10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2014

Commission file number: 001-12251

AMERISAFE, INC.

(Exact Name of Registrant as Specified in Its Charter)

Texas	75-2069407
(State of Incorporation)	(I.R.S. Employer Identification Number)
2301 Highway 190 West, DeRidder, Louisiana	70634
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (337) 463-9052

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of April 30, 2014, there were 18,674,459 shares of the Registrant’s common stock, par value $.01 per share, outstanding.

TABLE OF CONTENTS

		Page No.
PART I—FINANCIAL INFORMATION
	Forward-Looking Statements		3
Item 1	Financial Statements		4
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations		17
Item 3	Quantitative and Qualitative Disclosures About Market Risk		22
Item 4	Controls and Procedures		23
PART II—OTHER INFORMATION
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds		23
Item 6	Exhibits		24

2

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of Section 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 “expect,” “intend,” “plan,” “believe,” “project,” “forecast,” “estimate,” “may,” “should,” “anticipate” 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:

• 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;

• adverse developments in economic, competitive or regulatory conditions within the workers’ compensation insurance industry;

• decreased level of business activity of our policyholders caused by decreased business activity generally, and in particular in the industries we target;

• developments in capital markets that adversely affect the performance of our investments;

• the cyclical nature of the workers’ compensation insurance industry;

• general economic conditions, including recession, inflation, performance of financial markets, interest rates, unemployment rates and fluctuating asset values;

• decreased demand for our insurance;

• increased competition on the basis of types of insurance offered, premium rates, coverage availability, payment terms, claims management, safety services, policy terms, overall financial strength, financial ratings and reputation;

• changes in regulations, laws, rates, or rating factors applicable to us, our policyholders or the agencies that sell our insurance;

• loss of the services of any of our senior management or other key employees;

• 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;

• changes in rating agency policies or practices;

• changes in legal theories of liability under our insurance policies;

• 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

• other risks and uncertainties described from time to time in the Company’s filings with the Securities and Exchange Commission (“SEC”).

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this report, and under the caption “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2013. 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.

3

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

AMERISAFE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

	March 31, 2014			December 31, 2013
	(unaudited)
Assets
Investments:
Fixed maturity securities—held-to-maturity, at amortized cost (fair value $575,175 and $561,179 in 2014 and 2013, respectively)	$	548,612		$	536,583
Fixed maturity securities—available-for-sale, at fair value (cost $270,135 and $244,409 in 2014 and 2013, respectively)		268,189			237,877
Equity securities—available-for-sale, at fair value (cost $3,447 and $9,482 in 2014 and 2013, respectively)		3,682			9,302
Short-term investments		85,031			84,422
Other investments		10,820			10,591
Total investments		916,334			878,775
Cash and cash equivalents		106,860			123,077
Amounts recoverable from reinsurers		78,275			75,326
Premiums receivable, net of allowance		192,964			171,579
Deferred income taxes		32,806			33,645
Accrued interest receivable		11,345			11,242
Property and equipment, net		7,425			7,549
Deferred policy acquisition costs		21,091			19,171
Other assets		9,650			8,637
	$	1,376,750		$	1,329,001
Liabilities and shareholders’ equity
Liabilities:
Reserves for loss and loss adjustment expenses	$	636,191		$	614,557
Unearned premiums		177,428			164,296
Reinsurance premiums payable		1,727			607
Amounts held for others		36,617			35,739
Policyholder deposits		45,811			44,620
Insurance-related assessments		28,113			25,428
Accounts payable and other liabilities		29,650			26,940
Payable for investments purchased		635			—
		956,172			912,187
Shareholders’ equity:
Common stock:
Voting—$0.01 par value authorized shares—50,000,000 in 2014 and 2013; 19,917,709 and 19,855,430 shares issued and 18,659,459 and 18,597,180 shares outstanding in 2014 and 2013, respectively		198			198
Additional paid-in capital		194,076			192,537
Treasury stock at cost (1,258,250 shares in 2014 and 2013)		(22,370	)		(22,370	)
Accumulated earnings		249,729			250,744
Accumulated other comprehensive loss, net		(1,055	)		(4,295	)
		420,578			416,814
	$	1,376,750		$	1,329,001

See accompanying notes.

4

AMERISAFE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except share and per share data)

(unaudited)

	Three Months Ended March 31,
	2014			2013
Revenues
Gross premiums written	$	105,703		$	99,123
Ceded premiums written		(3,339	)		(4,481	)
Net premiums written	$	102,364		$	94,642
Net premiums earned	$	89,233		$	79,709
Net investment income		6,708			6,670
Net realized gains on investments		101			24
Fee and other income		131			109
Total revenues		96,173			86,512
Expenses
Loss and loss adjustment expenses incurred		61,285			56,001
Underwriting and certain other operating costs		7,963			7,068
Commissions		6,687			6,164
Salaries and benefits		6,721			5,645
Policyholder dividends		113			554
Total expenses		82,769			75,432
Income before income taxes		13,404			11,080
Income tax expense		2,855			2,229
Net income		10,549			8,851
Net income available to common shareholders	$	10,549		$	8,836
Earnings per share
Basic	$	0.57		$	0.48
Diluted	$	0.56		$	0.47
Shares used in computing earnings per share
Basic		18,531,926			18,281,353
Diluted		18,859,682			18,689,842
Extraordinary cash dividends declared per common share	$	0.50		$	—
Cash dividends declared per common share	$	0.12		$	0.08

See accompanying notes.

5

AMERISAFE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(unaudited)

	Three Months Ended March 31,
	2014		2013
Net income	$	10,549	$	8,851
Other comprehensive income:
Unrealized gain/(loss) on securities, net of tax		3,240		(545	)
Comprehensive income	$	13,789	$	8,306

AMERISAFE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

(in thousands, except share data)

(unaudited)

	Common Stock				Treasury Stock						Additional Paid-In		Accumulated			Accumulated Other Comprehensive			Total
	Shares		Amount		Shares			Amounts			Capital		Earnings			Loss
Balance at December 31, 2013		19,855,430	$	198		(1,258,250	)	$	(22,370	)	$	192,537	$	250,744		$	(4,295	)	$	416,814
Comprehensive income		—		—		—			—			—		10,549			3,240			13,789
Options exercised		61,167		—		—			—			600		—			—			600
Tax benefit from share-based payments		—		—		—			—			625		—			—			625
Restricted common stock issued		1,112		—		—			—			—		—			—			—
Share-based compensation		—		—		—			—			314		—			—			314
Dividends to stockholders		—		—		—			—			—		(11,564	)		—			(11,564	)
Balance at March 31, 2014		19,917,709	$	198		(1,258,250	)	$	(22,370	)	$	194,076	$	249,729		$	(1,055	)	$	420,578

See accompanying notes.

6

AMERISAFE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Three Months Ended March 31,
	2014			2013
Operating Activities
Net income	$	10,549		$	8,851
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		332			322
Net amortization of investments		3,765			2,928
Deferred income taxes		(906	)		(885	)
Net realized (gains) on investments		(101	)		(24	)
Share-based compensation		558			290
Changes in operating assets and liabilities:
Premiums receivable, net		(21,385	)		(25,197	)
Accrued interest receivable		(103	)		87
Deferred policy acquisition costs		(1,920	)		(1,619	)
Other assets		(1,241	)		(860	)
Reserves for loss and loss adjustment expenses		21,634			7,538
Unearned premiums		13,132			14,932
Reinsurance balances		(1,829	)		2,675
Amounts held for others and policyholder deposits		2,069			3,124
Accounts payable and other liabilities		5,732			9,615
Net cash provided by operating activities		30,286			21,777
Investing Activities
Purchases of investments held-to-maturity		(38,698	)		(26,454	)
Purchases of investments available-for-sale		(35,248	)		(43,263	)
Purchases of short-term investments		(44,920	)		(47,603	)
Proceeds from maturities of investments held-to-maturity		24,930			34,411
Proceeds from sales and maturities of investments available-for-sale		14,557			2,528
Proceeds from sales and maturities of short-term investments		43,369			41,338
Purchases of property and equipment		(208	)		(144	)
Net cash used in investing activities		(36,218	)		(39,187	)
Financing Activities
Proceeds from stock option exercises		600			855
Tax benefit from share-based payments		625			642
Dividends to stockholders		(11,510	)		(1,469	)
Net cash (used in)/provided by financing activities		(10,285	)		28
Change in cash and cash equivalents		(16,217	)		(17,382	)
Cash and cash equivalents at beginning of period		123,077			92,676
Cash and cash equivalents at end of period	$	106,860		$	75,294

See accompanying notes.

7

AMERISAFE, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1. Basis of Presentation

AMERISAFE, Inc. (the “Company”) is an insurance holding company incorporated in the state of Texas. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries: American Interstate Insurance Company (“AIIC”), Silver Oak Casualty, Inc. (“SOCI”), American Interstate Insurance Company of Texas (“AIICTX”), Amerisafe Risk Services, Inc. (“RISK”) and Amerisafe General Agency, Inc. (“AGAI”). AIIC and SOCI are property and casualty insurance companies organized under the laws of the state of Nebraska. AIICTX is a property and casualty insurance company organized under the laws of the state of Texas. In 2013, AIIC and SOCI were re-domesticated to Nebraska from Louisiana. RISK, a wholly owned subsidiary of the Company, is a claims and safety services company, currently servicing only affiliated 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 “AMERISAFE,” the “Company,” “we,” “us” or “our” refer to AMERISAFE, Inc. and its consolidated subsidiaries, as the context requires.

The Company provides workers’ compensation insurance for small to mid-sized employers engaged in hazardous industries, principally construction, trucking, manufacturing, oil and gas, and agriculture. Assets and revenues of AIIC represent at least 95% of comparable consolidated amounts of the Company for each of 2014 and 2013.

In the opinion of 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 (“GAAP”). 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 31, 2013.

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.

Certain prior year amounts have been reclassified to conform with the current year presentation.

Note 2. Stock Options and Restricted Stock

The Company has three equity incentive plans: the AMERISAFE 2005 Equity Incentive Plan (the “2005 Incentive Plan”), the AMERISAFE 2010 Non-Employee Director Restricted Stock Plan (the “2010 Restricted Stock Plan”) and the AMERISAFE 2012 Equity and Incentive Compensation Plan (the “2012 Incentive Plan”). See Note 13 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2013 for additional information regarding the Company’s incentive plans.

In March 2013, the Company granted 4,312 shares of restricted common stock to four executive officers. The awards were made pursuant to the Company’s 2012 Incentive Plan.

During the three months ended March 31, 2014, options to purchase 61,167 shares of common stock were exercised. During the three months ended March 31, 2013, options to purchase 95,000 shares of common stock were exercised. In connection with these exercises, the Company received $0.6 million of stock option proceeds in the first three months of 2014 and $0.9 million of stock option proceeds in the same period in 2013.

The Company recognized share-based compensation expense of $0.6 million and $0.3 million in the three months ended March 31, 2014 and 2013, respectively.

8

Note 3. Earnings Per Share

The Company computes earnings per share (EPS) in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 260, Earnings Per Share. Additionally, during 2013, the Company applied the “two-class method” in computing basic and diluted earnings per share as a result of the participating unvested common shares which contained nonforfeitable rights to dividends during this period. As of January 1, 2014, the Company no longer has participating unvested common shares which contain nonforfeitable rights to dividends and now applies the treasury stock method in computing basic and diluted earnings per share.

Under the two-class method, net income available to common and participating common shareholders is reduced by the amount of dividends declared in the current period and by the contractual amount of dividends that must be paid for the current period related to the Company’s common and participating common shares. Participating common shares include unvested share-based payment awards that contain nonforfeitable rights to dividends, whether paid or unpaid. Any remaining undistributed earnings are allocated to the common and participating common shareholders to the extent that each security shares in earnings as if all of the earnings for the period had been distributed. The amount of earnings allocable to each security is divided by the number of outstanding shares of the security to which the earnings are allocated to determine the EPS for the security. In a period of loss, no losses are allocated to the participating common shareholders. Instead, all such losses are allocated to the common shareholders.

Basic EPS is calculated by dividing income available to common shareholders by the weighted-average number of common shares outstanding during the period. The diluted EPS calculation includes potential common shares assumed issued under the treasury stock method, which reflects the potential dilution that would occur if any outstanding options or warrants were exercised or restricted stock becomes vested, and includes the “if converted” method for participating securities if the effect is dilutive. We determine diluted EPS as the more dilutive result of either the treasury method or the two-class method.

	Three Months Ended March 31,
	2014		2013
	(in thousands, except share and per share amounts)
Basic EPS:
Net income, as reported	$	10,549	$	8,851
Less allocated income to unvested shares		—		15
Net income available to common shareholders—basic	$	10,549	$	8,836
Basic weighted average common shares		18,531,926		18,281,353
Basic earnings per common share	$	0.57	$	0.48
Diluted EPS:
Net income available to common shareholders—diluted	$	10,549	$	8,836
Diluted weighted average common shares:
Weighted average common shares		18,531,926		18,281,353
Stock options and performance shares		327,756		408,489
Diluted weighted average common shares		18,859,682		18,689,842
Diluted earnings per common share	$	0.56	$	0.47

Note 4. Investments

The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as held-to-maturity at March 31, 2014 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	368,697	$	19,970	$	(303	)	$	388,364
Corporate bonds		94,099		945		(74	)		94,970
Commercial mortgage-backed securities		49,884		3,079		—			52,963
U.S. agency-based mortgage-backed securities		20,418		1,794		—			22,212
U.S. Treasury securities and obligations of U.S. government agencies		12,265		1,077		(6	)		13,336
Asset-backed securities		3,249		214		(133	)		3,330
Totals	$	548,612	$	27,079	$	(516	)	$	575,175

9

The gross unrealized gains and losses on, and the cost or amortized cost and fair value of, those investments classified as available-for-sale at March 31, 2014 are summarized as follows:

	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
Fixed maturity:
States and political subdivisions	$	153,335	$	3,530	$	(2,790	)	$	154,075
Corporate bonds		106,789		503		(198	)		107,094
U.S. agency-based mortgage-backed securities		10,011		—		(2,991	)		7,020
Total fixed maturity		270,135		4,033		(5,979	)		268,189
Other investments		10,000		820		—			10,820
Equity securities		3,447		261		(26	)		3,682
Totals	$	283,582	$	5,114	$	(6,005	)	$	282,691

The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as held-to-maturity at December 31, 2013 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	381,674	$	18,634	$	(1,153	)	$	399,155
Corporate bonds		67,423		861		(41	)		68,243
Commercial mortgage-backed securities		50,813		3,431		—			54,244
U.S. agency-based mortgage-backed securities		21,775		1,790		—			23,565
U.S. Treasury securities and obligations of U.S. Government agencies		11,514		1,002		—			12,516
Asset-backed securities		3,384		216		(144	)		3,456
Totals	$	536,583	$	25,934	$	(1,338	)	$	561,179

The gross unrealized gains and losses on, and the cost or amortized cost and fair value of, those investments classified as available-for-sale at December 31, 2013 are summarized as follows:

	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
Fixed maturity:
States and political subdivisions	$	154,024	$	1,491	$	(5,140	)	$	150,375
Corporate bonds		80,344		445		(361	)		80,428
U.S. agency-based mortgage-backed securities		10,041		—		(2,967	)		7,074
Total fixed maturity		244,409		1,936		(8,468	)		237,877
Other investments		10,000		591		—			10,591
Equity securities		9,482		387		(567	)		9,302
Totals	$	263,891	$	2,914	$	(9,035	)	$	257,770

10

A summary of the cost and fair value of investments in fixed maturity securities, classified as held-to-maturity at March 31, 2014, by contractual maturity, is as follows:

Remaining Time to Maturity	Amortized Cost Basis		Fair Value
	(in thousands)
Less than one year	$	55,114	$	55,575
One to five years		171,828		179,609
Five to ten years		127,493		136,840
More than ten years		120,626		124,646
U.S. agency-based mortgage-backed securities		20,418		22,212
Commercial mortgage-backed securities		49,884		52,963
Asset-backed securities		3,249		3,330
Total	$	548,612	$	575,175

A summary of cost and fair value of investments in fixed maturity securities, classified as available-for-sale at March 31, 2014, by contractual maturity, is as follows:

Remaining Time to Maturity	Amortized Cost Basis		Fair Value
	(in thousands)
Less than one year	$	41,459	$	41,542
One to five years		60,956		61,229
Five to ten years		15,939		16,289
More than ten years		141,770		142,109
U.S. agency-based mortgage-backed securities		10,011		7,020
Total	$	270,135	$	268,189

The following table summarizes the fair value and gross unrealized losses on securities, aggregated by major investment category and length of time that the individual securities have been in a continuous unrealized loss position:

	Less Than 12 Months				12 Months or Greater				Total
	Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses		Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses		Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses
	(In thousands)
March 31, 2014
Held-to-Maturity
Fixed maturity securities:
Corporate bonds	$	24,290	$	74	$	—	$	—	$	24,290	$	74
States and political subdivisions		27,027		262		2,012		41		29,039		303
Asset-backed securities		—		—		1,866		133		1,866		133
U.S. Treasury securities and obligations of U.S. government agencies		3,387		6		—		—		3,387		6
Total held-to-maturity securities		54,704		342		3,878		174		58,582		516
Available-for Sale
Fixed maturity securities:
Corporate bonds	$	45,493	$	198	$	—	$	—	$	45,493	$	198
States and political subdivisions		43,605		1,371		12,247		1,419		55,852		2,790
U.S. agency-based mortgage-backed securities		1,324		423		5,695		2,568		7,019		2,991
Equity securities		461		26		—		—		461		26
Total available-for-sale securities		90,883		2,018		17,942		3,987		108,825		6,005
Total	$	145,587	$	2,360	$	21,820	$	4,161	$	167,407	$	6,521

11

	Less Than 12 Months				12 Months or Greater				Total
	Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses		Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses		Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses
	(In thousands)
December 31, 2013
Held-to-Maturity
Fixed maturity securities:
Corporate bonds	$	14,090	$	41	$	—	$	—	$	14,090	$	41
States and political subdivisions		54,895		1,147		311		6		55,206		1,153
Asset-backed securities		—		—		1,916		144		1,916		144
Total held-to-maturity securities		68,985		1,188		2,227		150		71,212		1,338
Available-for Sale
Fixed maturity securities:
Corporate bonds	$	29,691	$	361	$	—	$	—	$	29,691	$	361
States and political subdivisions		101,908		4,798		1,753		342		103,661		5,140
U.S. agency-based mortgage-backed securities		1,303		465		5,772		2,502		7,075		2,967
Equity securities		5,205		567		—		—		5,205		567
Total available-for-sale securities		138,107		6,191		7,525		2,844		145,632		9,035
Total	$	207,092	$	7,379	$	9,752	$	2,994	$	216,844	$	10,373

At March 31, 2014, the Company held 144 individual fixed maturity securities and one equity security that were in an unrealized loss position, of which 27 individual fixed maturity securities were in a continuous unrealized loss position for longer than 12 months.

Amerisafe holds investments in a long/short equity fund, accounted for under the equity method. The carrying value of this investment is $10.8 million at March 31, 2014.

Investment income is recognized as it is earned. The discount or premium on fixed maturity securities is amortized using the “constant yield” method. Anticipated prepayments, where applicable, are considered when determining the amortization of premiums or discounts. Realized investment gains and losses are determined using the specific identification method.

We regularly review our investment portfolio to evaluate the necessity of recording impairment losses for other-than-temporary declines in the fair value of our investments. We consider various factors in determining if a decline in the fair value of an individual security is other-than-temporary. The key factors we consider are:

• any reduction or elimination of dividends, or nonpayment of scheduled principal or interest payments;

• the financial condition and near-term prospects of the issuer of the applicable security, including any specific events that may affect its operations or earnings;

• how long and by how much the fair value of the security has been below its cost or amortized cost;

• any downgrades of the security by a rating agency;

• our intent not to sell the security for a sufficient time period for it to recover its value;

• the likelihood of being forced to sell the security before the recovery of its value; and

• an evaluation as to whether there are any credit losses on debt securities.

We reviewed all securities with unrealized losses in accordance with the impairment policy described above. The Company expects to hold investments in equity securities for a reasonable period of time sufficient for a recovery of fair value. We determined that the unrealized losses in the fixed maturity securities portfolio related primarily to changes in market interest rates since the date of purchase, current conditions in the capital markets and the impact of those conditions on market liquidity and prices generally, and the transfer of the investments from the available-for-sale classification to the held-to-maturity classification in January 2004. We expect to recover the carrying value of these securities as it is not more likely than not that we will be required to sell the security before the recovery of its amortized cost basis. In addition, none of the unrealized losses on debt securities are considered credit losses.

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Net realized gains on investments in the three months ended March 31, 2014 totaled $0.1 million resulting from gains on called fixed maturity securities and the sale of equity securities. Net realized gains in the three months ended March 31, 2013 were immaterial.

As a result of the review of our investment portfolio, there were no impairment losses recognized for other-than-temporary declines in the fair value of our investments in the three months ended March 31, 2014 and 2013.

Note 5. Income Taxes

In accordance with FASB ASC Topic 740, “Income Taxes,” we provide for the recognition and measurement of deferred income tax benefits based on the likelihood of their realization in future years. As of March 31, 2014, the Company had no material unrecognized tax benefits and no adjustments to liabilities or operations were required.

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. There were no uncertain tax positions recognized for the periods ended March 31, 2014 and 2013.

Tax years 2009 through 2013 are subject to examination by the federal and state taxing authorities. In April 2012, the Company was notified by the Internal Revenue Service that the examination for tax year 2009 had been completed, but remains subject to state taxing authorities.

Note 6. Comprehensive Income and Accumulated Other Comprehensive Income

Comprehensive income was $13.8 million for the three months ended March 31, 2014, compared to $8.3 million for the three months ended March 31, 2013. The difference between net income as reported and comprehensive income was due to changes in unrealized gains and losses, net of tax on available-for-sale securities.

Comprehensive income includes net income plus unrealized gains/losses on our available-for-sale investment securities, net of tax. In reporting comprehensive income on a net basis in the statement of income, we used a 35 percent tax rate. The following table illustrates the changes in the balance of each component of accumulated other comprehensive income for each period presented in the interim financial statements.

	Three Months Ended March 31,
	2014			2013
	(in thousands)
Beginning balance	$	(4,295	)	$	2,979
Other comprehensive income/(loss) before reclassification		3,134			(556	)
Amounts reclassified from accumulated other comprehensive income		106			11
Net current period other comprehensive income/(loss)		3,240			(545	)
Ending Balance	$	(1,055	)	$	2,434

The sale or other-than-temporary impairment of an available-for-sale security results in amounts being reclassified from accumulated other comprehensive income to current period net income. The effects of reclassifications out of accumulated other comprehensive income by the respective line items of net income are presented in the following table.

Component of Accumulated Other Comprehensive Income	Three Months Ended March 31,						Affected line item in the statement of income
	2014			2013
	(in thousands)
Unrealized losses on available-for-sale securities	$	(163	)	$	(17	)	Net realized gains on investments
		(163	)		(17	)	Income before income taxes
		57			6		Income tax expense
	$	(106	)	$	(11	)	Net income

Note 7. Fair Value Measurements

We carry available-for-sale securities at fair value in our consolidated financial statements and determine fair value measurements and disclosure in accordance with FASB ASC Topic 820, “Fair Value Measurements and Disclosures.”

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The Company determines the fair values of its financial instruments based on the fair value hierarchy established in ASC Topic 820, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard defines fair value, describes three levels of inputs that may be used to measure fair value, and expands disclosures about fair value measurements.

Fair value is defined in ASC Topic 820 as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is the price to sell an asset or transfer a liability and, therefore, represents an exit price, not an entry price. Fair value is the exit price in the principal market (or, if lacking a principal market, the most advantageous market) in which the reporting entity would transact. Fair value is a market-based measurement, not an entity-specific measurement, and, as such, is determined based on the assumptions that market participants would use in pricing the asset or liability. The exit price objective of a fair value measurement applies regardless of the reporting entity’s intent and/or ability to sell the asset or transfer the liability at the measurement date.

ASC Topic 820 requires the use of valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities. The income approach uses valuation techniques to convert future amounts, such as cash flows or earnings, to a single present value amount on a discounted basis. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset, also known as current replacement cost. Valuation techniques used to measure fair value are to be consistently applied.

In ASC Topic 820, inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, for example, the risk inherent in a particular valuation technique used to measure fair value (such as a pricing model) and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable:

• Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity.

• Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

Valuation techniques used to measure fair value are intended to maximize the use of observable inputs and minimize the use of unobservable inputs. ASC Topic 820 establishes a fair value hierarchy that prioritizes the use of inputs used in valuation techniques into the following three levels:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

• Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, or inputs that are derived principally from or corroborated by observable market data.

• Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs are to be used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.

In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters.

The fair values of the Company’s investments are based upon prices provided by an independent pricing service. The Company has reviewed these prices for reasonableness and has not adjusted any prices received from the independent provider. Securities reported at fair value utilizing Level 1 inputs represent assets whose fair value is determined based upon observable unadjusted quoted market prices for identical assets in active markets. Level 2 securities represent assets whose fair value is determined using observable market information such as previous day trade prices, quotes from less active markets or quoted prices of securities with similar characteristics. There were no transfers between Level 1 and Level 2 during the three months ended March 31, 2014.

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At March 31, 2014, assets and liabilities measured at fair value on a recurring basis are summarized below:

	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(in thousands)
Financial instruments carried at fair value, classified as a part of:
Other investments	$	—	$	—	$	10,820	$	10,820
Securities available for sale—equity:
Domestic common stock		3,682		—		—		3,682
Securities available for sale—fixed maturity:
States and political subdivisions		—		154,075		—		154,075
Corporate bonds		—		107,094		—		107,094
U.S. agency-based mortgage-backed securities		—		7,020		—		7,020
Total securities available for sale—fixed maturity		—		268,189		—		268,189
Total available for sale	$	3,682	$	268,189	$	10,820	$	282,691

At March 31, 2014, assets and liabilities measured at amortized cost are summarized below:

	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(in thousands)
Securities held-to-maturity—fixed maturity
States and political subdivisions	$	—	$	388,364	$	—	$	388,364
Corporate bonds		—		94,970		—		94,970
Commercial mortgage-backed securities		—		52,963		—		52,963
U.S. agency-based mortgage-backed securities		—		22,212		—		22,212
U.S. Treasury securities and obligations of U.S. government agencies		7,343		—		—		7,343
Obligations of U.S. government agencies		—		5,993		—		5,993
Asset-backed securities		—		3,330		—		3,330
Total held-to-maturity	$	7,343	$	567,832	$	—	$	575,175

At December 31, 2013, assets and liabilities measured at fair value on a recurring basis are summarized below:

	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(in thousands)
Financial instruments carried at fair value, classified as part of:
Other investments	$	—	$	—	$	10,591	$	10,591
Securities available for sale—equity
Domestic common stock		9,302		—		—		9,302
Securities available for sale—fixed maturity
States and political subdivisions		—		150,375		—		150,375
Corporate bonds		—		80,428		—		80,428
U.S. agency-based mortgage-backed securities		—		7,074		—		7,074
Total available for sale—fixed maturity		—	$	237,877	$	—	$	237,877
Total available for sale	$	9,302	$	237,877	$	10,591	$	257,770

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At December 31, 2013, assets and liabilities measured at amortized cost are summarized below:

	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(in thousands)
Securities held-to-maturity—fixed maturity
States and political subdivisions	$	—	$	399,155	$	—	$	399,155
Corporate bonds		—		68,243		—		68,243
Commercial mortgage-backed securities		—		54,244		—		54,244
U.S. agency-based mortgage-backed securities		—		23,565		—		23,565
U.S. Treasury securities		6,602		—		—		6,602
Obligations of U.S. government agencies		—		5,914		—		5,914
Asset-backed securities		—		3,456		—		3,456
Total held-to-maturity	$	6,602	$	554,577	$	—	$	561,179

The Company determines fair value amounts for financial instruments using available third-party market information. When such information is not available, the Company determines the fair value amounts using appropriate valuation methodologies. Nonfinancial instruments such as real estate, property and equipment, deferred policy acquisition costs, deferred income taxes and loss and loss adjustment expense reserves are excluded from the fair value disclosure.

Cash and Cash Equivalents—The carrying amounts reported in the accompanying consolidated balance sheets for these financial instruments approximate their fair values, which are characterized as Level 1 assets.

Investments—The fair values for fixed maturity and equity securities are based on prices obtained from an independent pricing service. Equity and treasury securities are characterized as Level 1 assets, as their fair values are based on quoted prices in active markets. Fixed maturity securities, other than treasury securities, are characterized as Level 2 assets, as their fair values are determined using observable market inputs.

Short Term Investments—The carrying amounts reported in the accompanying consolidated balance sheets for these financial instruments approximate their fair values. These securities are characterized as Level 2 assets in the fair value hierarchy.

Other Investments—Other investments consist of limited partnership (LP) interests valued using the net asset value provided by the general partner of the LP, which approximates the fair value of the interest. The LP’s objective is to generate absolute returns by investing long and short in publicly-traded global securities. Redemptions are allowed monthly following a sixty day notice with no lock up periods. The Company has no unfunded commitments related to the LP. This investment is characterized as a Level 3 asset in the fair value hierarchy.

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The following table summarizes the carrying values and corresponding fair values for financial instruments:

	As of March 31, 2014				As of December 31, 2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(in thousands)
Assets:
Fixed maturity securities—held-to-maturity	$	548,612	$	575,175	$	536,583	$	561,179
Fixed maturity securities—available-for-sale		268,189		268,189		237,877		237,877
Equity securities		3,682		3,682		9,302		9,302
Cash and cash equivalents		106,860		106,860		123,077		123,077
Short-term investments		85,031		85,031		84,422		84,422
Other investments		10,820		10,820		10,591		10,591

The following table presents summary information regarding changes in the fair value of assets measured at fair value using Level 3 input.

	March 31, 2014		December 31, 2013
	(in thousands)
Beginning balance	$	10,591	$	—
Purchases		—		10,000
Total gains unrealized (Included in earnings as part of net investment income)		229		591
Ending Balance	$	10,820	$	10,591

The purchase reported on the Level 3 table above is related to an interest in a limited partnership.

Note 8. Treasury Stock

The Company’s Board of Directors initiated a share repurchase program in February 2010. In October 2011, October 2012 and October 2013, the Board reauthorized this program with a new limit of $25.0 million. Unless reauthorized, the program will expire on December 31, 2014. Since the beginning of this plan, the Company has repurchased a total of 1,258,250 shares for $22.4 million, or an average price of $17.78, including commissions.

Note 9. Subsequent Events

On April 29, 2014, the Company’s Board of Directors declared a quarterly cash dividend of $0.12 per share, payable on June 26, 2014 to shareholders of record as of June 12, 2014. The Board intends to consider the payment of a regular cash dividend each calendar quarter.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and the related notes included in Item 1 of Part I of this Quarterly Report on Form 10-Q, together with “Management’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 31, 2013.

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 months ended March 31, 2014 and 2013. 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.”

Business Overview

AMERISAFE is a holding company that markets and underwrites workers’ compensation insurance through its insurance subsidiaries. Workers’ 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

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to small to mid-sized employers engaged in hazardous industries, principally construction, trucking, manufacturing, oil and gas and agriculture. Employers engaged in hazardous industries pay substantially higher than average rates for workers’ 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’ 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 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 for our shareholders.

We actively market our insurance in 30 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 17 states and the U.S. Virgin Islands.

Critical Accounting Policies

Understanding our accounting policies is key to understanding our financial statements. Management considers some of these policies to be very important to the presentation of our financial results because they require us to make significant estimates and assumptions. These estimates and assumptions affect the reported amounts of our assets, liabilities, revenues and expenses and 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.

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, premiums receivable, assessments, deferred policy acquisition costs, deferred income taxes, the impairment of investment securities and share-based compensation. These critical accounting policies are more fully described in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2013.

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Results of Operations

The following table summarizes our consolidated financial results for the three months ended March 31, 2014 and 2013.

