Document:

PR-M Non-Bonus Assumption Agreement dated December 1, 2007

 Exhibit 10.10 
 PR-M Non-Bonus Assumption Agreement 

 

 

 THIS ASSUMPTION AGREEMENT (the “Agreement”) is executed as of the 1st day of December, 2009 (“Execution
Date”) by and between Homeowners Choice Property & Casualty Insurance Company, a Florida licensed and authorized insurance company (“Insurer”); and Citizens Property Insurance Corporation, an entity created by the Legislature
of the State of Florida pursuant to Subsection 627.351(6), and any successor entity (“CITIZENS”). 
 RECITALS

 WHEREAS, Insurer and CITIZENS desire, pursuant to this Agreement, to have the Insurer remove up to a maximum of
60,000 Policies by Assumption from CITIZENS in accordance with the terms and conditions of this Agreement. 
 WHEREAS, CITIZENS
desires to allow qualifying insurers to participate in the Program and remove policies from CITIZENS; 
 WHEREAS, Insurer has
made application to CITIZENS to participate in the Program; and 
 WHEREAS, the Office of Insurance Regulation (“OIR”)
has issued a Consent Order to this Insurer approving its Depopulation Plan. 
 NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, the Parties hereto do covenant and agree as follows: 
 DEFINITIONS 

For purposes of this Agreement: 
 A. “Aggregate Losses” shall mean those losses which include, but are not limited to, compensatory, punitive, bad faith and other damages arising from, and all loss adjustment expenses relating
to, the adjustment or defense of any and all claims with respect to losses on policies of insurance of Citizens or Issuer. 
 B. “Assumed Premium” shall mean Initial Assumed Premium as adjusted by a monthly remittance and bordereau process developed by the Insurer and CITIZENS to account for policy cancellations,
return premiums, policyholder requested coverage changes, and Returned Policies after the Assumption Date, with the positive and negative adjustments. 
  

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 PR-M Non-Bonus Assumption Agreement 
  

 C. “Assumption” shall mean the transference of risks from
CITIZENS to the Insurer on a Removed Policy, whereby the Insurer is deemed to have directly issued the Removed Policy as provided in subparagraph (p)6 of Subsection 627.351(6) (as added by Chapter 2007-1 Laws of Florida). 
 D. “Assumption Date” shall mean that date upon which the Assumption of a Removed Policy occurs. 
 E. “Assumption Procedures” shall mean those procedures applicable to the depopulation of CITIZENS policies under
subparagraphs (p) 3-6 of Subsection 627.351 (6), Section 627.3511, and Section 627.3517, Florida Statutes, and this Agreement, as set forth in Exhibit D attached hereto. 
 F. “Ceding Commission Rate” shall be as defined in Exhibit B attached hereto. 
 G. “Independent Auditor” shall mean a certified public accountant or certified public accounting firm, licensed in
the State of Florida, to perform professional auditing services and who is without bias with respect to the outcome of the audit services and with respect to the Insurer. 
 H. “Initial Assumed Premium” shall mean Written Premium, less the Written Premium earned by CITIZENS with respect
to the Removed Policies as of the respective Assumption Dates of such policies. 
 I. “Initial Notice”
shall mean a notice, in substantially form attached as Exhibit F (this is not included), mailed to a policyholders more than thirty days prior to the Assumption Date of a Tagged Policy. 
 J. “Office” shall mean the Florida Office of Insurance Regulation. 
 K. “Parties” shall mean the Insurer and CITIZENS. 
 L “Plan” shall mean the Plan of Operation of CITIZENS, as amended. 
 M. “Rejected Policy” shall mean any Tagged Policy the offer of which has been rejected by a policyholder as
provided in section 3.E. of this Agreement. 
 N. “Replacement Policy” shall mean a policy offered or
issued by Insurer on its own policy forms, to take effect upon the expiration or cancellation of a Removed Policy. 
 O. “Removed Policy or “Removed Policies” shall mean a CITIZENS Policy that is assumed by the Insurer under this Agreement and is not a Rejected Policy. 
 P. “Program” shall mean any program for the depopulation of policies by assumption or other take-out as approved by
CITIZENS and the Office pursuant to subparagraph (p)3-6 of Subsection 627.351(6). 
  

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 PR-M Non-Bonus Assumption Agreement 
  

 Q. “Returned Policy” shall mean a Removed Policy that is
returned to Citizens as provided in section 3.F. of this Agreement. 
 R. “Subsection 627.351(6)” shall
mean subsection 627.351(6), Florida Statutes (2006), which is Citizens’ enabling statute. 
 S. “Tagged
Policies” shall mean the Policies identified by CITIZENS policy number and expiration date on Exhibit A or any supplement thereto. 
 T. “Written Premium” shall mean the gross written premium of CITIZENS on the Removed Policies, less policy cancellation and return premiums, as of the respective Assumption Dates of such
polices. Written Premium shall not include fees or surcharges invoiced for collection by CITIZENS on the Policies, including a(n) (i) market equalization surcharge, (ii) CITIZENS policyholder surcharge, (iii) nonhomestead
policyholder assessment, (iv) Citizens additional policyholder assessment, (v) regular assessment, (vi) emergency assessment, (vii) tax-exempt surcharge, (viii) reinsurance or catastrophe financing surcharge, or
(ix) other fees, taxes, assessments, or surcharges imposed on CITIZENS policyholders as determined by CITIZENS. 
 TERMS
AND CONDITIONS 
 1. Term of this Agreement. This Agreement shall terminate 18 months from the date it
is signed. No Assumptions may occur after the Agreement terminates. 
 2. Agreement to Remove Policies.

 A. The Insurer and CITIZENS shall, prior to an Assumption Date, agree upon those Tagged Policies eligible to
be removed under the Program by the Insurer on the Assumption Date and shall set forth those Policies by CITIZENS policy number and expiration date on Exhibit A or any supplement thereto, which Exhibit A or supplement shall be attached hereto and
made a part hereof by reference. 
 B. Pursuant to this Agreement and the Assumption Procedures, the Insurer
shall remove by Assumption all of the Tagged Policies set forth on Exhibit A or supplements thereto, if available for removal on the Assumption Date pursuant to this Agreement and as approved by the Office. 
 3. Terms of Assumption. 
 A. Liabilities. 
 (i) With respect to a Removed Policy, the
Insurer is liable and obligated to pay all Aggregate Losses occurring on or after 12:01 A.M. Eastern Standard Time on the Assumption Date of a Removed Policy and CITIZENS has no obligation or liability with respect to such Aggregate Losses.

 (ii) The Insurer, in addition, agrees to assume and undertake all other obligations with respect to the
Removed Policies in the manner provided herein. Such obligations include, but are not limited to, accepting that the policy as written, and assumed, may not accurately reflect the risk. 
  

