10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2014

Commission file number 333-189686

HOMEOWNERS OF AMERICA HOLDING CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	57-1219329
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1333 Corporate Drive, Suite 325, Irving, TX   75038

(Address of principal executive offices)      (Zip Code)

(972) 607-4241

(Registrant's telephone number)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes No 

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 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 No 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. 

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.

Large accelerated filer  Accelerated filer  Non-accelerated filer  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 

The aggregate market value of the voting stock held by non-affiliates of the registrant based on the closing sales price, or the average bid and asked price on such stock, as of June 30, 2014, the last business day of the registrant's most recently completed second quarter, was $0.00. Shares of the registrant's common stock held by each executive officer and director and by each entity or person that, to the registrant's knowledge, owned 10% or more of registrant's outstanding common stock as of June 30, 2014 have been excluded in that such persons may be deemed to be affiliates of the registrant. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

As of March 26, 2015, 16,397,125 shares of common stock, par value $0.0001 per share, were outstanding.

Documents Incorporated by Reference: None

INDEX

		Page No.
Forward-Looking Statements		1
Part I.
Item 1.	Business	2
Item 1A.	Risk Factors	12
Item 1B.	Unresolved Staff Comments	24
Item 2.	Properties	24
Item 3.	Legal Proceedings	24
Item 4.	Mine Safety Disclosures	24
Part II.
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	25
Item 6.	Selected Financial Data	25
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	26
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	34
Item 8.	Financial Statements and Supplementary Data	35
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	53
Item 9A.	Controls and Procedures	53
Item 9B.	Other Information	54
Part III.
Item 10.	Directors, Executive Officers and Corporate Governance	55
Item 11.	Executive Compensation	56
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	57
Item 13.	Certain Relationships and Related Transactions, and Director Independence	59
Item 14.	Principal Accounting Fees and Services	60
Part IV.
Item 15.	Exhibits, Financial Statement Schedules	61
Exhibit Index		62
Signatures		63

i

FORWARD-LOOKING STATEMENTS

This Form 10-K includes forward-looking statements. These forward looking statements include statements about our expectations, beliefs or intentions regarding our product development efforts, business, financial condition, and results of operations, strategies or prospects. All statements other than statements of historical fact included in this Form 10-K, including statements regarding our future activities, events or developments, including such things as future revenues, product development, market acceptance, responses from competitors, capital expenditures (including the amount and nature thereof), business strategy and measures to implement strategy, competitive strengths, goals, expansion and growth of our business and operations, plans, references to future success, projected performance and trends, and other such matters, are forward-looking statements. The words "believe," "expect," "intend," "anticipates," or "propose," and other similar words and phrases, are intended to identify forward-looking statements. The forward-looking statements made in this Form 10-K are based on certain historical trends, current conditions and expected future developments as well as other factors we believe are appropriate in the circumstances. These statements relate only to events as of the date on which the statements are made and we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. All of the forward-looking statements made in this Form 10-K are qualified by these cautionary statements and there can be no assurance that the actual results anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to or effects on us or our business or operations. Whether actual results will conform to our expectations and predictions is subject to a number of risks and uncertainties that may cause actual results to differ materially. Risks and uncertainties, the occurrence of which could adversely affect our business, include the risks identified in this Form 10-K under Item 1A, Risk Factors.

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PART I

Item 1. Business

INTRODUCTION

General

Homeowners of America Holding Corporation (or "HAHC") is a property and casualty insurance holding company incorporated in Delaware in 2005. References to "we", "our", "us", "the Company", or "HAHC" in this Form 10-K refer to Homeowners of America Holding Corporation and its subsidiaries, unless otherwise indicated.

In May of 2006, we began selling property and casualty insurance products in Texas and beginning April, 2014, we began offering property and casualty insurance products in Arizona through our subsidiary, Homeowners of America Insurance Company (or "HAIC"). Our products are sold to the public through independent insurance agents. At present we offer homeowners, dwelling fire and extended coverage, tenant and condominium owner's policies.

We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act, or the JOBS Act, and will continue to be an emerging growth company until: (i) the last day of our fiscal year following the fifth anniversary of our Registration Statement on Form S-1 filed August 8, 2013, (ii) the date on which we become a large accelerated filer, or (iii) the date on which we have issued an aggregate of $1 billion in non-convertible debt during the preceding 3 years. As an emerging growth company, we are entitled to rely on certain scaled disclosure requirements and other exemptions, including an exemption from the requirement to provide an auditor attestation to management's assessment of its internal controls as required by Section 404(b) of the Sarbanes-Oxley Act of 2002. We may at any time voluntarily elect to cease to avail ourselves of the scaled disclosure and other exemptions available to us as an emerging growth company, and have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act. See the risk factor entitled "We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act which allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies." As a result of this election, our consolidated financial statements may not be comparable to companies that comply with public company effective dates.

The JOBS Act is intended to reduce the regulatory burden on emerging growth companies. As long as we qualify as an emerging growth company, we will also, among other things:

 be exempt from the "say on pay" provisions (requiring a non-binding vote to approve compensation of certain executive officers) and the "say on golden parachute" provisions (requiring a non-binding shareholder vote to approve golden parachute arrangements certain executive officers in connection with mergers and certain other business combinations) of The Dodd-Frank Wall Street Reform and Consumer Protection Act, or Dodd-Frank Act, and certain disclosure requirements of the Dodd-Frank Act relating to compensation of Chief Executive Officers;

 be permitted to omit the detailed compensation discussion and analysis from proxy statements and reports filed under the Securities Exchange Act of 1934, as amended and instead provide a reduced level of disclosure concerning executive compensation; and

 be exempt from any rules that may be adopted by the Public Company Oversight Board, or PCAOB, requiring mandatory audit firm rotation or a supplement to the auditor's report on the consolidated financial statements.

Although we are still evaluating the JOBS Act, we currently intend to take advantage of all of the reduced regulatory and reporting requirements that will be available to us so long as we qualify as an emerging growth company.

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Property and Casualty Insurance Business

We offer products with competitive prices in segments of the business that have proven long-term profitability. We are heavily invested in automated underwriting tools and use a variety of underwriting methods to select risks. Efficiency is achieved through automation. All business is sourced and processed through internet-enabled applications. Our user-friendly agent portal enables agents to rapidly quote and issue policies. We believe automation, a highly responsive and experienced underwriting and customer service staff, and local knowledge of the market all give us a competitive advantage.

As of December 31, 2014 we had 74,698 residential policyholders, total assets of $88,082,589 and stockholders' equity of $10,680,528.

In 2010, we formed a managing general agency, Homeowners of America MGA, Inc. (or "HAMGA"). HAMGA provides underwriting, policy administration and claims services to our insurance company.

The Company's private passenger automobile book of business, written in support of its homeowners program in Texas, was terminated with our last policy expiring in October, 2013. The Texas private passenger automobile program was discontinued as we were unable to capture a sufficient portion of the market at pricing which we deemed adequate to cover our expenses and provide a margin for profits.

Our Market and Opportunity

HAIC's market share for Texas homeowners business was estimated by SNL Financial at .76% at the end of December 31, 2014, of an estimated $7.8 billion market, expressed in terms of premiums. SNL ranked HAIC as the 18th largest Texas homeowners company in terms of Texas premiums.

The Texas residential property market is dominated by large, national insurance companies that market through captive agents. However, the Texas market is large enough, at $7.8 billion, to accommodate a smaller company providing local knowledge and service, able to focus its attention on the more profitable segments of the Texas market and the needs of Texas independent agents.

Further, as a consequence of the catastrophic losses in Texas over the last several years, a large part of the Texas residential property market is experiencing a degree of dysfunction, which creates an opportunity for a smaller company to select business in profitable segments.

Competitive Strengths

All of our business is sourced through internet-enabled applications. Our agents use the internet to quote and issue policies, conduct other transactions, and look up policyholder information. The agent portal or interface, and the actions required by the agents, are designed to be simple and rapid to use. Our commitment to technology has enabled us to grow rapidly without a loss in efficiency, while providing our agents with a highly satisfactory transactional experience.

Although automated underwriting tools are used extensively to qualify and price policies, some polices cannot be automatically underwritten, as they are outside the acceptable "underwriting box". To support our agents and our policyholders, we have local, experienced, and responsive underwriting and customer service personnel. Our timely responsiveness to our agents and the underwriting support we give them is an important component of our business philosophy. We consider our relationships with our agents to be excellent as a result.

Our management team has many years of insurance experience in Texas. Our knowledge of the Texas market helps us to better identify those market segments known by us to produce superior profit opportunities, and to avoid those that do not. Our pricing philosophy is to maximize profit margins within credible segments of the market while avoiding segments of the market where opportunities for profit are limited. This allows us to set prices competitively within self-selected (based on price) market segments.

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We have long-standing relationships with a large number of successful and productive independent agents in Texas.

We are a Texas-based company focusing on residential property business. As such, we can spend virtually all of our time researching and developing ways to improve our core business. This specialization, our use of technology, and our relatively small size, allow us to swiftly identify and react to opportunities and changes in the Texas market. If and when we expand into additional significant markets, we will staff the Company with personnel who are intimately familiar with each new market.

