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Exhibit 10.11  

 
  AMENDMENT NO. 1
  TO
  REINSURANCE AND POOLING AGREEMENT    
  

        WHEREAS,
Zenith Insurance Company ("Zenith"), CalFarm Insurance Company ("CalFarm"),  ZNAT Insurance Company ("ZNAT"),
and Zenith Star Insurance Company ("Zenith Star") have previously
entered into a Reinsurance and Pooling Agreement effective October 1, 1993; and 

        IN
CONSIDERATION of the premises, Zenith, CalFarm, ZNAT, and Zenith Star agree as follows: 

        Article IX
is deleted and replaced by the following new provision: 

	"IX.
	Statutory Insolvency Provisions.

        In
the event of the insolvency or the appointment of a liquidator, receiver of other statutory successor of any Company ceding reinsurance hereunder, any amount due the other Company as
a ceding part shall be payable by the accepting party, immediately upon demand, on the basis of the liability of the ceding party under the contract or contracts reinsured without diminution because
of the insolvency of the ceding party or because such liquidator, receiver or other statutory successor has failed to pay all or a portion of any claims. Payments by the accepting party shall be made
directly to the ceding party or to the liquidator, receiver or statutory successor, except (a) where the contract specifically provides another payee of such reinsurance in the event of the
insolvency of the ceding party, and (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 in substitution for the obligations of the ceding party to such payees. 

        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 contract or contracts 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, at its own expense, in the proceeding where the claim is to be adjudicated any defense or defenses which it may deem available to the ceding party or its liquidator or receiver of
statutory successor. The expenses thus incurred by the accepting party shall be chargeable subject to court approval against the insolvent ceding party as part of the expense of liquidation to the
extent of a proportionate share of the benefit which may accrue to the ceding party solely as a result of the defense undertaken by the accepting party." 

        IN
WITNESS WHEREOF, each of the undersigned parties has caused this Amendment No. 1 to the Reinsurance and Pooling
Agreement to be executed on its behalf, on this 25th day of January, 1995. 

 

	 	 	ZENITH INSURANCE COMPANY
	 	 	 	 	 
	/s/  JOHN J. TICKNER      
 JOHN J. TICKNER

Secretary	 	By:	 	/s/  STANLEY R. ZAX      
 STANLEY R. ZAX

President
	

 	
 	

 	
 	

 
	 	 	CALFARM INSURANCE COMPANY
	 	 	 	 	 
	/s/  JOHN J. TICKNER      
 JOHN J. TICKNER

Secretary	 	By:	 	/s/  FREDRICKA TAUBITZ      
 FREDRICKA TAUBITZ

Senior Vice President
	

 	
 	

 	
 	

 
	 	 	ZNAT INSURANCE COMPANY
	 	 	 	 	 
	/s/  JOHN J. TICKNER      
 JOHN J. TICKNER

Secretary	 	By:	 	/s/  STANLEY R. ZAX      
 STANLEY R. ZAX

President
	

 	
 	

 	
 	

 
	 	 	ZENITH STAR INSURANCE COMPANY
	 	 	 	 	 
	/s/  JOHN J. TICKNER      
 JOHN J. TICKNER

Secretary	 	By:	 	/s/  STANLEY R. ZAX      
 STANLEY R. ZAX

President

2

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AMENDMENT NO. 1 TO REINSURANCE AND POOLING AGREEMENTQuickLinks
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Exhibit 10.12  

 
  AMENDMENT NO. 2
  TO
  REINSURANCE AND POOLING AGREEMENT    
  

        WHEREAS, Zenith Insurance Company ("Zenith"), CalFarm Insurance Company ("CalFarm"), ZNAT Insurance Company
("ZNAT"), and Zenith Star Insurance Company ("Zenith Star") have previously entered into a Reinsurance and Pooling
Agreement effective October 1, 1993; and 

        WHEREAS,
Zenith Insurance Company has recently formed and owns 100% of the outstanding common stock of Zenith
Insurance Company of Florida ("Zenith/Florida"); and 

        WHEREAS,  Zenith/Florida desires to become a party to the aforementioned Reinsurance and Pooling
Agreement;

        IN
CONSIDERATION of the premises, Zenith, CalFarm, ZNAT, Zenith Star, and Zenith/Florida
agree as follows: 

	1.
	Effective
January 1, 1997, Zenith/Florida shall become a party to the Reinsurance and Pooling
Agreement, subject to all of the terms and conditions and obligations thereunder, the same as Zenith, CalFarm, ZNAT and  Zenith Star.