	Three Months Ended March 31,
	2014			2013
	(dollars in thousands, except per share data)
	(unaudited)
Gross premiums written	$	105,703		$	99,123
Net premiums earned		89,233			79,709
Net investment income		6,708			6,670
Total revenues		96,173			86,512
Total expenses		82,769			75,432
Net income		10,549			8,851
Diluted earnings per common share	$	0.56		$	0.47
Other Key Measures
Net combined ratio (1)		92.7	%		94.7	%
Return on average equity (2)		10.1	%		9.2	%
Book value per share (3)	$	22.54		$	21.20

(1) 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 net premiums earned in the current period.

(2) Return on average equity is calculated by dividing the annualized net income by the average shareholders’ equity for the applicable period.

(3) Book value per share is calculated by dividing shareholders’ equity by total outstanding shares, as of the end of the period.

Consolidated Results of Operations for Three Months Ended March 31, 2014 Compared to March 31, 2013

Gross Premiums Written. Gross premiums written for the quarter ended March 31, 2014 were $105.7 million, compared to $99.1 million for the same period in 2013, an increase of 6.6%. The increase was attributable to a $8.5 million increase in annual premiums on voluntary policies written during the period and a $0.7 million increase in assumed premiums from mandatory pooling arrangements. These increases were partially offset by a $2.7 million decrease in premiums resulting from payroll audits and related premium adjustments for policies written in previous quarters. The effective loss cost multiplier for our voluntary business was 1.86 for the first quarter ended March 31, 2014 compared to 1.72 for the same period in 2013.

Net Premiums Written. Net premiums written for the quarter ended March 31, 2014 were $102.4 million, compared to $94.6 million for the same period in 2013, an increase of 8.2%. The increase was primarily attributable to the increase in gross premiums written. As a percentage of gross premiums earned, ceded premiums were 3.6% for the first quarter of 2014 compared to 5.3% for the first quarter of 2013. The decrease in ceded premiums as a percentage of gross premiums earned is a result of a change in our 2014 reinsurance treaties. For additional information, see Item 1, “Business—Reinsurance” in our Annual Report on Form 10-K for the year ended December 31, 2013. Subsequent to the filing of the Annual Report on Form 10-K for the year ended December 31, 2013, AMSF placed the remaining 25% of its $3 million excess of $2 million working layer with a third party reinsurer. As a result, the working layer is 100% placed with reinsurers and Amerisafe is no longer a co-participant.

Net Premiums Earned. Net premiums earned for the first quarter of 2014 were $89.2 million, compared to $79.7 million for the same period in 2013, an increase of 11.9%. The increase was attributable to the increase in net premiums written in the quarter.

Net Investment Income. Net investment income for the quarter ended March 31, 2014 and 2013 was $6.7 million. Average invested assets, including cash and cash equivalents, were $1.0 billion in the quarter ended March 31, 2014, compared to an average of $0.9 billion for the same period in 2013, an increase of 11.9%. The pre-tax investment yield on our investment portfolio was 2.7% and 2.9% per annum during the quarters ended March 31, 2014 and 2013, respectively. The tax-equivalent yield on our investment portfolio was 3.8% per annum for the quarter ended March 31, 2014, compared to 4.2% per annum for the same period in 2013. The tax-equivalent yield is calculated using the effective interest rate and a 35% marginal tax rate.

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Net Realized Gains on Investments. Net realized gains on investments for the three months ended March 31, 2014 totaled $0.1 million compared to an immaterial amount for the same period in 2013. Net realized gains in the first quarter of 2014 were attributable to called fixed maturity securities and the sale of equity securities from the available-for-sale portfolio.

Loss and Loss Adjustment Expenses Incurred. Loss and loss adjustment expenses (LAE) incurred totaled $61.3 million for the three months ended March 31, 2014, compared to $56.0 million for the same period in 2013, an increase of $5.3 million, or 9.4%. The current accident year losses and LAE incurred were $63.8 million, or 71.5% of net premiums earned, compared to $58.4 million, or 73.2% of net premiums earned, for the same period in 2013. We recorded favorable prior accident year development of $2.5 million in the first quarter of 2014, compared to favorable prior accident year development of $2.4 million in the same period of 2013, as further discussed below in “Prior Year Development.” Our net loss ratio was 68.7% in the first quarter of 2014, compared to 70.3% for the same period of 2013.

Underwriting and Certain Other Operating Costs, Commissions and Salaries and Benefits. Underwriting and certain other operating costs, commissions and salaries and benefits for the quarter ended March 31, 2014 were $21.4 million, compared to $18.9 million for the same period in 2013, an increase of 13.2%. This increase was primarily driven by a $1.1 million increase in compensation expense due to annual merit increases as well as increases in bonus and share-based compensation, a $0.5 million increase in commission expense, and a $0.2 million increase in mandatory pooling arrangement fees. Offsetting the increases were a $0.3 million decrease in insurance related assessments and a $0.5 million decrease in premium tax expense primarily driven by the re-domestication to Nebraska. In addition, due to a change in our 2014 reinsurance treaty, we experienced a $1.0 million decrease in experience rated commission and a $0.4 million decrease in ceding commission. For the quarter, our expense ratio was 23.9% in 2014 compared to 23.7% in 2013.

Income Tax Expense. Income tax expense for the three months ended March 31, 2014 was $2.9 million, compared to $2.2 million for the same period in 2013. The increase was attributable to an increase in the effective tax rate to 21.3% in the first quarter of 2014 from 20.1% in the first quarter of 2013. The increase in the effective tax rate was attributable to improved underwriting margins which lowered the ratio of tax-exempt investment income to pre-tax income in the first quarter of 2014 compared to the first quarter of 2013.

Liquidity and Capital Resources

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 the excess.

Net cash provided by operating activities was $30.3 million for the three months ended March 31, 2014, which represented a $8.5 million increase from $21.8 million in net cash provided by operating activities for the three months ended March 31, 2013. This increase in operating cash flow was attributable to a $12.4 million increase in premium collections, a $3.3 million decrease in losses paid and a $0.7 million increase in investment income. Offsetting these increases were a $4.0 million decrease in payable for securities sold, a $3.2 million increase in underwriting expenses paid, a $0.4 million increase in federal income taxes paid and a $0.3 million decrease in reinsurance recoveries.

Net cash used in investing activities was $36.2 million for the three months ended March 31, 2014, compared to net cash used in investment activities of $39.2 million for the same period in 2013. Cash provided by sales and maturities of investments totaled $82.9 million for the three months ended March 31, 2014, compared to $78.3 million for the same period in 2013. A total of $118.9 million in cash was used to purchase investments in the three months ended March 31, 2014, compared to $117.3 million in purchases for the same period in 2013.

Net cash used in financing activities in the three months ended March 31, 2014 was $10.3 million compared to an immaterial amount for the same period in 2013. In the three months ended March 31, 2014, $11.5 million of cash was used for dividends paid to shareholders compared to $1.5 million in the same period of 2013. Offsetting these decreases were proceeds of $0.6 million from stock option exercises in the three months ended March 31, 2014 compared to $0.9 million for the same period in 2013. During the three months ended March 31, 2014 and 2013, the tax benefit from share based compensation was $0.6 million.

The Board of Directors initially authorized the Company’s share repurchase program in February 2010. In October 2011, 2012 and 2013, the Board reauthorized this program. As of March 31, 2014, we had repurchased a total of 1,258,250 shares of our outstanding common stock for $22.4 million. The Company has $25.0 million available for future purchases at March 31, 2014 under this program. There were no shares purchased during the three months ended March 31, 2014 and 2013. We intend to purchase shares of our common stock from time to time depending upon market conditions and subject to applicable regulatory considerations. It is anticipated that future purchases will be funded from available capital.

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On February 25, 2014, the Company declared an extraordinary cash dividend of $0.50 per share, or $9.3 million, payable March 28, 2014 to shareholders of record on March 14, 2014. There were no extraordinary cash dividends declared in 2013.

Also on February 25, 2014, the Company declared a regular quarterly cash dividend of $0.12 per share, or $2.2 million, payable on March 28, 2014 to shareholders of record on March 14, 2014. In 2013, the Company paid a quarterly cash dividend of $0.08 per share.

On April 29, 2014, the Company’s Board of Directors declared a quarterly cash dividend of $0.12 per share, payable on June 26, 2014 to shareholders of record as of June 12, 2014. The Board intends to consider the payment of a regular cash dividend each calendar quarter.

Investment Portfolio

As of March 31, 2014, our investment portfolio, including cash and cash equivalents, totaled $1.0 billion, an increase of 11.4% from $0.9 billion on March 31, 2013. Effective April 1, 2010, purchases of fixed maturity securities are classified as available-for-sale or held-to-maturity based on the individual security. Such classification is made at the time of purchase. The reported value of our fixed maturity securities classified as held-to-maturity, as defined by FASB ASC Topic 320, “Investments-Debt and Equity Securities,” was equal to their amortized cost, and thus was not impacted by changing interest rates. Our equity securities and fixed maturity securities classified as available-for-sale were reported at fair value.

The composition of our investment portfolio, including cash and cash equivalents, as of March 31, 2014, is shown in the following table:

	Carrying Value		Percentage of Portfolio
	(in thousands)
Fixed maturity securities—held-to-maturity:
States and political subdivisions	$	368,697		36.0	%
U.S. agency-based mortgage-backed securities		20,418		2.0	%
Commercial mortgage-backed securities		49,884		4.8	%
U.S. Treasury securities and obligations of U.S. government agencies		12,265		1.2	%
Corporate bonds		94,099		9.2	%
Asset-backed securities		3,249		0.3	%
Total fixed maturity securities—held-to-maturity		548,612		53.5	%
Fixed maturity securities—available-for-sale:
States and political subdivisions		154,075		15.1	%
U.S. agency-based mortgage-backed securities		7,020		0.7	%
Corporate bonds		107,094		10.5	%
Total fixed maturity securities—available-for-sale		268,189		26.3	%
Equity securities		3,682		0.4	%
Short-term investments		85,031		8.3	%
Cash and cash equivalents		106,860		10.4	%
Other investments		10,820		1.1	%
Total investments, including cash and cash equivalents	$	1,023,194		100.0	%

Our securities classified as available-for-sale are “marked to market” as of the end of each calendar quarter. As of that date, unrealized gains and losses are recorded to Accumulated Other Comprehensive Income, except when such securities are deemed to be other-than-temporarily impaired. For our securities classified as held-to-maturity, unrealized gains and losses are not recorded in the financial statements until realized or until a decline in fair value, below amortized cost, is deemed to be other-than-temporary.

During the three months ended March 31, 2014 and 2013, there were no impairment losses recognized for other-than-temporary declines in the fair value of our investments.

21

Prior Year Development

The Company recorded favorable prior accident year development of $2.5 million in the three months ended March 31, 2014. The table below sets forth the favorable or unfavorable development for the three months ended March 31, 2014 and 2013 for accident years 2009 through 2013 and, collectively, for all accident years prior to 2009.

	Favorable/(Unfavorable) Development
	Three Months Ended March 31, 2014		Three Months Ended March 31, 2013
	(in millions)
Accident Year
2013	$	—	$	—
2012		—		0.1
2011		—		—
2010		0.3		0.2
2009		1.0		1.1
Prior to 2009		1.2		1.0
Total net development	$	2.5	$	2.4

The table below sets forth the number of open claims as of March 31, 2014 and 2013, and the number of claims reported and closed during the three months then ended.

	Three Months Ended March 31,
	2014			2013
Open claims at beginning of period		5,297			4,964
Claims reported		1,320			1,260
Claims closed		(1,283	)		(1,145	)
Open claims at end of period		5,334			5,079

The number of open claims at March 31, 2014 increased by 255 claims as compared to the number of open claims at March 31, 2013. Efforts continue to close prior year claims, especially in those circumstances where the claim could be settled for less than the corresponding case reserve amount (which amount represents the estimated ultimate cost to settle the claim, undiscounted). Management believes that these efforts have contributed, in part, to the favorable prior accident year development recorded for the three months ended March 31, 2014.

Our reserves for loss and loss adjustment expenses are inherently uncertain and our focus on providing workers’ compensation insurance to employers engaged in hazardous industries results in our receiving relatively fewer but more severe claims than many other workers’ compensation insurance companies. As a result of this focus on higher severity, lower frequency business, our reserve for loss and loss adjustment expenses may have greater volatility than other workers’ compensation insurance companies. For additional information, see Item 1, “Business—Loss Reserves” in our Annual Report on Form 10-K for the year ended December 31, 2013.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

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.

Since December 31, 2013, there have been no material changes in the quantitative or qualitative aspect of our market risk profile. For additional information regarding the Company’s exposure to certain market risks, see Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the year ended December 31, 2013.

22

Item 4. Controls and Procedures.

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 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) 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. We note that the design of any system of controls is based in part upon 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.

Because of its inherent limitations, management does not expect that our disclosure control and our internal control over financial reporting will prevent or detect all misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with policies and procedures may deteriorate. Any control system, no matter how well designed and operated, is based upon certain assumptions and can only provide reasonable, not absolute assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to errors or fraud will not occur or that all control issues and instances of fraud, if any within the Company, have been detected.

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.

PART II—OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

The Board of Directors initially authorized the Company’s share repurchase program in February 2010. In October 2011, 2012 and 2013, the Board reauthorized this program. As of December 31, 2013, we had repurchased a total of 1,258,250 shares of our outstanding common stock for $22.4 million. There were no shares purchased during the three months ended March 31, 2014 and 2013. We intend to purchase shares of our common stock from time to time depending upon market conditions and subject to applicable regulatory considerations. It is anticipated that future purchases will be funded from available capital. The dollar value of shares that may yet be purchased under the program is $25.0 million.

23

Item 6. Exhibits.

Exhibit No.	Description
10.32	Casualty Catastrophe Excess of Loss Reinsurance Contract, effective as of January 1, 2014, issued to the Company by the reinsurers named therein
31.1	Certification of C. Allen Bradley, Jr. filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Michael Grasher filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of C. Allen Bradley, Jr. and Michael Grasher filed pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

24

SIGNATURES

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.

	AMERISAFE, INC.
May 2, 2014	/s/ C. ALLEN BRADLEY, JR.
	C. Allen Bradley, Jr.
	Chairman and Chief Executive Officer
	(Principal Executive Officer)
May 2, 2014	/s/ Michael Grasher
	Michael Grasher
	Executive Vice President and Chief Financial Officer
	(Principal Financial and Accounting Officer)

25

EXHIBIT INDEX

Exhibit No.	Description
10.32	Casualty Catastrophe Excess of Loss Reinsurance Contract, effective as of January 1, 2014, issued to the Company by the reinsurers named therein
31.1	Certification of C. Allen Bradley, Jr. filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Michael Grasher filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of C. Allen Bradley, Jr. and Michael Grasher filed pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

26

EX-10.32

Exhibit 10.32

ENDORSEMENT NO. 1

to the

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the ownership, control

or management of Amerisafe, Inc.

(the “Company”)

IT IS HEREBY AGREED, effective January 1, 2014, that the Company listing in the Contract's preamble shall be amended to read as follows:

AMERICAN INTERSTATE INSURANCE COMPANY

SILVER OAK CASUALTY, INC.

both of Omaha, Nebraska

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

any other insurance companies which arc now or hereafter come under the ownership, control

or management of Amerisafe, Inc.

(the “Company”)

IT IS FURTHER AGREED that the GOVERNING LAW ARTICLE shall be amended to read as follows:

This Contract shall be governed as to performance, administration and interpretation by the laws of the State of Nebraska, exclusive of that state’s rules with respect to conflicts of law, except as to rules with respect to credit for reinsurance in which case the applicable rules of all states shall apply.

IT IS FURTHER AGREED that paragraph E. of the ARBITRATION ARTICLE shall be amended to read as follows:

E. Within 30 days after notice of appointment of all arbitrators, the panel shall meet and determine timely periods for briefs, discovery procedures and schedules for hearings. The panel shall be relieved of all judicial formality and shall not be bound by the strict rules of procedure and evidence. Unless the panel agrees otherwise, arbitration shall take place in Omaha, Nebraska but the venue may be changed when deemed by the panel to be in the best interest of the arbitration

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Cat XOL Endt 1 1-17-14

proceeding. Insofar as the arbitration panel looks to substantive law, it shall consider the law of the State of Nebraska. The decision of any 2 arbitrators when rendered in writing shall be final and binding. The panel is empowered to grant interim relief as it may deem appropriate.

The provisions of this Contract shall remain otherwise unchanged.

IN WITNESS WHEREOF, the Company by its duly authorized representative has executed this Endorsement as of the date specified below:

Signed this 27^th day of January, 2014.

AMERICAN INTERSTATE INSURANCE COMPANY SILVER OAK CASUALTY, INC. AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS
By	/s/ C. Allen Bradley, Jr
Printed Name	C. Allen Bradley, Jr
Title	Chairman & Chief Executive Officer

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Cat XOL Endt 1 1-17-14

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the ownership,

control or management of Amerisafe Insurance Group

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 12-31-13

TABLE OF CONTENTS

ARTICLE		PAGE
I	BUSINESS COVERED		1
II	TERM		2
III	SPECIAL TERMINATION		2
IV	DEFINITIONS		4
	Act of Terrorism		4
	Declaratory Judgment Expense		4
	Extra Contractual Obligations/Loss in Excess of Policy Limits		4
	Loss Adjustment Expense		5
	Loss Occurrence		5
	Net Earned Premium		6
	Policy		6
V	TERRITORY		6
VI	EXCLUSIONS		7
VII	TERRORISM ACT RECOVERIES		9
VIII	COVERAGE		9
IX	REINSTATEMENT		10
X	SPECIAL ACCEPTANCE		10
XI	ACCOUNTING BASIS		11
XII	REINSURANCE PREMIUM		11
XIII	NOTICE OF LOSS AND LOSS SETTLEMENTS		11
XIV	LIABILITY OF REINSURERS		12
XV	LATE PAYMENTS		12
XVI	ANNUITIES AT THE COMPANY’S OPTION		13
XVII	AGENCY AGREEMENT		14
XVIII	SUBROGATION		14
XIX	ERRORS AND OMISSIONS		14
XX	OFFSET		14
XXI	CURRENCY		15
XXII	TAXES		15
XXIII	FEDERAL EXCISE TAX		15
XXIV	RESERVES AND FUNDING		15
XXV	NET RETAINED LINES		17
XXVI	THIRD PARTY RIGHTS		18

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 12-31-13

XXVII	SEVERABILITY	18
XXVIII	GOVERNING LAW	18
XXIX	INSPECTION OF RECORDS	18
XXX	CONFIDENTIALITY	19
XXXI	SUNSET AND COMMUTATION	20
XXXII	INSOLVENCY	21
XXXIII	ARBITRATION	22
XXXIV	EXPEDITED ARBITRATION	24
XXXV	SERVICE OF SUIT	24
XXXVI	ENTIRE AGREEMENT	25
XXXVII	MODE OF EXECUTION	26
XXXVIII	INTERMEDIARY	26
	Nuclear Incident Exclusion Clause - Liability - Reinsurance - U.S.A.

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 12-31-13

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

between

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the ownership,

control or management of Amerisafe Insurance Group

(collectively the “Company”)

and

THE SUBSCRIBING REINSURER(S) EXECUTING THE

INTERESTS AND LIABILITIES AGREEMENT(S)

ATTACHED HERETO

(the “Reinsurer”)

ARTICLE I

BUSINESS COVERED

A. By this Contract the Reinsurer agrees to reinsure the excess liability of the Company under its Policies that are in force at the effective time and date hereof or issued or renewed at or after that time and date, and classified by the Company as Workers’ Compensation, Employers Liability, including but not limited to coverage provided under the U.S. Longshore and Harbor Workers’ Compensation Act, Jones Act, Outer Continental Shelf Lands Act and any other Federal Coverage extensions, subject to the terms, conditions and limitations hereafter set forth.

B. The Reinsurer further agrees to reinsure the excess liability of the Company under Policies issued by Cooperative Mutual Insurance Company that are in force at the effective time and date hereof or issued or renewed at or after that time and date, and classified by the Company as Workers’ Compensation, Employers Liability, including but not limited to coverage provided under the U.S. Longshore and Harbor Workers’ Compensation Act, Jones Act, Outer Continental Shelf Lands Act and any other Federal Coverage extensions, subject to the terms, conditions and limitations hereafter set forth.

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 1 12-31-13

ARTICLE II

TERM

A. This Contract will apply to all losses occurring during the period January 1, 2014, 12:01 a.m. Standard Time (as set forth in the Company’s policies), to January 1, 2015, 12:01 a.m. Standard Time.

B. Upon the expiration or termination of this Contract, the entire liability of the Reinsurer for losses occurring subsequent to the date of expiration shall cease concurrently with the date of expiration of this Contract.

C. Notwithstanding the above, upon expiration or termination of this Contract, the Company shall have the option of requiring that the Reinsurer shall remain liable for losses occurring under Policies in force on the expiration or termination date of this Contract until the next renewal, termination, or natural expiration date of such Policies or until 12 months (plus “odd time,” not to exceed 18 months in all) following the date of expiration (whichever occurs first).

D. If this Contract expires while a Loss Occurrence covered hereunder is in progress, the Reinsurer’s liability hereunder shall, subject to the other terms and conditions of this Contract, be determined as if the entire Loss Occurrence had occurred prior to the expiration of this Contract, provided that no part of such Loss Occurrence is claimed against any renewal or replacement of this Contract.

ARTICLE III

SPECIAL TERMINATION

A. The Company may terminate a subscribing reinsurer’s share in this Contract by giving written notice to the subscribing reinsurer upon the happening of any one of the following circumstances:

1. A State Insurance Department or other legal authority orders the subscribing reinsurer to cease writing business, or

2. The subscribing reinsurer has become insolvent or has been placed into liquidation or receivership (whether voluntary or involuntary), or there has been instituted against it proceedings 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

3. For any period not exceeding 12 months which commences no earlier than 12 months prior to the inception of this Contract, the subscribing reinsurer’s policyholders’ surplus, as reported in the financial statements of the subscribing reinsurer, has been reduced by 20.0% or more, or

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 2 12-31-13

4. The subscribing reinsurer has become merged with, acquired or controlled by any company, corporation, or individual(s) not controlling the subscribing reinsurer’s operations previously, or

5. The subscribing reinsurer has reinsured its entire liability under this Contract without the Company’s prior written consent, or

6. The subscribing reinsurer receives an A. M. Best rating of lower than A-, or an S&P financial strength rating of lower than A-, or

7. The subscribing reinsurer has ceased writing new and renewal reinsurance for the lines of business covered hereunder.

B. In the event of such termination, the liability of the subscribing reinsurer shall be terminated, at the Company’s option, either in accordance with the cutoff provisions of paragraph B of the TERM ARTICLE or in accordance with the runoff provisions of paragraph C of the TERM ARTICLE, and such termination shall be effective as of the date the subscribing reinsurer receives written notice of termination pursuant to paragraph A above.

C. In the event the Company terminates a subscribing reinsurer’s share in this Contract under the provisions of this Article, the Company shall have the option to commute the excess liabilities of the subscribing reinsurer. If this commutation option is exercised, the provisions of the paragraphs B through G of the SUNSET AND COMMUTATION ARTICLE shall apply.

D. In the event the Company terminates a subscribing reinsurer’s share in this Contract under the provision of this Article, the Company shall have the option to require the subscribing reinsurer to fund its share of ceded unearned premium, outstanding loss and Loss Adjustment Expense reserves, reserves for losses and Loss Adjustment Expense incurred but not reported to the Company (IBNR as determined by the Company) and any other balances or financial obligations. Within 30 days of the Company’s written request to fund, the subscribing reinsurer shall provide to the Company a clean, unconditional, evergreen, irrevocable letter of credit or a trust agreement which establishes a trust account for the benefit of the Company. The method of funding must be acceptable to the Company, shall be established with a financial institution suitable to the Company, shall comply with any applicable state or federal laws or regulations involving the Company’s ability to recognize these agreements as assets or offsets to liabilities in such jurisdictions and shall be at the sole expense of the subscribing reinsurer. The Company and the subscribing reinsurer may mutually agree on alternative methods of funding or the use of a combination of methods. This option is available to the Company at any time there remains any outstanding liabilities of the subscribing reinsurer. Notwithstanding the foregoing, the Company shall not require funding in accordance with this subparagraph in the event the subscribing reinsurer has otherwise fully funded its obligations under this Contract in a manner acceptable to the Company.

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 3 12-31-13

ARTICLE IV

DEFINITIONS

A. Act of Terrorism

“Act of Terrorism” as used herein shall follow the definition provided under the Terrorism Risk Insurance Act of 2002 (TRIA) and as amended by the Terrorism Risk Insurance Extension Act of 2005 (TRIEA) and the Terrorism Risk Insurance Program Reauthorization Act of 2007 (TRIPRA), together and including any extensions or replacement thereof, the “Terrorism Act.”

In the event the Terrorism Act is not extended or renewed, Act of Terrorism shall mean a violent act or an act that is dangerous to human life; property; or infrastructure that 1) has resulted in damage within the United States, or outside of the United States in the case of an air carrier or vessel, 2) was committed by an individual or individuals as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the United States Government by coercion. The Company shall determine the application of the above definition.

An “Act of Terrorism” may include an act involving the use and/or dispersal of nuclear, chemical, biological or radiological agents.

B. Declaratory Judgment Expense

“Declaratory Judgment Expense” as used herein shall mean all expenses incurred by the Company in connection with a declaratory judgment action brought to determine the Company’s defense and/or indemnification obligations that are allocable to a specific claim subject to this Contract. Declaratory Judgment Expense shall be deemed to have been incurred on the date of the original loss (if any) giving rise to the declaratory judgment action.

C. Extra Contractual Obligations/Loss in Excess of Policy Limits

1. Extra Contractual Obligations

This Contract shall protect the Company for any “Extra Contractual Obligations” which as used herein shall mean any punitive, exemplary, compensatory or consequential damages, other than Loss in Excess of Policy Limits, paid or payable by the Company as a result of an action against it by its insured, its insured’s assignee or a third party claimant, by reason of alleged or actual negligence, fraud or bad faith on the part of the Company in handling a claim under a Policy subject to this Contract.

An Extra Contractual Obligation shall be deemed to have occurred on the same date as the loss covered or alleged to be covered under the Policy.

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 4 12-31-13

2. Loss in Excess of Policy Limits

This Contract shall protect the Company for any “Loss in Excess of Policy Limits” which as used herein shall mean an amount that the Company would have been contractually liable to pay had it not been for the limit of the original Policy as a result of an action against it by its insured, its insured’s assignee or a third party claimant. Such loss in excess of the limit shall have been incurred because of failure by the Company to settle within the Policy limit, or by reason of 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 in the preparation or prosecution of an appeal consequent upon such action.

3. This paragraph C shall not apply where an Extra Contractual Obligation and/or Loss in Excess of Policy Limits has been incurred due to an adjudicated finding of fraud committed by a member of the Board of Directors or a corporate officer of the Company acting individually or collectively or in collusion with a member of the Board of Directors or a corporate officer or a partner of any other corporation or partnership.

D. Loss Adjustment Expense

“Loss Adjustment Expense” as used herein shall mean all costs and expenses allocable to a specific claim that are incurred by the Company in the investigation, appraisal, adjustment, settlement, litigation, defense or appeal of a specific claim, including court costs and costs of supersedeas and appeal bonds, and including 1) pre-judgment interest, unless included as part of the award or judgment; 2) post-judgment interest; 3) legal expenses and costs incurred in connection with coverage questions and legal actions connected thereto, including Declaratory Judgment Expense; and 4) a pro rata share of salaries and expenses of Company field employees, and expenses of other Company employees who have been temporarily diverted from their normal and customary duties and assigned to the field adjustment of losses covered by this Contract. Loss Adjustment Expense does not include unallocated loss adjustment expense. Unallocated loss adjustment expense includes, but is not limited to, salaries and expenses of employees, other than (4) above, and office and other overhead expenses.

E. Loss Occurrence

“Loss Occurrence” as used in this Contract shall mean any one disaster or casualty or accident or loss or series of disasters or casualties or accidents or losses arising out of or caused by one event. The Company shall be the sole judge of what constitutes one event as outlined herein and in the original Policy.

As respects losses resulting from Occupational or Industrial Disease or Cumulative Trauma, each employee shall be considered a separate Loss Occurrence subject to the following:

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, shall be considered one Loss 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 Loss Occurrence within the meaning hereof.

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 5 12-31-13

A loss with respect to each employee affected by an Occupational Disease or Cumulative Trauma shall be deemed to have been sustained by the Company on the date of the beginning of the disability for which compensation is payable.

The terms “Occupational or Industrial Disease” and “Cumulative Trauma” as used in this Contract shall be as defined by applicable statutes or regulations.

F. Net Earned Premium

“Net Earned Premium” as used herein is defined as gross earned premium of the Company for the classes of business reinsured hereunder, less the earned portion of premiums ceded by the Company for reinsurance which inures to the benefit of this Contract and less dividends paid or accrued.

G. Policy

“Policy” or “Policies” as used herein shall mean the Company’s or Cooperative Mutual Insurance Company’s binders, policies and contracts providing insurance or reinsurance on the classes of business covered under this Contract.

H. Ultimate Net Loss

“Ultimate Net Loss” shall mean the actual loss, including any pre-judgment interest which is included as part of the award or judgment, “Second Injury Fund” assessments that can be allocated to specific claims, Loss Adjustment Expense, 90% of Loss in Excess of Policy Limits, and 90% of Extra Contractual Obligations, paid or to be paid by the Company on its net retained liability after making deductions for all recoveries, subrogations and all claims on inuring reinsurance, whether collectible or not; provided, however, that in the event of the insolvency of the Company, payment by the Reinsurer shall be made in accordance with the provisions of the INSOLVENCY ARTICLE. Nothing herein shall be construed to mean that losses under this Contract are not recoverable until the Company’s Ultimate Net Loss has been ascertained.

Notwithstanding the definition of “Ultimate Net Loss” herein, the provisions of paragraph H of the COVERAGE ARTICLE as respects the Minnesota Workers’ Compensation Reinsurance Association shall apply.

ARTICLE V

TERRITORY

The territorial limits of this Contract shall be identical with those of the Company’s Policies.

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 6 12-31-13

ARTICLE VI

EXCLUSIONS

A. This Contract does not apply to and specifically excludes the following:

1. Reinsurance assumed by the Company under obligatory reinsurance agreements, except:

a. 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

b. Intercompany reinsurance between any of the reinsured companies under this Contract.

c. Reinsurance assumed through Policies issued by Cooperative Mutual Insurance Company.

2. Nuclear risks as defined in the “Nuclear Incident Exclusion Clause – Liability – Reinsurance – U.S.A.” (NMA 1590 21/9/67) attached hereto.

3. Liability as a member, subscriber or reinsurer of any Pool, Syndicate or Association, including Assigned Risk Plans or similar plans; however, this exclusion shall not apply to liability under a Policy specifically designated to the Company from an Assigned Risk Plan or similar plan.

4. 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. “Insolvency Fund” 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.

5. Loss caused directly or indirectly by war, whether or not declared, civil war, insurrection, rebellion or revolution, or any act or condition incidental to any of the foregoing. This exclusion shall not apply to any Policy that contains a standard war exclusion.

6. Workers’ Compensation where the principal exposure, as defined by the governing class code, is:

a. Operation of aircraft, but only if the annual estimated policy premium is $250,000 or more;

b. Operation of Railroads, subways or street railways;

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 7 12-31-13

c. 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 and does not apply to the commercial use of explosives;

d. Underground mining.

7. Professional sports teams.

B. Notwithstanding the foregoing, insureds regularly engaged in operations not excluded under paragraph A above, but whose operations may include one or more perils excluded therein, shall not be excluded from coverage afforded by this Contract, provided said operations are incidental to the main operations of the insured. Notwithstanding the foregoing, coverage extended under this paragraph for incidental operations of an insured shall not apply to exposures excluded under subparagraphs 1 through 5 of paragraph A above. The Company shall be the judge of what constitutes an incidental part of the insured’s operation.

C. Except for subparagraphs 1 through 5 of paragraph A above, if the Company is inadvertently bound or is unknowingly exposed (due to error or automatic provisions of policy coverage) on a risk otherwise excluded in paragraph A above, such exclusion shall be waived. The duration of said waiver will not extend beyond the time that notice of such coverage has been received by a responsible underwriting authority of the Company and for a period not exceeding 30 days thereafter, or such longer period required to conform with any notice of cancellation provisions prescribed by regulatory authorities, such period not to exceed 12 months plus odd time (not exceeding 18 months).

