Document:

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                                                                   EXHIBIT 10.14

                         NOVATION AND TRANSFER AGREEMENT

This Novation and Transfer Agreement ("Agreement"), effective as of January 1,
2003 (the "Effective Date"), is made by and among Platinum Underwriters
Reinsurance, Inc., a Maryland domiciled insurance company ("Platinum"), St. Paul
Fire and Marine Insurance Company, a Minnesota domiciled insurance company ("St.
Paul") and Germantown Mutual Insurance Company, a Wisconsin domiciled insurance
company (the "Company").

WHEREAS, St. Paul and the Company entered into the CASUALTY EXCESS OF LOSS
REINSURANCE AGREEMENT, effective from January 1, 2003 through December 31, 2003
and displaying the St. Paul reference number 42258-00, 42259-00, 42260-00 (the
"Contract"). A copy of the Contract or the corresponding slip or binder is
attached hereto.

WHEREAS, Platinum has assumed a one hundred percent (100%) quota share of the
liabilities arising under the Contract, pursuant to a 100% Quota Share
Retrocession Agreement, dated as of November 1, 2002, between Platinum and St.
Paul.

WHEREAS, the parties hereto now desire to effect a novation of the Contract by
which Platinum shall be substituted as the reinsurer in place of St. Paul with
respect to the Contract.

WHEREAS, the Company agrees to consent to the substitution of Platinum under the
Contract in accordance with the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the mutual promises and the terms and
conditions set forth herein and for other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:

         1.       Defined Terms. For all purposes of this Agreement, capitalized
terms not otherwise defined in this Agreement shall have the meanings given to
them in the Contract.

         2.       St. Paul's Undertaking and Release of the Company. In
consideration of the undertakings given by the Company in Section 5, St. Paul
hereby releases and discharges the Company from all obligations to observe,
discharge and be bound by the Contract.

         3.       Transfer. St. Paul hereby transfers to Platinum all of its
rights, title and interests in, to and under, the Contract and all of its
obligations and liabilities in connection therewith.

         4.       Acceptance by Platinum. In consideration of the undertakings
given by Company in Section 5, Platinum hereby undertakes to observe, perform,
discharge and be

                                        1

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bound by the Contract as if it were an original signatory to the Contract
instead of the St. Paul, whether such obligations and liabilities accrue or
arise before, on or after the date hereof.

         5.       Company's Undertaking and Release of St. Paul. In
consideration of the undertakings given by Platinum in Section 4 and St. Paul in
Section 2, the Company hereby:

         (a) releases and discharges the St. Paul from all obligations to
         observe, perform, discharge and be bound by the Contract as if the St.
         Paul had never been a party to the Contract;

         (b) accepts Platinum's undertaking to observe, perform, and discharge
         and be bound by the Contract (such undertaking being set out in Section
         4); and

         (c) agrees to observe, perform, discharge and be bound by the Contract
         as if Platinum were a party to the Contract instead of the St. Paul,
         whether such obligations and liabilities accrue or arise before, on or
         after the date hereof.

         6.       Indemnification. Notwithstanding anything to the contrary in
this Agreement, Platinum shall indemnify and hold harmless and, at its own
expense, defend Company from and against any and all Losses suffered, incurred
or sustained by Company before, on or after the date hereof in connection with
matters arising or events occurring in relation to the Contract prior to the
date hereof for which the St. Paul would have been liable to Company under the
terms of the Contract.

         7.       Representations and Warranties. St. Paul hereby represents and
warrants to Platinum that it has fully discharged all its duties and obligations
under the Contract

         8.       Covenants. All covenants and undertakings made by the St. Paul
in the Contract shall be binding upon Platinum in all respects as if such
covenants and undertakings were made by Platinum with respect to itself.

         9.       Permissibility of Agreement. Each of St. Paul and Platinum
hereby represents, warrants and covenants to the Company that the execution of
this Agreement has been validly authorized, the obligations imposed on it by the
provisions of this Agreement constitute valid, legally binding and enforceable
obligations on it, shall not constitute a breach or event of default pursuant to
any agreement to which St. Paul or Platinum is a party and shall not constitute
a violation of law in any applicable jurisdiction.

         10.      Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto, and their permitted successors
and assigns.