Competitive Weaknesses

We are a new company competing against larger, well-established companies. Most of our competitors and all of the large competitors that dominate the personal lines insurance market in Texas and elsewhere are well-recognized and respected brands, such as State Farm, Allstate, Farmers, Nationwide, Travelers, USAA, Liberty Mutual, and others. These companies are known to independent agents and consumers alike. These brands continue to advertise heavily on television and through other media, while we do not.

Most of our competitors, again all the large, well-known brands, have a satisfactory financial stability rating from A.M. Best of B+ or higher, whereas we are not rated by A.M. Best and must rely on our Demotech, Inc. rating to compete. This puts us in an inferior competitive position as A.M. Best is better known and more highly regarded among independent agents, lenders, and consumers. A Demotech, Inc. rated company is generally acceptable to lenders throughout the United States, but Demotech tends to be unknown to independent agents in many parts of the United States, especially those who market insurance products away from the Gulf and Atlantic coasts.

Unlike our established competitors we must rely heavily on reinsurers for financial support in order to achieve our revenue objectives. This reliance may adversely affect our ability to compete price-wise, should our reinsurance costs significantly increase.

Our larger competitors have the advantage of spreading their risks over a more diverse insurance product offering and broader geographical markets than we can. This can give them a competitive advantage through efficient allocation of risks and costs as well as reduced operating costs through economies of scale.

Further, the ability of our main competitors to be able to offer a number of consumer focused insurance products including private passenger automobile, personal liability umbrellas and even life, health as well as various commercial coverages and other financial services products while we offer only residential property coverage, appeals to consumers who prefer to consolidate their insurance solutions with a single supplier. Broader product offerings also make our competitors more appealing to independent agents.  

Importance of Rating Agencies

The financial strength and stability of insurance companies are rated by a variety of rating agencies. The two most prominent in the insurance industry are A.M. Best Company and Demotech, Inc. The ratings assigned by these and other rating agencies are used by lenders to help determine whether an insurer is a satisfactory provider of homeowners insurance; by agents to help determine which insurance companies are the most reliable to do business with; and by consumers and others to judge the ability of an insurance company to meet its obligations.

We are not rated by A.M. Best, although we are rated A, Exceptional by Demotech, Inc. We have never been reviewed by A.M. Best and do not intend to seek a rating from A.M. Best until we believe we can secure a minimum rating of B+, that being the minimum accepted by most lenders as well as independent agents. Our analysis, applying known A.M. Best rating criteria, shows that we will need additional capital before we can qualify for an acceptable A.M. Best rating. Unlike Demotech, A.M. Best tends to penalize companies that are highly leveraged, i.e. that utilize reinsurance to support premium writings. HAIC has a gross premium to capital ratio of nearly 6-to-1, although our net premium to capital ratio is less than 1-to-1. We would need to reduce our gross ratio to approximately 2-to-1, either by increasing capital (the denominator) or decreasing premium writings (the numerator). Capital is expected to grow over time, but in order to achieve our premium revenue objective and size efficiency, we must continue to rely on reinsurers to ameliorate risks and provide financial support. In summary, we do not plan to give up revenues or efficiency of size as a means to qualify for an acceptable A.M. Best rating. Our Demotech rating has proved satisfactory to date in attracting an acceptable amount of business from independent agents and satisfies lenders as to our financial stability.

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A rating by A.M. Best is more widely accepted than a Demotech rating. A.M. Best has been the rating standard relied upon to rate insurance companies in the United States for many years. The Demotech rating alone may not be sufficient to allow us to expand into parts of the United States where it is not as well known or as widely used. However, it has been sufficient in Texas and we expect it to be sufficient in expansion states that the company has under study. Demotech has eight Financial Stability Ratings: A" (Unsurpassed), A' (also Unsurpassed), A (Exceptional), S (Substantial), M (Moderate), L (Licensed), NR (Not Rated), and I (Ineligible). This rating is subject to review by Demotech at least annually. Demotech is provided financial information as well as requested information to assist them in their evaluation. The absence of a sufficient minimum rating of less than A from Demotech, in the absence of a rating of B+ or better from A.M. Best, would have a significant negative affect on HAIC's sales, business retention, and ability to appoint or retain agents.

Our Strategies

Our long-term strategy in the Houston metropolitan area is to increase the proportion of business we write there. We believe that hard-market conditions in that area present an unusual opportunity to write business with a greater profit potential. At the same time we are limiting growth in areas with greater exposure to severe convective thunderstorms.

We will continue to manage our business through automated and non-automated selective underwriting processes and through creative pricing and product design. This allows us to attract and select the most potentially profitable segments of the market.

We will continue to take advantage of technological changes. As an example, with the help of our technology provider, Silvervine, Inc. (formerly known as IDMI, Inc.), we are developing a "direct business" portal, which would allow us to quote prices to potential customers shopping the internet. In Texas our intent is to use this means to drive new business to our agents. If and when we expand beyond Texas, we may also use this portal to do business directly with policyholders.

Our long-term growth strategy includes continued growth of our Texas residential property business and expansion of our residential property business into other states, but within the constraints imposed by our pricing philosophy, our competitors, and our capital resources. We have applied for licenses to write business in thirty-two additional states.  To date, we have received certificates of authority from twenty-five including, Alabama, Arkansas, Colorado, Delaware, Georgia, Indiana, Illinois, Iowa, Kentucky, Louisiana, Michigan, Missouri, Montana, Nebraska, Nevada, North Carolina, North Dakota, Oregon, South Carolina, South Dakota, Tennessee, Utah, Virginia, Washington and Wyoming to offer homeowners, dwelling fire and extended coverage, tenant and condominium policies.

We began selling homeowners coverage in Arizona in 2014 and plan to begin selling homeowners products in South Carolina and Virginia during 2015.  We are researching additional states for future expansion, which aren't planned for entry until 2016 or later.  Dwelling fire and extended coverage, tenant and condominium owner's policies will be added to these expansion states, including Arizona, in the latter half of 2015.

Underwriting

General

We limit the business we write within geographical areas in order to avoid undue concentration of risk and to reduce the uncertainty inherent in weather-related risks. For example, many coastal zip codes are closed to new business either to avoid undue concentration of homes to catastrophic loss, or because the proximity to the coastline.

Automated underwriting tools are used to select and price business. The automated tools include insurance scores derived from the applicant's financial history; the applicant's prior loss history; exposure of the property to tidal surge; and underwriting questionnaires. Third-party property inspections and other, non-automated underwriting tools are also used to verify underwriting information and to select business.

An experienced, local underwriting staff of sufficient size, supervision and quality is maintained in order to properly select risks and to provide a rapid and knowledgeable response to agents and policyholders.

All underwriting functions are performed by our employees. As of December 31, 2014, our underwriting department had 9 staff members.

5

Use of Computer Models to Assess Catastrophic Loss Risk

Property and casualty insurance companies writing business in areas subject to catastrophic losses routinely use highly sophisticated computer simulation models to assess the probabilities of catastrophic losses. These models are generally licensed by providers who specialize in the development and maintenance of these models. The two most prominent providers of models affecting property insurers in the United States are AIR Worldwide ("AIR") and Risk Management Solutions, Inc. ("RMS"). HAIC relies on the AIR hurricane model results, applied quarterly to HAIC's active policies, to help determine how much catastrophe reinsurance to purchase, how to properly price business that is subject to significant hurricane losses, and how to most economically and prudently allocate business geographically. HAIC does not license any models, but relies on its reinsurance broker to provide this service, which is customary for smaller companies who cannot economically license and operate these models.

Claims Administration

The Texas Department of Insurance regulates the minimum content and timeliness of various claims notices and transactions. We strive to exceed those requirements and to adjust claims fairly.

A variety of independent, licensed third-party field adjusters are used to physically examine and evaluate claims on-site, and to provide estimates of damages or loss. We hired two field adjusters as employees to assist in heavily-populated areas. HAMGA has relationships with a number of large, independent claims adjusting firms who are committed to provide field adjusters in the event of a large-scare catastrophic event. Claims are processed internally by our employees, who are experienced, local claims personnel. All decisions regarding payment or non-payment of claims are made by HAIC.

Policy Administration

The Texas Department of Insurance regulates the minimum content and timeliness of various policyholder notices and transactions, including the issuance of policies, cancellations, and renewals. We strive to exceed those requirements and to treat all customers fairly.

Policies are maintained by the Policy Transaction System, or PTS, licensed by a third party, Silvervine, Inc., or Silvervine (formerly known as IDMI, Inc.). Most policyholder transactions are automated, including policyholder billing, policy issuance, cancellation, expiration and renewal notices, and late payment notices. Endorsements or policy changes are made by agents or underwriting personnel utilizing PTS. Our employees perform all customary company policy administration functions, with the exception of the mailing of policy documents to new and renewal policyholders. The printing and mailing of these documents is conducted by a third party, Primoris Services LLC of Warner-Robbins, GA.

Technology

Policy processing and administration is conducted using the PTS. PTS enables agents, our employees and other users to input and complete transactions, review policy information, and otherwise perform customary duties by accessing PTS through the internet. Policy quoting and issuing, policy billing and administration, claims processing and payment, agent commission maintenance and payment, and various other tasks are initiated and completed using PTS.

