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<SEC-DOCUMENT>0000950134-06-015976.txt : 20060814
<SEC-HEADER>0000950134-06-015976.hdr.sgml : 20060814
<ACCEPTANCE-DATETIME>20060814104639
ACCESSION NUMBER:		0000950134-06-015976
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		9
CONFORMED PERIOD OF REPORT:	20060630
FILED AS OF DATE:		20060814
DATE AS OF CHANGE:		20060814

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			AMERISAFE INC
		CENTRAL INDEX KEY:			0001018979
		STANDARD INDUSTRIAL CLASSIFICATION:	FIRE, MARINE & CASUALTY INSURANCE [6331]
		IRS NUMBER:				752069407
		STATE OF INCORPORATION:			TX
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-12251
		FILM NUMBER:		061027526

	BUSINESS ADDRESS:	
		STREET 1:		2301 HIGHWAY 190 WEST
		CITY:			DERIDDER
		STATE:			LA
		ZIP:			70634
		BUSINESS PHONE:		337-463-9052

	MAIL ADDRESS:	
		STREET 1:		2301 HIGHWAY 190 WEST
		CITY:			DERIDDER
		STATE:			LA
		ZIP:			70634
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>d38372e10vq.htm
<DESCRIPTION>FORM 10-Q
<TEXT>
<HTML>
<HEAD>
<TITLE>e10vq</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>WASHINGTON, DC 20549</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM 10-Q</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)<BR>
OF THE SECURITIES EXCHANGE ACT OF 1934<BR>
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2006</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>Commission file number: 000-51520</B>

</DIV>
<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>AMERISAFE, INC.</B>
</DIV>

<DIV align="center" style="font-size: 10pt">(Exact Name of Registrant as Specified in Its Charter)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>Texas</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>75-2069407</B></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(State of Incorporation)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(I.R.S. Employer Identification Number)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>2301 Highway 190 West, DeRidder, Louisiana</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>70634</B></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">(Address of Principal Executive Offices)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Zip Code)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">Registrant&#146;s telephone number, including area code: <B>(337)&nbsp;463-9052</B>

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark whether the Registrant: (1)&nbsp;has filed all reports required to be filed by
Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12&nbsp;months (or for
such shorter period that the registrant was required to file such reports), and (2)&nbsp;has been
subject to such filing requirements for the past 90&nbsp;days. Yes <FONT face="Wingdings">&#254;</FONT> No <FONT face="Wingdings">&#111;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer,
or a non-accelerated filer. See definition of &#147;accelerated filer and large accelerated filer&#148; in
Rule&nbsp;12b-2 of the Exchange Act. (Check one):
</DIV>

<DIV align="center" style="font-size: 10pt">Large accelerated filer <FONT face="Wingdings">&#111;</FONT> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accelerated filer <FONT face="Wingdings">&#111;</FONT> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-accelerated filer <FONT face="Wingdings">&#254;</FONT></DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark whether the Registrant is a shell company (as defined in Rule&nbsp;12b-2 of the
Exchange Act). Yes <FONT face="Wingdings">&#111;</FONT> No <FONT face="Wingdings">&#254;</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As of August&nbsp;10, 2006, there were 17,446,110 shares of the Registrant&#146;s common stock, par value
$.01 per share, outstanding.
</DIV>


<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>






<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="tocpage"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>TABLE OF CONTENTS</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="87%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Page</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">No.</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD colspan="3" align="left"><A href="#101">PART I &#151; FINANCIAL INFORMATION</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#102">Forward-Looking Statements</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#103">Item&nbsp;1</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#103">Financial Statements</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#104">Item&nbsp;2</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#104">Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#105">Item&nbsp;3</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#105">Quantitative and Qualitative Disclosures About Market Risk</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#106">Item&nbsp;4</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#106">Controls and Procedures</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" align="left"><A href="#107">PART II &#151; OTHER INFORMATION</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#108">Item&nbsp;1</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#108">Legal Proceedings</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#109">Item&nbsp;1A</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#109">Risk Factors</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#110">Item&nbsp;2</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#110">Unregistered Sales of Equity Securities and Use of Proceeds</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#111">Item&nbsp;3</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#111">Defaults Upon Senior Securities</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#112">Item&nbsp;4</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#112">Submission of Matters to a Vote of Security Holders</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#113">Item&nbsp;5</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#113">Other Information</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#114">Item&nbsp;6</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><A href="#114">Exhibits</A></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d38372exv10w1.htm">First Casualty Excess of Loss Reinsurance Contract</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d38372exv10w2.htm">Second Casualty Excess of Loss Reinsurance Contract</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d38372exv10w3.htm">Third Casualty Excess of Loss Reinsurance Contract</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d38372exv10w4.htm">Workers' Compensation Per Person Excess of Loss Reinsurance Contract</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d38372exv10w5.htm">Casualty Catastrophe Excess of Loss Reinsurance Contract</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d38372exv31w1.htm">Certification Pursuant to Section 302</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d38372exv31w2.htm">Certification Pursuant to Section 302</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d38372exv32w1.htm">Certification Pursuant to Section 906</A></FONT></TD></TR>
</TABLE>
</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>


<P align="center" style="font-size: 10pt">2
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="102"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>FORWARD-LOOKING STATEMENTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This report contains forward-looking statements within the meaning of Section&nbsp;27A of the
Securities Act of 1933 and 21E of the Securities Exchange Act of 1934. You should not place undue
reliance on these statements. These forward-looking statements include statements that reflect the
current views of our senior management with respect to our financial performance and future events
with respect to our business and the insurance industry in general. Statements that include the
words &#147;expect,&#148; &#147;intend,&#148; &#147;plan,&#148; &#147;believe,&#148; &#147;project,&#148; &#147;forecast,&#148; &#147;estimate,&#148; &#147;may,&#148; &#147;should,&#148;
&#147;anticipate&#148; and similar statements of a future or forward-looking nature identify forward-looking
statements. Forward-looking statements address matters that involve risks and uncertainties.
Accordingly, there are or will be important factors that could cause our actual results to differ
materially from those indicated in these statements. We believe that these factors include, but
are not limited to, the following:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>greater frequency or severity of claims and loss activity, including as a result of
natural or man-made catastrophic events, than our underwriting, reserving or investment
practices anticipate based on historical experience or industry data;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in rating agency policies or practices;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the cyclical nature of the workers&#146; compensation insurance industry;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in the availability, cost or quality of reinsurance and the failure of our
reinsurers to pay claims in a timely manner or at all;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>negative developments in the workers&#146; compensation insurance industry;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>decreased level of business activity of our policyholders;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>decreased demand for our insurance;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>increased competition on the basis of coverage availability, claims management, safety
services, payment terms, premium rates, policy terms, types of insurance offered, overall
financial strength, financial ratings and reputation;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in regulations or laws applicable to us, our policyholders or the agencies that
sell our insurance;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in legal theories of liability under our insurance policies;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>developments in capital markets that adversely affect the performance of our investments;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>loss of the services of any of our senior management or other key employees;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the effects of U.S. involvement in hostilities with other countries and large-scale
acts of terrorism, or the threat of hostilities or terrorist acts; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in general economic conditions, including interest rates, inflation and other
factors.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The foregoing factors should not be construed as exhaustive and should be read together with
the other cautionary statements included in this and other reports we file with the Securities and
Exchange Commission, including the information in Item&nbsp;1A, &#147;Risk Factors&#148; of Part&nbsp;I to our Annual
Report on Form 10-K for the year ended December&nbsp;31, 2005. If one or more events related to these or
other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect,
actual results may differ materially from what we anticipate.
</DIV>

<P align="center" style="font-size: 10pt">3
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="101"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PART I  &#151; FINANCIAL INFORMATION</B>
</DIV>

<DIV align="left">
<A name="103"></A>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;1. Financial Statements.</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>AMERISAFE, INC. AND SUBSIDIARIES<BR>
CONDENSED CONSOLIDATED BALANCE SHEETS<BR>
(in thousands, except share and per share data)</B>

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>June 30,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>December 31,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2005</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" colspan="2">(unaudited)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Assets</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Investments:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Fixed maturity securities&#151;held-to-maturity, at amortized cost</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">515,784</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">465,648</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Fixed maturity securities&#151;available-for-sale, at fair value</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">682</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,695</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Equity securities&#151;available-for-sale, at fair value</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">69,102</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">66,275</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">585,568</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">533,618</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash and cash equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31,187</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49,286</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Amounts recoverable from reinsurers</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">118,899</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">122,562</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Premiums receivable, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">143,839</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">123,934</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,518</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,413</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accrued interest receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,432</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,597</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Property and equipment, net</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,029</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,321</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred policy acquisition costs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,630</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,973</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Deferred charges</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,101</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,182</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Other assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,942</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,434</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">956,145</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">892,320</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Liabilities, redeemable preferred stock and shareholders&#146; equity</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Liabilities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Reserves for loss and loss adjustment expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">505,060</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">484,485</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Unearned premiums</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">148,337</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">124,524</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Reinsurance premiums payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">694</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Amounts held for others</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,889</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,484</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Policyholder deposits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38,069</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38,033</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Insurance-related assessments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">39,739</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35,135</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Federal income tax payable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,677</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Accounts payable and other liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,451</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,852</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Subordinated debt securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36,090</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">36,090</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">793,635</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">744,974</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Redeemable preferred stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Shareholders&#146; equity:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Common stock:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Voting&#151;$0.01 par value;
issued and outstanding shares&#151;17,446,110 in 2006
and 17,424,054 in 2005</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">174</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">174</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Additional paid-in capital</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">145,667</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">145,206</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accumulated deficit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(39,292</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(54,346</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Accumulated other comprehensive income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,961</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,312</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">112,510</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">97,346</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">956,145</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">892,320</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">See accompanying notes.
</DIV>


<P align="center" style="font-size: 10pt">4
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>AMERISAFE, INC. AND SUBSIDIARIES<BR>
CONDENSED CONSOLIDATED STATEMENTS OF INCOME<BR>
(in thousands, except share and per share data)</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>Three Months Ended</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>Six Months Ended</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>June 30,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>June 30,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2005</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2005</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="14">(unaudited)</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Revenues</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gross premiums written</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">92,151</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">88,949</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">172,969</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">160,524</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Ceded premiums written</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(4,724</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(4,862</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(9,175</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(9,697</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net premiums written</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">87,427</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">84,087</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">163,794</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">150,827</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net premiums earned</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">72,107</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">63,115</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">139,981</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">125,032</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net investment income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,843</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,932</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,816</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,650</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net realized gains on investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,081</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">547</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,235</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">774</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fee and other income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">198</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">144</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">355</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">306</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total revenues</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">79,229</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">67,738</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">154,387</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">133,762</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Expenses</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Loss and loss adjustment expenses incurred</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,376</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">64,518</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">98,246</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">110,436</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Underwriting and certain other operating costs</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,329</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,653</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,435</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,697</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Commissions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,564</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,016</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,886</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,822</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Salaries and benefits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,207</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,948</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,209</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,048</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Interest expense</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">843</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">686</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,656</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,326</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Policyholder dividends</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">175</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">215</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">347</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">386</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">69,494</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">80,036</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">134,779</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">141,715</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Income (loss)&nbsp;before income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,735</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(12,298</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,608</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(7,953</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Income tax expense (benefit)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,917</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(4,777</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,554</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,669</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net income (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,818</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(7,521</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,054</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(4,284</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Preferred stock dividends</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,381</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(4,720</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net income (loss)&nbsp;available to common
shareholders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">7,818</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(9,902</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">15,054</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(9,004</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Earnings per share</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(33.03</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.76</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(30.04</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(33.03</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.76</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(30.04</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Shares used in computing earnings per share</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Basic</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,422,406</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">299,774</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,421,569</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">299,774</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Diluted</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,427,662</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">299,774</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,426,347</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">299,774</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">See accompanying notes.
</DIV>


<P align="center" style="font-size: 10pt">5
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>AMERISAFE, INC. AND SUBSIDIARIES<BR>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS<BR>
(in thousands)</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>Three Months Ended</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>Six Months Ended</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>June 30,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>June 30,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2005</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2005</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">(unaudited)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Operating Activities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net income (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">7,818</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(7,521</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">15,054</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(4,284</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Adjustments to reconcile net income (loss)&nbsp;to net
cash provided by operating activities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Depreciation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">478</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">576</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">928</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,154</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net amortization of
investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">769</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">506</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,310</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">999</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Deferred income taxes</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,522</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(6,602</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,916</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(7,427</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Net realized gains on investments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(1,081</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(547</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,235</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(774</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Gain on sale of asset</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(43</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(43</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Share-based compensation</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">318</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">458</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Changes in operating assets and liabilities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Premiums receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(13,229</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(20,839</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(19,905</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(30,812</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Accrued interest receivable</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">294</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">540</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(835</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(304</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Deferred policy acquisition costs and
deferred charges</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,084</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,675</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,576</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(7,292</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Other assets</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(5,421</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,068</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(6,508</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(2,229</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Reserves for loss and loss adjustment
expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,075</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,273</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,575</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24,947</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Unearned premiums</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,320</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,972</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,813</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,795</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Reinsurance balances</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,919</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,865</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,969</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,560</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Amounts held for others and policyholder
deposits</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">582</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,493</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">441</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,611</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Accounts payable and other
liabilities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">642</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,532</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,526</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,552</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net cash provided by operating
activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,835</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,505</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">34,056</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35,496</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Investing Activities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Purchases of investments held-to-maturity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(41,308</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(34,375</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(97,992</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(39,222</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Purchases of investments available-for-sale</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(6,352</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(3,982</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(19,123</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(25,047</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds from maturities of investments
held-to-maturity</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,081</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,266</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45,709</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,202</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds from sales and maturities of investments
available-for-sale</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,468</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,841</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,336</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Purchases of property and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(418</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(315</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(638</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(727</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Proceeds from sales of property and equipment</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">45</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net cash used in investing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(32,484</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(18,399</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(52,158</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(33,455</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Financing Activities</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Tax benefit from share-based payments</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net cash provided by financing activities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Change in cash and cash equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(13,646</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,106</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">(18,099</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,041</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash and cash equivalents at beginning of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">44,833</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">26,356</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">49,286</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,421</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash and cash equivalents at end of period</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">31,187</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">27,462</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">31,187</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">27,462</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">See accompanying notes.
</DIV>


<P align="center" style="font-size: 10pt">6
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>AMERISAFE, INC. AND SUBSIDIARIES<BR>
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 1. Basis of Presentation</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AMERISAFE, Inc. (the &#147;Company&#148;) is an insurance holding company incorporated in the state of
Texas. Based on voting shares, the Company is 40.7% owned by Welsh, Carson, Anderson and Stowe VII
L.P. and its affiliate WCAS Healthcare Partners, L.P. The accompanying unaudited condensed
consolidated financial statements include the accounts of the Company and its subsidiaries:
American Interstate Insurance Company (&#147;AIIC&#148;), Silver Oak Casualty, Inc. (&#147;SOCI&#148;), American
Interstate Insurance Company of Texas (&#147;AIICTX&#148;), Amerisafe Risk Services, Inc. (&#147;RISK&#148;) and
Amerisafe General Agency, Inc. (&#147;AGAI&#148;). AIIC and SOCI are property and casualty insurance
companies organized under the laws of the state of Louisiana. AIICTX is a property and casualty
insurance company organized under the laws of the state of Texas. RISK, a wholly-owned subsidiary
of the Company, is a claims and safety service company servicing only affiliate insurance
companies. AGAI, a wholly-owned subsidiary of the Company, is a general agent for the Company. AGAI
sells insurance, which is underwritten by AIIC, SOCI and AIICTX, as well as by nonaffiliated
insurance carriers. The assets and operations of AGAI are not significant to that of the Company
and its consolidated subsidiaries. The terms &#147;AMERISAFE,&#148; the &#147;Company,&#148; &#147;we,&#148; &#147;us,&#148; or &#147;our&#148; refer
to AMERISAFE, Inc. and its consolidated subsidiaries, as the context requires.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company provides workers&#146; compensation and general liability insurance for small to
mid-sized employers engaged in hazardous industries, principally construction, trucking and
logging. Assets and revenues of AIIC represent more than 99% of comparable consolidated amounts of
the Company for each of 2006 and 2005.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the opinion of the management of the Company, the accompanying unaudited condensed
consolidated financial statements contain all adjustments (consisting of normal recurring accruals)
necessary to present fairly the financial position, the results of operations and cash flows for
the periods presented. The unaudited condensed consolidated financial statements have been prepared
in accordance with the instructions to Form 10-Q under the Securities Exchange Act of 1934 and
therefore do not include all information and footnotes to be in conformity with accounting
principles generally accepted in the United States (&#147;GAAP&#148;). The results for the interim periods
are not necessarily indicative of the results of operations that may be expected for the year. The
unaudited condensed consolidated financial statements contained herein should be read in
conjunction with our Annual Report on Form 10-K for the year ended December&nbsp;31, 2005.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The preparation of financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results could differ from
those estimates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain prior year amounts have been reclassified to conform with the current year presentation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 2. Stock Options and Restricted Stock</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the initial public offering of shares of the Company&#146;s common stock in
November&nbsp;2005, the Company&#146;s shareholders approved the Amerisafe 2005 Equity Incentive Plan (the
&#147;2005 Incentive Plan&#148;) and the Amerisafe 2005 Non-Employee Director Restricted Stock Plan (the
&#147;2005 Restricted Stock Plan&#148;). See Note 13 to our consolidated financial statements included in
our Annual Report on Form 10-K for the year ended December&nbsp;31, 2005 for additional information
regarding the Company&#146;s incentive plans.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On March&nbsp;10, 2006, the compensation committee of the board approved incentive compensation
awards to each of the Company&#146;s executive officers for services rendered in 2005. The awards were
composed of cash bonuses and grants of restricted common stock. The restricted stock awards were
made pursuant to the Company&#146;s 2005 Incentive Plan, and will vest on the first anniversary of the
date of grant. The fair value of the restricted stock granted was $170,000.
</DIV>

<P align="center" style="font-size: 10pt">7
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In accordance with the terms of the Company&#146;s 2005 Restricted Stock Plan, the 3,332 shares of
restricted common stock issued to non-employee directors on November&nbsp;17, 2005 vested on May&nbsp;15,
2006, the date of the first annual shareholders&#146; meeting after the issuance of the restricted
common stock. On May&nbsp;15, 2006, the Company issued an additional 6,110 shares of restricted common
stock to non-employee directors. These shares will vest on the date of the annual shareholders&#146;
meeting to be held in 2007. The fair value of the restricted stock issued on May&nbsp;15, 2006 was
$75,000.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the six months ended June&nbsp;30, 2006, we recognized stock-based compensation expense of
$458,000 related to options granted under the 2005 Incentive Plan and restricted stock issued under
the 2005 Restricted Stock Plan.
</DIV>

<P align="center" style="font-size: 10pt">8
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>AMERISAFE, INC. AND SUBSIDIARIES<BR>
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Note 3. Earnings Per Share</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We compute earnings per share in accordance with SFAS No.&nbsp;128, &#147;Earnings per Share.&#148;
Additionally, we apply the &#147;two-class method&#148; in computing basic and diluted earnings per share.
The two-class method was introduced in SFAS 128, and further clarified in Emerging Issues Task
Force (EITF)&nbsp;No.&nbsp;03-06, &#147;Participating Securities and the Two-Class&nbsp;Method under FASB Statement No.
128, Earnings Per Share, (Issue 03-6).&#148; Under the two-class method, net income is allocated
between common stock and any securities other than common stock that participate in dividends with
common stock. Our redeemable preferred stock qualifies as &#147;participating securities&#148; under SFAS
128 and EITF 03-06.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The two-class method allocates net income available to common shareholders and participating
securities to the extent that each security shares in earnings as if all earnings for the period
had been distributed. The amount of earnings allocable to common shareholders is divided by the
weighted-average number of common shares outstanding for the period. Participating securities that
are convertible into common stock are included in the computation of basic earnings per share if
the effect is dilutive.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted earnings per share includes potential common shares assumed issued under the &#147;treasury
stock method,&#148; which reflects the potential dilution that would occur if any outstanding options
are exercised. Diluted earnings per share also includes the &#147;if converted&#148; method for
participating securities if the result is dilutive. The two-class method of calculating diluted
earnings per share is used whether the &#147;if converted&#148; result is dilutive or anti-dilutive.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 0px solid #000000"><B>Three Months Ended</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>Six Months Ended</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>June 30,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>June 30,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2005</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2005</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="14"><B>(in thousands, except share and per share data)</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="14"><B>(unaudited)</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Basic EPS:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net income (loss)&nbsp;available to common
shareholders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">7,818</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(9,902</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">15,054</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(9,004</TD>
    <TD nowrap>)</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Portion allocable to common shareholders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">87.8</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">100.0</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">87.8</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">100.0</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net income (loss)&nbsp;allocable to common
shareholders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6,862</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(9,902</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">13,212</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(9,004</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Basic weighted average common shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,422,406</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">299,774</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,421,569</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">299,774</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Basic earnings per common share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(33.03</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.76</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(30.04</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Diluted EPS:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net income (loss)&nbsp;allocable to common
shareholders</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">6,862</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(9,902</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">13,212</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(9,004</TD>
    <TD nowrap>)</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Diluted weighted average common shares:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Weighted average common shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,422,406</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">299,774</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,421,569</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">299,774</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Stock options</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Restricted stock</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,256</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,778</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Diluted weighted average common shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,427,662</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">299,774</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,426,347</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">299,774</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Diluted earnings per common share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(33.03</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0.76</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">$</TD>
    <TD align="right">(30.04</TD>
    <TD nowrap>)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">9
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The table below sets forth the calculation of the percentage of net income allocable to
common shareholders, or the &#147;portion allocable to common shareholders.&#148; Under the
two-class method, unvested stock options, and out-of-the-money vested stock options are not
considered to be participating securities. For the periods presented, the Company did not
have any in-the-money, vested stock options outstanding. As a result, the Company&#146;s
outstanding stock options are not included in this calculation.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>Three Months Ended</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>Six Months Ended</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>June 30,</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>June 30,</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2005</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2005</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="14"><B>(unaudited)</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Numerator:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Basic weighted average common
shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,422,406</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">299,774</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,421,569</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">299,774</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Add: Other common shares eligible
for common dividends:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Weighted average restricted shares
(including tax benefit
component)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,256</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,778</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Weighted average participating
common shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,427,662</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">299,774</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,426,347</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">299,774</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Denominator:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Weighted average
participating
common shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,427,662</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">299,774</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,426,347</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">299,774</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Add: Other
classes of
securities,
including
contingently
issuable common
shares and
convertible
preferred shares:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Weighted average
common shares
issuable upon
conversion of
Series&nbsp;C preferred
shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,457,724</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,457,724</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Weighted average
common shares
issuable upon
conversion of
Series&nbsp;D preferred
shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">971,817</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">971,817</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">&#151;</TD>
    <TD nowrap><SUP style="font-size: 85%; vertical-align: text-top">(1)</SUP></TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:60px; text-indent:-15px">Weighted average
participating
shares</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,857,203</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">299,774</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,855,888</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">299,774</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Not applicable as impact is antidilutive.</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Portion allocable to common shareholders for the second quarter of 2006 was 87.8%, or
17,427,662 divided by 19,857,203. Portion allocable to common shareholders for the second quarter
of 2005 was 100.0%. Portion allocable to common shareholders for the first six months of 2006 was
87.8%, or 17,426,347 divided by 19,855,888. Portion allocable to common shareholders for the first
six months of 2005 was 100.0%.
</DIV>

<P align="center" style="font-size: 10pt">10
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="104"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;2. Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following discussion should be read in conjunction with the accompanying unaudited
condensed consolidated financial statements and the related notes included in Item&nbsp;1 of this
Quarterly Report on Form 10-Q, together with Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended
December&nbsp;31, 2005.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We begin our discussion with an overview of our company to give you an understanding of our
business and the markets we serve. We then discuss our critical accounting policies. This is
followed with a discussion of our results of operations for the three and six months ended June&nbsp;30,
2006 and 2005. This discussion includes an analysis of certain significant period-to-period
variances in our consolidated statements of operations. Our cash flows and financial condition are
discussed under the caption Liquidity and Capital Resources.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Business Overview</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AMERISAFE is a holding company that markets and underwrites workers&#146; compensation insurance
through its subsidiaries. Workers&#146; compensation insurance covers statutorily prescribed benefits
that employers are obligated to provide to their employees who are injured in the course and scope
of their employment. Our business strategy is focused on providing this coverage to small to
mid-sized employers engaged in hazardous industries, principally construction, trucking and
logging. Employers engaged in hazardous industries pay substantially higher than average rates for
workers&#146; compensation insurance compared to employers in other industries, as measured per payroll
dollar. The higher premium rates are due to the nature of the work performed and the inherent
workplace danger of our target employers. Hazardous industry employers also tend to have less
frequent but more severe claims as compared to employers in other industries due to the nature of
their businesses. We provide proactive safety reviews of employers&#146; workplaces. These safety
reviews are a vital component of our underwriting process and also promote safer workplaces. We
utilize intensive claims management practices that we believe permit us to reduce the overall cost
of our claims. In addition, our audit services ensure that our policyholders pay the appropriate
premiums required under the terms of their policies and enable us to monitor payroll patterns or
aberrations that cause underwriting, safety or fraud concerns. We believe that the higher premiums
typically paid by our policyholders, together with our disciplined underwriting and safety, claims
and audit services, provide us with the opportunity to earn attractive returns on equity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We market our insurance in 27 states and the District of Columbia through independent
agencies, as well as through our wholly owned insurance agency subsidiary. We are also licensed in
an additional 18 states and the U.S. Virgin Islands.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Critical Accounting Policies</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It is important to understand our accounting policies in order to understand our financial
statements. Management considers some of these policies to be critically important to the
presentation of our financial results because they require us to make estimates and assumptions.
These estimates and assumptions affect the reported amounts of our assets, liabilities, revenues
and expenses and the related disclosures. Some of the estimates result from judgments that can be
subjective and complex and, consequently, actual results in future periods might differ from these
estimates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management believes that the most critical accounting policies relate to the reporting of
reserves for loss and loss adjustment expenses, including losses that have occurred but have not
been reported prior to the reporting date, amounts recoverable from reinsurers, assessments,
deferred policy acquisition costs, deferred income taxes and the impairment of investment
securities. These critical accounting policies are more fully described in Item&nbsp;7, &#147;Management&#146;s
Discussion and Analysis of Financial Condition and Results of Operations&#148; of Part&nbsp;II to our Annual
Report on Form 10-K for the year ended December&nbsp;31, 2005.
</DIV>

<P align="center" style="font-size: 10pt">11
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Results of Operations</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table summarizes our consolidated financial results for the three months and six
months ended June&nbsp;30, 2006.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Three Months Ended</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7"><B>Six Months Ended</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 0px solid #000000"><B>June 30,</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="7" style="border-bottom: 0px solid #000000"><B>June 30,</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2005</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2006</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>2005</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15"><B>(dollars in thousands, except per share data)</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15"><B>(unaudited)</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gross premiums written</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">92,151</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">88,949</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">172,969</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">160,524</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net premiums earned</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">72,107</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">63,115</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">139,981</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">125,032</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net investment income</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,843</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,932</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,816</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,650</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total revenues</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">79,229</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">67,738</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">154,387</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">133,762</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">69,494</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">80,036</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">134,779</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">141,715</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net income (loss)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,818</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(7,521</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,054</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(4,284</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Diluted earnings per common share</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(33.03</TD>
    <TD nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.76</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(30.04</TD>
    <TD nowrap>)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Other Key Measures</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Net combined ratio (1)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">95.2</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">125.7</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">95.1</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">112.2</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Return on average equity (2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">19.6</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(34.1</TD>
    <TD nowrap>%)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">19.4</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">(9.9</TD>
    <TD nowrap>%)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>The net combined ratio is calculated by dividing the sum of loss and loss
adjustment expenses incurred, underwriting and certain other operating costs,
commissions, salaries and benefits, and policyholder dividends by the current year&#146;s net
premiums earned.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Return on average equity is calculated by dividing the annualized net income by the
average shareholders&#146; equity, including redeemable preferred stock for the applicable
period.</TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Consolidated Results of Operations for Three Months Ended June&nbsp;30, 2006 Compared to June&nbsp;30, 2005</I></B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Gross Premiums Written</I>. Gross premiums written for the three months ended June&nbsp;30, 2006 were
$92.2&nbsp;million, compared to $88.9&nbsp;million for the same period in 2005, an increase of 3.6%. The
increase was attributable primarily to a $2.9&nbsp;million increase in annual premiums on voluntary
policies written during the period and a $2.6&nbsp;million increase in premiums resulting from payroll
audits and related premium adjustments. These increases were offset by an $870,000 decrease in
direct assigned risk premiums and a $1.3&nbsp;million decrease in assumed premiums from mandatory
pooling arrangements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Net Premiums Written</I>. Net premiums written for the three months ended June&nbsp;30, 2006 were
$87.4&nbsp;million, compared to $84.1&nbsp;million for the same period in 2005, an increase of 4.0%. The
increase was attributable to the growth in gross premiums written and a $138,000 decrease in
premiums ceded to reinsurers for the second quarter of 2006, as compared to the prior-year period.
As a percentage of gross premiums written, ceded premiums were 5.1% for the second quarter of 2006,
compared to 5.5% for the second quarter of 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Net Premiums Earned</I>. Net premiums earned for the three months ended June&nbsp;30, 2006 were $72.1
million, compared to $63.1&nbsp;million for the same period in 2005, an increase of 14.2%. The increase
was attributable to growth in net premiums written in the previous four quarters.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Net Investment Income</I>. Net investment income for the second quarter of 2006 was $5.8&nbsp;million,
compared to $3.9&nbsp;million for the same period in 2005, an increase of 48.6%. The change was
attributable to a 46.3% increase in our investment portfolio, including cash and cash equivalents,
from an average of $416.0&nbsp;million in the second quarter of 2005 to an average of $608.8&nbsp;million for
the same period of 2006. Also contributing to this growth was an increase in the tax-equivalent
yield on our investment portfolio, from 4.4% per annum as of June&nbsp;30, 2005, to 5.7% per annum as of
June&nbsp;30, 2006.
</DIV>

<P align="center" style="font-size: 10pt">12
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Net Realized Gains on Investments</I>. Net realized gains on investments for three months ended
June&nbsp;30, 2006 totaled $1.1&nbsp;million, compared to $547,000 for the same period in 2005. The increase
was attributable to the timing of the sale of equity securities in accordance with our investment
guidelines.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Loss and Loss Adjustment Expenses Incurred</I>. Loss and loss adjustment expenses (LAE)&nbsp;incurred
totaled $50.4&nbsp;million for the three months ended June&nbsp;30, 2006, compared to $64.5&nbsp;million for the
same period in 2005, a decrease of $14.1&nbsp;million, or 21.9%. The decrease was the result of $19.2
million in additional prior accident year reserves recorded in the second quarter of 2005, which
amount included $13.2&nbsp;million related to the commutation of certain reinsurance contracts. We
experienced no prior accident year development in the second quarter of 2006. The decrease in loss
and LAE incurred resulting from additional prior accident year reserves recorded in 2005 was
partially offset by an increase in loss and LAE incurred resulting from increased net premiums
earned in the second quarter of 2006 as compared to the same period in 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Underwriting and Certain Other Operating Costs, Commissions and Salaries and Benefits</I>.
Underwriting and certain other operating costs, commissions and salaries and benefits for the
second quarter of 2006 were $18.1&nbsp;million, compared to $14.6&nbsp;million for the same period in 2005,
an increase of 23.8%. This increase was partially due to a $1.4&nbsp;million increase in loss-based
assessments, which primarily related to assessments in the State of South Carolina, and a $604,000
increase in premium-based assessments. In addition, commissions increased $548,000, which was
attributable to the increase in gross premiums earned, and salary and benefits increased $259,000.
The change in salary and benefits expense included a $318,000 increase in salary expense
attributable to share-based compensation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Interest expense</I>. Interest expense for the second quarter of 2006 was $843,000, compared to
$686,000 for the comparable period of 2005. Our weighted average borrowings for both periods were
$36.1&nbsp;million. The weighted average interest rate increased to 9.0% per annum for the second
quarter of 2006 from 7.0% per annum for the second quarter of 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Income tax expense (benefit)</I>. Income tax expense for the three months ended June&nbsp;30, 2006 was
$1.9&nbsp;million, compared to a tax benefit of $4.8&nbsp;million for the same period in 2005. The increase
in tax expense was attributable to $9.7&nbsp;million of pre-tax income in 2006, as compared to a $12.3
million pre-tax net loss for the same period in 2005. This increase was offset by a $571,000
decrease in a tax accrual related to the resolution of prior year taxes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>Consolidated Results of Operations for Six Months Ended June&nbsp;30, 2006 Compared to June&nbsp;30, 2005</I></B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Gross Premiums Written</I>. Gross premiums written for the six months ended June&nbsp;30, 2006 were
$173.0&nbsp;million, compared to $160.5&nbsp;million for the same period in 2005, an increase of 7.8%. The
increase was attributable primarily to a $13.7&nbsp;million increase in annual premiums on voluntary
policies written during the period and a $1.8&nbsp;million increase in premiums resulting from payroll
audits and related premium adjustments. These increases were offset by a $1.7&nbsp;million decrease in
assumed premiums from mandatory pooling arrangements and a $1.3&nbsp;million decrease in direct assigned
risk premiums.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Net Premiums Written</I>. Net premiums written for the six months ended June&nbsp;30, 2006 were $163.8
million, compared to $150.8&nbsp;million for the same period in 2005, an increase of 8.6%. The increase
was attributable to growth in gross premiums written and a $522,000 decrease in premiums ceded to
reinsurers for the first six months of 2006 compared to the prior-year period. As a percentage of
gross premiums written, ceded premiums were 5.3% for the first six months of 2006 compared to 6.0%
for same period in 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Net Premiums Earned</I>. Net premiums earned for the six months ended June&nbsp;30, 2006 were $140.0
million, compared to $125.0&nbsp;million for the same period in 2005, an increase of 12.0%. The
increase was attributable to growth in net premiums written in the previous four quarters.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Net Investment Income</I>. Net investment income for the first six months of 2006 was $11.8
million, compared to $7.7&nbsp;million for the same period in 2005, an increase of 54.5%. The change was
attributable to a 47.3% increase
</DIV>

<P align="center" style="font-size: 10pt">13
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">in our investment portfolio, including cash and cash equivalents, from an average of $407.2
million in the first six months of 2005 to an average of $599.8&nbsp;million for the same period of
2006. Also contributing to this growth was an increase in the tax-equivalent yield on our
investment portfolio, from 4.4% per annum as of June&nbsp;30, 2005, to 5.7% per annum as of June&nbsp;30,
2006.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Net Realized Gains on Investments</I>. Net realized gains on investments for the first six months
of 2006 totaled $2.2&nbsp;million, compared to $774,000 for the same period in 2005. The increase was
attributable to the timing of the sale of equity securities in accordance with our investment
guidelines.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Loss and Loss Adjustment Expenses Incurred</I>. Loss and loss adjustment expenses (LAE)&nbsp;incurred
totaled $98.2&nbsp;million for the six months ended June&nbsp;30, 2006, compared to $110.4&nbsp;million for the
same period in 2005, a decrease of $12.2&nbsp;million, or 11.0%. The decrease was the result of $21.9
million in additional prior accident year reserves recorded in the second quarter of 2005, which
amount included $13.2&nbsp;million related to the commutation of certain reinsurance contracts. We
experienced no prior accident year development in the first six months of 2006. The decrease in
loss and LAE incurred resulting from additional prior accident year reserves recorded in 2005 was
partially offset by an increase in loss and LAE incurred resulting from increased net premiums
earned in the first six months of 2006 as compared to the same period in 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Underwriting and Certain Other Operating Costs, Commissions and Salaries and Benefits</I>.
Underwriting and certain other operating costs, commissions and salaries and benefits for the first
six months in 2006 were $34.5&nbsp;million, compared to $29.6&nbsp;million for the same period in 2005, an
increase of 16.8%. This increase was partially due to a $1.4&nbsp;million increase in deferred policy
acquisition costs, a $1.2&nbsp;million increase in salaries and benefits, which included a $458,000
increase in salary expense attributable to share-based compensation, and a $1.1&nbsp;million increase in
commissions. In addition, we experienced a $1.0&nbsp;million increase in premium-based assessments,
which resulted from growth in our gross premiums earned, and an $831,000 increase in loss-based
assessments, which primarily related to assessments in the State of South Carolina. Offsetting
these increases was an $885,000 increase in ceding commissions, which acts to reduce underwriting
expenses.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Interest expense</I>. Interest expense for the first six months of 2006 was $1.7&nbsp;million,
compared to $1.3&nbsp;million for the comparable period of 2005. Our weighted average borrowings for
both periods were $36.1&nbsp;million. The weighted average interest rate increased to 8.7% per annum for
the first six months of 2006 from 6.7% per annum for the same period of 2005.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Income tax expense (benefit)</I>. Income tax expense for the six months ended June&nbsp;30, 2006 was
$4.6&nbsp;million, compared to a tax benefit $3.7&nbsp;million for the same period in 2005. The increase in
tax expense was attributable to $19.6&nbsp;million of pre-tax income in the first six months of 2006, as
compared to a $8.0&nbsp;million pre-tax net loss for the same period in 2005. This increase was offset
by a $571,000 decrease in a tax accrual related to the resolution of prior year taxes
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Liquidity and Capital Resources</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our principal sources of operating funds are premiums, investment income and proceeds from
sales and maturities of investments. Our primary uses of operating funds include payments of claims
and operating expenses. Currently, we pay claims using cash flow from operations and invest our
excess cash in fixed maturity and equity securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities was $34.1&nbsp;million for the first six months of 2006,
which represented a $1.4&nbsp;million decrease in cash provided by operating activities from $35.5
million in the first six months of 2005. Premiums collected for the first six months of 2006
increased $24.7&nbsp;million versus the same period in 2005. This increase was offset by a $12.1
million reduction in recoveries from reinsurers, a $10.9&nbsp;million increase in federal income taxes
paid, a $2.3&nbsp;million increase in expense disbursements and a $813,000 decrease in claim payments.
Net cash used in investing activities was $52.2&nbsp;million for the six months ended June&nbsp;30, 2006,
compared to $33.5&nbsp;million for the same period in 2005.
</DIV>

<P align="center" style="font-size: 10pt">14
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of June&nbsp;30, 2006, our investment portfolio, including cash and cash equivalents, totaled
$616.8&nbsp;million, an increase of 45.4% from June&nbsp;30, 2005. Our fixed maturity securities are
primarily classified as held-to-maturity, as defined by SFAS No.&nbsp;115, &#147;Accounting for Certain
Investments in Debt and Equity Securities.&#148; As such, the reported value of those securities is
equal to their amortized cost, and is not impacted by changing interest rates. Our equity
securities, including redeemable preferred stocks, are classified as available-for-sale, as defined
by SFAS 115. These securities are reported at fair value.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The composition of our investment portfolio, including cash and cash equivalents, as of June
30, 2006 is shown in the following table.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2">Percentage of</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Carrying Value</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000">Portfolio</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6">(in thousands)</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Fixed maturity securities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">State and political
subdivisions</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">301,292</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">48.8</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Mortgage-backed
securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">106,543</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">17.3</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">U.S. Treasury securities and
obligations of U.S. Government
agencies</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">79,257</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">12.8</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Corporate
bonds</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22,796</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3.7</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Asset-backed
securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,896</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">1.0</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Redeemable preferred
stocks</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">682</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.1</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 0px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 0px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total fixed maturity
securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">516,466</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">83.7</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 0px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 0px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Equity securities:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Common
stocks</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">65,700</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">10.7</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Nonredeemable preferred
stocks</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,402</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.6</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 0px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 0px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:45px; text-indent:-15px">Total equity
securities</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">69,102</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">11.3</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 0px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 0px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Cash and cash
equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">31,187</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">5.0</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan="2" align="right" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Total investments, including cash
and cash equivalents</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">616,755</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">100.0</TD>
    <TD nowrap>%</TD>
</TR>
<TR style="font-size: 1px">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
        <TD nowrap colspan="2" align="right" style="border-top: 3px double #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We regularly evaluate our investment portfolio to identify other-than-temporary impairments in
the fair values of the securities held in our investment portfolio. As of June&nbsp;30, 2006, there
were no other-than-temporary declines in the fair values of the securities held in our investment
portfolio.
</DIV>

<DIV align="left">
<A name="105"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;3. Quantitative and Qualitative Disclosures About Market Risk.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Market risk is the risk of potential economic loss principally arising from adverse changes in
the fair value of financial instruments. The major components of market risk affecting us are
credit risk, interest rate risk and equity price risk. We currently have no exposure to foreign
currency risk.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since December&nbsp;31, 2005, there have been no material changes in the quantitative or
qualitative aspects of our market risk profile. For information regarding the Company&#146;s exposure
to certain market risks, see Item&nbsp;7A &#147;&#151;Quantitative and Qualitative Disclosures About Market Risk&#148;
in our Annual Report on Form 10-K for the fiscal year ended December&nbsp;31, 2005, as filed with the
SEC.
</DIV>
<DIV align="left">
<A name="106"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;4. Controls and Procedures.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the supervision and with the participation of our management, including our chief
executive officer and chief financial officer, we have evaluated the effectiveness of our
disclosure controls and procedures (as defined in Rule&nbsp;13a-15(e) under the Securities Exchange Act
of 1934, as amended (the &#147;Exchange Act&#148;)) as of the end of the period covered by this report.
Based on that evaluation, our chief executive officer and chief financial officer concluded that
our disclosure controls and procedures were effective as of the end of the period covered by this
report to provide reasonable assurance that information we are required to disclose in reports that
are filed or submitted under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the rules and forms specified by the SEC. We note that the
design of any system of controls is based in
</DIV>

<P align="center" style="font-size: 10pt">15
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">part upon certain assumptions about the likelihood of future events, and there can be no
assurance that any design will succeed in achieving the stated goals under all potential future
conditions.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There have not been any changes in our internal control over financial reporting during the
period covered by this report that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.
</DIV>
<DIV align="left">
<A name="107"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PART II  &#151; OTHER INFORMATION</B>
</DIV>