         11.      Headings. The headings in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.

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         12.      Execution of this Agreement. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original and all of
which shall constitute one and the same Agreement. This Agreement may be
executed and delivered by facsimile. Any such facsimile transmission executed by
facsimile by all parties shall constitute the final agreement of the parties and
conclusive proof of such agreement. Any party that shall deliver by facsimile an
executed signature page of this Agreement shall deliver originals of such
executed signature page to each other party within a reasonable time thereafter.

         13.      Further Assurances. Each of the parties shall from time to
time, on being reasonably requested to do so by the other party to this
Agreement, do such acts and/or execute such documents in a form reasonably
satisfactory to the party concerned as may be necessary to give full effect to
this Agreement and securing to that party the full benefit of the rights, powers
and remedies conferred upon it by this Agreement.

         14.      Entire Agreement. This Agreement may be amended only by
written agreement of the parties. This Agreement supersedes all prior
discussions and written and oral agreements and constitutes the sole and entire
agreement between the parties with respect to the subject matter hereof.

         15.      Governing Law and Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the United States of
America and the State of New York, regardless of the laws that might otherwise
govern under applicable choice-of-law principles. The parties hereby irrevocably
submit to the exclusive jurisdiction of the state and federal courts located in
the County of New York for purposes of all legal proceedings arising out of or
relating to this Agreement or the transactions contemplated hereby. The parties
hereby irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying of venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives as of the date first above written.

                                       ST. PAUL FIRE AND MARINE INSURANCE
                                       COMPANY

                                       By  /s/ W. Mark Wigmore
                                          --------------------------------------
                                          Name:  W. Mark Wigmore
                                          Title: Senior Vice President

                                       PLATINUM UNDERWRITERS REINSURANCE, INC.

                                       By   /s/ Sarah A. Schultz
                                          --------------------------------------
                                          Name:  Sarah A. Schultz
                                          Title: Vice President

                                        3

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Consented and agreed to by:

GERMANTOWN MUTUAL INSURANCE
COMPANY

By: /s/ Richard P. Smith
    ------------------------------
    Name: Richard P. Smith
    Title: President - Treasurer

                                        4<PAGE>

                                                                   Exhibit 10.15

            PROPERTY CATASTROPHE EXCESS OF LOSS REINSURANCE CONTRACT

                           (Cover Note No. C-03-22488)

                             Effective July 1, 2003

                                    issued to

                           GLENCOE GROUP OF COMPANIES

                     and its Quota Share Reinsurers, if any

                                    including

                             GLENCOE INSURANCE LTD.
                                Hamilton, Bermuda

                          STONINGTON INSURANCE COMPANY
                                  Dallas, Texas

                       STONINGTON LLOYDS INSURANCE COMPANY
                                  Dallas, Texas

                                       and

                             LANTANA INSURANCE LTD.
                                Hamilton, Bermuda

             (hereinafter referred to collectively as the "Company")

                                       by

                     PLATINUM UNDERWRITERS REINSURANCE INC

                               Baltimore, Maryland

         (hereinafter called, with other participants, the "Reinsurers")

Under the terms of this Contract, the above Reinsurer agrees to assume severally
and not jointly with other participants

                   SCHEDULE "A" - FIRST LAYER: a 15.00% share

of the liability described in the attached Contract and, as consideration, the
above Reinsurer shall receive the same proportionate share of the premium named
therein.

TOWERS PERRIN
REINSURANCE

                                      - 1 -

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Signed in New York, New York, this 10th day of September, 2003.

                                       PLATINUM UNDERWRITERS REINSURANCE INC.

                                       By: /s/ James A. Roddy
                                           -------------------------------------
                                            James A. Roddy

                                       Title: Senior Vice President

            PROPERTY CATASTROPHE EXCESS OF LOSS REINSURANCE CONTRACT

                           (Cover Note No. C-03-22488)

                             Effective July 1, 2003

TOWERS PERRIN
REINSURANCE

                                     - 2 -

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and in Hamilton, Bermuda, this 18th day of August, 2003.

                                       GLENCOE INSURANCE LTD.