PTS is licensed by HAIC, but is owned by an outside vendor Silvervine, Inc. or Silvervine (formerly known as IDMI, Inc.). Silvervine specializes in providing software to insurance companies throughout the United States. HAIC pays Silvervine a monthly fee to maintain PTS and pays fees to Silvervine for custom system modifications, based on estimated man hours.

Silvervine hosts PTS on its servers located in Warner Robbins, GA, with a mirror processor hosting both system and policy records in Atlanta, GA. Through this "mirror processing environment" the Company has established a data security protocol which provides instant "off-site" back-up of both its operating software and data. In addition, the Company has offsite storage of the Silvervine operating software with Iron Mountain Intellectual Property Management, Inc. and offsite cloud storage of its data.

6

Reserves for Loss and Loss Adjustment Expenses

We establish reserves for the estimated total unpaid costs of losses, including loss adjustment expenses ("LAE"). Unless otherwise specified below, the term "loss reserves" shall encompass reserves for both losses and LAE. Unpaid losses and LAE are based on claim adjusters' estimates of the cost of settlement, plus an estimate for losses incurred but not yet reported ("IBNR") based upon historical experience, industry loss experience, and management's estimates. Loss reserves reflect our best estimate of the total cost of (i) claims that have been incurred, but not yet paid, and (ii) claims that have been incurred, but not yet reported (IBNR). Loss reserves established by us are not an exact calculation of our liability, but rather loss reserves represent management's best estimate of our company's liability based on application of actuarial techniques and other projection methodology, taking into consideration other facts and circumstances known at the balance sheet date. The process of setting reserves is complex and necessarily imprecise. The impact of both internal and external variables on ultimate loss and LAE costs is difficult to estimate. To arrive at its best estimate for losses we use damage estimating software developed and owned by acknowledged industry leader, Insurance Service Office. Reserve factors for IBNR are reviewed at least quarterly by an independent actuarial consultant. In addition, our appointed independent actuary attests to the adequacy of our unpaid claim reserve, including IBNR at calendar year end.

Losses and Loss Adjustment Expenses

The following table provides a reconciliation of the beginning and ending reserve balances for losses and LAE, gross of reinsurance for 2014, 2013, and 2012:

	2014			2013			2012
Reserve for losses and LAE, beginning of year	$	15,884,062		$	11,641,296		$	9,308,974
Reinsurance recoverables on losses and LAE		(15,090,175	)		(10,618,032	)		(8,469,000	)
Reserve for losses and LAE, net of reinsurance recoverables at beginning of year		793,887			1,023,264			839,974
Add provision for claims and LAE occurring in:
Current year		2,882,295			2,015,107			3,904,000
Prior years		48,000			244,000			160,000
Net incurred losses and LAE during the current year		2,930,295			2,259,107			4,064,000
Deduct payments for claims and LAE occurring in:
Current year		2,111,930			1,927,482			3,057,000
Prior years		598,146			561,002			823,710
Net claim and LAE payments during the current year		2,710,076			2,488,484			3,880,710
Reserve for losses and LAE, net of reinsurance recoverables, at end of year		1,014,106			793,887			1,023,264
Reinsurance recoverables on losses and LAE		13,995,400			15,090,175			10,618,032
Losses and loss adjustment expenses at December 31	$	15,009,506		$	15,884,062		$	11,641,296

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Loss Reserve Development

Our losses and LAE represent estimated costs ultimately required to settle all claims for a given period. The following table illustrates development of the estimated liability for losses and LAE for the years 2006 (inception) through 2014 (dollars in thousands):

	2006	2007	2008	2009	2010	2011	2012	2013	2014
Reserves for Claims & Loss Adjustment Expenses	241	686	2,517	2,723	6,000	7,339	9,362	4,258	8,511
Cumulative paid claims and claim expenses
One year later	132	364	2,390	3,391	4,528	7,784	10,704	3,883
Two years later	132	453	2,791	3,502	4,946	8,425	30,200
Three years later	132	522	3,135	3,564	4,935	8,770
Four years later	132	523	3,643	3,580	4,936
Five years later	132	523	3,748	3,580
Six years later	132	523	3,748
Seven years later	132	523
Eight years later	132
Reserves re-estimated
One year later	-	-	580	652	972	1,519	11,135	1,420
Two years later	-	10	272	135	345	460	4,981
Three years later	-	-	863	15	19	98
Four years later	-	-	398	-	-
Five years later	-	-	-	-
Six years later	-	-	-
Seven years later	-	-
Eight years later	-
Deficiency (redundancy)	(109)	(173)	833	842	(1,083)	1,333	15,857	(1,795)

Reinsurance

Our insurance company uses a number of reinsurers to minimize or avoid the risk of adverse loss results, particularly weather-related losses. By utilizing reinsurance an insurance company can "cede" a portion of its potential claims and claims expense to another insurance company specializing in "assuming" insurance risks from "primary" companies. "Quota share" and "excess of loss" reinsurance programs are used, more fully described below. When selecting reinsurance coverage, HAIC considers the financial strength and stability of the providers, their history of responding to claims, and their overall reputation. HAIC requires that all reinsurers have an A.M. Best rating of A- (Excellent), or better, or an S&P rating of AA- or better. HAIC continually monitors the financial condition of its reinsurers through the aid of AON Benfield, its reinsurance broker.

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The following table shows the A.M. Best and S&P ratings of each of our reinsurers at December 31, 2014.

Reinsurer	A.M. Best Rating	S&P or S&P Lloyds Rating
American Standard Insurance Company of Wisconsin	A	NR
Caitlin Re Switzerland Limited	A	A
Everest Reinsurance Company	A+	A+
Hannover Re (Bermuda) Ltd.	A+	AA-
Hannover Rueck SE	A+	AA-
Houston Casualty Company (UK Branch)	A+	AA
Lloyds Syndicate No. 0510 RJ Kiln & Company	A	A+
Lloyds Syndicate No. 2001 Amlin Underwriting Limited (AML)	A	A+
Lloyds Syndicate No. 2014 Acappella (ACA)	A	A+
Mapfre Re, Compania de Reaseguros, S.A.	A	A
Montpelier Reinsurance Ltd.	A	A-
Odyssey Reinsurance Company	A	A-
Q-Re LLC	A	A
R+V Versicherung AG	NR	AA-
SCOR Reinsurance Company	A	A+
Shelter Mutual Insurance Company	A	NR
Sirius International Insurance Group	A	A-
Swiss Reinsurance America Corporation	A+	AA-
Taiping Reinsurance Co. Ltd.	A	A
Tokio Millennium Re AG	A++	AA-

Best's Financial Strength Ratings (FSR) represents the rating agency's assessment of an insurer's ability to meet its obligations to policy holders. The rating process involves quantitative and qualitative reviews of company's balance sheet, operating performance and business profile, including comparisons to peers and industry standards and assessment of insurers operating plans, philosophy and management.

The ratings scale includes six "Secure" ratings:

A++, A+ (Superior)

A, A- (Excellent)

B++, B+ (Good)

The scale also includes ten ratings for companies deemed "Vulnerable"

B, B- (Fair)

C++, C+ (Marginal)

C, C- (Weak)

D (Poor)

E (under regulatory supervision)

F (in liquidation)

S (rating suspended)

Standard & Poor's (S&P) credit ratings are forward looking opinions about credit risk. The rating represents the rating agency opinion about the ability and willingness of an insurer to meet its financial obligations in full and on time.

The ratings scale is as follows:

AAA – Extremely strong capacity to meet financial commitments

AA – Very strong capacity to meet financial commitments

A – Strong capacity to meet financial commitments, but somewhat susceptible to adverse economic conditions and changes in circumstances

BBB – Adequate capacity to meet financial commitments, but more subject to adverse economic conditions

BBB- - Considered lowest investment grade by market participants

Additional ratings complete the scale, but all are considered below investment grade and have not been shown.

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Quota Share Reinsurance. HAIC uses "quota share" reinsurance to share the risk of loss on its residential property with unaffiliated companies. Quota share or "proportional" reinsurance programs provide that the reinsurer share a proportional percentage of the insurance company's claims and claim expenses. For its residential property program, 80% of HAIC's quota share reinsurance program has an "occurrence cap" limiting a gross reinsured loss (claims and claims expenses before reinsurance recoveries) to the lesser of $110 million or 175% of the premiums earned during the contract year, while 10% of its quota share program has an occurrence cap of $4 million. This limits the amount that can be recovered for a single catastrophe or occurrence. The reinsurer receives a proportional percentage of the insurance company's collected premiums, less a "ceding commission" to cover the insurance company's expenses. The ceding commission on 80% of HAIC's quota share program is subject to adjustment, with a stipulated minimum, depending on the insurance company's claims level in relation to its earned premiums (loss ratio).