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 PR-M Non-Bonus Assumption Agreement 
  

 (iii) CITIZENS shall remain liable for all Aggregate Losses for the
Removed Policies occurring prior to the Assumption Date, and all Aggregate Losses for the Rejected Policies and the Returned Policies, and the Insurer shall have no responsibility with respect to such losses. 
 (iv) The Insurer shall comply with all applicable Assumption Procedures. 
 B. Notices. 
 (i) The cost of any notice and ancillary documentation to current CITIZENS policyholders to effectuate Assumption of the Policies shall be borne equally by the Parties, except that the cost of the Initial
Notice shall be borne solely by the Insurer. If CITIZENS bears the cost for any expenditures, the Insurer agrees that its portion of such costs may be withheld from any Assumed Premium paid to Insurer by CITIZENS pursuant to this Agreement or any
amendments or addenda to this Agreement. In the event CITIZENS, for whatever reason, does not withhold the Insurer’s portion of such cost from any Assumed Premium paid to Insurer, Insurer agrees to pay said sum to CITIZENS within thirty
(30) days of its receipt of a billing statement from CITIZENS. 
 (ii) The parties shall coordinate the
mailing of any documentation or notices required by this Agreement. 
 C. Assumed Premium. 
 (i) CITIZENS shall pay by wire transfer to the Insurer the Assumed Premium multiplied by 1.000 minus the applicable Ceding
Commission Rate on or before the 20th day following the Assumption Date. Any subsequent amounts due to or from CITIZENS as a result of the monthly remittance and bordereau process shall be remitted to the appropriate Party net of Ceding Commission
within ten (10) days following the end of each month without interest. 
 D. Servicing of Policies.
Commencing on the Assumption date of a Removed Policy: 
 (i) Until a Removed Policy is renewed onto an Insurers
policy form, on behalf of the Insurer, CITIZENS shall process endorsements and cancellations and provide other policy services with respect to the Removed Policy. The consideration for services to be performed by CITIZENS on behalf of the Insurer is
specifically encompassed in the Ceding Commission Rate referenced in Exhibit B attached hereto. 
 (ii) The
Insurer is responsible for offering and processing offers of renewal coverage with respect to its Replacement Policies, utilizing its approved rates and forms. Insurer is responsible for all policyholder services with respect to its Replacement
Policies. 
 E. Rejected Policies. 
 The parties acknowledge that policyholders of Tagged Policies have the right to reject Insurer’s offer of coverage and
to remain policyholders of Citizens. Accordingly, Insurer shall mail to the policyholders the Initial Notice disclosing such right. After the mailing of the Initial Notice, and prior to the Assumption Date, the Insurer shall be responsible for
obtaining written confirmation from any Policyholder requesting that their Policy not be removed from CITIZENS. Such information shall be remitted to CITIZENS in an electronic format acceptable to CITIZENS. 
  

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 PR-M Non-Bonus Assumption Agreement 
  

 F. Returned Policies. 
 Any policyholder under a Removed Policy may return to CITIZENS within thirty days after the Assumption Date and shall be
reinstated by CITIZENS. The insurer shall process all such received policyholder requests to return to CITIZENS and forward such requests, along with the appropriate unearned premium attributable to the Returned Policy, on a monthly basis to
CITIZENS in an electronic format acceptable to CITIZENS. After the thirty-day period following an Assumption Date, but prior to the date on which they are renewed onto a Replacement Policy issued by the Insurer, any assumed policyholder that elects
to return to CITIZENS may cancel their Policy with the Insurer, and may make application to CITIZENS for a new Policy, and shall be accepted for coverage by CITIZENS if otherwise eligible. 
 G. Claims Servicing. 
 (i) CITIZENS is solely responsible for the servicing of claims for losses occurring (a) prior to the Assumption Date under a Removed Policy, (b) at any time under a Rejected Policy, and
(c) at any time under a Returned Policy. 
 (ii) Insurer is solely responsible for the servicing of claims
for losses occurring on or after an Assumption Date under a Removed Policy. CITIZENS shall have no responsibility for payment of losses or loss adjustment expenses or for the servicing of claims with respect to losses occurring under any Removed
Policy on or after the Assumption Date. 
 (iii) CITIZENS agrees that in instances where the sharing of
information will facilitate the resolution of a claim which has occurred after the Assumption Date, and in accordance with applicable state and federal laws, it will share prior claims, underwriting and other information with the Insurer. CITIZENS
reserves the right at any time to deny access to any and all such information or to seek the permission of the Policyholder for release of such information. Insurer agrees to treat all information provided to them as confidential and certifies that
all such information provided to them by CITIZENS shall be used strictly to adjust a claim and for no other purpose. 
 (iv) With regard to losses occurring on Removed Policies after the Assumption Date, CITIZENS shall give notice promptly to the Insurer of any claim by a third party or the commencement of any legal proceedings against CITIZENS with respect
to such claim. The Insurer shall have the exclusive right to control the contest and defense for any such claim incurred or litigation initiated as of the Assumption Date. The liability of the Insurer under the Removed Policies shall always follow
that of CITIZENS, and any error or omission of CITIZENS or its agents shall in no way relieve the Insurer of its liability or obligations in respect of the matters affected by such errors or omissions, it being understood and agreed that the Insurer
shall follow and share the same fortune as CITIZENS under all circumstances. 
 (v) CITIZENS agrees to assign to
the Insurer any and all salvage and subrogation rights arising with respect to losses occurring on or after an Assumption Date, which CITIZENS may have with respect to the Removed Policies. 
  

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 PR-M Non-Bonus Assumption Agreement 
  

 H. Conditions to Closing. 
 The following conditions must be met prior to an Assumption Date: 
 (i) Approval by the Office of an Assumption by issuance of a Consent Order or letter, which Consent Order or letter shall be
attached hereto as Exhibit C. 
 (ii) Satisfactory compliance with all requirements of CITIZENS for participation
in the Assumption. 
 (iii) The mailing, more than thirty days in advance of the Assumption Date, of the Initial
Notice to each putative Policyholder of a Tagged Policy. 
 I. Implementation. 
 (i) The parties hereto acknowledge that, pursuant to all applicable laws and this Agreement, CITIZENS will use its sole
judgment and discretion in implementing the Assumption Procedures for participating Insurers. 
 (ii) Should the
parties fail to agree on the Tagged Policies to be set forth on Exhibit A, no obligation shall be created pursuant to this Agreement. 
 (iii) The Insurer and CITIZENS agree to allow the Insurer to supplement Exhibit A from time to time with lists of additional Tagged Policies, but such additional Tagged Policies must be designated and
assumed by the Insurer not later than eighteen (18) months from the initial Assumption Date. All Assumptions for each supplement to Exhibit A (e.g., Exhibit A-1, A-2, etc.) shall be in accordance with the terms and provisions of
this Agreement and the Assumption Procedures. The Policies so identified in any such supplement to Exhibit A shall be treated as Removed Policies as of the date of their Assumption for the purposes of this Agreement. All such supplements to this
Agreement shall be executed in writing by the Parties to effectuate and document such additional Assumptions. 
 (iv) CITIZENS shall not enter into an agreement with any other insurer for the removal of the Tagged Policies unless such policies are not removed by the Insurer in accordance with the terms and provisions of this Agreement, or are Rejected
Policies or Returned Policies or are written new by Citizens after their removal by Insurer. 
 4. Conditions of
Assumption. 
 A. The Insurer shall remove the Removed Policies by Assumption in accordance with this
Agreement and the Assumption Procedures and shall offer to renew the Insurer’s Replacement Policy for a period of three (3) years subsequent to the expiration of the Removed Policy. During the aforenoted period, the Insurer’s renewals
of the Replacement Policy shall be at the Insurer’s approved rates and on substantially similar terms or on such forms and rates as approved by the Office. No such Policy may be cancelled or nonrenewed by the Insurer during this period except
for nonpayment of premium or in accordance with the provisions of the Consent Order attached as Exhibit C. 
  