                                       By: /s/ William J. Ashley
                                           -------------------------------------
                                            William J. Ashley

                                       Title: President

            PROPERTY CATASTROPHE EXCESS OF LOSS REINSURANCE CONTRACT

                           (Cover Note No. C-03-22488)

                             Effective July 1, 2003
TOWERS PERRIN
REINSURANCE

                                      - 3 -

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                           GLENCOE GROUP OF COMPANIES

                     AND ITS QUOTA SHARE REINSURERS, IF ANY

                                    INCLUDING

                             GLENCOE INSURANCE LTD.
                                HAMILTON, BERMUDA

                          STONINGTON INSURANCE COMPANY
                                  DALLAS, TEXAS

                       STONINGTON LLOYDS INSURANCE COMPANY
                                  DALLAS, TEXAS

                                       AND

                             LANTANA INSURANCE LTD.
                                HAMILTON, BERMUDA

            PROPERTY CATASTROPHE EXCESS OF LOSS REINSURANCE CONTRACT

                          (COVER NOTE NO.: C-03-22488)

                                      INDEX

<TABLE>
<CAPTION>
ARTICLE                                                                             PAGE
-------                                                                             -----
<S>                                                                                 <C>
  I          CLASSES OF BUSINESS REINSURED......................................        1
  II         TERM AND CANCELLATION..............................................        2
  III        TERRITORY..........................................................        3
  IV         EXCLUSIONS.........................................................      3-4
  V          RETENTION AND LIMIT................................................      4-5
  VI         REINSTATEMENT......................................................      5-6
  VII        DEFINITIONS........................................................      6-7
  VIII       OTHER REINSURANCE..................................................      7-8
  IX         LOSS OCCURRENCE....................................................      8-9
  X          LOSS NOTICE AND LOSS SETTLEMENTS...................................     9-10
  XI         SALVAGE AND SUBROGATION............................................       10
  XII        REINSURANCE PREMIUM................................................    10-11
  XIII       OFFSET.............................................................       11
  XIV        ACCESS TO RECORDS..................................................       11
</TABLE>

TOWERS PERRIN
REINSURANCE

                                      - 1 -

<PAGE>

<TABLE>
<S>                                                                                 <C>
  XV         LIABILITY OF THE REINSURER.........................................       11
  XVI        NET RETAINED LINES (BRMA 32E)......................................    11-12
  XVII       ERRORS AND OMISSIONS (BRMA 14E)....................................       12
  XVIII      CURRENCY (BRMA 12A)................................................       12
  XIX        TAXES (BRMA 50C)...................................................       12
  XX         FEDERAL EXCISE TAX (BRMA 17A)......................................    12-13
  XXI        RESERVES AND LETTERS OF CREDIT.....................................    13-14
  XXII       INSOLVENCY.........................................................    14-15
  XXIII      ARBITRATION........................................................    15-16
  XXIV       SERVICE OF SUIT (BRMA 49C).........................................       16
  XXV        ENTIRE AGREEMENT...................................................       17
  XXVI       AGENCY AGREEMENT...................................................       17
  XXVII      INTERMEDIARY (BRMA 23A)............................................       17
</TABLE>

ATTACHMENTS

Schedule A
Insolvency Funds Exclusion Clause
Pools, Associations and Syndicates Clause
Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance - U.S. and
Canada

TOWERS PERRIN
REINSURANCE

                                     - 2 -

<PAGE>

                           GLENCOE GROUP OF COMPANIES

                     AND ITS QUOTA SHARE REINSURERS, IF ANY

                                    INCLUDING

                             GLENCOE INSURANCE LTD.
                                HAMILTON, BERMUDA

                          STONINGTON INSURANCE COMPANY
                                  DALLAS, TEXAS

                       STONINGTON LLOYDS INSURANCE COMPANY
                                  DALLAS, TEXAS

                                       AND

                             LANTANA INSURANCE LTD.
                                HAMILTON, BERMUDA

            PROPERTY CATASTROPHE EXCESS OF LOSS REINSURANCE CONTRACT

                          (COVER NOTE NO.: C-03-22488)

                   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

A.       By this Contract the Reinsurer agrees to reinsure the excess liability
         which may accrue to the Company under its policies, contracts, binders,
         certificates and other obligations, whether written or oral, 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.

B.       Notwithstanding the provisions of paragraph A above, the Company shall
         have the right to exclude specific programs, including quota share
         treaties and excess facultative reinsurance, subject to appropriate
         file notation at the time of writing.