HAIC also uses quota share reinsurance as a means to write more business than its capital resources might otherwise allow. The State of Texas limits the amount of "net written premiums" written by a property and casualty insurance company to 300% of its capital and surplus. Net written premiums are determined by deducting premiums paid to reinsurers from premiums received from policyholders. Thus, an insurance company with limited capital can expand its business activity beyond what otherwise might be achieved by reinsuring a portion of its business. As of December 31, 2014, HAIC reinsured 90% of its risk under property coverage and approximately 64% of its risk under casualty coverage through quota share reinsurance programs.

For residential property, the following table shows the proportion or share of premiums and losses assumed by each reinsurer.

Reinsurer	Reinsurer's Share
Catlin Insurance Company Ltd.	10.00 %
Everest Reinsurance Company	20.05 %
Montpelier Reinsurance Ltd.	5.00 %
Odyssey Reinsurance Company	5.00 %
Q-RE LLC*	12.95 %
R+V Versicherung AG*	13.00 %
SCOR Reinsurance Company	10.00 %
Swiss Reinsurance American Corporation	10.00 %
Taiping Reinsurance Co. Ltd.	4.00 %

*these reinsurers do not assume the personal liability risks associated with residential property policies.

HAIC's residential property quota share contracts are reviewed annually, on April 1, and are subject to termination as to new business or renegotiation as to terms.

Excess of Loss Reinsurance. HAIC also uses "excess of loss" reinsurance for its residential property line of business. This type of reinsurance covers losses, consisting of claims and claim expenses, above a certain retained amount per occurrence, subject to a maximum limit.

Currently, HAIC has two excess programs that limit residential property losses. One of the programs protects the insurance company against large numbers of individual losses originating from single loss events – weather or other catastrophes. The second program provides coverage for individual risks, generally limited to losses from fire or other non-weather perils.

Under the largest of the per event programs, HAIC purchases reinsurance covering an occurrence or catastrophe with a gross loss (claims and claims expenses before reinsurance recoveries) in excess of $4 million with a maximum gross loss of $110 million. This reinsurance applies to 20% of HAIC's property business, but does not apply to the losses assumed by the quota share reinsurers with per event limits of the lesser of $110 million or 175% earned premium. Thus, under this program, HAIC limits its maximum net loss under this program to $400,000 (10% of $4 million) per occurrence, unless the gross loss exceeds $110 million, in which occurrence HAIC may be subject to all losses above the $110 million limit. This excess loss coverage is purchased in layers, as shown in the table below.

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The reinsurers who participate in this program as of December 31, 2014 and their percentages of participation as it relates to HAIC's 20% of gross retained losses are as follows:

Layer/Reinsurer	Participation
$6,000,000 excess of $4,000,000
R+V Versicherung AG		100.0	%
$10,000,000 excess of $10,000,000
Everest Reinsurance Company		15.0	%
Shelter Mutual Insurance Co.		12.5	%
Sirius International Insurance		25.0	%
Lloyds Syndicate No. 0510 R.J. Kiln & Company Ltd.		25.0	%
Lloyds Syndicate No. 2001 Amlin Underwriting Limited (AML)		10.0	%
Lloyds Syndicate No. 2014 Acappella (ACA)		12.5	%
$20,000,000 excess of $20,000,000
American Standard Insurance Company of Wisconsin		10.0	%
Everest Reinsurance Company		15.0	%
Shelter Mutual Insurance Co.		5.0	%
Hannover Re (Bermuda) Ltd.		10.0	%
Mapfre Re, Compania  de Reaseguros, S.A.		10.0	%
Sirius International Insurance		20.0	%
Lloyds Syndicate No. 0510 R.J. Kiln & Company Ltd.		20.0	%
Lloyds Syndicate No. 2014 Acappella (ACA)		10.0	%
$70,000,000 excess of $40,000,000
American Standard Insurance Company of Wisconsin		12.5	%
Everest Reinsurance Company		15.0	%
Shelter Mutual Insurance Co.		5.0	%
Hannover Re (Bermuda) Ltd.		10.0	%
Mapfre Re, Compania  de Reaseguros, S.A.		10.0	%
Sirius International Insurance		23.75	%
Houston Casualty Company, UK Branch		11.88	%
Lloyds Syndicate No. 2014 Acappella (ACA)		11.88	%
$30,000,000 excess of $110,000,000 (1)
American Standard Insurance Company of Wisconsin		10.00	%
Everest Reinsurance Company		47.50	%
Shelter Mutual Insurance Co.		2.50	%
Hannover Re (Bermuda) Ltd.		5.00	%
Hamilton Re, Ltd		7.50	%
Sirius International Insurance		4.50	%
XL Re Ltd		10.00	%
Fubon Insurance Company Ltd		6.00	%
Taiping		5.00	%
Lloyds Syndicate 1729		2.00	%

(1)Commencing August 1, 2014 and ending November 30, 2014, the Company purchased a fifth layer of property catastrophe reinsurance with third party reinsurers to cover its potential maximum loss during the 2014 hurricane season. The layer extended the Company's coverage to $140 million, excess of $4 million of ultimate net loss arising out of each occurrence. When this coverage was in force, the Company's net retention on each loss occurrence remained at $400,000.

This larger excess of loss program is purchased annually with an April 1^st anniversary.

The amount of excess of loss reinsurance purchased is largely determined by subjecting HAIC's book of business to a computer model which runs numerous simulations of various severities of catastrophic events and arrives at levels of Probable Maximum Loss, or PML, based on levels of probability. The model used by HAIC to estimate PML's to assist in its decision to purchase catastrophe excess of loss reinsurance is the AIR Worldwide Hurricane Historical model. The background of models is described more fully in the Underwriting section on page 5.

HAIC's business is modeled quarterly, and the amount of reinsurance purchased is selected so that a sufficient amount of reinsurance is in place to, at minimum, cover a PML that equates to a hurricane that might be expected to occur in any given year approximately 1% of the time or less. While the initial decision on the level of reinsurance to purchase is made annually, for inception at each April 1^st,, the Company's quarterly review of loss models can lead to additional purchases throughout the year. The amount purchased is meant to exceed the amount calculated so that it will allow for business growth in hurricane-exposed areas, and the cost of handling claims. HAIC also estimates and includes an amount that is likely to be assessed by the Texas Windstorm Insurance Association, or TWIA, for a similar storm. The latter is included because a storm effecting HAIC would likely affect TWIA, both having business in many of the same geographical areas. TWIA is more fully described below.

HAIC also purchases residential property excess of loss coverage on a "per risk" basis, reinsuring large losses that may occur on individual residential properties. The perils covered are other than weather-related losses. The coverage which HAIC has in place covers losses in excess of $500,000 for each risk, with an occurrence limit of $3,337,500 and an annual limit of $12,237,500. The reinsurers participating in this program are shown below and are rated A- or better.

Reinsurer	Participation
Hannover Rueckversicherung-Aktiengesellschaft		20.0 %
Everest Reinsurance Company		80.0 %

The per risk excess of loss program is purchased annually with an April 1^st anniversary.

As HAIC relies heavily on quota share and catastrophe reinsurance to support its growth and continued operations and to protect it from adverse risk, the unavailability, limited availability, or increased cost of reinsurance could have a material adverse effect on our business, results of operations and financial condition.

The Texas Windstorm Insurance Association or TWIA

HAIC, as a company writing residential property insurance in Texas is a member of and is subject to assessments by TWIA. TWIA is a so-called "residual market", providing coverage for windstorm, hurricane, hail, and other weather-related perils in the Texas counties that face the Gulf of Mexico. The principal purpose of TWIA is to provide insurance protection from tropical cyclones to residential and commercial property owners along the Gulf of Mexico who would otherwise find it difficult or impossible to secure coverage from private companies.

Assessments are determined based on a formula largely determined by the market share of the member company in the property lines covered by TWIA. Potential assessments may be offset by windstorm business voluntarily written in the affected areas by the member company. HAIC has written insurance within the first tier including wind coverage, however not in amounts material enough to offset exposure to assessments. HAIC's assessment percentage for the loss year 2014 was 0.75% of assessable losses.

Losses incurred by TWIA are funded in a number of ways, of which assessments are a part. The first $400M of losses are expected to be funded by premiums charged Coastal consumers and accumulated in a Premium and Catastrophe Reserve Fund. The next $500M in losses is to be funded by a Bond Anticipation Note/Class 1 Public Securities, repaid by future premiums collected by TWIA from Coastal residents.

The next $1B in losses is to be funded by Class 2 Post-Event Bonds. Policyholders in the catastrophe area are to repay 70% of the amount funded through surcharges on future premiums. Member companies are to repay 30% of the amount funded through member assessments. Of the next $1.45B, $400M in losses is to be funded by catastrophe bonds to be sold to the public and $1.05B of losses are covered out of traditional reinsurance. The next $500 million in losses are to be paid by Class 3 Post Event bonds, which are 100% funded through member assessments.  Thus, TWIA member companies are subject to a potential assessment of their portion of $800M (30% of $1B + 100% of $500M).

HAIC's property reinsurance programs all include these potential assessments in the definition of a covered loss.

The funding mechanisms available to TWIA do not address losses in excess of the $3.85B outlined above, whether caused by a single event or multiple events. The funding of TWIA is governed by Texas law. It is unknown if the State of Texas would, through legislation or otherwise, provide additional funding or what funding methods would be used.