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 PR-M Non-Bonus Assumption Agreement 
  

 B. CITIZENS shall provide, or has provided, to the Insurer, by
electronic data transfer, or by such other means as is acceptable to CITIZENS, relevant information regarding the Tagged Policies available for assumption. The Insurer understands that CITIZENS cannot guarantee the reliability and accuracy of this
data and the Insurer agrees that policies will not be cancelled upon discovery that this information was not accurate, unless such inaccuracy amounts to a material misrepresentation or fraud on behalf of the insured. 
 C. The Insurer understands that CITIZENS makes no guarantee that a Tagged Policy will be available for removal on the
Assumption Date. 
 D. Thirty-six (36) months after the first Assumption Date, the Insurer shall provide to
CITIZENS an Independent Auditor’s report performed in accordance with the instructions provided in the Audit Scope attached hereto and incorporated herein by reference as Exhibit E. At a minimum the Audit shall contain all pertinent data to
verify the satisfactory completion of the Insurer’s performance pursuant to this agreement. Prior to commencing work, the Independent Auditor shall be approved by CITIZENS, which approval shall not be unreasonably withheld. All expenses of the
Independent Auditor shall be paid by the Insurer. At the beginning of the Audit CITIZENS shall provide the approved auditor the procedures to be followed in meeting the requirements of Exhibit E. 
 E. The Insurer agrees that as of the Assumption Date, no bonus, incentive plan, or consideration beyond the assumed premium
will be paid by CITIZENS for the Insurer’s removal of Removed Policies. 
 F. By signing this Agreement,
Insurer certifies that its assumption of policies complies with Section 627.3517, Florida Statutes. It is the Insurer’s sole responsibility to contact all agents involved with the Tagged Policies in order to obtain their permission to
include those particular policies in the Assumption. 
 5. Office Oversight. CITIZENS shall provide a fully
executed copy of this Agreement to the Office. The Insurer shall respond to any requests for information by the Office regarding the proposal or this Agreement. The Insurer and CITIZENS are, and shall remain, subject to all applicable laws of the
State of Florida and the supervision, rules, regulations and orders of the Office. 
 6. Right of Audit. CITIZENS
or its representatives, upon reasonable advance written notice, shall be entitled to audit, at its own cost and expense, the relevant books and records of the Insurer during normal business hours to confirm the Insurer’s compliance with the
terms and conditions of this Agreement, 
 7. Indemnification. Insurer shall indemnify CITIZENS, its Board of
Governors, officers, agents and employees (“CITIZENS Indemnitees”) against any costs, expenses (including reasonable counsel fees and costs of litigation), claims, demands, actions, losses or liabilities that CITIZENS Indemnitees may
suffer or that may be asserted or claimed against CITIZENS Indemnitees, caused by or arising directly out of any breach of this Agreement by the Insurer or Insurer’s Assumption of Removed Policies. 
  

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 PR-M Non-Bonus Assumption Agreement 
  

 8. Insurer’s Continuing Status. The Insurer, during the period of
this Agreement, shall remain duly licensed and authorized to transact property and casualty insurance business in the State of Florida and the lines of insurance applicable to Removed Policies and Replacement Policies. 
 9. Breach, Default, Cure, Termination and Other Remedies. 
 A. Events of Default. A default under this Agreement occurs in the event of any material breach of an obligation,
representation or undertaking of a party as set forth in this Agreement, including without limitation: 
 (i)
(a) Insurer fails to maintain its authority and licensing to conduct its business as provided in Section 8 of this Agreement; or 
 (b) Insurer becomes subject to an adverse finding or an order of supervision, rehabilitation, or liquidation pursuant to Chapter 631, Florida Statutes; or 
 (c) The issuance of any other order of the Office or a court of competent jurisdiction that in any material form or manner
limits or constrains the ability of the Insurer to engage in the business of property and casualty insurance, which results in the Insurer canceling or nonrenewing Removed Policies or Replaced Policies, other than the initial Consent Order issued by
the Office in connection with this Agreement. 
 (d) No notice or curative period is required for a material
breach occurring pursuant to this Section (i). 
 (ii) Insurer’s assumption of Tagged Policies, Replacement
Policies, or Removed Policies at unapproved rates within one year of the Assumption Date. 
 (iii) The
Insurer’s cancellation or non-renewal of a Removed Policy for an invalid reason. For purposes of this paragraph, an “invalid reason” shall be a cancellation of non-renewal not authorized by the terms of this Agreement or by the
Consent Order attached as Exhibit C. 
 (iv) The Insurer fails to materially comply with Section 627.3517,
Florida Statutes. In addition to any other remedies provided in this Agreement, if Section 627.3516 is violated, Insurer will be liable for any costs associated with CITIZENS re-assuming any Removed Policies, if Citizens in its sole discretion
determines to do so. In addition, Insurer will be assessed a monetary penalty in the amount of $1000.00 per Policy far every Policy assumed without the permission of the agent, if Insurer fails to cure under the provision of Paragraph 9.B.

 B. Cure. In the event of a default that may be cured, the non-defaulting party shall give the
defaulting party written notice of the material breach or default. Failure of the defaulting party to cure the material breach or default within fifteen (15) days of the receipt of the written notice as herein provided shall constitute and be
deemed a material breach and default of this Agreement unless the material breach or default is not capable of being cured within such period of time, and the defaulting party has commenced good faith efforts to cure such material breach or default
within fifteen (15) days, and thereafter continues in good faith to diligently pursue curing until the material breach or default is cured to the reasonable satisfaction of the non-breaching party. 
  

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 PR-M Non-Bonus Assumption Agreement 
  

 C. Termination and Other Remedies. Should the Insurer materially
breach or default in any obligation as set forth in this Agreement and not timely cure such material default and breach as set forth in this section, CITIZENS may in its sole discretion, take any or all of the follow actions; 
 (i) Terminate this Agreement or declare this Agreement canceled or void. 
 (ii) Prohibit Insurer from further assumption of policies pursuant to this Agreement or any future agreement. 
 (iii) Notify the Office of the violation of the Agreement and request that the Office take appropriate administrative action.

 (iv) Forfeiture of up to the entire amount of any escrowed bonus instituted pursuant to Paragraph 4.E., which
shall be set forth in detail in any addendum negotiated pursuant to Paragraph 4.E. 
 (v) In addition to any
rights and remedies set forth in this Agreement, the non-defaulting party shall have all rights and remedies available at law and/or equity, including, but not being limited to, the right to specific performance, damages or injunctive relief.

 D. Removed Policies. Notwithstanding any breach of this Agreement, the Insurer shall remain
responsible for Removed Policies unless and until a judicial determination is rendered relieving, altering or limiting Insurer’s responsibility. 
 10. Attorney’s Fees. If either of the parties hereto shall bring a Court action alleging material breach of this Agreement or seeking to enforce, rescind, renounce, declare void or
terminate this Agreement or any provisions thereof, the prevailing party shall be entitled to recover all of its legal expenses, including reasonable attorney’s fees and costs (including attorney’s fees and costs for any appeals taken),
and to have the same awarded as part of the judgment in the proceeding in which such legal expenses and attorney’s fees and costs were incurred. 
 11. Benefits. This Agreement shall be binding upon the parties, their heirs, legal representatives, successors and assigns. 
 12. Captions. The paragraph captions as to contents of the particular paragraphs herein are inserted only for convenience and
are in no way to be construed as part of this Agreement or as a limitation of the scope of the particular paragraph in which they are referred. 
 13. Construction of Agreement. Words of a gender used in this Agreement shall be held to include any other gender, and words in a singular number shall be held to include the plural, when
the sentence so requires. 
 14. Entire Agreement. This Agreement contains all of the oral and/or previously
written agreements, representations, and arrangements between the parties hereto concerning the Program, and all rights which the respective parties may have had under any prior written or oral agreements are hereby canceled and terminated, and all
parties agree that there are no representations or warranties other than those set forth herein. 
  