<DIV align="left">
<A name="108"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;1. Legal Proceedings.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.
</DIV>
<DIV align="left">
<A name="109"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;1A. Risk Factors.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.
</DIV>
<DIV align="left">
<A name="110"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;2. Unregistered Sales of Equity Securities and Use of Proceeds.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.
</DIV>
<DIV align="left">
<A name="111"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Item&nbsp;3. Defaults Upon Senior Securities.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.
</DIV>
<DIV align="left">
<A name="112"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;4. Submission of Matters to a Vote of Security Holders.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the annual meeting of shareholders held on May&nbsp;15, 2006, two directors were elected to the
board of directors to serve until the 2009 annual meeting of shareholders. The vote with respect
to the election of these directors was as follows:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Total Vote</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Withheld</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Total Vote for</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>from Each</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Each Director</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Director</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Thomas W. Hallagan</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16,634,760</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,011,621</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Paul B. Queally</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,574,001</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">72,380</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the same meeting, the appointment of Ernst &#038; Young LLP as our independent registered public
accounting firm for 2006 was ratified with the following votes:
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">For</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,639,431</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Against</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,300</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Abstain</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">650</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left">
<A name="113"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;5. Other Information.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.
</DIV>

<P align="center" style="font-size: 10pt">16
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="114"></A>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;6. Exhibits.</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="6%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Exhibit No.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Description</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->

<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">First Casualty Excess of Loss Reinsurance Contract, effective
as of January&nbsp;1, 2006, issued to the Registrant by the
reinsurers named therein</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Second Casualty Excess of Loss Reinsurance Contract, effective
as of January&nbsp;1, 2006, issued to the Registrant by the
reinsurers named therein</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Third Casualty Excess of Loss Reinsurance Contract, effective
as of January&nbsp;1, 2006, issued to the Registrant by the
reinsurers named therein</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Workers&#146; Compensation Per Person Excess of Loss Reinsurance Contract, effective as
of January&nbsp;1, 2006, issued to the Registrant by the reinsurers
named therein</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Casualty Catastrophe Excess of Loss Reinsurance Contract,
effective as of January&nbsp;1, 2006, issued to the Registrant by
the reinsurers named therein</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">31.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification of C. Allen Bradley filed pursuant to Section
302 of the Sarbanes-Oxley Act of 2002</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">31.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification of Geoffrey R. Banta filed pursuant to Section
302 of the Sarbanes-Oxley Act of 2002</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">32.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification of C. Allen Bradley and Geoffrey R. Banta filed
pursuant to 18 U.S.C. Section&nbsp;1350, as adopted pursuant to
Section&nbsp;906 of the Sarbanes-Oxley Act of 2002</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">17
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="115"></A>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">SIGNATURES
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">AMERISAFE, INC.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">August&nbsp;14, 2006
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ C. Allen Bradley, Jr.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">C. Allen Bradley, Jr.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chairman, President and Chief Executive Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(Principal Executive Officer)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">August&nbsp;14, 2006
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Geoffrey R. Banta</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Geoffrey R. Banta</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Vice President and Chief Financial Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(Principal Financial and Accounting Officer)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">18
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="116"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXHIBIT INDEX</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="6%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Exhibit No.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Description</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->

<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">First Casualty Excess of Loss Reinsurance Contract, effective
as of January&nbsp;1, 2006, issued to the Registrant by the
reinsurers named therein</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Second Casualty Excess of Loss Reinsurance Contract, effective
as of January&nbsp;1, 2006, issued to the Registrant by the
reinsurers named therein</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Third Casualty Excess of Loss Reinsurance Contract, effective
as of January&nbsp;1, 2006, issued to the Registrant by the
reinsurers named therein</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Workers&#146; Compensation Per Person Excess of Loss Reinsurance Contract, effective as
of January&nbsp;1, 2006, issued to the Registrant by the reinsurers
named therein</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Casualty Catastrophe Excess of Loss Reinsurance Contract,
effective as of January&nbsp;1, 2006, issued to the Registrant by
the reinsurers named therein</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">31.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification of C. Allen Bradley filed pursuant to Section
302 of the Sarbanes-Oxley Act of 2002</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">31.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification of Geoffrey R. Banta filed pursuant to Section
302 of the Sarbanes-Oxley Act of 2002</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">32.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certification of C. Allen Bradley and Geoffrey R. Banta filed
pursuant to 18 U.S.C. Section&nbsp;1350, as adopted pursuant to
Section&nbsp;906 of the Sarbanes-Oxley Act of 2002</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">19
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>d38372exv10w1.htm
<DESCRIPTION>FIRST CASUALTY EXCESS OF LOSS REINSURANCE CONTRACT
<TEXT>
<HTML>
<HEAD>
<TITLE>exv10w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<DIV style="font-family: Helvetica,Arial,sans-serif">



<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit&nbsp;10.1
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>First Casualty Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">issued to

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group
</DIV>

</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Table of Contents</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Article</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Page</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">I</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Classes of Business Reinsured</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;&nbsp;1</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">II</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Commencement and Termination</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;&nbsp;1</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">III</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Territory (BRMA 51A)</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;&nbsp;3</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">IV</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Exclusions</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;&nbsp;3</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">V</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Special Acceptances</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;&nbsp;7</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">VI</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Retention and Limit</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;&nbsp;7</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">VII</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Definitions</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;&nbsp;8</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">VIII</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Annuities at Company&#146;s Option</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">10</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">IX</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Claims</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">11</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">X</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Commutation</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">11</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">XI</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Special Commutation</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">12</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">XII</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Salvage and Subrogation</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">13</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">XIII</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Reinsurance Premium</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">14</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">XIV</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Late Payments</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">14</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">XV</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Offset (BRMA 36A)</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">15</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">XVI</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Access to Records (BRMA 1D)</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">16</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">XVII</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Liability of the Reinsurer</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">16</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">XVIII</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Net Retained Lines (BRMA 32E)</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">16</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">XIX</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Errors and Omissions (BRMA 14F)</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">16</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">XX</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Currency (BRMA 12A)</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">16</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">XXI</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Taxes (BRMA 50B)</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">17</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">XXII</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Federal Excise Tax</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">17</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">XXIII</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Reserves and Letters of Credit</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">17</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">XXIV</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Insolvency</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">19</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">XXV</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Arbitration (BRMA 6J)</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">19</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">XXVI</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Service of Suit (BRMA 49C)</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">20</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">XXVII</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Entire Agreement</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">21</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">XXVIII</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Governing Law (BRMA 71B)</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">21</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">XXIX</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Agency Agreement</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">21</TD>
</TR>
<TR valign="bottom">
    <TD align="right"><DIV style="margin-left:15px; text-indent:-15px">XXX</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Intermediary (BRMA 23A)</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">21</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>First Casualty Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">issued to

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group<BR>
(<I>hereinafter referred to collectively as the </I>&#147;Company&#148;)

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">by

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">The Subscribing Reinsurer(s) Executing the<BR>
Interests and Liabilities Agreement(s)<BR>
Attached Hereto<BR>
(<I>hereinafter referred to as the </I>&#147;Reinsurer&#148;)

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;I &#151; Classes of Business Reinsured</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">By this Contract the Reinsurer agrees to reinsure the excess liability which may accrue to the
Company under its policies, contracts and binders of insurance or reinsurance (hereinafter called
&#147;policies&#148;) in force at the effective date hereof or issued or renewed on or after that date, and
classified by the Company as Workers&#146; Compensation, Employers Liability, including coverage
provided under the U.S. Longshore and Harbor Workers&#146; Compensation Act and the Jones Act, and
General Liability business, subject to the terms, conditions and limitations hereinafter set forth.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;II &#151; Commencement and Termination</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This Contract shall become effective at 12:01&nbsp;a.m., Local Standard Time, January&nbsp;1, 2006,
with respect to losses arising out of occurrences commencing at or after that time and date,
and shall continue in force thereafter until terminated.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Either party may terminate this Contract at 12:01&nbsp;a.m., Local Standard Time, on any January 1
by giving the other party not less than 90&nbsp;days prior notice by certified or registered mail.</TD>
</TR>
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">Page 1
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Notwithstanding the provisions of paragraph B above, the Company may terminate a Subscribing
Reinsurer&#146;s percentage share in this Contract in the event any of the following circumstances
occur as clarified by public announcement for subparagraphs 1 through 6 below and upon
discovery for subparagraphs 7 and 8 below. The Company has 120&nbsp;days from the date of
applicable public announcement or discovery to exercise the option to terminate a Subscribing
Reinsurer&#146;s percentage share in this Contract. The effective date of special termination
shall not be sooner than one day after the Company provides the Subscribing Reinsurer notice
of its election to specially terminate, unless mutually agreed otherwise:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer&#146;s policyholders&#146; surplus at the beginning of any contract
year has been reduced by more than 20.0% of the amount of surplus 12&nbsp;months prior to that
date; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer&#146;s policyholders&#146; surplus at any time during any contract
year has been reduced by more than 20.0% of the amount of surplus at the date of the
Subscribing Reinsurer&#146;s most recent financial statement filed with regulatory authorities
and available to the public as of the beginning of the contract year; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer&#146;s A.M. Best&#146;s rating has been assigned or downgraded
below A- (inclusive of &#147;Not Rated&#148; ratings) and/or Standard &#038; Poor&#146;s rating has been
assigned or downgraded below BBB&#043; (inclusive of &#147;Not Rated&#148; ratings); or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer has become merged with, acquired by or controlled by any
other company, corporation or individual(s) not controlling the Subscribing Reinsurer&#146;s
operations previously; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A State Insurance Department or other legal authority has ordered the Subscribing
Reinsurer to cease writing business; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">6.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">7.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer has reinsured its entire liability under this Contract
without the Company&#146;s prior written consent; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">8.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer has ceased assuming new and renewal treaty reinsurance
business.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Unless the Company elects that the Reinsurer have no liability for losses arising out of
occurrences commencing after the effective date of termination, and so notifies the Reinsurer
prior to or as promptly as possible after the effective date of termination, reinsurance
hereunder on business in force on the effective date of termination shall remain in full force
and effect until expiration, cancellation or next premium anniversary of such business,
whichever first occurs, but in no event beyond 12&nbsp;months plus odd time (not exceeding 18
months in all) following the effective date of termination.</TD>
</TR>
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">Page 2
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;III &#151; Territory (BRMA 51A)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The territorial limits of this Contract shall be identical with those of the Company&#146;s
policies.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;IV &#151; Exclusions</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This Contract does not apply to and specifically excludes the following:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Lines of business not identified in the Classes of Business Reinsured Article.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All excess of loss reinsurance assumed by the Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Reinsurance assumed by the Company under obligatory reinsurance agreements, except:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Agency reinsurance where the policies involved are to be reunderwritten
in accordance with the underwriting standards of the Company and reissued as Company
policies at the next anniversary or expiration date; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Intercompany reinsurance between any of the reinsured companies under
this Contract.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Business written by the Company on a co-indemnity basis where the Company is not
the controlling carrier.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Business written to apply in excess of a deductible of more than $25,000, and
business issued to apply specifically in excess over underlying insurance. However, if
the Company is required, by any state regulation, to provide a deductible of more than
$25,000, this exclusion shall not apply.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">6.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Nuclear risks as defined in the &#147;Nuclear Incident Exclusion Clause &#151; Liability -
Reinsurance (U.S.A.)&#148; attached to and forming part of this Contract.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">7.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As regards interests which at time of loss or damage are on shore, no liability
shall attach hereto in respect of any loss or damage which is occasioned by 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. This War Exclusion Clause shall not, however, apply to interests which
at time of loss or damage are within the territorial limits of the United States of
America (comprising the Fifty States of the Union, the District of Columbia, and
including bridges between the United States of America and Mexico provided they are under
United States ownership), Canada, St. Pierre and Miquelon, provided such interests are
insured under policies containing a standard war or hostilities or warlike operations
exclusion clause.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">8.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Liability as a member, subscriber or reinsurer of any Pool, Syndicate or
Association, but this exclusion shall not apply to Assigned Risk Plans or similar plans.</TD>
</TR>

</TABLE>
</DIV>



<DIV style="margin-top: 6pt">
<TABLE align="center" cellspacing="0" cellpadding="0" border="0" width="100%" style="font-size: 10pt">
 <TR>
  <TD>Page 3</TD>
  <TD>&nbsp;</TD>
  <TD align="right">&nbsp;</TD>
 </TR>
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">9.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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. &#147;Insolvency fund&#148; 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.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">10.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Workers&#146; Compensation where the principal exposures, as defined by the governing
class code, include:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Operation of aircraft, but only if the annual estimated policy premium is
$250,000 or more;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Railroad, subway or street railway operations;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Operation or navigation of vessels or barges;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Manufacture, production or refining of gas, natural or artificial fuel,
or other liquefied petroleum fuel, but only if the annual estimated policy premium
is $250,000 or more;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">e.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Manufacturing, assembly, packing or processing of fireworks, fuses,
nitroglycerine, magnesium, pyroxylin, ammunition or explosives. This exclusion does
not apply to the assembly, packing or processing of explosives when the estimated
annual premium is under $250,000;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">f.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Wrecking or demolition of structures, but only if the annual estimated
policy premium is $250,000 or more;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">g.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Underground mining.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">11.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As respects Workers&#146; Compensation and Employers Liability only, unless otherwise
excluded as set forth above, the reinsurance provided under this Contract shall not apply
to any loss, cost or expense arising out of or related to, either directly or indirectly,
any &#147;terrorist activity,&#148; as defined herein, but this exclusion shall only apply when the
activity includes, involves or is associated with the use of any biological, chemical,
radioactive or nuclear agent, material, device or weapon, or when the predominant business
of the policyholder, as defined by the governing class code, is:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The operation of: airports and aircraft; flight schools; bridges, dams,
tunnels or locks; department stores; shopping malls; chain retail stores; casinos
and casino hotels; cruise lines; railroads; ports/public transit authorities;
security services; stadiums; convention/exhibition centers; or theme/amusement
parks;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The manufacture and distribution of: automobiles; chemicals,
petrochemicals or pharmaceuticals; utilities (electric, gas, water and sewer); major
defense/aerospace products; or high-tech equipment, but only if the policyholder</TD>
</TR>
</TABLE>
</DIV>

<P align="left" style="font-size: 10pt">Page 4
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>employs more than 20 personnel at the location of a terrorist activity at the time
of its occurrence;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The management or operation of the following type of structures, but only
if greater than 25 stories in height: apartments/condominiums/co-ops;
hotels/motels; or office buildings;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Businesses primarily engaged in the entertainment, media or
transportation industry limited to the following: major media providers (NBC, FOX,
ABC, CBS, etc.); television and motion picture studios; Broadway theaters; major
internet companies (AOL, Yahoo, etc.); professional sports teams; major
telecommunications companies (AT&#038;T, WorldCom/MCI, etc.); national truck rental
companies (Ryder, Penske, U-Haul, etc.); or major national motor freight common
carriers (J.B. Hunt, Red Arrow, etc.);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">e.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Policyholders primarily located in, or predominantly doing business as:
hospitals; universities; nuclear facilities; financial institutions; or governmental
buildings and national landmarks.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Terrorist activity&#148; shall mean any deliberate, unlawful act that:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Is declared by any authorized government official to be or to involve
terrorism, terrorist activity or acts of terrorism; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Includes, involves, or is associated with the use or threatened use of
force, violence or harm against any person, tangible or intangible property, the
environment, or any natural resources, where the act or threatened act is intended,
in whole or in part, to:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">i.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Promote or further any political, ideological, philosophical,
racial, ethnic, social or religious cause or objective of the perpetrator or
any organization, association or group affiliated with the perpetrator; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">ii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Influence, disrupt or interfere with any government related
operations, activities or policies; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Intimidate, coerce or frighten the general public or any segment of
the general public; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iv.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Disrupt or interfere with a national economy or any segment of a
national economy; or</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Includes, involves, or is associated with, in whole or in part, any of
the following activities, or the threat thereof:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">i.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Hijacking or sabotage of any form of transportation or
conveyance, including but not limited to spacecraft, satellite, aircraft,
train, vessel or motor vehicle;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">ii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Hostage taking or kidnapping;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The use of any bomb, incendiary device, explosive or firearm;</TD>
</TR>
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">Page 5
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iv.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The interference with or disruption of basic public or commercial
services and systems, including but not limited to the following
services or systems: electricity, natural gas, power, postal,
communications, telecommunications, information, public
transportation, water, fuel, sewer or waste disposal;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">v.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The injuring or assassination of any elected or appointed
government official or any government employee;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">vi.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The seizure, blockage, interference with, disruption of, or
damage to any government buildings, institutions, functions, events, tangible
or intangible property or other assets; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">vii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The seizure, blockage, interference with, disruption of, or
damage to tunnels, roads, streets, highways, or other places of public
transportation or conveyance.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any of the activities listed in subparagraph c, above, shall be
considered terrorist activity, except where the Company can demonstrate to the
Reinsurer that the foregoing activities or threats thereof were motivated solely by
personal objectives of the perpetrator that are unrelated, in whole or in part, to
any intention to:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">i.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Promote or further any political, ideological, philosophical,
racial, ethnic, social or religious cause or objective of the perpetrator or
any organization, association or group affiliated with the perpetrator;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">ii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Influence, disrupt or interfere with any government-related
operations, activities or policies;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Intimidate, coerce or frighten the general public or any segment of
the general public; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iv.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Disrupt or interfere with a national economy or any segment of a
national economy.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">12.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As respects General Liability policies, exposures, other than those identified below,
as included in the General Liability section of the Company&#146;s Commercial Lines Manual:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;97111 &#151; Logging;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;58873 &#151; Sawmill;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;59984 &#151; Woodyard and Drivers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;95410 &#151; Grading of Land;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">e.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;45819 &#151; Lumber Yard;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">f.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;10073 &#151; Repair Shops and Drivers;</TD>
</TR>

</TABLE>
</DIV>

<P align="left" style="font-size: 10pt">Page 6
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">g.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;43822 &#151; Timber Cruiser;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">h.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;99793 &#151; Truckmen Not Otherwise Classified;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">i.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;91591 &#151; Contractors &#151; Subcontracted Work Other Than Construction;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">j.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;49452 &#151; Vacant Land.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any exclusion set forth in subparagraphs 10 and/or 12 of paragraph A shall be waived
automatically when, in the opinion of the Company, the exposure excluded therein is incidental
to the principal exposure on the risk in question.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the Company is bound, without the knowledge and contrary to the instructions of the
Company&#146;s supervisory underwriting personnel, on any business falling within the scope of one
or more of the exclusions set forth in subparagraphs 10 and/or 12 of paragraph A, the
exclusion shall be suspended with respect to such business until the Company has the first
opportunity to cancel the policy in compliance with governmental requirements.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the Company is required to accept an assigned risk which conflicts with one or more of the
exclusions set forth in subparagraph 10 of paragraph A, reinsurance shall apply, but only for
the difference between the Company&#146;s retention and the minimum limit required by the
applicable state statute, and in no event shall the Reinsurer&#146;s liability exceed the limit set
forth in the Retention and Limit Article.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;V &#151; Special Acceptances</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">From time to time the Company may request a special acceptance of reinsurance falling outside
the scope of the provisions set forth in this Contract. If each Subscribing Reinsurer whose share
in the interests and liabilities of the Reinsurer is 20.0% or greater agrees to a special
acceptance, such special acceptance shall be binding on all Subscribing Reinsurers with respect to
their respective shares. If such agreement is not achieved, such special acceptance shall be made
to this Contract only with respect to the interests and liabilities of each Subscribing Reinsurer
who agrees to the special acceptance. In the event a reinsurer becomes a party to this Contract
subsequent to one or more special acceptances hereunder, the new reinsurer shall automatically
accept such special acceptance(s) as being covered hereunder.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;VI &#151; Retention and Limit</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall retain and be liable for the first $1,000,000 of ultimate net loss
arising out of each occurrence. The Reinsurer shall then be liable (subject to the provisions
of paragraph B below) for the amount by which such ultimate net loss exceeds the Company&#146;s
retention, but the liability of the Reinsurer shall not exceed $1,000,000 as respects any one
occurrence, nor shall it exceed an annual aggregate limit of 2.500% of net earned premium for
the contract year.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Notwithstanding the provisions of paragraph A above, no claim shall be made under this
Contract during any contract year unless and until cumulative subject excess losses paid from
losses arising out of occurrences commencing during the contract year (being losses which
would be recoverable from the Reinsurer under paragraph A above were it not for the</TD>
</TR>
</TABLE>
</DIV>

<P align="left" style="font-size: 10pt">Page 7
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>provisions of this paragraph) exceed an annual aggregate retention of 5.000% of net earned
premium. The Company shall retain and be liable for such annual aggregate retention in
addition to its initial loss retention stipulated in paragraph A above.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As respects any loss or losses arising out of terrorist activity, the liability of the
Reinsurer shall not exceed $1,000,000 each contract year. Terrorism losses that apply to the
annual aggregate deductible will also reduce the liability of the Reinsurer as respects the
aggregate terrorism limit.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall be permitted to carry quota share and excess 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.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall purchase or be deemed to have purchased inuring excess facultative
reinsurance to limit its ultimate net loss under any one coverage, any one policy (exclusive
of loss in excess of policy limits or extra contractual obligations) to $2,000,000 each
occurrence as respects General Liability and Employers Liability business subject hereto.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">F.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall be permitted to carry excess of loss reinsurance applying to Workers&#146;
Compensation risks in the State of Minnesota, recoveries under which shall inure to the
benefit of this Contract.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Such coverage shall be provided through the Minnesota Workers&#146; Compensation Reinsurance
Association. It is understood that the liability of the Reinsurer for Minnesota Workers&#146;
Compensation risks is not released.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event the Company accrues liability that is not provided by any inuring reinsurance, for
whatever reason, the Reinsurer agrees to reinsure such excess liability.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;VII &#151; Definitions</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Ultimate net loss&#148; as used herein is defined as the sum or sums (including loss in excess
of policy limits, extra contractual obligations and any 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.
Nothing herein shall be construed to mean that losses under this Contract are not recoverable
until the Company&#146;s ultimate net loss has been ascertained.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Loss in excess of policy limits&#148; and &#147;extra contractual obligations&#148; as used herein shall be
defined as follows:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Loss in excess of policy limits&#148; shall mean 90.0% of any amount paid or payable by
the Company in excess of its policy limits, but otherwise within the terms of its policy,
such loss in excess of the Company&#146;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&#146;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 reinsured or in the preparation or prosecution of an appeal consequent upon
such an action.</TD>
</TR>
</TABLE>
</DIV>

<P align="left" style="font-size: 10pt">Page 8
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Extra contractual obligations&#148; shall mean 90.0% 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&#146;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 reinsured or in the preparation or prosecution of an appeal consequent upon
such an action. 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.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If any provision of this Article 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.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Occurrence&#148; as used herein is defined as an accident or occurrence or a series of accidents
or occurrences arising out of or caused by one event, except that:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As respects General Liability policies where the Company&#146;s limit of liability for
Products and Completed Operations coverages is determined on the basis of the insured&#146;s
aggregate losses during a policy period, all such losses proceeding from or traceable to
the same causative agency shall, at the Company&#146;s option, be deemed to have been caused
by one occurrence commencing at the beginning of the policy period, it being understood
and agreed that each renewal or annual anniversary date of the policy involved shall be
deemed the beginning of a new policy period;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Each occupational or industrial disease case or cumulative trauma case contracted
by an employee of an insured shall be deemed to have been caused by a separate
occurrence, commencing on:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The date of disability for which compensation is payable if the case is
compensable under the Workers&#146; Compensation Law;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The date disability due to the disease actually began if the case is not
compensable under the Workers&#146; Compensation Law;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The date of cessation of employment if claim is made after employment has
ceased.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Notwithstanding the provisions of subparagraph 2 above, as respects losses
resulting from occupational or industrial disease or cumulative trauma suffered by
employees of</TD>
</TR>
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">Page 9
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>



<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>an insured for which the employer is liable, as a result of a sudden and accidental event
not exceeding 72 hours in duration, all such losses shall be considered one occurrence
and may be combined with losses classified as other than occupational or industrial
disease or cumulative trauma which arise out of the same event and the combination of
such losses shall be considered as one occurrence within the meaning hereof.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Occupational or industrial disease&#148; is any abnormal condition that fulfills all of the
following conditions:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It is not traceable to a definite compensable accident occurring during the
employee&#146;s past or present employment.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It has been caused by exposure to a disease producing agent or agents present in
the workers&#146; occupational environment.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It has resulted in disability or death.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Cumulative trauma&#148; is an injury that fulfills all of the following conditions:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It is not traceable to a definite compensable accident occurring during the
employee&#146;s past or present employment.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It has occurred from and has been aggravated by a repetitive employment related
activity.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It has resulted in disability or death.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">F.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Loss adjustment expense&#148; as used herein shall mean expenses allocable to the investigation,
defense and/or settlement of specific claims, including litigation expenses, interest on
judgments, declaratory judgment expenses or other legal expenses and costs incurred in
connection with coverage questions and legal actions connected thereto, and salaries and
expenses of salaried adjusters associated with claims covered under policies of the Company
reinsured hereunder but not including office expenses or salaries of the Company&#146;s regular
employees.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">G.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Contract year&#148; as used in this Contract shall mean
the period from 12:01 a.m. Local Standard Time, January&nbsp;1, 2006 to
12:01 a.m. Local Standard Time, January&nbsp;1, 2007,  and each respective 12-month period thereafter that
this Contract continues in force. However, if this Contract is terminated, the final contract
year shall be from the beginning of the then current contract year through the date of
termination if this Contract is terminated on a &#147;cutoff&#148; basis, or the end of the runoff
period if this Contract is terminated on a &#147;runoff&#148; basis.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;VIII &#151; Annuities at Company&#146;s Option</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Whenever the Company is required, or elects, to purchase an annuity or to negotiate a
structured settlement, either in satisfaction of a judgment or in an out-of-court settlement
or otherwise, the cost of the annuity or the structured settlement, as the case may be, shall
be deemed part of the Company&#146;s ultimate net loss.</TD>
</TR>

</TABLE>
</DIV>

<P align="left" style="font-size: 10pt">Page 10
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The terms &#147;annuity&#148; or &#147;structured settlement&#148; shall be understood to mean any insurance
policy, lump sum payment, agreement or device of whatever nature resulting in the payment of a
lump sum by the Company in settlement of any or all future liabilities which may attach to it
as a result of an occurrence.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event the Company purchases an annuity which inures in whole or in part to the benefit
of the Reinsurer, it is understood that the liability of the Reinsurer is not released
thereby. In the event the Company is required to provide benefits not provided by the annuity
for whatever reason, the Reinsurer shall pay its share of any loss.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;IX &#151; Claims</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Whenever a claim is reserved by the Company for an amount greater than 50.0% of its
retention hereunder and/or whenever a claim appears likely to result in a claim under this
Contract, the Company shall notify the Reinsurer. Further, the Company shall notify the
Reinsurer whenever a claim involves a fatality, major limb amputation, spinal cord damage,
brain damage, blindness or extensive burns, regardless of liability, if the policy limits or
statutory benefits applicable to the claim are greater than the Company&#146;s retention hereunder.
The Reinsurer shall have the right to participate, at its own expense, in the defense of any
claim or suit or proceeding involving this reinsurance.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All claim settlements made by the Company, provided they are within the terms of this
Contract (including but not limited to ex-gratia payments), shall be binding upon the
Reinsurer, and the Reinsurer agrees to pay all amounts for which it may be liable upon receipt
of satisfactory evidence of the amount paid by the Company.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;X &#151; Commutation</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Upon mutual agreement, the Company may commute the contract year.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Unless otherwise mutually agreed, the calculation for the commutation shall be calculated in
accordance with the following formula:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The net reinsurance premium earned for the contract year; less</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Reinsurer&#146;s paid losses and loss adjustment expense on losses arising out of
occurrences commencing during the contract year; less</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Reinsurer&#146;s margin at 25.0% of the net reinsurance premium earned  for the contract
year; equals</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company&#146;s net profit.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Payment to the Company of the Company&#146;s net profit will result in a full and final
commutation of all known and unknown losses and shall constitute a complete and final release
of the Reinsurer and the Company in respect of any and all liabilities on business covered
under this Contract during the contract year commuted.</TD>
</TR>
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">Page 11
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Should the calculation be zero or negative, no payment shall be made and the Company shall
have the option to provide a full and final commutation of all known and unknown losses, which
shall constitute a complete and final release of the Reinsurer and the Company with respect to
any and all liabilities on business covered under this Contract during the contract year
commuted.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XI &#151; Special Commutation</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event a Subscribing Reinsurer meets the following conditions, the Company may
require a commutation of that portion of any excess loss hereunder represented by any
outstanding claim or claims, including any related loss adjustment expense.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer&#146;s A.M. Best&#146;s rating has been assigned or downgraded
below A- (inclusive of &#147;Not Rated&#148; ratings) and/or Standard &#038; Poor&#146;s rating has been
assigned or downgraded below BBB&#043; (inclusive of &#147;Not Rated&#148; ratings); or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer has ceased assuming new and renewal property and casualty
treaty reinsurance business.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Outstanding claim or claims&#148; shall be defined as known or unknown claims, including any billed
yet unpaid claims. However, unless otherwise mutually agreed, this paragraph shall not apply
unless the outstanding claim or claims is for an amount not less than $5,000.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the Company elects to require commutation as provided in paragraph A above, the Company
shall submit a Statement of Valuation of the outstanding claim or claims as of the last day of
the month immediately preceding the month in which the Company elects to require commutation,
as determined by the Company. Such Statement of Valuation shall include the elements
considered reasonable to establish the excess loss and shall set forth or attach the
information relied upon by the Company and the methodology employed to calculate the excess
loss. The Subscribing Reinsurer shall then pay the amount requested within 30 calendar days
of receipt of such Statement of Valuation, unless the Subscribing Reinsurer needs additional
information from the Company to assess the Company&#146;s Statement of Valuation or contests such
amount.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the Subscribing Reinsurer needs additional information from the Company to assess the
Company&#146;s Statement of Valuation or contests the amount requested, the Subscribing Reinsurer
shall so notify the Company within 15 calendar days of receipt of the Company&#146;s Statement of
Valuation. The Company shall supply any reasonably requested information to the Subscribing
Reinsurer within 15 calendar days of receipt of the notification. Within 30 calendar days of
the date of the notification or of the receipt of the information, whichever is later, the
Subscribing Reinsurer shall provide the Company with its Statement of Valuation of the
outstanding claim or claims as of the last day of the month immediately preceding the month in
which the Company elects to require commutation, as determined by the Subscribing Reinsurer.
Such Statement of Valuation shall include the elements considered reasonable to establish the
excess loss and shall set forth or attach the information relied upon by the Subscribing
Reinsurer and the methodology employed to calculate the excess loss.</TD>
</TR>
</TABLE>
</DIV>

<P align="left" style="font-size: 10pt">Page 12
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event the Subscribing Reinsurer&#146;s Statement of Valuation of the outstanding claim or
claims is viewed as unacceptable to the Company, the Company may either abandon the
commutation effort, or may seek to settle any difference by using an independent actuary
agreed to by the parties.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the parties cannot agree on an acceptable independent actuary within 15 calendar days of
the date of the Subscribing Reinsurer&#146;s Statement of Valuation, then each party shall appoint
an actuary as party arbitrators for the limited and sole purpose of selecting an independent
actuary. If the actuaries cannot agree on an acceptable independent actuary within 15
calendar days of the date of the Subscribing Reinsurer&#146;s Statement of Valuation, the Company
shall supply the Subscribing Reinsurer with a list of at least three proposed independent
actuaries, and the Subscribing Reinsurer shall select the independent actuary from that list.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">F.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Upon selection of the independent actuary, both parties shall present their respective
written submissions to the independent actuary. The independent actuary may, at his or her
discretion, request additional information. The independent actuary shall issue his or her
decision within 45 calendar days after the written submissions have been filed and any
additional information has been provided.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">G.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The decision of the independent actuary shall be final and binding. The expense of the
independent actuary shall be equally divided between the two parties. For the purposes of
this Article, unless mutually agreed otherwise, an &#147;independent actuary&#148; shall be an actuary
who satisfies each of the following criteria:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Is regularly engaged in the valuation of claims resulting from lines of business
subject to this Contract; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Is either a Fellow of the Casualty Actuarial Society or of the American Academy of
Actuaries; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Is disinterested and impartial regarding this commutation.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">H.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Notwithstanding paragraph A, B and C above, in the event that the Subscribing Reinsurer no
longer meets the conditions set forth in subparagraph 1 or 2 in paragraph A above, this
commutation may continue on a mutually agreed basis.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">I.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Payment by the Subscribing Reinsurer of the amount requested in accordance with paragraph B,
C or F above, shall release the Subscribing Reinsurer from all further liability for
outstanding claim or claims, known or unknown, under this Contract, which shall release the
Company from all further liability for payments of salvage or subrogation amounts, known or
unknown, to the Subscribing Reinsurer under this Contract.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">J.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event of any conflict between this Article and any other Article of this Contract, the
terms of this Article shall control.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">K.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This Article shall survive the termination of this Contract.</TD>
</TR>

</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">Page 13
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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XII &#151; Salvage and Subrogation</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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) or
subrogation on account of claims and settlements involving reinsurance hereunder. Salvage or
subrogation 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 where it is economically reasonable in the judgment of the Company, relating to any
loss, a part of which loss was sustained by the Reinsurer, and to prosecute all claims arising out
of such rights.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XIII &#151; Reinsurance Premium</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As premium for the reinsurance provided hereunder during each contract year, the Company
shall pay the Reinsurer 0.600% of its net earned premium.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Within 30&nbsp;days after the end of each month, the Company shall report its net earned premium
for the month. The premium due the Reinsurer, at the rate shown in paragraph A, shall be paid
by the Company with its report. In the event this Contract is terminated in accordance with
paragraph C of the Commencement and Termination Article, no payments shall be due as respects
each Subscribing Reinsurer after the effective date of termination.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Within 60&nbsp;days after the end of each contract year, the Company shall provide a report to the
Reinsurer setting forth the premium due hereunder for the contract year, computed in
accordance with paragraph A, and any additional premium due the Reinsurer or return premium
due the Company shall be remitted promptly.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Net earned premium&#148; as used herein is defined as the Company&#146;s gross earned premium
collected on the classes of business subject to this Contract, less only the earned portion of
premiums, if any, ceded by the Company for reinsurance which inures to the benefit of this
Contract and less dividends incurred.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XIV &#151; Late Payments</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The provisions of this Article shall not be implemented unless specifically invoked, in
writing, by one of the parties to this Contract.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event any premium, loss or other payment due either party is not received by the
intermediary named in the Intermediary Article (BRMA 23A) (hereinafter referred to as the
&#147;Intermediary&#148;) by the payment due date, the party to whom payment is due, may, by notifying
the Intermediary in writing, require the debtor party to pay, and the debtor party agrees to
pay, an interest penalty on the amount past due calculated for each such payment on the last
business day of each month as follows:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The number of full days which have expired since the due date or the last monthly
calculation, whichever the lesser; times</TD>
</TR>
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">Page 14
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>1/365ths of the sum of 400 basis points plus the six-month United States Treasury
Bill rate as quoted in <I>The Wall Street Journal </I>on the first business day of the month for
which the calculation is made; times</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The amount past due, including accrued interest.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It is agreed that interest shall accumulate until payment of the original amount due plus
interest penalties have been received by the Intermediary.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The establishment of the due date shall, for purposes of this Article, be determined as
follows:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As respects the payment of routine deposits and premiums due the Reinsurer, the due
date shall be as provided for in the applicable section of this Contract. In the event a
due date is not specifically stated for a given payment, it shall be deemed due 30&nbsp;days
after the date of transmittal by the Intermediary of the initial billing for each such
payment.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any claim or loss payment due the Company hereunder shall be deemed due 45&nbsp;days
after the proof of loss or demand for payment is transmitted to the Reinsurer. If such
loss or claim payment is not received within the 45&nbsp;days, interest will accrue on the
payment or amount overdue in accordance with paragraph B above, from the date the proof
of loss or demand for payment was transmitted to the Reinsurer.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As respects any payment, adjustment or return due either party not otherwise
provided for in subparagraphs 1 and 2 of paragraph C above, the due date shall be as
provided for in the applicable section of this Contract. In the event a due date is not
specifically stated for a given payment, it shall be deemed due 10&nbsp;days following
transmittal of written notification that the provisions of this Article have been
invoked.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>For purposes of interest calculations only, amounts due hereunder shall be deemed paid upon
receipt by the Intermediary.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Nothing herein shall be construed as limiting or prohibiting a Subscribing Reinsurer from
contesting the validity of any claim, or from participating in the defense of any claim or
suit, or prohibiting either party from contesting the validity of any payment or from
initiating any arbitration or other proceeding in accordance with the provisions of this
Contract. If the debtor party prevails in an arbitration or other proceeding, then any
interest penalties due hereunder on the amount in dispute shall be null and void. If the
debtor party loses in such proceeding, then the interest penalty on the amount determined to
be due hereunder shall be calculated in accordance with the provisions set forth above unless
otherwise determined by such proceedings. If a debtor party advances payment of any amount it
is contesting, and proves to be correct in its contestation, either in whole or in part, the
other party shall reimburse the debtor party for any such excess payment made plus interest on
the excess amount calculated in accordance with this Article.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Interest penalties arising out of the application of this Article that are $100 or less from
any party shall be waived unless there is a pattern of late payments consisting of three or
more items over the course of any 12-month period.</TD>
</TR>

</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">Page 15
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XV &#151; Offset (BRMA 36A)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company and the Reinsurer may offset any balance or amount due from one party to the other
under this Contract or any other contract heretofore or hereafter entered into between the Company
and the Reinsurer, whether acting as assuming reinsurer or ceding company. This provision shall
not be affected by the insolvency of either party to this Contract.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XVI &#151; Access to Records (BRMA 1D)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Reinsurer or its designated representatives shall have access at any reasonable time to
all records of the Company which pertain in any way to this reinsurance.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XVII &#151; Liability of the Reinsurer</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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&#146;s policies and any endorsements thereon.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XVIII &#151; Net Retained Lines (BRMA 32E)</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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, only loss or losses in respect of
that portion of any policy which the Company retains net for its own account shall be
included.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The amount of the Reinsurer&#146;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.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XIX &#151; Errors and Omissions (BRMA 14F)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Inadvertent delays, errors or omissions made in connection with this Contract or any
transaction hereunder shall not relieve either party from any liability which would have attached
had such delay, error or omission not occurred, provided always that such error or omission is
rectified as soon as possible after discovery.
</DIV>


<P align="left" style="font-size: 10pt">Page 16
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XX &#151; Currency (BRMA 12A)</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Whenever the word &#147;Dollars&#148; or the &#147;$&#148; 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.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXI &#151; Taxes (BRMA 50B)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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 or the District of Columbia.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXII &#151; Federal Excise Tax</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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&nbsp;4371 of the
Internal Revenue Code) to the extent such premium is subject to the Federal Excise Tax.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXIII &#151; Reserves and Letters of Credit</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#091;Applies only to a reinsurer which does not qualify for full credit with any insurance
regulatory authority having jurisdiction over the Company&#146;s reserves, which is or becomes rated
&#147;B&#043;&#043;&#148; or lower by A.M. Best (inclusive of &#147;Not Rated&#148; ratings) and/or Standard &#038; Poor&#146;s rating is
or becomes &#147;BBB&#043;&#148; or lower (inclusive of &#147;Not Rated&#148; ratings).&#093;
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As regards policies or bonds issued by the Company coming within the scope of this Contract,
the Company agrees that when it shall file with the insurance regulatory authority or set up
on its books reserves for losses covered hereunder which it shall be required by law to set
up, it will forward to the Reinsurer a statement showing the proportion of such reserves which
is applicable to the Reinsurer. The Reinsurer hereby agrees to fund such reserves in respect
of known outstanding losses that have been reported to the Reinsurer and allocated loss
adjustment expense relating thereto, losses and allocated loss adjustment expense paid by the
Company but not recovered from the Reinsurer, plus reserves for losses incurred but not
reported, as shown in the statement prepared by the Company (hereinafter referred to as
&#147;Reinsurer&#146;s Obligations&#148;) by funds withheld, cash advances or a Letter of Credit. The
Reinsurer shall have the option of determining the method of funding provided it is acceptable
to the insurance regulatory authorities having</TD>
</TR>
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">Page 17
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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>jurisdiction over the Company&#146;s reserves with regards to unauthorized reinsurers; or, should
the Reinsurer be downgraded, the method of funding shall be mutually agreed.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>When funding by a Letter of Credit, the Reinsurer agrees to apply for and secure timely
delivery to the Company of a clean, irrevocable and unconditional Letter of Credit issued by a
bank meeting the NAIC Securities Valuation Office credit standards for issuers of Letters of
Credit and containing provisions acceptable to the insurance regulatory authorities having
jurisdiction over the Company&#146;s reserves in an amount equal to the Reinsurer&#146;s proportion of
said reserves. Such Letter of Credit shall be issued for a period of not less than one year,
and shall contain an &#147;evergreen&#148; clause, which automatically extends the term for one year
from its date of expiration or any future expiration date unless 30&nbsp;days (60&nbsp;days where
required by insurance regulatory authorities) prior to any expiration date the issuing bank
shall notify the Company by certified or registered mail that the issuing bank elects not to
consider the Letter of Credit extended for any additional period.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Reinsurer and Company agree that the Letters of Credit provided by the Reinsurer pursuant
to the provisions of this Contract may be drawn upon at any time, notwithstanding any other
provision of this Contract, and be utilized by the Company or any successor, by operation of
law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or
conservator of the Company for the following purposes, unless otherwise provided for in a
separate Trust Agreement:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To reimburse the Company for the Reinsurer&#146;s Obligations, the payment of which is
due under the terms of this Contract and which has not been otherwise paid;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To make refund of any sum which is in excess of the actual amount required to pay
the Reinsurer&#146;s Obligations under this Contract, if so requested by the Reinsurer;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To fund an account with the Company for the Reinsurer&#146;s Obligations. Such cash
deposit shall be held in an interest bearing account separate from the Company&#146;s other
assets, and interest thereon not in excess of the prime rate shall accrue to the benefit
of the Reinsurer;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To pay the Reinsurer&#146;s share of any other amounts the Company claims are due under
this Contract.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual
amount required for subparagraphs 1 or 3, or in the case of subparagraph 4, the actual amount
determined to be due, the Company shall promptly return to the Reinsurer the excess amount so
drawn. All of the foregoing shall be applied without diminution because of insolvency on the
part of the Company or the Reinsurer.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The issuing bank shall have no responsibility whatsoever in connection with the propriety of
withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that
withdrawals are made only upon the order of properly authorized representatives of the
Company.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>At annual intervals, or more frequently as agreed but never more frequently than quarterly,
the Company shall prepare a specific statement of the Reinsurer&#146;s Obligations, for the sole
purpose of amending the Letter of Credit, in the following manner:</TD>
</TR>
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">Page 18
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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the statement shows that the Reinsurer&#146;s Obligations exceed the balance of
credit as of the statement date, the Reinsurer shall, within 30&nbsp;days after receipt of
notice of such excess, secure delivery to the Company of an amendment to the Letter of
Credit increasing the amount of credit by the amount of such difference.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If, however, the statement shows that the Reinsurer&#146;s Obligations are less than the
balance of credit as of the statement date, the Company shall, within 30&nbsp;days after
receipt of written request from the Reinsurer, release such excess credit by agreeing to
secure an amendment to the Letter of Credit reducing the amount of credit available by
the amount of such excess credit.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXIV &#151; Insolvency</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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 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 or bond reinsured 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.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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 company.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It is further understood and agreed that, in the event of the insolvency of one or more of
the reinsured companies, the reinsurance under this Contract shall be payable directly by the
Reinsurer to the company or to its liquidator, receiver or statutory successor, except as
provided by Section 4118(a) of the New York Insurance Law or except (1)&nbsp;where this Contract
specifically provides another payee of such reinsurance in the event of the insolvency of the
company or (2)&nbsp;where the Reinsurer with the consent of the direct insured or insureds has
assumed such policy obligations of the company as direct obligations of the Reinsurer to the
payees under such policies and in substitution for the obligations of the company to such
payees.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXV &#151; Arbitration (BRMA 6J)</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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</TD>
</TR>
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">Page 19
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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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&#146;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&nbsp;days following their
appointment, each Arbiter shall nominate three candidates within 10&nbsp;days thereafter, two of
whom the other shall decline, and the decision shall be made by drawing lots.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Each party shall present its case to the Arbiters within 30&nbsp;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.
Judgment upon the final decision of the Arbiters may be entered in any court of competent
jurisdiction.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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 in which the Company has its
principal office.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXVI &#151; Service of Suit (BRMA 49C)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(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)
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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&#146;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.</TD>
</TR>
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">Page 20
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXVII &#151; Entire Agreement</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXVIII &#151; Governing Law (BRMA 71B)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Contract shall be governed by and construed in accordance with the laws of the State of
Louisiana.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXIX &#151; Agency Agreement</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If more than one reinsured company is named as a party to this Contract, the first named
company 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.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXX &#151; Intermediary (BRMA 23A)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Benfield Inc. 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 Benfield Inc.
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
</DIV>