Recent Developments

A number of our directors are among the beneficial owners of Inter-Atlantic Management, Inc. or "Inter-Atlantic". Per the terms of the Advisory Agreement dated August 1, 2013, Inter-Atlantic will be issued annually on February 1^st , a grant of the Company's common stock which in aggregate will have a fair market value of $150,000 at the time of grant. On February 2, 2015, the Company issued 227,273 shares of common stock at $0.66 a share, to Inter-Atlantic.

On February 16, 2015, the Company completed placement of its new 2015 catastrophe reinsurance program with a panel of  third party reinsurers, effective April 1, 2015. Coverage was extended to $150 million in excess of $5 million in the new treaty year.

On February 16, 2015, the Company completed placement of its new 2015 quota share reinsurance program with a panel of third party reinsurers, effective April 1, 2015. The quota share ratio remains the same (90%) as the current program. Certain participants on the program will change from the 2014 program.

Corporate Information

Our principal executive offices are located at 1333 Corporate Drive, Suite 325, Irving, TX 75038 and our telephone number is (972) 607-4241. Our website address is www.hoaic.com. Information contained on our website or that can be accessed through our website does not constitute a part of this Form 10-K and is not incorporated herein by reference.

Employees

As of December 31, 2014 we had 43 employees, all but one of whom are full time employees, including six executive officers. We are not a party to any collective bargaining agreement and have not experienced any work stoppages or strikes as a result of labor disputes. We consider relations with our employees to be satisfactory.

Available Information

We are subject to the information requirements of the Exchange Act and file annual, quarterly and current reports, and other information with the SEC. You may read and copy these reports on our website, www.hoaic.com under the Investor Relations section and at the SEC's Public Reference Room at 100 F Street NE, Washington, D.C. 20549. Information on the operation of the Public Reference Room is available by calling the SEC at 1-800-SEC-0330. You may also access this information at the SEC's website (www.sec.gov). This site contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. In addition, we make available, without charge, through our website (www.hoaic.com), electronic copies of our SEC filings, as soon as reasonably practicable after we electronically file such reports or amendments with, or furnish information to, the SEC.

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ITEM 1A. Risk Factors

Our business is subject to a number of risks, including those described below, which could have a material effect on our results of operations, financial condition or liquidity and, additionally, could cause our operating results to vary significantly from period to period.

Risks Related to Our Business

Because our insurance subsidiary currently conducts a significant portion of its business in only one state, any single catastrophic event or other condition affecting losses in that particular state could adversely affect our insurance subsidiary's business, financial condition, and results of operations.

Our insurance subsidiary conducts a significant portion of its business in only one state, the State of Texas. While our insurance subsidiary actively manages its exposure to catastrophic events through its underwriting process and the purchase of reinsurance, a single catastrophic event, destructive weather pattern, general economic trend, regulatory development or other condition specifically affecting the State of Texas could have a disproportionately adverse impact on our insurance subsidiary's business, financial condition, and results of operations. In addition, the fact that our insurance subsidiary's business is concentrated in the State of Texas subjects it to increased exposure to certain catastrophic events and destructive weather patterns such as severe thunderstorms, hurricanes, tropical storms, and floods. Changes in the prevailing regulatory, legal, economic, political, demographic, competitive, and other conditions in the State of Texas could also make it less attractive for our insurance subsidiary to do business in the State of Texas and would have a more pronounced effect on our insurance subsidiary than it would on other insurance companies that are more geographically diversified. Because our insurance subsidiary's business is concentrated in this manner, the occurrence of one or more catastrophic events or other conditions affecting losses in the State of Texas could have an adverse effect on its business, financial condition, and results of operations.

Our results may fluctuate based on many factors including cyclical changes in the insurance industry.

The insurance business historically has been a cyclical industry characterized by periods of intense price competition due to excessive underwriting capacity, as well as periods when shortages of capacity permitted an increase in pricing and, thus, more favorable underwriting profits. An increase in premium levels is often over time offset by an increasing supply of insurance capacity, either by capital provided by new entrants or by the commitment of additional capital by existing insurers, which may cause prices to decrease. Any of these factors could lead to a significant reduction in premium rates, less favorable policy terms and fewer opportunities to underwrite insurance risks, which could have a material adverse effect on our results of operations and cash flows. In addition to these considerations, changes in the frequency and severity of losses suffered by insureds and insurers may affect the cycles of the insurance business significantly. These may also be factors in the market's pricing of our common stock.

We rely heavily on quota share and catastrophe reinsurance to support our growth and continued operations and to protect us from adverse risk. The unavailability, limited availability, or increased cost of reinsurance could have a material adverse effect on our business, results of operations and financial condition.

We cannot predict whether insurance market conditions will improve, remain constant or deteriorate. Negative insurance market conditions may impair our ability to write insurance at rates that we consider appropriate relative to the risk assumed. If we cannot write insurance at appropriate rates or obtain sufficient reinsurance at appropriate rates, our ability to obtain business would be materially and adversely affected.

Increased competition, competitive pressures, industry developments and market conditions could affect the growth of our business and adversely impact our financial results.

The property and casualty insurance industry is cyclical and, during times of increased capacity, highly competitive. We compete not only with other stock companies but also with mutual companies, other underwriting organizations and alternative risk sharing mechanisms. Our principal competitors cannot be easily classified. Our principal lines of business are written by numerous other insurance companies. Competition for any one account may come from very large, well-established national companies, smaller regional companies, other specialty insurers in our field, and other companies that write insurance only in Texas. Many of these competitors have greater financial resources, larger agency networks and greater name recognition than our company. We compete for business not only on the basis of price, but also on the basis of financial strength, types of coverages offered, and availability of coverage desired by customers, commission structure and quality of service. We may have difficulty continuing to compete successfully on any of these bases in the future. Competitive pressures coupled with market conditions may affect our rate of premium growth and financial results.

Our ability to compete in the property and casualty insurance industry and our ability to expand our business may be negatively affected by the fact that we are not rated by A.M. Best. We are rated by Demotech, Inc. Mortgage companies and independent agents operating in the state of Texas generally accept a Demotech rating. However, in some states, mortgage companies require homeowners to obtain property insurance from an insurance company with a certain minimum A.M. Best rating. Further, some independent agents are reluctant to do business with a company that is not rated by A.M. Best. As a result, the minimum A.M. Best rating requirement may prevent us from expanding our business into other states or into certain independent agencies, which may in turn limit our ability to compete with large, national insurance companies and certain regional insurance companies.

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In addition, industry developments could further increase competition in our industry. These developments could include:

 an influx of new capital in the marketplace as existing companies attempt to expand their businesses and new companies attempt to enter the insurance business as a result of better pricing and/or terms;

 programs in which state-sponsored entities provide property insurance in catastrophe-prone areas or other alternative market types of coverage;

 changing practices caused by the Internet, which has led to greater competition in the insurance business;

 changes in Texas' regulatory climate; and

 the passage of federal proposals for an optional federal charter that would allow some competing insurers to operate under regulations different or less stringent than those applicable to our insurance subsidiary.

These developments and others could make the property and casualty insurance marketplace more competitive by increasing the supply of insurance available.

If competition limits our ability to write new business at adequate rates, our future results of operations would be adversely affected.

If our actual losses from insured claims exceed our loss reserves, our financial results would be adversely affected.

We record reserves for specific claims incurred and reported and reserves for claims incurred but not reported. The estimates of losses for reported claims are established judgmentally on an individual case basis. Such estimates are based on our particular experience with the type of risk involved and our knowledge of the circumstances surrounding each individual claim. Reserves for reported claims consider our estimate of the ultimate cost to settle the claim, including investigation and defense of the claim, and may be adjusted for differences between costs originally estimated and costs re-estimated or incurred. Reserves for incurred but not reported claims are based on the estimated ultimate cost of settling claims, including the effects of inflation and other social and economic factors, using past experience adjusted for current trends and any other factors that would modify past experience. We use a variety of statistical and actuarial techniques to analyze current claim costs, frequency and severity data, and prevailing economic, social and legal factors. While management believes that amounts included in the consolidated financial statements are adequate and our independent actuary opined to this amount, there can be no assurance that future changes in loss development, favorable or unfavorable, will not occur. The estimates are periodically reviewed and any changes are reflected in current operations.

Our objective is to set reserves that are adequate and represent management's best estimate; that is, the amounts originally recorded as reserves should at least equal the ultimate cost to investigate and settle claims. However, the process of establishing adequate reserves is inherently uncertain, and the ultimate cost of a claim may vary materially from the amounts reserved. We regularly monitor and evaluate loss and loss adjustment expense reserve development to verify reserve adequacy. Any adjustment to reserves is reflected in underwriting results for the accounting period in which the adjustment is made.

Due to the uncertainties discussed above, the ultimate losses may vary materially from current loss reserves which could have a material adverse effect on our future financial condition, results of operations and cash flows. To date, loss reserves have been adequate to cover losses incurred, including losses incurred but not reported. We have had no difficulty in establishing and maintaining adequate reserves for losses.

The effects of emerging claim and coverage issues on our business are uncertain.