TOWERS PERRIN
REINSURANCE

                                     - 1 -

<PAGE>

                                   ARTICLE II

TERM AND CANCELLATION

A.       This Contract shall become effective at 12:01 a.m., Local Standard
         Time, July 1, 2003, with respect to losses arising out of loss
         occurrences commencing at or after that time and date, and shall remain
         in force until 12:01 a.m., Local Standard Time, July 1, 2004.

B.       Notwithstanding the provisions of paragraph A above, the Company may
         terminate a Subscribing Reinsurer's percentage share in this Contract
         at any time by giving written notice to the Subscribing Reinsurer in
         the event any of the following circumstances occur:

         1.       The Subscribing Reinsurer's policyholders' surplus at the
                  inception of this Contract has been reduced by more than 25.0%
                  of the amount of surplus (or stamp capacity, in respect of
                  Lloyds Syndicates) 12 months prior to that date; or

         2.       The Subscribing Reinsurer's policyholders' surplus at any time
                  during the term of this Contract has been reduced by more than
                  25.0% of the amount of surplus (or stamp capacity, in respect
                  of Lloyds Syndicates) at the date of the Subscribing
                  Reinsurer's most recent financial statement filed with
                  regulatory authorities and available to the public as of the
                  inception of this Contract; or

         3.       The Subscribing Reinsurer's A.M. Best's rating has been
                  assigned or downgraded below A- and/or Standard and Poor's
                  rating has been assigned or downgraded below BBB+; or

         4.       The Subscribing Reinsurer has become merged with, acquired by
                  or controlled by any other company, corporation or
                  individual(s) not controlling the Subscribing Reinsurer's
                  operations previously; or

         5.       A State Insurance Department or other legal authority has
                  ordered the Subscribing Reinsurer to cease writing business;
                  or

         6.       The Subscribing Reinsurer has become insolvent or has been
                  placed into liquidation or receivership (whether voluntary or
                  involuntary) or proceedings have been instituted against the
                  Subscribing Reinsurer for the appointment of a receiver,
                  liquidator, rehabilitator, conservator or trustee in
                  bankruptcy, or other agent known by whatever name, to take
                  possession of its assets or control of its operations; or

         7.       The Subscribing Reinsurer has reinsured its entire liability
                  under this Contract without the Company's prior written
                  consent, except that this provision shall not apply to any
                  intercompany reinsurance or intercompany pooling arrangements
                  entered into by the Subscribing Reinsurer; or

TOWERS PERRIN
REINSURANCE

                                     - 2 -

<PAGE>

         8.       The Subscribing Reinsurer has ceased assuming new and renewal
                  property and casualty treaty reinsurance business.

C.       If this Contract is terminated or 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
         termination or expiration of this Contract, provided that no part of
         such loss occurrence is claimed against any renewal or replacement of
         this Contract.

                                   ARTICLE III

TERRITORY

The liability of the Reinsurer shall be limited to losses under policies
covering property located within the territorial limits of the United States of
America, its territories or possessions, Puerto Rico, the District of Columbia,
and Canada; but this limitation shall not apply to moveable property if the
Company's policies provide coverage when said moveable property is outside the
aforesaid territorial limits.

                                   ARTICLE IV

EXCLUSIONS

This Contract does not apply to and specifically excludes business classified by
the Company as follows:

         1.       Insolvency and Mortgage Impairment insurances and
                  reinsurances.

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

         3.       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.

         4.       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.

TOWERS PERRIN
REINSURANCE

                                     - 3 -

<PAGE>

         5.       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.

         6.       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.

         7.       Financial Guarantee.

         8.       Losses in respect of overhead transmission and distribution
                  lines and their supporting structures other than those on or
                  within 150 meters (or 500 feet) of the insured premises.

         9.       Retrocessional business.

         10.      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 in the
                  Terrorism Risk Insurance Act of 2002 (the "Act"), regardless
                  of any other cause or event contributing concurrently or in
                  any sequence to the loss.

                  Notwithstanding the above and subject otherwise to the terms,
                  conditions and limitations of this Contract, this Contract
                  will pay actual loss or damage (but not related cost or
                  expense) caused by any act of terrorism which does not meet
                  the definition of "act of terrorism" set forth in the Act or
                  meets the definition of "act of terrorism" as set forth in the
                  Act but results in loss under a policy that is not included in
                  "property and casualty insurance" as defined in the Act,
                  provided, in either case, (a) such loss or damage occurs in a
                  line of insurance otherwise covered by this Contract, and (b)
                  in no event will this Contract provide coverage for loss,
                  damage, cost or expense directly or indirectly caused by,
                  contributed to by, resulting from, or arising out of or in
                  connection with biological, chemical or nuclear explosion,
                  pollution, contamination and/or fire following thereon.