<P align="left" style="font-size: 10pt">Page 21
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>



<DIV style="font-family: Helvetica,Arial,sans-serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">constitute payment to the Company only to the extent that such payments are actually received by
the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>In Witness Whereof</B>, the Company by its duly authorized representative has executed this Contract as
of the date undermentioned at:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">DeRidder,
Louisiana, this 18th day of May in the year 2006.
</DIV>



<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="87%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Allan E. Farr</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">American Interstate Insurance Company</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">American Interstate Insurance Company of Texas</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Silver Oak Casualty, Inc.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">Page 22
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Nuclear Incident Exclusion Clause &#151; Liability &#151; Reinsurance (U.S.A.)</B><BR>
(Approved by Lloyd&#146;s Underwriters&#146; Fire and Non-Marine Association)
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This reinsurance does not cover any loss or liability accruing to the Reassured as a member
of, or subscriber to, any association of insurers or reinsurers formed for the purpose of
covering nuclear energy risks or as a direct or indirect reinsurer of any such member,
subscriber or association.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Without in any way restricting the operation of paragraph (1)&nbsp;of this Clause it is understood
and agreed that for all purposes of this reinsurance all the original policies of the
Reassured (new, renewal and replacement) of the classes specified in Clause II of this
paragraph (2)&nbsp;from the time specified in Clause III in this paragraph (2)&nbsp;shall be deemed to
include the following provision (specified as the Limited Exclusion Provision):</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Limited Exclusion Provision.*</B></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">I.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It is agreed that the policy does not apply under any liability coverage, to<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(<I>injury, sickness, disease, death or destruction</I><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bodily injury or property damage<BR>
with respect to which an insured under the policy is also an insured
under a nuclear energy liability policy issued by Nuclear Energy
Liability Insurance Association, Mutual Atomic Energy Liability
Underwriters or Nuclear Insurance Association of Canada, or would be
an insured under any such policy but for its termination upon
exhaustion of its limit of liability.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">II.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Family Automobile Policies (liability only), Special Automobile
Policies (private passenger automobiles, liability only), Farmers
Comprehensive Personal Liability Policies (liability only),
Comprehensive Personal Liability Policies (liability only) or
policies of a similar nature; and the liability portion of
combination forms related to the four classes of policies stated
above, such as the Comprehensive Dwelling Policy and the applicable
types of Homeowners Policies.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">III.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The inception dates and thereafter of all original policies as
described in II above, whether new, renewal or replacement, being
policies which either</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>become effective on or after 1st May, 1960, or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>become effective before that date and contain the Limited Exclusion
Provision set out above;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>provided this paragraph (2)&nbsp;shall not be applicable to Family Automobile Policies, Special
Automobile Policies, or policies or combination policies of a similar nature, issued by
the Reassured on New York risks, until 90&nbsp;days following approval of the Limited Exclusion
Provision by the Governmental Authority having jurisdiction thereof.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Except for those classes of policies specified in Clause II of paragraph (2)&nbsp;and without in
any way restricting the operation of paragraph (1)&nbsp;of this Clause, it is understood and agreed
that for all purposes of this reinsurance the original liability policies of the Reassured
(new, renewal and replacement) affording the following coverages:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Owners, Landlords and Tenants Liability, Contractual Liability, Elevator Liability, Owners
or Contractors (including railroad) Protective Liability, Manufacturers and Contractors
Liability, Product Liability, Professional and Malpractice Liability, Storekeepers
Liability, Garage Liability, Automobile Liability (including Massachusetts Motor Vehicle
or Garage Liability)</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>shall be deemed to include, with respect to such coverages, from the time specified in Clause V
of this paragraph (3), the following provision (specified as the Broad Exclusion Provision):</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Broad Exclusion Provision.*</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It is agreed that the policy does not apply:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">I.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Under any Liability Coverage to<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(<I>injury, sickness, disease, death or destruction</I><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bodily injury or property damage</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>with respect to which an insured under the policy is also an insured under
a nuclear energy liability policy issued by Nuclear Energy Liability Insurance
Association, Mutual Atomic Energy Liability Underwriters or Nuclear Insurance
Association of Canada, or would be an insured under any such policy but for its
termination upon exhaustion of its limit of liability; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>resulting from the hazardous properties of nuclear material and with
respect to which (1)&nbsp;any person or organization is required to maintain financial
protection pursuant to the Atomic Energy Act of 1954, or any law amendatory thereof,
or (2)&nbsp;the insured is, or had this policy not been issued would be, entitled to
indemnity from the United States of America, or any agency thereof, under any
agreement entered into by the United States of America, or any agency thereof, with
any person or organization.</TD>
</TR>
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">II.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Under any Medical Payments Coverage, or under any Supplementary Payments Provision relating to<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(<I>immediate medical or surgical relief</I><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(first aid,<BR>
to expenses incurred with respect to<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(<I>bodily injury, sickness, disease or death</I><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bodily injury<BR>
resulting from the hazardous properties of nuclear material and arising out of the operation of a nuclear facility by any
person or organization.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">III.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Under any Liability Coverage to<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>(injury, sickness, disease, death or destruction</I><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bodily injury or property damage<BR>
resulting from the hazardous properties of nuclear material, if</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the nuclear material (1)&nbsp;is at any nuclear facility owned by, or operated
by or on behalf of, an insured or (2)&nbsp;has been discharged or dispersed therefrom;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the nuclear material is contained in spent fuel or waste at any time
possessed, handled, used, processed, stored, transported or disposed of by or on
behalf of an insured; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(<I>injury, sickness, disease, death or destruction</I><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bodily injury or property damage<BR>
arises out of the furnishing by an insured of services, materials, parts or equipment in connection with the
planning, construction, maintenance, operation or use of any nuclear facility, but if such facility is located within the
United States of America, its territories, or possessions or Canada, this exclusion (c)&nbsp;applies only to<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(<I>injury to or destruction of property at such nuclear facility</I><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(property damage to such nuclear facility and any property thereat.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">IV.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As used in this endorsement:<BR>
&#147;hazardous properties&#148; include radioactive, toxic or explosive properties; &#147;nuclear material&#148; means source material,
special nuclear material or byproduct material; &#147;source material&#148;, &#147;special nuclear material&#148;, and &#147;byproduct material&#148;
have the meanings given them in the Atomic Energy Act of 1954 or in any law amendatory thereof; &#147;spent fuel&#148; means any fuel
element or fuel component, solid or liquid, which has been used or exposed to radiation in a nuclear reactor; &#147;waste&#148; means
any waste material (1)&nbsp;containing byproduct material and (2)&nbsp;resulting from the operation by any person or organization of
any nuclear facility included within the definition of nuclear facility under paragraph (a)&nbsp;or (b)&nbsp;thereof; &#147;nuclear
facility&#148; means</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any nuclear reactor,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any equipment or device designed or used for (1)&nbsp;separating the isotopes of
uranium or plutonium, (2)&nbsp;processing or utilizing spent fuel, or (3)&nbsp;handling
processing or packaging waste,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any equipment or device used for the processing, fabricating or alloying of
special nuclear material if at any time the total amount of such material in the
custody of the insured at the premises where such equipment or device is located
consists of or contains more than 25 grams of plutonium or uranium 233 or any
combination thereof, or more than 250 grams of uranium 235,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any structure, basin, excavation, premises or place prepared or used for
the storage or disposal of waste, and includes the site on which any of the foregoing
is located, all operations conducted on such site and all premises used for such
operations; &#147;nuclear reactor&#148; means any apparatus designed or used to sustain nuclear
fission in a self-supporting chain reaction or to contain a critical mass of
fissionable material;<BR>
(<I>With respect to injury to or destruction of property, the word &#147;injury&#148;
or &#147;destruction,&#148;</I><BR>
(&#147;property damage&#148; includes all forms of radioactive contamination of property,<BR>
(<I>includes all forms of radioactive contamination of property.</I></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">V.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The inception dates and thereafter of all original policies affording coverages
specified in this paragraph (3), whether new, renewal or replacement, being policies
which become effective on or after 1st May, 1960, provided this paragraph (3)&nbsp;shall not
be applicable to</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Garage and Automobile Policies issued by the Reassured on New
York risks, or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>statutory liability insurance required under Chapter&nbsp;90,
General Laws of Massachusetts, until 90&nbsp;days following approval of the Broad
Exclusion Provision by the Governmental Authority having jurisdiction thereof.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Without in any way restricting the operation of paragraph (1)&nbsp;of this Clause, it is
understood and agreed that paragraphs (2)&nbsp;and (3)&nbsp;above are not applicable to original
liability policies of the Reassured in Canada and that with respect to such policies this
Clause shall be deemed to include the Nuclear Energy Liability Exclusion Provisions adopted by
the Canadian Underwriters&#146; Association or the Independent Insurance Conference of Canada.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="2%"></TD>
    <TD width="95"></TD>
</TR>

<TR valign="top">
    <TD colspan="2">*NOTE. </TD>
    <TD><I>The words printed in italics in the Limited Exclusion Provision and in the Broad Exclusion
Provision shall apply only in relation to original liability policies which include a Limited
Exclusion Provision or a Broad Exclusion Provision containing those words.</I></TD>
</TR>
</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">21/9/67<BR>
N.M.A. 1590
</DIV>


<P align="left" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>First Casualty Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">issued to

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="82%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Reinsurers</B></TD>
    <TD nowrap align="left" colspan="2"><B>Participations</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Hannover Ruckversicherungs-Aktiengesellschaft</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">25.0%</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Through Benfield Limited</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Lloyd&#146;s Underwriters and Companies
Per Signing Schedule(s)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">50.0</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>75.0% </B>part of</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">100% share in the</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">interests and</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">liabilities of the</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&#147;Reinsurer&#148;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>



<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Interests and Liabilities Agreement</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">of

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">Hannover Ruckversicherungs-Aktiengesellschaft<BR>
Hannover, Germany<BR>
(<I>hereinafter referred to as the &#147;Subscribing Reinsurer&#148;</I>)

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">with respect to the

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>First Casualty Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">issued to and duly executed by

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer </I>hereby accepts a 25.0% share in the interests and liabilities of the
&#147;Reinsurer&#148; as set forth in the attached Contract captioned above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Agreement shall become effective at 12:01&nbsp;a.m., Local Standard Time, January&nbsp;1, 2006, and
shall continue in force until terminated in accordance with the provisions of the attached
Contract.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer&#146;s </I>share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the <I>Subscribing Reinsurer </I>shall in no event participate in the interests and
liabilities of the other reinsurers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In any action, suit or proceeding to enforce the <I>Subscribing Reinsurer&#146;s </I>obligations under the
attached Contract, service of process may be made upon Mendes &#038; Mount, 750 Seventh Avenue, New
York, New York 10019.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>In Witness Whereof</B>, the <I>Subscribing Reinsurer </I>by its duly authorized representative has executed
this Agreement as of the date undermentioned at:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Hannover, Germany, this
<FONT style="border-bottom: 1px solid #000000; width: 15%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;30th</FONT>  day of
<FONT style="border-bottom: 1px solid #000000; width: 25%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;June</FONT>
in the year
<FONT style="border-bottom: 1px solid #000000; width: 15%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2006</FONT>.
</DIV>



<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="87%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>/s/ A.
Freiboth&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/ S. Eberhardt</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>

<TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Hannover Ruckversicherungs-Aktiengesellschaft</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Interests and Liabilities Agreement</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">of

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">Certain Insurance Companies<BR>
shown in the Signing Schedule(s) attached hereto<BR>
(<I>hereinafter referred to as the &#147;Subscribing Reinsurer&#148;</I>)

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">with respect to the

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>First Casualty Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">issued to and duly executed by

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer </I>hereby accepts a 30.0% share in the interests and liabilities of the
&#147;Reinsurer&#148; as set forth in the attached Contract captioned above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Agreement shall become effective at 12:01&nbsp;a.m., Local Standard Time, January&nbsp;1, 2006, and
shall continue in force until terminated in accordance with the provisions of the attached
Contract.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer&#146;s </I>share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the <I>Subscribing Reinsurer </I>shall in no event participate in the interests and
liabilities of the other reinsurers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In any action, suit or proceeding to enforce the <I>Subscribing Reinsurer&#146;s </I>obligations under the
attached Contract, service of process may be made upon Mendes &#038; Mount, 750 Seventh Avenue, New
York, New York 10019.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Signed for and on behalf of the <I>Subscribing Reinsurer </I>in the Signing Schedule(s) attached hereto.
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Interests and Liabilities Agreement</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">of

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">Certain Underwriting Members of Lloyd&#146;s<BR>
shown in the Signing Schedule attached hereto<BR>
(<I>hereinafter referred to as the &#147;Subscribing Reinsurer&#148;</I>)

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">with respect to the

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>First Casualty Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">issued to and duly executed by

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer </I>hereby accepts a 20.0% share in the interests and liabilities of the
&#147;Reinsurer&#148; as set forth in the attached Contract captioned above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Agreement shall become effective at 12:01&nbsp;a.m., Local Standard Time, January&nbsp;1, 2006, and
shall continue in force until terminated in accordance with the provisions of the attached
Contract.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer&#146;s </I>share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the <I>Subscribing Reinsurer </I>shall in no event participate in the interests and
liabilities of the other reinsurers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Signed for and on behalf of the <I>Subscribing Reinsurer </I>in the Signing Schedule attached hereto.
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>


</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>d38372exv10w2.htm
<DESCRIPTION>SECOND CASUALTY EXCESS OF LOSS REINSURANCE CONTRACT
<TEXT>
<HTML>
<HEAD>
<TITLE>exv10w2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">



<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit&nbsp;10.2
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Second Casualty Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">issued to

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Table of Contents</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Article</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Page</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">I
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Classes of Business Reinsured
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">1</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">II
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Commencement and Termination
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">1</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">III
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Territory (BRMA 51A)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">3</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">IV
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Exclusions
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">3</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">V
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Special Acceptances
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">7</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">VI
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Retention and Limit
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">8</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">VII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Definitions
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">9</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">VIII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Annuities at Company&#146;s Option
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">11</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">IX
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Claims
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">11</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">X
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Commutation
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">12</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XI
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Special Commutation
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">12</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Salvage and Subrogation
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">14</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XIII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Reinsurance Premium
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">15</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XIV
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Late Payments
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">15</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XV
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Offset (BRMA 36A)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">17</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XVI
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Access to Records (BRMA 1D)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">17</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XVII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Liability of the Reinsurer
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">17</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XVIII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Net Retained Lines (BRMA 32E)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">17</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XIX
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Errors and Omissions (BRMA 14F)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">18</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XX
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Currency (BRMA 12A)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">18</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXI
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Taxes (BRMA 50B)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">18</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Federal Excise Tax
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">18</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXIII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Reserves and Letters of Credit
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">18</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXIV
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Insolvency
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">20</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXV
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Arbitration (BRMA 6J)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">21</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXVI
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Service of Suit (BRMA 49C)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">22</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXVII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Entire Agreement
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">22</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXVIII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Governing Law (BRMA 71B)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">23</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXIX
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Agency Agreement
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">23</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXX
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Intermediary (BRMA 23A)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">23</TD>
    <TD nowrap valign="bottom">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Second Casualty Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">issued to

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group<BR>
(<I>hereinafter referred to collectively as the </I>&#147;Company&#148;)
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">by

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt">The Subscribing Reinsurer(s) Executing the<BR>
Interests and Liabilities Agreement(s)<BR>
Attached Hereto<BR>
(<I>hereinafter referred to as the </I>&#147;Reinsurer&#148;)
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;I &#151; Classes of Business Reinsured</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">By this Contract the Reinsurer agrees to reinsure the excess liability which may accrue to the
Company under its policies, contracts and binders of insurance or reinsurance (hereinafter called
&#147;policies&#148;) in force at the effective date hereof or issued or renewed on or after that date, and
classified by the Company as Workers&#146; Compensation, Employers Liability, including coverage
provided under the U.S. Longshore and Harbor Workers&#146; Compensation Act and the Jones Act, and
General Liability business, subject to the terms, conditions and limitations hereinafter set forth.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;II &#151; Commencement and Termination</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This Contract shall become effective at 12:01&nbsp;a.m., Local Standard Time, January&nbsp;1, 2006,
with respect to losses arising out of occurrences commencing at or after that time and date,
and shall continue in force thereafter until terminated.
</TD>
</TR>
</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 1
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Either party may terminate this Contract at 12:01&nbsp;a.m., Local Standard Time, on any January 1
by giving the other party not less than 90&nbsp;days prior notice by certified or registered mail.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Notwithstanding the provisions of paragraph B above, the Company may terminate a Subscribing
Reinsurer&#146;s percentage share in this Contract in the event any of the following circumstances
occur as clarified by public announcement for subparagraphs 1 through 6 below and upon
discovery for subparagraphs 7 and 8 below. The Company has 120&nbsp;days from the date of
applicable public announcement or discovery to exercise the option to terminate a Subscribing
Reinsurer&#146;s percentage share in this Contract. The effective date of special termination
shall not be sooner than one day after the Company provides the Subscribing Reinsurer notice
of its election to specially terminate, unless mutually agreed otherwise:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer&#146;s policyholders&#146; surplus at the beginning of any contract
year has been reduced by more than 20.0% of the amount of surplus 12&nbsp;months prior to that
date; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer&#146;s policyholders&#146; surplus at any time during any contract
year has been reduced by more than 20.0% of the amount of surplus at the date of the
Subscribing Reinsurer&#146;s most recent financial statement filed with regulatory authorities
and available to the public as of the beginning of the contract year; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer&#146;s A.M. Best&#146;s rating has been assigned or downgraded
below A- (inclusive of &#147;Not Rated&#148; ratings) and/or Standard &#038; Poor&#146;s rating has been
assigned or downgraded below BBB&#043; (inclusive of &#147;Not Rated&#148; ratings); or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer has become merged with, acquired by or controlled by any
other company, corporation or individual(s) not controlling the Subscribing Reinsurer&#146;s
operations previously; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A State Insurance Department or other legal authority has ordered the Subscribing
Reinsurer to cease writing business; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">6.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">7.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer has reinsured its entire liability under this Contract
without the Company&#146;s prior written consent; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">8.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer has ceased assuming new and renewal treaty reinsurance
business.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Unless the Company elects that the Reinsurer have no liability for losses arising out of
occurrences commencing after the effective date of termination, and so notifies the</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 2
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Reinsurer prior to or as promptly as possible after the effective date of termination,
reinsurance hereunder on business in force on the effective date of termination shall remain in
full force and effect until expiration, cancellation or next premium anniversary of such
business, whichever first occurs, but in no event beyond 12&nbsp;months plus odd time (not exceeding
18&nbsp;months in all) following the effective date of termination.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;III &#151; Territory (BRMA 51A)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The territorial limits of this Contract shall be identical with those of the Company&#146;s
policies.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;IV &#151; Exclusions</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This Contract does not apply to and specifically excludes the following:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Lines of business not identified in the Classes of Business Reinsured Article.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All excess of loss reinsurance assumed by the Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Reinsurance assumed by the Company under obligatory reinsurance agreements, except:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Agency reinsurance where the policies involved are to be reunderwritten
in accordance with the underwriting standards of the Company and reissued as Company
policies at the next anniversary or expiration date; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Intercompany reinsurance between any of the reinsured companies under
this Contract.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Business written by the Company on a co-indemnity basis where the Company is not
the controlling carrier.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Business written to apply in excess of a deductible of more than $25,000, and
business issued to apply specifically in excess over underlying insurance. However, if
the Company is required, by any state regulation, to provide a deductible of more than
$25,000, this exclusion shall not apply.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">6.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Nuclear risks as defined in the &#147;Nuclear Incident
Exclusion Clause &#151; Liability &#151; Reinsurance (U.S.A.)&#148; attached to and forming part of this Contract.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">7.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As regards interests which at time of loss or damage are on shore, no liability
shall attach hereto in respect of any loss or damage which is occasioned by 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. This War Exclusion Clause shall not, however, apply to interests which
at time of loss or damage are within the territorial limits of the United States of
America (comprising the Fifty States of the Union, the District of Columbia, and
including bridges between</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 3
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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the United States of America and Mexico provided they are under United States ownership),
Canada, St. Pierre and Miquelon, provided such interests are insured under policies
containing a standard war or hostilities or warlike operations exclusion clause.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">8.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Liability as a member, subscriber or reinsurer of any Pool, Syndicate or
Association, but this exclusion shall not apply to Assigned Risk Plans or similar plans.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">9.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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. &#147;Insolvency fund&#148; 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.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">10.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Workers&#146; Compensation where the principal exposures, as defined by the governing
class code, include:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Operation of aircraft, but only if the annual estimated policy premium is
$250,000 or more;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Railroad, subway or street railway operations;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Operation or navigation of vessels or barges;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Manufacture, production or refining of gas, natural or artificial fuel,
or other liquefied petroleum fuel, but only if the annual estimated policy premium
is $250,000 or more;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">e.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Manufacturing, assembly, packing or processing of fireworks, fuses,
nitroglycerine, magnesium, pyroxylin, ammunition or explosives. This exclusion does
not apply to the assembly, packing or processing of explosives when the estimated
annual premium is under $250,000;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">f.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Wrecking or demolition of structures, but only if the annual estimated
policy premium is $250,000 or more;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">g.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Underground mining.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">11.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As respects Workers&#146; Compensation and Employers Liability only, unless otherwise
excluded as set forth above, the reinsurance provided under this Contract shall not apply
to any loss, cost or expense arising out of or related to, either directly or indirectly,
any &#147;terrorist activity,&#148; as defined herein, but this exclusion shall only apply when the
activity includes, involves or is associated with the use of any biological,</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 4
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>chemical, radioactive or nuclear agent, material, device or weapon, or when the
predominant business of the policyholder, as defined by the governing class code, is:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The operation of: airports and aircraft; flight schools; bridges, dams,
tunnels or locks; department stores; shopping malls; chain retail stores; casinos
and casino hotels; cruise lines; railroads; ports/public transit authorities;
security services; stadiums; convention/exhibition centers; or theme/amusement
parks;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The manufacture and distribution of: automobiles; chemicals,
petrochemicals or pharmaceuticals; utilities (electric, gas, water and sewer); major
defense/aerospace products; or high-tech equipment, but only if the policyholder
employs more than 20 personnel at the location of a terrorist activity at the time
of its occurrence;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The management or operation of the following type of structures, but only
if greater than 25 stories in height: apartments/condominiums/co-ops;
hotels/motels; or office buildings;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Businesses primarily engaged in the entertainment, media or
transportation industry limited to the following: major media providers (NBC, FOX,
ABC, CBS, etc.); television and motion picture studios; Broadway theaters; major
internet companies (AOL, Yahoo, etc.); professional sports teams; major
telecommunications companies (AT&#038;T, WorldCom/MCI, etc.); national truck rental
companies (Ryder, Penske, U-Haul, etc.); or major national motor freight common
carriers (J.B. Hunt, Red Arrow, etc.);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">e.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Policyholders primarily located in, or predominantly doing business as:
hospitals; universities; nuclear facilities; financial institutions; or governmental
buildings and national landmarks.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>

    <TD colspan="3">&#147;Terrorist activity&#148; shall mean any deliberate, unlawful act that:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Is declared by any authorized government official to be or to involve
terrorism, terrorist activity or acts of terrorism; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Includes, involves, or is associated with the use or threatened use of
force, violence or harm against any person, tangible or intangible property, the
environment, or any natural resources, where the act or threatened act is intended,
in whole or in part, to:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">i.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Promote or further any political, ideological, philosophical,
racial, ethnic, social or religious cause or objective of the perpetrator or
any organization, association or group affiliated with the perpetrator; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">ii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Influence, disrupt or interfere with any government related
operations, activities or policies; or</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 5
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Intimidate, coerce or frighten the general public or any segment of
the general public; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iv.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Disrupt or interfere with a national economy or any segment of a
national economy; or</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Includes, involves, or is associated with, in whole or in part, any of
the following activities, or the threat thereof:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">i.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Hijacking or sabotage of any form of transportation or
conveyance, including but not limited to spacecraft, satellite, aircraft,
train, vessel or motor vehicle;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">ii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Hostage taking or kidnapping;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The use of any bomb, incendiary device, explosive or firearm;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iv.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The interference with or disruption of basic public or commercial
services and systems, including but not limited to the following
services or systems: electricity, natural gas, power, postal,
communications, telecommunications, information, public
transportation, water, fuel, sewer or waste disposal;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">v.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The injuring or assassination of any elected or appointed
government official or any government employee;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">vi.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The seizure, blockage, interference with, disruption of, or
damage to any government buildings, institutions, functions, events, tangible
or intangible property or other assets; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">vii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The seizure, blockage, interference with, disruption of, or
damage to tunnels, roads, streets, highways, or other places of public
transportation or conveyance.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any of the activities listed in subparagraph c, above, shall be
considered terrorist activity, except where the Company can demonstrate to the
Reinsurer that the foregoing activities or threats thereof were motivated solely by
personal objectives of the perpetrator that are unrelated, in whole or in part, to
any intention to:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">i.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Promote or further any political, ideological, philosophical,
racial, ethnic, social or religious cause or objective of the perpetrator or
any organization, association or group affiliated with the perpetrator;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">ii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Influence, disrupt or interfere with any government-related
operations, activities or policies;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Intimidate, coerce or frighten the general public or any segment of
the general public; or
</TD>
</TR>
</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 6
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iv.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Disrupt or interfere with a national economy or any segment of a
national economy.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">12.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As respects General Liability policies, exposures, other than those identified below,
as included in the General Liability section of the Company&#146;s Commercial Lines Manual:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;97111 &#151; Logging;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;58873 &#151; Sawmill;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;59984 &#151; Woodyard and Drivers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;95410 &#151; Grading of Land;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">e.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;45819 &#151; Lumber Yard;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">f.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;10073 &#151; Repair Shops and Drivers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">g.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;43822 &#151; Timber Cruiser;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">h.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;99793 &#151; Truckmen Not Otherwise Classified;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">i.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;91591 &#151; Contractors &#151; Subcontracted Work Other Than Construction;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">j.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;49452 &#151; Vacant Land.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any exclusion set forth in subparagraphs 10 and/or 12 of paragraph A shall be waived
automatically when, in the opinion of the Company, the exposure excluded therein is incidental
to the principal exposure on the risk in question.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the Company is bound, without the knowledge and contrary to the instructions of the
Company&#146;s supervisory underwriting personnel, on any business falling within the scope of one
or more of the exclusions set forth in subparagraphs 10 and/or 12 of paragraph A, the
exclusion shall be suspended with respect to such business until the Company has the first
opportunity to cancel the policy in compliance with governmental requirements.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the Company is required to accept an assigned risk which conflicts with one or more of the
exclusions set forth in subparagraph 10 of paragraph A, reinsurance shall apply, but only for
the difference between the Company&#146;s retention and the minimum limit required by the
applicable state statute, and in no event shall the Reinsurer&#146;s liability exceed the limit set
forth in the Retention and Limit Article.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;V &#151; Special Acceptances</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">From time to time the Company may request a special acceptance of reinsurance falling outside
the scope of the provisions set forth in this Contract. If each Subscribing Reinsurer whose share
in the interests and liabilities of the Reinsurer is 20.0% or greater agrees to a special
</DIV>
<P align="left" style="font-size: 10pt">Page 7
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">acceptance, such special acceptance shall be binding on all Subscribing Reinsurers with respect to
their respective shares. If such agreement is not achieved, such special acceptance shall be made
to this Contract only with respect to the interests and liabilities of each Subscribing Reinsurer
who agrees to the special acceptance. In the event a reinsurer becomes a party to this Contract
subsequent to one or more special acceptances hereunder, the new reinsurer shall automatically
accept such special acceptance(s) as being covered hereunder.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;VI &#151; Retention and Limit</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall retain and be liable for the first $2,000,000 of ultimate net loss
arising out of each occurrence. The Reinsurer shall then be liable (subject to the provisions
of paragraph B below) for the amount by which such ultimate net loss exceeds the Company&#146;s
retention, but the liability of the Reinsurer shall not exceed $3,000,000 as respects any one
occurrence, nor shall the liability of the Reinsurer exceed $39,000,000 in all for the
contract year.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Notwithstanding the provisions of paragraph A above, no claim shall be made under this
Contract during any contract year unless and until cumulative subject excess losses paid from
losses arising out of occurrences commencing during the contract year (being losses which
would be recoverable from the Reinsurer under paragraph A above were it not for the provisions
of this paragraph) exceed an annual aggregate retention of 2.500% of net earned premium. The
Company shall retain and be liable for such annual aggregate retention in addition to its
initial loss retention stipulated in paragraph A above.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As respects any loss or losses arising out of terrorist activity, the liability of the
Reinsurer shall not exceed $3,000,000 each contract year. Terrorism losses that apply to the
annual aggregate deductible will also reduce the liability of the Reinsurer as respects the
aggregate terrorism limit.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall be permitted to carry quota share and excess 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.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall purchase or be deemed to have purchased inuring excess facultative
reinsurance to limit its ultimate net loss under any one coverage, any one policy (exclusive
of loss in excess of policy limits or extra contractual obligations) to $2,000,000 each
occurrence as respects General Liability and Employers Liability business subject hereto.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">F.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall be permitted to carry excess of loss reinsurance applying to Workers&#146;
Compensation risks in the State of Minnesota, recoveries under which shall inure to the
benefit of this Contract.
Such coverage shall be provided through the Minnesota Workers&#146; Compensation Reinsurance
Association. It is understood that the liability of the Reinsurer for Minnesota Workers&#146;
Compensation risks is not released.
</TD>
</TR>

<TR><TD colspan="3" style="font-size: 3pt">&nbsp;</TD></TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Such coverage shall be provided through the Minnesota
Workers&#146; Compensation Reinsurance Association. It is understood
that the liability of the Reinsurer for Minnesota Workers&#146;
Compensation risks is not released.</TD>
</TR>

</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">Page 8
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event the Company accrues liability that is not provided by any inuring reinsurance, for
whatever reason, the Reinsurer agrees to reinsure such excess liability.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;VII &#151; Definitions</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Ultimate net loss&#148; as used herein is defined as the sum or sums (including loss in excess
of policy limits, extra contractual obligations and any 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.
Nothing herein shall be construed to mean that losses under this Contract are not recoverable
until the Company&#146;s ultimate net loss has been ascertained.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Loss in excess of policy limits&#148; and &#147;extra contractual obligations&#148; as used herein shall be
defined as follows:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Loss in excess of policy limits&#148; shall mean 90.0% of any amount paid or payable by
the Company in excess of its policy limits, but otherwise within the terms of its policy,
such loss in excess of the Company&#146;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&#146;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 reinsured or in the preparation or prosecution of an appeal consequent upon
such an action.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Extra contractual obligations&#148; shall mean 90.0% 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&#146;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 reinsured or in the preparation or prosecution of an appeal consequent upon
such an action. 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.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If any provision of this Article 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.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 9
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>organization or party involved in the presentation, defense or settlement of any claim covered
hereunder.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Occurrence&#148; as used herein is defined as an accident or occurrence or a series of accidents
or occurrences arising out of or caused by one event, except that:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As respects General Liability policies where the Company&#146;s limit of liability for
Products and Completed Operations coverages is determined on the basis of the insured&#146;s
aggregate losses during a policy period, all such losses proceeding from or traceable to
the same causative agency shall, at the Company&#146;s option, be deemed to have been caused
by one occurrence commencing at the beginning of the policy period, it being understood
and agreed that each renewal or annual anniversary date of the policy involved shall be
deemed the beginning of a new policy period;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Each occupational or industrial disease case or cumulative trauma case contracted
by an employee of an insured shall be deemed to have been caused by a separate
occurrence, commencing on:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The date of disability for which compensation is payable if the case is
compensable under the Workers&#146; Compensation Law;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The date disability due to the disease actually began if the case is not
compensable under the Workers&#146; Compensation Law;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The date of cessation of employment if claim is made after employment has
ceased.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Notwithstanding the provisions of subparagraph 2 above, as respects losses
resulting from occupational or industrial disease or cumulative trauma suffered by
employees of an insured for which the employer is liable, as a result of a sudden and
accidental event not exceeding 72 hours in duration, all such losses shall be considered
one occurrence and may be combined with losses classified as other than occupational or
industrial disease or cumulative trauma which arise out of the same event and the
combination of such losses shall be considered as one occurrence within the meaning
hereof.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Occupational or industrial disease&#148; is any abnormal condition that fulfills all of the
following conditions:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It is not traceable to a definite compensable accident occurring during the
employee&#146;s past or present employment.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It has been caused by exposure to a disease producing agent or agents present in
the workers&#146; occupational environment.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It has resulted in disability or death.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Cumulative trauma&#148; is an injury that fulfills all of the following conditions:</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 10
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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It is not traceable to a definite compensable accident occurring during the
employee&#146;s past or present employment.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It has occurred from and has been aggravated by a repetitive employment related
activity.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It has resulted in disability or death.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">F.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Loss adjustment expense&#148; as used herein shall mean expenses allocable to the investigation,
defense and/or settlement of specific claims, including litigation expenses, interest on
judgments, declaratory judgment expenses or other legal expenses and costs incurred in
connection with coverage questions and legal actions connected thereto, and salaries and
expenses of salaried adjusters associated with claims covered under policies of the Company
reinsured hereunder but not including office expenses or salaries of the Company&#146;s regular
employees.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">G.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Contract year&#148; as used in this Contract shall mean
the period from 12:01 a.m., Local Standard Time, January&nbsp;1, 2006 to
12:01 a.m., Local Standard Time, January 1, 2007, both days inclusive, and each respective 12-month period thereafter that
this Contract continues in force. However, if this Contract is terminated, the final contract
year shall be from the beginning of the then current contract year through the date of
termination if this Contract is terminated on a &#147;cutoff&#148; basis, or the end of the runoff
period if this Contract is terminated on a &#147;runoff&#148; basis.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;VIII &#151; Annuities at Company&#146;s Option</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Whenever the Company is required, or elects, to purchase an annuity or to negotiate a
structured settlement, either in satisfaction of a judgment or in an out-of-court settlement
or otherwise, the cost of the annuity or the structured settlement, as the case may be, shall
be deemed part of the Company&#146;s ultimate net loss.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The terms &#147;annuity&#148; or &#147;structured settlement&#148; shall be understood to mean any insurance
policy, lump sum payment, agreement or device of whatever nature resulting in the payment of a
lump sum by the Company in settlement of any or all future liabilities which may attach to it
as a result of an occurrence.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event the Company purchases an annuity which inures in whole or in part to the benefit
of the Reinsurer, it is understood that the liability of the Reinsurer is not released
thereby. In the event the Company is required to provide benefits not provided by the annuity
for whatever reason, the Reinsurer shall pay its share of any loss.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;IX &#151; Claims</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Whenever a claim is reserved by the Company for an amount greater than 50.0% of its
retention hereunder and/or whenever a claim appears likely to result in a claim under this
Contract, the Company shall notify the Reinsurer. Further, the Company shall notify the</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 11
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Reinsurer whenever a claim involves a fatality, major limb amputation, spinal cord damage,
brain damage, blindness or extensive burns, regardless of liability, if the policy limits or
statutory benefits applicable to the claim are greater than the Company&#146;s retention hereunder.
The Reinsurer shall have the right to participate, at its own expense, in the defense of any
claim or suit or proceeding involving this reinsurance.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All claim settlements made by the Company, provided they are within the terms of this
Contract (including but not limited to ex-gratia payments), shall be binding upon the
Reinsurer, and the Reinsurer agrees to pay all amounts for which it may be liable upon receipt
of satisfactory evidence of the amount paid by the Company.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;X &#151; Commutation</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Upon mutual agreement, the Company may commute the contract year.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Unless otherwise mutually agreed, the calculation for the commutation shall be calculated in
accordance with the following formula:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The net reinsurance premium earned (i.e., the gross reinsurance premium earned less
the ceding commission allowed) for the contract year; less</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Reinsurer&#146;s paid losses and loss adjustment expense on losses arising out of
occurrences commencing during the contract year; less</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Reinsurer&#146;s margin at 25.0% of the net reinsurance premium earned (i.e., the
gross reinsurance premium earned less the ceding commission allowed) for the contract
year; equals</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company&#146;s net profit.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Payment to the Company of the Company&#146;s net profit will result in a full and final
commutation of all known and unknown losses and shall constitute a complete and final release
of the Reinsurer and the Company in respect of any and all liabilities on business covered
under this Contract during the contract year commuted.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Should the calculation be zero or negative, no payment shall be made and the Company shall
have the option to provide a full and final commutation of all known and unknown losses, which
shall constitute a complete and final release of the Reinsurer and the Company with respect to
any and all liabilities on business covered under this Contract during the contract year
commuted.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XI &#151; Special Commutation</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event a Subscribing Reinsurer meets the following conditions, the Company may
require a commutation of that portion of any excess loss hereunder represented by any
outstanding claim or claims, including any related loss adjustment expense.</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 12
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer&#146;s A.M. Best&#146;s rating has been assigned or downgraded
below A- (inclusive of &#147;Not Rated&#148; ratings) and/or Standard &#038; Poor&#146;s rating has been
assigned or downgraded below BBB&#043; (inclusive of &#147;Not Rated&#148; ratings); or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer has ceased assuming new and renewal property and casualty
treaty reinsurance business.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD>&#147;Outstanding claim or claims&#148; shall be defined as known or unknown claims, including any billed
yet unpaid claims. However, unless otherwise mutually agreed, this paragraph shall not apply
unless the outstanding claim or claims is for an amount not less than $5,000.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the Company elects to require commutation as provided in paragraph A above, the Company
shall submit a Statement of Valuation of the outstanding claim or claims as of the last day of
the month immediately preceding the month in which the Company elects to require commutation,
as determined by the Company. Such Statement of Valuation shall include the elements
considered reasonable to establish the excess loss and shall set forth or attach the
information relied upon by the Company and the methodology employed to calculate the excess
loss. The Subscribing Reinsurer shall then pay the amount requested within 30 calendar days
of receipt of such Statement of Valuation, unless the Subscribing Reinsurer needs additional
information from the Company to assess the Company&#146;s Statement of Valuation or contests such
amount.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the Subscribing Reinsurer needs additional information from the Company to assess the
Company&#146;s Statement of Valuation or contests the amount requested, the Subscribing Reinsurer
shall so notify the Company within 15 calendar days of receipt of the Company&#146;s Statement of
Valuation. The Company shall supply any reasonably requested information to the Subscribing
Reinsurer within 15 calendar days of receipt of the notification. Within 30 calendar days of
the date of the notification or of the receipt of the information, whichever is later, the
Subscribing Reinsurer shall provide the Company with its Statement of Valuation of the
outstanding claim or claims as of the last day of the month immediately preceding the month in
which the Company elects to require commutation, as determined by the Subscribing Reinsurer.
Such Statement of Valuation shall include the elements considered reasonable to establish the
excess loss and shall set forth or attach the information relied upon by the Subscribing
Reinsurer and the methodology employed to calculate the excess loss.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event the Subscribing Reinsurer&#146;s Statement of Valuation of the outstanding claim or
claims is viewed as unacceptable to the Company, the Company may either abandon the
commutation effort, or may seek to settle any difference by using an independent actuary
agreed to by the parties.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the parties cannot agree on an acceptable independent actuary within 15 calendar days of
the date of the Subscribing Reinsurer&#146;s Statement of Valuation, then each party shall appoint
an actuary as party arbitrators for the limited and sole purpose of selecting an independent
actuary. If the actuaries cannot agree on an acceptable independent actuary within 15
calendar days of the date of the Subscribing Reinsurer&#146;s Statement of Valuation, the Company
shall supply the Subscribing Reinsurer with a list of at least three proposed</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 13
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>independent actuaries, and the Subscribing Reinsurer shall select the independent actuary from
that list.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">F.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Upon selection of the independent actuary, both parties shall present their respective
written submissions to the independent actuary. The independent actuary may, at his or her
discretion, request additional information. The independent actuary shall issue his or her
decision within 45 calendar days after the written submissions have been filed and any
additional information has been provided.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">G.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The decision of the independent actuary shall be final and binding. The expense of the
independent actuary shall be equally divided between the two parties. For the purposes of
this Article, unless mutually agreed otherwise, an &#147;independent actuary&#148; shall be an actuary
who satisfies each of the following criteria:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Is regularly engaged in the valuation of claims resulting from lines of business
subject to this Contract; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Is either a Fellow of the Casualty Actuarial Society or of the American Academy of
Actuaries; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Is disinterested and impartial regarding this commutation.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">H.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Notwithstanding paragraph A, B and C above, in the event that the Subscribing Reinsurer no
longer meets the conditions set forth in subparagraph 1 or 2 in paragraph A above, this
commutation may continue on a mutually agreed basis.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">I.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Payment by the Subscribing Reinsurer of the amount requested in accordance with paragraph B,
C or F above, shall release the Subscribing Reinsurer from all further liability for
outstanding claim or claims, known or unknown, under this Contract, which shall release the
Company from all further liability for payments of salvage or subrogation amounts, known or
unknown, to the Subscribing Reinsurer under this Contract.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">J.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event of any conflict between this Article and any other Article of this Contract, the
terms of this Article shall control.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">K.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This Article shall not apply to a Subscribing Reinsurer which is rated &#147;A&#043;&#148; or better by A.M.
Best at the beginning of any Contract year.</TD>
</TR>
</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">L.</TD>
    <TD width="1%">&nbsp;</TD>
   <TD>This Article shall survive the termination of this Contract.