	2.
	Article V—Proportional Shares of the Reinsurance and Pooling Agreement  is amended effective
January 1, 1997, as follows: 

	Zenith Insurance Company	 	77.5	%
	CalFarm Insurance Company	 	18.0	%
	ZNAT Insurance Company	 	2.0	%
	Zenith Star Insurance Company	 	.5	%
	Zenith Insurance Company of Florida	 	2.0	%

 

        IN
WITNESS WHEREOF, each of the undersigned parties has caused this Amendment No. 2 to the Reinsurance and
Pooling Agreement to be executed on its behalf on this 9th day of February, 1998. 

	 	 	ZENITH INSURANCE COMPANY
	 	 	 	 	 
	/s/  JOHN J. TICKNER      
 JOHN J. TICKNER

Secretary	 	By:	 	/s/  STANLEY R. ZAX      
 STANLEY R. ZAX

President
	 	 	 	 	 
	 	 	 	 	 
	 	 	CALFARM INSURANCE COMPANY
	 	 	 	 	 
	/s/  JOHN J. TICKNER      
 JOHN J. TICKNER

Secretary	 	By:	 	/s/  FREDRICKA TAUBITZ      
 FREDRICKA TAUBITZ

Senior Vice President
	 	 	 	 	 
	 	 	 	 	 
	 	 	ZNAT INSURANCE COMPANY
	 	 	 	 	 
	/s/  JOHN J. TICKNER      
 JOHN J. TICKNER

Secretary	 	By:	 	/s/  STANLEY R. ZAX      
 STANLEY R. ZAX

President
	 	 	 	 	 
	 	 	 	 	 
	 	 	ZENITH STAR INSURANCE COMPANY
	 	 	 	 	 
	/s/  JOHN J. TICKNER      
 JOHN J. TICKNER

Secretary	 	By:	 	/s/  STANLEY R. ZAX      
 STANLEY R. ZAX

President
	 	 	 	 	 
	 	 	 	 	 
	 	 	ZENITH INSURANCE COMPANY OF FLORIDA
	 	 	 	 	 
	/s/  JOHN J. TICKNER      
 JOHN J. TICKNER

Secretary	 	By:	 	/s/  STANLEY R. ZAX      
 STANLEY R. ZAX

President

2

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Exhibit 10.13  

 
  AMENDMENT NO. 3
  TO
  REINSURANCE AND POOLING AGREEMENT    
  

        WHEREAS,
Zenith Insurance Company ("Zenith"), CalFarm Insurance Company ("CalFarm"), ZNAT Insurance Company ("ZNAT"), Zenith Star Insurance Company ("Zenith
Star"), and Zenith Insurance Company of Florida (Zenith/Florida) have previously entered into a  Reinsurance and Pooling Agreement
effective October 1,1993; as amended, and 

        WHEREAS,
effective January 1, 1997, Zenith/Florida became a party to the Reinsurance and Pooling
Agreement; and 

        WHEREAS,
effective June 30, 1998, Zenith/Florida has been merged with Zenith, and  Zenith is the surviving
corporation; 

        IN
CONSIDERATION of the premises, Zenith, CalFarm, ZNAT, and Zenith Star agree as follows: 

	1.
	Amendment
No. 2 to the Reinsurance and Pooling Agreement is terminated, effective June 30, 1998.

	2.
	Article V—Proportional Shares of the Reinsurance and Pooling
Agreement is amended effective June 30, 1998, as follows: 

	Zenith Insurance Company	 	79.5	%
	CalFarm Insurance Company	 	18.0	%
	ZNAT Insurance Company	 	2.0	%
	Zenith Star Insurance Company	 	.5	%

        IN
WITNESS WHEREOF, each of the undersigned parties has caused this Amendment No. 3 to the Reinsurance and
Pooling Agreement to be executed on its behalf, on this 15th day of July, 1998. 