                                    ARTICLE V

RETENTION AND LIMIT

A.       As respects each excess layer of reinsurance coverage provided by this
         Contract, the Company shall retain and be liable for the first amount
         of ultimate net loss, shown as "Company's Retention" for that excess
         layer in Schedule A attached hereto, arising out of each loss
         occurrence. The Reinsurer shall then be liable, as respects each excess

TOWERS PERRIN
REINSURANCE

                                     - 4 -

<PAGE>

         layer,for the amount by which such ultimate net loss exceeds the
         Company's applicable retention, but the liability of the Reinsurer
         under each excess layer shall not exceed the amount, shown as
         "Reinsurer's Per Occurrence Limit" for that excess layer in Schedule A
         attached hereto, as respects any one loss occurrence.

B.       As respects each excess layer of reinsurance coverage provided by this
         Contract, the Company shall retain at least 5.0% part of a 100% share
         in the interests and liabilities of the "Reinsurer" under each excess
         layer of this Contract.

C.       The Company warrants that no claim shall be made under any excess layer
         of coverage provided by this Contract in any one loss occurrence unless
         at least two risks insured or reinsured by the Company are involved in
         such loss occurrence. For purposes hereof, the Company shall be the
         sole judge of what constitutes one risk, but in no event shall a
         building and its contents be considered more than one risk.

                                   ARTICLE VI

REINSTATEMENT

A.       In the event all or any portion of the reinsurance under any excess
         layer of reinsurance coverage provided by this Contract 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 occurrence limit for the excess layer
                  reinstated (based on the loss paid by the Reinsurer under that
                  excess layer); times

         2.       The earned reinsurance premium for the excess layer reinstated
                  for the term of this Contract (exclusive of reinstatement
                  premium).

B.       Whenever the Company requests payment by the Reinsurer of any loss
         under any excess layer hereunder, the Company shall submit a statement
         to the Reinsurer of reinstatement premium due the Reinsurer for that
         excess layer. If the earned reinsurance premium for any excess layer
         for the term of this Contract has not been finally determined as of the
         date of any such statement, the calculation of reinstatement premium
         due for that excess layer shall be based on the annual deposit premium
         for that excess layer and shall be readjusted when the earned
         reinsurance premium for that excess layer for the term of this Contract
         has been finally determined. Any reinstatement premium shown to be due
         the Reinsurer for any excess layer as reflected by any such statement
         (less prior payments, if any, for that excess layer) shall be payable
         by the Company concurrently with payment by the Reinsurer of the
         requested loss for that excess layer. 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.

TOWERS PERRIN
REINSURANCE

                                     - 5 -

<PAGE>

C.       Notwithstanding anything stated herein, the liability of the Reinsurer
         under any excess layer of reinsurance coverage provided by this
         Contract shall not exceed either of the following:

         1.       The amount, shown as "Reinsurer's Per Occurrence Limit" for
                  that excess layer in Schedule A attached hereto, as respects
                  loss or losses arising out of any one loss occurrence; or

         2.       The amount, shown as "Reinsurer's Annual Limit" for that
                  excess layer in Schedule A attached hereto, in all during the
                  term of this Contract.

                                   ARTICLE VII

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. With respect to losses arising
         out of mycotoxins, mold or other fungi (hereinafter together referred
         to as "mold-related losses"), only those mold-related losses directly
         arising out of loss occurrences covered hereunder will be included in
         ultimate net loss. Mold-related losses, in and of themselves, shall not
         be considered an event. 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.

         All salvages and recoveries made or received subsequent to a loss
         settlement under this Contract shall be applied as if recovered or
         received prior to the said settlement and all necessary adjustments
         shall be made by the parties hereto.

B.       "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, court costs,
         costs of supersedeas and appeal bonds, pre-judgment interest,
         post-judgment interest, expenses of outside adjusters, legal expenses
         and costs incurred in connection with coverage questions and legal
         actions connected thereto, and a pro rata share of salaries and
         expenses of the Company's field employees and expenses of other
         employees who have been temporarily diverted from their normal and
         customary duties and assigned to the field adjustment of losses covered
         by this Contract. Loss adjustment expense shall not include salaries
         and expenses of the Company's regular employees, except as provided
         above, or office and overhead expenses.