D. If the Company is required to accept an assigned risk which conflicts with one or more of the exclusions set forth in subparagraph 5 of paragraph A, reinsurance shall apply, but only for the difference between the Company’s retention and the limit required by the applicable state statute, and in no event shall the Reinsurer’s liability exceed the limit set forth in the Coverage Article.

E. Notwithstanding the foregoing, any reinsurance falling within the scope of one or more of the exclusions set forth above that is specially accepted by the Reinsurer from the Company shall be covered under this Contract and be subject to the terms hereof.

F. Except for subparagraphs 1 through 5 of paragraph A above, should a court of competent jurisdiction invalidate any exclusion or expand coverage of the original Policy of the Company, any amount of Loss for which the Company would not be liable, except for such invalidation or expansion of coverage, shall not be subject to any of the exclusions, conditions and limitations hereinafter set forth under this Contract.

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ARTICLE VII

TERRORISM ACT RECOVERIES

A. Any financial assistance the Company receives under the Terrorism Act, shall apply as follows:

1. Except as provided in subparagraph 2 below, any such financial assistance shall inure solely to the benefit of the Company and shall be entirely disregarded in applying all of the provisions of this Contract.

2. If losses occurring hereunder result in recoveries made by the Company both under this Contract and under the Terrorism Act, and such recoveries, together with any other reinsurance recoverables made by the Company applicable to said losses, exceed the total amount of the Company’s insured losses, any amount in excess thereof shall reduce the Ultimate Net Loss subject to this Contract for the losses to which the Terrorism Act assistance applies. These recoveries shall be returned in proportion to each Reinsurer’s paid share of the loss.

B. Nothing herein shall be construed to mean that the losses under this Contract are not recoverable until the Company has received financial assistance under the Terrorism Act.

ARTICLE VIII

COVERAGE

A. The Reinsurer shall be liable for the Ultimate Net Loss in excess of $10,000,000 as a result of any one Loss Occurrence. The Reinsurer’s liability in respect of any one Loss Occurrence shall not exceed $60,000,000.

B. The Reinsurer’s liability in respect of Ultimate Net Loss amounts recoverable hereunder for an Act of Terrorism (as defined in the definition of “Act of Terrorism”) occurring during the term of this Contract shall not exceed $60,000,000. This paragraph is not subject the REINSTATEMENT ARTICLE.

C. The Reinsurer’s liability in respect of all losses occurring during the term of this Contract shall not exceed $120,000,000.

D. As respects the statutory portion of any Workers’ Compensation Policy, the Company’s Ultimate Net Loss subject to this Contract shall not exceed $10,000,000 as respects any one life, each Loss Occurrence

E. The Company shall be permitted to purchase (or maintain) other reinsurance which inures to the benefit of this Contract.

F. The Company shall be permitted to carry underlying 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.

G. As respects Employers Liability, the maximum net subject Policy limit (except statutory where required by law) as respects any one Policy shall be $2,000,000 or the Company shall be deemed to have purchased inuring excess facultative reinsurance for subject Policy limits in excess of $2,000,000.

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H. The Company shall be permitted to carry excess of loss reinsurance applying to Workers’ Compensation risks in the State of Minnesota, actual recoveries under which shall inure to the benefit of this Contract. Such coverage shall be provided through the Minnesota Workers’ Compensation Reinsurance Association. Notwithstanding the treatment of inuring coverage in the definition of Ultimate Net Loss, the liability of the Reinsurer for Minnesota Workers’ Compensation risks is not released.

ARTICLE IX

REINSTATEMENT

A. Should all or any part of the Reinsurer’s limit of liability be exhausted as a result of a Loss Occurrence, the sum so exhausted shall be reinstated from the date the Loss Occurrence commenced.

B. For each amount so reinstated, the Company agrees to pay an additional premium at the time of the Reinsurer’s payment of the loss calculated in accordance with the following formula:

1. The percentage of the Reinsurer’s limit of liability exhausted for the Loss Occurrence; times

2. The Net Earned Premium for the term of this Contract (exclusive of reinstatement premium).

The dollar amount resulting from the multiplication of subparagraphs 1 and 2 above shall equal the reinstatement premium. If at the time of the Reinsurer’s payment of a loss hereon, the reinsurance premium as calculated under this Contract is unknown, the calculation of the reinstatement premium shall be based upon the deposit premium subject to adjustment when the reinsurance premium is finally established.

C. Nevertheless, the Reinsurer’s liability hereunder shall not exceed $60,000,000 in respect of any one Loss Occurrence, and shall be further limited to $120,000,000 in respect of all losses occurring during the term of this Contract.

ARTICLE X

SPECIAL ACCEPTANCE

From time to time the Company may request a special acceptance applicable to this Contract. For purposes of this Contract, in the event each subscribing reinsurer whose share in the interests and liabilities of the Reinsurer is 20% or greater agree to a special acceptance, such agreement shall be binding on all subscribing reinsurers. 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. Should denial for special acceptance not be received within 10 working days of said request, the special acceptance shall be deemed automatically agreed. 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.

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ARTICLE XI

ACCOUNTING BASIS

All premiums and losses under this Contract shall be reported on an “accident year” accounting basis. Unless specified otherwise herein, all premiums shall be credited to the period during which they earn, and all losses shall be charged to the period during which they occur.

ARTICLE XII

REINSURANCE PREMIUM

A. As premium for the reinsurance provided hereunder, the Company shall pay the Reinsurer 0.5453% times its Net Earned Premium for the term of this Contract subject to a Minimum Premium of $1,440,000.

B. The Company shall pay the Reinsurer a Deposit Premium of $1,800,000 payable in quarterly installments on January 1, April 1, July 1 and October 1.

C. Within 90 days after the expiration of this Contract, the Company shall provide a report to the Reinsurer setting forth the premium due hereunder, computed in accordance with paragraph A, and if the premium so computed is greater than the previously paid Deposit Premium, the balance shall be remitted by the Company with its report.

D. If this Contract expires on a runoff basis, the Company shall pay to the Reinsurer a premium for the runoff period equal to the expiring rate times its Net Earned Premium for the runoff period. The runoff premium shall be calculated and paid within 90 days after the end of each three-month period during the runoff period. There shall be no minimum premium requirement for the runoff period.

ARTICLE XIII

NOTICE OF LOSS AND LOSS SETTLEMENTS

A. As soon as practicable, the Company shall advise the Reinsurer of all bodily injury claims or losses involving any of the following:

1. Any claim or loss reserved at 50.0% or more of the Company’s retention under this Contract.

2. Any claim involving any of the following injuries where the Company’s incurred loss is greater than or equal to $1,000,000:

a. Fatality.

b. Spinal cord injuries (e.g., quadriplegia, paraplegia).

c. Brain damage (e.g., seizure, coma or physical/mental impairment).

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d. Severe burn injuries resulting in disfigurement or scarring.

e. Total or partial blindness in one or both eyes.

f. Major organ (e.g., heart, lungs).

g. Amputation of a limb or multiple fractures.

B. The Company shall also advise the Reinsurer promptly of all losses which, in the opinion of the Company, may result in a claim hereunder and of all subsequent developments thereto which, in the opinion of the Company, may materially affect the position of the Reinsurer.

C. When so requested in writing, the Company shall afford the Reinsurer or its representatives an opportunity to be associated with the Company, at the expense of the Reinsurer, in the defense of any claim, suit or proceeding involving this reinsurance, and the Company and the Reinsurer shall cooperate in every respect in the defense of such claim, suit or proceeding.

D. All loss settlements made by the Company that are within the terms and conditions of this Contract (including but not limited to ex gratia payments) shall be binding upon the Reinsurer. Upon receipt of satisfactory proof of loss, the Reinsurer agrees to promptly pay or allow, as the case may be, its share of each such settlement in accordance with this Contract.

ARTICLE XIV

LIABILITY OF REINSURERS

All reinsurances for which the Reinsurer shall be liable by virtue of this Contract shall be subject in all respects to the same rates, terms, conditions, interpretations and waivers and to the same modifications, alterations, and cancellations, as the respective policies to which such reinsurances relate, the true intent of the parties to this Contract being that the Reinsurer shall follow the fortunes of the Company.

ARTICLE XV

LATE PAYMENTS

A. In the event any premium, loss or other payment due either party is not received by the Intermediary hereunder 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:

1. The number of full days which have expired since the due date or the last monthly calculation, whichever the lesser; times

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2. 1/365ths of a rate equal to the 90-day Treasury Bill rate as published in The Wall Street Journal on the first business day following the date a remittance becomes due; times

3. The amount past due, including accrued interest.

It is agreed that interest shall accumulate until payment of the original amount due plus interest penalties have been received by the Intermediary.

B. The establishment of the due date shall, for purposes of this Article, be determined as follows:

1. As respects the payment of deposits and premiums due the Reinsurer, the due date shall be as provided for in the applicable section of this Contract.

2. Any claim or loss payment due the Company hereunder shall be deemed due 10 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 the10 days, interest will accrue on the payment or amount overdue in accordance with the interest penalty calculation above, from the date the proof of loss or demand for payment was transmitted to the Reinsurer.

3. As respects any payment, adjustment or return due either party not otherwise provided for in subparagraphs 1 and 2 of this paragraph, the due date shall be as provided for in the applicable section of this Contract.

C. For purposes of interest calculation only, amounts due hereunder shall be deemed paid upon receipt by the Intermediary. The validity of any claim or payment may be contested under the provisions of this Contract. If the debtor party prevails in an arbitration, or any other proceeding, there shall be no interest penalty due. Otherwise, any interest will be calculated and due as outlined above.

D. 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.

ARTICLE XVI

ANNUITIES AT THE COMPANY’S OPTION

A. 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’s Ultimate Net Loss.

B. The terms “annuity” or “structured settlement” 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.

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C. 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.

ARTICLE XVII

AGENCY AGREEMENT

If more than one reinsured company is named as a party to this Contract, the first named company will 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.

ARTICLE XVIII

SUBROGATION

The Reinsurer shall be credited with subrogation recoveries (i.e., reimbursement obtained or recovery made by the Company, less Loss Adjustment Expense incurred in obtaining such reimbursement or making such recovery) on account of claims and settlements involving reinsurance hereunder. Subrogation recoveries 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, at its sole option and discretion, may enforce its rights to subrogation relating to any loss, a part of which loss was sustained by the Reinsurer, and may prosecute all claims arising out of such rights.

ARTICLE XIX

ERRORS AND OMISSIONS

Any inadvertent delay, omission or error shall not be held to relieve either party hereto from any liability which would attach to it hereunder if such delay, omission or error had not been made, provided such omission or error is rectified upon discovery. Nothing contained in this Article shall be held to override the specific loss reporting deadline of the SUNSET AND COMMUTATION ARTICLE.

ARTICLE XX

OFFSET

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. The party asserting the right of offset may exercise such right any time whether the balances due are on account of premiums or losses or otherwise.

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ARTICLE XXI

CURRENCY

A. Whenever the word “Dollars” or the “$” 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.

B. 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.

ARTICLE XXII

TAXES

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, the District of Columbia or Canada.

ARTICLE XXIII

FEDERAL EXCISE TAX

(Applicable to those subscribing reinsurers who are domiciled outside the United States of America, excepting subscribing reinsurers exempt from Federal Excise Tax.)

A. The subscribing 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 4371 of the Internal Revenue Code) to the extent such premium is subject to the Federal Excise Tax.

B. In the event of any return of premium becoming due hereunder the subscribing 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.

ARTICLE XXIV

RESERVES AND FUNDING

A. A subscribing reinsurer will provide funding under the terms of this Article only if the Company will be denied statutory credit for reinsurance ceded to that subscribing reinsurer pursuant to the credit for reinsurance law or regulations in any applicable jurisdiction. In the event any of the provisions of this Article conflict with or otherwise fail to satisfy the requirements of the appropriate credit for reinsurance statute or regulation, this Article will be deemed amended to conform to the appropriate statute or regulation; the intent of this Article being that the Company will be permitted to realize full credit for the reinsurance ceded to the Reinsurer under this Contract.

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B. 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 subscribing reinsurer a statement showing the proportion of such reserves which is applicable to the subscribing reinsurer. The subscribing reinsurer hereby agrees to fund such reserves in respect of known outstanding losses that have been reported to the subscribing reinsurer and allocated Loss Adjustment Expense relating thereto, losses and allocated Loss Adjustment Expense paid by the Company but not recovered from the subscribing reinsurer, plus reserves for losses incurred but not reported, as shown in the statement prepared by the Company (hereinafter referred to as “subscribing reinsurer’s obligations”) by funds withheld, cash advances or a Letter of Credit. The subscribing reinsurer shall have the option of determining the method of funding provided it is acceptable to the Company and to the insurance regulatory authorities having jurisdiction over the Company’s reserves.

C. When funding by a Letter of Credit, the subscribing 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 and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company’s reserves in an amount equal to the subscribing reinsurer’s proportion of said reserves. Such Letter of Credit shall be issued for a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless 30 days (60 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.

D. The subscribing reinsurer and Company agree that the Letters of Credit provided by the subscribing 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:

1. To reimburse the Company for the subscribing reinsurer’s obligations, the payment of which is due under the terms of this Contract and which has not been otherwise paid;

2. To make refund of any sum which is in excess of the actual amount required to pay the subscribing reinsurer’s obligations under this Contract;

3. To fund an account with the Company for the subscribing reinsurer’s obligations. Such cash deposit shall be held in an interest bearing account separate from the Company’s other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the subscribing reinsurer;

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4. To pay the subscribing reinsurer’s share of any other amounts the Company claims are due under this Contract.

In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual amount required for subparagraph 1 or 3, or in the case of subparagraph 4, the actual amount determined to be due, the Company shall promptly return to the subscribing 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 subscribing reinsurer.

E. 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.

F. At annual intervals, or more frequently as agreed but never more frequently than quarterly, the Company shall prepare a specific statement of the subscribing reinsurer’s obligations, for the sole purpose of amending the Letter of Credit, in the following manner:

1. If the statement shows that the subscribing reinsurer’s obligations exceed the balance of credit as of the statement date, the subscribing reinsurer shall, within 30 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.

2. If, however, the statement shows that the subscribing reinsurer’s obligations are less than the balance of credit as of the statement date, the Company shall, within 30 days after receipt of written request from the subscribing 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.

G. Should the subscribing reinsurer be in breach of its obligations under this Article, notwithstanding anything to the contrary elsewhere in this Contract, the Company may seek relief in respect of said breach from any court having competent jurisdiction of the parties hereto.

ARTICLE XXV

NET RETAINED LINES

A. 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.

B. The amount of the Reinsurer’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.

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ARTICLE XXVI

THIRD PARTY RIGHTS

This Contract is solely between the Company and the Reinsurer, and in no instance shall any other party have any rights under this Contract except as expressly provided otherwise in the INSOLVENCY ARTICLE.

ARTICLE XXVII

SEVERABILITY

If any provision of this Contract shall be rendered illegal or unenforceable by the laws or regulations 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.

ARTICLE XXVIII

GOVERNING LAW

This Contract shall be governed as to performance, administration and interpretation by the laws of the State of Louisiana, exclusive of that state’s rules with respect to conflicts of law, except as to rules with respect to credit for reinsurance in which case the applicable rules of all states shall apply.

ARTICLE XXIX

INSPECTION OF RECORDS

A. The Reinsurer or its designated representative(s) approved by the Company, upon providing reasonable advance notice to the Company, shall have access at the offices of the Company or at a location to be mutually agreed, at a time to be mutually agreed, to inspect the Company’s underwriting, accounting, or claim files pertaining to the subject matter of this Contract, other than proprietary information or privileged communications. The Company shall determine the manner in which files shall be accessed by the Reinsurer. The Reinsurer may, at its own expense, reasonably request copies of such files and agrees to pay the Company’s reasonable costs incurred in procuring such copies.

B. If any undisputed amounts are overdue from the Reinsurer to the Company, the Reinsurer shall have access to such records only upon payment of all such overdue amounts.

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C. If the Reinsurer makes any inspection of the Company’s books and records involving specific claims under this Contract and, as a result of the inspection the claim is contested or disputed, the Reinsurer shall provide the Company, at the Company’s request, a summary of any reports, other than proprietary information or privileged communications, completed by the Reinsurer’s personnel or by third parties on behalf of the Reinsurer outlining the reasons for contesting or disputing the subject claim.

ARTICLE XXX

CONFIDENTIALITY

A. The Reinsurer hereby acknowledges that the documents, information, and data provided to the Reinsurer by the Company, whether directly or through an authorized agent, in connection with the placement and execution of this Contract (“Confidential Information”) are proprietary and confidential to the Company.

B. Absent the written consent of the Company, the Reinsurer will not disclose any Confidential Information to any third parties, except when:

1. The disclosure is to professional advisors or to authorized agents of the Reinsurer performing underwriting, claim handling, pricing, placement and/or evaluation services for the Reinsurer; or

2. The Confidential Information is publicly known or has become publicly known through no unauthorized act of the Reinsurer; or

3. Required by retrocessionaires subject to the business ceded to this Contract; or

4. Required by state regulators performing an audit of the Reinsurer’s records and/or financial condition; or

5. Required by auditors performing an audit of the Reinsurer’s records in the normal course of business.

C. Further, the Reinsurer agrees not to use any Confidential Information for any purpose not permitted by this Contract or not related to the performance of their obligations or enforcement of their rights under this Contract.

D. Notwithstanding the above, in the event that the Reinsurer is required by court order, other legal process, or any regulatory authority to release or disclose any or all of the Confidential Information, the Reinsurer agrees to provide the Company by written or electronic mail, reasonable advance notice of same prior to such release or disclosure and to use their reasonable best efforts to assist the Company in maintaining the confidentiality provided for in this Article.

E. The provisions of this Article will extend to the officers, directors, shareholders, and employees of the Reinsurer and its affiliates, who have received Confidential Information in accordance with this Contract and will be binding upon their successors and assigns.

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ARTICLE XXXI

SUNSET AND COMMUTATION

A. Ten years after the expiration of this Contract, the Company shall advise the Reinsurer of any Loss Occurrences attaching to this Contract which have not been finally settled and which may result in a claim by the Company under this Contract. No liability shall attach hereunder for any claim or claims not reported to the Reinsurer within this ten year period. If a loss arising out of a Loss Occurrence is reported during this period, all losses arising out of the same Loss Occurrence shall be deemed reported under this paragraph regardless of when notification of loss is provided.

B. If both parties agree to commute the unsettled losses subject to the Contract, then the Reinsurer’s liability for all such unsettled losses shall then be commuted.

C. It is understood that commutation of all such losses shall be made using tabular reserving methods. For each loss, the nominal ultimate value of the Company’s Ultimate Net Loss shall be established by projecting out future medical and indemnity payments and loss expenses by year based on appropriate trends and escalations applied to annual cost estimates. The Contract limit and retention (where applicable) shall then be applied to the nominal ultimate value of the Company’s Ultimate Net Loss to determine the nominal ultimate Contract loss. Mortality factors and discount factors shall then be applied by year to the nominal ultimate Contract loss. The discounted, mortality adjusted projected annual loss payments shall be summed to determine the present value (“commutation price”) of the ultimate Contract loss. The medical escalation, discount and mortality factors are described in paragraph C.

D. The following factors shall be utilized in establishing the commutation price:

1. Medical Escalation Rate

The medical escalation rate shall be a reasonable estimate of future medical inflation.

2. Discount Rate

The discount rate shall be the annualized 10-year US Treasury Bill rate at the Valuation Date.

3. Mortality Tables

Mortality factors shall be based on the most recent mortality table at the Valuation Date from the “Vital Statistics of the United States” as published by the US Department of Health and Human Services, Center for Disease Control and Prevention. Factors for extension beyond age 85 shall also be included.

4. Impairment

Impairment factors shall be based on the individual claim characteristics.

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Any other method of calculating the commutation price of one or more losses subject to this Contract may be used as mutually agreed between the Company and the Reinsurer.

E. If the Company and the Reinsurer cannot agree on a commutation value, the effort can be abandoned. Alternatively, the Company and the Reinsurer may mutually agree to settle any difference using a panel of three actuaries, one to be chosen by each party and the third by the two so chosen. If either party refuses or neglects to appoint an actuary within 30 days, the other party may appoint two actuaries. If the two actuaries fail to agree on the selection of a third actuary within 30 days of their appointment, each of them shall name two, of whom the other shall decline one and the decision shall be made by drawing lots. All the actuaries shall be regularly engaged in the valuation of Workers’ Compensation claims and shall be Fellows of the Casualty Actuarial Society or members of the American Academy of Actuaries. All of the actuaries shall be independent of either party to this Contract.

F. The settlement agreed upon by a majority of the panel of actuaries shall be final and binding on both parties and set forth in a sworn written document expressing their professional opinion that said value is fair for the complete mutual release of all liabilities in respect of such reserves.

G. The Reinsurer’s commutation payment shall be due within 7 days following the date the Company and the Reinsurer agree to the commutation price. Such payment by the Reinsurer shall constitute both a complete release of the Reinsurer of its liability for all losses, known or unknown, under this Contract, and a complete release of the Company of its liabilities and obligations, known or unknown, under this Contract.

H. This Article shall survive the expiration of this Contract.

ARTICLE XXXII

INSOLVENCY

A. In the event of the insolvency of the Company, this reinsurance shall be payable directly to the Company or to its liquidator, receiver, conservator or statutory successor, with reasonable provision for verification, 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 proportionate share of the benefit which may accrue to the Company solely as a result of the defense undertaken by the Reinsurer.

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 21 12-31-13

B. Where two or more subscribing 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.

C. It is further agreed that, in the event of the insolvency of the Company, the reinsurance under this Contract shall be payable directly by the Reinsurer to the Company or its liquidator, receiver, conservator, or statutory successor, except as provided by Section 4118(a) of the New York Insurance Law or except 1) where this Contract specifically provides another payee of such reinsurance in the event of the insolvency of the Company or 2) 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 payee under such Policies and in substitution for the obligations of the Company to such payees.

D. In the event of the insolvency of any company or companies listed in the designation of “Company” under this Contract, this Article shall apply only to the insolvent company or companies.

ARTICLE XXXIII

ARBITRATION

A. As a condition precedent to any right of action hereunder, any irreconcilable dispute arising out of the interpretation, performance or breach of this Contract, including the formation or validity thereof, whether arising before or after the expiry or termination of the Contract, shall be submitted for decision to a panel of 3 arbitrators. Notice requesting arbitration will be in writing and sent by certified mail, return receipt requested, or such reputable courier service as is capable of returning proof of receipt of such notice by the recipient to the party demanding arbitration.

B. The Company shall have the option to either litigate or arbitrate where:

1. The Reinsurer makes any allegation of misrepresentation, non-disclosure, concealment, fraud or bad faith; or

2. The Reinsurer experiences any of the circumstances set forth in subparagraphs 1 through 7 of paragraph A of the SPECIAL TERMINATION ARTICLE.

C. One arbitrator shall be appointed by each party. If either party fails to appoint its arbitrator within 30 days after being requested to do so by the other party, the latter, after 10 days notice by certified mail or reputable courier as provided above of its intention to do so, may appoint the second arbitrator.

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 22 12-31-13

D. The two arbitrators shall, before instituting the hearing, appoint an impartial third arbitrator who shall preside at the hearing. Should the two arbitrators fail to choose the third arbitrator within 30 days of the appointment of the second arbitrator, the parties shall appoint the third arbitrator pursuant to the AIDA Reinsurance and Insurance Arbitration Society – U.S. (ARIAS) Umpire Selection Procedure. All arbitrators shall be disinterested active or former senior executives of insurance or reinsurance companies or Underwriters at Lloyd’s, London.

E. Within 30 days after notice of appointment of all arbitrators, the panel shall meet and determine timely periods for briefs, discovery procedures and schedules for hearings. The panel shall be relieved of all judicial formality and shall not be bound by the strict rules of procedure and evidence. Unless the panel agrees otherwise, arbitration shall take place in DeRidder, Louisiana but the venue may be changed when deemed by the panel to be in the best interest of the arbitration proceeding. Insofar as the arbitration panel looks to substantive law, it shall consider the law of the State of Louisiana. The decision of any 2 arbitrators when rendered in writing shall be final and binding. The panel is empowered to grant interim relief as it may deem appropriate.

F. In the event an arbitrator is unable to serve due to death, disability or other incapacity, a replacement arbitrator shall be chosen in accordance with the procedures set forth in this Article for the original selection of the arbitrator appointed and the newly constituted panel shall take all necessary and/or reasonable measures to continue the arbitration proceedings without additional delay.

G. The panel shall make its decision considering the custom and practice of the applicable insurance and reinsurance business as promptly as possible following the termination of the hearings. Judgment upon the award may be entered in any court having jurisdiction thereof.

H. If more than one subscribing reinsurer is involved in arbitration where there are common questions of law or fact and a possibility of conflicting awards or inconsistent results, all such subscribing 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 subscribing reinsurers constituting the one party; provided, however, that nothing therein shall impair the rights of such subscribing reinsurers to assert several, rather than joint defenses or claims, nor be construed as changing the liability of the subscribing reinsurers under the terms of this Contract from several to joint.

I. Each party shall bear the expense of its own arbitrator and shall jointly and equally bear with the other party the cost of the third arbitrator. The remaining costs of the arbitration shall be allocated by the panel. The panel may, at its discretion, award such further costs and expenses as it considers appropriate, including but not limited to attorneys fees, to the extent permitted by law. However, the panel may not award any Exemplary or Punitive Damages and Enhanced Compensatory Damages.

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 23 12-31-13

ARTICLE XXXIV

EXPEDITED ARBITRATION

A. Notwithstanding the provisions of the ARBITRATION ARTICLE, in the event an amount in dispute hereunder is $500,000 or less, the Company may elect to require an expedited arbitration process with the use of a single arbitrator. The arbitrator will be chosen in accordance with the procedures for selecting an arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society – U.S. (ARIAS).

B. Each party’s case will be submitted to the arbitrator within 100 days of the date of determination of the arbitrator. Discovery will be limited to exchanging only those documents directly relating to the issue in dispute, subject to a limit of two discovery depositions from each party, unless otherwise authorized by the arbitrator upon a showing of good cause.

C. Within 120 days of the date of determination of the arbitrator, the hearing will be completed and a written award will be issued by the arbitrator. The arbitrator will have all the powers conferred on the arbitration panel as provided in the ARBITRATION ARTICLE, and said Article will apply to all matters not specifically addressed above.

ARTICLE XXXV

SERVICE OF SUIT

(This Article is applicable if the subscribing 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. This Article is not intended to conflict with or override the obligation of the parties to arbitrate their disputes in accordance with the ARBITRATION ARTICLE.)

A. In the event of the failure of the subscribing reinsurer to pay any amount claimed to be due hereunder, the subscribing reinsurer, at the request of the Company, shall 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 subscribing reinsurer’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. The subscribing reinsurer, once the appropriate court is selected, whether such court is the one originally chosen by the Company and accepted by subscribing reinsurer or is determined by removal, transfer, or otherwise, as provided for above, shall comply with all requirements necessary to give said court jurisdiction and, in any suit instituted against it upon this Contract, and shall abide by the final decision of such court or of any appellate court in the event of an appeal.

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 24 12-31-13

B. Service of process in such suit may be made upon the agent for the service of process (“agent”) named below, depending on the jurisdiction where the Company chooses to bring suit:

1. If the suit is brought in the State of California, the law firm of Mendes and Mount, 601 South Figueroa Street, Suite 4676, Los Angeles, California 90017 shall be authorized and directed to accept service of process on behalf of the subscribing reinsurer in any such suit;

2. If the suit is brought in the State of New York, the law firm of Mendes and Mount, 750 Seventh Avenue, New York, New York 10019 shall be authorized and directed to accept service of process on behalf of the subscribing reinsurer in any such suit;

3. If the suit is brought in any state other than California or New York, either of the agents described in subparagraphs 1 or 2 above shall be authorized and directed to accept service of process on behalf of the subscribing reinsurer in any such suit; or

4. If the subscribing reinsurer has designated an agent in the subscribing reinsurer’s Interests and Liabilities Agreement attached hereto, then that agent shall be authorized and directed to accept service of process on behalf of the subscribing reinsurer in any suit. However, if an agent is designated in the subscribing reinsurer’s Interests and Liabilities Agreement and the agent is not located in California as respects a suit brought in California or New York as respects a suit brought in New York, in keeping with the laws of the states of California and New York which require that service be made on an agent located in the respective state if a suit is brought in that state, the applicable office of Mendes and Mount stipulated in subparagraphs 1 and 2 above must be used for service of suit unless the provisions of paragraph C of this Article apply.

C. Further, pursuant to any statute of any state, territory or district of the United States that makes provision therefor, the subscribing reinsurer hereby designates 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 proceedings instituted by or on behalf of the Company or any beneficiary hereunder arising out of this Contract, and hereby designates the above-named as the person to whom the said officer is authorized to mail such process or a true copy thereof.

ARTICLE XXXVI

ENTIRE AGREEMENT

This Contract shall constitute the entire agreement between the parties with respect to the business being reinsured hereunder. There are no understandings between the parties other than as expressed in this Contract. Any change or modification to this Contract shall be null and void unless made by amendment to this Contract and signed by both parties. This Article shall not be construed as limiting in any way the admissibility in the context of an arbitration or any other legal proceeding, evidence regarding the formation, interpretation, purpose or intent of this Contract.

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 25 12-31-13

ARTICLE XXXVII

MODE OF EXECUTION

This Contract may be executed either by an original written ink signature of paper documents, by an exchange of facsimile copies showing the original written ink signature of paper documents, or by electronic signature by either party employing appropriate software technology as to satisfy the parties at the time of execution that the version of the document agreed to by each party shall always be capable of authentication and satisfy the same rules of evidence as written signatures. The use of any one or a combination of these methods of execution shall constitute a legally binding and valid signing of this Contract. This Contract may be executed in one or more counterparts, each of which, when duly executed, shall be deemed an original.

ARTICLE XXXVIII

INTERMEDIARY

Willis Re Inc., 15305 North Dallas Parkway, Suite 1100, Colonnade III, Addison, Texas 75001 is hereby recognized as the intermediary negotiating this Contract and through whom all communications relating thereto shall be transmitted to the Company or the Reinsurer. However, all communications concerning accounts, claim information, funds and inquiries related thereto shall be transmitted to the Company or the Reinsurer through Willis Re Inc., 5420 Millstream Road, Suite 200, McLeansville, North Carolina 27301. Payments by the Company to Willis Re Inc. shall be deemed to constitute payment to the Reinsurer and payments by the Reinsurer to Willis Re Inc. shall be deemed to constitute payment to the Company only to the extent that such payments are actually received by the Company.

IN WITNESS WHEREOF, the Company by its duly authorized representative has executed this Contract as of the date specified below:

Signed this 15^th day of January, 2014.

AMERICAN INTERSTATE INSURANCE COMPANY AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS SILVER OAK CASUALTY, INC.
By	/s/ C. Allen Bradley, Jr
Print Name	C. Allen Bradley, Jr
Title	Chairman & CEO

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 26 12-31-13

NUCLEAR INCIDENT EXCLUSION CLAUSE-LIABILITY—REINSURANCE—U.S.A

(1) 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.

(2) Without in any way restricting the operation of paragraph (1) 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) from the time specified in Clause III in this paragraph (2) shall be deemed to include the following provision (specified as the Limited Exclusion Provision):

Limited Exclusion Provision.*

(1) Except for those classes of policies specified in Clause II of paragraph (2) and without in any way restricting the operation of paragraph (1) 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:

I. It is agreed that the policy does not apply under any liability coverage,

to (injury, sickness, disease, death or destruction,

(bodily injury or property damage

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.

II. 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.

III. The inception dates and thereafter of all original policies as described in II above, whether new, renewal or replacement, being policies which either

(a) become effective on or after 1st May, 1960, or

(b) become effective before that date and contain the Limited Exclusion Provision set out above; provided this paragraph

(2) 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 days following approval of the Limited Exclusion Provision by the Governmental Authority having jurisdiction thereof.

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) 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):

Broad Exclusion Provision.*

It is agreed that the policy does not apply:

I. Under any Liability Coverage, to (injury, sickness, disease, death or destruction (bodily injury or property damage

(a) 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

(b) resulting from the hazardous properties of nuclear material and with respect to which (1) 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) 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.