As industry practices and legal, judicial, social and other environmental conditions change, unexpected and unintended issues related to claims and coverage may emerge. These issues may adversely affect our business by either extending coverage beyond our underwriting intent or by increasing the number or size of claims. In some instances, these changes may not become apparent until sometime after we have issued insurance contracts that are affected by the changes. As a result, the full extent of liability under our insurance contracts may not be known for many years after a contract is issued and renewed, and our financial position and results of operations may be adversely affected.

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If we are unable to expand our business because our capital must be used to pay greater than anticipated claims, our financial results may suffer.

Our future growth will depend on our ability to expand the number of insurance policies we write in Texas, to expand the kinds of insurance products we offer, and to expand the geographic markets in which we do business, all balanced by the business risks we choose to assume and cede. Unexpected catastrophic events in our market areas, such as the severe thunderstorms experienced in Texas in recent years, may result in greater claims losses than anticipated, which could require us to limit or halt our growth while we redeploy our capital to pay these unanticipated claims unless we are able to raise additional capital.

We may require additional capital in the future which may not be available or may only be available on unfavorable terms.

Our future capital requirements depend on many factors, including our ability to write new business successfully and to establish premium rates and reserves at levels sufficient to cover losses. To the extent that our present capital is insufficient to meet future operating requirements or to cover losses, we may need to raise additional funds through financings or curtail our growth. Based on our current operating plan, we believe current capital together with our anticipated retained earnings will support our operations without the need to raise additional capital. However, we cannot provide any assurance in that regard, since many factors will affect our capital needs and their amount and timing, including our growth, profitability, and the availability of reinsurance, as well as possible acquisition opportunities, market disruptions and other unforeseeable developments. If we had to raise additional capital, equity or debt financing may not be available at all or may be available only on terms that are not favorable to us. In the case of equity financings, dilution to our stockholders could result, and in any case such securities may have rights, preferences and privileges that are senior to those of existing stockholders. If we cannot obtain adequate capital on favorable terms or at all, our business, financial condition or results of operations could be materially adversely affected. At present we have adequate capital to meet current levels of new business production and anticipated growth within the markets we serve and the products we offer. However, additional capital may be needed if through our expansion into additional states we significantly increase our premium production or if we decide to immediately and significantly reduce our need for and reliance on reinsurance. 

Our financial results may be negatively affected by the fact that a portion of our income is generated by the investment of our company's capital and surplus, premiums and loss reserves.

A portion of our income is, and likely will continue to be, generated by the investment of our company's capital and surplus, premiums and loss reserves. The amount of income so generated is a function of our investment policy, available investment opportunities, and the amount of capital and surplus, premium and loss reserves invested. As we continue to grow and to deploy our capital, the proportion of income invested will decrease, and investment income will make up a smaller percentage of our net revenue. As of December 31, 2014, approximately 24% of our available cash and invested assets were invested in fixed-maturity securities with the balance invested in money market mutual funds or in bank deposits (i.e., certificates of deposit) that mature in no more than eighteen months. Fluctuating interest rates and other economic factors make it impossible to estimate accurately the amount of investment income that will be realized. In fact, we may realize losses on our investments.

We have exposure to unpredictable catastrophes, which can materially and adversely affect our financial results.

We write insurance policies that cover homeowners, condominium owners, and tenants for losses that result from, among other things, catastrophes. We are therefore subject to claims arising out of catastrophes that may have a significant effect on our business, results of operations, and/or financial condition. Catastrophes can be caused by various events, including hurricanes, tropical storms, tornadoes, windstorms, earthquakes, hailstorms, explosions, power outages, fires and by man-made events, such as terrorist attacks. The Company does not insure damages caused by earthquakes and floods. The incidence and severity of catastrophes are inherently unpredictable. The extent of losses from a catastrophe is a function of both the total amount of insured exposure in the area affected by the event, the type of catastrophe and the severity of the event. Our policyholders are currently concentrated in Texas, which is especially subject to adverse weather conditions such as severe thunderstorms, hurricanes and tropical storms. Insurance companies are not permitted to reserve for catastrophes until such event takes place. Therefore, although we attempt to manage our exposure to catastrophes through our underwriting process and the purchase of reinsurance protection, an especially severe catastrophe or series of catastrophes could exceed our reinsurance protection and may have a material adverse impact on our results of operations and financial condition. See the risk factor below entitled "Although we follow the industry practice of reinsuring a portion of our risks, our costs of obtaining reinsurance may increase and we may not be able to successfully alleviate risk through reinsurance arrangements" for a discussion of our reinsurance coverage.

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Industry trends, such as increased litigation against the insurance industry and individual insurers, the willingness of courts to expand covered causes of loss, rising jury awards, and the escalation of loss severity may contribute to increased costs and to the deterioration of the reserves of our insurance subsidiary.

Litigation against property and casualty insurance insurers in Texas has increased in recent years. The propensity of policyholders and third party claimants to litigate and the willingness of courts to expand causes of loss and the size of awards may render the loss reserves of our insurance subsidiary inadequate for current and future losses.

Although we follow the industry practice of reinsuring a portion of our risks we may not be able to successfully alleviate risk through reinsurance arrangements.

Reinsurance is the practice of transferring part of an insurance company's liability and premium under an insurance policy to another insurance company. We use reinsurance arrangements to limit and manage the amount of risk we retain, to stabilize our underwriting results and to increase our underwriting capacity. Our reinsurance structure is comprised of numerous reinsurance companies with varying levels of participation providing coverage for loss and loss adjustment expense, or LAE, at pre-established minimum and maximum amounts. In accordance with our minimum requirements, our amount of reinsurance coverage is determined by subjecting our homeowner exposures to statistical forecasting models that are designed to quantify a catastrophic event in terms of the amount of our probable maximum loss from a storm of severity that occurs once in every 100 years or greater. Our amount of losses retained (our deductible) in connection with a catastrophic event is determined by market capacity, pricing conditions and surplus preservation. Losses incurred in connection with a catastrophic event below the minimum and above the maximum are the responsibility of our insurance subsidiary. For the 2013-2014 treaty period, we retain an aggregate of $400,000 in loss and LAE for each of the first two catastrophic events. We have purchased reinsurance treaties to insure our insurance subsidiary to the standard which consists of first and second event coverage greater than the 1- in -100 year level, as required by us. We purchased coverage totaling $80 million of aggregate loss and LAE. Single catastrophe losses and LAE exceeding $80 million are our responsibility. For the 2014 – 2015 treaty period, which began on April 1, 2014, we retain an aggregate of $400,000 in loss and LAE for each of the first two catastrophic events. We have purchased reinsurance treaties to insure our insurance subsidiary to the standard which consists of first and second event coverage greater than 1-in 100 year level, as required by us. The treaties cover 80% of its risk under property coverage on any one loss occurrence not to exceed $110 million and 20% of its risk under property coverage on any one loss occurrence in excess of $4 million, not to exceed $110 million. Single catastrophe losses and LAE exceeding $110 million are our responsibility. During the period from August 1, 2014 through November 30, 2014 this limit was increased to $140 million, to provide the Company with additional coverage during the 2014 hurricane season.

Although we follow the industry practice of reinsuring a portion of our risk through various types of reinsurance programs, including quota share, excess of loss and catastrophe excess of loss, we may not be able to successfully alleviate risk through such reinsurance arrangements. The pricing for these types of reinsurance is based on both on the experience of HAIC's book of business as well as the overall experience of the global property and casualty insurance industry. The cost of the quota share reinsurance is reflected in the amount of the ceding commission allowance reinsurers pay HAIC of the production of the business. Should the allowance offered to HAIC by reinsurers not reflect the actual cost of producing the business, this would create a risk to the current business model and adversely affect the business. Both types of excess of loss reinsurance used by HAIC allows the sharing of losses on both a per risk and per occurrence basis, allowing HAIC to underwrite larger amounts of business than it would be able to, without this coverage. Reinsurers charge for this type of coverage by taking a percentage of the premium earned on each policy included in the program. The rising cost of this type of coverage, which could limit HAIC's ability to obtain adequate levels of coverage could limit HAIC's ability to write policies with certain risk limits and or limit its ability to take on additional business over concerns of risk concentration. Both instances would mean a reduction in business volume and would adversely affect the operating results of the company.

We face a risk of non-availability of reinsurance, which could materially and adversely affect our ability to write business and our results of operations and financial condition.

Market conditions beyond our control, such as the amount of capital in the reinsurance market and natural and man-made catastrophes, determine the availability and cost of the reinsurance protection we purchase. We cannot be assured that reinsurance will remain continuously available to the same extent and on the same terms and rates as are currently available. If we are unable to maintain our current level of reinsurance or purchase new reinsurance protection in amounts that are considered sufficient, we may have to accept an increase in our net exposures and we may have to reduce our insurance writings. Either of these potential developments could have a material adverse effect on our financial position, results of operations and cash flows.

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We face a risk of non-collectability of reinsurance, which could materially and adversely affect our business, results of operations and/or financial condition.