</TD>
</TR>
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XII &#151; Salvage and Subrogation</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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) or
subrogation on account of claims and settlements involving reinsurance hereunder. Salvage or
subrogation thereon shall always be used to reimburse the excess
</DIV>
<P align="left" style="font-size: 10pt">Page 14
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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 where it is economically reasonable in the judgment of the
Company, relating to any loss, a part of which loss was sustained by the Reinsurer, and to
prosecute all claims arising out of such rights.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XIII &#151; Reinsurance Premium</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As premium for the reinsurance provided hereunder during each contract year, the Company
shall pay the Reinsurer 4.286% (3.000% net) of its net earned premium.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Reinsurer shall allow the Company a 30.0% commission on all premiums ceded to the Reinsurer
hereunder. The Company shall allow the Reinsurer return commission on return premiums at the
same rate.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Within 30&nbsp;days after the end of each month, the Company shall report its net earned premium
for the month. The premium due the Reinsurer, at the rate shown in paragraph A, shall be paid
by the Company with its report. In the event this Contract is terminated in accordance with
paragraph C of the Commencement and Termination Article, no payments shall be due as respects
each Subscribing Reinsurer after the effective date of termination.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Within 60&nbsp;days after the end of each contract year, the Company shall provide a report to the
Reinsurer setting forth the premium due hereunder for the contract year, computed in
accordance with paragraph A, and any additional premium due the Reinsurer or return premium
due the Company shall be remitted promptly.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Net earned premium&#148; as used herein is defined as the Company&#146;s gross earned premium
collected on the classes of business subject to this Contract, less only the earned portion of
premiums, if any, ceded by the Company for reinsurance which inures to the benefit of this
Contract and less dividends incurred.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XIV &#151; Late Payments</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The provisions of this Article shall not be implemented unless specifically invoked, in
writing, by one of the parties to this Contract.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event any premium, loss or other payment due either party is not received by the
intermediary named in the Intermediary Article (BRMA 23A) (hereinafter referred to as the
&#147;Intermediary&#148;) by the payment due date, the party to whom payment is due, may, by notifying
the Intermediary in writing, require the debtor party to pay, and the debtor party agrees to
pay, an interest penalty on the amount past due calculated for each such payment on the last
business day of each month as follows:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The number of full days which have expired since the due date or the last monthly
calculation, whichever the lesser; times</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 15
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>1/365ths of the sum of 400 basis points plus the six-month United States Treasury
Bill rate as quoted in <I>The Wall Street Journal </I>on the first business day of the month for
which the calculation is made; times</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;The amount past due, including accrued interest.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It is agreed that interest shall accumulate until payment of the original amount due plus
interest penalties have been received by the Intermediary.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The establishment of the due date shall, for purposes of this Article, be determined as
follows:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As respects the payment of routine deposits and premiums due the Reinsurer, the due
date shall be as provided for in the applicable section of this Contract. In the event a
due date is not specifically stated for a given payment, it shall be deemed due 30&nbsp;days
after the date of transmittal by the Intermediary of the initial billing for each such
payment.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any claim or loss payment due the Company hereunder shall be deemed due 45&nbsp;days
after the proof of loss or demand for payment is transmitted to the Reinsurer. If such
loss or claim payment is not received within the 45&nbsp;days, interest will accrue on the
payment or amount overdue in accordance with paragraph B above, from the date the proof
of loss or demand for payment was transmitted to the Reinsurer.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As respects any payment, adjustment or return due either party not otherwise
provided for in subparagraphs 1 and 2 of paragraph C above, the due date shall be as
provided for in the applicable section of this Contract. In the event a due date is not
specifically stated for a given payment, it shall be deemed due 10&nbsp;days following
transmittal of written notification that the provisions of this Article have been
invoked.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>For purposes of interest calculations only, amounts due hereunder shall be deemed paid upon
receipt by the Intermediary.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Nothing herein shall be construed as limiting or prohibiting a Subscribing Reinsurer from
contesting the validity of any claim, or from participating in the defense of any claim or
suit, or prohibiting either party from contesting the validity of any payment or from
initiating any arbitration or other proceeding in accordance with the provisions of this
Contract. If the debtor party prevails in an arbitration or other proceeding, then any
interest penalties due hereunder on the amount in dispute shall be null and void. If the
debtor party loses in such proceeding, then the interest penalty on the amount determined to
be due hereunder shall be calculated in accordance with the provisions set forth above unless
otherwise determined by such proceedings. If a debtor party advances payment of any amount it
is contesting, and proves to be correct in its contestation, either in whole or in part, the
other party shall reimburse the debtor party for any such excess payment made plus interest on
the excess amount calculated in accordance with this Article.</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 16
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Interest penalties arising out of the application of this Article that are $100 or less from
any party shall be waived unless there is a pattern of late payments consisting of three or
more items over the course of any 12-month period.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XV &#151; Offset (BRMA 36A)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company and the Reinsurer may offset any balance or amount due from one party to the other
under this Contract or any other contract heretofore or hereafter entered into between the Company
and the Reinsurer, whether acting as assuming reinsurer or ceding company. This provision shall
not be affected by the insolvency of either party to this Contract.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XVI &#151; Access to Records (BRMA 1D)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Reinsurer or its designated representatives shall have access at any reasonable time to
all records of the Company which pertain in any way to this reinsurance.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XVII &#151; Liability of the Reinsurer</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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&#146;s policies and any endorsements thereon.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XVIII &#151; Net Retained Lines (BRMA 32E)</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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, only loss or losses in respect of
that portion of any policy which the Company retains net for its own account shall be
included.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The amount of the Reinsurer&#146;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.</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 17
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XIX &#151; Errors and Omissions (BRMA 14F)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Inadvertent delays, errors or omissions made in connection with this Contract or any
transaction hereunder shall not relieve either party from any liability which would have attached
had such delay, error or omission not occurred, provided always that such error or omission is
rectified as soon as possible after discovery.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XX &#151; Currency (BRMA 12A)</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Whenever the word &#147;Dollars&#148; or the &#147;$&#148; 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.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXI &#151; Taxes (BRMA 50B)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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 or the District of Columbia.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXII &#151; Federal Excise Tax</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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&nbsp;4371 of the
Internal Revenue Code) to the extent such premium is subject to the Federal Excise Tax.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXIII &#151; Reserves and Letters of Credit</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#091;Applies only to a reinsurer which does not qualify for full credit with any insurance
regulatory authority having jurisdiction over the Company&#146;s reserves, which is or becomes rated
&#147;B&#043;&#043;&#148; or lower by A.M. Best (inclusive of &#147;Not Rated&#148; ratings) and/or Standard &#038; Poor&#146;s rating is
or becomes &#147;BBB&#043;&#148; or lower (inclusive of &#147;Not Rated&#148; ratings).&#093;
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As regards policies or bonds issued by the Company coming within the scope of this Contract,
the Company agrees that when it shall file with the insurance regulatory authority</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 18
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>or set up on its books reserves for losses covered hereunder which it shall be required by law
to set up, it will forward to the Reinsurer a statement showing the proportion of such reserves
which is applicable to the Reinsurer. The Reinsurer hereby agrees to fund such reserves in
respect of known outstanding losses that have been reported to the Reinsurer and allocated loss
adjustment expense relating thereto, losses and allocated loss adjustment expense paid by the
Company but not recovered from the Reinsurer, plus reserves for losses incurred but not
reported, as shown in the statement prepared by the Company (hereinafter referred to as
&#147;Reinsurer&#146;s Obligations&#148;) by funds withheld, cash advances or a Letter of Credit. The
Reinsurer shall have the option of determining the method of funding provided it is acceptable
to the insurance regulatory authorities having jurisdiction over the Company&#146;s reserves with
regards to unauthorized reinsurers; or, should the Reinsurer be downgraded, the method of
funding shall be mutually agreed.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>When funding by a Letter of Credit, the Reinsurer agrees to apply for and secure timely
delivery to the Company of a clean, irrevocable and unconditional Letter of Credit issued by a
bank meeting the NAIC Securities Valuation Office credit standards for issuers of Letters of
Credit and containing provisions acceptable to the insurance regulatory authorities having
jurisdiction over the Company&#146;s reserves in an amount equal to the Reinsurer&#146;s proportion of
said reserves. Such Letter of Credit shall be issued for a period of not less than one year,
and shall contain an &#147;evergreen&#148; clause, which automatically extends the term for one year
from its date of expiration or any future expiration date unless 30&nbsp;days (60&nbsp;days where
required by insurance regulatory authorities) prior to any expiration date the issuing bank
shall notify the Company by certified or registered mail that the issuing bank elects not to
consider the Letter of Credit extended for any additional period.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Reinsurer and Company agree that the Letters of Credit provided by the Reinsurer pursuant
to the provisions of this Contract may be drawn upon at any time, notwithstanding any other
provision of this Contract, and be utilized by the Company or any successor, by operation of
law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or
conservator of the Company for the following purposes, unless otherwise provided for in a
separate Trust Agreement:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To reimburse the Company for the Reinsurer&#146;s Obligations, the payment of which is
due under the terms of this Contract and which has not been otherwise paid;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To make refund of any sum which is in excess of the actual amount required to pay
the Reinsurer&#146;s Obligations under this Contract, if so requested by the Reinsurer;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To fund an account with the Company for the Reinsurer&#146;s Obligations. Such cash
deposit shall be held in an interest bearing account separate from the Company&#146;s other
assets, and interest thereon not in excess of the prime rate shall accrue to the benefit
of the Reinsurer;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To pay the Reinsurer&#146;s share of any other amounts the Company claims are due under
this Contract.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual
amount required for subparagraphs 1 or 3, or in the case of subparagraph 4, the</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 19
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>actual amount determined to be due, the Company shall promptly return to the Reinsurer the
excess amount so drawn. All of the foregoing shall be applied without diminution because of
insolvency on the part of the Company or the Reinsurer.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The issuing bank shall have no responsibility whatsoever in connection with the propriety of
withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that
withdrawals are made only upon the order of properly authorized representatives of the
Company.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>At annual intervals, or more frequently as agreed but never more frequently than quarterly,
the Company shall prepare a specific statement of the Reinsurer&#146;s Obligations, for the sole
purpose of amending the Letter of Credit, in the following manner:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the statement shows that the Reinsurer&#146;s Obligations exceed the balance of
credit as of the statement date, the Reinsurer shall, within 30&nbsp;days after receipt of
notice of such excess, secure delivery to the Company of an amendment to the Letter of
Credit increasing the amount of credit by the amount of such difference.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If, however, the statement shows that the Reinsurer&#146;s Obligations are less than the
balance of credit as of the statement date, the Company shall, within 30&nbsp;days after
receipt of written request from the Reinsurer, release such excess credit by agreeing to
secure an amendment to the Letter of Credit reducing the amount of credit available by
the amount of such excess credit.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">F.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This Article shall not apply to a reinsurer which satisfies both of the following conditions:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Qualifies for full credit with any insurance regulatory authority having
jurisdiction over the Company&#146;s reserves; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Is rated &#147;A&#043;&#148; or better by A.M. Best at the beginning of any contract year.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXIV &#151; Insolvency</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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 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 or bond reinsured 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</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 20
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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 company.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It is further understood and agreed that, in the event of the insolvency of one or more of
the reinsured companies, the reinsurance under this Contract shall be payable directly by the
Reinsurer to the company or to its liquidator, receiver or statutory successor, except as
provided by Section 4118(a) of the New York Insurance Law or except (1)&nbsp;where this Contract
specifically provides another payee of such reinsurance in the event of the insolvency of the
company or (2)&nbsp;where the Reinsurer with the consent of the direct insured or insureds has
assumed such policy obligations of the company as direct obligations of the Reinsurer to the
payees under such policies and in substitution for the obligations of the company to such
payees.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXV &#151; Arbitration (BRMA 6J)</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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&#146;s
London Underwriters. In the event that either party should fail to choose an Arbiter within
30&nbsp;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&nbsp;days following their
appointment, each Arbiter shall nominate three candidates within 10&nbsp;days thereafter, two of
whom the other shall decline, and the decision shall be made by drawing lots.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Each party shall present its case to the Arbiters within 30&nbsp;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.
Judgment upon the final decision of the Arbiters may be entered in any court of competent
jurisdiction.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 21
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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 in which the Company has its
principal office.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXVI &#151; Service of Suit (BRMA 49C)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(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)
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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&#146;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.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXVII &#151; Entire Agreement</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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.
</DIV>


<P align="left" style="font-size: 10pt">Page 22
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXVIII &#151; Governing Law (BRMA 71B)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Contract shall be governed by and construed in accordance with the laws of the State of
Louisiana.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXIX &#151; Agency Agreement</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If more than one reinsured company is named as a party to this Contract, the first named
company 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.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXX &#151; Intermediary (BRMA 23A)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Benfield Inc. 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 Benfield Inc.
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.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>In Witness Whereof</B>, the Company by its duly authorized representative has executed this Contract as
of the date undermentioned at:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">DeRidder,
Louisiana, this 18th day of May in the year 2006.
</DIV>

<DIV style="margin-top: 18pt">
<DIV style="font-size:10pt; margin-left: 54pt; margin-right: 70pt; border-top: 0px solid #000000">/s/ Allan E. Farr</DIV>
<DIV style="margin-left: 54pt; margin-right: 70pt; border-top: 1px solid #000000">
</DIV>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 9%; margin-top: 0pt">American Interstate Insurance Company<BR>
American Interstate Insurance Company of Texas<BR>
Silver Oak Casualty, Inc.
</DIV>




<P align="left" style="font-size: 10pt">Page 23
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Nuclear Incident Exclusion Clause &#151; Liability &#151; Reinsurance (U.S.A.)</B>
</DIV>

<DIV align="center" style="font-size: 10pt">(Approved by Lloyd&#146;s Underwriters&#146; Fire and Non-Marine Association)</DIV>



<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This reinsurance does not cover any loss or liability accruing to the Reassured as a member
of, or subscriber to, any association of insurers or reinsurers formed for the purpose of
covering nuclear energy risks or as a direct or indirect reinsurer of any such member,
subscriber or association.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Without in any way restricting the operation of paragraph (1)&nbsp;of this Clause it is understood
and agreed that for all purposes of this reinsurance all the original policies of the
Reassured (new, renewal and replacement) of the classes specified in Clause II of this
paragraph (2)&nbsp;from the time specified in Clause III in this paragraph (2)&nbsp;shall be deemed to
include the following provision (specified as the Limited Exclusion Provision):</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Limited Exclusion Provision.*</B>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">I.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It is agreed that the policy does not apply under any liability coverage, to</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-left: 9%; margin-top: 0pt">(<I>injury, sickness, disease, death or destruction</I><BR>
(bodily injury or property damage
</DIV>


<DIV style="margin-top: 0pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>with respect to which an insured under the policy is also an insured
under a nuclear energy liability policy issued by Nuclear Energy
Liability Insurance Association, Mutual Atomic Energy Liability
Underwriters or Nuclear Insurance Association of Canada, or would be
an insured under any such policy but for its termination upon
exhaustion of its limit of liability.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">II.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Family Automobile Policies (liability only), Special Automobile
Policies (private passenger automobiles, liability only), Farmers
Comprehensive Personal Liability Policies (liability only),
Comprehensive Personal Liability Policies (liability only) or
policies of a similar nature; and the liability portion of
combination forms related to the four classes of policies stated
above, such as the Comprehensive Dwelling Policy and the applicable
types of Homeowners Policies.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">III.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The inception dates and thereafter of all original policies as
described in II above, whether new, renewal or replacement, being
policies which either</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>become effective on or after 1st May, 1960, or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>become effective before that date and contain the Limited Exclusion
Provision set out above;
provided this paragraph (2)&nbsp;shall not be applicable to Family Automobile Policies, Special
Automobile Policies, or policies or combination policies of a similar nature, issued by
the Reassured on New York risks, until 90&nbsp;days following approval of the Limited Exclusion
Provision by the Governmental Authority having jurisdiction thereof.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Except for those classes of policies specified in Clause II of paragraph (2)&nbsp;and without in
any way restricting the operation of paragraph (1)&nbsp;of this Clause, it is understood and agreed
that for all purposes of this reinsurance the original liability policies of the Reassured
(new, renewal and replacement) affording the following coverages:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Owners, Landlords and Tenants Liability, Contractual Liability, Elevator Liability, Owners
or Contractors (including railroad) Protective Liability, Manufacturers and Contractors
Liability, Product Liability, Professional and Malpractice Liability, Storekeepers
Liability, Garage Liability, Automobile Liability (including Massachusetts Motor Vehicle
or Garage Liability)</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">shall be deemed to include, with respect to such coverages, from the time specified in Clause V
of this paragraph (3), the following provision (specified as the Broad Exclusion Provision):
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Broad Exclusion Provision.*</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It is agreed that the policy does not apply:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">I.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Under any Liability Coverage to</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 0pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>(<I>injury, sickness, disease, death or destruction</I><BR>
(bodily injury or property damage</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>with respect to which an insured under the policy is also an insured under
a nuclear energy liability policy issued by Nuclear Energy Liability Insurance
Association, Mutual Atomic Energy Liability Underwriters or Nuclear Insurance
Association of Canada, or would be an insured under any such policy but for its
termination upon exhaustion of its limit of liability; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>resulting from the hazardous properties of nuclear material and with
respect to which (1)&nbsp;any person or organization is required to maintain financial
protection pursuant to the Atomic Energy Act of 1954, or any law amendatory thereof,
or (2)&nbsp;the insured is, or had this policy not been issued would be, entitled to
indemnity from the United States of America, or any agency thereof, under any
agreement entered into by the United States of America, or any agency thereof, with
any person or organization.</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">&nbsp;
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">II.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Under any Medical Payments Coverage, or under any Supplementary Payments Provision relating to</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 0pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>(<I>immediate medical or surgical relief</I>
(first aid,<BR>
</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD colspan="3">
to expenses incurred with respect to
</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>
<I>bodily injury, sickness, disease or death</I><BR>
(bodily injury</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD colspan="3">
resulting from the hazardous properties of nuclear material and arising out of the operation of a nuclear facility by any
person or organization.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">III.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Under any Liability Coverage to</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 0pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>(<I>injury, sickness, disease, death or destruction</I><BR>
(bodily injury or property damage</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD colspan="3">

resulting from the hazardous properties of nuclear material, if</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the nuclear material (1)&nbsp;is at any nuclear facility owned by, or operated
by or on behalf of, an insured or (2)&nbsp;has been discharged or dispersed therefrom;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the nuclear material is contained in spent fuel or waste at any time
possessed, handled, used, processed, stored, transported or disposed of by or on
behalf of an insured; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(<I>injury, sickness, disease, death or destruction</I><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bodily injury or property damage<BR>
arises out of the furnishing by an insured of services, materials, parts or equipment in connection with the
planning, construction, maintenance, operation or use of any nuclear facility, but if such facility is located within the
United States of America, its territories, or possessions or Canada, this exclusion (c)&nbsp;applies only to<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(<I>injury to or destruction of property at such nuclear facility</I><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(property damage to such nuclear facility and any property thereat.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">IV.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As used in this endorsement:<BR>
&#147;hazardous properties&#148; include radioactive, toxic or explosive properties; &#147;nuclear material&#148; means source material,
special nuclear material or byproduct material; &#147;source material&#148;, &#147;special nuclear material&#148;, and &#147;byproduct material&#148;
have the meanings given them in the Atomic Energy Act of 1954 or in any law amendatory thereof; &#147;spent fuel&#148; means any fuel
element or fuel component, solid or liquid, which has been used or exposed to radiation in a nuclear reactor; &#147;waste&#148; means
any waste material (1)&nbsp;containing byproduct material and (2)&nbsp;resulting from the operation by any person or organization of
any nuclear facility included within the definition of nuclear facility under paragraph (a)&nbsp;or (b)&nbsp;thereof; &#147;nuclear
facility&#148; means</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any nuclear reactor,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any equipment or device designed or used for (1)&nbsp;separating the isotopes of
uranium or plutonium, (2)&nbsp;processing or utilizing spent fuel, or (3)&nbsp;handling
processing or packaging waste,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any equipment or device used for the processing, fabricating or alloying of
special nuclear material if at any time the total amount of such material in the
custody of the insured at the premises where such equipment or device is located
consists of or contains more than 25 grams of plutonium or uranium 233 or any
combination thereof, or more than 250 grams of uranium 235,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any structure, basin, excavation, premises or place prepared or used for
the storage or disposal of waste, and includes the site on which any of the foregoing
is located, all operations conducted on such site and all premises used for such
operations; &#147;nuclear reactor&#148; means any apparatus designed or used to sustain nuclear
fission in a self-supporting chain reaction or to contain a critical mass of
fissionable material;<BR>
(<I>With respect to injury to or destruction of property, the word &#147;injury&#148;
or &#147;destruction,&#148;</I><BR>
(&#147;property damage&#148; includes all forms of radioactive contamination of property,<BR>
(<I>includes all forms of radioactive contamination of property.</I></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">V.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The inception dates and thereafter of all original policies affording coverages
specified in this paragraph (3), whether new, renewal or replacement, being policies
which become effective on or after 1st May, 1960, provided this paragraph (3)&nbsp;shall not
be applicable to</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Garage and Automobile Policies issued by the Reassured on New
York risks, or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>statutory liability insurance required under Chapter&nbsp;90,
General Laws of Massachusetts, until 90&nbsp;days following approval of the Broad
Exclusion Provision by the Governmental Authority having jurisdiction thereof.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Without in any way restricting the operation of paragraph (1)&nbsp;of this Clause, it is
understood and agreed that paragraphs (2)&nbsp;and (3)&nbsp;above are not applicable to original
liability policies of the Reassured in Canada and that with respect to such policies this
Clause shall be deemed to include the Nuclear Energy Liability Exclusion Provisions adopted by
the Canadian Underwriters&#146; Association or the Independent Insurance Conference of Canada.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*NOTE.</TD>
    <TD>&nbsp;</TD>
    <TD><I>The words printed in italics in the Limited Exclusion Provision and in the Broad Exclusion
Provision shall apply only in relation to original liability policies which include a Limited
Exclusion Provision or a Broad Exclusion Provision containing those words.</I></TD>
</TR>

</TABLE>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">21/9/67<BR>
N.M.A. 1590

</DIV>

<P align="left" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Second Casualty Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">issued to

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">

<TD nowrap align="center"><B>Reinsurers&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Participations</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Hannover Ruckversicherungs-Aktiengesellschaft</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">30.0</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Partner Reinsurance Company of the U.S.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25.0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Through Benfield Limited (Placement Only)</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">AXA RE</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Through Benfield Limited</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Lloyd&#146;s Underwriters and Companies
Per Signing Schedule(s)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">35.0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right"><B>100.0</B></TD>
    <TD nowrap><B>%</B></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Interests and Liabilities Agreement</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">of

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt">Hannover Ruckversicherungs-Aktiengesellschaft<BR>
Hannover, Germany<BR>
(<I>hereinafter referred to as the &#147;Subscribing Reinsurer&#148;</I>)
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">with respect to the

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>Second Casualty Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">issued to and duly executed by

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer </I>hereby accepts a 30.0% share in the interests and liabilities of the
&#147;Reinsurer&#148; as set forth in the attached Contract captioned above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Agreement shall become effective at 12:01&nbsp;a.m., Local Standard Time, January&nbsp;1, 2006, and
shall continue in force until terminated in accordance with the provisions of the attached
Contract.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer&#146;s </I>share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the <I>Subscribing Reinsurer </I>shall in no event participate in the interests and
liabilities of the other reinsurers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In any action, suit or proceeding to enforce the <I>Subscribing Reinsurer&#146;s </I>obligations under the
attached Contract, service of process may be made upon Mendes &#038; Mount, 750 Seventh Avenue, New
York, New York 10019.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>In Witness Whereof</B>, the <I>Subscribing Reinsurer </I>by its duly authorized representative has executed
this Agreement as of the date undermentioned at:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Hannover, Germany, this
<FONT style="border-bottom: 1px solid #000000; width: 15%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;30th</FONT>  day of
<FONT style="border-bottom: 1px solid #000000; width: 25%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;June</FONT>
in the year
<FONT style="border-bottom: 1px solid #000000; width: 15%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2006</FONT>.
</DIV>



<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="87%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>/s/ A.
Freiboth&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/ S. Eberhardt</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>

<TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Hannover Ruckversicherungs-Aktiengesellschaft</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Interests and Liabilities Agreement</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">of

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt">AXA RE<BR>
Paris, France<BR>
(<I>hereinafter referred to as the &#147;Subscribing Reinsurer&#148;</I>)
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">with respect to the

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>Second Casualty Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">issued to and duly executed by

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer </I>hereby accepts a 10.0% share in the interests and liabilities of the
&#147;Reinsurer&#148; as set forth in the attached Contract captioned above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Agreement shall become effective at 12:01&nbsp;a.m., Local Standard Time, January&nbsp;1, 2006, and
shall continue in force until terminated in accordance with the provisions of the attached
Contract.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer&#146;s </I>share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the <I>Subscribing Reinsurer </I>shall in no event participate in the interests and
liabilities of the other reinsurers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>In Witness Whereof</B>, the <I>Subscribing Reinsurer </I>by its duly authorized representative has executed
this Agreement as of the date undermentioned at:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Paris, France, this
<FONT style="border-bottom: 1px solid #000000; width: 15%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21st</FONT>  day of
<FONT style="border-bottom: 1px solid #000000; width: 25%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;June</FONT>
in the year
<FONT style="border-bottom: 1px solid #000000; width: 15%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2006</FONT>.
</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="87%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>/s/ Allison Janisch</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">AXA RE</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Interests and Liabilities Agreement</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">of

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt">Certain Insurance Companies<BR>
shown in the Signing Schedule(s) attached hereto<BR>
(<I>hereinafter referred to as the &#147;Subscribing Reinsurer&#148;</I>)
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">with respect to the

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>Second Casualty Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">issued to and duly executed by

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer </I>hereby accepts a 20.0% share in the interests and liabilities of the
&#147;Reinsurer&#148; as set forth in the attached Contract captioned above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Agreement shall become effective at 12:01&nbsp;a.m., Local Standard Time, January&nbsp;1, 2006, and
shall continue in force until terminated in accordance with the provisions of the attached
Contract.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer&#146;s </I>share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the <I>Subscribing Reinsurer </I>shall in no event participate in the interests and
liabilities of the other reinsurers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In any action, suit or proceeding to enforce the <I>Subscribing Reinsurer&#146;s </I>obligations under the
attached Contract, service of process may be made upon Mendes &#038; Mount, 750 Seventh Avenue, New
York, New York 10019.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Signed for and on behalf of the <I>Subscribing Reinsurer </I>in the Signing Schedule(s) attached
</DIV>


<P align="left" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Interests and Liabilities Agreement</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">of

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt">Partner Reinsurance Company of the U.S.<BR>
New York, New York<BR>
(<I>hereinafter referred to as the &#147;Subscribing Reinsurer&#148;</I>)
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">with respect to the

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>Second Casualty Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">issued to and duly executed by

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer </I>hereby accepts a 25.0% share in the interests and liabilities of the
&#147;Reinsurer&#148; as set forth in the attached Contract captioned above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Agreement shall become effective at 12:01&nbsp;a.m., Local Standard Time, January&nbsp;1, 2006, and
shall continue in force until terminated in accordance with the provisions of the attached
Contract.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer&#146;s </I>share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the <I>Subscribing Reinsurer </I>shall in no event participate in the interests and
liabilities of the other reinsurers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>In Witness Whereof</B>, the <I>Subscribing Reinsurer </I>by its duly authorized representative has executed
this Agreement as of the date undermentioned at:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Greenwich,
Connecticut, this 13th day of June in the year 2006.
</DIV>







<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="73%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 0px solid #000000">&nbsp;</DIV>
/s/ Giuseppe A. Ruggieri, VP
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>


<TR style="font-size:1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 0px solid #000000">&nbsp;</DIV>
Partner Reinsurance Company of the U.S.
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>





<P align="left" style="font-size: 10pt">&nbsp;
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Interests and Liabilities Agreement</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">of

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt">Certain Underwriting Members of Lloyd&#146;s<BR>
shown in the Signing Schedule attached hereto<BR>
(<I>hereinafter referred to as the &#147;Subscribing Reinsurer&#148;</I>)
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">with respect to the

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>Second Casualty Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">issued to and duly executed by

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer </I>hereby accepts a 15.0% share in the interests and liabilities of the
&#147;Reinsurer&#148; as set forth in the attached Contract captioned above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Agreement shall become effective at 12:01&nbsp;a.m., Local Standard Time, January&nbsp;1, 2006, and
shall continue in force until terminated in accordance with the provisions of the attached
Contract.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer&#146;s </I>share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the <I>Subscribing Reinsurer </I>shall in no event participate in the interests and
liabilities of the other reinsurers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In any action, suit or proceeding to enforce the <I>Subscribing Reinsurer&#146;s </I>obligations under the
attached Contract, service of process may be made upon Mendes &#038; Mount, 750 Seventh Avenue, New
York, New York 10019.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Signed for and on behalf of the <I>Subscribing Reinsurer </I>in the Signing Schedule attached hereto.
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>


</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>4
<FILENAME>d38372exv10w3.htm
<DESCRIPTION>THIRD CASUALTY EXCESS OF LOSS REINSURANCE CONTRACT
<TEXT>
<HTML>
<HEAD>
<TITLE>exv10w3</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">



<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit&nbsp;10.3
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Third Casualty Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">issued to
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Table of Contents</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%" align="right" valign="top">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="83%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%" align="right" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD align="center" valign="top"><B>Article</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>Page</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">I</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Classes of Business Reinsured</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">1&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">II</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Commencement and Termination</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">1&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">III</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Territory (BRMA 51A)</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">3&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">IV</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Exclusions</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">3&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">V</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Special Acceptances</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">7&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">VI</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Retention and Limit</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">7&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">VII</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Reinstatement</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">8&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">VIII</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Definitions</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">9&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">IX</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Annuities at Company&#146;s Option</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">11&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">X</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Claims</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">11&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">XI</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Sunset</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">12&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">XII</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Special Commutation</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">12&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">XIII</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Salvage and Subrogation</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">14&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">XIV</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Federal Terrorism Coverage</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">14&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">XV</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Reinsurance Premium</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">14&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">XVI</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Late Payments</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">15&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">XVII</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Offset (BRMA 36A)</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">16&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">XVIII</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Access to Records (BRMA 1D)</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">16&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">XIX</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Liability of the Reinsurer</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">17&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">XX</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Net Retained Lines (BRMA 32E)</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">17&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">XXI</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Errors and Omissions</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">17&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">XXII</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Currency (BRMA 12A)</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">17&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">XXIII</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Taxes (BRMA 50B)</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">17&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">XXIV</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Federal Excise Tax</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">18&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">XXV</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Reserves and Letters of Credit</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">18&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">XXVI</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Insolvency</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">19&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">XXVII</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Arbitration (BRMA 6J)</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">20&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">XXVIII</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Service of Suit (BRMA 49C)</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">21&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">XXIX</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Entire Agreement</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">22&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">XXX</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Governing Law (BRMA 71B)</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">22&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">XXXI</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Agency Agreement</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">22&nbsp;&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:15px; text-indent:-15px">XXXII</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Intermediary (BRMA 23A)</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">22&nbsp;&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">&nbsp;
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Third Casualty Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">issued to
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group<BR>
(<I>hereinafter referred to collectively as the </I>&#147;Company&#148;)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">by
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">The Subscribing Reinsurer(s) Executing the<BR>
Interests and Liabilities Agreement(s)<BR>
Attached Hereto<BR>
(<I>hereinafter referred to as the </I>&#147;Reinsurer&#148;)
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;I &#151; Classes of Business Reinsured</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">By this Contract the Reinsurer agrees to reinsure the excess liability which may accrue to the
Company under its policies, contracts and binders of insurance or reinsurance (hereinafter called
&#147;policies&#148;) in force at the effective date hereof or issued or renewed on or after that date, and
classified by the Company as Workers&#146; Compensation, Employers Liability, including coverage
provided under the U.S. Longshore and Harbor Workers&#146; Compensation Act and the Jones Act, and
General Liability business, subject to the terms, conditions and limitations hereinafter set forth.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;II &#151; Commencement and Termination</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This Contract shall become effective at 12:01&nbsp;a.m., Local Standard Time, January&nbsp;1, 2006,
with respect to losses arising out of occurrences commencing at or after that time and date,
and shall continue in force thereafter until terminated.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Either party may terminate this Contract at 12:01&nbsp;a.m., Local Standard Time on any January 1
by giving the other party not less than 90&nbsp;days prior notice by certified or registered mail.</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 1
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Notwithstanding the provisions of paragraph B above, the Company may terminate a Subscribing
Reinsurer&#146;s percentage share in this Contract in the event any of the following circumstances
occur as clarified by public announcement for subparagraphs 1 through 6 below and upon
discovery for subparagraphs 7 and 8 below. The Company has 120&nbsp;days from the date of
applicable public announcement or discovery to exercise the option to terminate a Subscribing
Reinsurer&#146;s percentage share in this Contract. The effective date of special termination
shall not be sooner than one day after the Company provides the Subscribing Reinsurer notice
of its election to specially terminate, unless mutually agreed otherwise:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer&#146;s policyholders&#146; surplus at the beginning of any contract
year has been reduced by more than 20.0% of the amount of surplus 12&nbsp;months prior to that
date; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer&#146;s policyholders&#146; surplus at any time during any contract
year has been reduced by more than 20.0% of the amount of surplus at the date of the
Subscribing Reinsurer&#146;s most recent financial statement filed with regulatory authorities
and available to the public as of the beginning of the contract year; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer&#146;s A.M. Best&#146;s rating has been assigned or downgraded
below A- (inclusive of &#147;Not Rated&#148; ratings) and/or Standard &#038; Poor&#146;s rating has been
assigned or downgraded below BBB&#043; (inclusive of &#147;Not Rated&#148; ratings); or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer has become merged with, acquired by or controlled by any
other company, corporation or individual(s) not controlling the Subscribing Reinsurer&#146;s
operations previously; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A State Insurance Department or other legal authority has ordered the Subscribing
Reinsurer to cease writing business; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">6.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">7.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer has reinsured its entire liability under this Contract
without the Company&#146;s prior written consent; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">8.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer has ceased assuming new and renewal treaty reinsurance
business.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Unless the Company elects that the Reinsurer have no liability for losses arising out of
occurrences commencing after the effective date of termination, and so notifies the Reinsurer
prior to or as promptly as possible after the effective date of termination, reinsurance
hereunder on business in force on the effective date of termination shall remain in full force
and effect until expiration, cancellation or next premium anniversary of such business,
whichever first occurs, but in no event beyond 12&nbsp;months plus odd time (not exceeding 18
months in all) following the effective date of termination.</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 2
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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;III &#151; Territory (BRMA 51A)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The territorial limits of this Contract shall be identical with those of the Company&#146;s
policies.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;IV &#151; Exclusions</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This Contract does not apply to and specifically excludes the following:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Lines of business not identified in the Classes of Business Reinsured Article.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All excess of loss reinsurance assumed by the Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Reinsurance assumed by the Company under obligatory reinsurance agreements, except:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Agency reinsurance where the policies involved are to be reunderwritten
in accordance with the underwriting standards of the Company and reissued as Company
policies at the next anniversary or expiration date; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Intercompany reinsurance between any of the reinsured companies under
this Contract.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Business written by the Company on a co-indemnity basis where the Company is not
the controlling carrier.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Business written to apply in excess of a deductible of more than $25,000, and
business issued to apply specifically in excess over underlying insurance. However, if
the Company is required, by any state regulation, to provide a deductible of more than
$25,000, this exclusion shall not apply.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">6.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Nuclear risks as defined in the &#147;Nuclear Incident
Exclusion Clause &#151; Liability &#151;
Reinsurance (U.S.A.)&#148; attached to and forming part of this Contract.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">7.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As regards interests which at time of loss or damage are on shore, no liability
shall attach hereto in respect of any loss or damage which is occasioned by 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. This War Exclusion Clause shall not, however, apply to interests which
at time of loss or damage are within the territorial limits of the United States of
America (comprising the Fifty States of the Union, the District of Columbia, and
including bridges between the United States of America and Mexico provided they are under
United States ownership), Canada, St. Pierre and Miquelon, provided such interests are
insured under policies containing a standard war or hostilities or warlike operations
exclusion clause.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">8.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Liability as a member, subscriber or reinsurer of any Pool, Syndicate or
Association, but this exclusion shall not apply to Assigned Risk Plans or similar plans.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">9.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 3
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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Insolvency fund&#148; 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.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">10.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Workers&#146; Compensation where the principal exposures, as defined by the governing
class code, include:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Operation of aircraft, but only if the annual estimated policy premium is
$250,000 or more;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Railroad, subway or street railway operations;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Operation or navigation of vessels or barges;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Manufacture, production or refining of gas, natural or artificial fuel,
or other liquefied petroleum fuel, but only if the annual estimated policy premium
is $250,000 or more;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">e.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Manufacturing, assembly, packing or processing of fireworks, fuses,
nitroglycerine, magnesium, pyroxylin, ammunition or explosives. This exclusion does
not apply to the assembly, packing or processing of explosives when the estimated
annual premium is under $250,000;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">f.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Wrecking or demolition of structures, but only if the annual estimated
policy premium is $250,000 or more;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">g.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Underground mining.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">11.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As respects Workers&#146; Compensation and Employers Liability only, unless otherwise
excluded as set forth above, the reinsurance provided under this Contract shall not apply
to any loss, cost or expense arising out of or related to, either directly or indirectly,
any &#147;terrorist activity,&#148; as defined herein, but this exclusion shall only apply when the
activity includes, involves or is associated with the use of any biological, chemical,
radioactive or nuclear agent, material, device or weapon, or when the predominant business
of the policyholder, as defined by the governing class code, is:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The operation of: airports and aircraft; flight schools; bridges, dams,
tunnels or locks; department stores; shopping malls; chain retail stores; casinos
and casino hotels; cruise lines; railroads; ports/public transit authorities;
security services; stadiums; convention/exhibition centers; or theme/amusement
parks;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The manufacture and distribution of: automobiles; chemicals,
petrochemicals or pharmaceuticals; utilities (electric, gas, water and sewer); major
defense/aerospace products; or high-tech equipment, but only if the policyholder
employs more than 20 personnel at the location of a terrorist activity at the time
of its occurrence;</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 4
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The management or operation of the following type of structures, but only
if greater than 25 stories in height: apartments/condominiums/co-ops;
hotels/motels; or office buildings;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Businesses primarily engaged in the entertainment, media or
transportation industry limited to the following: major media providers (NBC, FOX,
ABC, CBS, etc.); television and motion picture studios; Broadway theaters; major
internet companies (AOL, Yahoo, etc.); professional sports teams; major
telecommunications companies (AT&#038;T, WorldCom/MCI, etc.); national truck rental
companies (Ryder, Penske, U-Haul, etc.); or major national motor freight common
carriers (J.B. Hunt, Red Arrow, etc.);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">e.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Policyholders primarily located in, or predominantly doing business as:
hospitals; universities; nuclear facilities; financial institutions; or governmental
buildings and national landmarks.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">&#147;Terrorist activity&#148; shall mean any deliberate, unlawful act that:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Is declared by any authorized government official to be or to involve
terrorism, terrorist activity or acts of terrorism; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Includes, involves or is associated with the use or threatened use of
force, violence or harm against any person, tangible or intangible property, the
environment, or any natural resources, where the act or threatened act is intended,
in whole or in part, to:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">i.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Promote or further any political, ideological, philosophical,
racial, ethnic, social or religious cause or objective of the perpetrator or
any organization, association or group affiliated with the perpetrator; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">ii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Influence, disrupt or interfere with any government related
operations, activities or policies; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Intimidate, coerce or frighten the general public or any segment of
the general public; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iv.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Disrupt or interfere with a national economy or any segment of a
national economy; or</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">c. Includes, involves, or is associated with, in whole or in part, any of
the following activities, or the threat thereof:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">i.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Hijacking or sabotage of any form of transportation or
conveyance, including but not limited to spacecraft, satellite, aircraft,
train, vessel or motor vehicle;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">ii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Hostage taking or kidnapping;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The use of any bomb, incendiary device, explosive or firearm;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iv.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The interference with or disruption of basic public or commercial
services and systems, including but not limited to the following
services or systems:
</TD>
</TR>
</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 5
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>electricity, natural gas, power, postal, communications, telecommunications,
information, public transportation, water, fuel, sewer or waste disposal;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">v.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The injuring or assassination of any elected or appointed
government official or any government employee;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">vi.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The seizure, blockage, interference with, disruption of, or
damage to any government buildings, institutions, functions, events, tangible
or intangible property or other assets; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">vii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The seizure, blockage, interference with, disruption of, or
damage to tunnels, roads, streets, highways, or other places of public
transportation or conveyance.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%; text-indent: -2%">d. Any of the activities listed in subparagraph c, above, shall be
considered terrorist activity, except where the Company can demonstrate to the
Reinsurer that the foregoing activities or threats thereof were motivated solely by
personal objectives of the perpetrator that are unrelated, in whole or in part, to
any intention to:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">i.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Promote or further any political, ideological, philosophical,
racial, ethnic, social or religious cause or objective of the perpetrator or
any organization, association or group affiliated with the perpetrator;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">ii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Influence, disrupt or interfere with any government-related
operations, activities or policies;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Intimidate, coerce or frighten the general public or any segment of
the general public; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iv.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Disrupt or interfere with a national economy or any segment of a
national economy.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">12.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As respects General Liability policies, exposures, other than those identified below,
as included in the General Liability section of the Company&#146;s Commercial Lines Manual:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;97111 &#151; Logging;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;58873 &#151; Sawmill;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;59984 &#151; Woodyard and Drivers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;95410 &#151; Grading of Land;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">e.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;45819 &#151; Lumber Yard;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">f.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;10073 &#151; Repair Shops and Drivers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">g.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;43822 &#151; Timber Cruiser;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">h.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;99793 &#151; Truckmen Not Otherwise Classified;</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 6
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">i.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;91591 &#151; Contractors &#151; Subcontracted Work Other Than Construction;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">j.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;49452 &#151; Vacant Land.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any exclusion set forth in subparagraphs 10 and/or 12 of paragraph A shall be waived
automatically when, in the opinion of the Company, the exposure excluded therein is incidental
to the principal exposure on the risk in question.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the Company is bound, without the knowledge and contrary to the instructions of the
Company&#146;s supervisory underwriting personnel, on any business falling within the scope of one
or more of the exclusions set forth in subparagraphs 10 and/or 12 of paragraph A, the
exclusion shall be suspended with respect to such business until the Company has the first
opportunity to cancel the policy in compliance with governmental requirements.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the Company is required to accept an assigned risk which conflicts with one or more of the
exclusions set forth in subparagraph 10 of paragraph A, reinsurance shall apply, but only for
the difference between the Company&#146;s retention and the minimum limit required by the
applicable state statute, and in no event shall the Reinsurer&#146;s liability exceed the limit set
forth in the Retention and Limit Article.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;V &#151; Special Acceptances</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">From time to time the Company may request a special acceptance of reinsurance falling outside
the scope of the provisions set forth herein. As respects each layer of this Contract separately,
if each Subscribing Reinsurer whose share in the interests and liabilities of the Reinsurer is
20.0% or greater agrees to a special acceptance, such special acceptance shall be binding on all
Subscribing Reinsurers with respect to their respective shares of each such layer. In the event
agreement is not achieved, such special acceptance shall be made to a layer or layers of this
Contract only with respect to the interests and liabilities of each Subscribing Reinsurer on such
layer or layers who agrees to such special acceptance. In the event a reinsurer becomes a party to
this Contract subsequent to one or more special acceptances hereunder, the new reinsurer shall
automatically accept such special acceptance(s) as being covered hereunder.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;VI &#151; Retention and Limit</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall retain and be liable for the first $5,000,000 of ultimate net loss,
arising out of each occurrence. The Reinsurer shall then be liable for the amount by which
such ultimate net loss exceeds the Company&#146;s retention, but the liability of the Reinsurer
shall not exceed $5,000,000, as respects any one occurrence.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the Event that a loss is recoverable under this
Contract and under the Company&#146;s Workers&#146; Compensation Per Person Excess of Loss Reinsurance
Contract or Casualty Catastrophe Excess of Loss Reinsurance Contract, both effective January 1, 2006,
the Company shall be the sole judge in effecting recovery under any one or more of the aforementioned
contracts, including this Contract.  However, in no event shall this be constructed to mean that the
Company may recover an amount from the Reinsurer which exceeds the total amount for any one loss,
subject to the provisions of the applicable contract(s).</TD>
</TR>
<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall be permitted to carry excess of loss and quota share 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.</TD>
</TR>