II. Under any Medical Payments Coverage, or under any Supplementary Payments Provision relating to (immediate medical or surgical relief,

(first aid,

to expenses incurred with respect

to (bodily injury, sickness, disease or death

(bodily injury

resulting from the hazardous properties of nuclear material and arising out of the operation of a nuclear facility by any person or organization.

III. Under any Liability Coverage to (injury, sickness, disease, death or destruction (bodily injury or property damage resulting from the hazardous properties of nuclear material, if

(a) the nuclear material (1) is at any nuclear facility owned by, or operated by or on behalf of, an insured or (2) has been discharged or dispersed therefrom;

(b) 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

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 1 12-31-13

(c)     the (injury, sickness, disease, death or destruction

(bodily injury or property damages

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) applies only to

(injury to or destruction of property at such nuclear facility

(property damage to such nuclear facility and any property thereat.

IV. As used in this endorsement:

“Hazardous properties” include radioactive, toxic or explosive properties; “nuclear material” means source material, special nuclear material or byproduct material; “source material,” “special nuclear material,” and “byproduct material” have the meanings given them in the Atomic Energy Act of 1954 or in any law amendatory thereof; “spent fuel” means any fuel element or fuel component, solid or liquid, which has been used or exposed to radiation in a nuclear reactor; “waste” means any waste material

(1) containing byproduct material and (2) resulting from the operation by any person or organization of any nuclear facility included within the definition of nuclear facility under paragraph (a) or (b) thereof; “nuclear facility” means

(a) any nuclear reactor,

(b) any equipment or device designed or used for (1) separating the isotopes of uranium or plutonium, (2) processing or utilizing spent fuel, or (3) handling, processing or packaging waste,

(c) 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,

(d) 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; “nuclear reactor” 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;

(With respect to injury to or destruction of property, the word “injury “ or “destruction” (“property damage” includes all forms of radioactive contamination of property (includes all forms of radioactive contamination of property.

V. 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) shall not be applicable to

(i) Garage and Automobile Policies issued by the Reassured on New York risks, or

(ii) statutory liability insurance required under Chapter 90, General Laws of Massachusetts, until 90 days following approval of the Broad Exclusion Provision by the Governmental Authority having jurisdiction thereof.

(4) Without in any way restricting the operation of paragraph (1) of this Clause, it is understood and agreed that paragraphs (2) and (3) 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’ Association of the Independent Insurance Conference of Canada.

*NOTE: 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.

21/9/67

N.M.A. 1590

BRMA 35A

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 2 12-31-13

INTERESTS AND LIABILITIES AGREEMENT

(the “Agreement”)

of

ALTERRA REINSURANCE USA INC

(the “Subscribing Reinsurer”)

with respect to the

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the ownership,

control or management of Amerisafe Insurance Group

(collectively the “Company”)

The Subscribing Reinsurer shall have a 5.00% share in the interests and liabilities of the “Reinsurer” as set forth in the Contract attached hereto and executed by the Company.

This Agreement shall commence at 12:01 a.m., Standard Time, January 1, 2014 and shall continue in force until 12:01 a.m., Standard Time, January 1, 2015.

The share of the Subscribing Reinsurer in the interests and liabilities of the “Reinsurer” shall be several and not joint with the share of any other subscribing reinsurer. In no event shall the Subscribing Reinsurer participate in the interests and liabilities of the other subscribing reinsurers.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized representative has executed this Agreement as of the date specified below:

Signed this 26^th day of January, 2014.

ALTERRA REINSURANCE USA INC
By	/s/ William Pentony
Print Name	William Pentony
Title	SVP

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL - I&L 12-31-13

ENDORSEMENT NO. 1

to the

INTERESTS AND LIABILITIES AGREEMENT

(the “Agreement”)

of

ALTERRA REINSURANCE USA INC

(the “Subscribing Reinsurer”)

with respect to the

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the ownership,

control or management of Amerisafe, Inc.

(the “Company”)

The Subscribing Reinsurer hereby accepts Endorsement No. 1 to the Contract as part of the Contract, effective January 1, 2014.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized representative has executed this Endorsement as of the date specified below:

Signed this 30^th day of January, 2014.

ALTERRA REINSURANCE USA INC
By	/s/ William Pentony
Print Name	William Pentony
Title	SVP

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Cat XOL Endt 1 to I&L 1-17-14

INTERESTS AND LIABILITIES AGREEMENT

(the “Agreement”)

of

ARCH REINSURANCE COMPANY

(the “Subscribing Reinsurer”)

with respect to the

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the ownership,

control or management of Amerisafe Insurance Group

(collectively the “Company”)

The Subscribing Reinsurer shall have a 7.50% share in the interests and liabilities of the “Reinsurer” as set forth in the Contract attached hereto and executed by the Company.

This Agreement shall commence at 12:01 a.m., Standard Time, January 1, 2014 and shall continue in force until 12:01 a.m., Standard Time, January 1, 2015.

The share of the Subscribing Reinsurer in the interests and liabilities of the “Reinsurer” shall be several and not joint with the share of any other subscribing reinsurer. In no event shall the Subscribing Reinsurer participate in the interests and liabilities of the other subscribing reinsurers.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized representative has executed this Agreement as of the date specified below:

Signed this 20^th day of January, 2014.

ARCH REINSURANCE COMPANY
By	/s/ Peder F. Moller
Print Name	Peder F. Moller
Title	Director, Casualty Clash

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL - I&L 12-31-13

ENDORSEMENT NO. 1

to the

INTERESTS AND LIABILITIES AGREEMENT

(the “Agreement”)

of

ARCH REINSURANCE COMPANY

(the “Subscribing Reinsurer”)

with respect to the

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the ownership,

control or management of Amerisafe, Inc.

(the “Company”)

The Subscribing Reinsurer hereby accepts Endorsement No. 1 to the Contract as part of the Contract, effective January 1, 2014.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized representative has executed this Endorsement as of the date specified below:

Signed this 29^th day of January, 2014.

ARCH REINSURANCE COMPANY

By	/s/ Peder F. Moller
Printed Name	Peder F. Moller
Title	Director, Casualty Clash

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Cat XOL Endt 1 to I&L 1-17-14

INTERESTS AND LIABILITIES AGREEMENT

(the “Agreement”)

of

BRIT SYNDICATE 2987 AT LLOYD’S

(the “Subscribing Reinsurer”)

with respect to the

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the ownership,

control or management of Amerisafe Insurance Group

(collectively the “Company”)

The Subscribing Reinsurer shall have a 10.00% share in the interests and liabilities of the “Reinsurer” as set forth in the Contract attached hereto and executed by the Company.

This Agreement shall commence at 12:01 a.m., Standard Time, January 1, 2014 and shall continue in force until 12:01 a.m., Standard Time, January 1, 2015.

The share of the Subscribing Reinsurer in the interests and liabilities of the “Reinsurer” shall be several and not joint with the share of any other subscribing reinsurer. In no event shall the Subscribing Reinsurer participate in the interests and liabilities of the other subscribing reinsurers.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized representative has executed this Agreement as of the date specified below:

Signed this 10^th day of January, 2014.

BGS SERVICES (BERMUDA) LIMITED for and on behalf of BRIT SYNDICATE 2987 AT LLOYD’S
By	/s/ Joseph Bonanno
Print Name	Joseph Bonanno
Title	SVP

American Interstate Insurance Company

93948003-14 (Eff: 1-1-14)

Casualty Catastrophe XOL - I&L

ENDORSEMENT NO. 1

to the

INTERESTS AND LIABILITIES AGREEMENT

(the “Agreement”)

of

BRIT SYNDICATE 2987 AT LLOYD’S

(the “Subscribing Reinsurer”)

with respect to the

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the ownership,

control or management of Amerisafe, Inc.

(the “Company”)

The Subscribing Reinsurer hereby accepts Endorsement No. 1 to the Contract as part of the Contract, effective January 1, 2014.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized representative has executed this Endorsement as of the date specified below:

Signed this 30^th day of January, 2014.

BGS SERVICES (BERMUDA) LIMITED for and on behalf of BRIT SYNDICATE 2987 AT LLOYD’S
By	/s/ Joseph Bonanno
Printed Name	Joseph Bonanno
Title	SVP

American Interstate Insurance Company

93948003-14 (Eff: 1-1-14)

Casualty Cat XOL Endt 1 to I&L

INTERESTS AND LIABILITIES AGREEMENT

(the “Agreement”)

of

CATLIN UNDERWRITING AGENCIES LIMITED (#2003)

(the “Subscribing Reinsurer”)

with respect to the

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the ownership,

control or management of Amerisafe Insurance Group

(collectively the “Company”)

The Subscribing Reinsurer shall have a 10.00% share in the interests and liabilities of the “Reinsurer” as set forth in the Contract attached hereto and executed by the Company.

This Agreement shall commence at 12:01 a.m., Standard Time, January 1, 2014 and shall continue in force until 12:01 a.m., Standard Time, January 1, 2015.

The share of the Subscribing Reinsurer in the interests and liabilities of the “Reinsurer” shall be several and not joint with the share of any other subscribing reinsurer. In no event shall the Subscribing Reinsurer participate in the interests and liabilities of the other subscribing reinsurers.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized representative has executed this Agreement as of the date specified below:

Signed this 9^th day of January, 2014.

CATLIN UNDERWRITING, INC. on behalf of CATLIN UNDERWRITING AGENCIES LIMITED (#2003)
By	/s/ Michael Orlich
Print Name	Michael Orlich
Title	Vice President

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL - I&L 12-31-13

ENDORSEMENT NO. 1

to the

INTERESTS AND LIABILITIES AGREEMENT

(the “Agreement”)

of

CATLIN UNDERWRITING AGENCIES LIMITED (#2003)

(the “Subscribing Reinsurer”)

with respect to the

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the ownership,

control or management of Amerisafe, Inc.

(the “Company”)

The Subscribing Reinsurer hereby accepts Endorsement No. 1 to the Contract as part of the Contract, effective January 1, 2014.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized representative has executed this Endorsement as of the date specified below:

Signed this 29^th day of January, 2014.

CATLIN UNDERWRITING, INC.

on behalf of CATLIN UNDERWRITING AGENCIES LIMITED (#2003)

By	/s/ Michael Orlich
Printed Name Michael Orlich
Title Vice President

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Cat XOL Endt 1 to I&L 1-17-14

INTERESTS AND LIABILITIES AGREEMENT

(the “Agreement”)

of

MONTPELIER UNDERWRITING AGENCIES LIMITED

(the “Subscribing Reinsurer”)

with respect to the

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the ownership,

control or management of Amerisafe Insurance Group

(collectively the “Company”)

The Subscribing Reinsurer shall have a 5.00% share in the interests and liabilities of the “Reinsurer” as set forth in the Contract attached hereto and executed by the Company.

This Agreement shall commence at 12:01 a.m., Standard Time, January 1, 2014 and shall continue in force until 12:01 a.m., Standard Time, January 1, 2015.

The share of the Subscribing Reinsurer in the interests and liabilities of the “Reinsurer” shall be several and not joint with the share of any other subscribing reinsurer. In no event shall the Subscribing Reinsurer participate in the interests and liabilities of the other subscribing reinsurers.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized representative has executed this Agreement as of the date specified below:

Signed this 9^th day of January, 2014.

IOA REINSURANCE UNDERWRITING MANAGERS

on behalf of MONTPELIER UNDERWRITING AGENCIES LIMITED

By	/s/ William Reichert
Print Name William Reichert Title Senior Vice President

American Interstate Insurance Company

93948003-14 (Eff: 1-1-14)

Casualty Catastrophe XOL - I&L

ENDORSEMENT NO. 1

to the

INTERESTS AND LIABILITIES AGREEMENT

(the “Agreement”)

of

MONTPELIER UNDERWRITING AGENCIES LIMITED

(the “Subscribing Reinsurer”)

with respect to the

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the ownership,

control or management of Amerisafe, Inc.

(the “Company”)

The Subscribing Reinsurer hereby accepts Endorsement No. 1 to the Contract as part of the Contract, effective January 1, 2014.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized representative has executed this Endorsement as of the date specified below:

Signed this 12^th day of February, 2014.

IOA REINSURANCE UNDERWRITING MANAGERS

on behalf of MONTPELIER UNDERWRITING AGENCIES LIMITED

By	/s/ William Reichert
Printed Name William Reichert
Title SVP

American Interstate Insurance Company

93948003-14 (Eff: 1-1-14)

Casualty Cat XOL Endt 1 to - I&L

INTERESTS AND LIABILITIES AGREEMENT

(the “Agreement”)

of

MUNICH REINSURANCE AMERICA, INC.

(the “Subscribing Reinsurer”)

with respect to the

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the ownership,

control or management of Amerisafe Insurance Group

(collectively the “Company”)

The Subscribing Reinsurer shall have a 10.00% share in the interests and liabilities of the “Reinsurer” as set forth in the Contract attached hereto and executed by the Company,

This Agreement shall commence at 12:01 a.m., Standard Time, January 1, 2014 and shall continue in force until 12:01 a.m., Standard Time, January 1, 2015.

The share of the Subscribing Reinsurer in the interests and liabilities of the “Reinsurer” shall be several and not joint with the share of any other subscribing reinsurer. In no event shall the Subscribing Reinsurer participate in the interests and liabilities of the other subscribing reinsurers.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized representative has executed this Agreement as of the date specified below:

Signed this 14^th day of January, 2014.

MUNICH REINSURANCE AMERICA, INC.

By	/s/ Michael Schummer/Gerard P. Skalka
Print Name Michael Schummer/Gerard P. Skalka
Title Senior Vice President

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL - I&L 12-31-13

ENDORSEMENT NO. 1

to the

INTERESTS AND LIABILITIES AGREEMENT

(the “Agreement”)

of

MUNICH REINSURANCE AMERICA, INC.

(the “Subscribing Reinsurer”)

with respect to the

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the ownership,

control or management of Amerisafe, Inc.

(the “Company”)

The Subscribing Reinsurer hereby accepts Endorsement No. 1 to the Contract as part of the Contract, effective January 1, 2014.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized representative has executed this Endorsement as of the date specified below:

Signed this 30^th day of January, 2014.

MUNICH REINSURANCE AMERICA, INC.

By	/s/ Michelle R Glass	/s/ Janet Dezube
Printed Name Michelle R Glass		Janet Dezube
Title Senior Vice President		SVP

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Cat XOL Endt 1 to I&L 1-17-14

INTERESTS AND LIABILITIES AGREEMENT

(the “Agreement”)

of

TOKIO MILLENNIUM RE AG

(the “Subscribing Reinsurer”)

with respect to the

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

AMERICAN INTERSTATE INSURANCE COMPANY

DcRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the ownership,

control or management of Amerisafe Insurance Group

(collectively the “Company”)

The Subscribing Reinsurer shall have a 5.00% share in the interests and liabilities of the “Reinsurer” as set forth in the Contract attached hereto and executed by the Company.

This Agreement shall commence at 12:01 a.m., Standard Time, January 1, 2014 and shall continue in force until 12:01 a.m., Standard Time, January 1, 2015.

The share of the Subscribing Reinsurer in the interests and liabilities of the “Reinsurer” shall be several and not joint with the share of any other subscribing reinsurer. In no event shall the Subscribing Reinsurer participate in the interests and liabilities of the other subscribing reinsurers.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized representative has executed this Agreement as of the date specified below:

Signed this 14^th day of January, 2014.

TOKIO MILLENNIUM AG, BERMUDA

By	/s/ Mirek Wieczorek
Print Name Mirek Wieczorek
Title Senior Vice President

Market Ref #: 510032/01/14 American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL - I&L 12-31-13

ENDORSEMENT NO. 1

to the

INTERESTS AND LIABILITIES AGREEMENT

(the “Agreement”)

of

TOKIO MILLENNIUM RE AG, BERMUDA BRANCH

(the “Subscribing Reinsurer”)

with respect to the

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the ownership,

control or management of Amerisafe, Inc.

(the “Company”)

The Subscribing Reinsurer hereby accepts Endorsement No. 1 to the Contract as part of the Contract, effective January 1, 2014.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized representative has executed this Endorsement as of the date specified below:

Signed this 4^th day of February, 2014.

TOKIO MILLENNIUM RE AG, BERMUDA BRANCH

By	/s/ Mirek Wieczorek
Printed Name Mirek Wieczorek
Title Senior Vice President

TMR Reference: 510032/01/13 American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Cat XOL Endt 1 to I&L 1-17-14

Willis Limited 51 Lime Street London EC3M 7DQ United Kingdom Telephone: +44 (0)2031246000 Fax: +44 (0)2031248223 Website: www.willis.com

Order hereon:	47.50%
EFFECTED WITH:
27.50%	Underwriters at Lloyd’s, as per schedule below
10.00%	Markel at Lloyd’s — Zurich Branch Branch of Alterra UK Underwriting Services Limited, on behalf of Lloyd’s Syndicate 3000
10.00%	HCC International Insurance Company PLC, London, England
47.50%

LLOYD’S UNDERWRITERS

Signed Line	Syndicate Number	Pseudonym	NAIC Code
10.00%	4472	LIB	AA-1126006
7.50%	1955	BAR	AA-1120084
10.00%	1084	CSL	AA-1127084
27.50%

Willis Limited. A Willis Group Company. A Lloyds broken. Willis Limited is authorised and regulated by the Financial Conduct Authority. Registered office 51 Lime Street, London EC3M 7DQ Registered number 181116 England and Wales. Registered VAT number GB 334 1289 70

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Cat XOL Endt 1 to I&L 1-17-14

Willis Limited 51 Lime Street London EC3M 7DQ United Kingdom Telephone: +44 (0)2031246000 Fax: +44 (0)2031248223 Website: www.willis.com

For and on behalf of

Willis Limited

Authorised Signatory	Authorised Signatory

Willis Limited. A Willis Group Company. A Lloyds broker. Willis Limited is authorised and regulated by the Financial Conduct Authority. Registered office 51 Lime Street, London EC3M 7DQ. Registered number 181116 England and Wales. Registered VAT number GB 334 1289 70

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Cat XOL Endt 1 to I&L 1-17-14

Willis Limited WLM 801

CONTRACT ENDORSEMENT

UNIQUE MARKET REFERENCE:	B080110074N14 (93948003-14)
ENDORSEMENT REFERENCE:	001

REINSURED	American Interstate Insurance Company
TYPE	Casualty Catastrophe Excess of Loss Reinsurance Contract
PERIOD	1st January 2014 to 1st January 2015

CONTRACT CHANGES

It is hereby noted and agreed that this Contract is amended as per the attached Endorsement 1.

All other terms and conditions remain unaltered.

AGREEMENT

ENDORSEMENT NO. 1

to the

INTERESTS AND LIABILITIES AGREEMENT

(the “Agreement”)

of

UNDERWRITERS AT LLOYD’S, LONDON

AS SET FORTH IN THE SIGNING PAGE(S) ATTACHED HERETO

(the “Subscribing Reinsurer”)

with respect to the

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the ownership,

control or management of Amerisafe, Inc.

(the “Company”)

The Subscribing Reinsurer hereby accepts Endorsement No. 1 to the Contract as part of the Contract, effective January 1, 2014.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized representative has executed this Endorsement per the attached signing page(s).

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Cat XOL Endt 1 to I&L 1-17-14

ENDORSEMENT NO. 1

to the

INTERESTS AND LIABILITIES AGREEMENT

(the “Agreement”)

of

HOUSTON CASUALTY COMPANY

(the “Subscribing Reinsurer”)

with respect to the

CASUALTY CATASTROPHE EXCESS OF LOSS REINSURANCE CONTRACT

(the “Contract”)

issued to

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the ownership,

control or management of Amerisafe, Inc.

(the “Company”)

The Subscribing Reinsurer hereby accepts Endorsement No. 1 to the Contract as part of the Contract, effective January 1, 2014.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized representative has executed this Endorsement as of the date specified below:

Signed this                                 day of                                 , 20     .

HOUSTON CASUALTY COMPANY

By

Printed Name

Title

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Cat XOL Endt 1 to I&L 1-17-14

ENDORSEMENT NO. 1

to the

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the ownership, control

or management of Amerisafe, Inc.

(the “Company”)

IT IS HEREBY AGREED, effective January 1, 2014, that the Company listing in the Contract’s preamble shall be amended to read as follows:

AMERICAN INTERSTATE INSURANCE COMPANY

SILVER OAK CASUALTY, INC.

both of Omaha, Nebraska

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

any other insurance companies which are now or hereafter come under the ownership, control

or management of Amerisafe, Inc.

(the “Company”)

IT IS FURTHER AGREED that the GOVERNING LAW ARTICLE shall be amended to read as follows:

This Contract shall be governed as to performance, administration and interpretation by the laws of the State of Nebraska, exclusive of that state’s rules with respect to conflicts of law, except as to rules with respect to credit for reinsurance in which case the applicable rules of all states shall apply.

IT IS FURTHER AGREED that paragraph E. of the ARBITRATION ARTICLE shall be amended to read as follows:

E. Within 30 days after notice of appointment of all arbitrators, the panel shall meet and determine timely periods for briefs, discovery procedures and schedules for hearings. The panel shall be relieved of all judicial formality and shall not be bound by the strict rules of procedure and evidence. Unless the panel agrees otherwise, arbitration shall take place in Omaha, Nebraska but the venue may be changed when deemed by the panel to be in the best interest of the arbitration

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Cat XOL Endt 1 1-17-14

proceeding. Insofar as the arbitration panel looks to substantive law, it shall consider the law of the State of Nebraska. The decision of any 2 arbitrators when rendered in writing shall be final and binding. The panel is empowered to grant interim relief as it may deem appropriate.

The provisions of this Contract shall remain otherwise unchanged.

IN WITNESS WHEREOF, the Company by its duly authorized representative has executed this Endorsement as of the date specified below:

Signed this 27^th day of January, 2014.

AMERICAN INTERSTATE INSURANCE COMPANY SILVER OAK CASUALTY, INC. AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS
By	/s/ C. Allen Bradley, Jr
Printed Name	C. Allen Bradley, Jr
Title	Chairman & Chief Executive Officer

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Cat XOL Endt 1 1-17-14

MRC Format Exempt — Client Requirement

WILLIS LIMITED	B0801WLM
Agreement Number:	10074N14
Reinsured:	American Interstate Insurance Company
Type of Agreement:	Casualty Catastrophe Excess of Loss Reinsurance Contract
Period:	12 months commencing 1st January 2014
Client Shortname:	WILREINC
Client Ref:	93948003-14
Previous Ref:	10074N13
Client Longname:	Willis Re Inc., Texas
Brokerage:	15% brokerage, split 10% Willis Re Inc. and 5% Willis Re London
Account Executive:	Graeme Meachem	Extn:	17449
London Technician:	Sean Brown	Extn:	27074

Willis Limited, Lloyd’s broker, authorised and regulated by the Financial Conduct Authority.

Registered office: 51 Lime Street, London EC3M 7DQ. Registered number 181116 England and Wales

UMR	: B080110074N14
Reinsured	: American Interstate Insurance Company
Type	: Casualty Catastrophe Excess of Loss

RISK DETAILS

UNIQUE MARKET REFERENCE:	B080110074N14
REINSURED:	American Interstate Insurance Company
TYPE:	Casualty Catastrophe Excess of Loss Reinsurance Contract
PERIOD:	This Contract will apply to all losses occurring during the period January 1, 2014, 12:01 a,m., Standard Time (as set forth in the Company’s policies), to January 1, 2015, 12:01 a.m., Standard Time.
TAXES PAYABLE BY REINSURED AND ADMINISTERED BY REINSURERS:	None.
TAXES PAYABLE BY REINSURERS) AND ADMINISTERED BY THE REINSURED OR THEIR AGENT:	1% Federal Excise Tax where applicable or as statutorily required.
REINSURER CONTRACT DOCUMENTATION:	This Reinsurance Agreement details the Agreement terms entered into by the Reinsurer(s) and constitutes the Reinsurance Agreement. Any further documentation changing this Agreement, which has been appropriately agreed, shall form the evidence of such change(s) Full contractual wording (93984003-14 [12-31-l3]) is incorporated.

The “Risk Details” section represents only a convenient summary of the Contractual Wording and is not itself contractually binding.

SB / 27-12-13

Willis Limited, Lloyd’s broker, authorised and regulated by the Financial Conduct Authority.

Registered office: 51 Lime Street, London EC3M 7DQ. Registered number 181116 England and Wales

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the ownership,

control or management of Amerisafe Insurance Group

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 12-31-13

TABLE OF CONTENTS

ARTICLE		PAGE
I	BUSINESS COVERED		1
II	TERM		2
III	SPECIAL TERMINATION		2
IV	DEFINITIONS		4
	Act of Terrorism		4
	Declaratory Judgment Expense		4
	Extra Contractual Obligations/Loss in Excess of Policy Limits		4
	Loss Adjustment Expense		5
	Loss Occurrence		5
	Net Earned Premium		6
	Policy		6
V	TERRITORY		6
VI	EXCLUSIONS		7
VII	TERRORISM ACT RECOVERIES		9
VIII	COVERAGE		9
IX	REINSTATEMENT		10
X	SPECIAL ACCEPTANCE		10
XI	ACCOUNTING BASIS		11
XII	REINSURANCE PREMIUM		11
XIII	NOTICE OF LOSS AND LOSS SETTLEMENTS		11
XIV	LIABILITY OF REINSURERS		12
XV	LATE PAYMENTS		12
XVI	ANNUITIES AT THE COMPANY’S OPTION		13
XVII	AGENCY AGREEMENT		14
XVIII	SUBROGATION		14
XIX	ERRORS AND OMISSIONS		14
XX	OFFSET		14
XXI	CURRENCY		15
XXII	TAXES		15
XXIII	FEDERAL EXCISE TAX		15
XXIV	RESERVES AND FUNDING		15
XXV	NET RETAINED LINES		17
XXVI	THIRD PARTY RIGHTS		18

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 12-31-13

XXVII	SEVERABILITY	18
XXVIII	GOVERNING LAW	18
XXIX	INSPECTION OF RECORDS	18
XXX	CONFIDENTIALITY	19
XXXI	SUNSET AND COMMUTATION	20
XXXII	INSOLVENCY	21
XXXIII	ARBITRATION	22
XXXIV	EXPEDITED ARBITRATION	24
XXXV	SERVICE OF SUIT	24
XXXVI	ENTIRE AGREEMENT	25
XXXVII	MODE OF EXECUTION	26
XXXVIII	INTERMEDIARY	26
	Nuclear Incident Exclusion Clause—Liability—Reinsurance—U.S.A.

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 12-31-13

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

between

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the ownership,

control or management of Amerisafe Insurance Group

(collectively the “Company”)

and

THE SUBSCRIBING REINSURER(S) EXECUTING THE

INTERESTS AND LIABILITIES AGREEMENT(S)

ATTACHED HERETO

(the “Reinsurer”)

ARTICLE I

BUSINESS COVERED

A. By this Contract the Reinsurer agrees to reinsure the excess liability of the Company under its Policies that are in force at the effective time and date hereof or issued or renewed at or after that time and date, and classified by the Company as Workers’ Compensation, Employers Liability, including but not limited to coverage provided under the U.S. Longshore and Harbor Workers’ Compensation Act, Jones Act, Outer Continental Shelf Lands Act and any other Federal Coverage extensions, subject to the terms, conditions and limitations hereafter set forth.

B. The Reinsurer further agrees to reinsure the excess liability of the Company under Policies issued by Cooperative Mutual Insurance Company that are in force at the effective time and date hereof or issued or renewed at or after that time and date, and classified by the Company as Workers’ Compensation, Employers Liability, including but not limited to coverage provided under the U.S. Longshore and Harbor Workers’ Compensation Act, Jones Act, Outer Continental Shelf Lands Act and any other Federal Coverage extensions, subject to the terms, conditions and limitations hereafter set forth.

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 1 12-31-13

ARTICLE II

TERM

A. This Contract will apply to all losses occurring during the period January 1, 2014, 12:01 a.m. Standard Time (as set forth in the Company’s policies), to January 1, 2015, 12:01 a.m. Standard Time.

B. Upon the expiration or termination of this Contract, the entire liability of the Reinsurer for losses occurring subsequent to the date of expiration shall cease concurrently with the date of expiration of this Contract.

C. Notwithstanding the above, upon expiration or termination of this Contract, the Company shall have the option of requiring that the Reinsurer shall remain liable for losses occurring under Policies in force on the expiration or termination date of this Contract until the next renewal, termination, or natural expiration date of such Policies or until 12 months (plus “odd time,” not to exceed 18 months in all) following the date of expiration (whichever occurs first),

D. If this Contract expires while a Loss Occurrence covered hereunder is in progress, the Reinsurer’s liability hereunder shall, subject to the other terms and conditions of this Contract, be determined as if the entire Loss Occurrence had occurred prior to the expiration of this Contract, provided that no part of such Loss Occurrence is claimed against any renewal or replacement of this Contract.

ARTICLE III

SPECIAL TERMINATION

A. The Company may terminate a subscribing reinsurer’s share in this Contract by giving written notice to the subscribing reinsurer upon the happening of any one of the following circumstances:

1. A State Insurance Department or other legal authority orders the subscribing reinsurer to cease writing business, or

2. The subscribing reinsurer has become insolvent or has been placed into liquidation or receivership (whether voluntary or involuntary), or there has been instituted against it proceedings for the appointment of a receiver, liquidator, rchabilitator, conservator, or trustee in bankruptcy, or other agent known by whatever name, to take possession of its assets or control of its operations, or

3. For any period not exceeding 12 months which commences no earlier than 12 months prior to the inception of this Contract, the subscribing reinsurer’s policyholders’ surplus, as reported in the financial statements of the subscribing reinsurer, has been reduced by 20.0% or more, or

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 2 12-31-13

4. The subscribing reinsurer has become merged with, acquired or controlled by any company, corporation, or individual(s) not controlling the subscribing reinsurer’s operations previously, or

5. The subscribing reinsurer has reinsured its entire liability under this Contract without the Company’s prior written consent, or

6. The subscribing reinsurer receives an A. M. Best rating of lower than A-, or an S&P financial strength rating of lower than A-, or

7. The subscribing reinsurer has ceased writing new and renewal reinsurance for the lines of business covered hereunder.

B. In the event of such termination, the liability of the subscribing reinsurer shall be terminated, at the Company’s option, either in accordance with the cutoff provisions of paragraph B of the TERM ARTICLE or in accordance with the runoff provisions of paragraph C of the TERM ARTICLE, and such termination shall be effective as of the date the subscribing reinsurer receives written notice of termination pursuant to paragraph A above.

C. In the event the Company terminates a subscribing reinsurer’s share in this Contract under the provisions of this Article, the Company shall have the option to commute the excess liabilities of the subscribing reinsurer. If this commutation option is exercised, the provisions of the paragraphs B through G of the SUNSET AND COMMUTATION ARTICLE shall apply.

D. In the event the Company terminates a subscribing reinsurer’s share in this Contract under the provision of this Article, the Company shall have the option to require the subscribing reinsurer to fund its share of ceded unearned premium, outstanding loss and Loss Adjustment Expense reserves, reserves for losses and Loss Adjustment Expense incurred but not reported to the Company (IBNR as determined by the Company) and any other balances or financial obligations. Within 30 days of the Company’s written request to fund, the subscribing reinsurer shall provide to the Company a clean, unconditional, evergreen, irrevocable letter of credit or a trust agreement which establishes a trust account for the benefit of the Company. The method of funding must be acceptable to the Company, shall be established with a financial institution suitable to the Company, shall comply with any applicable state or federal laws or regulations involving the Company’s ability to recognize these agreements as assets or offsets to liabilities in such jurisdictions and shall be at the sole expense of the subscribing reinsurer. The Company and the subscribing reinsurer may mutually agree on alternative methods of funding or the use of a combination of methods. This option is available to the Company at any time there remains any outstanding liabilities of the subscribing reinsurer. Notwithstanding the foregoing, the Company shall not require funding in accordance with this subparagraph in the event the subscribing reinsurer has otherwise fully funded its obligations under this Contract in a manner acceptable to the Company.