	 	 	ZENITH INSURANCE COMPANY
	 	 	 	 
	/s/  JOHN J. TICKNER      
 JOHN J. TICKNER

Secretary	 	By:	/s/  STANLEY R. ZAX      
 STANLEY R. ZAX

President
	 	 	 	 
	 	 	CALFARM INSURANCE COMPANY
	 	 	 	 
	/s/  JOHN J. TICKNER      
 JOHN J. TICKNER

Secretary	 	By:	
 FREDRICKA TAUBITZ

Senior Vice President
	 	 	 	 
	 	 	ZNAT INSURANCE COMPANY
	 	 	 	 
	/s/  JOHN J. TICKNER      
 JOHN J. TICKNER

Secretary	 	By:	/s/  STANLEY R. ZAX      
 STANLEY R. ZAX

President
	 	 	 	 
	 	 	ZENITH STAR INSURANCE COMPANY
	 	 	 	 
	/s/  JOHN J. TICKNER      
 JOHN J. TICKNER

Secretary	 	By:	/s/  STANLEY R. ZAX      
 STANLEY R. ZAX

President

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AMENDMENT NO. 3 TO REINSURANCE AND POOLING AGREEMENTQuickLinks
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Exhibit 10.14  

 
  AMENDMENT NO. 4 (the "Amendment")
  
  to
  
  REINSURANCE AND POOLING AGREEMENT
  
  between
  
  ZENITH INSURANCE COMPANY
  
  CALFARM INSURANCE COMPANY
  

ZNAT INSURANCE COMPANY
  
  and
  
  ZENITH STAR INSURANCE COMPANY
  
  
  
  
      

Dated March 31, 1999  

 
 WITNESSETH  

        WHEREAS, the parties hereto (together, the "Pool Companies") have agreed to terminate the participation of CalFarm Insurance Company ("CalFarm"; the Pool
Companies other than the CalFarm being termed the "Zenith Companies") in that certain Reinsurance Pooling and Agreement, by and between the parties hereto, effective as of 12:01 a.m.,
October 1, 1993, as amended by Amendment Nos. 1, 2 and 3, effective January 25, 1995, January 1, 1997 and June 30, 1998, respectively (the "Pooling Agreement"); and 

        WHEREAS,
Nationwide Mutual Insurance Company ("NMIC") and Zenith Insurance Company ("Zenith") have entered into a Stock Purchase Agreement, dated as of February 22, 1999 (the
"Stock Purchase Agreement") which, among other things, contemplates such termination. 

        NOW
THEREFORE, in consideration of the mutual promises set forth herein, the parties hereto agree as follows: 

        1.    Definitions.    All capitalized terms not defined herein shall have those meanings set forth in the Pooling
Agreement. 

        2.    Effect.    Subject to the satisfaction or waiver of the conditions set forth in paragraph 3 hereof and
the payment of the Net Payment (as hereinafter defined), effective as of 12:01 a.m., January 1, 1999 (the "Effective Time"), the Pooling Agreement is hereby amended to delete CalFarm as
a party thereto. 

        3.    Conditions to Effectiveness.    This Amendment is conditioned upon the satisfaction or waiver of those
conditions set forth in Section 7 (relating to Zenith) and Section 8 (relating to NMIC) of the Stock Purchase Agreement (other than the covenant of Zenith set forth in
Section 5.11(a) thereof). 

        4.    Net Payment    

        (a)  The
Net Payment, which shall be payable by Zenith to CalFarm on behalf of the Zenith Companies, shall equal: 

        (i)    The
aggregate statutory reserves for net retained "underwriting liabilities" held by the Pool Companies as of that time immediately prior to the Effective Time, pursuant
to the Pooling Agreement
resulting from business written, issued or assumed (other than by operation of the Pooling Agreement) by CalFarm; less 

        (ii)  The
aggregate statutory reserves for net retained "underwriting liabilities" held by CalFarm as of that time immediately prior to the Effective Time, pursuant to the
Pooling Agreement resulting from business written, issued or assumed (other than by operation of the Pooling Agreement) by the Pool Companies. 