<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall be permitted to carry excess of loss reinsurance applying to Workers&#146;
Compensation risks in the State of Minnesota, recoveries under which shall inure to the
benefit of this Contract.</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 7
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Such coverage shall be provided through the Minnesota Workers&#146; Compensation Reinsurance
Association. It is understood that the liability of the Reinsurer for Minnesota Workers&#146;
Compensation risks is not released.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event the Company accrues liability that is not provided by any inuring reinsurance, for
whatever reason, the Reinsurer agrees to reinsure such excess liability.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As respects Workers&#146; Compensation business, the Company&#146;s ultimate net loss, for the purpose
of this Contract, shall be deemed to be a maximum of $5,000,000 any one life.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;VII &#151; Reinstatement</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event all or any portion of the reinsurance hereunder is exhausted by loss, the
amount so exhausted shall be reinstated immediately from the time the occurrence commences
hereon. For each amount so reinstated the Company agrees to pay additional premium equal to
the product of the following:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The percentage of the occurrence limit reinstated (based on the loss paid by the
Reinsurer); times</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The earned reinsurance premium for the contract year (exclusive of reinstatement
premium).</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Whenever the Company requests payment by the Reinsurer of any loss hereunder, the Company
shall submit a statement to the Reinsurer of reinstatement premium due the Reinsurer. If the
earned reinsurance premium for the contract year has not been finally determined as of the
date of any such statement, the calculation of reinstatement premium due shall be based on the
annual deposit premium and shall be readjusted when the earned reinsurance premium for the
contract year has been finally determined. Any reinstatement premium shown to be due the
Reinsurer as reflected by any such statement (less prior payments, if any) shall be payable by
the Company concurrently with payment by the Reinsurer of the requested loss. 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&#146;s statement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Notwithstanding anything stated herein, the liability of the Reinsurer hereunder shall not
exceed $5,000,000 as respects loss or losses arising out of any one occurrence, nor shall it
exceed $10,000,000 in all during the contract year.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event this Contract is terminated on a runoff basis, additional reinstatement coverage
shall be negotiated on or prior to the effective date of termination.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;VIII &#151; Definitions</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Ultimate net loss&#148; as used herein is defined as the sum or sums (including loss in excess
of policy limits, extra contractual obligations and any 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</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 8
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>collectible or not. Nothing herein shall be construed to mean that losses under this Contract
are not recoverable until the Company&#146;s ultimate net loss has been ascertained.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Loss in excess of policy limits&#148; and &#147;extra contractual obligations&#148; as used herein shall be
defined as follows:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Loss in excess of policy limits&#148; shall mean 90.0% of any amount paid or payable by
the Company in excess of its policy limits, but otherwise within the terms of its policy,
such loss in excess of the Company&#146;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&#146;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 reinsured or in the preparation or prosecution of an appeal consequent upon
such an action.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Extra contractual obligations&#148; shall mean 90.0% 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&#146;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 reinsured or in the preparation or prosecution of an appeal consequent upon
such an action. 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.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">If any provision of this Article 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.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">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.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Occurrence&#148; as used herein is defined as an accident or occurrence or a series of accidents
or occurrences arising out of or caused by one event, except that:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As respects General Liability policies where the Company&#146;s limit of liability for
Products and Completed Operations coverages is determined on the basis of the insured&#146;s
aggregate losses during a policy period, all such losses proceeding from or traceable to
the same causative agency shall, at the Company&#146;s option, be deemed to have been caused
by one occurrence commencing at the beginning of the policy period, it being understood
and agreed that each renewal or annual anniversary date of the policy involved shall be
deemed the beginning of a new policy period;</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 9
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Each occupational or industrial disease case or cumulative trauma case contracted
by an employee of an insured shall be deemed to have been caused by a separate
occurrence, commencing on:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The date of disability for which compensation is payable if the case is
compensable under the Workers&#146; Compensation Law;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The date disability due to the disease actually began if the case is not
compensable under the Workers&#146; Compensation Law;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The date of cessation of employment if claim is made after employment has
ceased.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Notwithstanding the provisions of subparagraph 2 above, as respects losses
resulting from occupational or industrial disease or cumulative trauma suffered by
employees of an insured for which the employer is liable, as a result of a sudden and
accidental event not exceeding 72 hours in duration, all such losses shall be considered
one occurrence and may be combined with losses classified as other than occupational or
industrial disease or cumulative trauma which arise out of the same event and the
combination of such losses shall be considered as one occurrence within the meaning
hereof.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Occupational or industrial disease&#148; is any abnormal condition that fulfills all of the
following conditions:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It is not traceable to a definite compensable accident occurring during the
employee&#146;s past or present employment.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It has been caused by exposure to a disease producing agent or agents present in
the workers&#146; occupational environment.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It has resulted in disability or death.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Cumulative trauma&#148; is an injury that fulfills all of the following conditions:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It is not traceable to a definite compensable accident occurring during the
employee&#146;s past or present employment.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It has occurred from and has been aggravated by a repetitive employment related
activity.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It has resulted in disability or death.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">F.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Loss adjustment expense&#148; as used herein shall mean expenses allocable to the investigation,
defense and/or settlement of specific claims, including litigation expenses, interest on
judgments, declaratory judgment expenses or other legal expenses and costs incurred in
connection with coverage questions and legal actions connected thereto, and salaries and
expenses of salaried adjusters associated with claims covered under policies of the Company
reinsured hereunder but not including office expenses or salaries of the Company&#146;s regular
employees.</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 10
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">G.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Contract year&#148; as used in this Contract shall mean
the period from 12:01 a.m., Local Standard Time, January&nbsp;1, 2006 to
12:01 a.m., Local Standard Time, January 1, 2007, both days inclusive, and each respective 12-month period thereafter that
this Contract continues in force. However, if this Contract is terminated on a &#147;cutoff&#148;
basis, the final contract year shall be from the beginning of the then current contract year
through the effective date of termination. If this Contract is terminated on a &#147;runoff&#148;
basis, the period from the effective date of termination through the end of the &#147;runoff&#148;
period shall be a separate contract year and referred to as the &#147;runoff contract year.&#148;</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;IX &#151; Annuities at Company&#146;s Option</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Whenever the Company is required, or elects, to purchase an annuity or to negotiate a
structured settlement, either in satisfaction of a judgment or in an out-of-court settlement
or otherwise, the cost of the annuity or the structured settlement, as the case may be, shall
be deemed part of the Company&#146;s ultimate net loss.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The terms &#147;annuity&#148; or &#147;structured settlement&#148; shall be understood to mean any insurance
policy, lump sum payment, agreement or device of whatever nature resulting in the payment of a
lump sum by the Company in settlement of any or all future liabilities which may attach to it
as a result of an occurrence.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event the Company purchases an annuity which inures in whole or in part to the benefit
of the Reinsurer, it is understood that the liability of the Reinsurer is not released
thereby. In the event the Company is required to provide benefits not provided by the annuity
for whatever reason, the Reinsurer shall pay its share of any loss.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;X &#151; Claims</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Whenever a claim is reserved by the Company for an amount greater than 50.0% of its
retention hereunder and/or whenever a claim appears likely to result in a claim under this
Contract, the Company shall notify the Reinsurer. Further, the Company shall notify the
Reinsurer whenever a claim involves a fatality, major limb amputation, spinal cord damage,
brain damage, blindness or extensive burns, regardless of liability, if the policy limits or
statutory benefits applicable to the claim are greater than the Company&#146;s retention hereunder.
The Reinsurer shall have the right to participate, at its own expense, in the defense of any
claim or suit or proceeding involving this reinsurance.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All claim settlements made by the Company, provided they are within the terms of this
Contract (including but not limited to ex-gratia payments), shall be binding upon the
Reinsurer, and the Reinsurer agrees to pay all amounts for which it may be liable upon receipt
of satisfactory evidence of the amount paid by the Company.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XI &#151; Sunset</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ten years after the effective date of termination of this Contract (or after the end of the
runoff period, if applicable), the Company shall advise the Reinsurer of any outstanding claims
and/or occurrences (each hereinafter referred to as a &#147;claim&#148;) arising during any contract year,
which have not been finally settled and which may cause a recovery under this Contract. Unless
 </DIV>

<P align="left" style="font-size: 10pt">Page 11
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">mutually agreed, no liability shall attach hereunder for any claim not reported to the Reinsurer
within 90&nbsp;days following the 10-year period.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XII &#151; Special Commutation</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event a Subscribing Reinsurer meets the following conditions, the Company may
require a commutation of that portion of any excess loss hereunder represented by any
outstanding claim or claims, including any related loss adjustment expense.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer&#146;s A.M. Best&#146;s rating has been assigned or downgraded
below A- (inclusive of &#147;Not Rated&#148; ratings) and/or Standard &#038; Poor&#146;s rating has been
assigned or downgraded below BBB&#043; (inclusive of &#147;Not Rated&#148; ratings); or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer has ceased assuming new and renewal property and casualty
treaty reinsurance business.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&#147;Outstanding claim or claims&#148; shall be defined as known or unknown claims, including any billed
yet unpaid claims. However, unless otherwise mutually agreed, this paragraph shall not apply
unless the outstanding claim or claims is for an amount not less than $5,000.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the Company elects to require commutation as provided in paragraph A above, the Company
shall submit a Statement of Valuation of the outstanding claim or claims as of the last day of
the month immediately preceding the month in which the Company elects to require commutation,
as determined by the Company. Such Statement of Valuation shall include the elements
considered reasonable to establish the excess loss and shall set forth or attach the
information relied upon by the Company and the methodology employed to calculate the excess
loss. The Subscribing Reinsurer shall then pay the amount requested within 30 calendar days
of receipt of such Statement of Valuation, unless the Subscribing Reinsurer needs additional
information from the Company to assess the Company&#146;s Statement of Valuation or contests such
amount.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the Subscribing Reinsurer needs additional information from the Company to assess the
Company&#146;s Statement of Valuation or contests the amount requested, the Subscribing Reinsurer
shall so notify the Company within 15 calendar days of receipt of the Company&#146;s Statement of
Valuation. The Company shall supply any reasonably requested information to the Subscribing
Reinsurer within 15 calendar days of receipt of the notification. Within 30 calendar days of
the date of the notification or of the receipt of the information, whichever is later, the
Subscribing Reinsurer shall provide the Company with its Statement of Valuation of the
outstanding claim or claims as of the last day of the month immediately preceding the month in
which the Company elects to require commutation, as determined by the Subscribing Reinsurer.
Such Statement of Valuation shall include the elements considered reasonable to establish the
excess loss and shall set forth or attach the information relied upon by the Subscribing
Reinsurer and the methodology employed to calculate the excess loss.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event the Subscribing Reinsurer&#146;s Statement of Valuation of the outstanding claim or
claims is viewed as unacceptable to the Company, the Company may either abandon the
commutation effort, or may seek to settle any difference by using an independent actuary
agreed to by the parties.</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 12
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the parties cannot agree on an acceptable independent actuary within 15 calendar days of
the date of the Subscribing Reinsurer&#146;s Statement of Valuation, then each party shall appoint
an actuary as party arbitrators for the limited and sole purpose of selecting an independent
actuary. If the actuaries cannot agree on an acceptable independent actuary within 15
calendar days of the date of the Subscribing Reinsurer&#146;s Statement of Valuation, the Company
shall supply the Subscribing Reinsurer with a list of at least three proposed independent
actuaries, and the Subscribing Reinsurer shall select the independent actuary from that list.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">F.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Upon selection of the independent actuary, both parties shall present their respective
written submissions to the independent actuary. The independent actuary may, at his or her
discretion, request additional information. The independent actuary shall issue his or her
decision within 45 calendar days after the written submissions have been filed and any
additional information has been provided.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">G.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The decision of the independent actuary shall be final and binding. The expense of the
independent actuary shall be equally divided between the two parties. For the purposes of
this Article, unless mutually agreed otherwise, an &#147;independent actuary&#148; shall be an actuary
who satisfies each of the following criteria:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Is regularly engaged in the valuation of claims resulting from lines of business
subject to this Contract; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Is either a Fellow of the Casualty Actuarial Society or of the American Academy of
Actuaries; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Is disinterested and impartial regarding this commutation.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">H.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Notwithstanding paragraph A, B and C above, in the event that the Subscribing Reinsurer no
longer meets the conditions set forth in subparagraph 1 or 2 in paragraph A above, this
commutation may continue on a mutually agreed basis.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">I.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Payment by the Subscribing Reinsurer of the amount requested in accordance with paragraph B,
C or F above, shall release the Subscribing Reinsurer from all further liability for
outstanding claim or claims, known or unknown, under this Contract, which shall release the
Company from all further liability for payments of salvage or subrogation amounts, known or
unknown, to the Subscribing Reinsurer under this Contract.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">J.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event of any conflict between this Article and any other Article of this Contract, the
terms of this Article shall control.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">K.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This Article shall survive the termination of this Contract.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XIII &#151; Salvage and Subrogation</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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) or
subrogation on account of claims and settlements involving reinsurance hereunder. Salvage or
subrogation thereon shall always be used to reimburse the excess

<P align="left" style="font-size: 10pt">Page 13
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<DIV style="font-family: Helvetica,Arial,sans-serif">

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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 where it is economically reasonable in the judgment of the
Company, relating to any loss, a part of which loss was sustained by the Reinsurer, and to
prosecute all claims arising out of such rights.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XIV &#151; Federal Terrorism Coverage</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Except as provided in paragraphs B and C below, any loss reimbursement the Company receives
from the United States Government under the Terrorism Risk Insurance Act of 2002, as amended
by the Terrorism Risk Insurance Extension Act of 2005 (together the &#147;Terrorism Act&#148;) as a
result of loss occurrences commencing during the term of this Contract shall inure solely to
the benefit of the Company and shall be entirely disregarded in applying all of the provisions
of this Contract.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If one or more loss occurrences commencing during the term of this Contract result(s) in
recoveries made by the Company for insured losses (as defined in the Terrorism Act) under this
Contract <U>and</U> under the Terrorism Act, and such recoveries, together with any other
reinsurance recoveries made by the Company for insured losses applicable to said loss
occurrence(s), exceed the total amount of insured losses, a percentage of any amount in excess
thereof shall reduce the ultimate net loss subject to this Contract for the loss occurrence(s)
to which the recoveries apply. The Company shall determine how such percentage is calculated.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>For purposes hereof, if a loss reimbursement received by the Company under the Terrorism Act
is based on the Company&#146;s insured losses in more than one loss occurrence and the United
States Government does not designate the amount allocable to each loss occurrence, the
reimbursement shall be determined by the Company and in accordance with paragraph B above.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XV &#151; Reinsurance Premium</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As premium for the reinsurance provided hereunder during each contract year (except the
runoff contract year, if any), the Company shall pay the Reinsurer 0.225% of its net earned
premium for the contract year, subject to an annual minimum premium of $504,000 (or a pro rata
portion thereof if this Contract is terminated in accordance with paragraph C of the
Commencement and Termination Article).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall pay the Reinsurer an annual deposit premium of $630,000 in four equal
installments of $157,500 on January&nbsp;1, April&nbsp;1, July 1 and October 1 of each contract year
(except the runoff contract year, if any). However, in the event this Contract is terminated
in accordance with paragraph C of the Commencement and Termination Article, no deposit premium
shall be due after the effective date of termination (except as provided in paragraph D
below).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Within 60&nbsp;days after the end of each contract year (and 60&nbsp;days after the end of the runoff
contract year, if any), the Company shall provide a report to the Reinsurer setting forth the
premium due hereunder for the contract year, computed in accordance with paragraph A,</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 14
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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>and any additional premium due the Reinsurer or return premium due the Company shall be
remitted promptly.</TD>
</TR>



<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event this Contract is terminated on a runoff basis, the reinsurance premium for the
runoff contract year shall be calculated by multiplying the unearned portion of premium in
force at the effective date of termination by 0.225%, and paid semi-annually, and no minimum
premium shall apply.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Net earned premium&#148; as used herein is defined as the Company&#146;s gross earned premium
collected on the classes of business subject to this Contract, less only the earned portion of
premiums, if any, ceded by the Company for reinsurance which inures to the benefit of this
Contract and less dividends incurred.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XVI &#151; Late Payments</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The provisions of this Article shall not be implemented unless specifically invoked, in
writing, by one of the parties to this Contract.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event any premium, loss or other payment due either party is not received by the
intermediary named in the Intermediary Article (BRMA 23A) (hereinafter referred to as the
&#147;Intermediary&#148;) by the payment due date, the party to whom payment is due, may, by notifying
the Intermediary in writing, require the debtor party to pay, and the debtor party agrees to
pay, an interest penalty on the amount past due calculated for each such payment on the last
business day of each month as follows:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The number of full days which have expired since the due date or the last monthly
calculation, whichever the lesser; times</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>1/365ths of the sum of 400 basis points plus the six-month United States Treasury
Bill rate as quoted in <I>The Wall Street Journal </I>on the first business day of the month for
which the calculation is made; times</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The amount past due, including accrued interest.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">It is agreed that interest shall accumulate until payment of the original amount due plus
interest penalties have been received by the Intermediary.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The establishment of the due date shall, for purposes of this Article, be determined as
follows:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As respects the payment of routine deposits and premiums due the Reinsurer, the due
date shall be as provided for in the applicable section of this Contract. In the event a
due date is not specifically stated for a given payment, it shall be deemed due 30&nbsp;days
after the date of transmittal by the Intermediary of the initial billing for each such
payment.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any claim or loss payment due the Company hereunder shall be deemed due 45&nbsp;days
after the proof of loss or demand for payment is transmitted to the Reinsurer. If such
loss or claim payment is not received within the 45&nbsp;days, interest will accrue on the</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 15
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>payment or amount overdue in accordance with paragraph B above, from the date the proof
of loss or demand for payment was transmitted to the Reinsurer.</TD>
</TR>


<TR valign="bottom" style="font-size: 6pt">
    <TD>&nbsp;</TD>
</TR>


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As respects any payment, adjustment or return due either party not otherwise
provided for in subparagraphs 1 and 2 of paragraph C above, the due date shall be as
provided for in the applicable section of this Contract. In the event a due date is not
specifically stated for a given payment, it shall be deemed due 10&nbsp;days following
transmittal of written notification that the provisions of this Article have been
invoked.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">For purposes of interest calculations only, amounts due hereunder shall be deemed paid upon
receipt by the Intermediary.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>



<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Nothing herein shall be construed as limiting or prohibiting a Subscribing Reinsurer from
contesting the validity of any claim, or from participating in the defense of any claim or
suit, or prohibiting either party from contesting the validity of any payment or from
initiating any arbitration or other proceeding in accordance with the provisions of this
Contract. If the debtor party prevails in an arbitration or other proceeding, then any
interest penalties due hereunder on the amount in dispute shall be null and void. If the
debtor party loses in such proceeding, then the interest penalty on the amount determined to
be due hereunder shall be calculated in accordance with the provisions set forth above unless
otherwise determined by such proceedings. If a debtor party advances payment of any amount it
is contesting, and proves to be correct in its contestation, either in whole or in part, the
other party shall reimburse the debtor party for any such excess payment made plus interest on
the excess amount calculated in accordance with this Article.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Interest penalties arising out of the application of this Article that are $100 or less from
any party shall be waived unless there is a pattern of late payments consisting of three or
more items over the course of any 12-month period.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XVII &#151; Offset (BRMA 36A)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company and the Reinsurer may offset any balance or amount due from one party to the other
under this Contract or any other contract heretofore or hereafter entered into between the Company
and the Reinsurer, whether acting as assuming reinsurer or ceding company. This provision shall
not be affected by the insolvency of either party to this Contract.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XVIII &#151; Access to Records (BRMA 1D)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Reinsurer or its designated representatives shall have access at any reasonable time to
all records of the Company which pertain in any way to this reinsurance.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XIX &#151; Liability of the Reinsurer</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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&#146;s policies and any endorsements thereon.</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 16
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XX &#151; Net Retained Lines (BRMA 32E)</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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, only loss or losses in respect of
that portion of any policy which the Company retains net for its own account shall be
included.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The amount of the Reinsurer&#146;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.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXI &#151; Errors and Omissions</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Except as provided in the Sunset Article, inadvertent delays, errors or omissions made in
connection with this Contract or any transaction hereunder shall not relieve either party from any
liability which would have attached had such delay, error or omission not occurred, provided always
that such error or omission is rectified as soon as possible after discovery.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXII &#151; Currency (BRMA 12A)</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Whenever the word &#147;Dollars&#148; or the &#147;$&#148; 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.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXIII &#151; Taxes (BRMA 50B)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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 or the District of Columbia.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXIV &#151; Federal Excise Tax</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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&nbsp;4371 of</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 17
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Internal Revenue Code) to the extent such premium is subject to the Federal Excise Tax.</TD>
</TR>


<TR valign="bottom" style="font-size: 6pt">
    <TD>&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXV &#151; Reserves and Letters of Credit</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#091;Applies only to a reinsurer which does not qualify for full credit with any insurance
regulatory authority having jurisdiction over the Company&#146;s reserves, which is or becomes rated
&#147;B&#043;&#043;&#148; or lower by A.M. Best (inclusive of &#147;Not Rated&#148; ratings) and/or Standard &#038; Poor&#146;s rating is
or becomes &#147;BBB&#043;&#148; or lower (inclusive of &#147;Not Rated&#148; ratings).&#093;
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As regards policies or bonds issued by the Company coming within the scope of this Contract,
the Company agrees that when it shall file with the insurance regulatory authority or set up
on its books reserves for losses covered hereunder which it shall be required by law to set
up, it will forward to the Reinsurer a statement showing the proportion of such reserves which
is applicable to the Reinsurer. The Reinsurer hereby agrees to fund such reserves in respect
of known outstanding losses that have been reported to the Reinsurer and allocated loss
adjustment expense relating thereto, losses and allocated loss adjustment expense paid by the
Company but not recovered from the Reinsurer, plus reserves for losses incurred but not
reported, as shown in the statement prepared by the Company (hereinafter referred to as
&#147;Reinsurer&#146;s Obligations&#148;) by funds withheld, cash advances or a Letter of Credit. The
Reinsurer shall have the option of determining the method of funding provided it is acceptable
to the insurance regulatory authorities having jurisdiction over the Company&#146;s reserves with
regards to unauthorized reinsurers; or, should the Reinsurer be downgraded, the method of
funding shall be mutually agreed.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>When funding by a Letter of Credit, the Reinsurer agrees to apply for and secure timely
delivery to the Company of a clean, irrevocable and unconditional Letter of Credit issued by a
bank meeting the NAIC Securities Valuation Office credit standards for issuers of Letters of
Credit and containing provisions acceptable to the insurance regulatory authorities having
jurisdiction over the Company&#146;s reserves in an amount equal to the Reinsurer&#146;s proportion of
said reserves. Such Letter of Credit shall be issued for a period of not less than one year,
and shall contain an &#147;evergreen&#148; clause, which automatically extends the term for one year
from its date of expiration or any future expiration date unless 30&nbsp;days (60&nbsp;days where
required by insurance regulatory authorities) prior to any expiration date the issuing bank
shall notify the Company by certified or registered mail that the issuing bank elects not to
consider the Letter of Credit extended for any additional period.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Reinsurer and Company agree that the Letters of Credit provided by the Reinsurer pursuant
to the provisions of this Contract may be drawn upon at any time, notwithstanding any other
provision of this Contract, and be utilized by the Company or any successor, by operation of
law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or
conservator of the Company for the following purposes, unless otherwise provided for in a
separate Trust Agreement:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To reimburse the Company for the Reinsurer&#146;s Obligations, the payment of which is
due under the terms of this Contract and which has not been otherwise paid;</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 18
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To make refund of any sum which is in excess of the actual amount required to pay
the Reinsurer&#146;s Obligations under this Contract, if so requested by the Reinsurer;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To fund an account with the Company for the Reinsurer&#146;s Obligations. Such cash
deposit shall be held in an interest bearing account separate from the Company&#146;s other
assets, and interest thereon not in excess of the prime rate shall accrue to the benefit
of the Reinsurer;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To pay the Reinsurer&#146;s share of any other amounts the Company claims are due under
this Contract.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual
amount required for subparagraphs 1 or 3, or in the case of subparagraph 4, the actual amount
determined to be due, the Company shall promptly return to the Reinsurer the excess amount so
drawn. All of the foregoing shall be applied without diminution because of insolvency on the
part of the Company or the Reinsurer.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The issuing bank shall have no responsibility whatsoever in connection with the propriety of
withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that
withdrawals are made only upon the order of properly authorized representatives of the
Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>At annual intervals, or more frequently as agreed but never more frequently than quarterly,
the Company shall prepare a specific statement of the Reinsurer&#146;s Obligations, for the sole
purpose of amending the Letter of Credit, in the following manner:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the statement shows that the Reinsurer&#146;s Obligations exceed the balance of
credit as of the statement date, the Reinsurer shall, within 30&nbsp;days after receipt of
notice of such excess, secure delivery to the Company of an amendment to the Letter of
Credit increasing the amount of credit by the amount of such difference.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If, however, the statement shows that the Reinsurer&#146;s Obligations are less than the
balance of credit as of the statement date, the Company shall, within 30&nbsp;days after
receipt of written request from the Reinsurer, release such excess credit by agreeing to
secure an amendment to the Letter of Credit reducing the amount of credit available by
the amount of such excess credit.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXVI &#151; Insolvency</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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 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 or bond reinsured 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</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 19
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>


<TR valign="bottom" style="font-size: 6pt">
    <TD>&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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 company.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It is further understood and agreed that, in the event of the insolvency of one or more of
the reinsured companies, the reinsurance under this Contract shall be payable directly by the
Reinsurer to the company or to its liquidator, receiver or statutory successor, except as
provided by Section 4118(a) of the New York Insurance Law or except (1)&nbsp;where this Contract
specifically provides another payee of such reinsurance in the event of the insolvency of the
company or (2)&nbsp;where the Reinsurer with the consent of the direct insured or insureds has
assumed such policy obligations of the company as direct obligations of the Reinsurer to the
payees under such policies and in substitution for the obligations of the company to such
payees.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXVII &#151; Arbitration (BRMA 6J)</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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&#146;s
London Underwriters. In the event that either party should fail to choose an Arbiter within
30&nbsp;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&nbsp;days following their
appointment, each Arbiter shall nominate three candidates within 10&nbsp;days thereafter, two of
whom the other shall decline, and the decision shall be made by drawing lots.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Each party shall present its case to the Arbiters within 30&nbsp;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.
Judgment upon the final decision of the Arbiters may be entered in any court of competent
jurisdiction.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 20
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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 in which the Company has its
principal office.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXVIII &#151; Service of Suit (BRMA 49C)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(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)
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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&#146;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.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXIX &#151; Entire Agreement</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXX &#151; Governing Law (BRMA 71B)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Contract shall be governed by and construed in accordance with the laws of the State of
Louisiana.
</DIV>


<P align="left" style="font-size: 10pt">Page 21
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXXI &#151; Agency Agreement</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If more than one reinsured company is named as a party to this Contract, the first named
company 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.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXXII &#151; Intermediary (BRMA 23A)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Benfield Inc. 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 Benfield Inc.
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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>In Witness Whereof</B>, the Company by its duly authorized representative has executed this Contract as
of the date undermentioned at:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">DeRidder,
Louisiana, this 18th day of May in the year 2006.
</DIV>





<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>

    <TD width="60%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="18%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>

<TD align="left" valign="top" style="font-size: 10pt; border-top: 0px solid #000000">/s/
Allan E. Farr</TD>

<TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 0px solid #000000">&nbsp;</DIV></TD>

<TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 0px solid #000000">&nbsp;</DIV></TD>
</TR>

<TR style="font-size:1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>


<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>

<TD align="left" valign="top" style="font-size: 10pt; border-top: 0px solid #000000">American Interstate Insurance Company
</TD>

<TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 0px solid #000000">&nbsp;</DIV></TD>

<TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 0px solid #000000">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">American Interstate Insurance Company of Texas</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Silver Oak Casualty, Inc.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">Page 22
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Nuclear Incident Exclusion Clause &#151; Liability &#151; Reinsurance (U.S.A.)</B><BR>
(Approved by Lloyd&#146;s Underwriters&#146; Fire and Non-Marine Association)
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This reinsurance does not cover any loss or liability accruing to the Reassured as a member
of, or subscriber to, any association of insurers or reinsurers formed for the purpose of
covering nuclear energy risks or as a direct or indirect reinsurer of any such member,
subscriber or association.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Without in any way restricting the operation of paragraph (1)&nbsp;of this Clause it is understood
and agreed that for all purposes of this reinsurance all the original policies of the
Reassured (new, renewal and replacement) of the classes specified in Clause II of this
paragraph (2)&nbsp;from the time specified in Clause III in this paragraph (2)&nbsp;shall be deemed to
include the following provision (specified as the Limited Exclusion Provision):</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>Limited Exclusion Provision.*</B>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">I.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It is agreed that the policy does not apply under any liability coverage, to</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 0pt; margin-left: 12%">(<I>injury, sickness, disease, death or destruction</I><BR>
(bodily injury or property damage
</DIV>

<DIV style="margin-top: 0pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>with respect to which an insured under the policy is also an insured
under a nuclear energy liability policy issued by Nuclear Energy
Liability Insurance Association, Mutual Atomic Energy Liability
Underwriters or Nuclear Insurance Association of Canada, or would be
an insured under any such policy but for its termination upon
exhaustion of its limit of liability.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">II.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Family Automobile Policies (liability only), Special Automobile
Policies (private passenger automobiles, liability only), Farmers
Comprehensive Personal Liability Policies (liability only),
Comprehensive Personal Liability Policies (liability only) or
policies of a similar nature; and the liability portion of
combination forms related to the four classes of policies stated
above, such as the Comprehensive Dwelling Policy and the applicable
types of Homeowners Policies.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">III.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The inception dates and thereafter of all original policies as
described in II above, whether new, renewal or replacement, being
policies which either</TD>
</TR>


<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;become effective on or after 1st May, 1960, or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;become effective before that date and contain the Limited Exclusion
Provision set out above;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>provided this paragraph (2)&nbsp;shall not be applicable to Family Automobile Policies, Special
Automobile Policies, or policies or combination policies of a similar nature, issued by
the Reassured on New York risks, until 90&nbsp;days following approval of the Limited Exclusion
Provision by the Governmental Authority having jurisdiction
thereof.</DIV></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Except for those classes of policies specified in Clause II of paragraph (2)&nbsp;and without in
any way restricting the operation of paragraph (1)&nbsp;of this Clause, it is understood and agreed
that for all purposes of this reinsurance the original liability policies of the Reassured
(new, renewal and replacement) affording the following coverages:</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">Owners,
Landlords and Tenants Liability, Contractual Liability, Elevator Liability, Owners or Contractors (including railroad) Protective Liability, Manufacturers and Contractors
Liability, Product Liability, Professional and Malpractice Liability, Storekeepers
Liability, Garage Liability, Automobile Liability (including Massachusetts Motor Vehicle
or Garage Liability)
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">shall be deemed to include, with respect to such coverages, from the time specified in Clause V
of this paragraph (3), the following provision (specified as the Broad Exclusion Provision):
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>Broad Exclusion Provision.*</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">It is agreed that the policy does not apply:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">I.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Under any Liability Coverage to</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 0pt; margin-left: 12%">(<I>injury, sickness, disease, death or destruction</I><BR>
(bodily injury or property damage
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>with respect to which an insured under the policy is also an insured under
a nuclear energy liability policy issued by Nuclear Energy Liability Insurance
Association, Mutual Atomic Energy Liability Underwriters or Nuclear Insurance
Association of Canada, or would be an insured under any such policy but for its
termination upon exhaustion of its limit of liability; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>resulting from the hazardous properties of nuclear material and with
respect to which (1)&nbsp;any person or organization is required to maintain financial
protection pursuant to the Atomic Energy Act of 1954, or any law amendatory thereof,
or (2)&nbsp;the insured is, or had this policy not been issued would be, entitled to
indemnity from the United States of America, or any agency thereof, under any
agreement entered into by the United States of America, or any agency thereof, with
any person or organization.</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">II.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Under any Medical Payments Coverage, or under any Supplementary Payments Provision relating to</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 0pt; margin-left: 12%">(<I>immediate medical or surgical relief</I><BR>
(first aid,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 0pt; margin-left: 8%">to expenses incurred with respect to
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 0pt; margin-left: 12%">(<I>bodily injury, sickness, disease or death</I><BR>
(bodily injury
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 0pt; margin-left: 8%">resulting from the hazardous properties of nuclear material and arising out of the operation of a nuclear facility by any
person or organization.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">III.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Under any Liability Coverage to</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 0pt; margin-left: 12%">(<I>injury, sickness, disease, death or destruction</I><BR>
(bodily injury or property damage
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 0pt; margin-left: 8%">resulting from the hazardous properties of nuclear material, if
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the nuclear material (1)&nbsp;is at any nuclear facility owned by, or operated
by or on behalf of, an insured or (2)&nbsp;has been discharged or dispersed therefrom;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the nuclear material is contained in spent fuel or waste at any time
possessed, handled, used, processed, stored, transported or disposed of by or on
behalf of an insured; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 0pt; margin-left: 15%">(<I>injury, sickness, disease, death or destruction</I><BR>
(bodily injury or property damage
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 12%">arises out of the furnishing by an insured of services, materials, parts or equipment in connection with the
planning, construction, maintenance, operation or use of any nuclear facility, but if such facility is located within the
United States of America, its territories, or possessions or Canada, this exclusion (c)&nbsp;applies only to
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 0pt; margin-left: 15%">(<I>injury to or destruction of property at such nuclear facility</I><BR>
(property damage to such nuclear facility and any property thereat.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">IV.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As used in this endorsement:
<BR>&#147;hazardous properties&#148; include radioactive, toxic or explosive properties; &#147;nuclear material&#148; means source material,
special nuclear material or byproduct material; &#147;source material&#148;, &#147;special nuclear material&#148;, and &#147;byproduct material&#148;
have the meanings given them in the Atomic Energy Act of 1954 or in any law amendatory thereof; &#147;spent fuel&#148; means any fuel
element or fuel component, solid or liquid, which has been used or exposed to radiation in a nuclear reactor; &#147;waste&#148; means
any waste material (1)&nbsp;containing byproduct material and (2)&nbsp;resulting from the operation by any person or organization of
any nuclear facility included within the definition of nuclear facility under paragraph (a)&nbsp;or (b)&nbsp;thereof; &#147;nuclear
facility&#148; means</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any nuclear reactor,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any equipment or device designed or used for (1)&nbsp;separating the isotopes of
uranium or plutonium, (2)&nbsp;processing or utilizing spent fuel, or (3)&nbsp;handling
processing or packaging waste,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any equipment or device used for the processing, fabricating or alloying of
special nuclear material if at any time the total amount of such material in the
custody of the insured at the premises where such equipment or device is located
consists of or contains more than 25 grams of plutonium or uranium 233 or any
combination thereof, or more than 250 grams of uranium 235,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any structure, basin, excavation, premises or place prepared or used for
the storage or disposal of waste, and includes the site on which any of the foregoing
is located, all operations conducted on such site and all premises used for such
operations; &#147;nuclear reactor&#148; means any apparatus designed or used to sustain nuclear
fission in a self-supporting chain reaction or to contain a critical mass of
fissionable material;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>(<I>With respect to injury to or destruction of property, the word &#147;injury&#148;
or &#147;destruction,&#148;</I></TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>(&#147;property damage&#148; includes all forms of radioactive contamination of property,<BR>
(<I>includes all forms of radioactive contamination of property.</I></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">V.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The inception dates and thereafter of all original policies affording coverages
specified in this paragraph (3), whether new, renewal or replacement, being policies
which become effective on or after 1st May, 1960, provided this paragraph (3)&nbsp;shall not
be applicable to</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Garage and Automobile Policies issued by the Reassured on New
York risks, or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="12%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>statutory liability insurance required under Chapter&nbsp;90,
General Laws of Massachusetts, until 90&nbsp;days following approval of the Broad
Exclusion Provision by the Governmental Authority having jurisdiction thereof.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Without in any way restricting the operation of paragraph (1)&nbsp;of this Clause, it is
understood and agreed that paragraphs (2)&nbsp;and (3)&nbsp;above are not applicable to original
liability policies of the Reassured in Canada and that with respect to such policies this
Clause shall be deemed to include the Nuclear Energy Liability Exclusion Provisions adopted by
the Canadian Underwriters&#146; Association or the Independent Insurance Conference of Canada.</TD>
</TR>

</TABLE>
</DIV>


<DIV style="width: 16%; border-bottom: 1px solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-top: 0pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">*NOTE.</TD>
    <TD>&nbsp;</TD>
    <TD><I>The words printed in italics in the Limited Exclusion Provision and in the Broad Exclusion
Provision shall apply only in relation to original liability policies which include a Limited
Exclusion Provision or a Broad Exclusion Provision containing those words.</I></TD>
</TR>
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">21/9/67<BR>N.M.A. 1590
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Third Casualty Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">issued to
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">

<TD nowrap align="left" style="border-bottom: 0px solid #000000"><DIV style="margin-left:140px; text-indent:-15px"><B>Reinsurers</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 0px solid #000000"><B>Participations</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Platinum Underwriters Reinsurance, Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">5.0</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Through Benfield Limited (Placement Only)</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">AXA RE</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7.0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Through Benfield Limited</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Lloyd&#146;s Underwriters and Companies
Per Signing Schedule(s)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">88.0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right"><B>100.0</B></TD>
    <TD nowrap><B>%</B></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Interests and Liabilities Agreement</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">of
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">Certain Underwriting Members of Lloyd&#146;s<BR>
shown in the Signing Schedule attached hereto<BR>
(<I>hereinafter referred to as the &#147;Subscribing Reinsurer&#148;</I>)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">with respect to the
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>Third Casualty Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">issued to and duly executed by
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer </I>hereby accepts a 68.0% share in the interests and liabilities of the
&#147;Reinsurer&#148; as set forth in the attached Contract captioned above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Agreement shall become effective at 12:01&nbsp;a.m., Local Standard Time, January&nbsp;1, 2006, and
shall continue in force until terminated in accordance with the provisions of the attached
Contract.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer&#146;s </I>share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the <I>Subscribing Reinsurer </I>shall in no event participate in the interests and
liabilities of the other reinsurers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In any action, suit or proceeding to enforce the <I>Subscribing Reinsurer&#146;s </I>obligations under the
attached Contract, service of process may be made upon Mendes &#038; Mount, 750 Seventh Avenue, New
York, New York 10019.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Signed for and on behalf of the <I>Subscribing Reinsurer </I>in the Signing Schedule attached hereto.
</DIV>