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 3 12-31-13

ARTICLE IV

DEFINITIONS

A. Act of Terrorism

“Act of Terrorism” as used herein shall follow the definition provided under the Terrorism Risk Insurance Act of 2002 (TRIA) and as amended by the Terrorism Risk Insurance Extension Act of 2005 (TRIEA) and the Terrorism Risk Insurance Program Reauthorization Act of 2007 (TRIPRA), together and including any extensions or replacement thereof, the “Terrorism Act.”

In the event the Terrorism Act is not extended or renewed, Act of Terrorism shall mean a violent act or an act that is dangerous to human life; property; or infrastructure that 1) has resulted in damage within the United States, or outside of the United States in the case of an air carrier or vessel, 2) was committed by an individual or individuals as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the United States Government by coercion. The Company shall determine the application of the above definition.

An “Act of Terrorism” may include an act involving the use and/or dispersal of nuclear, chemical, biological or radiological agents.

B. Declaratory Judgment Expense

“Declaratory Judgment Expense” as used herein shall mean all expenses incurred by the Company in connection with a declaratory judgment action brought to determine the Company’s defense and/or indemnification obligations that are allocable to a specific claim subject to this Contract. Declaratory Judgment Expense shall be deemed to have been incurred on the date of the original loss (it any) giving rise to the declaratory judgment action.

C. Extra Contractual Obligations/Loss in Excess of Policy Limits

1. Extra Contractual Obligations

This Contract shall protect the Company for any “Extra Contractual Obligations” which as used herein shall mean any punitive, exemplary, compensatory or consequential damages, other than Loss in Excess of Policy Limits, paid or payable by the Company as a result of an action against it by its insured, its insurcd’s assignee or a third party claimant, by reason of alleged or actual negligence, fraud or bad faith on the part of the Company in handling a claim under a Policy subject to this Contract.

An Extra Contractual Obligation shall be deemed to have occurred on the same date as the loss covered or alleged to be covered under the Policy.

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2. Loss in Excess of Policy Limits

This Contract shall protect the Company for any “Loss in Excess of Policy Limits” which as used herein shall mean an amount that the Company would have been contractually liable to pay had it not been for the limit of the original Policy as a result of an action against it by its insured, its insured’s assignee or a third party claimant. Such loss in excess of the limit shall have been incurred because of failure by the Company to settle within the Policy limit, or by reason of 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 in the preparation or prosecution of an appeal consequent upon such action.

3. This paragraph C shall not apply where an Extra Contractual Obligation and/or Loss in Excess of Policy Limits has been incurred due to an adjudicated finding of fraud committed by a member of the Hoard of Directors or a corporate officer of the Company acting individually or collectively or in collusion with a member of the Board of Directors or a corporate officer or a partner of any other corporation or partnership.

D. Loss Adjustment Expense

“Loss Adjustment Expense” as used herein shall mean all costs and expenses allocable to a specific claim that are incurred by the Company in the investigation, appraisal, adjustment, settlement, litigation, defense or appeal of a specific claim, including court costs and costs of supersedeas and appeal bonds, and including 1) pre-judgment interest, unless included as part of the award or judgment; 2) post-judgment interest; 3) legal expenses and costs incurred in connection with coverage questions and legal actions connected thereto, including Declaratory Judgment Expense; and 4) a pro rata share of salaries and expenses of Company field employees, and expenses of other Company employees who have been temporarily diverted from their normal and customary duties and assigned to the field adjustment of losses covered by this Contract. Loss Adjustment Expense does not include unallocated loss adjustment expense. Unallocated loss adjustment expense includes, but is not limited to, salaries and expenses of employees, other than (4) above, and office and other overhead expenses.

E. Loss Occurrence

“Loss Occurrence” as used in this Contract shall mean any one disaster or casualty or accident or lessor series of disasters or casualties or accidents or losses arising out of or caused by one event. The Company shall be the sole judge of what constitutes one event as outlined herein and in the original Policy.

As respects losses resulting from Occupational or Industrial Disease or Cumulative Trauma, each employee shall be considered a separate Loss Occurrence subject to the following:

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, shall be considered one Loss 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 he considered as one Loss Occurrence within the meaning hereof.

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A loss with respect to each employee affected by an Occupational Disease or Cumulative Trauma shall be deemed to have been sustained by the Company on the date of the beginning of the disability for which compensation is payable.

The terms “Occupational or Industrial Disease” and “Cumulative Trauma” as used in this Contract shall be as defined by applicable statutes or regulations.

F. Net Earned Premium

“Net Earned Premium” as used herein is defined as gross earned premium of the Company for the classes of business reinsured hereunder, less the earned portion of premiums ceded by the Company for reinsurance which inures to the benefit of this Contract and less dividends paid or accrued.

G. Policy

“Policy” or “Policies” as used herein shall mean the Company’s or Cooperative Mutual Insurance Company’s binders, policies and contracts providing insurance or reinsurance on the classes of business covered under this Contract.

H. Ultimate Net Loss

“Ultimate Net Loss” shall mean the actual loss, including any pre-judgment interest which is included as part of the award or judgment, “Second Injury Fund” assessments that can be allocated to specific claims, Loss Adjustment Expense, 90% of Loss in Excess of Policy Limits, and 90% of Extra Contractual Obligations, paid or to be paid by the Company on its net retained liability after making deductions for all recoveries, subrogations and all claims on inuring reinsurance, whether collectible or not; provided, however, that in the event of the insolvency of the Company, payment by the Reinsurer shall be made in accordance with the provisions of the INSOLVENCY ARTICLE. Nothing herein shall be consumed to mean that losses under this Contract are not recoverable until the Company’s Ultimate Net Loss has been ascertained.

Notwithstanding the definition of “Ultimate Net Loss” herein, the provisions of paragraph H of the COVERAGE ARTICLE as respects the Minnesota Workers’ Compensation Reinsurance Association shall apply.

ARTICLE V

TERRITORY

The territorial limits of this Contract shall be identical with those of the Company’s Policies.

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ARTICLE VI

EXCLUSIONS

A. This Contract does not apply to and specifically excludes the following:

1. Reinsurance assumed by the Company under obligatory reinsurance agreements, except:

a. 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

b. Intercompany reinsurance between any of the reinsured companies under this Contract.

c. Reinsurance assumed through Policies issued by Cooperative Mutual Insurance Company.

2. Nuclear risks as defined in the “Nuclear Incident Exclusion Clause — Liability—Reinsurance -U.S.A.” (NMA 1590 21/9/67) attached hereto.

3. Liability as a member, subscriber or reinsurer of any Pool, Syndicate or Association, including Assigned Risk Plans or similar plans; however, this exclusion shall not apply to liability under a Policy specifically designated to the Company from an Assigned Risk Plan or similar plan.

4. 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. “Insolvency Fund” 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.

5. Loss caused directly or indirectly by war, whether or not declared, civil war, insurrection, rebellion or revolution, or any act or condition incidental to any of the foregoing. This exclusion shall not apply to any Policy that contains a standard war exclusion.

6. Workers’ Compensation where the principal exposure, as defined by the governing class code, is:

a. Operation of aircraft, but only if the annual estimated policy premium is $250,000 or more;

b. Operation of Railroads, subways or street railways;

c. 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 and does not apply to the commercial use of explosives;

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d. Underground mining.

7. Professional sports teams.

B. Notwithstanding the foregoing, insureds regularly engaged in operations not excluded under paragraph A above, but whose operations may include one or more perils excluded therein, shall not be excluded from coverage afforded by this Contract, provided said operations are incidental to the main operations of the insured. Notwithstanding the foregoing, coverage extended under this paragraph for incidental operations of an insured shall not apply to exposures excluded under subparagraphs 1 through 5 of paragraph A above. The Company shall be the judge of what constitutes an incidental part of the insured’s operation.

C. Except for subparagraphs 1 through 5 of paragraph A above, if the Company is inadvertently bound or is unknowingly exposed (due to error or automatic provisions of policy coverage) on a risk otherwise excluded in paragraph A above, such exclusion shall be waived. The duration of said waiver will not extend beyond the time that notice of such coverage has been received by a responsible underwriting authority of the Company and for a period not exceeding 30 days thereafter, or such longer period required to conform with any notice of cancellation provisions prescribed by regulatory authorities, such period not to exceed 12 months plus odd time (not exceeding 18 months).

D. If the Company is required to accept an assigned risk which conflicts with one or more of the exclusions set forth in subparagraph 5 of paragraph A, reinsurance shall apply, but only for the difference between the Company’s retention and the limit required by the applicable state statute, and in no event shall the Reinsurer’s liability exceed the limit set forth in the Coverage Article.

E. Notwithstanding the foregoing, any reinsurance falling within the scope of one or more of the exclusions set forth above that is specially accepted by the Reinsurer from the Company shall be covered under this Contract and be subject to the terms hereof.

F. Except for subparagraphs 1 through 5 of paragraph A above, should a court of competent jurisdiction invalidate any exclusion or expand coverage of the original Policy of the Company, any amount of Loss for which the Company would not be liable, except for such invalidation or expansion of coverage, shall not be subject to any of the exclusions, conditions and limitations hereinafter set forth under this Contract.

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ARTICLE VII

TERRORISM ACT RECOVERIES

A. Any financial assistance the Company receives under the Terrorism Act, shall apply as follows:

1. Except as provided in subparagraph 2 below, any such financial assistance shall inure solely to the benefit of the Company and shall be entirely disregarded in applying all of the provisions of this Contract.

2. If losses occurring hereunder result in recoveries made by the Company both under this Contract and under the Terrorism Act, and such recoveries, together with any other reinsurance recoverables made by the Company applicable to said losses, exceed the total amount of the Company’s insured losses, any amount in excess thereof shall reduce the Ultimate Net Loss subject to this Contract for the losses to which the Terrorism Act assistance applies. These recoveries shall be returned in proportion to each Reinsurer’s paid share of the loss.

B. Nothing herein shall be construed to mean that the losses under this Contract are not recoverable until the Company has received financial assistance under the Terrorism Act.

ARTICLE VIII

COVERAGE

A. The Reinsurer shall be liable for the Ultimate Net Loss in excess of $10,000,000 as a result of any one Loss Occurrence. The Reinsurer’s liability in respect of any one Loss Occurrence shall not exceed $60,000,000.

B. The Reinsurer’s liability in respect of Ultimate Net Loss amounts recoverable hereunder for an Act of Terrorism (as defined in the definition of “Act of Terrorism”) occurring during the term of this Contract shall not exceed $60,000,000. This paragraph is not subject the REINSTATEMENT ARTICLE.

C. The Reinsurer’s liability in respect of all losses occurring during the term of this Contract shall not exceed $120,000,000.

D. As respects the statutory portion of any Workers’ Compensation Policy, the Company’s Ultimate Net Loss subject to this Contract shall not exceed $10,000,000 as respects any one life, each Loss Occurrence

E. The Company shall be permitted to purchase (or maintain) other reinsurance which inures to the benefit of this Contract.

F. The Company shall be permitted to carry underlying 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.

G. As respects Employers Liability, the maximum net subject Policy limit (except statutory where required by law) as respects any one Policy shall be $2,000,000 or the Company shall be deemed to have purchased inuring excess facultative reinsurance for subject Policy limits in excess of $2,000,000.

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H. The Company shall be permitted to carry excess of loss reinsurance applying to Workers’ Compensation risks in the State of Minnesota, actual recoveries under which shall inure to the benefit of this Contract. Such coverage shall be provided through the Minnesota Workers’ Compensation Reinsurance Association. Notwithstanding the treatment of inuring coverage in the definition of Ultimate Net Loss, the liability of the Reinsurer for Minnesota Workers’ Compensation risks is not released.

ARTICLE IX

REINSTATEMENT

A. Should all or any part of the Reinsurer’s limit of liability be exhausted as a result of a Loss Occurrence, the sum so exhausted shall be reinstated from the date the Loss Occurrence commenced.

B. For each amount so reinstated, the Company agrees to pay an additional premium at the time of the Reinsurer’s payment of the loss calculated in accordance with the following formula:

1. The percentage of the Reinsurer’s limit of liability exhausted for the Loss Occurrence; times

2. The Net Earned Premium for the term of this Contract (exclusive of reinstatement premium).

The dollar amount resulting from the multiplication of subparagraphs 1 and 2 above shall equal the reinstatement premium. If at the time of the Reinsurer’s payment of a loss hereon, the reinsurance premium as calculated under this Contract is unknown, the calculation of the reinstatement premium shall be based upon the deposit premium subject to adjustment when the reinsurance premium is finally established.

C. Nevertheless, the Reinsurer’s liability hereunder shall not exceed $60,000,000 in respect of any one Loss Occurrence, and shall be further limited to $120,000,000 in respect of all losses occurring during the term of this Contract.

ARTICLE X

SPECIAL ACCEPTANCE

From time to time the Company may request a special acceptance applicable to this Contract. For purposes of this Contract, in the event each subscribing reinsurer whose share in the interests and liabilities of the Reinsurer is 20% or greater agree to a special acceptance, such agreement shall be binding on all subscribing reinsurers. 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. Should denial for special acceptance not be received within 10 working days of said request, the special acceptance shall be deemed automatically agreed. 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.

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ARTICLE XI

ACCOUNTING BASIS

All premiums and losses under this Contract shall be reported on an “accident year” accounting basis. Unless specified otherwise herein, all premiums shall be credited to the period during which they earn, and all losses shall be charged to the period during which they occur.

ARTICLE XII

REINSURANCE PREMIUM

A. As premium for the reinsurance provided hereunder, the Company shall pay the Reinsurer 0.5453% times its Net Earned Premium for the term of this Contract subject to a Minimum Premium of $1,440,000.

B. The Company shall pay the Reinsurer a Deposit Premium of $1,800,000 payable in quarterly installments on January 1, April 1, July 1 and October 1.

C. Within 90 days after the expiration of this Contract, the Company shall provide a report to the Reinsurer setting forth the premium due hereunder, computed in accordance with paragraph A, and if the premium so computed is greater than the previously paid Deposit Premium, the balance shall be remitted by the Company with its report.

D. If this Contract expires on a runoff basis, the Company shall pay to the Reinsurer a premium for the runoff period equal to the expiring rate times its Net Earned Premium for the runoff period. The runoff premium shall be calculated and paid within 90 days after the end of each three-month period during the runoff period. There shall be no minimum premium requirement for the runoff period.

ARTICLE XIII

NOTICE OF LOSS AND LOSS SETTLEMENTS

A. As soon as practicable, the Company shall advise the Reinsurer of all bodily injury claims or losses involving any of the following:

1. Any claim or loss reserved at 50.0% or more of the Company’s retention under this Contract.

2. Any claim involving any of the following injuries where the Company’s incurred loss is greater than or equal to $1,000,000:

a. Fatality.

b. Spinal cord injuries (e.g., quadriplegia, paraplegia).

c. Brain damage (e.g., seizure, coma or physical/mental impairment).

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d. Severe burn injuries resulting in disfigurement or scarring.

e. Total or partial blindness in one or both eyes.

f. Major organ (e.g., heart, lungs).

g. Amputation of a limb or multiple fractures.

B. The Company shall also advise the Reinsurer promptly of all losses which, in the opinion of the Company, may result in a claim hereunder and of all subsequent developments thereto which, in the opinion of the Company, may materially affect the position of the Reinsurer.

C. When so requested in writing, the Company shall afford the Reinsurer or its representatives an opportunity to be associated with the Company, at the expense of the Reinsurer, in the defense of any claim, suit or proceeding involving this reinsurance, and the Company and the Reinsurer shall cooperate in every respect in the defense of such claim, suit or proceeding.

D. All loss settlements made by the Company that are within the terms and conditions of this Contract (including but not limited to ex gratia payments) shall be binding upon the Reinsurer. Upon receipt of satisfactory proof of loss, the Reinsurer agrees to promptly pay or allow, as the case may be, its share of each such settlement in accordance with this Contract.

ARTICLE XIV

LIABILITY OF REINSURERS

All reinsurances for which the Reinsurer shall be liable by virtue of this Contract shall be subject in all respects to the same rates, terms, conditions, interpretations and waivers and to the same modifications, alterations, and cancellations, as the respective policies to which such reinsurances relate, the true intent of the parties to this Contract being that the Reinsurer shall follow the fortunes of the Company.

ARTICLE XV

LATE PAYMENTS

A. In the event any premium, loss or other payment due either party is not received by the Intermediary hereunder 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:

1. The number of full days which have expired since the due date or the last monthly calculation, whichever the lesser; times

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2. l/365ths of a rate equal to the 90-day Treasury Bill rate as published in The Wall Street Journal on the first business day following the date a remittance becomes due; times

3. The amount past due, including accrued interest.

It is agreed that interest shall accumulate until payment of the original amount due plus interest penalties have been received by the Intermediary.

B. The establishment of the due date shall, for purposes of this Article, be determined as follows:

1. As respects the payment of deposits and premiums due the Reinsurer, the due date shall be as provided for in the applicable section of this Contract.

2. Any claim or loss payment due the Company hereunder shall be deemed due 10 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 10 days, interest will accrue on the payment or amount overdue in accordance with the interest penalty calculation above, from the date the proof of loss or demand for payment was transmitted to the Reinsurer.

3. As respects any payment, adjustment or return due either party not otherwise provided For in subparagraphs 1 and 2 of this paragraph, the due date shall be as provided for in the applicable section of this Contract.

C. For purposes of interest calculation only, amounts due hereunder shall be deemed paid upon receipt by the Intermediary. The validity of any claim or payment may be contested under the provisions of this Contract. If the debtor party prevails in an arbitration, or any other proceeding, there shall be no interest penalty due. Otherwise, any interest will be calculated and due as outlined above.

D. 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.

ARTICLE XVI

ANNUITIES AT THE COMPANY’S OPTION

A. 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’s Ultimate Net Loss.

B. The terms “annuity” or “structured settlement” 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.

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C. 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.

ARTICLE XVIII

AGENCY AGREEMENT

If more than one reinsured company is named as a party to this Contract, the first named company will 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.

ARTICLE XVIII

SUBROGATION

The Reinsurer shall be credited with subrogation recoveries (i.e., reimbursement obtained or recovery made by the Company, less Loss Adjustment Expense incurred in obtaining such reimbursement or making such recovery) on account of claims and settlements involving reinsurance hereunder. Subrogation recoveries 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, at its sole option and discretion, may enforce its rights to subrogation relating to any loss, a part of which loss was sustained by the Reinsurer, and may prosecute all claims arising out of such rights.

ARTICLE XIX

ERRORS AND OMISSIONS

Any inadvertent delay, omission or error shall not be held to relieve either party hereto from any liability which would attach to it hereunder if such delay, omission or error had not been made, provided such omission or error is rectified upon discovery. Nothing contained in this Article shall be held to override the specific loss reporting deadline of the SUNSET AND COMMUTATION ARTICLE.

ARTICLE XX

OFFSET

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. The party asserting the right of offset may exercise such right any time whether the balances due are on account of premiums or losses or otherwise.

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ARTICLE XXI

CURRENCY

A. Whenever the word “Dollars” or the “$” 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.

B. 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.

ARTICLE XXII

TAXES

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, the District of Columbia or Canada.

ARTICLE XXIII

FEDERAL EXCISE TAX

(Applicable to those subscribing reinsurers who are domiciled outside the United States of America, excepting subscribing reinsurers exempt from Federal Excise Tax.)

A. The subscribing 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 4371 of the Internal Revenue Code) to the extent such premium is subject to the Federal Excise Tax.

B. In the event of any return of premium becoming due hereunder the subscribing 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.

ARTICLE XXIV

RESERVES AND FUNDING

A. A subscribing reinsurer will provide funding under the terms of this Article only if the Company will be denied statutory credit for reinsurance ceded to that subscribing reinsurer pursuant to the credit for reinsurance law or regulations in any applicable jurisdiction. In the event any of the provisions of this Article conflict with or otherwise fail to satisfy the requirements of the appropriate credit for reinsurance statute or regulation, this Article will be deemed amended to conform to the appropriate statute or regulation; the intent of this Article being that the Company will be permitted to realize full credit for the reinsurance ceded to the Reinsurer under this Contract.

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B. 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 subscribing reinsurer a statement showing the proportion of such reserves which is applicable to the subscribing reinsurer. The subscribing reinsurer hereby agrees to fund such reserves in respect of known outstanding losses that have been reported to the subscribing reinsurer and allocated Loss Adjustment Expense relating thereto, losses and allocated Loss Adjustment Expense paid by the Company but not recovered from the subscribing reinsurer, plus reserves for losses incurred but not reported, as shown in the statement prepared by the Company (hereinafter referred to as “subscribing reinsurer’s obligations”) by funds withheld, cash advances or a Letter of Credit. The subscribing reinsurer shall have the option of determining the method of funding provided it is acceptable to the Company and to the insurance regulatory authorities having jurisdiction over the Company’s reserves.

C. When funding by a Letter of Credit, the subscribing 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 and containing provisions acceptable to the insurance regulatory authorities having jurisdiction over the Company’s reserves in an amount equal to the subscribing reinsurer’s proportion of said reserves. Such Letter of Credit shall be issued for a period of not less than one year, and shall be automatically extended for one year from its date of expiration or any future expiration date unless 30 days (60 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.

D. The subscribing reinsurer and Company agree that the Letters of Credit provided by the subscribing 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:

1. To reimburse the Company for the subscribing reinsurer’s obligations, the payment of which is due under the terms of this Contract and which has not been otherwise paid;

2. To make refund of any sum which is in excess of the actual amount required to pay the subscribing reinsurer’s obligations under this Contract;

3. To fund an account with the Company for the subscribing reinsurer’s obligations. Such cash deposit shall be held in an interest bearing account separate from the Company’s other assets, and interest thereon not in excess of the prime rate shall accrue to the benefit of the subscribing reinsurer;

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4. To pay the subscribing reinsurer’s share of any other amounts the Company claims are due under this Contract.

In the event the amount drawn by the Company on any Letter of Credit is in excess of the actual amount required for subparagraph 1 or 3, or in the case of subparagraph 4, the actual amount determined to be due, the Company shall promptly return to the subscribing 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 subscribing reinsurer.

E. 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.

F. At annual intervals, or more frequently as agreed but never more frequently than quarterly, the Company shall prepare a specific statement of the subscribing reinsurer’s obligations, for the sole purpose of amending the Letter of Credit, in the following manner:

1. If the statement shows that the subscribing reinsurer’s obligations exceed the balance of credit as of the statement date, the subscribing reinsurer shall, within 30 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.

2. If, however, the statement shows that the subscribing reinsurer’s obligations are less than the balance of credit as of the statement date, the Company shall, within 30 days after receipt of written request from the subscribing 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.

G. Should the subscribing reinsurer be in breach of its obligations under this Article, notwithstanding anything to the contrary elsewhere in this Contract, the Company may seek relief in respect of said breach from any court having competent jurisdiction of the parties hereto.

ARTICLE XXV

NET RETAINED LINES

A. 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.

B. The amount of the Reinsurer’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.

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ARTICLE XXVI

THIRD PARTY RIGHTS

This Contract is solely between the Company and the Reinsurer, and in no instance shall any other party have any rights under this Contract except as expressly provided otherwise in the INSOLVENCY ARTICLE.

ARTICLE XXVII

SEVERABILITY

If any provision of this Contract shall be rendered illegal or unenforceable by the laws or regulations 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.

ARTICLE XXVIII

GOVERNING LAW

This Contract shall be governed as to performance, administration and interpretation by the laws of the State of Louisiana, exclusive of that state’s rules with respect to conflicts of law, except as to rules with respect to credit for reinsurance in which case the applicable rules of all states shall apply.

ARTICLE XXIX

INSPECTION OF RECORDS

A. The Reinsurer or its designated representative(s) approved by the Company, upon providing reasonable advance notice to the Company, shall have access at the offices of the Company or at a location to be mutually agreed, at a time to be mutually agreed, to inspect the Company’s underwriting, accounting, or claim files pertaining to the subject matter of this Contract, other than proprietary information or privileged communications. The Company shall determine the manner in which files shall be accessed by the Reinsurer. The Reinsurer may, at its own expense, reasonably request copies of such files and agrees to pay the Company’s reasonable costs incurred in procuring such copies.

B. If any undisputed amounts are overdue from the Reinsurer to the Company, the Reinsurer shall have access to such records only upon payment of all such overdue amounts.

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 18 12-31-13

C. If the Reinsurer makes any inspection of the Company’s books and records involving specific claims under this Contract and, as a result of the inspection the claim is contested or disputed, the Reinsurer shall provide the Company, at the Company’s request, a summary of any reports, other than proprietary information or privileged communications, completed by the Reinsurer’s personnel or by third parties on behalf of the Reinsurer outlining the reasons for contesting or disputing the subject claim.

ARTICLE XXX

CONFIDENTIALITY

A. The Reinsurer hereby acknowledges that the documents, information, and data provided to the Reinsurer by the Company, whether directly or through an authorized agent, in connection with the placement and execution of this Contract (“Confidential Information”) are proprietary and confidential to the Company.

B. Absent the written consent of the Company, the Reinsurer will not disclose any Confidential Information to any third parties, except when:

1. The disclosure is to professional advisors or to authorized agents of the Reinsurer performing underwriting, claim handling, pricing, placement and/or evaluation services for the Reinsurer; or

2. The Confidential Information is publicly known or has become publicly known through no unauthorized act of the Reinsurer; or

3. Required by retrocessionaires subject to the business ceded to this Contract; or

4. Required by state regulators performing an audit of the Reinsurer’s records and/or financial condition; or

5. Required by auditors performing an audit of the Reinsurer’s records in the normal course of business.

C. Further, the Reinsurer agrees not to use any Confidential Information for any purpose not permitted by this Contract or not related to the performance of their obligations or enforcement of their rights under this Contract.

D. Notwithstanding the above, in the event that the Reinsurer is required by court order, other legal process, or any regulatory authority to release or disclose any or all of the Confidential Information, the Reinsurer agrees to provide the Company by written or electronic mail, reasonable advance notice of same prior to such release or disclosure and to use their reasonable best efforts to assist the Company in maintaining the confidentiality provided for in this Article.

E. The provisions of this Article will extend to the officers, directors, shareholders, and employees of the Reinsurer and its affiliates, who have received Confidential Information in accordance with this Contract and will be binding upon their successors and assigns.

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 19 12-31-13

ARTICLE XXXI

SUNSET AND COMMUTATION

A. Ten years after the expiration of this Contract, the Company shall advise the Reinsurer of any Loss Occurrences attaching to this Contract which have not been finally settled and which may result in a claim by the Company under this Contract. No liability shall attach hereunder for any claim or claims not reported to the Reinsurer within this ten year period. If a loss arising out of a Loss Occurrence is reported during this period, all losses arising out of the same Loss Occurrence shall be deemed reported under this paragraph regardless of when notification of loss is provided.

B. If both parties agree to commute the unsettled losses subject to the Contract, then the Reinsurer’s liability for all such unsettled losses shall then be commuted.

C. It is understood that commutation of all such losses shall be made using tabular reserving methods. For each loss, the nominal ultimate value of the Company’s Ultimate Net Loss shall be established by projecting out future medical and indemnity payments and loss expenses by year based on appropriate trends and escalations applied to annual cost estimates. The Contract limit and retention (where applicable) shall then be applied to the nominal ultimate value of the Company’s Ultimate Net Loss to determine the nominal ultimate Contract loss. Mortality factors and discount factors shall then be applied by year to the nominal ultimate Contract loss. The discounted, mortality adjusted projected annual loss payments shall be summed to determine the present value (“commutation price”) of the ultimate Contract loss. The medical escalation, discount and mortality factors are described in paragraph C.

D. The following factors shall be utilized in establishing the commutation price:

1. Medical Escalation Rate

The medical escalation rate shall be a reasonable estimate of future medical inflation.

2. Discount Rate

The discount rate shall be the annualized 10-year US Treasury Bill rate at the Valuation Date.

3. Mortality Tables

Mortality factors shall be based on the most recent mortality table at the Valuation Date from the “Vital Statistics of the United States” as published by the US Department of Health and Human Services, Center for Disease Control and Prevention. Factors for extension beyond age 85 shall also be included.

4. Impairment

Impairment factors shall be based on the individual claim characteristics.

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 20 12-31-13

Any other method of calculating the commutation price of one or more losses subject to this Contract may be used as mutually agreed between the Company and the Reinsurer.

E. If the Company and the Reinsurer cannot agree on a commutation value, the effort can be abandoned. Alternatively, the Company and the Reinsurer may mutually agree to settle any difference using a panel of three actuaries, one to be chosen by each party and the third by the two so chosen. If either party refuses or neglects to appoint an actuary within 30 days, the other party may appoint two actuaries. If the two actuaries fail to agree on the selection of a third actuary within 30 days of their appointment, each of them shall name two, of whom the other shall decline one and the decision shall be made by drawing lots. All the actuarics shall be regularly engaged in the valuation of Workers’ Compensation claims and shall be Fellows of the Casualty Actuarial Society or members of the American Academy of Actuaries. All of the actuaries shall be independent of either party to this Contract.

F. The settlement agreed upon by a majority of the panel of actuaries shall be final and binding on both parties and set forth in a sworn written document expressing their professional opinion that said value is fair for the complete mutual release of all liabilities in respect of such reserves.

G. The Reinsurer’s commutation payment shall be due within 7 days following the date the Company and the Reinsurer agree to the commutation price. Such payment by the Reinsurer shall constitute both a complete release of the Reinsurer of its liability for all losses, known or unknown, under this Contract, and a complete release of the Company of its liabilities and obligations, known or unknown, under this Contract.

H. This Article shall survive the expiration of this Contract.

ARTICLE XXXII

INSOLVENCY

A. In the event of the insolvency of the Company, this reinsurance shall be payable directly to the Company or to its liquidator, receiver, conservator or statutory successor, with reasonable provision for verification, 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 proportionate share of the benefit which may accrue to the Company solely as a result of the defense undertaken by the Reinsurer.

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 21 12-31-13

B. Where two or more subscribing 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.

C. It is further agreed that, in the event of the insolvency of the Company, the reinsurance under this Contract shall be payable directly by the Reinsurer to the Company or its liquidator, receiver, conservator, or statutory successor, except as provided by Section 4118(a) of the New York Insurance Law or except 1) where this Contract specifically provides another payee of such reinsurance in the event of the insolvency of the Company or 2) 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 payee under such Policies and in substitution for the obligations of the Company to such payees.

D. In the event of the insolvency of any company or companies listed in the designation of “Company” under this Contract, this Article shall apply only to the insolvent company or companies.

ARTICLE XXXIII

ARBITRATION

A. As a condition precedent to any right of action hereunder, any irreconcilable dispute arising out of the interpretation, performance or breach of this Contract, including the formation or validity thereof, whether arising before or after the expiry or termination of the Contract, shall be submitted for decision to a panel of 3 arbitrators. Notice requesting arbitration will be in writing and sent by certified mail, return receipt requested, or such reputable courier service as is capable of returning proof of receipt of such notice by the recipient to the party demanding arbitration.

B. The Company shall have the option to either litigate or arbitrate where:

1. The Reinsurer makes any allegation of misrepresentation, non-disclosure, concealment, fraud or bad faith; or

2. The Reinsurer experiences any of the circumstances set forth in subparagraphs 1 through 7 of paragraph A of the SPECIAL TERMINATION ARTICLE.

C. One arbitrator shall be appointed by each party. If either party fails to appoint its arbitrator within 30 days after being requested to do so by the other party, the latter, after 10 days notice by certified mail or reputable courier as provided above of its intention to do so, may appoint the second arbitrator.

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 22 12-31-13

D. The two arbitrators shall, before instituting the hearing, appoint an impartial third arbitrator who shall preside at the hearing. Should the two arbitrators fail to choose the third arbitrator within 30 days of the appointment of the second arbitrator, the parties shall appoint the third arbitrator pursuant to the AIDA Reinsurance and Insurance Arbitration Society — U.S. (ARIAS) Umpire Selection Procedure. All arbitrators shall be disinterested active or former senior executives of insurance or reinsurance companies or Underwriters at Lloyd’s, London.

E. Within 30 days after notice of appointment of all arbitrators, the panel shall meet and determine timely periods for briefs, discovery procedures and schedules for hearings. The panel shall be relieved of all judicial formality and shall not be bound by the strict rules of procedure and evidence. Unless the panel agrees otherwise, arbitration shall take place in DeRidder, Louisiana but the venue may be changed when deemed by the panel to be in the best interest of the arbitration proceeding. Insofar as the arbitration panel looks to substantive law, it shall consider the law of the State of Louisiana. The decision of any 2 arbitrators when rendered in writing shall be final and binding. The panel is empowered to grant interim relief as it may deem appropriate.