        (b)  All
such amounts above are to be determined before the removal of CalFarm from the Zenith pool. 

        5.    Payment of Net Payment.    

        (a)  The
Pool Companies agree that the "Transaction Balance Sheet" appended to this Amendment as Exhibit A (and showing a Net Payment of approximately
$63.9 million) constitutes a good faith, estimated calculation of the Net Payment assuming an Effective Time of December 31,1998 and properly reflects the provisions set forth in
paragraph 4 hereof (the "Trial Balance Sheet"). The Pool Companies further agree that, subject to such changes as NMIC may approve, (i) any additional calculation of the Net subject to
such changes as NMIC may approve, (i) any additional calculation of the Net Payment to be made for purposes of this Amendment No. 4 or the Stock Purchase Agreement will be consistent in
all material respects with that reflected in the Trial Balance Sheet, and (ii) that each line item in any such additional calculation 

2

 

will be determined in a manner consistent in all material respects with the determination of such line item for use in the Trial Balance Sheet. 

        (b)  The
Net Payment shall be paid on the Closing Date (as defined in the Stock Purchase Agreement). 

        (c)  In
addition, on the Closing Date, Zenith, on the one hand, and the Zenith Companies (other than Zenith), on the other hand, shall make such payments to one another
necessary to reflect the net cash flows among them described in paragraph 4(a) hereof. Such payments will have no effect upon the calculation of the Net Payment or the payment of the Net
Payment. 

        6.    Releases.    Subject to the occurrence of the transaction set forth in paragraph 2 hereof: 

        (a)  CalFarm
hereby releases and forever discharges the Zenith Companies and each of their respective present and future affiliates, successors or assigns from all actions,
causes in action, suits, debts, due
sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, vacancies, trespasses, damages, judgments, extents, executions and demands
whatsoever, in law and in equity, which CalFarm and its affiliates, successors or assigns ever had, now have or hereafter have for, upon, or by reason of the Pooling Agreement, as amended from time to
time, other than the obligations provided in paragraphs 4 and 5 hereof and under the Stock Purchase Agreement. 

        (b)  The
Zenith Companies hereby release and forever discharge CalFarm and each of its present and future affiliates, successors or assigns from all actions, causes in
action, suits, debts, due sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, vacancies, trespasses, damages, judgments, extents,
executions and demands whatsoever, in law and in equity, which the Zenith Companies and their affiliates, successors or assigns ever had, now have or hereafter have for, upon, or by reason of the
Pooling Agreement, as amended from time to time, other than the obligations provided in paragraphs 4 and 5 hereof and under the Stock Purchase Agreement. 

        (c)  Each
Pool Company fully understands and expressly waives its rights and benefits under Section 1542 of the California Civil Code or under any similar provision of
law. Section 1542 of the California Civil Code provides in relevant part: 

A
general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected
his settlement with the debtor. 

        7.    Amendment.    Subject to the occurrence of the transaction set forth in paragraph 2 hereof,
Article V of the Pooling Agreement is restated as provided in Exhibit B hereto. All other provisions of the Pooling Agreement are hereby ratified and confirmed except as otherwise
expressly provided for herein. 

3

	 	 	Zenith Insurance Company
	 	 	 	 	 
	/s/  HYMAN J. LEE      
 Witness	 	By:	 	/s/  JOHN J. TICKNER      

	

 	
 	

 	
 	

 
	 	 	CalFarm Insurance Company
	 	 	 	 	 
	/s/  HYMAN J. LEE      
 Witness	 	By:	 	/s/  JOHN J. TICKNER      

	

 	
 	

 	
 	

 
	 	 	ZNAT Insurance Company
	 	 	 	 	 
	/s/  HYMAN J. LEE      
 Witness	 	By:	 	/s/  JOHN J. TICKNER      

	

 	
 	

 	
 	