<P align="left" style="font-size: 10pt">&nbsp;
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>



<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Interests and Liabilities Agreement</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">of
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">AXA RE<BR>
Paris, France<BR>
(<I>hereinafter referred to as the &#147;Subscribing Reinsurer&#148;</I>)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">with respect to the
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>Third Casualty Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">issued to and duly executed by
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer </I>hereby accepts a 7.0% share in the interests and liabilities of the
&#147;Reinsurer&#148; as set forth in the attached Contract captioned above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Agreement shall become effective at 12:01&nbsp;a.m., Local Standard Time, January&nbsp;1, 2006, and
shall continue in force until terminated in accordance with the provisions of the attached
Contract.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer&#146;s </I>share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the <I>Subscribing Reinsurer </I>shall in no event participate in the interests and
liabilities of the other reinsurers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>In Witness Whereof</B>, the <I>Subscribing Reinsurer </I>by its duly authorized representative has executed
this Agreement as of the date undermentioned at:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Paris, France, this
<FONT style="border-bottom: 1px solid #000000; width: 15%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21st</FONT>  day of
<FONT style="border-bottom: 1px solid #000000; width: 25%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;June</FONT>
in the year
<FONT style="border-bottom: 1px solid #000000; width: 15%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2006</FONT>.
</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="87%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>/s/ Allison Janisch</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">AXA RE</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Interests and Liabilities Agreement</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">of
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">Certain Insurance Companies<BR>
shown in the Signing Schedule(s) attached hereto<BR>
(<I>hereinafter referred to as the &#147;Subscribing Reinsurer&#148;</I>)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">with respect to the
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>Third Casualty Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">issued to and duly executed by
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer </I>hereby accepts a 20.0% share in the interests and liabilities of the
&#147;Reinsurer&#148; as set forth in the attached Contract captioned above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Agreement shall become effective at 12:01&nbsp;a.m., Local Standard Time, January&nbsp;1, 2006, and
shall continue in force until terminated in accordance with the provisions of the attached
Contract.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer&#146;s </I>share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the <I>Subscribing Reinsurer </I>shall in no event participate in the interests and
liabilities of the other reinsurers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In any action, suit or proceeding to enforce the <I>Subscribing Reinsurer&#146;s </I>obligations under the
attached Contract, service of process may be made upon Mendes &#038; Mount, 750 Seventh Avenue, New
York, New York 10019.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Signed for and on behalf of the <I>Subscribing Reinsurer </I>in the Signing Schedule(s) attached hereto.
</DIV>


<P align="left" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Interests and Liabilities Agreement</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">of
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">Platinum Underwriters Reinsurance, Inc.<BR>
Baltimore, Maryland<BR>
(<I>hereinafter referred to as the &#147;Subscribing Reinsurer&#148;</I>)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">with respect to the
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>Third Casualty Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">issued to and duly executed by
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer </I>hereby accepts a 5.0% share in the interests and liabilities of the
&#147;Reinsurer&#148; as set forth in the attached Contract captioned above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Agreement shall become effective at 12:01&nbsp;a.m., Local Standard Time, January&nbsp;1, 2006, and
shall continue in force until terminated in accordance with the provisions of the attached
Contract.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer&#146;s </I>share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the <I>Subscribing Reinsurer </I>shall in no event participate in the interests and
liabilities of the other reinsurers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>In Witness Whereof</B>, the <I>Subscribing Reinsurer </I>by its duly authorized representative has executed
this Agreement as of the date undermentioned at:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">New York, New York, this
<FONT style="border-bottom: 1px solid #000000; width: 15%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8th</FONT>  day of
<FONT style="border-bottom: 1px solid #000000; width: 25%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;June</FONT>
in the year
<FONT style="border-bottom: 1px solid #000000; width: 15%">&nbsp;2006</FONT>.
</DIV>





<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="73%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>/s/ Jeffrey Gearheart</TD>
</TR>
<TR style="font-size:1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>


<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>

<TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 0px solid #000000">&nbsp;</DIV>
Platinum Underwriters Reinsurance, Inc.
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>


</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>5
<FILENAME>d38372exv10w4.htm
<DESCRIPTION>WORKERS' COMPENSATION PER PERSON EXCESS OF LOSS REINSURANCE CONTRACT
<TEXT>
<HTML>
<HEAD>
<TITLE>exv10w4</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: Helvetica,Arial,sans-serif">



<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit&nbsp;10.4
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Workers&#146;
Compensation<BR> Per Person Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">issued to
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Table of Contents</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="86%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left"><B>Article</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Page</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">I
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Classes of Business Reinsured
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">II
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Commencement and Termination
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">III
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Territory (BRMA 51A)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">IV
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Exclusions
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">V
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Special Acceptances
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">7</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">VI
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Retention and Limit
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">7</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">VII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Reinstatement
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">7</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">VIII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Definitions
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">8</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">IX
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Annuities at Company&#146;s Option
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">10</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">X
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Claims
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">11</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XI
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Sunset
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">11</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Commutation
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">11</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XIII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Special Commutation
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">12</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XIV
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Salvage and Subrogation
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">14</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XV
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Federal Terrorism Coverage
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">14</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XVI
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Reinsurance Premium
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">14</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XVII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Late Payments
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">15</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XVIII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Offset (brma 36A)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">16</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XIX
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Access to Records (brma 1D)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">16</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XX
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Liability of the Reinsurer
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">17</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXI
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Net Retained Lines (brma 32E)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">17</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Errors and Omissions
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">17</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXIII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Currency (brma 12A)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">17</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXIV
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Taxes (brma 50B)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">17</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXV
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Federal Excise Tax
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">18</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXVI
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Reserves and Letters of Credit
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">18</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXVII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Insolvency
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">19</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXVIII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Arbitration (brma 6J)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">21</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXIX
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Service of Suit (brma 49C)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">21</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXX
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Entire Agreement
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">21</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXXI
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Governing Law (brma 71B)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">22</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXXII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Agency Agreement
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">22</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXXIII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Intermediary (brma 23A)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">22</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Workers&#146;
Compensation<BR>Per Person Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">issued to
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group<BR>
(<I>hereinafter referred to collectively as the </I>&#147;Company&#148;)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">by
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">The Subscribing Reinsurer(s) Executing the<BR>
Interests and Liabilities Agreement(s)<BR>
Attached Hereto<BR>
(<I>hereinafter referred to as the </I>&#147;Reinsurer&#148;)
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;I &#151; Classes of Business Reinsured</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">By this Contract the Reinsurer agrees to reinsure the excess liability which may accrue to the
Company under its policies, contracts and binders of insurance or reinsurance (hereinafter called
&#147;policies&#148;) in force at the effective date hereof or issued or renewed on or after that date, and
classified by the Company as Workers&#146; Compensation business, including coverage
provided under the U.S. Longshore and Harbor Workers&#146;
Compensation Act and the Jones Act, subject to the terms, conditions and limitations hereinafter set forth.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;II &#151; Commencement and Termination</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This Contract shall become effective at 12:01&nbsp;a.m., Local Standard Time, January&nbsp;1, 2006,
with respect to losses arising out of occurrences commencing at or after that time and date,
and shall continue in force thereafter until terminated.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Either party may terminate this Contract at 12:01&nbsp;a.m., Local Standard Time on any January 1
by giving the other party not less than 90&nbsp;days prior notice by certified or registered mail.</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 1
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Notwithstanding the provisions of paragraph B above, the Company may terminate a Subscribing
Reinsurer&#146;s percentage share in this Contract in the event any of the following circumstances
occur as clarified by public announcement for subparagraphs 1 through 6 below and upon
discovery for subparagraphs 7 and 8 below. The Company has 120&nbsp;days from the date of
applicable public announcement or discovery to exercise the option to terminate a Subscribing
Reinsurer&#146;s percentage share in this Contract. The effective date of special termination
shall not be sooner than one day after the Company provides the Subscribing Reinsurer notice
of its election to specially terminate, unless mutually agreed otherwise:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer&#146;s policyholders&#146; surplus at the beginning of any contract
year has been reduced by more than 20.0% of the amount of surplus 12&nbsp;months prior to that
date; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer&#146;s policyholders&#146; surplus at any time during any contract
year has been reduced by more than 20.0% of the amount of surplus at the date of the
Subscribing Reinsurer&#146;s most recent financial statement filed with regulatory authorities
and available to the public as of the beginning of the contract year; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer&#146;s A.M. Best&#146;s rating has been assigned or downgraded
below A- (inclusive of &#147;Not Rated&#148; ratings) and/or Standard &#038; Poor&#146;s rating has been
assigned or downgraded below BBB&#043; (inclusive of &#147;Not Rated&#148; ratings); or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer has become merged with, acquired by or controlled by any
other company, corporation or individual(s) not controlling the Subscribing Reinsurer&#146;s
operations previously; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A State Insurance Department or other legal authority has ordered the Subscribing
Reinsurer to cease writing business; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">6.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">7.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer has reinsured its entire liability under this Contract
without the Company&#146;s prior written consent; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">8.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer has ceased assuming new and renewal treaty reinsurance
business.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Unless the Company elects that the Reinsurer have no liability for losses arising out of
occurrences commencing after the effective date of termination, and so notifies the Reinsurer
prior to or as promptly as possible after the effective date of termination, reinsurance
hereunder on business in force on the effective date of termination shall remain in full force
and effect until expiration, cancellation or next premium anniversary of such business,
whichever first occurs, but in no event beyond 12&nbsp;months plus odd time (not exceeding 18
months in all) following the effective date of termination.</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 2
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;III &#151; Territory (BRMA 51A)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The territorial limits of this Contract shall be identical with those of the Company&#146;s
policies.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;IV &#151; Exclusions</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This Contract does not apply to and specifically excludes the following:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Lines of business not identified in the Classes of Business Reinsured Article.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All excess of loss reinsurance assumed by the Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Reinsurance assumed by the Company under obligatory reinsurance agreements, except:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Agency reinsurance where the policies involved are to be reunderwritten
in accordance with the underwriting standards of the Company and reissued as Company
policies at the next anniversary or expiration date; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Intercompany reinsurance between any of the reinsured companies under
this Contract.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Business written by the Company on a co-indemnity basis where the Company is not
the controlling carrier.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Business written to apply in excess of a deductible of more than $25,000, and
business issued to apply specifically in excess over underlying insurance. However, if
the Company is required, by any state regulation, to provide a deductible of more than
$25,000, this exclusion shall not apply.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">6.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Nuclear risks as defined in the &#147;Nuclear Incident
Exclusion Clause &#151; Liability &#151;
Reinsurance (U.S.A.)&#148; attached to and forming part of this Contract.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">7.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As regards interests which at time of loss or damage are on shore, no liability
shall attach hereto in respect of any loss or damage which is occasioned by 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. This War Exclusion Clause shall not, however, apply to interests which
at time of loss or damage are within the territorial limits of the United States of
America (comprising the Fifty States of the Union, the District of Columbia, and
including bridges between the United States of America and Mexico provided they are under
United States ownership), Canada, St. Pierre and Miquelon, provided such interests are
insured under policies containing a standard war or hostilities or warlike operations
exclusion clause.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">8.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Liability as a member, subscriber or reinsurer of any Pool, Syndicate or
Association, but this exclusion shall not apply to Assigned Risk Plans or similar plans.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">9.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.
</TD>
</TR>
</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 3
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Insolvency fund&#148; 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.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">10.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Workers&#146; Compensation where the principal exposures, as defined by the governing
class code, include:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Operation of aircraft, but only if the annual estimated policy premium is
$250,000 or more;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Railroad, subway or street railway operations;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Operation or navigation of vessels or barges;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Manufacture, production or refining of gas, natural or artificial fuel,
or other liquefied petroleum fuel, but only if the annual estimated policy premium
is $250,000 or more;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">e.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Manufacturing, assembly, packing or processing of fireworks, fuses,
nitroglycerine, magnesium, pyroxylin, ammunition or explosives. This exclusion does
not apply to the assembly, packing or processing of explosives when the estimated
annual premium is under $250,000;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">f.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Wrecking or demolition of structures, but only if the annual estimated
policy premium is $250,000 or more;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">g.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Underground mining.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">11.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Unless otherwise
excluded as set forth above, the reinsurance provided under this Contract shall not apply
to any loss, cost or expense arising out of or related to, either directly or indirectly,
any &#147;terrorist activity,&#148; as defined herein, but this exclusion shall only apply when the
activity includes, involves or is associated with the use of any biological, chemical,
radioactive or nuclear agent, material, device or weapon, or when the predominant business
of the policyholder, as defined by the governing class code, is:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The operation of: airports and aircraft; flight schools; bridges, dams,
tunnels or locks; department stores; shopping malls; chain retail stores; casinos
and casino hotels; cruise lines; railroads; ports/public transit authorities;
security services; stadiums; convention/exhibition centers; or theme/amusement
parks;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The manufacture and distribution of: automobiles; chemicals,
petrochemicals or pharmaceuticals; utilities (electric, gas, water and sewer); major
defense/aerospace products; or high-tech equipment, but only if the policyholder
employs more than 20 personnel at the location of a terrorist activity at the time
of its occurrence;</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 4
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The management or operation of the following type of structures, but only
if greater than 25 stories in height: apartments/condominiums/co-ops;
hotels/motels; or office buildings;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Businesses primarily engaged in the entertainment, media or
transportation industry limited to the following: major media providers (NBC, FOX,
ABC, CBS, etc.); television and motion picture studios; Broadway theaters; major
internet companies (AOL, Yahoo, etc.); professional sports teams; major
telecommunications companies (AT&#038;T, WorldCom/MCI, etc.); national truck rental
companies (Ryder, Penske, U-Haul, etc.); or major national motor freight common
carriers (J.B. Hunt, Red Arrow, etc.);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">e.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Policyholders primarily located in, or predominantly doing business as:
hospitals; universities; nuclear facilities; financial institutions; or governmental
buildings and national landmarks.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Terrorist activity&#148; shall mean any deliberate, unlawful act that:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Is declared by any authorized government official to be or to involve
terrorism, terrorist activity or acts of terrorism; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Includes, involves or is associated with the use or threatened use of
force, violence or harm against any person, tangible or intangible property, the
environment, or any natural resources, where the act or threatened act is intended,
in whole or in part, to:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">i.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Promote or further any political, ideological, philosophical,
racial, ethnic, social or religious cause or objective of the perpetrator or
any organization, association or group affiliated with the perpetrator; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">ii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Influence, disrupt or interfere with any government related
operations, activities or policies; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Intimidate, coerce or frighten the general public or any segment of
the general public; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iv.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Disrupt or interfere with a national economy or any segment of a
national economy; or</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Includes, involves, or is associated with, in whole or in part, any of
the following activities, or the threat thereof:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">i.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Hijacking or sabotage of any form of transportation or
conveyance, including but not limited to spacecraft, satellite, aircraft,
train, vessel or motor vehicle;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">ii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Hostage taking or kidnapping;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The use of any bomb, incendiary device, explosive or firearm;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iv.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The interference with or disruption of basic public or commercial
services and systems, including but not limited to the following
services or systems:</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 5
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>electricity, natural gas, power, postal, communications, telecommunications,
information, public transportation, water, fuel, sewer or waste disposal;</TD>
</TR>

<TR valign="bottom" style="font-size: 6pt">
    <TD>&nbsp;</TD>
</TR>


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">v.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The injuring or assassination of any elected or appointed
government official or any government employee;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">vi.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The seizure, blockage, interference with, disruption of, or
damage to any government buildings, institutions, functions, events, tangible
or intangible property or other assets; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="7%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">vii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The seizure, blockage, interference with, disruption of, or
damage to tunnels, roads, streets, highways, or other places of public
transportation or conveyance.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any of the activities listed in subparagraph c, above, shall be
considered terrorist activity, except where the Company can demonstrate to the
Reinsurer that the foregoing activities or threats thereof were motivated solely by
personal objectives of the perpetrator that are unrelated, in whole or in part, to
any intention to:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="7%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">i.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Promote or further any political, ideological, philosophical,
racial, ethnic, social or religious cause or objective of the perpetrator or
any organization, association or group affiliated with the perpetrator;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">ii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Influence, disrupt or interfere with any government-related
operations, activities or policies;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Intimidate, coerce or frighten the general public or any segment of
the general public; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iv.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Disrupt or interfere with a national economy or any segment of a
national economy.</TD>
</TR>

</TABLE>
</DIV>

<P align="left" style="font-size: 10pt">Page 6
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any exclusion set forth in subparagraph 10 of paragraph A shall be waived
automatically when, in the opinion of the Company, the exposure excluded therein is incidental
to the principal exposure on the risk in question.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the Company is bound, without the knowledge and contrary to the instructions of the
Company&#146;s supervisory underwriting personnel, on any business falling within the scope of one
or more of the exclusions set forth in subparagraph 10 of paragraph A, the
exclusion shall be suspended with respect to such business until the Company has the first
opportunity to cancel the policy in compliance with governmental requirements.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the Company is required to accept an assigned risk which conflicts with one or more of the
exclusions set forth in subparagraph 10 of paragraph A, reinsurance shall apply, but only for
the difference between the Company&#146;s retention and the minimum limit required by the
applicable state statute, and in no event shall the Reinsurer&#146;s liability exceed the limit set
forth in the Retention and Limit Article.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;V &#151; Special Acceptances</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">From time to time the Company may request a special acceptance of reinsurance falling outside
the scope of the provisions set forth in this Contract. If each Subscribing Reinsurer whose share in the interests and liabilities of the Reinsurer is
20.0% or greater agrees to a special acceptance, such special acceptance shall be binding on all
Subscribing Reinsurers with respect to their respective shares. In the event
agreement is not achieved, such special acceptance shall be made to this
Contract only with respect to the interests and liabilities of each Subscribing Reinsurer who agrees to such special acceptance. In the event a reinsurer becomes a party to
this Contract subsequent to one or more special acceptances hereunder, the new reinsurer shall
automatically accept such special acceptance(s) as being covered hereunder.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;VI &#151; Retention and Limit</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall retain and be liable for the first $5,000,000 of ultimate net loss as
respects each person, each occurrence. The Reinsurer shall then be liable for the amount by
which such ultimate net loss exceeds the Company&#146;s retention, but the liability of the
Reinsurer shall not exceed $5,000,000 as respects each person, each occurrence.</TD>
</TR>

</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event that a loss is recoverable under this Contract and under the Company&#146;s Third
Casualty Excess of Loss Reinsurance Contract or Casualty Catastrophe Excess of Loss Reinsurance Contract,
both effective January 1, 2006, the Company shall be the sole judge in effecting recovery under any one or
more of the aforementioned contracts, including this Contract.  However, in no event shall this be construed to
mean that the Company may recover an amount from the Reinsurer which exceeds the total amount for any one
loss, subject to the provisions of the applicable contract(s).
</TD>
</TR>

</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall be permitted to carry excess of loss and quota share 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.</TD>
</TR>
</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall be permitted to carry excess of loss reinsurance applying to Workers&#146;
Compensation risks in the State of Minnesota, recoveries under which shall inure to the
benefit of this Contract.
</TD>
</TR>
</TABLE>
</DIV>

<P align="left" style="font-size: 10pt">Page 7
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Such coverage shall be provided through the Minnesota Workers&#146; Compensation Reinsurance
Association. It is understood that the liability of the Reinsurer for Minnesota Workers&#146;
Compensation risks is not released.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event the Company accrues liability that is not provided by any inuring reinsurance, for
whatever reason, the Reinsurer agrees to reinsure such excess liability.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;VII &#151; Reinstatement</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event all or any portion of the reinsurance hereunder is exhausted by loss, the
amount so exhausted shall be reinstated immediately from the time the occurrence commences
hereon. For each amount so reinstated the Company agrees to pay additional premium equal to
the product of the following:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The percentage of the occurrence limit reinstated (based on the loss paid by the
Reinsurer); times</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The earned reinsurance premium for the contract year (exclusive of reinstatement
premium).</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Whenever the Company requests payment by the Reinsurer of any loss hereunder, the Company
shall submit a statement to the Reinsurer of reinstatement premium due the Reinsurer. If the
earned reinsurance premium for the contract year has not been finally determined as of the
date of any such statement, the calculation of reinstatement premium due shall be based on the
annual deposit premium and shall be readjusted when the earned reinsurance premium for the
contract year has been finally determined. Any reinstatement premium shown to be due the
Reinsurer as reflected by any such statement (less prior payments, if any) shall be payable by
the Company concurrently with payment by the Reinsurer of the requested loss. 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&#146;s statement.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Notwithstanding anything stated herein, the liability of the Reinsurer hereunder shall not
exceed $5,000,000 as respects each person, each occurrence, nor shall it exceed $10,000,000 in
all during the contract year.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event this Contract is terminated on a runoff basis, additional reinstatement coverage
shall be negotiated on or prior to the effective date of termination.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;VIII &#151; Definitions</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Ultimate net loss&#148; as used herein is defined as the sum or sums (including loss in excess
of policy limits, extra contractual obligations and any 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.
Nothing herein shall be construed to mean that losses under this Contract are not recoverable
until the Company&#146;s ultimate net loss has been ascertained.</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 8
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Loss in excess of policy limits&#148; and &#147;extra contractual obligations&#148; as used herein shall be
defined as follows:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Loss in excess of policy limits&#148; shall mean 90.0% of any amount paid or payable by
the Company in excess of its policy limits, but otherwise within the terms of its policy,
such loss in excess of the Company&#146;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&#146;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 reinsured or in the preparation or prosecution of an appeal consequent upon
such an action.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Extra contractual obligations&#148; shall mean 90.0% 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&#146;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 reinsured or in the preparation or prosecution of an appeal consequent upon
such an action. 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.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD colspan="3">If any provision of this Article 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.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD colspan="3">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.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Occurrence&#148; as used herein is defined as an accident or occurrence or a series of accidents
or occurrences arising out of or caused by one event, except that:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Each occupational or industrial disease case or cumulative trauma case contracted
by an employee of an insured shall be deemed to have been caused by a separate
occurrence, commencing on:</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 9
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The date of disability for which compensation is payable if the case is
compensable under the Workers&#146; Compensation Law;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The date disability due to the disease actually began if the case is not
compensable under the Workers&#146; Compensation Law;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The date of cessation of employment if claim is made after employment has
ceased.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Notwithstanding the provisions of subparagraph 2 above, as respects losses
resulting from occupational or industrial disease or cumulative trauma suffered by
employees of an insured for which the employer is liable, as a result of a sudden and
accidental event not exceeding 72 hours in duration, all such losses shall be considered
one occurrence and may be combined with losses classified as other than occupational or
industrial disease or cumulative trauma which arise out of the same event and the
combination of such losses shall be considered as one occurrence within the meaning
hereof.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Occupational or industrial disease&#148; is any abnormal condition that fulfills all of the
following conditions:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It is not traceable to a definite compensable accident occurring during the
employee&#146;s past or present employment.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It has been caused by exposure to a disease producing agent or agents present in
the workers&#146; occupational environment.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It has resulted in disability or death.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Cumulative trauma&#148; is an injury that fulfills all of the following conditions:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It is not traceable to a definite compensable accident occurring during the
employee&#146;s past or present employment.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It has occurred from and has been aggravated by a repetitive employment related
activity.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It has resulted in disability or death.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">F.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Loss adjustment expense&#148; as used herein shall mean expenses allocable to the investigation,
defense and/or settlement of specific claims, including litigation expenses, interest on
judgments, declaratory judgment expenses or other legal expenses and costs incurred in
connection with coverage questions and legal actions connected thereto, and salaries and
expenses of salaried adjusters associated with claims covered under policies of the Company
reinsured hereunder but not including office expenses or salaries of the Company&#146;s regular
employees.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">G.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Contract year&#148; as used in this Contract shall mean the period from  12:01 a.m., Local Standard Time, January&nbsp;1, 2006 to
12:01 a.m., Local Standard Time, January 1, 2007, both days inclusive, and each respective 12-month period thereafter that
this Contract continues in force. However, if this Contract is terminated on a &#147;cutoff&#148;
basis, the final contract year shall be from the beginning of the then current contract year</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 10
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>through the effective date of termination. If this Contract is terminated on a &#147;runoff&#148; basis,
the period from the effective date of termination through the end of the &#147;runoff&#148; period shall
be a separate contract year and referred to as the &#147;runoff contract year.&#148;</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;IX &#151; Annuities at Company&#146;s Option</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Whenever the Company is required, or elects, to purchase an annuity or to negotiate a
structured settlement, either in satisfaction of a judgment or in an out-of-court settlement
or otherwise, the cost of the annuity or the structured settlement, as the case may be, shall
be deemed part of the Company&#146;s ultimate net loss.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The terms &#147;annuity&#148; or &#147;structured settlement&#148; shall be understood to mean any insurance
policy, lump sum payment, agreement or device of whatever nature resulting in the payment of a
lump sum by the Company in settlement of any or all future liabilities which may attach to it
as a result of an occurrence.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event the Company purchases an annuity which inures in whole or in part to the benefit
of the Reinsurer, it is understood that the liability of the Reinsurer is not released
thereby. In the event the Company is required to provide benefits not provided by the annuity
for whatever reason, the Reinsurer shall pay its share of any loss.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;X &#151; Claims</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Whenever a claim is reserved by the Company for an amount greater than 50.0% of its
retention hereunder and/or whenever a claim appears likely to result in a claim under this
Contract, the Company shall notify the Reinsurer. Further, the Company shall notify the
Reinsurer whenever a claim involves a fatality, major limb amputation, spinal cord damage,
brain damage, blindness or extensive burns, regardless of liability, if the policy limits or
statutory benefits applicable to the claim are greater than the Company&#146;s retention hereunder.
The Reinsurer shall have the right to participate, at its own expense, in the defense of any
claim or suit or proceeding involving this reinsurance.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All claim settlements made by the Company, provided they are within the terms of this
Contract (including but not limited to ex-gratia payments), shall be binding upon the
Reinsurer, and the Reinsurer agrees to pay all amounts for which it may be liable upon receipt
of satisfactory evidence of the amount paid by the Company.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XI &#151; Sunset</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Five years after the effective date of termination of this Contract (or after the end of the
runoff period, if applicable), the Company shall advise the Reinsurer of any outstanding claims
and/or occurrences (each hereinafter referred to as a &#147;claim&#148;) arising during any contract year,
which have not been finally settled and which may cause a recovery under this Contract. Unless
mutually agreed, no liability shall attach hereunder for any claim not reported to the Reinsurer
within 90&nbsp;days following the five-year period.
</DIV>


<P align="left" style="font-size: 10pt">Page 11
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XII &#151; Commutation</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As mutually agreed, the Company may commute the contract year.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Unless otherwise mutually agreed, the calculation for the commutation shall be calculated in
accordance with the following formula:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The net reinsurance premium earned  for the contract year; less</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Reinsurer&#146;s paid losses and loss adjustment expense on losses arising out of
occurrences commencing during the contract year; less</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Reinsurer&#146;s margin at 25.0% of the net reinsurance premium earned for the contract
year; equals</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company&#146;s net profit.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Payment to the Company of the Company&#146;s net profit will result in a full and final
commutation of all known and unknown losses and shall constitute a complete and final release
of the Reinsurer and the Company in respect of any and all liabilities on business covered
under this Contract during the contract year commuted.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Should the calculation be zero or negative, no payment shall be made and the Company shall
have the option to provide a full and final commutation of all known and unknown losses, which
shall constitute a complete and final release of the Reinsurer and the Company with respect to
any and all liabilities on business covered under this Contract during the contract year
commuted.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XIII &#151; Special Commutation</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event a Subscribing Reinsurer meets the following conditions, the Company may
require a commutation of that portion of any excess loss hereunder represented by any
outstanding claim or claims, including any related loss adjustment expense.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer&#146;s A.M. Best&#146;s rating has been assigned or downgraded
below A- (inclusive of &#147;Not Rated&#148; ratings) and/or Standard &#038; Poor&#146;s rating has been
assigned or downgraded below BBB&#043; (inclusive of &#147;Not Rated&#148; ratings); or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer has ceased assuming new and renewal property and casualty
treaty reinsurance business.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Outstanding claim or claims&#148; shall be defined as known or unknown claims, including any billed
yet unpaid claims. However, unless otherwise mutually agreed, this paragraph shall not apply
unless the outstanding claim or claims is for an amount not less than $5,000.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the Company elects to require commutation as provided in paragraph A above, the Company
shall submit a Statement of Valuation of the outstanding claim or claims as of the last day of
the month immediately preceding the month in which the Company elects to</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 12
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>require commutation, as determined by the Company. Such Statement of Valuation shall include
the elements considered reasonable to establish the excess loss and shall set forth or attach
the information relied upon by the Company and the methodology employed to calculate the excess
loss. The Subscribing Reinsurer shall then pay the amount requested within 30 calendar days of
receipt of such Statement of Valuation, unless the Subscribing Reinsurer needs additional
information from the Company to assess the Company&#146;s Statement of Valuation or contests such
amount.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the Subscribing Reinsurer needs additional information from the Company to assess the
Company&#146;s Statement of Valuation or contests the amount requested, the Subscribing Reinsurer
shall so notify the Company within 15 calendar days of receipt of the Company&#146;s Statement of
Valuation. The Company shall supply any reasonably requested information to the Subscribing
Reinsurer within 15 calendar days of receipt of the notification. Within 30 calendar days of
the date of the notification or of the receipt of the information, whichever is later, the
Subscribing Reinsurer shall provide the Company with its Statement of Valuation of the
outstanding claim or claims as of the last day of the month immediately preceding the month in
which the Company elects to require commutation, as determined by the Subscribing Reinsurer.
Such Statement of Valuation shall include the elements considered reasonable to establish the
excess loss and shall set forth or attach the information relied upon by the Subscribing
Reinsurer and the methodology employed to calculate the excess loss.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event the Subscribing Reinsurer&#146;s Statement of Valuation of the outstanding claim or
claims is viewed as unacceptable to the Company, the Company may either abandon the
commutation effort, or may seek to settle any difference by using an independent actuary
agreed to by the parties.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the parties cannot agree on an acceptable independent actuary within 15 calendar days of
the date of the Subscribing Reinsurer&#146;s Statement of Valuation, then each party shall appoint
an actuary as party arbitrators for the limited and sole purpose of selecting an independent
actuary. If the actuaries cannot agree on an acceptable independent actuary within 15
calendar days of the date of the Subscribing Reinsurer&#146;s Statement of Valuation, the Company
shall supply the Subscribing Reinsurer with a list of at least three proposed independent
actuaries, and the Subscribing Reinsurer shall select the independent actuary from that list.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">F.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Upon selection of the independent actuary, both parties shall present their respective
written submissions to the independent actuary. The independent actuary may, at his or her
discretion, request additional information. The independent actuary shall issue his or her
decision within 45 calendar days after the written submissions have been filed and any
additional information has been provided.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">G.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The decision of the independent actuary shall be final and binding. The expense of the
independent actuary shall be equally divided between the two parties. For the purposes of
this Article, unless mutually agreed otherwise, an &#147;independent actuary&#148; shall be an actuary
who satisfies each of the following criteria:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Is regularly engaged in the valuation of claims resulting from lines of business
subject to this Contract; and</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 13
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Is either a Fellow of the Casualty Actuarial Society or of the American Academy of
Actuaries; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Is disinterested and impartial regarding this commutation.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">H.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Notwithstanding paragraph A, B and C above, in the event that the Subscribing Reinsurer no
longer meets the conditions set forth in subparagraph 1 or 2 in paragraph A above, this
commutation may continue on a mutually agreed basis.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">I.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Payment by the Subscribing Reinsurer of the amount requested in accordance with paragraph B,
C or F above, shall release the Subscribing Reinsurer from all further liability for
outstanding claim or claims, known or unknown, under this Contract, which shall release the
Company from all further liability for payments of salvage or subrogation amounts, known or
unknown, to the Subscribing Reinsurer under this Contract.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">J.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event of any conflict between this Article and any other Article of this Contract, the
terms of this Article shall control.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">K.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This Article shall survive the termination of this Contract.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XIV &#151; Salvage and Subrogation</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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) or
subrogation on account of claims and settlements involving reinsurance hereunder. Salvage or
subrogation 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 where it is economically reasonable in the judgment of the Company, relating to any
loss, a part of which loss was sustained by the Reinsurer, and to prosecute all claims arising out
of such rights.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XV &#151; Federal Terrorism Coverage</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Except as provided in paragraphs B and C below, any loss reimbursement the Company receives
from the United States Government under the Terrorism Risk Insurance Act of 2002, as amended
by the Terrorism Risk Insurance Extension Act of 2005 (together the &#147;Terrorism Act&#148;) as a
result of loss occurrences commencing during the term of this Contract shall inure solely to
the benefit of the Company and shall be entirely disregarded in applying all of the provisions
of this Contract.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If one or more loss occurrences commencing during the term of this Contract result(s) in
recoveries made by the Company for insured losses (as defined in the Terrorism Act) under this
Contract <U>and</U> under the Terrorism Act, and such recoveries, together with any other
reinsurance recoveries made by the Company for insured losses applicable to said loss
occurrence(s), exceed the total amount of insured losses, a percentage of any amount in excess
thereof shall reduce the ultimate net loss subject to this Contract for the loss</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 14
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>occurrence(s) to which the recoveries apply. The Company shall determine how such percentage
is calculated.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>For purposes hereof, if a loss reimbursement received by the Company under the Terrorism Act
is based on the Company&#146;s insured losses in more than one loss occurrence and the United
States Government does not designate the amount allocable to each loss occurrence, the
reimbursement shall be determined by the Company and in accordance with paragraph B above.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XVI &#151; Reinsurance Premium</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As premium for the reinsurance provided hereunder during each contract year (except the
runoff contract year, if any), the Company shall pay the Reinsurer 0.536% of its net earned
premium for the contract year, subject to an annual minimum premium of $1,500,000 (or a pro
rata portion thereof if this Contract is terminated in accordance with paragraph C of the
Commencement and Termination Article).</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall pay the Reinsurer an annual deposit premium of $1,500,000 in four equal
installments of $375,000 on January&nbsp;1, April&nbsp;1, July 1 and October 1 of each contract year
(except the runoff contract year, if any). However, in the event this Contract is terminated
in accordance with paragraph C of the Commencement and Termination Article, no deposit premium
shall be due after the effective date of termination (except as provided in paragraph D
below).</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Within 60&nbsp;days after the end of each contract year (and 60&nbsp;days after the end of the runoff
contract year, if any), the Company shall provide a report to the Reinsurer setting forth the
premium due hereunder for the contract year, computed in accordance with paragraph A, and any
additional premium due the Reinsurer or return premium due the Company shall be remitted
promptly.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event this Contract is terminated on a runoff basis, the reinsurance premium for the
runoff contract year shall be calculated by multiplying the unearned portion of premium in
force at the effective date of termination by 0.536%, and paid semi-annually, and no minimum
premium shall apply.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Net earned premium&#148; as used herein is defined as the Company&#146;s gross earned premium
collected on the classes of business subject to this Contract, less only the earned portion of
premiums, if any, ceded by the Company for reinsurance which inures to the benefit of this
Contract and less dividends incurred.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XVII &#151; Late Payments</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The provisions of this Article shall not be implemented unless specifically invoked, in
writing, by one of the parties to this Contract.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event any premium, loss or other payment due either party is not received by the
intermediary named in the Intermediary Article (BRMA 23A) (hereinafter referred to as the
&#147;Intermediary&#148;) by the payment due date, the party to whom payment is due, may, by notifying
the Intermediary in writing, require the debtor party to pay, and the debtor party</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 15
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>agrees to pay, an interest penalty on the amount past due calculated for each such payment on
the last business day of each month as follows:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The number of full days which have expired since the due date or the last monthly
calculation, whichever the lesser; times</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>1/365ths of the sum of 400 basis points plus the six-month United States Treasury
Bill rate as quoted in <I>The Wall Street Journal </I>on the first business day of the month for
which the calculation is made; times</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The amount past due, including accrued interest.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It is agreed that interest shall accumulate until payment of the original amount due plus
interest penalties have been received by the Intermediary.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The establishment of the due date shall, for purposes of this Article, be determined as
follows:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As respects the payment of routine deposits and premiums due the Reinsurer, the due
date shall be as provided for in the applicable section of this Contract. In the event a
due date is not specifically stated for a given payment, it shall be deemed due 30&nbsp;days
after the date of transmittal by the Intermediary of the initial billing for each such
payment.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any claim or loss payment due the Company hereunder shall be deemed due 45&nbsp;days
after the proof of loss or demand for payment is transmitted to the Reinsurer. If such
loss or claim payment is not received within the 45&nbsp;days, interest will accrue on the
payment or amount overdue in accordance with paragraph B above, from the date the proof
of loss or demand for payment was transmitted to the Reinsurer.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As respects any payment, adjustment or return due either party not otherwise
provided for in subparagraphs 1 and 2 of paragraph C above, the due date shall be as
provided for in the applicable section of this Contract. In the event a due date is not
specifically stated for a given payment, it shall be deemed due 10&nbsp;days following
transmittal of written notification that the provisions of this Article have been
invoked.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>For purposes of interest calculations only, amounts due hereunder shall be deemed paid upon
receipt by the Intermediary.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Nothing herein shall be construed as limiting or prohibiting a Subscribing Reinsurer from
contesting the validity of any claim, or from participating in the defense of any claim or
suit, or prohibiting either party from contesting the validity of any payment or from
initiating any arbitration or other proceeding in accordance with the provisions of this
Contract. If the debtor party prevails in an arbitration or other proceeding, then any
interest penalties due hereunder on the amount in dispute shall be null and void. If the
debtor party loses in such proceeding, then the interest penalty on the amount determined to
be due hereunder shall be calculated in accordance with the provisions set forth above unless
otherwise determined by such proceedings. If a debtor party advances payment of any amount it
is contesting, and proves to be correct in its contestation, either in whole or in part, the
other party shall reimburse the debtor party for any such excess payment made plus interest on
the excess amount calculated in accordance with this Article.</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 16
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Interest penalties arising out of the application of this Article that are $100 or less from
any party shall be waived unless there is a pattern of late payments consisting of three or
more items over the course of any 12-month period.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XVIII &#151; Offset (BRMA 36A)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company and the Reinsurer may offset any balance or amount due from one party to the other
under this Contract or any other contract heretofore or hereafter entered into between the Company
and the Reinsurer, whether acting as assuming reinsurer or ceding company. This provision shall
not be affected by the insolvency of either party to this Contract.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XIX &#151; Access to Records (BRMA 1D)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Reinsurer or its designated representatives shall have access at any reasonable time to
all records of the Company which pertain in any way to this reinsurance.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XX &#151; Liability of the Reinsurer</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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&#146;s policies and any endorsements thereon.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXI &#151; Net Retained Lines (BRMA 32E)</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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, only loss or losses in respect of
that portion of any policy which the Company retains net for its own account shall be
included.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The amount of the Reinsurer&#146;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.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXII &#151; Errors and Omissions</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Except as provided in the Sunset Article, inadvertent delays, errors or omissions made in
connection with this Contract or any transaction hereunder shall not relieve either party from any
</DIV>
<P align="left" style="font-size: 10pt">Page 17
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">liability which would have attached had such delay, error or omission not occurred, provided always
that such error or omission is rectified as soon as possible after discovery.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXIII &#151; Currency (BRMA 12A)</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Whenever the word &#147;Dollars&#148; or the &#147;$&#148; 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.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXIV &#151; Taxes (BRMA 50B)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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 or the District of Columbia.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXV &#151; Federal Excise Tax</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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&nbsp;4371 of the
Internal Revenue Code) to the extent such premium is subject to the Federal Excise Tax.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXVI &#151; Reserves and Letters of Credit</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#091;Applies only to a reinsurer which does not qualify for full credit with any insurance
regulatory authority having jurisdiction over the Company&#146;s reserves, which is or becomes rated
&#147;B&#043;&#043;&#148; or lower by A.M. Best (inclusive of &#147;Not Rated&#148; ratings) and/or Standard &#038; Poor&#146;s rating is
or becomes &#147;BBB&#043;&#148; or lower (inclusive of &#147;Not Rated&#148; ratings).&#093;
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As regards policies or bonds issued by the Company coming within the scope of this Contract,
the Company agrees that when it shall file with the insurance regulatory authority or set up
on its books reserves for losses covered hereunder which it shall be required by law to set
up, it will forward to the Reinsurer a statement showing the proportion of such reserves which
is applicable to the Reinsurer. The Reinsurer hereby agrees to fund such reserves in respect
of known outstanding losses that have been reported to the Reinsurer and allocated loss
adjustment expense relating thereto, losses and allocated loss adjustment expense paid by the
Company but not recovered from the Reinsurer, plus reserves for losses incurred but not
reported, as shown in the statement prepared by the</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 18
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Company (hereinafter referred to as &#147;Reinsurer&#146;s Obligations&#148;) by funds withheld, cash advances
or a Letter of Credit. The Reinsurer shall have the option of determining the method of
funding provided it is acceptable to the insurance regulatory authorities having jurisdiction
over the Company&#146;s reserves with regards to unauthorized reinsurers; or, should the Reinsurer
be downgraded, the method of funding shall be mutually agreed.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>When funding by a Letter of Credit, the Reinsurer agrees to apply for and secure timely
delivery to the Company of a clean, irrevocable and unconditional Letter of Credit issued by a
bank meeting the NAIC Securities Valuation Office credit standards for issuers of Letters of
Credit and containing provisions acceptable to the insurance regulatory authorities having
jurisdiction over the Company&#146;s reserves in an amount equal to the Reinsurer&#146;s proportion of
said reserves. Such Letter of Credit shall be issued for a period of not less than one year,
and shall contain an &#147;evergreen&#148; clause, which automatically extends the term for one year
from its date of expiration or any future expiration date unless 30&nbsp;days (60&nbsp;days where
required by insurance regulatory authorities) prior to any expiration date the issuing bank
shall notify the Company by certified or registered mail that the issuing bank elects not to
consider the Letter of Credit extended for any additional period.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Reinsurer and Company agree that the Letters of Credit provided by the Reinsurer pursuant
to the provisions of this Contract may be drawn upon at any time, notwithstanding any other
provision of this Contract, and be utilized by the Company or any successor, by operation of
law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or
conservator of the Company for the following purposes, unless otherwise provided for in a
separate Trust Agreement:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To reimburse the Company for the Reinsurer&#146;s Obligations, the payment of which is
due under the terms of this Contract and which has not been otherwise paid;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To make refund of any sum which is in excess of the actual amount required to pay
the Reinsurer&#146;s Obligations under this Contract, if so requested by the Reinsurer;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To fund an account with the Company for the Reinsurer&#146;s Obligations. Such cash
deposit shall be held in an interest bearing account separate from the Company&#146;s other
assets, and interest thereon not in excess of the prime rate shall accrue to the benefit
of the Reinsurer;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To pay the Reinsurer&#146;s share of any other amounts the Company claims are due under
this Contract.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual
amount required for subparagraphs 1 or 3, or in the case of subparagraph 4, the actual amount
determined to be due, the Company shall promptly return to the Reinsurer the excess amount so
drawn. All of the foregoing shall be applied without diminution because of insolvency on the
part of the Company or the Reinsurer.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The issuing bank shall have no responsibility whatsoever in connection with the propriety of
withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that
withdrawals are made only upon the order of properly authorized representatives of the
Company.</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 19
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>At annual intervals, or more frequently as agreed but never more frequently than quarterly,
the Company shall prepare a specific statement of the Reinsurer&#146;s Obligations, for the sole
purpose of amending the Letter of Credit, in the following manner:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the statement shows that the Reinsurer&#146;s Obligations exceed the balance of
credit as of the statement date, the Reinsurer shall, within 30&nbsp;days after receipt of
notice of such excess, secure delivery to the Company of an amendment to the Letter of
Credit increasing the amount of credit by the amount of such difference.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If, however, the statement shows that the Reinsurer&#146;s Obligations are less than the
balance of credit as of the statement date, the Company shall, within 30&nbsp;days after
receipt of written request from the Reinsurer, release such excess credit by agreeing to
secure an amendment to the Letter of Credit reducing the amount of credit available by
the amount of such excess credit.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXVII &#151; Insolvency</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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 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 or bond reinsured 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.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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 company.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It is further understood and agreed that, in the event of the insolvency of one or more of
the reinsured companies, the reinsurance under this Contract shall be payable directly by the
Reinsurer to the company or to its liquidator, receiver or statutory successor, except as
provided by Section 4118(a) of the New York Insurance Law or except (1)&nbsp;where this Contract
specifically provides another payee of such reinsurance in the event of the insolvency of the
company or (2)&nbsp;where the Reinsurer with the consent of the direct insured or insureds has
assumed such policy obligations of the company as direct obligations of the Reinsurer to the
payees under such policies and in substitution for the obligations of the company to such
payees.</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 20
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXVIII &#151; Arbitration (BRMA 6J)</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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&#146;s
London Underwriters. In the event that either party should fail to choose an Arbiter within
30&nbsp;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&nbsp;days following their
appointment, each Arbiter shall nominate three candidates within 10&nbsp;days thereafter, two of
whom the other shall decline, and the decision shall be made by drawing lots.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Each party shall present its case to the Arbiters within 30&nbsp;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.
Judgment upon the final decision of the Arbiters may be entered in any court of competent
jurisdiction.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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 in which the Company has its
principal office.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXIX &#151; Service of Suit (BRMA 49C)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(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)
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">Page 21
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>should be understood to constitute a waiver of the Reinsurer&#146;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.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXX &#151; Entire Agreement</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXXI &#151; Governing Law (BRMA 71B)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Contract shall be governed by and construed in accordance with the laws of the State of
Louisiana.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXXII &#151; Agency Agreement</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If more than one reinsured company is named as a party to this Contract, the first named
company 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.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXXIII
&#151; Intermediary (BRMA 23A)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Benfield Inc. 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 Benfield Inc.
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
</DIV>
<P align="left" style="font-size: 10pt">Page 22
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">constitute payment to the Company only to the extent that such payments are actually received by
the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>In Witness Whereof</B>, the Company by its duly authorized representative has executed this Contract as
of the date undermentioned at:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">DeRidder, Louisiana, this 18th day of May in the year 2006.
</DIV>