F. In the event an arbitrator is unable to serve due to death, disability or other incapacity, a replacement arbitrator shall be chosen in accordance with the procedures set forth in this Article for the original selection of the arbitrator appointed and the newly constituted panel shall take all necessary and/or reasonable measures to continue the arbitration proceedings without additional delay.

G. The panel shall make its decision considering the custom and practice of the applicable insurance and reinsurance business as promptly as possible following the termination of the hearings. Judgment upon the award may be entered in any court having jurisdiction thereof.

H. If more than one subscribing reinsurer is involved in arbitration where there are common questions of law or fact and a possibility of conflicting awards or inconsistent results, all such subscribing 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 subscribing reinsurers constituting the one party; provided, however, that nothing therein shall impair the rights of such subscribing reinsurers to assert several, rather than joint defenses or claims, nor be construed as changing the liability of the subscribing reinsurers under the terms of this Contract from several to joint.

I. Each party shall bear the expense of its own arbitrator and shall jointly and equally bear with the other party the cost of the third arbitrator. The remaining costs of the arbitration shall be allocated by the panel. The panel may, at its discretion, award such further costs and expenses as it considers appropriate, including but not limited to attorneys fees, to the extent permitted by law. However, the panel may not award any Exemplary or Punitive Damages and Enhanced Compensatory Damages.

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 23 12-31-13

ARTICLE XXXIV

EXPEDITED ARBITRATION

A. Notwithstanding the provisions of the ARBITRATION ARTICLE, in the event an amount in dispute hereunder is $500,000 or less, the Company may elect to require an expedited arbitration process with the use of a single arbitrator. The arbitrator will be chosen in accordance with the procedures for selecting an arbitrator in force on the date the arbitration is demanded, established by the AIDA Reinsurance and Insurance Arbitration Society – U.S. (ARIAS).

B. Each party’s case will be submitted to the arbitrator within 100 days of the date of determination of the arbitrator. Discovery will be limited to exchanging only those documents directly relating to the issue in dispute, subject to a limit of two discovery depositions from each party, unless otherwise authorized by the arbitrator upon a showing of good cause.

C. Within 120 days of the date of determination of the arbitrator, the hearing will be completed and a written award will be issued by the arbitrator. The arbitrator will have all the powers conferred on the arbitration panel as provided in the ARBITRATION ARTICLE, and said Article will apply to all matters not specifically addressed above.

ARTICLE XXXV

SERVICE OF SUIT

(This Article is applicable if the subscribing reinsurer is not domiciled in the United States of America and/or is not authorised in any State, Territory or District of the United States where authorization is required by insurance regulatory authorities. This Article is not intended to conflict with or override the obligation of the parties to arbitrate their disputes in accordance with the ARBITRATION ARTICLE.)

A. In the event of the failure of the subscribing reinsurer to pay any amount claimed to be due hereunder, the subscribing reinsurer, at the request of the Company, shall 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 subscribing reinsurer’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. The subscribing reinsurer, once the appropriate court is selected, whether such court is the one originally chosen by the Company and accepted by subscribing reinsurer or is determined by removal, transfer, or otherwise, as provided for above, shall comply with all requirements necessary to give said court jurisdiction and, in any suit instituted against it upon this Contract, and shall abide by the final decision of such court or of any appellate court in the event of an appeal.

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 24 12-31-13

B. Service of process in such suit may be made upon the agent for the service of process (“agent”) named below, depending on the jurisdiction where the Company chooses to bring suit:

1. If the suit is brought in the State of California, the law firm of Mendes and Mount, 601 South Figueroa Street, Suite 4676, Los Angeles, California 90017 shall be authorized and directed to accept service of process on behalf of the subscribing reinsurer in any such suit;

2. If the suit is brought in the State of New York, the law firm of Mendes and Mount, 750 Seventh Avenue, New York, New York 10019 shall be authorized and directed to accept service of process on behalf of the subscribing reinsurer in any such suit;

3. If the suit is brought in any state other than California or New York, either of the agents described in subparagraphs 1 or 2 above shall be authorized and directed to accept service of process on behalf of the subscribing reinsurer in any such suit; or

4. If the subscribing reinsurer has designated an agent in the subscribing reinsurer’s Interests and Liabilities Agreement attached hereto, then that agent shall be authorized and directed to accept service of process on behalf of the subscribing reinsurer in any suit. However, if an agent is designated in the subscribing reinsurer’s Interests and Liabilities Agreement and the agent is not located in California as respects a suit brought in California or New York as respects a suit brought in New York, in keeping with the laws of the states of California and New York which require that service be made on an agent located in the respective state if a suit is brought in that state, the applicable office of Mendes and Mount stipulated in subparagraphs 1 and 2 above must be used for service of suit unless the provisions of paragraph C of this Article apply.

C. Further, pursuant to any statute of any state, territory or district of the United States that makes provision therefor, the subscribing reinsurer hereby designates 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 proceedings instituted by or on behalf of the Company or any beneficiary hereunder arising out of this Contract, and hereby designates the above-named as the person to whom the said officer is authorized to mail such process or a true copy thereof.

ARTICLE XXXVI

ENTIRE AGREEMENT

This Contract shall constitute the entire agreement between the parties with respect to the business being reinsured hereunder. There are no understandings between the parties other than as expressed in this Contract. Any change or modification to this Contract shall be null and void unless made by amendment to this Contract and signed by both parties. This Article shall not be construed as limiting in any way the admissibility in the context of an arbitration or any other legal proceeding, evidence regarding the formation, interpretation, purpose or intent of this Contract.

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 25 12-31-13

ARTICLE XXXVII

MODE OF EXECUTION

This Contract may be executed either by an original written ink signature of paper documents, by an exchange of facsimile copies showing the original written ink signature of paper documents, or by electronic signature by either party employing appropriate software technology as to satisfy the parties at the time of execution that the version of the document agreed to by each party shall always be capable of authentication and satisfy the same rules of evidence as written signatures. The use of any one or a combination of these methods of execution shall constitute a legally binding and valid signing of this Contract. This Contract may be executed in one or more counterparts, each of which, when duly executed, shall be deemed an original.

ARTICLE XXXVIII

INTERMEDIARY

Willis Re Inc., 15305 North Dallas Parkway, Suite 1100, Colonnade III, Addison, Texas 75001 is hereby recognized as the intermediary negotiating this Contract and through whom all communications relating thereto shall be transmitted to the Company or the Reinsurer. However, all communications concerning accounts, claim information, funds and inquiries related thereto shall be transmitted to the Company or the Reinsurer through Willis Re Inc., 5420 Millstream Road, Suite 200, McLeansville, North Carolina 27301. Payments by the Company to Willis Re Inc. shall be deemed to constitute payment to the Reinsurer and payments by the Reinsurer to Willis Re Inc. shall be deemed to constitute payment to the Company only to the extent that such payments are actually received by the Company.

IN WITNESS WHEREOF, the Company by its duly authorized representative has executed this Contract as of the date specified below:

Signed this 15^th day of January, 2014.

AMERICAN INTERSTATE INSURANCE COMPANY

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

SILVER OAK CASUALTY, INC.

By	/s/ C. Allen Bradley, Jr
Print Name	C. Allen Bradley, Jr
Title	Chairman & CEO

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 26 12-31-13

NUCLEAR INCIDENT EXCLUSION CLAUSE—LIABILITY—REINSURANCE—U.S.A.

(1) 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.

(2) Without in any way restricting the operation of paragraph (1) 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) from the time specified in Clause III in this paragraph (2) shall be deemed to include the following provision (specified as the Limited Exclusion Provision):

Limited Exclusion Provision.*

I. It is agreed that the policy does not apply under any liability coverage,

to (injury, sickness, disease, death or destruction,

(bodily injury or property damage

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.

II. 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.

Ill. The inception dates and thereafter of all original policies as described in II above, whether new, renewal or replacement, being policies which either

(a) become effective on or after 1st May, 1960, or

(b) become effective before that date and contain the Limited Exclusion Provision set out above; provided this paragraph (2) 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 days following approval of the Limited Exclusion Provision by the Governmental Authority having jurisdiction thereof.

(3) Except for those classes of policies specified in Clause II of paragraph (2) and without in any way restricting the operation of paragraph (1) 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:

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)

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):

Broad Exclusion Provision.*

It is agreed that the policy does not apply:

I. Under any Liability Coverage, to (injury, sickness, disease death or destruction

(bodily injury or properly damage

(a) 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

(b) resulting from the hazardous properties of nuclear material and with respect to which (1) any person or organisation is required to maintain financial protection pursuant to the Atomic Energy Act of 1954, or any law amendatory thereof, or (2) 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.

II. Under any Medical Payments Coverage, or under any Supplementary Payments Provision relating to (immediate medical or

surgical relief,

(first aid,

to expenses incurred with respect

to (bodily injury, sickness, disease or death

(bodily injury

resulting from the hazardous properties of nuclear material and arising out of the operation of a nuclear facility by any person or organization.

III. Under any Liability Coverage to (injury, sickness, disease, death or destruction

(bodily injury or property damage

resulting from the hazardous properties of nuclear material, if

(a) the nuclear material (1) is at any nuclear facility owned by, or operated by or on behalf of, an insured or (2) has been discharged or dispersed therefrom;

(b) 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

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 1 12-31-13

(c) the (injury, sickness, disease, death or destruction

(bodily injury or property damages

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, hut if such facility is located within the United States of America, its territories, or possessions or Canada, this exclusion (c) applies only to

(injury to or destruction of property at such nuclear facility

(property damage to such nuclear facility and any property thereat.

IV. As used in this endorsement:

“Hazardous properties” include radioactive, toxic or explosive properties; “nuclear material” means source material, special nuclear material or byproduct material; “source material,” special nuclear material,” and “byproduct material” have the meanings given them in the Atomic Energy Act of 1954 or in any law amendatory thereof; “spent fuel” means any fuel element or fuel component, solid or liquid, which has been used or exposed to radiation in a nuclear reactor; “waste” means any waste material (1) containing byproduct material and (2) resulting from the operation by any person or organization of any nuclear facility included within the definition of nuclear facility under paragraph (a) or (b) thereof; “nuclear facility” means

(a) any nuclear reactor,

(b) any equipment or device designed or used for (1) separating the isotopes of uranium or plutonium, (2) processing or utilizing spent fuel, or (3) handling, processing or packaging waste,

(c) 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,

(d) 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; “nuclear reactor” 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;

(With respect to injury to or destruction of property, the word “injury” or “destruction”

(“property damage” includes all forms of radioactive contamination of property

(Includes all farms of radioactive contamination of property.

V. 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) shall not be applicable to

(i) Garage and Automobile Policies issued by the Reassured on New York risks, or

(ii) statutory liability insurance required under Chapter 90, General Laws of Massachusetts, until 90 days following approval of the Broad Exclusion Provision by the Governmental Authority having jurisdiction thereof.

(4) Without in any way restricting the operation of paragraph (1) of this Clause, it is understood and agreed that paragraphs (2) and (3) 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’ Association of the Independent Insurance Conference of Canada.

* NOTE: 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.

21/9/67

N.M.A. 1590

BRMA35A

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL Contract 2 12-31-13

INTERESTS AND LIABILITIES AGREEMENT

(the “Agreement”)

of

UNDERWRITERS AT LLOYD’S, LONDON

AS SET FORTH IN THE SIGNING PAGE(S) ATTACHED HERETO

(the “Subscribing Reinsurer”)

with respect to the

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

AMERICAN INTERSTATE INSURANCE COMPANY

DcRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DcRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the ownership,

control or management of Amerisafe Insurance Group

(collectively the “Company”)

The Subscribing Reinsurer shall have a share in the interests and liabilities of the “Reinsurer” as set forth in the Contract attached hereto and executed by the Company. The Subscribing Reinsurer’s percentage share shall equal the sum of the final signed lines percentage share(s) as executed on the attached signing page(s) for Lloyd’s Underwriters.

This Agreement shall commence at 12:01 a.m., Standard Time, January 1, 2014 and shall continue in force until 12:01 a.m., Standard Time, January 1, 2015.

The share of the Subscribing Reinsurer in the interests and liabilities of the “Reinsurer” shall be several and not joint with the share of any other subscribing reinsurer. In no event shall the Subscribing Reinsurer participate in the interests and liabilities of the other subscribing reinsurers.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized representative has executed this Agreement per the attached signing page(s).

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL - I&L 12-31-13

INTERESTS AND LIABILITIES AGREEMENT

(the “Agreement”)

of

HOUSTON CASUALTY COMPANY

(the “Subscribing Reinsurer”)

with respect to the

CASUALTY CATASTROPHE EXCESS OF LOSS

REINSURANCE CONTRACT

(the “Contract”)

issued to

AMERICAN INTERSTATE INSURANCE COMPANY

DeRidder, Louisiana

and

AMERICAN INTERSTATE INSURANCE COMPANY OF TEXAS

Austin, Texas

and

SILVER OAK CASUALTY, INC.

DeRidder, Louisiana

and

any other insurance companies which are now or hereafter come under the ownership,

control or management of Amerisafe Insurance Group

(collectively the “Company”)

The Subscribing Reinsurer shall have a 10.00% share in the interests and liabilities of the “Reinsurer” as set forth in the Contract attached hereto and executed by the Company.

This Agreement shall commence at 12:01 a.m., Standard Time, January 1, 2014 and shall continue in force until 12:01 a.m., Standard Time, January 1, 2015.

The share of the Subscribing Reinsurer in the interests and liabilities of the “Reinsurer” shall be several and not joint with the share of any other subscribing reinsurer. In no event shall the Subscribing Reinsurer participate in the interests and liabilities of the other subscribing reinsurers.

IN WITNESS WHEREOF, the Subscribing Reinsurer by its duly authorized representative has executed this Agreement as of the date specified below:

Signed this 13^th day of January, 2014.

HOUSTON CASUALTY COMPANY
By	/s/ Stephen Kempton
Print Name	Stephen Kempton
Title	Accident and Health Underwriter

American Interstate Insurance Company 93948003-14 (Eff: 1-1-14) Casualty Catastrophe XOL - I&L 12-31-13

UMR
Reinsured Type : B080110074N14 : American Interstate Insurance Company : Casualty Catastrophe Excess of Loss

B.I.P.A.R. Statement

In a co-reinsurance placement, following reinsurers may, but are not obliged to, follow the premium charged by the lead reinsurer.

Reinsurers may not seek to guarantee for themselves terms as favourable as those which others subsequently achieve during the placement.

Reinsurer and Reference:
Written line(s):	12 1⁄2%	Ref. 1131360114FY
Final signed line(s):	10%
Line Condition(s):

Signed in this 27^th day of December 2013

Willis Limited, Lloyd’s broker, authorised and regulated by the Financial Conduct Authority.

Registered office: 51 Lime Street, London EC3M 7DQ. Registered number 181116 England and Wales

UMR : B080110074N14

Reinsured : American Interstate Insurance Company

Type : Casualty Catastrophe Excess of Loss

B.I.P.A.R. Statement

In a co-reinsurance placement, following reinsurers may, but are not obliged to, follow the premium charged by the lead reinsurer.

Reinsurers may not seek to guarantee for themselves terms as favourable as those which others subsequently achieve during the placement.

Reinsurer and Reference:

Written line(s): 20% Ref.: 51331714AA

Final signed line(s): 10%

Line Condition(s):

Signed in this 27^th day of December 2013

Willis Limited, Lloyd’s broker, authorised and regulated by the Financial Conduct Authority.

Registered office: 51 Lime Street, London EC3M 7DQ. Registered number 181116 England and Wales

UMR : B080110074N14

Reinsured : American Interstate Insurance Company

Type : Casualty Catastrophe Excess of Loss

B.I.P.A.R. Statement

In a co-reinsurance placement, following reinsurers may, but are not obliged to, follow the premium charged by the lead reinsurer.

Reinsurers may not seek to guarantee for themselves terms as favourable as those which others subsequently achieve during the placement.

Reinsurer and Reference:
	Markel at Lloyd’s – Zurich Branch
	Branch of Alterra UK Underwriting Services Ltd
	for and on behalf of Lloyd’s Syndicate 3000

Written line(s):	20%	Ref.: CA7542A14T2A
Final signed line(s):	10%
Line Condition(s):

Signed in this 27 day of December 2013

Willis Limited, Lloyd’s broker, authorised and regulated by the Financial Conduct Authority.

Registered office: 51 Lime Street, London EC3M 7DQ. Registered number 181116 England and Wales

UMR	: B080110074N14
Reinsured	: American Interstate Insurance Company
Type	: Casualty Catastrophe Excess of Loss

B.I.P.A.R. Statement

In a co-reinsurance placement, following reinsurers may, but are not obliged to, follow the premium charged by the lead reinsurer.

Reinsurers may not seek to guarantee for themselves terms as favorable as those which others subsequently achieve during the placements.

Reinsurer and Reference:

Written line(s): 7.5% Ref.: 000028011400

Final signed line(s): 7.5%

Line Condition(s):

Signed at this 27^th day of December 2013

Willis Limited, Lloyd’s broker, authorised and regulated by the Financial Conduct Authority.

Registered office: 51 Lime Street, London EC3M 7DQ. Registered number 181116 England and Wales

UMR
Reinsured Type : B080110074N14 : American Interstate Insurance Company : Casualty Catastrophe Excess of Loss

B.I.P.A.R. Statement

In a co-reinsurance placement, following reinsurers may, but are not obliged to, follow the premium charged by the lead reinsurer.

Reinsurers may not seek to guarantee for themselves terms as favourable as those which others subsequently achieve during the placement.

Reinsurer and Reference:

Written line(s):	12.5%	Ref.:
Final signed line(s):	10%
Line Condition(s):

Signed in London this 27^th day of December 2013

Willis Limited, Lloyd’s broker, authorised and regulated by the Financial Conduct Authority.

Registered office: 51 Lime Street, London EC3M 7DQ. Registered number 181116 England and Wales

UMR Reinsured Type : B080110074N14 : American Interstate Insurance Company : Casualty Catastrophe Excess of Loss

INFORMATION

THIS INFORMATION SECTION LISTS INFORMATION MADE AVAILABLE TO REINSURERS FOR ASSESSMENT OF THE RISK. IT DOES NOT INCLUDE CONTRACTUAL TERMS AND CONDITIONS OF COVER.

ESTIMATED PREMIUM INCOME: USD 330,095,955

SB / 27-12-13

Willis Limited, Lloyd’s broker, authorised and regulated by the Financial Conduct Authority.

Registered office: 51 Lime Street, London EC3M 7DQ. Registered number 181116 England and Wales

UMR Reinsured Type : B080110074N14 : American Interstate Insurance Company : Casualty Catastrophe Excess of Loss

SECURITY DETAILS

REINSURERS LIABILITY:	Reinsurers Liability Clause LMA3333
	Reinsurer’s liability several not joint.
	The liability of a Reinsurer under this contract is several and not joint with other Reinsurers party to this contract. A Reinsurer is liable only for the proportion of liability it has underwritten. A Reinsurer is not jointly liable for the proportion of liability underwritten by any other Reinsurer. Nor is a Reinsurer otherwise responsible for any liability of any other Reinsurer that may underwrite this contract. The proportion of liability under this contract underwritten by a Reinsurer (or, in the case of a Lloyd’s syndicate, the total of the proportions underwritten by all the members of the syndicate taken together) is shown next to its stamp. This is subject always to the provision concerning “signing” below. In the case of a Lloyd’s syndicate, each member of the syndicate (rather than the syndicate itself) is a Reinsurer. Each member has underwritten a proportion of the total shown for the syndicate (that total itself being the total of the proportions underwritten by all the members of the syndicate taken together). The liability of each member of the syndicate is several and not joint with other members. A member is liable only for that member’s proportion. A member is not jointly liable for any other member’s proportion. Nor is any member otherwise responsible for any liability of any other Reinsurer that may underwrite this contract. The business address of each member is Lloyd’s, One Lime Street, London EC3M 7HA. The identity of each member of a Lloyd’s syndicate and their respective proportion may be obtained by writing to Market Services, Lloyd’s, at the above address. Proportion of liability Unless there is “signing” (see below), the proportion of liability under this contract underwritten by each Reinsurer (or, in the case of a Lloyd’s syndicate, the total of the proportions underwritten by all the members of the syndicate taken together) is shown next to its stamp and is referred to as its “written line”. Where this contract permits, written lines, or certain written lines, may be adjusted (“signed”). In that case a schedule is to be appended to this contract to show the definitive proportion of liability under this contract underwritten by each Reinsurer (or, in the case of a Lloyd’s syndicate, the total of the proportions underwritten by all the members of the syndicate taken together). A definitive proportion (or, in the case of a Lloyd’s syndicate, the total of the proportions underwritten by all the members of a

SB / 27-12-13

Willis Limited, Lloyd’s broker, authorised and regulated by the Financial Conduct Authority.

Registered office: 51 Lime Street, London EC3M 7DQ. Registered number 181116 England and Wales

UMR Reinsured Type : B080110074N14 : American Interstate Insurance Company : Casualty Catastrophe Excess of Loss

SECURITY DETAILS

	Lloyd’s syndicate taken together) is referred to as a “signed line”. The signed lines shown in the schedule will prevail over the written lines unless a proven error in calculation has occurred. Although reference is made at various points in this clause to “this contract” in the singular, where the circumstances so require this should be read as a reference to contracts in the plural.
ORDER HEREON:	47.50%
BASIS OF WRITTEN LINES:	Percentage of Whole
SIGNING PROVISIONS:	In the event that the placement of this Reinsurance is not completed by the commencement date of the period of Reinsurance then all lines written by that date, at the Reinsured’s option, may be signed in full. If such written lines hereon exceed 100% of the order, all lines written will be signed down in equal proportions so that the aggregate signed lines are equal to 100% of the order. Whether before or after inception of the period of Reinsurance, the Reinsured may elect for the disproportionate signing of Reinsurer’s lines without further specific agreement of Reinsurers.
LINE CONDITIONS:	None unless specified individually by Reinsurers hereon under their written participations.

SB / 27-12-13

Willis Limited, Lloyd’s broker, authorised and regulated by the Financial Conduct Authority.

Registered office: 51 Lime Street, London EC3M 7DQ. Registered number 181116 England and Wales

UMR Reinsured Type : B080110074N14 : American Interstate Insurance Company : Casualty Catastrophe Excess of Loss

CONTRACT ADMINISTRATION AND ADVISORY SECTIONS

SUBSCRIPTION AGREEMENT

SUBSCRIPTION AGREEMENT BETWEEN THE BROKER AND THE INSURERS / REINSURERS WHICH WILL NOT FORM PART OF THIS AGREEMENT FOR CONTRACTUAL DOCUMENTATION PURPOSES

SLIP LEADER:
BASIS OF AGREEMENT TO CONTRACT CHANGES:	Reinsurers hereon authorise the Slip Leader to be the sole judge in determining whether any future alterations to this Reinsurance Agreement should be agreed by the Slip Leader only and copied to other Reinsurers, or agreed by all Reinsurers other than risks accepted pursuant to Special Acceptance Provision (if any).
	Subject to the foregoing:
	A.  In respect of each Reinsurer which at any time has the ability to send and receive ACORD messages: i.  Any contract change will be submitted by Willis Limited for agreement via an ‘ACORD message’; ii. any contract change which requires notification will be notified by Willis Limited via an ‘ACORD message,; iii. It is understood and agreed that whilst any contract change may be negotiated and agreed in any legally effective manner (and will be binding at that stage), such agreement of any contract change will be confirmed by each such Reinsurer via an appropriate ‘ACORD message’. For the avoidance of any doubt, no further duty of disclosure arises in relation to any such confirmation. B.  In respect of each Reinsurer who does not have the ability to send and receive ACORD messages: i.  It is understood and agreed that whilst any contract change may be negotiated and agreed in any legally effective manner (and will be binding at that stage), any such contract change will be submitted/notified by Willis Limited electronically via email or other electronic means;

SB / 27-12-13

Willis Limited, Lloyd’s broker, authorised and regulated by the Financial Conduct Authority.

Registered office: 51 Lime Street, London EC3M 7DQ. Registered number 181116 England and Wales

UMR Reinsured Type : B080110074N14 : American Interstate Insurance Company : Casualty Catastrophe Excess of Loss

CONTRACT ADMINISTRATION AND ADVISORY SECTIONS

SUBSCRIPTION AGREEMENT

ii. Such binding agreement of any contract change will be confirmed by each such Reinsurer via email or other electronic means. For the avoidance of any doubt, no further duty of disclosure arises in relation to any such confirmation.

BASIS OF CLAIMS AGREEMENT:

Claims review, as required by Slip Leader for the benefit of and at the cost to current Reinsurers hereon. Settlement of fees will be by the parties authorising the claims review. In the event of cancellation of the Treaty, fees to be borne by final contract year. Lloyd’s Reinsurers: Claims to be managed in accordance with The Lloyd’s Claims Scheme (Combined), or as amended or any successor thereto IUA Company Reinsurers: Claims to be managed in accordance with IUA (or successor organisations) Claims Agreement practices. Lloyd’s Reinsurers / IUA Company Reinsurers: In respect of any Bureau claims settlements hereunder, Reinsurers who made their acceptance under the Bureau schemes agree to claims on a projected payment basis on the agreement of the respective Bureau Leading Reinsurer only. Any further payments under this provision shall be agreed by the respective Bureau Leading Underwriter only. This will be binding on all following Lloyds and IUA Reinsurers and Xchanging Inssure Services (XIS) (or successor organisations). Non-Bureaux Reinsurers: All claims shall be agreed by each Reinsurer according to their own practices. Reinsurers agree to arrange simultaneous settlement by money transfer to broker account three days before date Reinsured specifies they will settle, given seven days advance notice of same.

SB / 27-12-13

Willis Limited, Lloyd’s broker, authorised and regulated by the Financial Conduct Authority.

Registered office: 51 Lime Street, London EC3M 7DQ. Registered number 181116 England and Wales

UMR Reinsured Type : B080110074N14 : American Interstate Insurance Company : Casualty Catastrophe Excess of Loss

CONTRACT ADMINISTRATION AND ADVISORY SECTIONS

SUBSCRIPTION AGREEMENT

CLAIMS AGREEMENT PARTIES:	Lloyd’s Reinsurers: The Leading Lloyd’s syndicate and, where required by the applicable Claims Scheme, the second Lloyd’s syndicate and/or the Scheme Service Provider.
	Lloyd’s Leader:
	The second Lloyd’s syndicate is:	CSL 1084
	IUA Company Reinsurers: Those companies acting in accordance with the IUA (or successor organisations) claims agreement practices. Non-Bureaux Reinsurers: All claims shall be agreed by each Reinsurer in respect of their own participation.
CLAIMS ADMINISTRATION:	Lloyd’s Reinsurers: Willis Limited and Reinsurers agree that any claims hereunder (including any claims related costs/fees) that are in scope and supported by Electronic Claims File (ECF) may be notified and administered via the Electronic Claims File (ECF) system with any payment(s) processed via CLASS. Lloyd’s Reinsurers authorise Xchanging Claims Services to waive the deferred settlement system in the event of presentation of settlement request with first advice. IUA Company Reinsurers: All IUA Company Reinsurers agree to respond to claims via CLASS (unless otherwise specified here). Willis Limited and Reinsurers agree that any claims hereunder (including any claims related costs/fees) that are in scope and supported by Electronic Claims File (ECF) may be notified and administered via the Electronic Claims File (ECF) system with any payment(s) processed via CLASS.

SB / 27-12-13

Willis Limited, Lloyd’s broker, authorised and regulated by the Financial Conduct Authority.

Registered office: 51 Lime Street, London EC3M 7DQ. Registered number 181116 England and Wales

UMR Reinsured Type : B080110074N14 : American Interstate Insurance Company : Casualty Catastrophe Excess of Loss

CONTRACT ADMINISTRATION AND ADVISORY SECTIONS

SUBSCRIPTION AGREEMENT

	Non-Bureaux Reinsurers: Each Reinsurer agrees to receive all claims via Broker visit, email, repositories, facsimile or letter.
RULES AND EXTENT OF ANY OTHER DELEGATED CLAIMS AUTHORITY:	None, unless otherwise specified
SETTLEMENT DUE DATE:	28 February 2014
INSTALMENT PREMIUM PERIOD OF CREDIT:	30 days.
ADJUSTMENT PREMIUM PERIOD OF CREDIT:	120 days.
BUREAUX ARRANGEMENTS:	Processing Documents: Xchanging Ins-sure Services (XIS) are authorised to accept Additional Premium, Return Premium, Premium Adjustment and Profit Commission figures, where applicable, without certification or production of letters or other documents and enter in accordance with the figures shown thereon, without Reinsurers agreement. Reinsurers agree to the use of a copy (including a photocopy) or duplicate of the applicable Slip or Wording for the collection and taking down of Additional Premium(s), Return Premium(s), Premium Adjustment(s) and Profit Commission(s).

SB / 27-12-13

Willis Limited, Lloyd’s broker, authorised and regulated by the Financial Conduct Authority.

Registered office: 51 Lime Street, London EC3M 7DQ. Registered number 181116 England and Wales

UMR Reinsured Type : B080110074N14 : American Interstate Insurance Company : Casualty Catastrophe Excess of Loss

CONTRACT ADMINISTRATION AND ADVISORY SECTIONS

SUBSCRIPTION AGREEMENT

Presentation of premium documentation to XIS by the Settlement Due Date(s) is deemed to be in compliance with the payment provisions.

Reinsurers agree that Willis Limited may pay de-linked premiums for this Agreement at different times.

Premium Processing Clause—LSW 3003 (14/12/09)

Where the premium is to be paid through Xchanging Ins-sure Services (XIS), payment to Reinsurers will be deemed to occur on the day that a delinked premium is released for settlement by the Appointed Broker or in the case of non-delinked premiums, on the day that the error-free Premium Advice Note (PAN) is submitted to XIS.

Where premiums are to be paid by instalments under the Deferred Account Scheme, and the Appointed Broker does not receive the premium in time to comply with the agreed settlement date for the second or subsequent instalment, the Appointed Broker, if electing to suspend the automatic debiting of the relevant deferred instalment, shall advise the Slip Leader in writing and instruct XIS accordingly. XIS shall then notify Reinsurers. Payment to any entity within the same group of companies as the Appointed Broker will be deemed to be payment to the Appointed Broker.

Nothing in this clause shall be construed to override the terms of any Premium Payment Warranty or Clause or any Termination or Cancellation provision contained in this contract. Furthermore, any amendment to the Settlement Due Date of a premium instalment as a result of the operation of this Premium Processing Clause shall not amend the date that such instalment is deemed to be due for the purposes of such Premium Payment Warranty or Clause or Termination or Cancellation provision unless (Re) Insurers expressly agree otherwise.

Appointed Broker: Willis Limited

LSW 3003 14/12/09

If the Settlement Due Date falls on a Saturday, a Sunday or a Bank Holiday, it is agreed that the Settlement Due Date shall be changed to the first following working day.

XIS are authorised to:

•       sign policies in multiple copies

SB / 27-12-13

Willis Limited, Lloyd’s broker, authorised and regulated by the Financial Conduct Authority.

Registered office: 51 Lime Street, London EC3M 7DQ. Registered number 181116 England and Wales

UMR Reinsured Type : B080110074N14 : American Interstate Insurance Company : Casualty Catastrophe Excess of Loss

CONTRACT ADMINISTRATION AND ADVISORY SECTIONS

FISCAL AND REGULATORY

TAXES PAYABLE BY REINSURER(S):	As stated under the heading “Taxes payable by Reinsurer(s) and Administered by the Reinsured or their Agent”.
COUNTRY OF ORIGIN	USA
OVERSEAS BROKER	Willis Re. Inc. 15305 North Dallas Parkway Suite 1100 Collonnade III Addison Texas 75001 USA
U.S. CLASSIFICATION	U.S Reinsurance
NAIC CODES:	NAIC number: 12228; 31895; 26869
ALLOCATION OF PREMIUM TO CODING:
REGULATORY CLIENT CLASSIFICATION:	Reinsurance.