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

TOWERS PERRIN
REINSURANCE

                                     - 6 -

<PAGE>

         1.       "Loss in excess of policy limits" shall mean 80% of any amount
                  paid or payable by the Company in excess of its policy limits,
                  but otherwise within the terms of its policy and within the
                  terms of this agreement, 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 an action
                  against its insured or in the preparation or prosecution of an
                  appeal consequent upon such an action. For purposes of this
                  Contract, losses in excess of policy limits arising out of any
                  one loss occurrence shall not exceed 25% of the contractual
                  loss under all policies involved in the loss occurrence.

         2.       "Extra contractual obligations" shall mean 80% 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 in the preparation or prosecution of an appeal consequent
                  upon such an action. For purposes of this Contract, extra
                  contractual obligations arising out of any one loss occurrence
                  shall not exceed 25% of the contractual loss under all
                  policies involved in the loss occurrence. 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, 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 C shall be rendered illegal
                  or unenforceable by the laws, regulations or public policy of
                  any state, such provision shall be considered void in such
                  state, but this shall not affect the validity or
                  enforceability of any other provision of this Contract or the
                  enforceability of such provision in any other jurisdiction.

                                  ARTICLE VIII

OTHER REINSURANCE

The Company shall be permitted to carry the following:

         1.       Catastrophe excess of loss, including but not limited to
                  catastrophe excess of loss as classified by the Company as
                  index, Original Loss Warranty (OLW), swaps, and

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REINSURANCE

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<PAGE>

                  cat-linked covers;

         2.       Any other underlying reinsurance;

         recoveries under which shall inure solely to the benefit of the Company
         and be entirely disregarded in applying all of the provisions of this
         Contract.

                                   ARTICLE IX

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
                  assured's premises by strikers, provided such occupation
                  commenced during the aforesaid period.

         3.       As regards earthquake (the epicenter of which need not
                  necessarily be within the territorial confines referred to in
                  paragraph A of this Article) 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."

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REINSURANCE

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<PAGE>

B.       Except for those "loss occurrences" 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 subparagraph 1 of paragraph A above
         where only one such period of 72 consecutive hours shall apply with
         respect to one event.

C.       However, as respects those "loss occurrences" 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. 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 that 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.

E.       Losses directly or indirectly occasioned by:

         1.       Loss of, alteration of, or damage to; or

         2.       A reduction in the functionality, availability or operation
                  of;

         a computer system, hardware, program, software, data, information
         repository, microchip, integrated circuit, or similar device in
         computer equipment or non-computer equipment, whether the property of
         the policyholder of the Company or not, do not in and of themselves
         constitute an event unless arising out of one or more of the following
         perils:

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

                                    ARTICLE X

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.

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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 XI

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 XII

REINSURANCE PREMIUM

A.       As premium for each excess layer of reinsurance coverage provided by
         this Contract, the Company shall pay the Reinsurer the greater of the
         following:

         1.       The amount, shown as "Annual Minimum Premium" for that excess
                  layer in Schedule A attached hereto (or a pro rata portion
                  thereof if the term of this Contract is less than 12 months);
                  or

         2.       The percentage, shown as "Premium Rate" for that excess layer
                  in Schedule A attached hereto, of the Company's net earned
                  premium for the term of this Contract.

B.       The Company shall pay the Reinsurer an annual deposit premium for each
         excess layer of the amount, shown as "Annual Deposit Premium" for that
         excess layer in Schedule A attached hereto, in four equal installments
         of the amount, shown as "Quarterly Deposit Premium" for that excess
         layer in Schedule A attached hereto, on July 1, 2003, October 1, 2003,
         January 1, 2004 and April 1, 2004. However, if this Contract is
         terminated prior to July 1, 2004, no deposit premium installments shall
         be due after the effective date of termination.

C.       As promptly as possible after the effective date of termination or
         expiration of this Contract, the Company shall provide a report to the
         Reinsurer setting forth the premium due hereunder for each excess
         layer, computed in accordance with paragraph A, and any additional
         premium due the Reinsurer or return premium due the Company for

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REINSURANCE

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<PAGE>

         each such excess layer shall be remitted promptly. Pro rata premium is
         to be paid in the event of early termination in conjunction with the
         Special Termination Clause.