<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="68%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
<TD align="left" valign="top" style="font-size: 10pt; border-top: 0px solid #000000">/s/ Allan E. Farr</TD>
</TR>


<TR style="font-size:1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>


<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 0px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">American Interstate Insurance Company</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">American Interstate Insurance Company of Texas</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Silver Oak Casualty, Inc.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">Page 23
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Nuclear Incident Exclusion Clause &#151; Liability &#151; Reinsurance (U.S.A.)</B><BR>
(Approved by Lloyd&#146;s Underwriters&#146; Fire and Non-Marine Association)
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This reinsurance does not cover any loss or liability accruing to the Reassured as a member
of, or subscriber to, any association of insurers or reinsurers formed for the purpose of
covering nuclear energy risks or as a direct or indirect reinsurer of any such member,
subscriber or association.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Without in any way restricting the operation of paragraph (1)&nbsp;of this Clause it is understood
and agreed that for all purposes of this reinsurance all the original policies of the
Reassured (new, renewal and replacement) of the classes specified in Clause II of this
paragraph (2)&nbsp;from the time specified in Clause III in this paragraph (2)&nbsp;shall be deemed to
include the following provision (specified as the Limited Exclusion Provision):</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Limited Exclusion Provision.*</B></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">I.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It is agreed that the policy does not apply under any liability coverage, to<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(<I>injury, sickness, disease, death or destruction</I><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bodily injury or property damage<br>
with respect to which an insured under the policy is also an insured
under a nuclear energy liability policy issued by Nuclear Energy
Liability Insurance Association, Mutual Atomic Energy Liability
Underwriters or Nuclear Insurance Association of Canada, or would be
an insured under any such policy but for its termination upon
exhaustion of its limit of liability.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">II.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Family Automobile Policies (liability only), Special Automobile
Policies (private passenger automobiles, liability only), Farmers
Comprehensive Personal Liability Policies (liability only),
Comprehensive Personal Liability Policies (liability only) or
policies of a similar nature; and the liability portion of
combination forms related to the four classes of policies stated
above, such as the Comprehensive Dwelling Policy and the applicable
types of Homeowners Policies.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">III.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The inception dates and thereafter of all original policies as
described in II above, whether new, renewal or replacement, being
policies which either</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>(a)&nbsp;become effective on or after 1st May, 1960, or</TD>
</TR>
<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>(b)&nbsp;become effective before that date and contain the Limited Exclusion
Provision set out above;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>provided this paragraph (2)&nbsp;shall not be applicable to Family Automobile Policies, Special
Automobile Policies, or policies or combination policies of a similar nature, issued by
the Reassured on New York risks, until 90&nbsp;days following approval of the Limited Exclusion
Provision by the Governmental Authority having jurisdiction thereof.</TD>
</TR>
</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Except for those classes of policies specified in Clause II of paragraph (2)&nbsp;and without in
any way restricting the operation of paragraph (1)&nbsp;of this Clause, it is understood and agreed
that for all purposes of this reinsurance the original liability policies of the Reassured
(new, renewal and replacement) affording the following coverages:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Owners, Landlords and Tenants Liability, Contractual Liability, Elevator Liability, Owners
or Contractors (including railroad) Protective Liability, Manufacturers and Contractors
Liability, Product Liability, Professional and Malpractice Liability, Storekeepers
Liability, Garage Liability, Automobile Liability (including Massachusetts Motor Vehicle
or Garage Liability)</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>shall be deemed to include, with respect to such coverages, from the time specified in Clause V
of this paragraph (3), the following provision (specified as the Broad Exclusion Provision):</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Broad Exclusion Provision.*</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It is agreed that the policy does not apply:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">I.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Under any Liability Coverage to<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(<I>injury, sickness, disease, death or destruction</I><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bodily injury or property damage</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>with respect to which an insured under the policy is also an insured under
a nuclear energy liability policy issued by Nuclear Energy Liability Insurance
Association, Mutual Atomic Energy Liability Underwriters or Nuclear Insurance
Association of Canada, or would be an insured under any such policy but for its
termination upon exhaustion of its limit of liability; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="7%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>resulting from the hazardous properties of nuclear material and with
respect to which (1)&nbsp;any person or organization is required to maintain financial
protection pursuant to the Atomic Energy Act of 1954, or any law amendatory thereof,
or (2)&nbsp;the insured is, or had this policy not been issued would be, entitled to
indemnity from the United States of America, or any agency thereof, under any
agreement entered into by the United States of America, or any agency thereof, with
any person or organization.</TD>
</TR>

</TABLE>
</DIV>
<P align="left" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">II.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Under any Medical Payments Coverage, or under any Supplementary Payments Provision relating to<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(<I>immediate medical or surgical relief</I><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(first aid,
<BR>
to expenses incurred with respect to<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(<I>bodily injury, sickness, disease or death</I><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bodily injury<br>
resulting from the hazardous properties of nuclear material and arising out of the operation of a nuclear facility by any
person or organization.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">III.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Under any Liability Coverage to<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(<I>injury, sickness, disease, death or destruction</I><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bodily injury or property damage<br>
resulting from the hazardous properties of nuclear material, if</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="7%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the nuclear material (1)&nbsp;is at any nuclear facility owned by, or operated
by or on behalf of, an insured or (2)&nbsp;has been discharged or dispersed therefrom;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="7%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the nuclear material is contained in spent fuel or waste at any time
possessed, handled, used, processed, stored, transported or disposed of by or on
behalf of an insured; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="7%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(<I>injury, sickness, disease, death or destruction</I><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bodily injury or property damage<br>
arises out of the furnishing by an insured of services, materials, parts or equipment in connection with the
planning, construction, maintenance, operation or use of any nuclear facility, but if such facility is located within the
United States of America, its territories, or possessions or Canada, this exclusion (c)&nbsp;applies only to<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(<I>injury to or destruction of property at such nuclear facility</I><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(property damage to such nuclear facility and any property thereat.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">IV.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As used in this endorsement:<br>
&#147;hazardous properties&#148; include radioactive, toxic or explosive properties; &#147;nuclear material&#148; means source material,
special nuclear material or byproduct material; &#147;source material&#148;, &#147;special nuclear material&#148;, and &#147;byproduct material&#148;
have the meanings given them in the Atomic Energy Act of 1954 or in any law amendatory thereof; &#147;spent fuel&#148; means any fuel
element or fuel component, solid or liquid, which has been used or exposed to radiation in a nuclear reactor; &#147;waste&#148; means
any waste material (1)&nbsp;containing byproduct material and (2)&nbsp;resulting from the operation by any person or organization of
any nuclear facility included within the definition of nuclear facility under paragraph (a)&nbsp;or (b)&nbsp;thereof; &#147;nuclear
facility&#148; means</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="7%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any nuclear reactor,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="7%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any equipment or device designed or used for (1)&nbsp;separating the isotopes of
uranium or plutonium, (2)&nbsp;processing or utilizing spent fuel, or (3)&nbsp;handling
processing or packaging waste,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="7%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any equipment or device used for the processing, fabricating or alloying of
special nuclear material if at any time the total amount of such material in the
custody of the insured at the premises where such equipment or device is located
consists of or contains more than 25 grams of plutonium or uranium 233 or any
combination thereof, or more than 250 grams of uranium 235,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="7%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any structure, basin, excavation, premises or place prepared or used for
the storage or disposal of waste, and includes the site on which any of the foregoing
is located, all operations conducted on such site and all premises used for such
operations; &#147;nuclear reactor&#148; means any apparatus designed or used to sustain nuclear
fission in a self-supporting chain reaction or to contain a critical mass of
fissionable material;<br>
(<I>With respect to injury to or destruction of property, the word &#147;injury&#148;
or &#147;destruction,&#148;</I><br>
(&#147;property damage&#148; includes all forms of radioactive contamination of property,<BR>
(<I>includes all forms of radioactive contamination of property.</I></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">V.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The inception dates and thereafter of all original policies affording coverages
specified in this paragraph (3), whether new, renewal or replacement, being policies
which become effective on or after 1st May, 1960, provided this paragraph (3)&nbsp;shall not
be applicable to</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="11%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Garage and Automobile Policies issued by the Reassured on New
York risks, or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="11%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>statutory liability insurance required under Chapter&nbsp;90,
General Laws of Massachusetts, until 90&nbsp;days following approval of the Broad
Exclusion Provision by the Governmental Authority having jurisdiction thereof.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Without in any way restricting the operation of paragraph (1)&nbsp;of this Clause, it is
understood and agreed that paragraphs (2)&nbsp;and (3)&nbsp;above are not applicable to original
liability policies of the Reassured in Canada and that with respect to such policies this
Clause shall be deemed to include the Nuclear Energy Liability Exclusion Provisions adopted by
the Canadian Underwriters&#146; Association or the Independent Insurance Conference of Canada.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><DIV style="border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>
</DIV>


<DIV align="left" style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">*NOTE.</TD>
    <TD>&nbsp;</TD>
    <TD><I>The words printed in italics in the Limited Exclusion Provision and in the Broad Exclusion
Provision shall apply only in relation to original liability policies which include a Limited
Exclusion Provision or a Broad Exclusion Provision containing those words.</I></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">21/9/67
<BR>
N.M.A. 1590
</DIV>


<P align="left" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Workers&#146; Compensation<BR>
Per Person Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">issued to
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="68%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
    <TD width="18%">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">

<TD nowrap left="center"><DIV style="margin-left: 100px"><B>Reinsurers</B></DIV></TD>
    <TD nowrap align="center" colspan="2"><B>Participations</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR><TD colspan="3">&nbsp;</TD></TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Hannover Ruckversicherungs-Aktiengesellschaft</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">20.0%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Through Benfield Limited</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Lloyd&#146;s Underwriters and Companies</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Per Signing Schedule(s)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">60.0</TD>
</TR>



<TR valign="bottom">
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>80.0% </B>part of</TD>
</TR>




<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">100% share in the</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">interests and</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">liabilities of the</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&#147;Reinsurer&#148;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Interests and Liabilities Agreement</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">of
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">Certain Insurance Companies<BR>
shown in the Signing Schedule(s) attached hereto<BR>
(<I>hereinafter referred to as the &#147;Subscribing Reinsurer&#148;</I>)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">with respect to the
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>Per Person Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">issued to and duly executed by
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer </I>hereby accepts a 30.0% share in the interests and liabilities of the
&#147;Reinsurer&#148; as set forth in the attached Contract captioned above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Agreement shall become effective at 12:01&nbsp;a.m., Local Standard Time, January&nbsp;1, 2006, and
shall continue in force until terminated in accordance with the provisions of the attached
Contract.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer&#146;s </I>share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the <I>Subscribing Reinsurer </I>shall in no event participate in the interests and
liabilities of the other reinsurers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In any action, suit or proceeding to enforce the <I>Subscribing Reinsurer&#146;s </I>obligations under the
attached Contract, service of process may be made upon Mendes &#038; Mount, 750 Seventh Avenue, New
York, New York 10019.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Signed for and on behalf of the <I>Subscribing Reinsurer </I>in the Signing Schedule(s) attached hereto.
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Interests and Liabilities Agreement</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">of
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">Hannover Ruckversicherungs-Aktiengesellschaft<BR>
Hannover, Germany<BR>
(<I>hereinafter referred to as the &#147;Subscribing Reinsurer&#148;</I>)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">with respect to the
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>Per Person Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">issued to and duly executed by
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer </I>hereby accepts a 20.0% share in the interests and liabilities of the
&#147;Reinsurer&#148; as set forth in the attached Contract captioned above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Agreement shall become effective at 12:01&nbsp;a.m., Local Standard Time, January&nbsp;1, 2006, and
shall continue in force until terminated in accordance with the provisions of the attached
Contract.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer&#146;s </I>share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the <I>Subscribing Reinsurer </I>shall in no event participate in the interests and
liabilities of the other reinsurers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In any action, suit or proceeding to enforce the <I>Subscribing Reinsurer&#146;s </I>obligations under the
attached Contract, service of process may be made upon Mendes &#038; Mount, 750 Seventh Avenue, New
York, New York 10019.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>In Witness Whereof</B>, the <I>Subscribing Reinsurer </I>by its duly authorized representative has executed
this Agreement as of the date undermentioned at:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Hannover, Germany, this
<FONT style="border-bottom: 1px solid #000000; width: 15%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;30th</FONT>  day of
<FONT style="border-bottom: 1px solid #000000; width: 25%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;June</FONT>
in the year
<FONT style="border-bottom: 1px solid #000000; width: 15%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2006</FONT>.
</DIV>



<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="87%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>/s/ A.
Freiboth&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/ S. Eberhardt</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>

<TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Hannover Ruckversicherungs-Aktiengesellschaft</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Interests and Liabilities Agreement</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">of
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">Certain Underwriting Members of Lloyd&#146;s<BR>
shown in the Signing Schedule attached hereto<BR>
(<I>hereinafter referred to as the &#147;Subscribing Reinsurer&#148;</I>)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">with respect to the
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt"><B>Per Person Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">issued to and duly executed by
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 6pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer </I>hereby accepts a 30.0% share in the interests and liabilities of the
&#147;Reinsurer&#148; as set forth in the attached Contract captioned above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Agreement shall become effective at 12:01&nbsp;a.m., Local Standard Time, January&nbsp;1, 2006, and
shall continue in force until terminated in accordance with the provisions of the attached
Contract.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer&#146;s </I>share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the <I>Subscribing Reinsurer </I>shall in no event participate in the interests and
liabilities of the other reinsurers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In any action, suit or proceeding to enforce the <I>Subscribing Reinsurer&#146;s </I>obligations under the
attached Contract, service of process may be made upon Mendes &#038; Mount, 750 Seventh Avenue, New
York, New York 10019.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Signed for and on behalf of the <I>Subscribing Reinsurer </I>in the Signing Schedule attached hereto.
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>


</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>6
<FILENAME>d38372exv10w5.htm
<DESCRIPTION>CASUALTY CATASTROPHE EXCESS OF LOSS REINSURANCE CONTRACT
<TEXT>
<HTML>
<HEAD>
<TITLE>exv10w5</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit&nbsp;10.5
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Casualty Catastrophe Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">issued to

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group

</DIV>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Table of Contents</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="52%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD colspan="2" nowrap align="center" style="border-bottom: 0px solid #000000"><B>Article</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 0px solid #000000"><B>Page</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">I
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Classes of Business Reinsured
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">II
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Commencement and Termination
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">III
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Territory (BRMA 51A)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">IV
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Exclusions
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">V
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Special Acceptances
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">7</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">VI
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Retention and Limit
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">7</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">VII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Reinstatement
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">8</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">VIII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Definitions
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">9</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">IX
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Annuities at Company&#146;s Option
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">11</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">X
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Claims
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">12</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XI
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Sunset
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">12</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Special Commutation
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">12</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XIII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Salvage and Subrogation
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">14</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XIV
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Federal Terrorism Coverage
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">14</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XV
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Reinsurance Premium
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">14</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XVI
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Late Payments
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">15</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XVII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Offset (BRMA 36A)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">17</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XVIII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Access to Records (BRMA 1D)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">17</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XIX
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Liability of the Reinsurer
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">17</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XX
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Net Retained Lines (BRMA 32E)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">17</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXI
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Errors and Omissions
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">17</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Currency (BRMA 12A)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">18</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXIII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Taxes (BRMA 50B)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">18</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXIV
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Federal Excise Tax
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">18</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXV
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Reserves and Letters of Credit
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">18</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXVI
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Insolvency
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">20</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXVII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Arbitration (BRMA 6J)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">20</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXVIII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Service of Suit (BRMA 49C)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">21</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXIX
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Entire Agreement
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">22</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXX
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Governing Law (BRMA 71B)
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">22</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXXI
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Agency Agreement
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">22</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">XXXII
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Intermediary
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">22</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Schedule&nbsp;A</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>




<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Casualty Catastrophe Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">issued to

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group<BR>
(<I>hereinafter referred to collectively as the </I>&#147;Company&#148;)

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">by

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">The Subscribing Reinsurer(s) Executing the<BR>
Interests and Liabilities Agreement(s)<BR>
Attached Hereto<BR>
(<I>hereinafter referred to as the </I>&#147;Reinsurer&#148;)

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;I &#151; Classes of Business Reinsured</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">By this Contract the Reinsurer agrees to reinsure the excess liability which may accrue to the
Company under its policies, contracts and binders of insurance or reinsurance (hereinafter called
&#147;policies&#148;) in force at the effective date hereof or issued or renewed on or after that date, and
classified by the Company as Workers&#146; Compensation, Employers Liability, including coverage
provided under the U.S. Longshore and Harbor Workers&#146; Compensation Act and the Jones Act, and
General Liability business, subject to the terms, conditions and limitations set forth herein and
in Schedule&nbsp;A attached to and forming part of this Contract.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;II &#151; Commencement and Termination</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This Contract shall become effective at 12:01&nbsp;a.m., Local Standard Time, January&nbsp;1, 2006,
with respect to losses arising out of occurrences commencing at or after that time and date,
and shall continue in force thereafter until terminated.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Either party may terminate this Contract at 12:01&nbsp;a.m., Local Standard Time, on any January 1
by giving the other party not less than 90&nbsp;days prior notice by certified or registered mail.</TD>
</TR>

</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">Page 1
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Notwithstanding the provisions of paragraph B above, the Company may terminate a Subscribing
Reinsurer&#146;s percentage share in this Contract in the event any of the following circumstances
occur as clarified by public announcement for subparagraphs 1 through 6 below and upon
discovery for subparagraphs 7 and 8 below. The Company has 120&nbsp;days from the date of
applicable public announcement or discovery to exercise the option to terminate a Subscribing
Reinsurer&#146;s percentage share in this Contract. The effective date of special termination
shall not be sooner than one day after the Company provides the Subscribing Reinsurer notice
of its election to specially terminate, unless mutually agreed otherwise:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer&#146;s policyholders&#146; surplus at the beginning of any contract
year has been reduced by more than 20.0% of the amount of surplus 12&nbsp;months prior to that
date; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer&#146;s policyholders&#146; surplus at any time during any contract
year has been reduced by more than 20.0% of the amount of surplus at the date of the
Subscribing Reinsurer&#146;s most recent financial statement filed with regulatory authorities
and available to the public as of the beginning of the contract year; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer&#146;s A.M. Best&#146;s rating has been assigned or downgraded
below A- (inclusive of &#147;Not Rated&#148; ratings) and/or Standard &#038; Poor&#146;s rating has been
assigned or downgraded below BBB&#043; (inclusive of &#147;Not Rated&#148; ratings); or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer has become merged with, acquired by or controlled by any
other company, corporation or individual(s) not controlling the Subscribing Reinsurer&#146;s
operations previously; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A State Insurance Department or other legal authority has ordered the Subscribing
Reinsurer to cease writing business; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">6.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">7.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer has reinsured its entire liability under this Contract
without the Company&#146;s prior written consent; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">8.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer has ceased assuming new and renewal treaty reinsurance
business.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Unless the Company elects that the Reinsurer have no liability for losses arising out of
occurrences commencing after the effective date of termination, and so notifies the Reinsurer
prior to or as promptly as possible after the effective date of termination, reinsurance
hereunder on business in force on the effective date of termination shall remain in full force
and effect until expiration, cancellation or next premium anniversary of such business,
whichever first occurs, but in no event beyond 12&nbsp;months plus odd time (not exceeding 18
months in all) following the effective date of termination.</TD>
</TR>

</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">Page 2
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;III &#151; Territory (BRMA 51A)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The territorial limits of this Contract shall be identical with those of the Company&#146;s
policies.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;IV &#151; Exclusions</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This Contract does not apply to and specifically excludes the following:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Lines of business not identified in the Classes of Business Reinsured Article.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All excess of loss reinsurance assumed by the Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Reinsurance assumed by the Company under obligatory reinsurance agreements, except:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Agency reinsurance where the policies involved are to be reunderwritten
in accordance with the underwriting standards of the Company and reissued as Company
policies at the next anniversary or expiration date; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Intercompany reinsurance between any of the reinsured companies under
this Contract.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Business written by the Company on a co-indemnity basis where the Company is not
the controlling carrier.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Business written to apply in excess of a deductible of more than $25,000, and
business issued to apply specifically in excess over underlying insurance. However, if
the Company is required, by any state regulation, to provide a deductible of more than
$25,000, this exclusion shall not apply.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">6.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Nuclear risks as defined in the &#147;Nuclear Incident Exclusion Clause &#151; Liability -
Reinsurance (U.S.A.)&#148; attached to and forming part of this Contract.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">7.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As regards interests which at time of loss or damage are on shore, no liability
shall attach hereto in respect of any loss or damage which is occasioned by 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. This War Exclusion Clause shall not, however, apply to interests which
at time of loss or damage are within the territorial limits of the United States of
America (comprising the Fifty States of the Union, the District of Columbia, and
including bridges between the United States of America and Mexico provided they are under
United States ownership), Canada, St. Pierre and Miquelon, provided such interests are
insured under policies containing a standard war or hostilities or warlike operations
exclusion clause.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">8.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Liability as a member, subscriber or reinsurer of any Pool, Syndicate or
Association, but this exclusion shall not apply to Assigned Risk Plans or similar plans.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">9.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">Page 3
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Insolvency fund&#148; 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.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">10.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Workers&#146; Compensation where the principal exposures, as defined by the governing
class code, include:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Operation of aircraft, but only if the annual estimated policy premium is
$250,000 or more;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Railroad, subway or street railway operations;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Operation or navigation of vessels or barges;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Manufacture, production or refining of gas, natural or artificial fuel,
or other liquefied petroleum fuel, but only if the annual estimated policy premium
is $250,000 or more;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">e.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Manufacturing, assembly, packing or processing of fireworks, fuses,
nitroglycerine, magnesium, pyroxylin, ammunition or explosives. This exclusion does
not apply to the assembly, packing or processing of explosives when the estimated
annual premium is under $250,000;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">f.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Wrecking or demolition of structures, but only if the annual estimated
policy premium is $250,000 or more;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">g.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Underground mining.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">11.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As respects Workers&#146; Compensation and Employers Liability only, unless otherwise
excluded as set forth above, the reinsurance provided under this Contract shall not apply
to any loss, cost or expense arising out of or related to, either directly or indirectly,
any &#147;terrorist activity,&#148; as defined herein, but this exclusion shall only apply when the
activity includes, involves or is associated with the use of any biological, chemical,
radioactive or nuclear agent, material, device or weapon, or when the predominant business
of the policyholder, as defined by the governing class code, is:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The operation of: airports and aircraft; flight schools; bridges, dams,
tunnels or locks; department stores; shopping malls; chain retail stores; casinos
and casino hotels; cruise lines; railroads; ports/public transit authorities;
security services; stadiums; convention/exhibition centers; or theme/amusement
parks;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The manufacture and distribution of: automobiles; chemicals,
petrochemicals or pharmaceuticals; utilities (electric, gas, water and sewer); major
defense/aerospace products; or high-tech equipment, but only if the policyholder
employs more than 20 personnel at the location of a terrorist activity at the time
of its occurrence;</TD>
</TR>

</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">Page 4
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<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The management or operation of the following type of structures, but only
if greater than 25 stories in height: apartments/condominiums/co-ops;
hotels/motels; or office buildings;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Businesses primarily engaged in the entertainment, media or
transportation industry limited to the following: major media providers (NBC, FOX,
ABC, CBS, etc.); television and motion picture studios; Broadway theaters; major
internet companies (AOL, Yahoo, etc.); professional sports teams; major
telecommunications companies (AT&#038;T, WorldCom/MCI, etc.); national truck rental
companies (Ryder, Penske, U-Haul, etc.); or major national motor freight common
carriers (J.B. Hunt, Red Arrow, etc.);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">e.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Policyholders primarily located in, or predominantly doing business as:
hospitals; universities; nuclear facilities; financial institutions; or governmental
buildings and national landmarks.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Terrorist activity&#148; shall mean any deliberate, unlawful act that:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Is declared by any authorized government official to be or to involve
terrorism, terrorist activity or acts of terrorism; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Includes, involves, or is associated with the use or threatened use of
force, violence or harm against any person, tangible or intangible property, the
environment, or any natural resources, where the act or threatened act is intended,
in whole or in part, to:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">i.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Promote or further any political, ideological, philosophical,
racial, ethnic, social or religious cause or objective of the perpetrator or
any organization, association or group affiliated with the perpetrator; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">ii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Influence, disrupt or interfere with any government related
operations, activities or policies; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Intimidate, coerce or frighten the general public or any segment of
the general public; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iv.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Disrupt or interfere with a national economy or any segment of a
national economy; or</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Includes, involves, or is associated with, in whole or in part, any of
the following activities, or the threat thereof:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">i.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Hijacking or sabotage of any form of transportation or
conveyance, including but not limited to spacecraft, satellite, aircraft,
train, vessel or motor vehicle;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">ii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Hostage taking or kidnapping;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The use of any bomb, incendiary device, explosive or firearm;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iv.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The interference with or disruption of basic public or commercial
services and systems, including but not limited to the following
services or systems:</TD>
</TR>

</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">Page 5
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<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>electricity, natural gas, power, postal, communications, telecommunications,
information, public transportation, water, fuel, sewer or waste disposal;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">v.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The injuring or assassination of any elected or appointed
government official or any government employee;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">vi.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The seizure, blockage, interference with, disruption of, or
damage to any government buildings, institutions, functions, events, tangible
or intangible property or other assets; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">vii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The seizure, blockage, interference with, disruption of, or
damage to tunnels, roads, streets, highways, or other places of public
transportation or conveyance.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any of the activities listed in subparagraph c, above, shall be
considered terrorist activity except where the Company can demonstrate to the
Reinsurer that the foregoing activities or threats thereof were motivated solely by
personal objectives of the perpetrator that are unrelated, in whole or in part, to
any intention to:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">i.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Promote or further any political, ideological, philosophical,
racial, ethnic, social or religious cause or objective of the perpetrator or
any organization, association or group affiliated with the perpetrator;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">ii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Influence, disrupt or interfere with any government-related
operations, activities or policies;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Intimidate, coerce or frighten the general public or any segment of
the general public; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="10%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iv.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Disrupt or interfere with a national economy or any segment of a
national economy.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">12.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As respects General Liability policies, exposures, other than those identified below,
as included in the General Liability section of the Company&#146;s Commercial Lines Manual:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;97111 &#151; Logging;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;58873 &#151; Sawmill;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;59984 &#151; Woodyard and Drivers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;95410 &#151; Grading of Land;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">e.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;45819 &#151; Lumber Yard;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">f.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;10073 &#151; Repair Shops and Drivers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">g.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;43822 &#151; Timber Cruiser;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">h.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;99793 &#151; Truckmen Not Otherwise Classified;</TD>
</TR>

</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">Page 6
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">i.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;91591 &#151; Contractors &#151; Subcontracted Work Other Than Construction;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">j.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Class&nbsp;49452 &#151; Vacant Land.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any exclusion set forth in subparagraphs 10 and/or 12 of paragraph A shall be waived
automatically when, in the opinion of the Company, the exposure excluded therein is incidental
to the principal exposure on the risk in question.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the Company is bound, without the knowledge and contrary to the instructions of the
Company&#146;s supervisory underwriting personnel, on any business falling within the scope of one
or more of the exclusions set forth in subparagraphs 10 and/or 12 of paragraph A, the
exclusion shall be suspended with respect to such business until the Company has the first
opportunity to cancel the policy in compliance with governmental requirements.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the Company is required to accept an assigned risk which conflicts with one or more of the
exclusions set forth in subparagraph 10 of paragraph A, reinsurance shall apply, but only for
the difference between the Company&#146;s retention and the minimum limit required by the
applicable state statute, and in no event shall the Reinsurer&#146;s liability exceed the limit set
forth in the Retention and Limit Article.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;V &#151; Special Acceptances</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">From time to time the Company may request a special acceptance of reinsurance falling outside
the scope of the provisions set forth herein. As respects each layer of this Contract separately,
if each Subscribing Reinsurer whose share in the interests and liabilities of the Reinsurer is
20.0% or greater agrees to a special acceptance, such special acceptance shall be binding on all
Subscribing Reinsurers with respect to their respective shares of each such layer. In the event
agreement is not achieved, such special acceptance shall be made to a layer or layers of this
Contract only with respect to the interests and liabilities of each Subscribing Reinsurer on such
layer or layers who agrees to such special acceptance. In the event a reinsurer becomes a party to
this Contract subsequent to one or more special acceptances hereunder, the new reinsurer shall
automatically accept such special acceptance(s) as being covered hereunder.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;VI &#151; Retention and Limit</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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
&#147;Company&#146;s Retention&#148; for that excess layer in Schedule&nbsp;A attached hereto, arising out of each
occurrence. The Reinsurer shall then be liable, as respects each excess layer, for the amount
by which such ultimate net loss exceeds the Company&#146;s applicable retention, but the liability
of the Reinsurer under each excess layer shall not exceed the amount shown as &#147;Reinsurer&#146;s Per
Occurrence Limit&#148; for that excess layer in Schedule&nbsp;A attached hereto, as respects any one
occurrence.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As respects Workers&#146; Compensation business, the Company&#146;s ultimate net loss, for the purpose
of this Contract, shall be deemed to be a maximum of $10,000,000 any one life.</TD>
</TR>

</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">Page 7
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event that a loss is recoverable under this Contract and under the Company&#146;s Third Casualty
Excess of Loss Reinsurance Contract or Workers&#146; Compensation Per Person Excess of Loss Reinsurance Contract, both
effective January 1, 2006, the Company shall be the sole judge in effecting recovery under any one or more of the
aforementioned contracts, including this Contract.  However, in no event shall this be construed to mean that the
Company may recover an amount from the Reinsurer which exceeds the total amount for any one loss, subject to the
provisions of the applicable contract(s).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall be permitted to carry excess of loss and quota share 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.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall be permitted to carry excess of loss reinsurance applying to Workers&#146;
Compensation risks in the State of Minnesota, recoveries under which shall inure to the
benefit of this Contract.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Such coverage shall be provided through the Minnesota Workers&#146; Compensation Reinsurance
Association. It is understood that the liability of the Reinsurer for Minnesota Workers&#146;
Compensation risks is not released.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event the Company accrues liability that is not provided by any inuring reinsurance, for
whatever reason, the Reinsurer agrees to reinsure such excess liability.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">F.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event this Contract is terminated on a &#147;runoff&#148; basis, additional reinstatement
coverage shall be negotiated on or prior to the effective date of termination.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;VII &#151; Reinstatement</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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 occurrence commences hereon. For each amount so
reinstated the Company agrees to pay additional premium equal to the product of the following:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The percentage of the occurrence limit for the excess layer reinstated (based on
the loss paid by the Reinsurer under that excess layer); times</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The earned reinsurance premium for the excess layer reinstated for the contract
year (exclusive of reinstatement premium).</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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 contract year 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 contract year 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&#146;s statement.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Notwithstanding anything stated herein, the liability of the Reinsurer under any excess layer
of reinsurance coverage provided by this Contract shall not exceed any of the following:</TD>
</TR>

</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">Page 8
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<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The amount, shown as &#147;Reinsurer&#146;s Per Occurrence Limit&#148; for that excess layer in
Schedule&nbsp;A attached hereto, as respects loss or losses arising out of any one occurrence;
or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The amount, shown as &#147;Reinsurer&#146;s Contract Year Limit&#148; for that excess layer in
Schedule&nbsp;A attached hereto, in all during the contract year.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;VIII &#151; Definitions</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Ultimate net loss&#148; as used herein is defined as the sum or sums (including loss in excess
of policy limits, extra contractual obligations and any 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.
Nothing herein shall be construed to mean that losses under this Contract are not recoverable
until the Company&#146;s ultimate net loss has been ascertained.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Loss in excess of policy limits&#148; and &#147;extra contractual obligations&#148; as used herein shall be
defined as follows:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Loss in excess of policy limits&#148; shall mean 90.0% of any amount paid or payable by
the Company in excess of its policy limits, but otherwise within the terms of its policy,
such loss in excess of the Company&#146;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&#146;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 reinsured or in the preparation or prosecution of an appeal consequent upon
such an action.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Extra contractual obligations&#148; shall mean 90.0% 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&#146;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 reinsured or in the preparation or prosecution of an appeal consequent upon
such an action. 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.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If any provision of this Article 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.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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</TD>
</TR>

</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">Page 9
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<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>organization or party involved in the presentation, defense or settlement of any claim covered
hereunder.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Occurrence&#148; as used herein is defined as an accident or occurrence or a series of accidents
or occurrences arising out of or caused by one event, except that:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As respects General Liability policies where the Company&#146;s limit of liability for
Products and Completed Operations coverages is determined on the basis of the insured&#146;s
aggregate losses during a policy period, all such losses proceeding from or traceable to
the same causative agency shall, at the Company&#146;s option, be deemed to have been caused
by one occurrence commencing at the beginning of the policy period, it being understood
and agreed that each renewal or annual anniversary date of the policy involved shall be
deemed the beginning of a new policy period;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Each occupational or industrial disease case or cumulative trauma case contracted
by an employee of an insured shall be deemed to have been caused by a separate occurrence
commencing on:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The date of disability for which compensation is payable if the case is
compensable under the Workers&#146; Compensation Law;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The date disability due to the disease actually began if the case is not
compensable under the Workers&#146; Compensation Law;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The date of cessation of employment if claim is made after employment has
ceased.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Notwithstanding the provisions of subparagraph 2 above, as respects losses
resulting from occupational or industrial disease or cumulative trauma suffered by
employees of an insured for which the employer is liable, as a result of a sudden and
accidental event not exceeding 72 hours in duration, all such losses shall be considered
one occurrence and may be combined with losses classified as other than occupational or
industrial disease or cumulative trauma which arise out of the same event and the
combination of such losses shall be considered as one occurrence within the meaning
hereof.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Occupational or industrial disease&#148; is any abnormal condition that fulfills all of the
following conditions:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It is not traceable to a definite compensable accident occurring during the
employee&#146;s past or present employment.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It has been caused by exposure to a disease producing agent or agents present in
the workers&#146; occupational environment.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It has resulted in disability or death.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Cumulative trauma&#148; is an injury that fulfills all of the following conditions:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It is not traceable to a definite compensable accident occurring during the
employee&#146;s past or present employment.</TD>
</TR>

</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">Page 10
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It has occurred from and has been aggravated by a repetitive employment related
activity.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It has resulted in disability or death.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">F.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Loss adjustment expense&#148; as used herein shall mean expenses allocable to the investigation,
defense and/or settlement of specific claims, including litigation expenses, interest on
judgments, declaratory judgment expenses or other legal expenses and costs incurred in
connection with coverage questions and legal actions connected thereto, and salaries and
expenses of salaried adjusters associated with claims covered under policies of the Company
reinsured hereunder but not including office expenses or salaries of the Company&#146;s regular
employees.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">G.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Contract year&#148; as used in this Contract shall mean the period from 12:01 a.m., Local Standard Time, January&nbsp;1, 2006 to
12:01 a.m., Local Standard Time, January 1, 2007, both days inclusive, and each respective 12-month period thereafter that
this Contract continues in force. However, if this Contract is terminated on a &#147;cutoff&#148;
basis, the final contract year shall be from the beginning of the then current contract year
through the effective date of termination. If this Contract is terminated on a &#147;runoff&#148;
basis, the period from the effective date of termination through the end of the &#147;runoff&#148;
period shall be a separate contract year and referred to as the &#147;runoff contract year.&#148;</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;IX &#151; Annuities at Company&#146;s Option</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Whenever the Company is required, or elects, to purchase an annuity or to negotiate a
structured settlement, either in satisfaction of a judgment or in an out-of-court settlement
or otherwise, the cost of the annuity or the structured settlement, as the case may be, shall
be deemed part of the Company&#146;s ultimate net loss.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The terms &#147;annuity&#148; or &#147;structured settlement&#148; shall be understood to mean any insurance
policy, lump sum payment, agreement or device of whatever nature resulting in the payment of a
lump sum by the Company in settlement of any or all future liabilities which may attach to it
as a result of an occurrence.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event the Company purchases an annuity which inures in whole or in part to the benefit
of the Reinsurer, it is understood that the liability of the Reinsurer is not released
thereby. In the event the Company is required to provide benefits not provided by the annuity
for whatever reason, the Reinsurer shall pay its share of any loss.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;X &#151; Claims</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Whenever a claim is reserved by the Company for an amount greater than 50.0% of its
retention hereunder and/or whenever a claim appears likely to result in a claim under this
Contract, the Company shall notify the Reinsurer. Further, the Company shall notify the
Reinsurer whenever a claim involves a fatality, major limb amputation, spinal cord damage,
brain damage, blindness or extensive burns, regardless of liability, if the policy limits or
statutory benefits applicable to the claim are greater than the Company&#146;s retention hereunder.
The Reinsurer shall have the right to participate, at its own expense, in the defense of any
claim or suit or proceeding involving this reinsurance.</TD>
</TR>