SB / 27-12-13

Willis Limited, Lloyd’s broker, authorised and regulated by the Financial Conduct Authority.

Registered office: 51 Lime Street, London EC3M 7DQ. Registered number 181116 England and Wales

UMR Reinsured Type : B080110074N14 : American Interstate Insurance Company : Casualty Catastrophe Excess of Loss

BROKER REMUNERATION AND DEDUCTIONS

FEE PAYABLE BY	No
REINSURED / CLIENT? TOTAL BROKERAGE:	15%
OTHER DEDUCTIONS FROM PREMIUM:	None.

SB / 27-12-13

Willis Limited, Lloyd’s broker, authorised and regulated by the Financial Conduct Authority.

Registered office: 51 Lime Street, London EC3M 7DQ. Registered number 181116 England and Wales

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, C. Allen Bradley, Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of AMERISAFE, Inc.;

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;

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;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(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;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’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

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(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’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 2, 2014	/s/ C. Allen Bradley, Jr.
	C. Allen Bradley, Jr.
	Chairman and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Michael Grasher, certify that:

1. I have reviewed this quarterly report on Form 10-Q of AMERISAFE, Inc.;

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;

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;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(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;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’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

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(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’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 2, 2014	/s/ Michael Grasher
	Michael Grasher
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. § 1350,

AS ADOPTED PURSUANT TO § 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the filing of the Quarterly Report on Form 10-Q of AMERISAFE, Inc., a Texas corporation (the “Company”), for the quarter ended March 31, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge:

1. The report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. 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.

Date: May 2, 2014	/s/ C. Allen Bradley, Jr.
	C. Allen Bradley, Jr.
	Chairman and Chief Executive Officer
	(Principal Executive Officer)
	/s/ Michael Grasher
	Michael Grasher
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer)

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.

XML

Treasury Stock - Additional Information (Detail) (USD $) In Millions, except Share data, unless otherwise specified	1 Months Ended			3 Months Ended
	Oct. 31, 2013	Oct. 31, 2012	Oct. 31, 2011	Mar. 31, 2014	Dec. 31, 2013
Equity [Abstract]
Share repurchase new limit amount	$ 25.0	$ 25.0	$ 25.0
Share repurchase program expiration date				Dec. 31, 2014
Shares repurchased				1,258,250	1,258,250
Shares repurchased, value				$ 22.4
Shares repurchased, average price				$ 17.78

XML

Comprehensive Income and Accumulated Other Comprehensive Income - Schedule of Changes in Accumulated Other Comprehensive Income (AOCI) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract]
Beginning balance	$ (4,295)	$ 2,979
Other comprehensive income/(loss) before reclassification	3,134	(556)
Amounts reclassified from accumulated other comprehensive income	106	11
Net current period other comprehensive income/(loss)	3,240	(545)
Ending Balance	$ (1,055)	$ 2,434

XML

Investments - Gross Unrealized Gains and Losses and the Amortized Cost and Fair Value of Investments Classified as Held-to-maturity (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Investment [Line Items]
Amortized Cost	$ 548,612	$ 536,583
Gross Unrealized Gains	27,079	25,934
Gross Unrealized Losses	(516)	(1,338)
Fair Value	575,175	561,179
States and political subdivisions [Member]
Investment [Line Items]
Amortized Cost	368,697	381,674
Gross Unrealized Gains	19,970	18,634
Gross Unrealized Losses	(303)	(1,153)
Fair Value	388,364	399,155
Corporate bonds [Member]
Investment [Line Items]
Amortized Cost	94,099	67,423
Gross Unrealized Gains	945	861
Gross Unrealized Losses	(74)	(41)
Fair Value	94,970	68,243
Commercial mortgage-backed securities [Member]
Investment [Line Items]
Amortized Cost	49,884	50,813
Gross Unrealized Gains	3,079	3,431
Fair Value	52,963	54,244
U.S. agency-based mortgage-backed securities [Member]
Investment [Line Items]
Amortized Cost	20,418	21,775
Gross Unrealized Gains	1,794	1,790
Fair Value	22,212	23,565
U.S. Treasury securities and obligations of U.S. government agencies [Member]
Investment [Line Items]
Amortized Cost	12,265	11,514
Gross Unrealized Gains	1,077	1,002
Gross Unrealized Losses	(6)
Fair Value	13,336	12,516
Asset-backed securities [Member]
Investment [Line Items]
Amortized Cost	3,249	3,384
Gross Unrealized Gains	214	216
Gross Unrealized Losses	(133)	(144)
Fair Value	$ 3,330	$ 3,456

XML

Fair Value Measurements - Summary of Carrying Values and Corresponding Fair Values for Financial Instruments (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Fair Value Of Financial Instruments [Line Items]
Fixed maturity securities-held-to-maturity	$ 575,175	$ 561,179
Fixed maturity securities-held-to-maturity	548,612	536,583
Fixed maturity securities-available-for-sale	268,189	237,877
Equity securities	3,682	9,302
Carrying Amount [Member]
Fair Value Of Financial Instruments [Line Items]
Fixed maturity securities-held-to-maturity	548,612	536,583
Fixed maturity securities-available-for-sale	268,189	237,877
Equity securities	3,682	9,302
Cash and cash equivalents	106,860	123,077
Short-term investments	85,031	84,422
Other investments	10,820	10,591
Fair Value [Member]
Fair Value Of Financial Instruments [Line Items]
Fixed maturity securities-held-to-maturity	575,175	561,179
Fixed maturity securities-available-for-sale	268,189	237,877
Equity securities	3,682	9,302
Cash and cash equivalents	106,860	123,077
Short-term investments	85,031	84,422
Other investments	$ 10,820	$ 10,591

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Stock Options and Restricted Stock

3 Months Ended

Mar. 31, 2014

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock Options and Restricted Stock

Note 2. Stock Options and Restricted Stock

The Company has three equity incentive plans: the AMERISAFE 2005 Equity Incentive Plan (the “2005 Incentive Plan”), the AMERISAFE 2010 Non-Employee Director Restricted Stock Plan (the “2010 Restricted Stock Plan”) and the AMERISAFE 2012 Equity and Incentive Compensation Plan (the “2012 Incentive Plan”). See Note 13 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2013 for additional information regarding the Company’s incentive plans.

In March 2013, the Company granted 4,312 shares of restricted common stock to four executive officers. The awards were made pursuant to the Company’s 2012 Incentive Plan.

During the three months ended March 31, 2014, options to purchase 61,167 shares of common stock were exercised. During the three months ended March 31, 2013, options to purchase 95,000 shares of common stock were exercised. In connection with these exercises, the Company received $0.6 million of stock option proceeds in the first three months of 2014 and $0.9 million of stock option proceeds in the same period in 2013.

The Company recognized share-based compensation expense of $0.6 million and $0.3 million in the three months ended March 31, 2014 and 2013, respectively.

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Investments - Investment Securities Continuous Unrealized Loss Position (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Investment [Line Items]
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	$ 54,704	$ 68,985
Held To Maturity Securities Continuous Unrealized Loss Position Less Than Twelve Months Accumulated Loss	342	1,188
Held-to-maturity Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	3,878	2,227
Held To Maturity Securities, Continuous Unrealized Loss Position Twelve Months Or Longer Accumulated Loss	174	150
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value	58,582	71,212
Gross Unrealized Losses	516	1,338
Available-for Sale, Fair value of Investments with Unrealized Losses, Less Than 12 Months	90,883	138,107
Available-for Sale, Gross Unrealized Losses, Less Than 12 Months	2,018	6,191
Fair Value of Investments with Unrealized Losses, 12 Months or Greater	17,942	7,525
Gross Unrealized Losses, 12 Months or Greater	3,987	2,844
Available-for Sale, Fair Value of Investments with Unrealized Losses, Total	108,825	145,632
Available-for Sale, Gross Unrealized Losses, Total	6,005	9,035
Corporate bonds [Member]
Investment [Line Items]
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	24,290	14,090
Held To Maturity Securities Continuous Unrealized Loss Position Less Than Twelve Months Accumulated Loss	74	41
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value	24,290	14,090
Gross Unrealized Losses	74	41
Available-for Sale, Fair value of Investments with Unrealized Losses, Less Than 12 Months	45,493	29,691
Available-for Sale, Gross Unrealized Losses, Less Than 12 Months	198	361
Fair Value of Investments with Unrealized Losses, 12 Months or Greater
Gross Unrealized Losses, 12 Months or Greater
Available-for Sale, Fair Value of Investments with Unrealized Losses, Total	45,493	29,691
Available-for Sale, Gross Unrealized Losses, Total	198	361
States and political subdivisions [Member]
Investment [Line Items]
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	27,027	54,895
Held To Maturity Securities Continuous Unrealized Loss Position Less Than Twelve Months Accumulated Loss	262	1,147
Held-to-maturity Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	2,012	311
Held To Maturity Securities, Continuous Unrealized Loss Position Twelve Months Or Longer Accumulated Loss	41	6
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value	29,039	55,206
Gross Unrealized Losses	303	1,153
Available-for Sale, Fair value of Investments with Unrealized Losses, Less Than 12 Months	43,605	101,908
Available-for Sale, Gross Unrealized Losses, Less Than 12 Months	1,371	4,798
Fair Value of Investments with Unrealized Losses, 12 Months or Greater	12,247	1,753
Gross Unrealized Losses, 12 Months or Greater	1,419	342
Available-for Sale, Fair Value of Investments with Unrealized Losses, Total	55,852	103,661
Available-for Sale, Gross Unrealized Losses, Total	2,790	5,140
U.S. agency-based mortgage-backed securities [Member]
Investment [Line Items]
Available-for Sale, Fair value of Investments with Unrealized Losses, Less Than 12 Months	1,324	1,303
Available-for Sale, Gross Unrealized Losses, Less Than 12 Months	423	465
Fair Value of Investments with Unrealized Losses, 12 Months or Greater	5,695	5,772
Gross Unrealized Losses, 12 Months or Greater	2,568	2,502
Available-for Sale, Fair Value of Investments with Unrealized Losses, Total	7,019	7,075
Available-for Sale, Gross Unrealized Losses, Total	2,991	2,967
Equity securities [Member]
Investment [Line Items]
Available-for Sale, Fair value of Investments with Unrealized Losses, Less Than 12 Months	461	5,205
Available-for Sale, Gross Unrealized Losses, Less Than 12 Months	26	567
Fair Value of Investments with Unrealized Losses, 12 Months or Greater
Gross Unrealized Losses, 12 Months or Greater
Available-for Sale, Fair Value of Investments with Unrealized Losses, Total	461	5,205
Available-for Sale, Gross Unrealized Losses, Total	26	567
Asset-backed securities [Member]
Investment [Line Items]
Held-to-maturity Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	1,866	1,916
Held To Maturity Securities, Continuous Unrealized Loss Position Twelve Months Or Longer Accumulated Loss	133	144
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value	1,866	1,916
Gross Unrealized Losses	133	144
U.S. Treasury securities and obligations of U.S. government agencies [Member]
Investment [Line Items]
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	3,387
Held To Maturity Securities Continuous Unrealized Loss Position Less Than Twelve Months Accumulated Loss	6
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value	3,387
Gross Unrealized Losses	6
Held-to-maturity securities [Member]
Investment [Line Items]
Fair Value of Investments with Unrealized Losses, Less Than 12 months	145,587	207,092
Gross Unrealized Loss, Less Than 12 Months	2,360	7,379
Fair Value of Investments with Unrealized Losses, 12 Months or Greater	21,820	9,752
Gross Unrealized Losses, 12 Months or Greater	4,161	2,994
Fair Value of Investments with Unrealized Losses, Total	167,407	216,844
Gross Unrealized Losses, Total	$ 6,521	$ 10,373

XML

Investments - Summary of the Amortized Cost and Fair Value of Investments in Fixed Maturity Securities, Classified as Available-for-sale (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Investment [Line Items]
Less than one year, Amortized Cost	$ 41,459
One to five years, Amortized Cost	60,956
Five to ten years, Amortized Cost	15,939
More than ten years, Amortized Cost	141,770
Total, Amortized Cost	270,135	244,409
Less than one year, Fair Value	41,542
One to five years, Fair Value	61,229
Five to ten years, Fair Value	16,289
More than ten years, Fair Value	142,109
Total, Fair Value	268,189	237,877
U.S. agency-based mortgage-backed securities [Member]
Investment [Line Items]
Available for sale securities, Amortized Cost	10,011
Available for sale securities, Fair Value	$ 7,020

XML

Investments - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 31, 2014 Individual Equity	Mar. 31, 2013
Investments Schedule [Abstract]
Individual fixed maturity held in unrealized loss position	144
Equity securities held in unrealized loss position	1
Individual fixed maturity held in unrealized loss position	27
Carrying value of investments	$ 10,800,000
Net realized investment gains (losses)	100,000
Impairment losses recognized	$ 0	$ 0

XML

Income Taxes - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Income Tax Disclosure [Abstract]
Company recognized uncertain tax positions	$ 0	$ 0
Unrecognized tax benefits	$ 0

XML

Basis of Presentation

3 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

Basis of Presentation

Note 1. Basis of Presentation

AMERISAFE, Inc. (the “Company”) is an insurance holding company incorporated in the state of Texas. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries: American Interstate Insurance Company (“AIIC”), Silver Oak Casualty, Inc. (“SOCI”), American Interstate Insurance Company of Texas (“AIICTX”), Amerisafe Risk Services, Inc. (“RISK”) and Amerisafe General Agency, Inc. (“AGAI”). AIIC and SOCI are property and casualty insurance companies organized under the laws of the state of Nebraska. AIICTX is a property and casualty insurance company organized under the laws of the state of Texas. In 2013, AIIC and SOCI were re-domesticated to Nebraska from Louisiana. RISK, a wholly owned subsidiary of the Company, is a claims and safety services company, currently servicing only affiliated 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 “AMERISAFE,” the “Company,” “we,” “us” or “our” refer to AMERISAFE, Inc. and its consolidated subsidiaries, as the context requires.

The Company provides workers’ compensation insurance for small to mid-sized employers engaged in hazardous industries, principally construction, trucking, manufacturing, oil and gas, and agriculture. Assets and revenues of AIIC represent at least 95% of comparable consolidated amounts of the Company for each of 2014 and 2013.

In the opinion of 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 (“GAAP”). 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 31, 2013.

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.

Certain prior year amounts have been reclassified to conform with the current year presentation.

XML

Comprehensive Income and Accumulated Other Comprehensive Income - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract]
Comprehensive income	$ 13,789	$ 8,306
Comprehensive income tax rate	35.00%

XML

Subsequent Events - Additional Information (Detail) (Dividend Declared [Member], USD $)	3 Months Ended
	Mar. 31, 2014	Apr. 29, 2014 Subsequent Event [Member]
Subsequent Event [Line Items]
Cash dividend per share		$ 0.12
Date of payment to shareholders entitled to dividends	Jun. 26, 2014
Date of record of shareholders entitled to dividends	Jun. 12, 2014

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Investments:
Fixed maturity securities-held-to-maturity, at amortized cost (fair value $575,175 and $561,179 in 2014 and 2013, respectively)	$ 548,612	$ 536,583
Fixed maturity securities-available-for-sale, at fair value (cost $270,135 and $244,409 in 2014 and 2013, respectively)	268,189	237,877
Equity securities-available-for-sale, at fair value (cost $3,447 and $9,482 in 2014 and 2013, respectively)	3,682	9,302
Short-term investments	85,031	84,422
Other investments	10,820	10,591
Total investments	916,334	878,775
Cash and cash equivalents	106,860	123,077
Amounts recoverable from reinsurers	78,275	75,326
Premiums receivable, net of allowance	192,964	171,579
Deferred income taxes	32,806	33,645
Accrued interest receivable	11,345	11,242
Property and equipment, net	7,425	7,549
Deferred policy acquisition costs	21,091	19,171
Other assets	9,650	8,637
Total assets	1,376,750	1,329,001
Liabilities:
Reserves for loss and loss adjustment expenses	636,191	614,557
Unearned premiums	177,428	164,296
Reinsurance premiums payable	1,727	607
Amounts held for others	36,617	35,739
Policyholder deposits	45,811	44,620
Insurance-related assessments	28,113	25,428
Accounts payable and other liabilities	29,650	26,940
Payable for investments purchased	635
Total liabilities	956,172	912,187
Shareholders' equity:
Common stock: Voting-$0.01 par value authorized shares-50,000,000 in 2014 and 2013; 19,917,709 and 19,855,430 shares issued and 18,659,459 and 18,597,180 shares outstanding in 2014 and 2013, respectively	198	198
Additional paid-in capital	194,076	192,537
Treasury stock at cost (1,258,250 shares in 2014 and 2013)	(22,370)	(22,370)
Accumulated earnings	249,729	250,744
Accumulated other comprehensive loss, net	(1,055)	(4,295)
Total shareholders' equity	420,578	416,814
Total liabilities and shareholders' equity	$ 1,376,750	$ 1,329,001

XML

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) (USD $) In Thousands, except Share data	Total	Common Stock	Treasury Stock	Additional Paid-In Capital	Accumulated Earnings	Accumulated Other Comprehensive Income
Beginning Balance at Dec. 31, 2013	$ 416,814	$ 198	$ (22,370)	$ 192,537	$ 250,744	$ (4,295)
Treasury Stock Beginning Balance, Shares at Dec. 31, 2013	(1,258,250)		(1,258,250)
Beginning Balance, Shares at Dec. 31, 2013	19,855,430	19,855,430
Comprehensive income	13,789				10,549	3,240
Options exercised	600			600
Options exercised, Shares	61,167	61,167
Tax benefit from share-based payments	625			625
Restricted common stock issued
Restricted common stock issued, Shares		1,112
Share-based compensation	314			314
Dividends to stockholders	(11,564)				(11,564)
Ending Balance at Mar. 31, 2014	$ 420,578	$ 198	$ (22,370)	$ 194,076	$ 249,729	$ (1,055)
Treasury Stock Ending Balance, Shares at Mar. 31, 2014	(1,258,250)		(1,258,250)
Ending Balance, Shares at Mar. 31, 2014	19,917,709	19,917,709

XML

Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value	$ 282,691	$ 257,770
Equity securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value	3,682	9,302
Other Investments [Member]
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value	10,820	10,591
Fair Value, Measurements, Recurring [Member]
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value	282,691	257,770
Fair Value, Measurements, Recurring [Member] | Debt Securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value	268,189	237,877
Fair Value, Measurements, Recurring [Member] | Other Investments [Member]
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value	10,820	10,591
Fair Value, Measurements, Recurring [Member] | Common Stock | Equity securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value	3,682	9,302
Fair Value, Measurements, Recurring [Member] | States and political subdivisions [Member] | Debt Securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value	154,075	150,375
Fair Value, Measurements, Recurring [Member] | Corporate bonds [Member] | Debt Securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value	107,094	80,428
Fair Value, Measurements, Recurring [Member] | U.S. agency-based mortgage-backed securities [Member] | Debt Securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value	7,020	7,074
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value	3,682	9,302
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | Debt Securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | Other Investments [Member]
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | Common Stock | Equity securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value	3,682	9,302
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | States and political subdivisions [Member] | Debt Securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | Corporate bonds [Member] | Debt Securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | U.S. agency-based mortgage-backed securities [Member] | Debt Securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value	268,189	237,877
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Debt Securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value	268,189	237,877
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Other Investments [Member]
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Common Stock | Equity securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | States and political subdivisions [Member] | Debt Securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value	154,075	150,375
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | Corporate bonds [Member] | Debt Securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value	107,094	80,428
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | U.S. agency-based mortgage-backed securities [Member] | Debt Securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value	7,020	7,074
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value	10,820	10,591
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | Debt Securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | Other Investments [Member]
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value	10,820	10,591
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | Common Stock | Equity securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | States and political subdivisions [Member] | Debt Securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | Corporate bonds [Member] | Debt Securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | U.S. agency-based mortgage-backed securities [Member] | Debt Securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities available for sale/Available-for-sale, Fair value

XML

Basis of Presentation - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Percentage of comparable consolidated amounts	95.00%	95.00%

XML

Fair Value Measurements - Schedule of Assets and Liabilities Measured at Amortized Cost (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	$ 575,175	$ 561,179
States and political subdivisions [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	388,364	399,155
Corporate bonds [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	94,970	68,243
Commercial mortgage-backed securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	52,963	54,244
U.S. agency-based mortgage-backed securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	22,212	23,565
US Treasury Securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	7,343	6,602
Obligations of U.S. government agencies [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	5,993	5,914
Asset-backed securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	3,330	3,456
Fair Value, Inputs, Level 1 [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	7,343	6,602
Fair Value, Inputs, Level 1 [Member] | States and political subdivisions [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value
Fair Value, Inputs, Level 1 [Member] | Corporate bonds [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value
Fair Value, Inputs, Level 1 [Member] | Commercial mortgage-backed securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value
Fair Value, Inputs, Level 1 [Member] | U.S. agency-based mortgage-backed securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value
Fair Value, Inputs, Level 1 [Member] | US Treasury Securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	7,343	6,602
Fair Value, Inputs, Level 1 [Member] | Obligations of U.S. government agencies [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value
Fair Value, Inputs, Level 1 [Member] | Asset-backed securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value
Fair Value, Inputs, Level 2 [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	567,832	554,577
Fair Value, Inputs, Level 2 [Member] | States and political subdivisions [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	388,364	399,155
Fair Value, Inputs, Level 2 [Member] | Corporate bonds [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	94,970	68,243
Fair Value, Inputs, Level 2 [Member] | Commercial mortgage-backed securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	52,963	54,244
Fair Value, Inputs, Level 2 [Member] | U.S. agency-based mortgage-backed securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	22,212	23,565
Fair Value, Inputs, Level 2 [Member] | US Treasury Securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value
Fair Value, Inputs, Level 2 [Member] | Obligations of U.S. government agencies [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	5,993	5,914
Fair Value, Inputs, Level 2 [Member] | Asset-backed securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	3,330	3,456
Fair Value, Inputs, Level 3 [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value
Fair Value, Inputs, Level 3 [Member] | States and political subdivisions [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value
Fair Value, Inputs, Level 3 [Member] | Corporate bonds [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value
Fair Value, Inputs, Level 3 [Member] | Commercial mortgage-backed securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value
Fair Value, Inputs, Level 3 [Member] | U.S. agency-based mortgage-backed securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value
Fair Value, Inputs, Level 3 [Member] | US Treasury Securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value
Fair Value, Inputs, Level 3 [Member] | Obligations of U.S. government agencies [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value
Fair Value, Inputs, Level 3 [Member] | Asset-backed securities [Member]
Fair Value Measurements Disclosure [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value

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Earnings Per Share - Summary of Earnings Per Share (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Earnings Per Share Basic [Abstract]
Net income, as reported	$ 10,549	$ 8,851
Less allocated income to unvested shares		15
Net income available to common shareholders-basic	10,549	8,836
Basic weighted average common shares	18,531,926	18,281,353
Basic earnings per common share	$ 0.57	$ 0.48
Net income available to common shareholders-diluted	$ 10,549	$ 8,836
Weighted average common shares	18,531,926	18,281,353
Stock options and performance shares	327,756	408,489
Diluted weighted average common shares	18,859,682	18,689,842
Diluted earnings per common share	$ 0.56	$ 0.47

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Operating Activities
Net income	$ 10,549	$ 8,851
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	332	322
Net amortization of investments	3,765	2,928
Deferred income taxes	(906)	(885)
Net realized (gains) on investments	(101)	(24)
Share-based compensation	558	290
Changes in operating assets and liabilities:
Premiums receivable, net	(21,385)	(25,197)
Accrued interest receivable	(103)	87
Deferred policy acquisition costs	(1,920)	(1,619)
Other assets	(1,241)	(860)
Reserves for loss and loss adjustment expenses	21,634	7,538
Unearned premiums	13,132	14,932
Reinsurance balances	(1,829)	2,675
Amounts held for others and policyholder deposits	2,069	3,124
Accounts payable and other liabilities	5,732	9,615
Net cash provided by operating activities	30,286	21,777
Investing Activities
Purchases of investments held-to-maturity	(38,698)	(26,454)
Purchases of investments available-for-sale	(35,248)	(43,263)
Purchases of short-term investments	(44,920)	(47,603)
Proceeds from maturities of investments held-to-maturity	24,930	34,411
Proceeds from sales and maturities of investments available-for-sale	14,557	2,528
Proceeds from sales and maturities of short-term investments	43,369	41,338
Purchases of property and equipment	(208)	(144)
Net cash used in investing activities	(36,218)	(39,187)
Financing Activities
Proceeds from stock option exercises	600	855
Tax benefit from share-based payments	625	642
Dividends to stockholders	(11,510)	(1,469)
Net cash (used in)/provided by financing activities	(10,285)	28
Change in cash and cash equivalents	(16,217)	(17,382)
Cash and cash equivalents at beginning of period	123,077	92,676
Cash and cash equivalents at end of period	$ 106,860	$ 75,294

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Statement Of Financial Position [Abstract]
Fixed maturity securities, fair value	$ 575,175	$ 561,179
Fixed maturity securities, cost	270,135	244,409
Equity securities, cost	$ 3,447	$ 9,482
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	19,917,709	19,855,430
Common stock, shares outstanding	18,659,459	18,597,180
Treasury stock, shares	1,258,250	1,258,250

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Earnings Per Share (Policies)

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Earnings Per Share

The Company computes earnings per share (EPS) in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 260, Earnings Per Share. Additionally, during 2013, the Company applied the “two-class method” in computing basic and diluted earnings per share as a result of the participating unvested common shares which contained nonforfeitable rights to dividends during this period. As of January 1, 2014, the Company no longer has participating unvested common shares which contain nonforfeitable rights to dividends and now applies the treasury stock method in computing basic and diluted earnings per share.

Income Taxes

In accordance with FASB ASC Topic 740, “Income Taxes,” we provide for the recognition and measurement of deferred income tax benefits based on the likelihood of their realization in future years. As of March 31, 2014, the Company had no material unrecognized tax benefits and no adjustments to liabilities or operations were required.

Fair Value Measurements

We carry available-for-sale securities at fair value in our consolidated financial statements and determine fair value measurements and disclosure in accordance with FASB ASC Topic 820, “Fair Value Measurements and Disclosures.”

The Company determines the fair values of its financial instruments based on the fair value hierarchy established in ASC Topic 820, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard defines fair value, describes three levels of inputs that may be used to measure fair value, and expands disclosures about fair value measurements.

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Document and Entity Information	3 Months Ended
	Mar. 31, 2014	Apr. 30, 2014
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1
Trading Symbol	AMSF
Entity Registrant Name	AMERISAFE INC
Entity Central Index Key	0001018979
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		18,674,459

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Summary of Earnings Per Share

	Three Months Ended March 31,
	2014		2013
	(in thousands, except share and per share amounts)
Basic EPS:
Net income, as reported	$	10,549	$	8,851
Less allocated income to unvested shares		—		15
Net income available to common shareholders—basic	$	10,549	$	8,836
Basic weighted average common shares		18,531,926		18,281,353
Basic earnings per common share	$	0.57	$	0.48
Diluted EPS:
Net income available to common shareholders—diluted	$	10,549	$	8,836
Diluted weighted average common shares:
Weighted average common shares		18,531,926		18,281,353
Stock options and performance shares		327,756		408,489
Diluted weighted average common shares		18,859,682		18,689,842
Diluted earnings per common share	$	0.56	$	0.47

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Revenues
Gross premiums written	$ 105,703	$ 99,123
Ceded premiums written	(3,339)	(4,481)
Net premiums written	102,364	94,642
Net premiums earned	89,233	79,709
Net investment income	6,708	6,670
Net realized gains on investments	101	24
Fee and other income	131	109
Total revenues	96,173	86,512
Expenses
Loss and loss adjustment expenses incurred	61,285	56,001
Underwriting and certain other operating costs	7,963	7,068
Commissions	6,687	6,164
Salaries and benefits	6,721	5,645
Policyholder dividends	113	554
Total expenses	82,769	75,432
Income before income taxes	13,404	11,080
Income tax expense	2,855	2,229
Net income	10,549	8,851
Net income available to common shareholders	$ 10,549	$ 8,836
Earnings per share
Basic	$ 0.57	$ 0.48
Diluted	$ 0.56	$ 0.47
Shares used in computing earnings per share
Basic	18,531,926	18,281,353
Diluted	18,859,682	18,689,842
Extraordinary cash dividends declared per common share	$ 0.50
Cash dividends declared per common share	$ 0.12	$ 0.08

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Income Taxes

3 Months Ended

Mar. 31, 2014

Income Tax Disclosure [Abstract]

Income Taxes

Note 5. Income Taxes

In accordance with FASB ASC Topic 740, “Income Taxes,” we provide for the recognition and measurement of deferred income tax benefits based on the likelihood of their realization in future years. As of March 31, 2014, the Company had no material unrecognized tax benefits and no adjustments to liabilities or operations were required.

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. There were no uncertain tax positions recognized for the periods ended March 31, 2014 and 2013.

Tax years 2009 through 2013 are subject to examination by the federal and state taxing authorities. In April 2012, the Company was notified by the Internal Revenue Service that the examination for tax year 2009 had been completed, but remains subject to state taxing authorities.

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Investments

3 Months Ended

Mar. 31, 2014

Investments Debt And Equity Securities [Abstract]

Investments

Note 4. Investments

The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as held-to-maturity at March 31, 2014 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	368,697	$	19,970	$	(303	)	$	388,364
Corporate bonds		94,099		945		(74	)		94,970
Commercial mortgage-backed securities		49,884		3,079		—			52,963
U.S. agency-based mortgage-backed securities		20,418		1,794		—			22,212
U.S. Treasury securities and obligations of U.S. government agencies		12,265		1,077		(6	)		13,336
Asset-backed securities		3,249		214		(133	)		3,330
Totals	$	548,612	$	27,079	$	(516	)	$	575,175

The gross unrealized gains and losses on, and the cost or amortized cost and fair value of, those investments classified as available-for-sale at March 31, 2014 are summarized as follows:

	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
Fixed maturity:
States and political subdivisions	$	153,335	$	3,530	$	(2,790	)	$	154,075
Corporate bonds		106,789		503		(198	)		107,094
U.S. agency-based mortgage-backed securities		10,011		—		(2,991	)		7,020
Total fixed maturity		270,135		4,033		(5,979	)		268,189
Other investments		10,000		820		—			10,820
Equity securities		3,447		261		(26	)		3,682
Totals	$	283,582	$	5,114	$	(6,005	)	$	282,691

The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as held-to-maturity at December 31, 2013 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	381,674	$	18,634	$	(1,153	)	$	399,155
Corporate bonds		67,423		861		(41	)		68,243
Commercial mortgage-backed securities		50,813		3,431		—			54,244
U.S. agency-based mortgage-backed securities		21,775		1,790		—			23,565
U.S. Treasury securities and obligations of U.S. Government agencies		11,514		1,002		—			12,516
Asset-backed securities		3,384		216		(144	)		3,456
Totals	$	536,583	$	25,934	$	(1,338	)	$	561,179

The gross unrealized gains and losses on, and the cost or amortized cost and fair value of, those investments classified as available-for-sale at December 31, 2013 are summarized as follows:

	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
Fixed maturity:
States and political subdivisions	$	154,024	$	1,491	$	(5,140	)	$	150,375
Corporate bonds		80,344		445		(361	)		80,428
U.S. agency-based mortgage-backed securities		10,041		—		(2,967	)		7,074
Total fixed maturity		244,409		1,936		(8,468	)		237,877
Other investments		10,000		591		—			10,591
Equity securities		9,482		387		(567	)		9,302
Totals	$	263,891	$	2,914	$	(9,035	)	$	257,770

A summary of the cost and fair value of investments in fixed maturity securities, classified as held-to-maturity at March 31, 2014, by contractual maturity, is as follows:

Remaining Time to Maturity	Amortized Cost Basis		Fair Value
	(in thousands)
Less than one year	$	55,114	$	55,575
One to five years		171,828		179,609
Five to ten years		127,493		136,840
More than ten years		120,626		124,646
U.S. agency-based mortgage-backed securities		20,418		22,212
Commercial mortgage-backed securities		49,884		52,963
Asset-backed securities		3,249		3,330
Total	$	548,612	$	575,175

A summary of cost and fair value of investments in fixed maturity securities, classified as available-for-sale at March 31, 2014, by contractual maturity, is as follows:

Remaining Time to Maturity	Amortized Cost Basis		Fair Value
	(in thousands)
Less than one year	$	41,459	$	41,542
One to five years		60,956		61,229
Five to ten years		15,939		16,289
More than ten years		141,770		142,109
U.S. agency-based mortgage-backed securities		10,011		7,020
Total	$	270,135	$	268,189

The following table summarizes the fair value and gross unrealized losses on securities, aggregated by major investment category and length of time that the individual securities have been in a continuous unrealized loss position:

	Less Than 12 Months				12 Months or Greater				Total
	Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses		Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses		Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses
	(In thousands)
March 31, 2014
Held-to-Maturity
Fixed maturity securities:
Corporate bonds	$	24,290	$	74	$	—	$	—	$	24,290	$	74
States and political subdivisions		27,027		262		2,012		41		29,039		303
Asset-backed securities		—		—		1,866		133		1,866		133
U.S. Treasury securities and obligations of U.S. government agencies		3,387		6		—		—		3,387		6
Total held-to-maturity securities		54,704		342		3,878		174		58,582		516
Available-for Sale
Fixed maturity securities:
Corporate bonds	$	45,493	$	198	$	—	$	—	$	45,493	$	198
States and political subdivisions		43,605		1,371		12,247		1,419		55,852		2,790
U.S. agency-based mortgage-backed securities		1,324		423		5,695		2,568		7,019		2,991
Equity securities		461		26		—		—		461		26
Total available-for-sale securities		90,883		2,018		17,942		3,987		108,825		6,005
Total	$	145,587	$	2,360	$	21,820	$	4,161	$	167,407	$	6,521

	Less Than 12 Months				12 Months or Greater				Total
	Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses		Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses		Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses
	(In thousands)
December 31, 2013
Held-to-Maturity
Fixed maturity securities:
Corporate bonds	$	14,090	$	41	$	—	$	—	$	14,090	$	41
States and political subdivisions		54,895		1,147		311		6		55,206		1,153
Asset-backed securities		—		—		1,916		144		1,916		144
Total held-to-maturity securities		68,985		1,188		2,227		150		71,212		1,338
Available-for Sale
Fixed maturity securities:
Corporate bonds	$	29,691	$	361	$	—	$	—	$	29,691	$	361
States and political subdivisions		101,908		4,798		1,753		342		103,661		5,140
U.S. agency-based mortgage-backed securities		1,303		465		5,772		2,502		7,075		2,967
Equity securities		5,205		567		—		—		5,205		567
Total available-for-sale securities		138,107		6,191		7,525		2,844		145,632		9,035
Total	$	207,092	$	7,379	$	9,752	$	2,994	$	216,844	$	10,373

At March 31, 2014, the Company held 144 individual fixed maturity securities and one equity security that were in an unrealized loss position, of which 27 individual fixed maturity securities were in a continuous unrealized loss position for longer than 12 months.

