as expressly
provided for in the insolvency provisions above, nothing in this Pool
Management Agreement will confer any rights upon any person that is not a party
or a successor or permitted assignee of a party to this Pool Management
Agreement.

I.          Wherever the words “include,”
“includes” or “including” are used in this Pool Management Agreement, they
shall be deemed to be followed by the words “without limitation.”

J.         This Article VI shall
survive the termination of this Pool Management Agreement.

IN WITNESS WHEREOF, the Participating Companies have caused
this Pool Management Agreement to be executed as of the day and year first
above written, subject to the satisfaction of New York Insurance Law § 1505,
including any conditions such regulators may impose on the terms of this
Agreement subsequent to the date hereof.

	
  

  	
  TOWER INSURANCE COMPANY OF NEW YORK

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Francis M. Colalucci

  	
   

  
	
   

  	
   

  	
  Name: Francis M. Colalucci

  
	
   

  	
   

  	
  Title: Senior Vice President & Chief Financial
  Officer

  

 

	
  

  	
  CASTLEPOINT
  INSURANCE COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joel S. Weiner

  	
   

  
	
   

  	
   

  	
  Name: Joel S. Weiner

  
	
   

  	
   

  	
  Title: Senior Vice President & Chief Financial
  Officer

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