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 PR-M Non-Bonus Assumption Agreement 
  

 15. Florida Law and jurisdiction. It is acknowledged that this Agreement
was executed in and shall be construed and governed in accordance with the laws of the State of Florida and the rules, orders and regulations of the Office in effect at the time of the execution of this Agreement. In the event of any conflict
between such laws, rules, orders and regulations and Subsection 627.351(6), the provisions of that Subsection govern, If any legal action is filed pursuant to this agreement such action must be filed in a court of competent jurisdiction in Leon
County Florida. 
 16. Assignment. The Insurer may not assign or transfer this Agreement, or any benefit or right
under this Agreement without Citizens’ prior written consent. Any change in control or ownership is deemed a transfer of this Agreement requiring Citizens’ written consent. 
 17. Invalidation. In the event any provision of this Agreement is determined to be invalid by a court of competent
jurisdiction, the remaining provisions of this Agreement remain in full force and effect. 
 18. No Intermediary.
The Insurer represents and warrants that it has not, and CITIZENS represents and warrants that it has not, incurred an obligation to make payment of any fees to any intermediary with respect to the obligations afforded under this Agreement.

 19. Modification. No change or modification of this Agreement shall be valid unless the same shall be in
writing and signed by all of the parties hereto and not disapproved by the Office. 
 20. Notices. Any and all
notices, designations, consents, offers, acceptances, or any other communications provided for herein shall be given in writing, by hand delivery, by overnight mail, by registered or certified mail, or by facsimile transmission and shall be
addressed as follows: 
  

			
	Notice to Insurer:	  	
		
		  	 Mr. F.X. McCahill
 President
& CEO
 Homeowners Choice Property & Casualty Insurance Company
 2340 Drew Street, Suite 200
 Clearwater, FL 33765
 772-204-9394

		
	Notice to CITIZENS:	  	
		
		  	 Mr. Scott Wallace
 President/CEO and Executive Director
 CITIZENS Property Insurance Corporation
 101 North Monroe Street, Suite 1000
 Tallahassee,
Florida 32301
 (850) 513-3780

  

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 PR-M Non-Bonus Assumption Agreement 
  

 Notices sent by hand delivery shall be deemed delivered on the date of hand delivery. Notices sent by
overnight insurer shall be deemed delivered on the next business day after being placed into the hands of the overnight Insurer. Notices sent by registered or certified mail shall be deemed delivered on the third business day after being deposited
into the post office. Notices sent by facsimile transmission shall be deemed to be delivered on the day when sent if sent prior to 4:30 p.m. (the time being determined by the time zone of the recipient) otherwise they shall be deemed delivered on
the next business day. 
 21. Parties Represented. The parties acknowledge that each party and its counsel have
reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any amendments or exhibits
hereto. 
 22. Survival of Terms. Sections 3, 4, 5, 6, 7, 10, 15, 16,17, and 20 shall survive the termination of
this Agreement. 
 IN WITNESS WHEREOF, the parties hereto have set their hands and seals as of the day and year first above set
forth. 
  

			
	CITIZENS PROPERTY INSURANCE CORPORATION
		
	BY:	 	/s/ Mr. Scott Wallace
		 	Mr. Scott Wallace
		 	President/CEO and Executive Director
		
	INSURER:	 	Homeowners Choice Property & Casualty Insurance Company.
		
	BY:	 	/s/ Mr. F.X. McCahill
		 	Mr. F.X. McCahill
		 	President & CEO

  

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 PR-M Non-Bonus Assumption Agreement 
  

 Exhibits: 
  

	 	A.	Schedule of Policies 

  

	 	B.	Ceding Commission Rate 

  

	 	C.	Consent Order 

  

	 	D.	Timeline and Requirements for Assumption 

  

	 	E.	Audit Scope 

  

	 	F.	Initial Notice 

  

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 PR-M Non-Bonus Assumption Agreement 
  

 EXHIBIT B 
 Ceding Commission Rate 
 The contract period to remove policies
from CITIZENS will be eighteen (18) months. Any single assumption in a take-out contract period must remove a minimum of 2,500 policies or a Total Insured Value (coverages A, B, C & D combined) of five hundred (500) million dollars.
High Risk Account (HRA) and Personal Lines Account (PR-M) take-outs are exclusive and may not be assumed simultaneously under a single eighteen (18) month take-out contract. 
 There are additional incentives for assuming Insurers that remove larger numbers of eligible policies or TIV from the Personal Lines Account or High Risk Account. CITIZENS agrees to reduce the ceding
commission for all policies in a take-out if either the minimum number of policies or TIV are assumed. No agreement may be modified mid-term to change to a different bonus program, unless specified in the assumption agreement. 
 Ceding Commission (PR-M) 
  

							
	 Number of Policies
	  	Minimum Eligible
Total Insured Value
(TIV)	  	Ceding
Commission	 
	 Less than 60,000
	  	 	N/A	  	16	% 
	 60,000 to 74,999
	  	$	11 Billion	  	Reduced to 12	% 
	 75,000 to 89,999
	  	$	14 Billion	  	Reduced to 9	% 
	 90,000 and up
	  	$	17 Billion	  	Reduced to 6	% 

 Ceding Commission (HRA)

  

							
	 Number of Policies
	  	Minimum Eligible
Total Insured Value
(TIV)	  	Ceding
Commission	 
	 Less than 35,000
	  	 	N/A	  	16	% 
	 35,000 to 49,999
	  	$	10 Billion	  	Reduced to 12	% 
	 50,000 to 79,999
	  	$	14 Billion	  	Reduced to 9	% 
	 80,000 and up
	  	$	22 Billion	  	Reduced to 6	% 

  

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 PR-M Non-Bonus Assumption Agreement 
  

 Ceding Commission (Mobile Home) 
  

						
	 Number of Policies
	  	Minimum Eligible
Total Insured Value
(TIV)	  	Ceding
Commission	 
	 Less than 15,000
	  	N/A	  	16	% 
	 15,000 to 19,999
	  	N/A	  	Reduced to 12	% 
	 20,000 to 29,999
	  	N/A	  	Reduced to 9	% 
	 30,000 and up
	  	N/A	  	Reduced to 6	% 

  

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 PR-M Non-Bonus Assumption Agreement 
  

 EXHIBIT D 
 Timeline and Requirements for Assumption 
  

	 	•	 	 At any point in time, an Insurer may request, for purposes of depopulation and subject to an appropriate confidentiality agreement, a data file of
policies from CITIZENS. All policies not currently pending cancellation, not set for non-renewal or tagged for another insurer as described below, will be included in the data file. 

  

	 	•	 	 Companies may not be allowed to Depopulate polices in consecutive assumptions. This is dependent upon the number of participants. This determination is
based on resources, and solely at the discretion of the Depopulation Manager. 

 At Least 45 Days
Before Initial Assumption 
  

	 	•	 	 The Insurer must provide a Certificate of Authority from the Office, and an Order or letter from the Office approving the assumption.

  

	 	•	 	 The assuming carrier must return an executed Assumption Agreement and an executed Requirements and Deadline Letter to Citizens.

 At Least 40 Days Before Initial Assumption 

  

	 	•	 	 The assuming carrier’s policy selection and company information for the assumption notice (i.e. company letterhead with logo, signature, etc.)
must be submitted to Citizens. By submitting this policy selection file, the assuming carrier is certifying that all associated agents have either been appointed by the assuming carrier or agreed to have their policies assumed under the provisions
of “Consumer Choice.” 

  

	 	•	 	 Per Order 94539-08 assuming carriers must submit a list of policies (Access format) associated with agents that have declined to participate or did not
respond to the assuming carrier (specific to this assumption date). The file must be submitted to Citizens in Access format and include the Citizens policy number and policyholders name. 