Amerisafe holds investments in a long/short equity fund, accounted for under the equity method. The carrying value of this investment is $10.8 million at March 31, 2014.

Investment income is recognized as it is earned. The discount or premium on fixed maturity securities is amortized using the “constant yield” method. Anticipated prepayments, where applicable, are considered when determining the amortization of premiums or discounts. Realized investment gains and losses are determined using the specific identification method.

We regularly review our investment portfolio to evaluate the necessity of recording impairment losses for other-than-temporary declines in the fair value of our investments. We consider various factors in determining if a decline in the fair value of an individual security is other-than-temporary. The key factors we consider are:

• any reduction or elimination of dividends, or nonpayment of scheduled principal or interest payments;

• the financial condition and near-term prospects of the issuer of the applicable security, including any specific events that may affect its operations or earnings;

• how long and by how much the fair value of the security has been below its cost or amortized cost;

• any downgrades of the security by a rating agency;

• our intent not to sell the security for a sufficient time period for it to recover its value;

• the likelihood of being forced to sell the security before the recovery of its value; and

• an evaluation as to whether there are any credit losses on debt securities.

We reviewed all securities with unrealized losses in accordance with the impairment policy described above. The Company expects to hold investments in equity securities for a reasonable period of time sufficient for a recovery of fair value. We determined that the unrealized losses in the fixed maturity securities portfolio related primarily to changes in market interest rates since the date of purchase, current conditions in the capital markets and the impact of those conditions on market liquidity and prices generally, and the transfer of the investments from the available-for-sale classification to the held-to-maturity classification in January 2004. We expect to recover the carrying value of these securities as it is not more likely than not that we will be required to sell the security before the recovery of its amortized cost basis. In addition, none of the unrealized losses on debt securities are considered credit losses.

Net realized gains on investments in the three months ended March 31, 2014 totaled $0.1 million resulting from gains on called fixed maturity securities and the sale of equity securities. Net realized gains in the three months ended March 31, 2013 were immaterial.

As a result of the review of our investment portfolio, there were no impairment losses recognized for other-than-temporary declines in the fair value of our investments in the three months ended March 31, 2014 and 2013.

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Stock Options and Restricted Stock - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 31, 2014 Incentive_Plan	Mar. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of equity incentive plans	3
Stock options exercised, Shares	61,167	95,000
Proceeds from stock option exercises	$ 600,000	$ 855,000
Share-based compensation expense	$ 600,000	$ 300,000
Restricted Stock Units (RSUs) [Member] | Executive Officers [Member] | 2012 Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted common stock granted	4,312
Restricted common stock to executive officers	4

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Investments (Tables)

3 Months Ended

Mar. 31, 2014

Gross Unrealized Gains and Losses and the Amortized Cost and Fair Value of Investments Classified as Held-to-maturity

The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as held-to-maturity at March 31, 2014 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	368,697	$	19,970	$	(303	)	$	388,364
Corporate bonds		94,099		945		(74	)		94,970
Commercial mortgage-backed securities		49,884		3,079		—			52,963
U.S. agency-based mortgage-backed securities		20,418		1,794		—			22,212
U.S. Treasury securities and obligations of U.S. government agencies		12,265		1,077		(6	)		13,336
Asset-backed securities		3,249		214		(133	)		3,330
Totals	$	548,612	$	27,079	$	(516	)	$	575,175

The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as held-to-maturity at December 31, 2013 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	381,674	$	18,634	$	(1,153	)	$	399,155
Corporate bonds		67,423		861		(41	)		68,243
Commercial mortgage-backed securities		50,813		3,431		—			54,244
U.S. agency-based mortgage-backed securities		21,775		1,790		—			23,565
U.S. Treasury securities and obligations of U.S. Government agencies		11,514		1,002		—			12,516
Asset-backed securities		3,384		216		(144	)		3,456
Totals	$	536,583	$	25,934	$	(1,338	)	$	561,179

Gross Unrealized Gains and Losses and Cost or Amortized Cost and Fair Value of Investments Classified as Available-for-sale

The gross unrealized gains and losses on, and the cost or amortized cost and fair value of, those investments classified as available-for-sale at March 31, 2014 are summarized as follows:

	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
Fixed maturity:
States and political subdivisions	$	153,335	$	3,530	$	(2,790	)	$	154,075
Corporate bonds		106,789		503		(198	)		107,094
U.S. agency-based mortgage-backed securities		10,011		—		(2,991	)		7,020
Total fixed maturity		270,135		4,033		(5,979	)		268,189
Other investments		10,000		820		—			10,820
Equity securities		3,447		261		(26	)		3,682
Totals	$	283,582	$	5,114	$	(6,005	)	$	282,691

The gross unrealized gains and losses on, and the cost or amortized cost and fair value of, those investments classified as available-for-sale at December 31, 2013 are summarized as follows:

	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
Fixed maturity:
States and political subdivisions	$	154,024	$	1,491	$	(5,140	)	$	150,375
Corporate bonds		80,344		445		(361	)		80,428
U.S. agency-based mortgage-backed securities		10,041		—		(2,967	)		7,074
Total fixed maturity		244,409		1,936		(8,468	)		237,877
Other investments		10,000		591		—			10,591
Equity securities		9,482		387		(567	)		9,302
Totals	$	263,891	$	2,914	$	(9,035	)	$	257,770

Investment Securities Continuous Unrealized Loss Position

The following table summarizes the fair value and gross unrealized losses on securities, aggregated by major investment category and length of time that the individual securities have been in a continuous unrealized loss position:

	Less Than 12 Months				12 Months or Greater				Total
	Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses		Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses		Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses
	(In thousands)
March 31, 2014
Held-to-Maturity
Fixed maturity securities:
Corporate bonds	$	24,290	$	74	$	—	$	—	$	24,290	$	74
States and political subdivisions		27,027		262		2,012		41		29,039		303
Asset-backed securities		—		—		1,866		133		1,866		133
U.S. Treasury securities and obligations of U.S. government agencies		3,387		6		—		—		3,387		6
Total held-to-maturity securities		54,704		342		3,878		174		58,582		516
Available-for Sale
Fixed maturity securities:
Corporate bonds	$	45,493	$	198	$	—	$	—	$	45,493	$	198
States and political subdivisions		43,605		1,371		12,247		1,419		55,852		2,790
U.S. agency-based mortgage-backed securities		1,324		423		5,695		2,568		7,019		2,991
Equity securities		461		26		—		—		461		26
Total available-for-sale securities		90,883		2,018		17,942		3,987		108,825		6,005
Total	$	145,587	$	2,360	$	21,820	$	4,161	$	167,407	$	6,521

	Less Than 12 Months				12 Months or Greater				Total
	Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses		Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses		Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses
	(In thousands)
December 31, 2013
Held-to-Maturity
Fixed maturity securities:
Corporate bonds	$	14,090	$	41	$	—	$	—	$	14,090	$	41
States and political subdivisions		54,895		1,147		311		6		55,206		1,153
Asset-backed securities		—		—		1,916		144		1,916		144
Total held-to-maturity securities		68,985		1,188		2,227		150		71,212		1,338
Available-for Sale
Fixed maturity securities:
Corporate bonds	$	29,691	$	361	$	—	$	—	$	29,691	$	361
States and political subdivisions		101,908		4,798		1,753		342		103,661		5,140
U.S. agency-based mortgage-backed securities		1,303		465		5,772		2,502		7,075		2,967
Equity securities		5,205		567		—		—		5,205		567
Total available-for-sale securities		138,107		6,191		7,525		2,844		145,632		9,035
Total	$	207,092	$	7,379	$	9,752	$	2,994	$	216,844	$	10,373

Held-to-maturity securities [Member]

Summary of the Amortized Cost and Fair Value of Investments in Fixed Maturity Securities, by Contractual Maturity

A summary of the cost and fair value of investments in fixed maturity securities, classified as held-to-maturity at March 31, 2014, by contractual maturity, is as follows:

Remaining Time to Maturity	Amortized Cost Basis		Fair Value
	(in thousands)
Less than one year	$	55,114	$	55,575
One to five years		171,828		179,609
Five to ten years		127,493		136,840
More than ten years		120,626		124,646
U.S. agency-based mortgage-backed securities		20,418		22,212
Commercial mortgage-backed securities		49,884		52,963
Asset-backed securities		3,249		3,330
Total	$	548,612	$	575,175

Available-for-sale securities [Member]

Summary of the Amortized Cost and Fair Value of Investments in Fixed Maturity Securities, by Contractual Maturity

A summary of cost and fair value of investments in fixed maturity securities, classified as available-for-sale at March 31, 2014, by contractual maturity, is as follows:

Remaining Time to Maturity	Amortized Cost Basis		Fair Value
	(in thousands)
Less than one year	$	41,459	$	41,542
One to five years		60,956		61,229
Five to ten years		15,939		16,289
More than ten years		141,770		142,109
U.S. agency-based mortgage-backed securities		10,011		7,020
Total	$	270,135	$	268,189

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Treasury Stock

3 Months Ended

Mar. 31, 2014

Equity [Abstract]

Treasury Stock

Note 8. Treasury Stock

The Company’s Board of Directors initiated a share repurchase program in February 2010. In October 2011, October 2012 and October 2013, the Board reauthorized this program with a new limit of $25.0 million. Unless reauthorized, the program will expire on December 31, 2014. Since the beginning of this plan, the Company has repurchased a total of 1,258,250 shares for $22.4 million, or an average price of $17.78, including commissions.

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Comprehensive Income and Accumulated Other Comprehensive Income

3 Months Ended

Mar. 31, 2014

Equity [Abstract]

Comprehensive Income and Accumulated Other Comprehensive Income

Note 6. Comprehensive Income and Accumulated Other Comprehensive Income

Comprehensive income was $13.8 million for the three months ended March 31, 2014, compared to $8.3 million for the three months ended March 31, 2013. The difference between net income as reported and comprehensive income was due to changes in unrealized gains and losses, net of tax on available-for-sale securities.

Comprehensive income includes net income plus unrealized gains/losses on our available-for-sale investment securities, net of tax. In reporting comprehensive income on a net basis in the statement of income, we used a 35 percent tax rate. The following table illustrates the changes in the balance of each component of accumulated other comprehensive income for each period presented in the interim financial statements.

	Three Months Ended March 31,
	2014			2013
	(in thousands)
Beginning balance	$	(4,295	)	$	2,979
Other comprehensive income/(loss) before reclassification		3,134			(556	)
Amounts reclassified from accumulated other comprehensive income		106			11
Net current period other comprehensive income/(loss)		3,240			(545	)
Ending Balance	$	(1,055	)	$	2,434

The sale or other-than-temporary impairment of an available-for-sale security results in amounts being reclassified from accumulated other comprehensive income to current period net income. The effects of reclassifications out of accumulated other comprehensive income by the respective line items of net income are presented in the following table.

Component of Accumulated Other Comprehensive Income	Three Months Ended March 31,						Affected line item in the statement of income
	2014			2013
	(in thousands)
Unrealized losses on available-for-sale securities	$	(163	)	$	(17	)	Net realized gains on investments
		(163	)		(17	)	Income before income taxes
		57			6		Income tax expense
	$	(106	)	$	(11	)	Net income

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Fair Value Measurements

3 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 7. Fair Value Measurements

We carry available-for-sale securities at fair value in our consolidated financial statements and determine fair value measurements and disclosure in accordance with FASB ASC Topic 820, “Fair Value Measurements and Disclosures.”

The Company determines the fair values of its financial instruments based on the fair value hierarchy established in ASC Topic 820, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard defines fair value, describes three levels of inputs that may be used to measure fair value, and expands disclosures about fair value measurements.

Fair value is defined in ASC Topic 820 as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is the price to sell an asset or transfer a liability and, therefore, represents an exit price, not an entry price. Fair value is the exit price in the principal market (or, if lacking a principal market, the most advantageous market) in which the reporting entity would transact. Fair value is a market-based measurement, not an entity-specific measurement, and, as such, is determined based on the assumptions that market participants would use in pricing the asset or liability. The exit price objective of a fair value measurement applies regardless of the reporting entity’s intent and/or ability to sell the asset or transfer the liability at the measurement date.

ASC Topic 820 requires the use of valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities. The income approach uses valuation techniques to convert future amounts, such as cash flows or earnings, to a single present value amount on a discounted basis. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset, also known as current replacement cost. Valuation techniques used to measure fair value are to be consistently applied.

In ASC Topic 820, inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, for example, the risk inherent in a particular valuation technique used to measure fair value (such as a pricing model) and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable:

• Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity.

• Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

Valuation techniques used to measure fair value are intended to maximize the use of observable inputs and minimize the use of unobservable inputs. ASC Topic 820 establishes a fair value hierarchy that prioritizes the use of inputs used in valuation techniques into the following three levels:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

• Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, or inputs that are derived principally from or corroborated by observable market data.

• Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs are to be used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.

In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters.

The fair values of the Company’s investments are based upon prices provided by an independent pricing service. The Company has reviewed these prices for reasonableness and has not adjusted any prices received from the independent provider. Securities reported at fair value utilizing Level 1 inputs represent assets whose fair value is determined based upon observable unadjusted quoted market prices for identical assets in active markets. Level 2 securities represent assets whose fair value is determined using observable market information such as previous day trade prices, quotes from less active markets or quoted prices of securities with similar characteristics. There were no transfers between Level 1 and Level 2 during the three months ended March 31, 2014.

At March 31, 2014, assets and liabilities measured at fair value on a recurring basis are summarized below:

	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(in thousands)
Financial instruments carried at fair value, classified as a part of:
Other investments	$	—	$	—	$	10,820	$	10,820
Securities available for sale—equity:
Domestic common stock		3,682		—		—		3,682
Securities available for sale—fixed maturity:
States and political subdivisions		—		154,075		—		154,075
Corporate bonds		—		107,094		—		107,094
U.S. agency-based mortgage-backed securities		—		7,020		—		7,020
Total securities available for sale—fixed maturity		—		268,189		—		268,189
Total available for sale	$	3,682	$	268,189	$	10,820	$	282,691

At March 31, 2014, assets and liabilities measured at amortized cost are summarized below:

	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(in thousands)
Securities held-to-maturity—fixed maturity
States and political subdivisions	$	—	$	388,364	$	—	$	388,364
Corporate bonds		—		94,970		—		94,970
Commercial mortgage-backed securities		—		52,963		—		52,963
U.S. agency-based mortgage-backed securities		—		22,212		—		22,212
U.S. Treasury securities and obligations of U.S. government agencies		7,343		—		—		7,343
Obligations of U.S. government agencies		—		5,993		—		5,993
Asset-backed securities		—		3,330		—		3,330
Total held-to-maturity	$	7,343	$	567,832	$	—	$	575,175

At December 31, 2013, assets and liabilities measured at fair value on a recurring basis are summarized below:

	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(in thousands)
Financial instruments carried at fair value, classified as part of:
Other investments	$	—	$	—	$	10,591	$	10,591
Securities available for sale—equity
Domestic common stock		9,302		—		—		9,302
Securities available for sale—fixed maturity
States and political subdivisions		—		150,375		—		150,375
Corporate bonds		—		80,428		—		80,428
U.S. agency-based mortgage-backed securities		—		7,074		—		7,074
Total available for sale—fixed maturity		—	$	237,877	$	—	$	237,877
Total available for sale	$	9,302	$	237,877	$	10,591	$	257,770

At December 31, 2013, assets and liabilities measured at amortized cost are summarized below:

	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(in thousands)
Securities held-to-maturity—fixed maturity
States and political subdivisions	$	—	$	399,155	$	—	$	399,155
Corporate bonds		—		68,243		—		68,243
Commercial mortgage-backed securities		—		54,244		—		54,244
U.S. agency-based mortgage-backed securities		—		23,565		—		23,565
U.S. Treasury securities		6,602		—		—		6,602
Obligations of U.S. government agencies		—		5,914		—		5,914
Asset-backed securities		—		3,456		—		3,456
Total held-to-maturity	$	6,602	$	554,577	$	—	$	561,179

The Company determines fair value amounts for financial instruments using available third-party market information. When such information is not available, the Company determines the fair value amounts using appropriate valuation methodologies. Nonfinancial instruments such as real estate, property and equipment, deferred policy acquisition costs, deferred income taxes and loss and loss adjustment expense reserves are excluded from the fair value disclosure.

Cash and Cash Equivalents—The carrying amounts reported in the accompanying consolidated balance sheets for these financial instruments approximate their fair values, which are characterized as Level 1 assets.

Investments—The fair values for fixed maturity and equity securities are based on prices obtained from an independent pricing service. Equity and treasury securities are characterized as Level 1 assets, as their fair values are based on quoted prices in active markets. Fixed maturity securities, other than treasury securities, are characterized as Level 2 assets, as their fair values are determined using observable market inputs.

Short Term Investments—The carrying amounts reported in the accompanying consolidated balance sheets for these financial instruments approximate their fair values. These securities are characterized as Level 2 assets in the fair value hierarchy.

Other Investments—Other investments consist of limited partnership (LP) interests valued using the net asset value provided by the general partner of the LP, which approximates the fair value of the interest. The LP’s objective is to generate absolute returns by investing long and short in publicly-traded global securities. Redemptions are allowed monthly following a sixty day notice with no lock up periods. The Company has no unfunded commitments related to the LP. This investment is characterized as a Level 3 asset in the fair value hierarchy.

The following table summarizes the carrying values and corresponding fair values for financial instruments:

	As of March 31, 2014				As of December 31, 2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(in thousands)
Assets:
Fixed maturity securities—held-to-maturity	$	548,612	$	575,175	$	536,583	$	561,179
Fixed maturity securities—available-for-sale		268,189		268,189		237,877		237,877
Equity securities		3,682		3,682		9,302		9,302
Cash and cash equivalents		106,860		106,860		123,077		123,077
Short-term investments		85,031		85,031		84,422		84,422
Other investments		10,820		10,820		10,591		10,591

The following table presents summary information regarding changes in the fair value of assets measured at fair value using Level 3 input.

	March 31, 2014		December 31, 2013
	(in thousands)
Beginning balance	$	10,591	$	—
Purchases		—		10,000
Total gains unrealized (Included in earnings as part of net investment income)		229		591
Ending Balance	$	10,820	$	10,591

The purchase reported on the Level 3 table above is related to an interest in a limited partnership.

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Subsequent Events

3 Months Ended

Mar. 31, 2014

Subsequent Events [Abstract]

Subsequent Events

Note 9. Subsequent Events

On April 29, 2014, the Company’s Board of Directors declared a quarterly cash dividend of $0.12 per share, payable on June 26, 2014 to shareholders of record as of June 12, 2014. The Board intends to consider the payment of a regular cash dividend each calendar quarter.

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Comprehensive Income and Accumulated Other Comprehensive Income - Reclassification Out of Accumulated Other Comprehensive Income (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Income before income taxes	$ (163)	$ (17)
Income tax expense	57	6
Net income	(106)	(11)
Unrealized gains/(losses) on available-for-sale securities [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net realized gains/(losses) on investments	$ (163)	$ (17)

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis

At March 31, 2014, assets and liabilities measured at fair value on a recurring basis are summarized below:

	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(in thousands)
Financial instruments carried at fair value, classified as a part of:
Other investments	$	—	$	—	$	10,820	$	10,820
Securities available for sale—equity:
Domestic common stock		3,682		—		—		3,682
Securities available for sale—fixed maturity:
States and political subdivisions		—		154,075		—		154,075
Corporate bonds		—		107,094		—		107,094
U.S. agency-based mortgage-backed securities		—		7,020		—		7,020
Total securities available for sale—fixed maturity		—		268,189		—		268,189
Total available for sale	$	3,682	$	268,189	$	10,820	$	282,691

At December 31, 2013, assets and liabilities measured at fair value on a recurring basis are summarized below:

	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(in thousands)
Financial instruments carried at fair value, classified as part of:
Other investments	$	—	$	—	$	10,591	$	10,591
Securities available for sale—equity
Domestic common stock		9,302		—		—		9,302
Securities available for sale—fixed maturity
States and political subdivisions		—		150,375		—		150,375
Corporate bonds		—		80,428		—		80,428
U.S. agency-based mortgage-backed securities		—		7,074		—		7,074
Total available for sale—fixed maturity		—	$	237,877	$	—	$	237,877
Total available for sale	$	9,302	$	237,877	$	10,591	$	257,770

Schedule of Assets and Liabilities Measured at Amortized Cost

At March 31, 2014, assets and liabilities measured at amortized cost are summarized below:

	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(in thousands)
Securities held-to-maturity—fixed maturity
States and political subdivisions	$	—	$	388,364	$	—	$	388,364
Corporate bonds		—		94,970		—		94,970
Commercial mortgage-backed securities		—		52,963		—		52,963
U.S. agency-based mortgage-backed securities		—		22,212		—		22,212
U.S. Treasury securities and obligations of U.S. government agencies		7,343		—		—		7,343
Obligations of U.S. government agencies		—		5,993		—		5,993
Asset-backed securities		—		3,330		—		3,330
Total held-to-maturity	$	7,343	$	567,832	$	—	$	575,175

At December 31, 2013, assets and liabilities measured at amortized cost are summarized below:

	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(in thousands)
Securities held-to-maturity—fixed maturity
States and political subdivisions	$	—	$	399,155	$	—	$	399,155
Corporate bonds		—		68,243		—		68,243
Commercial mortgage-backed securities		—		54,244		—		54,244
U.S. agency-based mortgage-backed securities		—		23,565		—		23,565
U.S. Treasury securities		6,602		—		—		6,602
Obligations of U.S. government agencies		—		5,914		—		5,914
Asset-backed securities		—		3,456		—		3,456
Total held-to-maturity	$	6,602	$	554,577	$	—	$	561,179

Summary of Carrying Values and Corresponding Fair Values for Financial Instruments

The following table summarizes the carrying values and corresponding fair values for financial instruments:

	As of March 31, 2014				As of December 31, 2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(in thousands)
Assets:
Fixed maturity securities—held-to-maturity	$	548,612	$	575,175	$	536,583	$	561,179
Fixed maturity securities—available-for-sale		268,189		268,189		237,877		237,877
Equity securities		3,682		3,682		9,302		9,302
Cash and cash equivalents		106,860		106,860		123,077		123,077
Short-term investments		85,031		85,031		84,422		84,422
Other investments		10,820		10,820		10,591		10,591

Summary of Changes in Fair Value of Assets Measured at Fair value

The following table presents summary information regarding changes in the fair value of assets measured at fair value using Level 3 input.

	March 31, 2014		December 31, 2013
	(in thousands)
Beginning balance	$	10,591	$	—
Purchases		—		10,000
Total gains unrealized (Included in earnings as part of net investment income)		229		591
Ending Balance	$	10,820	$	10,591

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Investments - Gross Unrealized Gains and Losses and Cost or Amortized Cost and Fair Value of Investments Classified as Available-for-sale (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Investment [Line Items]
Cost or Amortized Cost	$ 283,582	$ 263,891
Gross Unrealized Gains	5,114	2,914
Gross Unrealized Losses	(6,005)	(9,035)
Fair Value	282,691	257,770
Total Fixed Maturity [Member]
Investment [Line Items]
Cost or Amortized Cost	270,135	244,409
Gross Unrealized Gains	4,033	1,936
Gross Unrealized Losses	(5,979)	(8,468)
Fair Value	268,189	237,877
Other Investments [Member]
Investment [Line Items]
Cost or Amortized Cost	10,000	10,000
Gross Unrealized Gains	820	591
Fair Value	10,820	10,591
States and political subdivisions [Member]
Investment [Line Items]
Cost or Amortized Cost	153,335	154,024
Gross Unrealized Gains	3,530	1,491
Gross Unrealized Losses	(2,790)	(5,140)
Fair Value	154,075	150,375
Corporate bonds [Member]
Investment [Line Items]
Cost or Amortized Cost	106,789	80,344
Gross Unrealized Gains	503	445
Gross Unrealized Losses	(198)	(361)
Fair Value	107,094	80,428
U.S. agency-based mortgage-backed securities [Member]
Investment [Line Items]
Cost or Amortized Cost	10,011	10,041
Gross Unrealized Losses	(2,991)	(2,967)
Fair Value	7,020	7,074
Equity securities [Member]
Investment [Line Items]
Cost or Amortized Cost	3,447	9,482
Gross Unrealized Gains	261	387
Gross Unrealized Losses	(26)	(567)
Fair Value	$ 3,682	$ 9,302

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 10,549	$ 8,851
Other comprehensive income:
Unrealized gain/(loss) on securities, net of tax	3,240	(545)
Comprehensive income	$ 13,789	$ 8,306

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Earnings Per Share

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Earnings Per Share

Note 3. Earnings Per Share

The Company computes earnings per share (EPS) in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 260, Earnings Per Share. Additionally, during 2013, the Company applied the “two-class method” in computing basic and diluted earnings per share as a result of the participating unvested common shares which contained nonforfeitable rights to dividends during this period. As of January 1, 2014, the Company no longer has participating unvested common shares which contain nonforfeitable rights to dividends and now applies the treasury stock method in computing basic and diluted earnings per share.

Under the two-class method, net income available to common and participating common shareholders is reduced by the amount of dividends declared in the current period and by the contractual amount of dividends that must be paid for the current period related to the Company’s common and participating common shares. Participating common shares include unvested share-based payment awards that contain nonforfeitable rights to dividends, whether paid or unpaid. Any remaining undistributed earnings are allocated to the common and participating common shareholders to the extent that each security shares in earnings as if all of the earnings for the period had been distributed. The amount of earnings allocable to each security is divided by the number of outstanding shares of the security to which the earnings are allocated to determine the EPS for the security. In a period of loss, no losses are allocated to the participating common shareholders. Instead, all such losses are allocated to the common shareholders.

Basic EPS is calculated by dividing income available to common shareholders by the weighted-average number of common shares outstanding during the period. The diluted EPS calculation includes potential common shares assumed issued under the treasury stock method, which reflects the potential dilution that would occur if any outstanding options or warrants were exercised or restricted stock becomes vested, and includes the “if converted” method for participating securities if the effect is dilutive. We determine diluted EPS as the more dilutive result of either the treasury method or the two-class method.

	Three Months Ended March 31,
	2014		2013
	(in thousands, except share and per share amounts)
Basic EPS:
Net income, as reported	$	10,549	$	8,851
Less allocated income to unvested shares		—		15
Net income available to common shareholders—basic	$	10,549	$	8,836
Basic weighted average common shares		18,531,926		18,281,353
Basic earnings per common share	$	0.57	$	0.48
Diluted EPS:
Net income available to common shareholders—diluted	$	10,549	$	8,836
Diluted weighted average common shares:
Weighted average common shares		18,531,926		18,281,353
Stock options and performance shares		327,756		408,489
Diluted weighted average common shares		18,859,682		18,689,842
Diluted earnings per common share	$	0.56	$	0.47

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Investments - Summary of the Amortized Cost and Fair Value of Investments in Fixed Maturity Securities, Classified as Held-to-maturity (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Investment [Line Items]
Less than one year, Amortized Cost	$ 55,114
One to five years, Amortized Cost	171,828
Five to ten years, Amortized Cost	127,493
More than ten years, Amortized Cost	120,626
Total, Amortized Cost	548,612	536,583
Less than one year, Fair Value	55,575
One to five years, Fair Value	179,609
Five to ten years, Fair Value	136,840
More than ten years, Fair Value	124,646
Total, Fair Value	575,175	561,179
U.S. agency-based mortgage-backed securities [Member]
Investment [Line Items]
Held-to-maturity, Amortized Cost	20,418
Held-to-maturity, Fair Value	22,212
Commercial mortgage-backed securities [Member]
Investment [Line Items]
Held-to-maturity, Amortized Cost	49,884
Held-to-maturity, Fair Value	52,963
Asset-backed securities [Member]
Investment [Line Items]
Held-to-maturity, Amortized Cost	3,249
Held-to-maturity, Fair Value	$ 3,330

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Fair Value Measurements - Summary of Changes in Fair Value of Assets Measured at Fair Value (Detail) (Fair Value, Inputs, Level 3 [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Fair Value, Inputs, Level 3 [Member]
Fair Value Measurements Disclosure [Line Items]
Beginning balance	$ 10,591
Purchases		10,000
Total gains unrealized (Included in earnings as part of net investment income)	229	591
Ending Balance	$ 10,820	$ 10,591

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Comprehensive Income and Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2014

Equity [Abstract]

Schedule of Changes in Accumulated Other Comprehensive Income (AOCI)

The following table illustrates the changes in the balance of each component of accumulated other comprehensive income for each period presented in the interim financial statements.

	Three Months Ended March 31,
	2014			2013
	(in thousands)
Beginning balance	$	(4,295	)	$	2,979
Other comprehensive income/(loss) before reclassification		3,134			(556	)
Amounts reclassified from accumulated other comprehensive income		106			11
Net current period other comprehensive income/(loss)		3,240			(545	)
Ending Balance	$	(1,055	)	$	2,434

Reclassification Out of Accumulated Other Comprehensive Income

The effects of reclassifications out of accumulated other comprehensive income by the respective line items of net income are presented in the following table.

Component of Accumulated Other Comprehensive Income	Three Months Ended March 31,						Affected line item in the statement of income
	2014			2013
	(in thousands)
Unrealized losses on available-for-sale securities	$	(163	)	$	(17	)	Net realized gains on investments
		(163	)		(17	)	Income before income taxes
		57			6		Income tax expense
	$	(106	)	$	(11	)	Net income