As is common practice within the insurance industry, we transfer a portion of the risks insured under our policies to other companies through the purchase of reinsurance. This reinsurance is maintained to protect our insurance subsidiary against the severity of losses on individual claims, unusually serious occurrences in which a number of claims produce an aggregate extraordinary loss and catastrophic events. Although reinsurance does not discharge our insurance subsidiary from its primary obligation to pay for losses insured under the policies it issues, reinsurance does make the assuming reinsurer liable to the insurance subsidiary for the reinsured portion of the risk. A credit exposure exists with respect to ceded losses to the extent that any reinsurer is unable or unwilling to meet the obligations assumed under the reinsurance contracts. The collectability of reinsurance is subject to the solvency of the reinsurers, interpretation of contract language and other factors. We are selective with regard to our reinsurers, placing reinsurance with those reinsurers with strong financial strength ratings from A.M. Best, Standard & Poor's, or a combination thereof, although the financial condition of a reinsurer may change based on market conditions. We perform credit reviews on our reinsurers, focusing on, among other things, financial condition, stability, trends and commitment to the reinsurance business. We may require assets in trust, letters of credit or other acceptable collateral to support balances due from reinsurers not authorized to transact business in the applicable jurisdictions. It has not always been standard business practice to require security for balances due; therefore, certain balances are not collateralized. A reinsurer's insolvency or inability to make payments under the terms of a reinsurance contract could have a material adverse effect on our results of operations and financial condition.

The failure of the risk mitigation strategies we utilize could have a material adverse effect on our financial condition or results of operations.

We utilize a number of strategies to mitigate our risk exposure including:

  engaging in vigorous underwriting;

  carefully evaluating terms and conditions of our policies;

  focusing on our risk aggregations by geographic zones, credit exposure and other bases; and

  ceding insurance risk to reinsurance companies.

However, there are inherent limitations in all of these tactics. No assurance can be given that an event or series of unanticipated events will not result in loss levels which could have a material adverse effect on our financial condition or results of operations.

The failure of any of the loss limitation methods we employ could have a material adverse effect on our financial condition or our results of operations.

Various provisions of our policies, such as limitations or exclusions from coverage which have been negotiated to limit our risks, may not be enforceable in the manner we intend. At the present time, we employ a variety of endorsements to our policies that limit exposure to known risks, including but not limited to weather exclusions relating to homes in close proximity to the coast line.

While our insurance product exclusions and limitations reduce the loss exposure to us and help eliminate known exposures to certain risks, it is possible that a court or regulatory authority could nullify or void an exclusion or legislation could be enacted modifying or barring the use of such endorsements and limitations in a way that would adversely affect our loss experience, which could have a material adverse effect on our financial condition or results of operations.

We may be unable to attract and retain qualified employees.

We depend on our ability to attract and retain experienced underwriting talent and other skilled employees who are knowledgeable about our business. If the quality of our underwriters and other personnel decreases, we may be unable to maintain our current competitive position in the specialized markets in which we operate and be unable to expand our operations, which could adversely affect our results.

Because we have relatively few employees, the loss of, or failure to attract, key personnel could also significantly impede the financial plans, growth, marketing and other objectives of our insurance subsidiary. Our insurance subsidiary's success depends to a substantial extent on the ability and experience of the members of its senior management team. Our insurance subsidiary believes that its ability to grow and future success will depend in large part on its ability to attract and retain additional skilled and qualified personnel and to expand, train and manage its employees. Our insurance subsidiary may not be successful in doing so, because the competition for experienced personnel in the insurance industry is intense. We have employment agreements with some but not all key personnel. To date we have had no difficulty attracting qualified personnel to support our operations.

16

Our information technology systems may fail or suffer a loss of security which could adversely affect our business.

The Company's insurance subsidiary is highly dependent on the successful and uninterrupted functioning of its computer systems. We rely on these systems to quote and underwrite our business, bill premium and issue policies to customers as well as provide financial data. The failure of the system through natural disaster and/or power outages could disrupt our operations and could result in a material adverse effect on our business. The Company has addressed this risk through the establishment of back up facilities for data and source code built to DOD anti-terrorism force protection codes, at one of the most physically secure commercial data centers in the country. The Company enhanced its backup / data recovery capabilities by bringing on-line the mirror processing systems.

A security breach of our computer systems could damage our reputation or result in liability. We retain confidential information regarding our business dealings in our computer systems. We may be required to spend significant capital and other resources to protect against security breaches or to alleviate problems caused by such breaches. It is critical that these facilities and infrastructure remain secure. Despite the implementation of security measures, this infrastructure may be vulnerable to physical break-ins, computer viruses, programming errors, attacks by third parties or similar disruptive problems. In addition, we could be subject to liability if hackers were able to penetrate our network security or otherwise misappropriate confidential information.

In addition to physical security measures employed at the Company's offsite operations center, which is audited annually under SOC 1 (SSAE No.16) standards, the Company's third party operations center uses  firewalls, intrusion detection systems, data base field encryption and other "best practices" to protect access to customer data.  Access to the databases is not allowed from outside our network, except for specific IP addresses which the Company has specified and has control over.  These configurations are reviewed quarterly, to ensure policies and procedures are followed.  The Company's third party operations site administration performs annual "ethical hack" tests to identify possible vulnerabilities.

The development and expansion of our business is dependent upon the successful development and implementation of advanced computer and data processing systems. The failure of these systems to function as planned could slow our growth and adversely affect our future business volume and results of operations. We license the software used in our policy administration process (PTS) from a third party, Silvervine, Inc. (formerly known as IDMI, Inc). Silvervine also maintains PTS. In addition, we outsource the hosting and operating of our policy administration system with Silvervine.  Silvervine hosts PTS on its servers located in Warner Robbins, GA, with a mirror processor hosting both system and policy records in Atlanta, GA. Through this "mirror processing environment" the Company has established a data security protocol which provides instant "off-site" back-up of both its operating software and data. In addition, the Company has offsite storage of the Silvervine operating software with Iron Mountain Intellectual Property Management, Inc.

The license and maintenance agreement with Silvervine may be terminated by us with 45 days written notice or by Silvervine in the event of a material breach of the agreement (such as non-payment) by us. If termination of the Silvervine agreement occurs, we may be required to spend significant capital and other resources to purchase and implement PTS or a replacement software system, and to staff and support the technologists that would be needed to maintain and operate our processing system. Alternatively, we could outsource our policy administration process with another third party, which would also require significant expenditures.

The hosting and operating agreement with Silvervine may be terminated by us with 90 days written notice or by Silvervine in the event of a material breach by us of the agreement. If termination of this agreement occurs, we may be required to spend significant capital and other resources to purchase and implement the hardware needed to host and operate PTS, and possibly to staff and support the technologists that would be needed to maintain and operate our processing system. Alternatively, we could outsource our PTS hosting and operating functions with another third party, which could also require significant expenditures.

Any failure on the part of a third party to properly maintain our policy administration system (PTS), or to host and operate PTS could lead to material litigation, undermine our reputation in the marketplace, impair our image and negatively affect our financial results.

We rely on independent agents to write our insurance policies, and if we are not able to attract and retain independent agents, our revenues would be negatively affected.

We write insurance policies through approximately 650 independent agents in Texas, some of whom write a significant amount of business with us. We rely on these independent agents as the only source for our property insurance policies.

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Many of our competitors also rely on independent agents. As a result, we must compete with other insurers for independent agents' business. Our competitors may offer a greater variety of insurance products, lower premiums for insurance coverage, or higher commissions to their agents. If our products, pricing and commissions do not remain competitive, we may find it more difficult to attract business from independent agents to sell our products. A material reduction in the amount of our products that independent agents sell would negatively affect our revenues. To date we have not experienced difficulty attracting new independent agents to support our new business and growth objectives.

We are only rated by Demotech, Inc. and do not have a rating from A.M. Best. The Demotech rating alone may not be sufficient to allow us to expand into parts of the United States where Demotech is not as well known or as widely used.

We are not rated by A.M. Best, although we are rated "A, Exceptional" by Demotech, Inc. We have never been reviewed by A.M. Best and do not intend to seek a rating from A.M. Best until we believe we can secure a minimum rating of B+, that being the minimum accepted by most lenders as well as many independent agents. Our analysis, applying known A.M. Best rating criteria, shows that we will need additional capital before we can qualify for an acceptable A.M. Best rating. Unlike Demotech, A.M. Best tends to penalize companies that are highly leveraged, i.e. that utilize reinsurance to support premium writings. HAIC has a gross premium to capital ratio of approximately 6-to-1, although our net premium to capital ratio is less than 1-to-1. We would need to reduce our gross ratio to approximately 2-to-1, either by increasing capital (the denominator) or decreasing premium writings (the numerator). Capital is expected to grow over time, but in order to achieve our premium revenue objectives and maintain size efficiency, we must continue to rely on reinsurers to ameliorate risks and provide financial support. In summary, we do not plan to give up revenues or efficiency of size as a means to qualify for an acceptable A.M. Best rating. Our Demotech rating has proved satisfactory to date in attracting an acceptable amount of business from independent agent and satisfies lenders as to our financial stability.