  

	 	•	 	 Assuming carriers must provide contact information to be inserted Into a notice to policyholders whose agents have declined to participate in the
assumption process. This includes legal name, mailing address, and a contact number. Per Order 94539-08, the notice will provide the policyholder with the offering Insurer’s contact information and allow the policyholder to contact the carrier
directly to make a determination on their own about the offer of coverage from the carrier. The assuming carrier must have knowledgeable staff available to answer the policyholders questions regarding the offer, coverages, etc. and be ready to write
the coverage outside of the assumption process. 

 At Least 35 Days Before Initial
Assumption 
  

	 	•	 	 The assuming carrier must mail notice at least 35 days prior to the assumption date giving all policyholders the option to choose not to be assumed
(“opt out”). The notice must be approved by the OIR and Citizens and must be sent to every policyholder the assuming carrier intends to assume. It Is the assuming carriers responsibility to collect, retain and report responses from the
above notice. All policyholders who indicate that they do not want to be assumed must be collected in an Access database (policyholder name and Citizens policy number). 

  

 15 

 PR-M Non-Bonus Assumption Agreement 
  

 At Least 6 Days Before Initial Assumptionh5au 
  

	 	•	 	 The assuming carrier must provide the Access database with the name and associated Citizens policy number for all policyholders that have chosen not to
be assumed. Citizens will remove those policyholders from the assuming carriers policy selection file for that assumption date. 

  

	 	•	 	 Citizens reserves the right to modify any deadline or requirement. 

  

 16 

 PR-M Non-Bonus Assumption Agreement 
  

 EXHIBIT E 
 Audit Scope 
 This Audit Scope provides the directions for the audit
which will occur 36 months after the last assumption date. By signing the overall assumption agreement the Insurer has agreed to abide by the terms of this document. 
 1. Approximately sixty (60) days prior to the end of the 36-month period following the date that the Insurer last removed policies under the Non-Bonus Takeout Program, the Insurer will provide to
CITIZENS a computer file (hereinafter referred to as the “Policy Computer File”) in ACCESS format sorted by CITIZENS policy number, which contains the following information on each policy: 
  

	 	a.	Complete CITIZENS policy number; 

  

	 	b.	Year and month in which policy was removed from CITIZENS; 

  

	 	c.	Insurer’s policy number; 

  

	 	d.	Policy effective date of the Insurer’s initial policy; 

  

	 	e.	Policy expiration date of the Insurer’s initial policy; 

  

	 	f.	County of property location; 

  

	 	g.	Property address; and 

  

	 	h.	Indicate if the policy is in-force, or canceled. 

  

	 	I.	For all cancelled policies, the effective date of the cancellation. 

 2. CITIZENS will select a random sample of 400 policies, hereinafter referred to as the “Sample Policies”, from the Policy Computer File and provide a list of the selected policies to the
Insurer. 
 3. The Insurer will select an Independent Auditor subject to the concurrence of Citizens, which concurrence shall not be
unreasonably withheld. The Insurer will provide its Independent Auditor with the list of the Sample Policies. The Independent Auditor, at the expense of the Insurer, will conduct agreed-upon procedures pursuant to this Agreement, and will perform
the following: 
  

	 	a.	For in force Sample Policies: 

  

	 	1.	Verify that there were offers of coverage and policyholder payments; and 

  

	 	2.	Verify that the effective date, county and property address are correct; and 

  

	 	3.	Verify that the policy was in-force with no lapse in coverage through the end of the initial 36-month period. 

  

	 	4.	Identify and explain any exceptions. 

  

	 	b.	For Sample Policies no longer in force: 

  

	 	1.	Verify that there were offers of coverage and policyholder payments; and 

  

	 	2.	Verify that the effective date, county, and property address are correct; and 

  

	 	3.	Identify and explain any exceptions; and 

  

 17 

 PR-M Non-Bonus Assumption Agreement 
  

	 	4.	For Sample Policies no longer in force due to voluntary cancellation by the insured (including those cancelled for non-payment of premium), review the policy file for
documentation or other data entry, e.g., diary comments, letters from insured, etc., regarding the cancellation and document the reason(s) for cancellation and the effective date of the cancellation. 

  

	 	5.	For Sample Policies no longer in force due to cancellation by the Insurer for fraud, i.e., material misrepresentation, review the policy file for supporting
documentation for the cancellation and document the reason(s) for cancellation and the effective date of the cancellation. 

  

	 	6.	Identify any Sample Policies that were cancelled or non-renewed by the Insurer to reduce the Insurer’s hurricane exposure or for any other reason other than in 4
and 5, above, and provide the effective date of the cancellation and reason for cancellation. 

 4. The Independent Auditor will
provide an agreed-upon procedures report (hereinafter referred to as “Report”) to the Insurer and CITIZENS detailing its findings on each policy reviewed. The Report will list CITIZENS and Its auditor, Ernst & Young, as users.

 5. CITIZENS will review and verify the Report of the Independent Auditor. Within 10 working days of receipt of the Report, CITIZENS will
verify whether the Report has been prepared in compliance with the agreed-upon procedures set forth in this Agreement. If the Report is not verified, CITIZENS will advise the Independent Auditor on how to correct any deficiencies noted’ during
the verification process and may require that additional policies be sampled in order to validate the findings in the Report. 
 6. After
verification of the Independent Auditor’s Report by Citizens, either the Insurer or CITIZENS may elect, at its own expense, to expand the review sample to enhance the accuracy of the data to be used in extrapolating findings to the entire
population. This election may only be made once by each party to this Agreement. The party making such election must notify the other party of its intent within 14 days after receipt of notice of verification of the Independent Auditor’s Report
prepared pursuant to Paragraphs 4 and 5, above. 
 7. The Report shall be referred to the Office. 
  

 18Service Contract for Homeowners Claims Handling dated January 29, 2010

 Exhibit 10.11 
 SERVICE CONTRACT FOR 
 NON-CATASTROPHE HOMEOWNERS CLAIMS
HANDLING 
 THIS SERVICE CONTRACT FOR HOMEOWNERS CLAIMS HANDLING is made and entered into this 29th day of December, 2009, but is effective for
all purposes as of the 1st day of January, 2010, by and between HOMEOWNERS CHOICE MANAGERS, INC., (herein after referred to as the “Client”), and JOHNS EASTERN COMPANY, INC. (hereinafter referred to as the “Service Agent”).

 This contract refers to services provided by Service Agent on behalf of Client for non-Catastrophe claims with dates of loss of
January 1, 2010 through December 31, 2010. This contract supersedes portions of all previous agreements between Client and Service Agent that deal with non-Catastrophe claims with dates of loss of January 1, 2010 through
December 31, 2010. All other sections of previous contracts remain in effect. 
 WITNESSETH: 
 WHEREAS, the Client has undertaken to provide homeowners insurance in accordance with Florida Law and other applicable statutes and
regulations; and 
 WHEREAS, the Service Agent is engaged in providing the claims programs administration for homeowners claims;

 WHEREAS, the Client desires to engage the Service Agent for, and the Service Agent desires to assist the Client in,
homeowners claims handling; 
 NOW, THEREFORE, for and in consideration of the premises and of the mutual obligations,
performance of services, and payment of compensation set forth herein, the parties agree as follows: 
 DEFINITIONS Where used in
this Contract: 
 Catastrophe claims shall mean losses, occurring during any period of 96 consecutive hours, resulting from a single
event (e.g. Hurricane and/or Tropical Storm). 
 Services shall mean those services provided hereunder by Service Agent which are further
defined in Addendum A, attached hereto and incorporated by reference. 
 1. Engagement. The Client hereby engages the Service Agent to
supervise and administer the non-Catastrophe claims assigned to Service Agent by the Client in accordance with the applicable rules, regulations, and laws of the State of Florida, all in accordance with the Addendum A, attached hereto and
incorporated herein by this reference. Engagement terms in regards to the handling of Catastrophe claims will be handled by a separate contract. 

