Common use of REINSURANCE COVERAGE Clause in Contracts

REINSURANCE COVERAGE. A. Upon the contribution of capital to the Reinsurer by its parent in the amount of at least $156 million, the Company shall automatically and obligatorily cede to the Reinsurer, and the Reinsurer shall be obligated to accept as assumed reinsurance, an 85% quota share portion of the Net Liabilities with respect to such Policies, subject to adjustment as set forth below. The Company may, in its sole discretion, change the quota share participation of the Reinsurer from time to time effective as of any 6 month anniversary date of the effective date of this Agreement upon not less than ninety (90) days prior written notice to the Reinsurer; provided, however that the quota share participation of the Company shall at all times during the term of this Agreement be a minimum of 15% and a maximum of 25%, and provided further that the quota share participation of the Company does not exceed $25 million during the first 12 month period ended March 31, 2007, with such maximum amount subject to a 25% growth factor per twelve (12) month period thereafter. If the Company’s quota share participation maximum of $25 million (subject to the growth factor) is attained in any twelve month period ended March 31, then the quota share participation percentage, which shall apply to all premiums and losses on a pro-rated basis for such period, shall be decreased for that 12 month period even if such participation is below 15%. Each such change shall apply to Policies issued or renewed after the effective date of such change.

REINSURANCE COVERAGE. A. Upon the contribution of capital to the Reinsurer by its parent in the amount of at least $156 million, the Company shall automatically and obligatorily cede to the Reinsurer, and the Reinsurer shall be obligated to accept as assumed reinsurance, an 85a 30% quota share portion of the Net Liabilities with respect to such Policies, subject to adjustment as set forth below. The Company may, in its sole discretion, change the quota share participation of the Reinsurer from time to time effective as of any 6 six month anniversary date of the effective date of this Agreement upon not less than ninety (90) days prior written notice to the Reinsurer; provided, however that the quota share participation of the Company Reinsurer shall at all times during the term of this Agreement be a minimum of 1525% and a maximum of 2545%, ; and provided further that the Reinsurer’s quota share participation of the Company does not exceed $25 50 million during of gross written premium for the first 12 month period ended March 31, 2007, with such maximum amount subject to a 25% growth factor per twelve (12) 12 month period thereafter. If the CompanyReinsurer’s quota share participation maximum of $25 50 million (subject to the growth factor) is attained in any twelve month period ended March 31, then the quota share participation percentage, which shall apply to all premiums and losses on a pro-rated basis for such period, shall be decreased for that 12 month period even if such participation is below 1525%. Each such change shall apply to Policies issued or renewed after the effective date of such change. Notwithstanding the foregoing, if the Company writes business of the type that it has historically not written or writes more than 25% of its gross written premiums outside the state of New York in any 12 month period ending on the anniversary date of this Agreement, then the Reinsurer has the right to refuse to reinsure such business that the Company has not historically written and such excess business written outside the State of New York.

REINSURANCE COVERAGE. A. Upon the contribution of capital to the Reinsurer by its parent in the amount of at least $156 million, the Company shall automatically and obligatorily cede to the Reinsurer, and the Reinsurer shall be obligated to accept as assumed reinsurance, an 85a 30% quota share portion of the Net Liabilities with respect to such Policies, subject to adjustment as set forth below. The Company may, in its sole discretion, change the quota share participation of the Reinsurer Reinsurer, from time to time effective time, as of any 6 six month anniversary date of the effective date of this Agreement upon not less than ninety (90) days prior written notice to the Reinsurer; provided, however that the quota share participation of the Company Reinsurer shall at all times during the term of this Agreement be a minimum of 1525% and a maximum of 2545%, and provided further that the quota share participation of the Company Reinsurer does not exceed $25 150 million during for the first 12 month period ended March 31, 2007, with such maximum amount subject to a 25% growth factor per twelve (12) month period year thereafter. If the CompanyReinsurer’s quota share participation maximum of $25 150 million (subject to the growth factor) is attained in any twelve month period ended March 31, then the quota share participation percentage, which shall apply to all premiums and losses on a pro-rated basis for such period, shall be decreased for that 12 month period even if such participation is below 1525%. Each such change shall apply to Policies issued or renewed after the effective date of such change. Notwithstanding the foregoing, if the Company writes business of the type that it has historically not written or writes more than 25% of its gross written premiums outside the state of New York in any 12 month period ending on the anniversary date of this Agreement, then the Reinsurer has the right to refuse to reinsure such business that the Company has not historically written and such excess business written outside the State of New York.