This Certificate is an Agreement of Reinsurance under which the Reinsurer indemnifies the Company with respect to its insurance liability assumed under the policy set forth on the front of this Certificate subject to the following terms and conditions:

A. APPLICATION OF LIABILITY. The liability of the Reinsurer shall follow the terms and conditions of the Company's policy furnished to the Reinsurer at the effective date of this Reinsurance Certificate, unless otherwise specifically provided herein by endorsement made a part of this Certificate. Any change in the terms and conditions of the Company's policy subsequent to the effective date of this Reinsurance Certificate shall not increase or extend the Reinsurer's liability hereunder unless such change is made a part of this Certificate by endorsement issued by the Reinsurer.

B. RETENTION OF THE COMPANY. This reinsurance is accepted in reliance on the Company's not reducing its net interest in order to reduce its liability as determined by the amount specified in Item 3. Company Retention. Should the Company Retention be reduced by reinsurance or otherwise without notice to the Reinsurer (except as the Company Retention may be covered by non-specific excess of loss catastrophe reinsurance applying to more than one of the Company's policies in a single event), the Reinsurer's liability for loss otherwise fully collectible hereunder shall be determined in accordance with the following:

(1) If this reinsurance is on an excess-of-loss basis, the Reinsurer shall be liable only for that portion of any loss otherwise fully collectible hereunder than the percentage which the actual amount of the Company's Retention at the time of loss bears to the amount stipulated in Item 3, and there shall be no return premium to the Company on account of any such reduction in the Reinsurer's liability for loss.

(2) If this reinsurance is on a pro rata (or quota share) basis, the Reinsurer shall be liable for its proportion of any loss otherwise fully collectible hereunder than the percentage which the actual amount of the Company's Retention at the time of loss bears to the amount stipulated in Item 3, and there shall be no return premium to the Company on account of any such reduction in the Reinsurer's liability for loss.

C. COOPERATION OF THE COMPANY. The Company shall furnish the Reinsurer with a copy of its policy and all endorsements thereto which in any manner affect this Certificate, and shall make available for inspection and place at the disposal of the Reinsurer at reasonable times, at the offices of the Company during normal business hours, any of its records relating to this reinsurance or claims in connection herewith.

D. NOTICE OF OCCURRENCE. Prompt notice shall be given the Reinsurer of any occurrence of incident which is likely to involve it under this reinsurance, whether or not the Company considers it has an adequate defense or not.

E. DEFENSE OF CLAIMS OR SUITS. While the Reinsurer owes or undertakes to investigate or defend claims or suits, it shall not thereby have the right and be given the opportunity to associate with the Company and its representatives at its own expense in connection with and control of any claim, suit or proceeding involving the occurrence with full cooperation of the Company. The Reinsurer shall have the right to defend any such claim, but not the obligation to defend or pursue and satisfy any of the Company's defenses in its name.

F. LIMITATION OF REINSURANCE. All Insurance Policy claims arising out of this reinsurance accepted by the Company shall be reinsured by the Reinsurer which will be bound to pay the full value of such settlement promptly, following receipt of such settlement.

G. SALVAGE. The Reinsurer will be entitled to be paid by the Company with its proportion of salvage, less the amounts obtained or reserved by the Company in accordance with Section 4 of this Certificate, if any, except as hereinafter provided. All costs other than Company salaries and expenses of such salvage or reimbursement shall be borne by the Company and the Reinsurer in proportion to the ultimate benefit received to each.

H. TAXES. The Company will be liable for all taxes, including income taxes, on business done by the Reinsurer under this Certificate.

I. INSOLVENCY. In the event of insolvency of the Company, insurance under this Certificate shall be payable by the Reinsurer on the basis of the liability of the Company without limitation because of said insolvency, subject to the Company's right to terminate this Certificate upon notice to the Reinsurer. The Reinsurer shall be given the opportunity to defend any such claim, but shall not have the right to associate with the Company and its representatives at its own expense in connection with and control of any claim, suit or proceeding involving the occurrence with full cooperation of the Company. The Reinsurer shall have the right to defend any such claim, but not the obligation to defend or pursue and satisfy any of the Company's defenses in its name.