 2. Term. Subject to termination pursuant to Paragraph 8, the term of this Contract shall begin as of
January 1, 2010 and shall terminate on December 31, 2010, provided, however, that this Contract shall renew automatically for two additional one-year terms unless otherwise terminated. 
 3. Fund for Payment of Claims. The Client has the sole obligation and responsibility for funding the payment of claims. The Service Agent assumes no duty to
fund any such claims at any time and shall have no obligation to advance funds for any such payment. The Client agrees to maintain all necessary funds for payment of claims and to inform the Service Agent of all relevant details with respect to any
such accounts in order for the Service Agent to perform its duties under this Contract. 
 4. Allocated Claims Expenses. “Allocated Claims
Expenses” shall be defined as out-of-pocket expenditures arising in connection with the settlement of claims and directly attributable to a particular claim to be discharged from the accounts funded by the Client specified in Paragraph 3,
including, but not limited to: 
 a. Attorneys’ and legal assistants’ fees for claim and any lawsuits, before and at trial, on appeal,
or otherwise; 
 b. Court and other litigation and settlement expenses, including, without limitation: 
 (i) Medical examinations to determine extent of liability; 
 (ii) Expert medical and other testimony; 
 (iii) Laboratory, X-ray and other diagnostic tests;

 (iv) Autopsy, surgical reviews, and other pathology services; 
 (v) Physician and related fees and expenses in reading, interpreting, or performing any of the foregoing tests or services; 
 (vi) Stenographer, process server, and other related trial preparation, trial, settlement, and court costs; 
 (vii) Witnesses fees and expenses before and at trial, deposition, settlement discussions, or otherwise; and 
 c. Fees and expenses for surveillance, private investigators, and other outside experts; 
 d. Fees
for the indexing of injured claimants; 
 e. Fees for over-night or special mail service for various documents;. 
 f. Photocopying of relevant outside documentation; 

 g. Fees and expenses for engineers, industrial hygienists, and other outside experts necessary to properly
investigate and settle property claims; 
 h. Fees and expenses for field adjusters necessary to perform field adjustment activities for
non-catastrophe exposures with dates of loss from January 1, 2010 through December 31, 2010; and 
 i. Medicare Set-Aside (MSA)
services to include; recommendation for MSA submission, MSA cost projection, MSA submission, liability MSA services, comprehensive drug utilization review, lien search, conditional lien dispute, projection update. 
 The term Allocated Claims Expenses specifically excludes expenditures for salaries, transportation, tolls, photography, local telephone, file creation,
copying, overhead, secretarial support and first notice of loss services through QRM. Other expenditures (lodging for example) will be reimbursed with prior written approval by the Client. 
 5. Compensation for the Service Agent. For performing its Services under this Contract, the Service Agent shall be entitled to the following compensation:

 See Addendum A 
 Refer to previous contracts for compensation agreements for adjustment and third party administration services in regards to Losses with Dates of Loss prior to January 1, 2010. 
 Notwithstanding anything in this Paragraph 5 to the contrary, the Client agrees to bear the cost of printing checks in connection with the payment of claims
or otherwise under this Contract. 
 6. Continuing Handling of Claims After Termination of Contract or Legally Imposed Mandates. Upon
termination of this Contract as set forth in paragraph 8, the Service Agent agrees to return all claims that have been made and reported to it prior to such date of termination immediately to the Client unless the parties have agreed otherwise in
writing. 
 Upon contract termination, client data will be provided to the new Service Agent either by a series of attachments to one or more
email messages containing zip files which can be password-protected or via CD ROMS. The claim files may exist as paper files and will be shipped as such. If the claim files are stored as images in a document retrieval system, they will be
provided via CD ROM or the most current means of providing data. The cost for this will be no greater than $3,500.00. The Client will be billed for any additional programming to help in data transfer. 
 Not withstanding any provision herein to the contrary, in no event shall either Party be liable for any indirect, incidental, special, consequential,
punitive or exemplinary damages, including, without limitations, damages for loss of profits, data or use, incurred by any Party whether in an action in contract or tort, even if the other Party has been advised of the possibilities of such damages.

 7. Dispute Resolution. Except as otherwise expressly provided herein, any dispute between Client and
Service Agent arising out of or relating to this Contract shall be resolved in accordance with this Section 7 and its subsections. 
 (i) Upon the initial occurrence of a dispute under this Contract, the senior management (“Executive Relationship Managers”) of Service Agent and Client shall negotiate in good faith the
resolution of any dispute in an effort to resolve such dispute within twenty (20) business days of Client or Service Agent, as the case may be, notifying the other party of any such dispute. In the event the Executive Relationship Managers of
the parties to the dispute are unable to resolve a dispute within such twenty (20) business day period, any of the parties to the dispute shall be entitled to commence arbitration as stated below; provided, however, that if a dispute cannot be
resolved by the Executive Relationship Managers of the parties to the dispute, the proceedings occurring pursuant to this Section and its subsections shall have been without prejudice to the legal positions of the parties to the dispute. 

(ii) Any dispute arising out of this Contract which shall not be settled by the parties using the dispute resolution procedure described
above shall be resolved by binding arbitration under the then current commercial arbitration rules of the American Arbitration Association in the State of Florida, before a single arbitrator who shall not be, nor have been, an employee, officer,
director or agent of any party, or any of their respective Affiliates and who is: (i) agreeable to the Executive Relationship Managers of the parties to the dispute, or (ii) if the Executive Relationship Managers of the parties to the
dispute cannot agree on an arbitrator within fifteen (15) business days after a demand for arbitration has been request in writing by any of them, appointed by the Florida office of the American Arbitration Association under its then-current
commercial arbitration rules (such Person, the “Arbitrator”). The Arbitrator shall have experience in the commercial insurance industry and shall be either a business executive or a lawyer who has participated previously in arbitration or
dispute resolution proceedings. Any arbitration shall consist of not more than three (3) days of hearings all of which shall occur within thirty (30) days after the Arbitrator has been selected. The Arbitrator shall issue a written
decision with findings of fact and reason for his (her) decision within one (1) week after the final hearing date. The arbitration award shall be specifically enforceable, and judgment upon any award rendered pursuant to the arbitration may be
entered in any court with jurisdiction over the parties and subject matter of the dispute; provided, however, that the parties stipulate that the United States District Court for the State of Florida and the Supreme Court of the State of Florida,
each sitting in the State of Florida, are courts of competent jurisdiction for this purpose. The Arbitrator shall apply the substantive law of the State of Florida to the merits of any dispute or claim. The parties agree that, any provision of
Applicable Law notwithstanding, they will not request, and the Arbitrator shall have no authority to award, punitive or exemplary damages against any party or any damages not otherwise recoverable pursuant to this Contract. The costs of the
arbitration, including administrative and Arbitrator’s fees, shall be shared equally by the parties. Each party shall bear the cost of its own attorney’s fees and expert witness fees. 
 (iii) Notwithstanding any other provision of this Section and its subsections, any party may seek injunctive relief (temporary, preliminary
and/or permanent) in a court of law for any