 
	 	 	Zenith Star Insurance Company
	 	 	 	 	 
	/s/  HYMAN J. LEE      
 Witness	 	By:	 	/s/  JOHN J. TICKNER      

CalFarm Insurance Company

Estimated Transactions to Undo Pooling

December 31, 1998  

	 
	 	Statutory

Post Pooling
	 	Transaction to

Undo Pooling
	 	Pooling

Undone

	ASSETS	 	 	 	 	 	 
	Bonds	 	142,369,942	 	 	 	142,369,942
	Preferred stocks	 	5,042,560	 	 	 	5,042,560
	Occupied properties	 	14,873,491	 	 	 	14,873,491
	Cash & STI	 	20,498,854	 	 	 	29,498,854
	 	 	
	 	
	 	

	Cash & Invested Assets	 	182,784,847	 	—	 	182,784,847
	

 	
 	

 	
 	

 	
 	

 
	Agents' balances	 	16,927,462	 	24,656,657	 	41,584,119
	Funds held by reinsurers	 	878,912	 	(878,912	)	—
	Reinsurance recoverable on paid losses	 	4,767,210	 	(4,497,711	)	269,499
	Guarantee funds receivable	 	—	 	9,915	 	9,915
	EDP equipment	 	2,286,259	 	 	 	2,286,259
	Accrued investment income	 	2,650,562	 	 	 	2,650,562
	Receivable from affiliates	 	39,003,884	 	(38,174,056	)	829,828
	Deposits in pools & associations	 	180,667	 	573,324	 	753,991
	Receivable from Zenith	 	 	 	63,864,323	 	63,864,323
	Aggregate write-ins:	 	 	 	 	 	 
	 	Cash surrender value of life ins policies	 	378,436	 	 	 	378,436
	 	Receivable on deductible policies	 	82,817	 	(82,817	)	—
	 	Prepaid items, deposits & loss funds	 	 	 	 	 	—
	 	Miscellaneous receivables	 	13,628	 	 	 	13,628
	 	 	
	 	
	 	

	Total Assets	 	249,954,684	 	45,470,723	 	295,425,407
	 	 	
	 	
	 	

	LIABILITIES	 	 	 	 	 	 
	Losses	 	121,585,204	 	(41,307,705	)	80,277,499
	RI payable on paid losses	 	631,589	 	(631,589	)	—
	LAE reserves	 	21,485,521	 	7,564,220	 	29,049,741
	Contingent commissions	 	433,338	 	(433,338	)	—
	Other expenses	 	2,985,618	 	941,985	 	3,927,603
	Taxes, licenses & fees	 	340,984	 	(325,937	)	15,047
	Federal income tax payable	 	355,222	 	 	 	355,222
	Federal income tax payable on depooling	 	 	 	5,359,068	 	5,359,068
	Unearned premiums	 	26,211,058	 	62,587,437	 	88,798,495
	Funds held	 	329	 	(329	)	—
	Amounts withheld	 	337,964	 	 	 	337,964
	Remittances and items not allocated	 	97,253	 	370,889	 	468,142
	Schedule P reserves	 	509,000	 	3,413,000	 	3,922,000
	Drafts outstanding	 	1,036,352	 	4,721,157	 	5,757,509
	Payable to affiliates	 	 	 	490,980	 	490,980
	Aggregate write-ins	 	 	 	 	 	 
	 	Reserves for state fund assessments	 	103,704	 	(103,704	)	—
	 	Other liabilities	 	82,651	 	(2	)	82,649
	 	Unclaimed funds	 	79,383	 	 	 	79,383
	 	Terminal commissions	 	61,191	 	278,759	 	339,950
	 	Retroactive reinsurance reserve ceded	 	(9,000,000	)	9,000,000	 	—
	 	 	
	 	
	 	

	Total Liabilities	 	167,336,361	 	51,924,891	 	219,261,252
	 	 	
	 	
	 	

	Net Assets	 	82,618,323	 	(6,454,168	)	76,164,155
	 	 	
	 	
	 	

Exhibit B

Proportionate Shares of the Reinsurance and Pooling  

Zenith Insurance Company [97.5%]

ZNAT Insurance Company [2.0%]

Zenith Star Insurance Company [0.5%]  

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AMENDMENT NO. 4 (the "Amendment") to REINSURANCE AND POOLING AGREEMENT between ZENITH INSURANCE COMPANY CALFARM INSURANCE COMPANY ZNAT INSURANCE COMPANY and ZENITH STAR INSURANCE COMPANY

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