D.       "Net earned premium" as used herein is defined as gross earned premium
         of the Company for the classes of business reinsured hereunder, less
         the earned portion of premiums ceded by the Company for reinsurance
         which inures to the benefit of this Contract.

                                  ARTICLE XIII

OFFSET (BRMA 36C)

The Company and the Reinsurer shall have the right to offset any balance or
amounts due from one party to the other under the terms of this Contract. The
party asserting the right of offset may exercise such right any time whether the
balances due are on account of premiums or losses or otherwise.

                                  ARTICLE XIV

ACCESS TO RECORDS

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

                                   ARTICLE XV

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 XVI

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,

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REINSURANCE

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<PAGE>

         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 XVII

ERRORS AND OMISSIONS (BRMA 14E)

Any inadvertent delay, omission or error shall not be held to relieve either
party hereto from any liability which would attach to it hereunder if such
delay, omission or error had not been made, provided such delay, omission or
error is rectified upon discovery.

                                  ARTICLE XVIII

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 XIX

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 XX

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.)

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REINSURANCE

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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 XXI

RESERVES AND LETTERS OF CREDIT

(This Article shall not apply to those Reinsurers who, at the inception of this
Agreement and throughout the term of this Agreement, are authorized and continue
to be authorized in all states of the United States of America and the District
of Columbia and who, at the inception of this Agreement and throughout the term
of this Agreement, have been assigned an "A+" or better A. M. Best's Rating.)

A.       If the Reinsurer is unauthorized in any state of the United States of
         America or the District of Columbia, or in the event the Reinsurer's
         A.M. Best's rating has been assigned or downgraded below A-, the
         Reinsurer agrees to fund its share of the Company's ceded United States
         outstanding loss and loss adjustment expense reserves (including all
         case reserves plus any reasonable amount estimated to be unreported
         from known loss occurrences) 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;

         The Reinsurer, at its sole option, may fund in other than cash if its
         method and form of funding are acceptable to the Company.

B.       If the Reinsurer is unauthorized in any province or jurisdiction of
         Canada, the Reinsurer agrees to fund 115% of its share of the Company's
         ceded Canadian outstanding loss and loss adjustment expense reserves
         (including all case reserves plus any reasonable amount estimated to be
         unreported from known loss occurrences) 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

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REINSURANCE

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<PAGE>

                  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;

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 the
         Company, 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. 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 losses and/or
                  loss adjustment expense paid under the terms of policies
                  reinsured hereunder, unless paid in cash by the Reinsurer;

         2.       To reimburse itself for the Reinsurer's share of any other
                  amounts which are 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 and loss adjustment
                  expense reserves (including all case reserves plus any
                  reasonable amount estimated to be unreported from known loss
                  occurrences) 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 and loss adjustment expense reserves
                  (including all case reserves plus any reasonable amount
                  estimated to be unreported from known loss occurrences), 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 XXII

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

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REINSURANCE

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<PAGE>

         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 insured 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 insolvent
         company.

                                  ARTICLE XXIII

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 Contract, it is hereby mutually agreed that such dispute or
         difference of opinion shall be submitted to arbitration. One Arbiter
         shall be chosen by the Company, the other by the Reinsurer, and an
         Umpire shall be chosen by the two Arbiters before they enter upon
         arbitration, all of whom shall be active or retired disinterested
         executive officers of insurance or reinsurance companies or Lloyd's
         London Underwriters. In the event that either party should fail to
         choose an Arbiter within 30 days following a written request by the
         other party to do so, the requesting party may choose two Arbiters who
         shall in turn choose an Umpire before entering upon arbitration. If the
         two Arbiters fail to agree upon the selection of an Umpire within 30
         days following their appointment, the two Arbiters shall request the
         American Arbitration Association to appoint the Umpire. If the American
         Arbitration Association fails to appoint the Umpire 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 Umpire.

B.       Each party shall present its case to the Arbiters within 30 days
         following the date of appointment of the Umpire. The Arbiters shall
         consider this Contract 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 both parties; but failing to
         agree, they shall call in the Umpire and the decision of the majority
         shall be final and binding upon both parties.

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         Judgment upon the final decision of the Arbiters may be entered in any
         court of competent jurisdiction.