 
breach by a party of its payment obligations hereunder or any breach of a party’s obligation with respect to Confidential Information, in each case, pursuant to the terms thereof; provided,
that the parties stipulate that the United States District Court of the State of Florida and the Supreme Court of the State of Florida, each sitting in the State of Florida, are courts of competent jurisdiction for this purpose. 
 (iv) All applicable statutes of limitation shall be tolled while the procedures specified in this Section and its subsections are pending.
The parties shall take such action, if any, required to effectuate such tolling. 
 8. Termination. This Contract may be terminated by either
the Client or the Service Agent by giving prior written notice of ninety (90) days. In the event of such termination, compensation paid or payable to Service Agent under Paragraph 5 shall be prorated as appropriate. Notwithstanding anything in
this Paragraph 8 to the contrary, the insolvency or filing for relief from creditors of any party pursuant to the United States bankruptcy Code or the material breach of a material provision of this Agreement by any party shall permit the other
party to cancel this Contract immediately upon written notice. 
 9. Covenants of the Service Agent and the Client: The Service Agent and the
Client each agrees to use its normal and ordinary professional care and diligence in the performance of its duties under this Contract and will use its best efforts to comply at all times with the Law of the State of Florida. 
 10. Indemnification. Each party agrees to indemnify and hold harmless the other and its directors, officers, employees, stockholders, and agents against any
and all claims, lawsuits, settlements, judgments, costs, penalties, and expenses, including, without limitation, attorneys’ and legal assistants’ fees before and at trial, on appeal, or otherwise, resulting from the breach of, or
negligence or misconduct in performing, any provision of this Contract, by the indemnifying party or by its directors, officers, employees, stockholders or agents (other than Service Agent), whether acting alone or in collusion with others.

 Client agrees to provide an answer and to defend Service Agent in any lawsuits involving claims handled by the Service Agent for the Client
unless the complaint alleges specific acts of negligence on the part of the Service Agent. A general statement in the complaint that the Service Agent handled the claim improperly is not considered a specific act of negligence. 
 11. Service Agent and Client mutually agree that, during the previous Contract, and for the period of one year thereafter, they will not solicit for
employment, or employ, any of each others employees contracted on the performance of this Contract. 
 12. “Confidential Information”,
as used herein, shall mean any materials, data, information and documents disclosed by either party or their affiliates, (whether transmitted orally, in writing, or through any electronic medium) or generated in connection with the Services of this
Contract which relate to the business, business activities, business operations, customer data or proprietary trade secrets. Confidential Information may include, but not be limited to, (i) trade secrets and work product, (ii) information
relating to business plans, sales, pricing, financial data,

 
or marketing plans or methods, (iii) software, applications, and systems, including source code, object code and documentation and commentary related thereto, (iv) information relating
to one or more customers, including, but not limited to: (a) personal information such as a customer’s name, address, telephone number, account relationships, account numbers, account balances, and account histories; (b) information
concerning such customers which would be considered “non-public personal information” within the meaning of Title V of the Gramm-Leach Bliley Act of 1999 (Public Law 106-102, 113 Stat. 1338) and its implementing regulations, as the same
may be amended from time to time; (c) information concerning such customers which would be considered “individually identifiable health information” within the meaning of the Health Insurance Portability and Accountability Act; and
(d) information concerning such customers which is protected from disclosure by other applicable federal or state laws and regulations regarding privacy; (e) confidential information of third parties in either party’s possession, and
(f) security procedures and measures (collectively and separately the “Confidential Information”). Confidential Information shall remain the property of the disclosing party and the recipient shall not be deemed by virtue of this
Agreement or by any access to Confidential Information to have acquired any right or interest of any kind in or to any such Confidential Information. Each party represents and warrants that it shall not use the other party’s Confidential
Information for its benefit, nor shall it disclose Confidential Information to any third parties, other than persons specifically authorized in writing, or as may be required by order of a court of competent jurisdiction, a governmental agency or by
operation of law. 
 Notwithstanding the foregoing, “Confidential Information” shall not include information, which is disclosed to a
party by third parties not under a confidentiality obligation, or information, which is public information, or information known by a party prior to the effective date of this Contract and for which such party is not under a separate confidentiality
obligation. 
 13. Client will report to and advise its reinsurers if any, in accordance with the terms of the policies with its carriers.
Reporting to reinsurers will not be the responsibility of Service Agent. In addition, Client will make all required state and federal reports and filings. Client further agrees that Service Agent shall have no obligation to make any such reports or
filings on behalf of or instead of, Client. 
 14. Mold Adjustments. Service Agent will provide no mold remediation services. Mold remediation
is outside the scope of this contract. Service Agent will scope and estimate mold damages, and that will be the extent of its services. Not withstanding anything to the contrary herein, Client understands and agrees that it assumes the risk of all
liabilities it may incur, including, without limited to, damage or injury to persons and property arising in connection with any assignment to investigate, detect, remediate or remove mold or any other environmental site inspection, investigation or
remediation assignment, either alone or in combination with any other assignment, and the Client waives all claims against Service Agent and its affiliates in connection therewith. Service Agent will not be liable directly, or indirectly, for any
liability (including legal fees and expenses) including, without limitations, any third party claims arising therefrom. 
 15. Miscellaneous.

 a. Each party represents and warrants that it has full power and authority to enter into this Contract.

 b. All notices, requests, demands and other communications which are required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given when received if personally delivered; when transmitted if transmitted by telecopy, electronic telephone line facsimile transmission, or other similar electronic or digital transmission method; the day after
it is sent, if sent by recognized expedited delivery service; and five (5) days after it is sent, if mailed, certified or registered mail, return receipt requested, postage prepaid. In each case, notice shall be sent to: 
  

			
	If to Client:	  	Homeowners Choice Managers, Inc.
		  	2340 Drew Street
		  	Suite 200
		  	Clearwater, FL 33765-3310
		
	If to the Service Agent:	  	Johns Eastern Company, Inc.
		  	Post Office Box 110259
		  	Lakewood Ranch, FL 34211

 or to such other address as either
party may have specified in writing to the other using the procedures specified above in this Paragraph. 
 c. (i) This Contract shall be
construed pursuant to and governed by the substantive laws of the State of Florida (and any provision of any other state law shall not apply if the law of a state or jurisdiction other than Florida would otherwise apply). 
 (ii) The headings of the various Paragraphs in this Contract are inserted for the convenience of the parties and shall not affect the meaning, construction,
or interpretation of this Contract. 
 (iii) Any provision of this Contract which is determined by a court of competent jurisdiction to be
prohibited, unenforceable or not authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition, unenforceability or non-authorization without invalidating the remaining provisions hereof or affecting
the validity, enforceability or legality of such provision in any other jurisdiction. In any such case, such determination shall not affect any other provision of this Agreement, and the remaining provisions of this Contract shall remain in full
force and effect. If any provision or term of this Contract is susceptible to two or more constructions or interpretations, one or more of which would render the provision or term void or unenforceable, the parties agree that a construction or
interpretation which renders the term or provision valid shall be favored. 
 d. This Contract constitutes the entire Contract, and supersedes
all prior agreements and understandings, oral and written among the parties to this Contract with respect to the subject matter hereof. 

 e. (i) If, within ten (10) days after demand to comply with the obligations of one of the parties to
this Contract served in writing on the other, compliance or reasonable assurance of compliance is not forthcoming, and the other party takes steps to enforce rights under this Contract pursuant to Paragraph 7 or otherwise, the prevailing party in
any action shall be entitled to recover all reasonable costs and expenses (including reasonable attorneys’ and legal assistants’ fees before and at trial, on appeal, or otherwise.) 
 (ii) If any monies shall be due either of the parties to this Contract hereunder and shall not be paid within thirty (30) days from the due date of
such payment, interest shall accrue on such unpaid amount at the rate of 1% per month in accordance with the Florida Prompt Payment Act - F.S.218.70-79. 
 f. This Contract shall be binding upon and inure to the benefit of the successors in interest and assigns of the parties. This Contract is not assignable by the Service Agent without consent of the Client
except to a purchase of all or substantially all of Service Agent’s claims handling business. 
 g. The parties to this Contract will
execute and deliver, or cause to be executed and delivered, such additional or further documents, agreements, or instruments and shall cooperate with one another in all respects for the purpose of carrying out the transactions contemplated by this
Contract. 
 h. This Contract may be executed in any number of counterparts, each of which shall be considered an original, but all of which
together shall constitute one and the same instrument and shall become effective when each of the parties has executed at least one of the counterparts even if all the parties have not executed the same counterpart. 
 16. Extended Claims Handling. 
 Service Agent will
handle all claims received whose date of loss is within the terms of this contract. If and when the contract is terminated and/or expires, Service Agent will handle the claims for a period of thirty (30) days thereafter at no additional charge.
If Client wishes the claims to be handled beyond this point, fees will be negotiated at that time. 