</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">Page 11
</DIV>

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\
<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All claim settlements made by the Company, provided they are within the terms of this
Contract (including but not limited to ex-gratia payments), shall be binding upon the
Reinsurer, and the Reinsurer agrees to pay all amounts for which it may be liable upon receipt
of satisfactory evidence of the amount paid by the Company.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XI &#151; Sunset</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ten years after the effective date of termination of this Contract (or after the end of the
runoff period, if applicable), the Company shall advise the Reinsurer of any outstanding claims
and/or occurrences (each hereinafter referred to as a &#147;claim&#148;) arising during any contract year,
which have not been finally settled and which may cause a recovery under this Contract. Unless
mutually agreed, no liability shall attach hereunder for any claim not reported to the Reinsurer
within 90&nbsp;days following the 10-year period.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XII &#151; Special Commutation</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event a Subscribing Reinsurer meets the following conditions, the Company may
require a commutation of that portion of any excess loss hereunder represented by any
outstanding claim or claims, including any related loss adjustment expense.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer&#146;s A.M. Best&#146;s rating has been assigned or downgraded
below A- (inclusive of &#147;Not Rated&#148; ratings) and/or Standard &#038; Poor&#146;s rating has been
assigned or downgraded below BBB&#043; (inclusive of &#147;Not Rated&#148; ratings); or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Subscribing Reinsurer has ceased assuming new and renewal property and casualty
treaty reinsurance business.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Outstanding claim or claims&#148; shall be defined as known or unknown claims, including any billed
yet unpaid claims. However, unless otherwise mutually agreed, this paragraph shall not apply
unless the outstanding claim or claims is for an amount not less than $5,000.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the Company elects to require commutation as provided in paragraph A above, the Company
shall submit a Statement of Valuation of the outstanding claim or claims as of the last day of
the month immediately preceding the month in which the Company elects to require commutation,
as determined by the Company. Such Statement of Valuation shall include the elements
considered reasonable to establish the excess loss and shall set forth or attach the
information relied upon by the Company and the methodology employed to calculate the excess
loss. The Subscribing Reinsurer shall then pay the amount requested within 30 calendar days
of receipt of such Statement of Valuation, unless the Subscribing Reinsurer needs additional
information from the Company to assess the Company&#146;s Statement of Valuation or contests such
amount.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the Subscribing Reinsurer needs additional information from the Company to assess the
Company&#146;s Statement of Valuation or contests the amount requested, the Subscribing Reinsurer
shall so notify the Company within 15 calendar days of receipt of the Company&#146;s Statement of
Valuation. The Company shall supply any reasonably requested information to the Subscribing
Reinsurer within 15 calendar days of receipt of the notification. Within 30 calendar days of
the date of the notification or of the receipt of the information, whichever is</TD>
</TR>

</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">Page 12
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>later, the Subscribing Reinsurer shall provide the Company with its Statement of Valuation of
the outstanding claim or claims as of the last day of the month immediately preceding the month
in which the Company elects to require commutation, as determined by the Subscribing Reinsurer.
Such Statement of Valuation shall include the elements considered reasonable to establish the
excess loss and shall set forth or attach the information relied upon by the Subscribing
Reinsurer and the methodology employed to calculate the excess loss.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event the Subscribing Reinsurer&#146;s Statement of Valuation of the outstanding claim or
claims is viewed as unacceptable to the Company, the Company may either abandon the
commutation effort, or may seek to settle any difference by using an independent actuary
agreed to by the parties.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the parties cannot agree on an acceptable independent actuary within 15 calendar days of
the date of the Subscribing Reinsurer&#146;s Statement of Valuation, then each party shall appoint
an actuary as party arbitrators for the limited and sole purpose of selecting an independent
actuary. If the actuaries cannot agree on an acceptable independent actuary within 15
calendar days of the date of the Subscribing Reinsurer&#146;s Statement of Valuation, the Company
shall supply the Subscribing Reinsurer with a list of at least three proposed independent
actuaries, and the Subscribing Reinsurer shall select the independent actuary from that list.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">F.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Upon selection of the independent actuary, both parties shall present their respective
written submissions to the independent actuary. The independent actuary may, at his or her
discretion, request additional information. The independent actuary shall issue his or her
decision within 45 calendar days after the written submissions have been filed and any
additional information has been provided.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">G.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The decision of the independent actuary shall be final and binding. The expense of the
independent actuary shall be equally divided between the two parties. For the purposes of
this Article, unless mutually agreed otherwise, an &#147;independent actuary&#148; shall be an actuary
who satisfies each of the following criteria:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Is regularly engaged in the valuation of claims resulting from lines of business
subject to this Contract; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Is either a Fellow of the Casualty Actuarial Society or of the American Academy of
Actuaries; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Is disinterested and impartial regarding this commutation.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">H.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Notwithstanding paragraph A, B and C above, in the event that the Subscribing Reinsurer no
longer meets the conditions set forth in subparagraph 1 or 2 in paragraph A above, this
commutation may continue on a mutually agreed basis.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">I.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Payment by the Subscribing Reinsurer of the amount requested in accordance with paragraph B,
C or F above, shall release the Subscribing Reinsurer from all further liability for
outstanding claim or claims, known or unknown, under this Contract, which shall release the
Company from all further liability for payments of salvage or subrogation amounts, known or
unknown, to the Subscribing Reinsurer under this Contract.</TD>
</TR>

</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">Page 13
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<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">J.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event of any conflict between this Article and any other Article of this Contract, the
terms of this Article shall control.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">K.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This Article shall survive the termination of this Contract.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XIII &#151; Salvage and Subrogation</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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) or
subrogation on account of claims and settlements involving reinsurance hereunder. Salvage or
subrogation 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 where it is economically reasonable in the judgment of the Company, relating to any
loss, a part of which loss was sustained by the Reinsurer, and to prosecute all claims arising out
of such rights.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XIV &#151; Federal Terrorism Coverage</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any loss reimbursement the Company receives from the United States Government under the
Terrorism Risk Insurance Act of 2002, as amended by the Terrorism Risk Insurance Extension Act
of 2005 (together the &#147;Terrorism Act&#148;) as a result of occurrences commencing during the
contract year shall inure to the benefit of this Contract in the proportion that the Company&#146;s
insured losses (as defined in the Terrorism Act) in that occurrence under policies reinsured
under this Contract bear to the Company&#146;s total insured losses in that occurrence.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If a loss reimbursement received by the Company under the Terrorism Act is based on the
Company&#146;s insured losses in more than one occurrence and the United States Government does not
designate the amount allocable to each occurrence, the reimbursement shall be prorated in the
proportion that the Company&#146;s insured losses in each occurrence bear to the Company&#146;s total
insured losses arising out of all occurrences to which the recovery applies.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XV &#151; Reinsurance Premium</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As premium for each excess layer of reinsurance coverage provided by this Contract, the
Company shall pay the Reinsurer the greater of the following:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The amount, shown as &#147;Annual Minimum Premium&#148; for that excess layer in Schedule&nbsp;A
attached hereto (or a pro rata portion thereof if the contract year is less than 12
months); or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The percentage, shown as &#147;Premium Rate&#148; for that excess layer in Schedule&nbsp;A
attached hereto, of the Company&#146;s net earned premium for the contract year (except the
runoff contract year, if any).</TD>
</TR>

</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">Page 14
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company shall pay the Reinsurer a deposit premium for each excess layer of the amount,
shown as &#147;Annual Deposit Premium&#148; for that excess layer in Schedule&nbsp;A attached hereto, in four
equal installments of the amount, shown as &#147;Quarterly Deposit Premium&#148; for that excess layer
in Schedule&nbsp;A attached hereto, on January&nbsp;1, April&nbsp;1, July 1 and October 1 of each contract
year (except the runoff contract year, if any). However, if this Contract is terminated, no
deposit premium installments shall be due after the effective date of termination (except as
provided in paragraph D below).</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Within 60&nbsp;days after the end of each contract year (and 60&nbsp;days after the end of the runoff
contract year, if any), 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 each excess layer
shall be remitted promptly.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event this Contract is terminated on a runoff basis, the reinsurance premium for the
runoff contract year shall be calculated by multiplying the unearned portion of premium in
force at the effective date of termination by the percentage, shown as &#147;Premium Rate&#148; for that
excess layer in Schedule&nbsp;A attached hereto, and paid semi-annually, and no minimum premium
shall apply.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Net earned premium&#148; as used herein is defined as the Company&#146;s gross earned premium
collected on the classes of business subject to this Contract, less only the earned portion of
premiums, if any, ceded by the Company for reinsurance which inures to the benefit of this
Contract and less dividends incurred.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XVI &#151; Late Payments</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The provisions of this Article shall not be implemented unless specifically invoked, in
writing, by one of the parties to this Contract.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event any premium, loss or other payment due either party is not received by the
intermediary named in the Intermediary Article (BRMA 23A) (hereinafter referred to as the
&#147;Intermediary&#148;) by the payment due date, the party to whom payment is due, may, by notifying
the Intermediary in writing, require the debtor party to pay, and the debtor party agrees to
pay, an interest penalty on the amount past due calculated for each such payment on the last
business day of each month as follows:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The number of full days which have expired since the due date or the last monthly
calculation, whichever the lesser; times</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>1/365ths of the sum of 400 basis points plus the six-month United States Treasury
Bill rate as quoted in <I>The Wall Street Journal </I>on the first business day of the month for
which the calculation is made; times</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The amount past due, including accrued interest.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It is agreed that interest shall accumulate until payment of the original amount due plus
interest penalties have been received by the Intermediary.</TD>
</TR>

</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">Page 15
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The establishment of the due date shall, for purposes of this Article, be determined as
follows:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As respects the payment of routine deposits and premiums due the Reinsurer, the due
date shall be as provided for in the applicable section of this Contract. In the event a
due date is not specifically stated for a given payment, it shall be deemed due 30&nbsp;days
after the date of transmittal by the Intermediary of the initial billing for each such
payment.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any claim or loss payment due the Company hereunder shall be deemed due 45 business
days after the proof of loss or demand for payment is transmitted to the Reinsurer. If
such loss or claim payment is not received within the 45&nbsp;days, interest will accrue on
the payment or amount overdue in accordance with paragraph B above, from the date the
proof of loss or demand for payment was transmitted to the Reinsurer.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As respects any payment, adjustment or return due either party not otherwise
provided for in subparagraphs 1 and 2 of paragraph C above, the due date shall be as
provided for in the applicable section of this Contract. In the event a due date is not
specifically stated for a given payment, it shall be deemed due 10 business days
following transmittal of written notification that the provisions of this Article have
been invoked.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>For purposes of interest calculations only, amounts due hereunder shall be deemed paid upon
receipt by the Intermediary.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Nothing herein shall be construed as limiting or prohibiting a Subscribing Reinsurer from
contesting the validity of any claim, or from participating in the defense of any claim or
suit, or prohibiting either party from contesting the validity of any payment or from
initiating any arbitration or other proceeding in accordance with the provisions of this
Contract. If the debtor party prevails in an arbitration or other proceeding, then any
interest penalties due hereunder on the amount in dispute shall be null and void. If the
debtor party loses in such proceeding, then the interest penalty on the amount determined to
be due hereunder shall be calculated in accordance with the provisions set forth above unless
otherwise determined by such proceedings. If a debtor party advances payment of any amount it
is contesting, and proves to be correct in its contestation, either in whole or in part, the
other party shall reimburse the debtor party for any such excess payment made plus interest on
the excess amount calculated in accordance with this Article.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Interest penalties arising out of the application of this Article that are $100 or less from
any party shall be waived unless there is a pattern of late payments consisting of three or
more items over the course of any 12-month period.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XVII &#151; Offset (BRMA 36A)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Company and the Reinsurer may offset any balance or amount due from one party to the other
under this Contract or any other contract heretofore or hereafter entered into between the Company
and the Reinsurer, whether acting as assuming reinsurer or ceding company. This provision shall
not be affected by the insolvency of either party to this Contract.
</DIV>




<P align="left" style="font-size: 10pt">Page 16
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XVIII &#151; Access to Records (BRMA 1D)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The Reinsurer or its designated representatives shall have access at any reasonable time to
all records of the Company which pertain in any way to this reinsurance.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XIX &#151; Liability of the Reinsurer</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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&#146;s policies and any endorsements thereon.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XX &#151; Net Retained Lines (BRMA 32E)</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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, only loss or losses in respect of
that portion of any policy which the Company retains net for its own account shall be
included.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The amount of the Reinsurer&#146;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.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXI &#151; Errors and Omissions</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Except as provided in the Sunset Article, inadvertent delays, errors or omissions made in
connection with this Contract or any transaction hereunder shall not relieve either party from any
liability which would have attached had such delay, error or omission not occurred, provided always
that such error or omission is rectified as soon as possible after discovery.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXII &#151; Currency (BRMA 12A)</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Whenever the word &#147;Dollars&#148; or the &#147;$&#148; 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.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">Page 17
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXIII &#151; Taxes (BRMA 50B)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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 or the District of Columbia.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXIV &#151; Federal Excise Tax</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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&nbsp;4371 of the
Internal Revenue Code) to the extent such premium is subject to the Federal Excise Tax.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXV &#151; Reserves and Letters of Credit</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#091;Applies only to a reinsurer which does not qualify for full credit with any insurance
regulatory authority having jurisdiction over the Company&#146;s reserves, which is or becomes rated
&#147;B&#043;&#043;&#148; or lower by A.M. Best (inclusive of &#147;Not Rated&#148; ratings) and/or Standard &#038; Poor&#146;s rating is
or becomes &#147;BBB&#043;&#148; or lower (inclusive of &#147;Not Rated&#148; ratings).&#093;
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As regards policies or bonds issued by the Company coming within the scope of this Contract,
the Company agrees that when it shall file with the insurance regulatory authority or set up
on its books reserves for losses covered hereunder which it shall be required by law to set
up, it will forward to the Reinsurer a statement showing the proportion of such reserves which
is applicable to the Reinsurer. The Reinsurer hereby agrees to fund such reserves in respect
of known outstanding losses that have been reported to the Reinsurer and allocated loss
adjustment expense relating thereto, losses and allocated loss adjustment expense paid by the
Company but not recovered from the Reinsurer, plus reserves for losses incurred but not
reported, as shown in the statement prepared by the Company (hereinafter referred to as
&#147;Reinsurer&#146;s Obligations&#148;) by funds withheld, cash advances or a Letter of Credit. The
Reinsurer shall have the option of determining the method of funding provided it is acceptable
to the insurance regulatory authorities having jurisdiction over the Company&#146;s reserves with
regards to unauthorized reinsurers; or, should the Reinsurer be downgraded, the method of
funding shall be mutually agreed.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>When funding by a Letter of Credit, the Reinsurer agrees to apply for and secure timely
delivery to the Company of a clean, irrevocable and unconditional Letter of Credit issued by a
bank meeting the NAIC Securities Valuation Office credit standards for issuers of Letters of
Credit and containing provisions acceptable to the insurance regulatory authorities having
jurisdiction over the Company&#146;s reserves in an amount equal to the Reinsurer&#146;s proportion of
said reserves. Such Letter of Credit shall be issued for a period of not less than one year,
and shall contain an &#147;evergreen&#148; clause, which automatically extends the term for one year
from its date of expiration or any future expiration date unless 30&nbsp;days</TD>
</TR>

</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">Page 18
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>(60&nbsp;days where required by insurance regulatory authorities) prior to any expiration date the
issuing bank shall notify the Company by certified or registered mail that the issuing bank
elects not to consider the Letter of Credit extended for any additional period.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Reinsurer and Company agree that the Letters of Credit provided by the Reinsurer pursuant
to the provisions of this Contract may be drawn upon at any time, notwithstanding any other
provision of this Contract, and be utilized by the Company or any successor, by operation of
law, of the Company including, without limitation, any liquidator, rehabilitator, receiver or
conservator of the Company for the following purposes, unless otherwise provided for in a
separate Trust Agreement:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To reimburse the Company for the Reinsurer&#146;s Obligations, the payment of which is
due under the terms of this Contract and which has not been otherwise paid;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To make refund of any sum which is in excess of the actual amount required to pay
the Reinsurer&#146;s Obligations under this Contract, if so requested by the Reinsurer;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To fund an account with the Company for the Reinsurer&#146;s Obligations. Such cash
deposit shall be held in an interest bearing account separate from the Company&#146;s other
assets, and interest thereon not in excess of the prime rate shall accrue to the benefit
of the Reinsurer;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To pay the Reinsurer&#146;s share of any other amounts the Company claims are due under
this Contract.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual
amount required for subparagraphs 1 or 3, or in the case of subparagraph 4, the actual amount
determined to be due, the Company shall promptly return to the Reinsurer the excess amount so
drawn. All of the foregoing shall be applied without diminution because of insolvency on the
part of the Company or the Reinsurer.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The issuing bank shall have no responsibility whatsoever in connection with the propriety of
withdrawals made by the Company or the disposition of funds withdrawn, except to ensure that
withdrawals are made only upon the order of properly authorized representatives of the
Company.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>At annual intervals, or more frequently as agreed but never more frequently than quarterly,
the Company shall prepare a specific statement of the Reinsurer&#146;s Obligations, for the sole
purpose of amending the Letter of Credit, in the following manner:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the statement shows that the Reinsurer&#146;s Obligations exceed the balance of
credit as of the statement date, the Reinsurer shall, within 30&nbsp;days after receipt of
notice of such excess, secure delivery to the Company of an amendment to the Letter of
Credit increasing the amount of credit by the amount of such difference.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If, however, the statement shows that the Reinsurer&#146;s Obligations are less than the
balance of credit as of the statement date, the Company shall, within 30&nbsp;days after
receipt of written request from the Reinsurer, release such excess credit by agreeing to
secure an amendment to the Letter of Credit reducing the amount of credit available by
the amount of such excess credit.</TD>
</TR>

</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">Page 19
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXVI &#151; Insolvency</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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 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 or bond reinsured 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.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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 company.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It is further understood and agreed that, in the event of the insolvency of one or more of
the reinsured companies, the reinsurance under this Contract shall be payable directly by the
Reinsurer to the company or to its liquidator, receiver or statutory successor, except as
provided by Section 4118(a) of the New York Insurance Law or except (1)&nbsp;where this Contract
specifically provides another payee of such reinsurance in the event of the insolvency of the
company or (2)&nbsp;where the Reinsurer with the consent of the direct insured or insureds has
assumed such policy obligations of the company as direct obligations of the Reinsurer to the
payees under such policies and in substitution for the obligations of the company to such
payees.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXVII &#151; Arbitration (BRMA 6J)</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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&#146;s
London Underwriters. In the event that either party should fail to choose an Arbiter within
30&nbsp;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&nbsp;days following their
appointment, each Arbiter shall nominate three candidates within 10&nbsp;days thereafter, two of
whom the other shall decline, and the decision shall be made by drawing lots.</TD>
</TR>

</TABLE>
</DIV>




<P align="left" style="font-size: 10pt">Page 20
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Each party shall present its case to the Arbiters within 30&nbsp;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.
Judgment upon the final decision of the Arbiters may be entered in any court of competent
jurisdiction.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">C.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">D.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">E.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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 in which the Company has its
principal office.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXVIII &#151; Service of Suit (BRMA 49C)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(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)
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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&#146;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.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">Page 21
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXIX &#151; Entire Agreement</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXX &#151; Governing Law (BRMA 71B)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Contract shall be governed by and construed in accordance with the laws of the State of
Louisiana.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXXI &#151; Agency Agreement</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If more than one reinsured company is named as a party to this Contract, the first named
company 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.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Article&nbsp;XXXII &#151; Intermediary</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Benfield Inc. is hereby recognized as the Intermediary negotiating this Contract for all
business hereunder. All communications relating thereto (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
Benfield Inc. 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>In Witness Whereof</B>, the Company by its duly authorized representative has executed this Contract as
of the date undermentioned at:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">DeRidder, Louisiana, this 18th day of May in the year 2006.
</DIV>




<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="22%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="46%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Allan E. Farr</TD>
</TR>

<TR style="font-size:1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">American Interstate Insurance Company</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">American Interstate Insurance Company of Texas</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Silver Oak Casualty, Inc.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>




<P align="left" style="font-size: 10pt">Page 22
</DIV>


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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: Helvetica,Arial,sans-serif">



<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Schedule&nbsp;A</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Casualty Catastrophe Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">issued to
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="76%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>First</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Second</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Excess</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Excess</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Company&#146;s Retention</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">10,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">20,000,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Reinsurer&#146;s Per Occurrence Limit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">10,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">10,000,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Reinsurer&#146;s Contract Year Limit</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">20,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">20,000,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Annual Minimum Premium</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">800,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">560,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Premium Rate</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.357</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">0.250</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Annual Deposit Premium</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">700,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Quarterly Deposit Premium</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">250,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">175,000</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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.
</DIV>





<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Nuclear Incident Exclusion Clause &#151; Liability &#151; Reinsurance (U.S.A.)</B><BR>
(Approved by Lloyd&#146;s Underwriters&#146; Fire and Non-Marine Association)
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>This reinsurance does not cover any loss or liability accruing to the Reassured as a member
of, or subscriber to, any association of insurers or reinsurers formed for the purpose of
covering nuclear energy risks or as a direct or indirect reinsurer of any such member,
subscriber or association.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Without in any way restricting the operation of paragraph (1)&nbsp;of this Clause it is understood
and agreed that for all purposes of this reinsurance all the original policies of the
Reassured (new, renewal and replacement) of the classes specified in Clause II of this
paragraph (2)&nbsp;from the time specified in Clause III in this paragraph (2)&nbsp;shall be deemed to
include the following provision (specified as the Limited Exclusion Provision):</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Limited Exclusion Provision.*</B></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">I.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>It is agreed that the policy does not apply under any liability coverage, to<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(<I>injury, sickness, disease, death or destruction</I><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bodily injury or property damage<BR>
with respect to which an insured under the policy is also an insured
under a nuclear energy liability policy issued by Nuclear Energy
Liability Insurance Association, Mutual Atomic Energy Liability
Underwriters or Nuclear Insurance Association of Canada, or would be
an insured under any such policy but for its termination upon
exhaustion of its limit of liability.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">II.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Family Automobile Policies (liability only), Special Automobile
Policies (private passenger automobiles, liability only), Farmers
Comprehensive Personal Liability Policies (liability only),
Comprehensive Personal Liability Policies (liability only) or
policies of a similar nature; and the liability portion of
combination forms related to the four classes of policies stated
above, such as the Comprehensive Dwelling Policy and the applicable
types of Homeowners Policies.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">III.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The inception dates and thereafter of all original policies as
described in II above, whether new, renewal or replacement, being
policies which either</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>become effective on or after 1st May, 1960, or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>become effective before that date and contain the Limited Exclusion
Provision set out above;</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">provided this paragraph (2)&nbsp;shall not be applicable to Family Automobile Policies, Special
Automobile Policies, or policies or combination policies of a similar nature, issued by
the Reassured on New York risks, until 90&nbsp;days following approval of the Limited Exclusion
Provision by the Governmental Authority having jurisdiction thereof.
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Except for those classes of policies specified in Clause II of paragraph (2)&nbsp;and without in
any way restricting the operation of paragraph (1)&nbsp;of this Clause, it is understood and agreed
that for all purposes of this reinsurance the original liability policies of the Reassured
(new, renewal and replacement) affording the following coverages:</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 8%">Owners, Landlords and Tenants Liability, Contractual Liability, Elevator Liability, Owners
or Contractors (including railroad) Protective Liability, Manufacturers and Contractors
Liability, Product Liability, Professional and Malpractice Liability, Storekeepers
Liability, Garage Liability, Automobile Liability (including Massachusetts Motor Vehicle
or Garage Liability)
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">shall be deemed to include, with respect to such coverages, from the time specified in Clause V
of this paragraph (3), the following provision (specified as the Broad Exclusion Provision):
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><B>Broad Exclusion Provision.*</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">It is agreed that the policy does not apply:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">I.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Under any Liability Coverage to<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(<I>injury, sickness, disease, death or destruction</I><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bodily injury or property damage</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>with respect to which an insured under the policy is also an insured under
a nuclear energy liability policy issued by Nuclear Energy Liability Insurance
Association, Mutual Atomic Energy Liability Underwriters or Nuclear Insurance
Association of Canada, or would be an insured under any such policy but for its
termination upon exhaustion of its limit of liability; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>resulting from the hazardous properties of nuclear material and with
respect to which (1)&nbsp;any person or organization is required to maintain financial
protection pursuant to the Atomic Energy Act of 1954, or any law amendatory thereof,
or (2)&nbsp;the insured is, or had this policy not been issued would be, entitled to
indemnity from the United States of America, or any agency thereof, under any
agreement entered into by the United States of America, or any agency thereof, with
any person or organization.</TD>
</TR>

</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">II.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Under any Medical Payments Coverage, or under any Supplementary Payments Provision relating to<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(<I>immediate medical or surgical relief</I><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(first aid,<BR>
to expenses incurred with respect to<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(<I>bodily injury, sickness, disease or death</I><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bodily injury<BR>
resulting from the hazardous properties of nuclear material and arising out of the operation of a nuclear facility by any
person or organization.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">III.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Under any Liability Coverage to<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(<I>injury, sickness, disease, death or destruction</I><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bodily injury or property damage<BR>
resulting from the hazardous properties of nuclear material, if</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the nuclear material (1)&nbsp;is at any nuclear facility owned by, or operated
by or on behalf of, an insured or (2)&nbsp;has been discharged or dispersed therefrom;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the nuclear material is contained in spent fuel or waste at any time
possessed, handled, used, processed, stored, transported or disposed of by or on
behalf of an insured; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(<I>injury, sickness, disease, death or destruction</I><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bodily injury or property damage<BR>
arises out of the furnishing by an insured of services, materials, parts or equipment in connection with the
planning, construction, maintenance, operation or use of any nuclear facility, but if such facility is located within the
United States of America, its territories, or possessions or Canada, this exclusion (c)&nbsp;applies only to<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(<I>injury to or destruction of property at such nuclear facility</I><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(property damage to such nuclear facility and any property thereat.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">IV.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>As used in this endorsement:<BR>
&#147;hazardous properties&#148; include radioactive, toxic or explosive properties; &#147;nuclear material&#148; means source material,
special nuclear material or byproduct material; &#147;source material&#148;, &#147;special nuclear material&#148;, and &#147;byproduct material&#148;
have the meanings given them in the Atomic Energy Act of 1954 or in any law amendatory thereof; &#147;spent fuel&#148; means any fuel
element or fuel component, solid or liquid, which has been used or exposed to radiation in a nuclear reactor; &#147;waste&#148; means
any waste material (1)&nbsp;containing byproduct material and (2)&nbsp;resulting from the operation by any person or organization of
any nuclear facility included within the definition of nuclear facility under paragraph (a)&nbsp;or (b)&nbsp;thereof; &#147;nuclear
facility&#148; means</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any nuclear reactor,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any equipment or device designed or used for (1)&nbsp;separating the isotopes of
uranium or plutonium, (2)&nbsp;processing or utilizing spent fuel, or (3)&nbsp;handling
processing or packaging waste,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any equipment or device used for the processing, fabricating or alloying of
special nuclear material if at any time the total amount of such material in the
custody of the insured at the premises where such equipment or device is located
consists of or contains more than 25 grams of plutonium or uranium 233 or any
combination thereof, or more than 250 grams of uranium 235,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any structure, basin, excavation, premises or place prepared or used for
the storage or disposal of waste, and includes the site on which any of the foregoing
is located, all operations conducted on such site and all premises used for such
operations; &#147;nuclear reactor&#148; means any apparatus designed or used to sustain nuclear
fission in a self-supporting chain reaction or to contain a critical mass of
fissionable material;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD align="right" width="1%">&nbsp;</TD>
    <TD><I>(With respect to injury to or destruction of property, the word &#147;injury&#148;
or &#147;destruction,&#148;</I><BR>
(&#147;property damage&#148; includes all forms of radioactive contamination of property,<BR>
(<I>includes all forms of radioactive contamination of property.</I></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">V.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The inception dates and thereafter of all original policies affording coverages
specified in this paragraph (3), whether new, renewal or replacement, being policies
which become effective on or after 1st May, 1960, provided this paragraph (3)&nbsp;shall not
be applicable to</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="15%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Garage and Automobile Policies issued by the Reassured on New
York risks, or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="15%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>statutory liability insurance required under Chapter&nbsp;90,
General Laws of Massachusetts, until 90&nbsp;days following approval of the Broad
Exclusion Provision by the Governmental Authority having jurisdiction thereof.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Without in any way restricting the operation of paragraph (1)&nbsp;of this Clause, it is
understood and agreed that paragraphs (2)&nbsp;and (3)&nbsp;above are not applicable to original
liability policies of the Reassured in Canada and that with respect to such policies this
Clause shall be deemed to include the Nuclear Energy Liability Exclusion Provisions adopted by
the Canadian Underwriters&#146; Association or the Independent Insurance Conference of Canada.</TD>
</TR>

</TABLE>
</DIV>
<DIV style="font-size: 3pt; margin-top: 16pt; width: 100%; border-top: 1px solid #000000">&nbsp;</DIV>
<DIV align="left" style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">*NOTE.</TD>
    <TD>&nbsp;</TD>
    <TD><I>The words printed in italics in the Limited Exclusion Provision and in the Broad Exclusion
Provision shall apply only in relation to original liability policies which include a Limited
Exclusion Provision or a Broad Exclusion Provision containing those words.</I></TD>
</TR>
</TABLE>
</DIV>




<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Casualty Catastrophe Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">issued to
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">First Workers&#146; Compensation Catastrophe Reinsurance
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Reinsurers</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Participations</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Harbor Point Insurance Services, Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">(for Federal Insurance Company)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">10.0</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">IOA RE, Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">(for Catlin Insurance Company Ltd.)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Platinum Underwriters Reinsurance, Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Through Benfield Limited</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Lloyd&#146;s Underwriters and Companies
<BR>Per Signing Schedule(s)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">70.0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right"><B>100.0</B></TD>
    <TD nowrap><B>%</B></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>





<P align="center" style="font-size: 10pt">&nbsp;
</DIV>


<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Second Workers&#146; Compensation Catastrophe Reinsurance
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="53%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>

<TR style="font-size: 10pt" valign="bottom">
    <TD nowrap align="center"><B>Reinsurers</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Participations</B></TD>
</TR>
<TR><TD colspan="3" style="font-size: 8pt">&nbsp;</TD></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Harbor Point Insurance Services, Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">(for Federal Insurance Company)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">20.0</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">IOA RE, Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">(for Catlin Insurance Company Ltd.)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Platinum Underwriters Reinsurance, Inc.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10.0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Through Benfield Limited</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Lloyd&#146;s Underwriters and Companies
<BR>Per Signing Schedule(s)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">60.0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><B>Total</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right"><B>100.0</B></TD>
    <TD nowrap><B>%</B></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>




<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Interests and Liabilities Agreement</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">of
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Certain Insurance Companies<BR>
shown in the Signing Schedule(s) attached hereto<BR>
(<I>hereinafter referred to as the &#147;Subscribing Reinsurer&#148;</I>)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">with respect to the
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Casualty Catastrophe Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">issued to and duly executed by
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer </I>hereby accepts the following percentage shares in the interests and
liabilities of the &#147;Reinsurer&#148; as set forth in the attached Contract captioned above:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 6%; margin-top: 6pt">20.0% of the First Workers&#146; Compensation Catastrophe Reinsurance<BR>
20.0% of the Second Workers&#146; Compensation Catastrophe Reinsurance
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Agreement shall become effective at 12:01&nbsp;a.m., Local Standard Time, January&nbsp;1, 2006, and
shall continue in force until terminated in accordance with the provisions of the attached
Contract.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer&#146;s </I>share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the <I>Subscribing Reinsurer </I>shall in no event participate in the interests and
liabilities of the other reinsurers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In any action, suit or proceeding to enforce the <I>Subscribing Reinsurer&#146;s </I>obligations under the
attached Contract, service of process may be made upon Mendes &#038; Mount, 750 Seventh Avenue, New
York, New York 10019.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Signed for and on behalf of the <I>Subscribing Reinsurer </I>in the Signing Schedule(s) attached hereto.
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>


<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Interests and Liabilities Agreement</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">of
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Federal Insurance Company<BR>
Indianapolis, Indiana<BR>
through<BR>
Harbor Point Insurance Services, Inc.<BR>
Bernardsville, New Jersey<BR>
(<I>hereinafter referred to as the &#147;Subscribing Reinsurer&#148;</I>)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">with respect to the
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Casualty Catastrophe Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">issued to and duly executed by
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer </I>hereby accepts the following percentage shares in the interests and
liabilities of the &#147;Reinsurer&#148; as set forth in the attached Contract captioned above:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 6%; margin-top: 6pt">10.0% of the First Workers&#146; Compensation Catastrophe Reinsurance<BR>
20.0% of the Second Workers&#146; Compensation Catastrophe Reinsurance
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Agreement shall become effective at 12:01&nbsp;a.m., Local Standard Time, January&nbsp;1, 2006, and
shall continue in force until terminated in accordance with the provisions of the attached
Contract.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer&#146;s </I>share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the <I>Subscribing Reinsurer </I>shall in no event participate in the interests and
liabilities of the other reinsurers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>In Witness Whereof</B>, the <I>Subscribing Reinsurer </I>by its duly authorized representative has executed
this Agreement as of the date undermentioned at:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Bernardsville, New Jersey, this
<FONT style="border-bottom: 1px solid #000000; width: 15%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28th</FONT>  day of
<FONT style="border-bottom: 1px solid #000000; width: 25%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;June</FONT>
in the year
<FONT style="border-bottom: 1px solid #000000; width: 15%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2006</FONT>.
</DIV>



<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="58%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>/s/ William Pentony</TD>
</TR>
<TR style="font-size:1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Harbor Point Insurance Services, Inc. (for and on behalf of Federal</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Insurance Company)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>






<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Interests and Liabilities Agreement</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">of
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Catlin Insurance Company Ltd.<BR>
Hamilton, Bermuda<BR>
by<BR>
IOA RE, Inc.<BR>
Plymouth Meeting, Pennsylvania<BR>
(<I>hereinafter referred to as the &#147;Subscribing Reinsurer&#148;</I>)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">with respect to the
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Casualty Catastrophe Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">issued to and duly executed by
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer </I>hereby accepts the following percentage shares in the interests and
liabilities of the &#147;Reinsurer&#148; as set forth in the attached Contract captioned above:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 6%; margin-top: 6pt">10.0% of the First Workers&#146; Compensation Catastrophe Reinsurance<BR>
10.0% of the Second Workers&#146; Compensation Catastrophe Reinsurance
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Agreement shall become effective at 12:01&nbsp;a.m., Local Standard Time, January&nbsp;1, 2006, and
shall continue in force until terminated in accordance with the provisions of the attached
Contract.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer&#146;s </I>share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the <I>Subscribing Reinsurer </I>shall in no event participate in the interests and
liabilities of the other reinsurers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>In Witness Whereof</B>, the <I>Subscribing Reinsurer </I>by its duly authorized representative has executed
this Agreement as of the date undermentioned at:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Plymouth Meeting, Pennsylvania, this
<FONT style="border-bottom: 1px solid #000000; width: 15%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13th</FONT>  day of
<FONT style="border-bottom: 1px solid #000000; width: 25%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;June</FONT>
in the year
<FONT style="border-bottom: 1px solid #000000; width: 15%">&nbsp;2006</FONT>.
</DIV>




<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="58%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>/s/ William Reichert</TD>
</TR>
<TR style="font-size:1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">IOA RE, Inc. (for and on behalf of</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Catlin Insurance Company Ltd.)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>





<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Interests and Liabilities Agreement</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">of
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Platinum Underwriters Reinsurance, Inc.<BR>
Baltimore, Maryland<BR>
(<I>hereinafter referred to as the &#147;Subscribing Reinsurer&#148;</I>)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">with respect to the
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Casualty Catastrophe Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">issued to and duly executed by
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer </I>hereby accepts the following percentage shares in the interests and
liabilities of the &#147;Reinsurer&#148; as set forth in the attached Contract captioned above:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 6%; margin-top: 6pt">10.0% of the First Workers&#146; Compensation Catastrophe Reinsurance<BR>
10.0% of the Second Workers&#146; Compensation Catastrophe Reinsurance
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Agreement shall become effective at 12:01&nbsp;a.m., Local Standard Time, January&nbsp;1, 2006, and
shall continue in force until terminated in accordance with the provisions of the attached
Contract.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer&#146;s </I>share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the <I>Subscribing Reinsurer </I>shall in no event participate in the interests and
liabilities of the other reinsurers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>In Witness Whereof</B>, the <I>Subscribing Reinsurer </I>by its duly authorized representative has executed
this Agreement as of the date undermentioned at:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">New York, New York, this
<FONT style="border-bottom: 1px solid #000000; width: 15%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8th</FONT>  day of
<FONT style="border-bottom: 1px solid #000000; width: 25%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;June</FONT>
in the year
<FONT style="border-bottom: 1px solid #000000; width: 15%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2006</FONT>.
</DIV>




<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="58%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>/s/ Jeffrey Gearheart</TD>
</TR>
<TR style="font-size:1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-bottom: 1px solid #000000">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Platinum Underwriters Reinsurance, Inc.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>





<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Interests and Liabilities Agreement</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">of
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Certain Underwriting Members of Lloyd&#146;s<BR>
shown in the Signing Schedules attached hereto<BR>
(<I>hereinafter referred to as the &#147;Subscribing Reinsurer&#148;</I>)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">with respect to the
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Casualty Catastrophe Excess of Loss<BR>
Reinsurance Contract<BR>
Effective: January&nbsp;1, 2006</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">issued to and duly executed by
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">American Interstate Insurance Company<BR>
DeRidder, Louisiana<BR>
American Interstate Insurance Company of Texas<BR>
Austin, Texas<BR>
Silver Oak Casualty, Inc.<BR>
DeRidder, Louisiana<BR>
and<BR>
any other insurance companies which are now or<BR>
hereafter come under the ownership, control or management of<BR>
Amerisafe Insurance Group
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer </I>hereby accepts the following percentage shares in the interests and
liabilities of the &#147;Reinsurer&#148; as set forth in the attached Contract captioned above:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-left: 6%; margin-top: 6pt">50.0% of the First Workers&#146; Compensation Catastrophe Reinsurance<BR>
40.0% of the Second Workers&#146; Compensation Catastrophe Reinsurance
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">This Agreement shall become effective at 12:01&nbsp;a.m., Local Standard Time, January&nbsp;1, 2006, and
shall continue in force until terminated in accordance with the provisions of the attached
Contract.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The <I>Subscribing Reinsurer&#146;s </I>share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the <I>Subscribing Reinsurer </I>shall in no event participate in the interests and
liabilities of the other reinsurers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In any action, suit or proceeding to enforce the <I>Subscribing Reinsurer&#146;s </I>obligations under the
attached Contract, service of process may be made upon Mendes &#038; Mount, 750 Seventh Avenue, New
York, New York 10019.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Signed for and on behalf of the <I>Subscribing Reinsurer </I>in the Signing Schedules attached hereto.
</DIV>




<P align="center" style="font-size: 10pt">&nbsp;
</DIV>


</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>7
<FILENAME>d38372exv31w1.htm
<DESCRIPTION>CERTIFICATION PURSUANT TO SECTION 302
<TEXT>
<HTML>
<HEAD>
<TITLE>exv31w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;31.1</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CERTIFICATIONS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I, C. Allen Bradley, Jr., certify that:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this quarterly report on Form 10-Q of AMERISAFE, Inc.;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this report;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included
in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this report;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant&#146;s other certifying officer(s) and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules&nbsp;13a-15(e) and
15d-15(e)) for the registrant and have:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in which this
report is being prepared;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) &#091;Not Applicable&#093;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by this report based on such
evaluation; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant&#146;s internal control over
financial reporting that occurred during the registrant&#146;s most recent fiscal quarter (the
registrant&#146;s fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrant&#146;s internal control
over financial reporting; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant&#146;s other certifying officer(s) and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrant&#146;s auditors and the audit
committee of the registrant&#146;s board of directors (or persons performing the equivalent functions):
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect
the registrant&#146;s ability to record, process, summarize and report financial information; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrant&#146;s internal control over financial reporting.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date: August&nbsp;14, 2006
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ C. Allen Bradley, Jr.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">C. Allen Bradley, Jr.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chairman, President and Chief Executive Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(Principal Executive Officer)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>8
<FILENAME>d38372exv31w2.htm
<DESCRIPTION>CERTIFICATION PURSUANT TO SECTION 302
<TEXT>
<HTML>
<HEAD>
<TITLE>exv31w2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;31.2</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CERTIFICATIONS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I, Geoffrey R. Banta, certify that:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this quarterly report on Form 10-Q of AMERISAFE, Inc.;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period
covered by this report;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included
in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this report;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant&#146;s other certifying officer(s) and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules&nbsp;13a-15(e) and
15d-15(e)) for the registrant and have:
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in which this
report is being prepared;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) &#091;Not Applicable&#093;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant&#146;s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by this report based on such
evaluation; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant&#146;s internal control over
financial reporting that occurred during the registrant&#146;s most recent fiscal quarter (the
registrant&#146;s fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrant&#146;s internal control
over financial reporting; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant&#146;s other certifying officer(s) and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrant&#146;s auditors and the audit
committee of the registrant&#146;s board of directors (or persons performing the equivalent functions):
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect
the registrant&#146;s ability to record, process, summarize and report financial information; and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 3%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrant&#146;s internal control over financial reporting.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date: August&nbsp;14, 2006
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Geoffrey R. Banta</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Geoffrey R. Banta</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Vice President and Chief Financial Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(Principal Financial Officer)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>9
<FILENAME>d38372exv32w1.htm
<DESCRIPTION>CERTIFICATION PURSUANT TO SECTION 906
<TEXT>
<HTML>
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<TITLE>exv32w1</TITLE>
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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;32.1</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CERTIFICATION PURSUANT TO 18 U.S.C. &#167; 1350,<BR>
AS ADOPTED PURSUANT TO &#167; 906<BR>
OF THE SARBANES-OXLEY ACT OF 2002</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the filing of the Quarterly Report on Form 10-Q of AMERISAFE, Inc., a Texas
corporation (the &#148;Company&#148;), for the quarter ended June&nbsp;30, 2006, as filed with the Securities and
Exchange Commission on the date hereof (the &#147;Report&#148;), each of the undersigned officers of the
Company certifies, pursuant to 18 U.S.C. &#167; 1350, as adopted pursuant to &#167; 906 of the Sarbanes-Oxley
Act of 2002, that, to such officer&#146;s knowledge:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;The report fully complies with the requirements of section 13(a) or 15(d) of the Securities
Exchange Act of 1934; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;The information contained in the Report fairly presents, in all material respects, the
financial condition and results of operations of the Company as of the dates and for the periods
expressed in the Report.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date: August&nbsp;14, 2006
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ C. Allen Bradley, Jr.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">C. Allen Bradley, Jr.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chairman, President and Chief Executive Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(Principal Executive Officer)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Geoffrey R. Banta</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Geoffrey R. Banta</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Vice President and Chief Financial Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(Principal Financial Officer)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The foregoing certification is being furnished solely pursuant to 18 U.S.C. &#167; 1350 and is not
being filed as part of the Report or as a separate disclosure document.
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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