C.       If more than one reinsurer is involved in the same dispute, all such
         reinsurers shall constitute and act as one party for purposes of this
         Article and communications shall be made by the Company to each of the
         reinsurers constituting one party, provided, however, that nothing
         herein 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 reinsurers participating under the terms of this
         Contract from several to joint.

D.       Each party 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 one
         party, as above provided, the expense of the Arbiters, the Umpire and
         the arbitration shall be equally divided between the two parties.

E.       Any arbitration proceedings shall take place at a location mutually
         agreed upon by the parties to this Contract, but notwithstanding the
         location of the arbitration, all proceedings pursuant hereto shall be
         governed by the law of the State of New York.

                                  ARTICLE XXIV

SERVICE OF SUIT (BRMA 49C)

(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)

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.

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REINSURANCE

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                                   ARTICLE XXV

ENTIRE AGREEMENT

This written Contract constitutes the entire agreement between the parties
hereto with respect to the business being reinsured hereunder, and there are no
understandings between the parties hereto other than as expressed in this
Contract. Any change or modification to this Contract will be made by amendment
to this Contract and signed by the parties.

                                  ARTICLE XXVI

AGENCY AGREEMENT

If more than one reinsured company is named as a party to this Contract, Glencoe
Insurance Ltd. 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 XXVII

INTERMEDIARY (BRMA 23A)

Towers Perrin Reinsurance 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 Towers Perrin
Reinsurance, 525 Market Street, Suite 2900, San Francisco, California,
94105-2708. 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.

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                                   SCHEDULE A

                  ATTACHING TO AND FORMING AN INTEGRAL PART OF

            PROPERTY CATASTROPHE EXCESS OF LOSS REINSURANCE CONTRACT

                           (COVER NOTE NO: C-03-22488)

                                    ISSUED TO

                           GLENCOE GROUP OF COMPANIES
                     AND ITS QUOTA SHARE REINSURERS, IF ANY

                                    INCLUDING

                             GLENCOE INSURANCE LTD.
                                HAMILTON, BERMUDA

                          STONINGTON INSURANCE COMPANY
                                  DALLAS, TEXAS

                       STONINGTON LLOYDS INSURANCE COMPANY
                                  DALLAS, TEXAS

                                       AND

                             LANTANA INSURANCE LTD.
                                HAMILTON, BERMUDA

<TABLE>
<CAPTION>
                                              FIRST LAYER        SECOND LAYER
<S>                                           <C>                <C>
Company's Retention:                          $15,000,000        $ 22,500,000

Reinsurer's Per Occurrence Limit:             $ 7,500,000        $ 12,500,000

Reinsurer's Annual Limit:                     $15,000,000        $ 25,000,000

Minimum Premium:                              $ 1,740,000        $  2,100,000

Premium Rate:                                        3.98%               4.81%

Deposit Premium:                              $ 2,175,000        $  2,625,000

Quarterly Deposit Premium:                    $   543,750        $    656,250
</TABLE>

The figures listed above for each excess layer shall apply to each Subscribing
Reinsurer in the percentage share for that excess layer as expressed in its
Interests and Liabilities Agreement attached hereto.

TOWERS PERRIN
REINSURANCE

<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:

         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 $300,000,000.

         (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:

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REINSURANCE

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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

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

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REINSURANCE

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                  (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.

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REINSURANCE

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                                                                        (U.S.A.)

NUCLEAR INCIDENT EXCLUSION CLAUSE - PHYSICAL DAMAGE - REINSURANCE

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.

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REINSURANCE

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                                                                        (U.S.A.)

NUCLEAR INCIDENT EXCLUSION CLAUSE - PHYSICAL DAMAGE - REINSURANCE

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

TOWERS PERRIN
REINSURANCE

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                                                                        (CANADA)

NUCLEAR INCIDENT EXCLUSION CLAUSE - PHYSICAL DAMAGE - REINSURANCE

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 prescribed substances,
                  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 "prescribed substances" shall have the meaning given to it by
         the Atomic Energy Control Act R.S.C. 1985(c), A-16 or by any law
         amendatory thereof.

TOWERS PERRIN
REINSURANCE

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                                                                        (CANADA)

NUCLEAR INCIDENT EXCLUSION CLAUSE - PHYSICAL DAMAGE - REINSURANCE

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 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. 1980 (2/19/93)

TOWERS PERRIN
REINSURANCE

                                      - 2 -

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