 IN WITNESS WHEREOF, the parties have executed this Contract effective for all purposes as of
(inception date). 
  

					
	WITNESSES:	 		 	HOMEOWNERS CHOICE MANAGERS, INC.
			
	 /s/ Cynthia L. Keiser
	 		 	 /s/ Francis X. McCahill III

			
	 /s/ Richard R. Allen
	 		 	Frank McCahill
		 		 	President
			
	WITNESSES:	 		 	JOHNS EASTERN COMPANY, INC.
			
	 /s/ Marti E. Hogan
	 		 	 /s/ Donald E. Lederer

			
	  
	 		 	Donald E. Lederer, CPCU, AIM, AIC, ARM
		 		 	President

 ADDENDUM A 
 to 
 Service Contract for Non-Catastrophe Homeowners Claims Handling 
 SECTION I 
 In consideration for
the terms and provisions outlined in this contract, Service Agent and Client agree that the following Services will be offered by Service Agent: 
 1. To accept and review non-catastrophe claims and loss reports assigned to Service Agent involving those exposures with a date of loss of January 1, 2010 through December 31, 2010. “Catastrophe” exposures will be
handled under the terms of the “Catastrophe Claims Service Agreement.” 
 2. To investigate accepted claims and losses to the extent
deemed necessary in the judgment of Service Agent, and to adjust, settle, resist or otherwise handle all such claims or losses within the authority granted by Client, which authority maybe granted, withheld, limited or altered anytime by the Client.

 3. To investigate accepted claims and losses to the extent deemed necessary in the judgment of Service Agent and to adjust, settle, resist,
or otherwise handle all such claims and losses in excess of the authority granted Service Agent, with the prior approval of Client. 
 4. To
establish claim and/or loss files for all accepted claims and losses, which shall be available for review at all reasonable times by Client. 
 5. To provide Client via the Internet, after the end of each month during which services are performed under this contract, an electronic report showing the status of each open claim assigned, including
details of payments and outstanding reserves for the month and year covered by the report. Service Agent shall make all normal efforts and take reasonable measures to have this information available to Client after the 5th business day of the following month. 
 6. To retain and store files as follows: 
 Loss
and Claim files to be stored in their existing state at the time of file closure for a period up to two (2) years from termination or expiration of contract. 
 Upon expiration of this two (2) year period, Client shall have one of the following options. 
  

	 	a.	Require Service Agent to return all stored files to Client at Client’s expense, or 

  

	 	b.	Require Service Agent to continue storing files at the then prevailing rate and expense method of billing. 

 If at the end of the two (2) year period Client has not notified Service Agent in writing of its selection of one of the options set forth in a, or b,
above, it is agreed that Service Agent will return all stored files to Client at Client’s expense. 

 7. Service Agent will maintain in its information system data on each claim, including insurer’s name
and address, appropriate reserve, appropriate paid amount, open or close status, description of accident, and other information as may be agreed upon in the future. That will be available to Client on a monthly basis, in a form to be determined at a
later date. 
 8. This addendum does not cover handling for Catastrophe claims. 
 9. The Services will be performed by Service Agent’s Maitland office. Service Agent agrees to maintain claims handling staffing at two teams, each with a supervisor/manager and three full time
examiners unless a change in this arrangement is mutually agreed to. Service Agent agrees to provide sufficient support staff or customer service representatives to ensure that the teams perform at maximum efficiency. 
 10. Service Agent will continuously provide access to the AIM system for both Service Agent and Client claims handling teams until such time as the Client
notifies Service Agent that the Client claims system is ready to be placed into production. At that time the Client staff will utilize the Client system and a plan will be implemented for the Service Agent teams and their claims. At a minimum,
Service Agent claim data handled by Service Agent teams will be uploaded on a regular basis to ensure both systems remain in data sync with the claim information required. 
 11. The Client will assume the responsibility of assigning claims to JE and the Client teams no later than the end of January 2010. 
 12. Field assignments for adjusters will be handled by each team and all parties agree to a rotation method that will include all adjusting partners of the Client including Service Agent field offices
adjusting teams. Any deficiencies in field claim handling will be brought to the Client’s attention as soon as discovered. The Client will have the deficiency corrected or the adjusting firm will be limited in ongoing future business potential.

 13 Issuing of claims checks will remain the responsibility of Service Agent until the Client advises that it is ready to assume this task.

 14. Issuing of claims related adjusting invoices will be assumed by the Client no later than the end of January 2010. This will include the
invoices of Service Agent field offices in the form of a payment to Service Agent headquarters for further distribution to locations per Service Agent normal operating procedures and policies. 
 15. The Client will have the right to change team makeup of Service Agent teams if proper notification of defects occurs and corrective action reasonably
satisfactory to the Client is not taken by Service Agent within 60 days of reporting of deficiency. Service Agent agrees that it will take corrective action up to and including replacement of team members if required by the Client. 

 SECTION II 
 The Client will provide the following information to Service Agent: 
 Monthly information regarding direct written premium, earned
premium, number of policies, and any other data necessary for the proper confirmation of coverage and handling of claims. 
 SECTION III

 In consideration of the Services, Service Agent fees will be paid as follows: 
 1. The Client agrees to pay Service Agent $1,190,000 in four installments of $297,500 with the first payment due 1-1-2010, the second payment due 4-1-2010, the third payment due 7-1-2010 and the fourth
payment due 10-1-2010. This payment scheme assumes that the Service Agent will handle approximately 1,000 claims per six month period. Both parties agree that 60 days before the expiration of the first six months and again 60 days before expiration
of the full year, they will meet and jointly review claims and ongoing business operations and outlooks. 
  

	 	2.	If a significant change in either claims activity or operations occurs during six month period then both parties agree to work towards agreement regarding the amount(s)
required for the next six months. Expenses associated with use of QRM for first notice of loss services, including after hours, holiday, and weekend use will remain the responsibility of Service Agent. 

  

	 	3.	Should the claim handling volume exceed the initial 2,000 claims within a calendar year then both parties agree to expeditiously negotiate on the incremental or
variable costs associated with the handling of claims above that volume or level of activity. 

  

	4.	Liability claims with dates of loss between January 1, 2010 and December 31, 2010 will be charged on an hourly basis at $72/hour plus administrative costs.

  

	 	5.	Field Adjustments conducted by Service Agent employees/adjusters will be invoiced per the Client’s field fee schedule. 

  

	 	15.	All years are subject to audit on an annual basis.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00171-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00171-of-00352.parquet"}]]