Certain premiums and losses are ceded to other insurance companies under various excess of loss reinsurance agreements. The ceded reinsurance agreements are intended to provide the Company with the ability to maintain its exposure to losses within its capital resources.

These reinsurance agreements do not relieve the Company from its primary obligation to policyholders, as it remains liable to its policyholders to the extent that any reinsurer does not meet its obligations for reinsurance ceded to it under reinsurance contracts. Therefore, the Company is subject to credit risk with respect to the obligations of its reinsurers, and any failure on the part of these reinsurers could have a material adverse effect on the Company’s business, financial condition and results of operations.

Effective June 1, 2025, the Company entered into a per risk excess of loss treaty for its personal residential property business retaining $0.7 million on each property risk and ceding the next $4.3 million of loss. The per risk excess of loss treaties cover 100% of all losses except those related to named storms. These treaties are effective until May 31, 2026.

Effective June 1, 2025, the Company entered into a facultative excess of loss reinsurance contract for its personal residential property business which provides $7 million of coverage in excess of $5 million for each loss, each risk. The reinsurer’s total liability is capped at $14 million.

Effective October 29, 2024, the Company entered into a per risk excess of loss treaty for its commercial residential property business retaining $1 million on each risk and ceding the next $9 million of loss. The per risk excess of loss treaties cover 100% of all losses except those related to named storms. These treaties are effective until November 1, 2025.

Effective October 29, 2024, the Company entered into a facultative excess of loss reinsurance contract for its commercial residential property business which provides $50 million of coverage in excess of $10 million for each loss, each risk. Like the per risk treaty, the facultative contract does not cover losses related to named storms.

To minimize the Company’s exposure to losses from catastrophes, primarily hurricanes, the Company has entered into a catastrophe excess of loss agreement, as well as the mandatory participation in the Florida Hurricane Catastrophe Fund (“FHCF”).

For the treaty period June 1, 2025 through May 31, 2026, the catastrophe excess of loss reinsurance agreement has the following retention and limits:


	1st Event
	Coverage		In Excess of		Reinsurer Participation
1st Layer	$	50 million	$	50 million		48.00	%
2nd Layer	$	65 million	$	100 million		100.00	%
3rd Layer	$	100 million	$	165 million		98.35	%
4th Layer	$	250 million	$	265 million		100.00	%
5th Layer	$	92 million	$	515 million		100.00	%
Purple Re 2023-1 Cat Bond	$	100 million	$	607 million		100.00	%
Purple Re 2023-2 Cat Bond	$	100 million	$	607 million		100.00	%
Purple Re 2024-1 Cat Bond	$	300 million	$	607 million		70.00	%
6th Layer	$	150 million	$	607 million		30.00	%
7th Layer	$	150 million	$	607 million		30.00	%
Purple Re 2025-1 Class B Cat Bond	$	250 million	$	607 million		50.00	%
8th Layer	$	150 million	$	607 million		50.00	%
9th Layer	$	100 million	$	607 million		50.00	%
Purple Re 2025-1 Class A Cat Bond	$	257 million	$	607 million		48.64	%
10th Layer	$	257 million	$	607 million		51.36	%

The catastrophe excess of loss agreement has a corridor through it, whereby the FHCF picks up 90% of losses and the catastrophe layers pick up the remaining 10%. The mandatory FHCF layer is estimated to be 90% of $991.9 million, excess of $557.2 million. Premium for this coverage is estimated to be $71,345. The ultimate net loss for each of the above layers will include any recoveries from the FHCF or so deemed. The FHCF provides catastrophe coverage for named hurricanes up to a maximum limit of 90% of the amount of ultimate losses in the layer, as determined by a premium formula. The Company’s maximum projected payout from the FHCF is estimated to be $892.7 million, with a retention of $557.2 million.

Effective June 1, 2024, the Company entered into a per risk excess of loss treaty retaining $0.7 million on each property risk and ceding the next $4.3 million of loss. The per risk excess of loss treaties cover 100% of all losses except those related to named storms. These treaties are effective until May 31, 2025.

Effective June 1, 2024, the Company entered into a facultative excess of loss reinsurance contract which provides $7 million of coverage in excess of $5 million for each loss, each risk. The reinsurer’s total liability is capped at $14 million.


	1st Event
	Coverage		In Excess of		Reinsurer Participation
1st Layer	$	35 million	$	35 million		80.00	%
2nd Layer	$	60 million	$	70 million		95.33	%
3rd Layer	$	85 million	$	130 million		100.00	%
4th Layer	$	170 million	$	215 million		100.00	%
5th Layer	$	85 million	$	385 million		100.00	%
6th Layer	$	35 million	$	470 million		100.00	%
Purple Re 2023-1 Cat Bond	$	100 million	$	505 million		100.00	%
Purple Re 2023-2 Cat Bond	$	100 million	$	505 million		100.00	%
Purple Re 2024-1 Cat Bond	$	300 million	$	505 million		70.00	%
7th Layer	$	150 million	$	505 million		30.00	%
8th Layer	$	150 million	$	505 million		30.00	%
9th Layer	$	115 million	$	505 million		93.31	%
10th Layer	$	28 million	$	505 million		100.00	%

The catastrophic excess of loss agreement has a corridor through it, whereby the FHCF picks up 90% of losses and the catastrophe layers pick up the remaining 10%. The mandatory FHCF layer is 90% of $791.7 million, excess of $379.3 million. Premium for this coverage is $60,077. The ultimate net loss for each of the above layers will include any recoveries from the FHCF or so deemed. The FHCF provides catastrophe coverage for named hurricanes up to a maximum limit of 90% of the amount of ultimate losses in the layer, as determined by a premium formula. The Company’s maximum projected payout from the FHCF is $712.5 million, with a retention of $379.3 million.