A rating by A.M Best is more widely accepted by lenders, independent agents and consumers than a Demotech rating. A.M. Best has been the rating standard relied upon to rate insurance companies in the United States for many years. The Demotech rating alone may not be sufficient to allow us to expand into parts of the United States where Demotech is not as well known or as widely used. However, Demotech's rating has been sufficient in Texas and we expect it to be sufficient in expansion states that the Company has under study.

Our success depends on our ability to accurately price the risks we underwrite.

The results of our operations and the financial condition of our insurance subsidiary depend on our ability to underwrite and set premium rates accurately for a wide variety of risks. Rate adequacy is necessary to generate sufficient premiums to pay losses, LAE and underwriting expenses and to earn a profit. In order to price our products accurately, we must collect and properly analyze a substantial amount of data; develop, test and apply appropriate rating formulas; closely monitor and timely recognize changes in trends; and project both severity and frequency of losses with reasonable accuracy. Our ability to undertake these efforts successfully, and as a result price our products accurately, is subject to a number of risks and uncertainties, some of which are outside our control, including:

 the availability of sufficient reliable data and our ability to properly analyze available data;

 the uncertainties that inherently characterize estimates and assumptions;

 our selection and application of appropriate rating and pricing techniques;

 changes in legal standards, claim settlement practices, and restoration costs; and

 legislatively imposed consumer initiatives.

A failure to adequately price risks will negatively affect future underwriting profits. We could also overprice risks, which could reduce our sales volume and competitiveness. In either event, the profitability of our insurance subsidiary could be materially and adversely affected.

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We incur additional costs as a result of being a public company, which could reduce our profits.

As a relatively new public company, we have and will incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, as well as new rules subsequently implemented by the Securities and Exchange Commission, have required changes in the corporate governance practices of public companies, including rules requiring public companies to include a report of management on the company's internal control over financial reporting in their annual reports on Form 10-K. Compliance with these rules and regulations will increase our legal and financial compliance costs and have made some activities more time-consuming and costly. We cannot predict or estimate the amount of additional costs we may incur in the future or the timing of such costs, which could increase our operating costs and reduce our profits.

We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act which allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies.

We are an emerging growth company as defined in the JOBS Act, and will continue to be an emerging growth company until: (i) the last day of our fiscal year following the fifth anniversary of our Registration Statement on Form S-1 filed August 8, 2013, (ii) the date on which we become a large accelerated filer, or (iii) the date on which we have issued an aggregate of $1 billion in non-convertible debt during the preceding 3 years. As an emerging growth company, we have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act. This election allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.

Risks Related to Regulation of our Insurance Operations

As an insurance holding company, we are currently subject to regulation by the State of Texas and in the future may become subject to regulation by certain other states or a federal regulator.

All states regulate insurance holding company systems. State statutes and administrative rules generally require each insurance company in the holding company group to register with the department of insurance in its state of domicile and to furnish information concerning the operations of the companies within the holding company system which may materially affect the operations, management or financial condition of the insurers within the group. As part of its registration, each insurance company must identify material agreements, relationships and transactions with affiliates, including without limitation loans, investments, asset transfers, transactions outside of the ordinary course of business, certain management, service, and cost sharing agreements, reinsurance transactions, dividends, and consolidated tax allocation agreements.

Insurance holding company regulations generally provide that transactions between an insurance company and its affiliates must be fair and equitable, allocated between the parties in accordance with customary accounting practices, and fully disclosed in the records of the respective parties. Many types of transactions between an insurance company and its affiliates, such as transfers of assets among such affiliated companies, certain dividend payments from insurance subsidiaries and certain material transactions between companies within the system, may be subject to prior notice to, or prior approval by, state regulatory authorities. If we are unable to obtain the requisite prior approval for a specific transaction, we would be precluded from taking the action which could adversely affect our operations.

Our insurance subsidiary currently operates in the State of Texas and the State of Arizona. In the future, our insurance subsidiary may become authorized to transact business in other states and therefore will become subject to the laws and regulatory requirements of those states. These regulations may vary from state to state, and states occasionally may have conflicting regulations. Currently, the federal government's role in regulating or dictating the policies of insurance companies is limited. However, Congress, from time to time, considers proposals that would increase the role of the federal government in insurance regulation, either in addition to or in lieu of state regulation. The impact of any future federal insurance regulation on our insurance operations is unclear and may adversely impact our business or competitive position.

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Our insurance subsidiary is subject to extensive regulation which may reduce our profitability or inhibit our growth. Moreover, if we fail to comply with these regulations, we may be subject to penalties, including fines and suspensions, which may adversely affect our financial condition and results of operations.

The insurance industry is highly regulated and supervised. Our insurance subsidiary is subject to the supervision and regulation of the state in which it is domiciled (Texas) and the states in which it does business (currently Texas and Arizona). Such supervision and regulation is primarily designed to protect our policyholders rather than our stockholders. These regulations are generally administered by a department of insurance in each state and relate to, among other things:

 the content and timing of required notices and other policyholder information;

 the amount of premiums the insurer may write in relation to its surplus;

 the amount and nature of reinsurance a company is required to purchase;

 participation in guaranty funds and other statutorily-created markets or organizations;

 business operations and claims practices;

 approval of policy forms and premium rates;

 standards of solvency, including risk-based capital measurements;

 licensing of insurers and their products;

 restrictions on the nature, quality and concentration of investments;

 restrictions on the ability of our insurance company subsidiary to pay dividends to us;

 restrictions on transactions between insurance company subsidiaries and their affiliates;

 restrictions on the size of risks insurable under a single policy;

 requiring deposits for the benefit of policyholders;

 requiring certain methods of accounting;

 periodic examinations of our operations and finances;

 prescribing the form and content of records of financial condition required to be filed; and

 requiring reserves as required by statutory accounting rules.

The Texas Department of Insurance and regulators in other jurisdictions where our insurance subsidiary may become licensed conduct periodic examinations of the affairs of insurance companies and require the filing of annual and other reports relating to financial condition, holding company issues and other matters. These regulatory requirements may adversely affect or inhibit our ability to achieve some or all of our business objectives. These regulatory authorities also conduct periodic examinations into insurers' business practices. These reviews may reveal deficiencies in our insurance operations or differences between our interpretations of regulatory requirements and those of the regulators.

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In addition, regulatory authorities have relatively broad discretion to deny or revoke licenses for various reasons, including the violation of regulations. In some instances, we follow practices based on our interpretations of regulations or practices that we believe may be generally followed by the industry. These practices may turn out to be different from the interpretations of regulatory authorities. If we do not have the requisite licenses and approvals or do not comply with applicable regulatory requirements, insurance regulatory authorities could preclude or temporarily suspend us from carrying on some or all of our activities or otherwise penalize us. This could adversely affect our ability to operate our business.

The Company's insurance subsidiary, HAIC is not currently subject to any regulatory investigations or settlements.

Finally, changes in the level of regulation of the insurance industry or changes in laws or regulations themselves or interpretations by regulatory authorities could adversely affect our ability to operate our business.

Changes in regulation may reduce our profitability and limit our growth.

We are subject to extensive regulation in the states in which we conduct business (currently Texas and Arizona). This regulation is generally designed to protect the interests of policyholders, as opposed to stockholders and other investors in the insurance company or its affiliates, and relates to authorization for lines of business, capital and surplus requirements, investment limitations, underwriting limitations, transactions with affiliates, dividend limitations, trade practices and claims practices, participation in guaranty funds and other statutorily-created markets or organizations, changes in control, premium rates and a variety of other financial and non-financial components of an insurance company's business. The National Association of Insurance Commissioners ("NAIC") and state insurance regulators are constantly reexamining existing laws and regulations, generally focusing on modifications to holding company regulations, interpretations of existing laws and the development of new laws.

From time to time, states consider and/or enact laws that may alter or increase state authority to regulate insurance companies and insurance holding companies. States also consider and/or enact laws that impact the competitive environment and marketplace for property and casualty insurance. Texas lawmakers may enact legislation that reduces our profitability, limits our growth, or otherwise adversely affects our operations.

During the past several years, various regulatory and legislative bodies have adopted or proposed new laws or regulations to address the cyclical nature of the insurance industry, catastrophic events and insurance capacity and pricing. These regulations include (i) the creation of "market assistance plans" under which insurers are induced to provide certain coverages, (ii) restrictions on the ability of insurers to rescind or otherwise cancel certain policies in mid-term or to nonrenew policies at their scheduled expirations, (iii) advance notice requirements or limitations imposed for certain policy non-renewals, (iv) limitations upon or decreases in rates permitted to be charged, (v) expansion of governmental involvement in the insurance market, and (vi) increased regulation of insurers' policy administration and claims handling practices.

Currently, the federal government does not directly regulate the insurance business. However, in recent years the state insurance regulatory framework has come under increased federal scrutiny. Congress and some federal agencies from time to time investigate the current condition of insurance regulation in the United States to determine whether to impose federal regulation or to allow an optional federal charter, similar to banks. In addition, changes in federal legislation and administrative policies in several areas, including changes in the Gramm-Leach-Bliley Act, financial services regulation and federal taxation, can significantly impact the insurance industry and us.

We cannot predict with certainty the effect any enacted, proposed or future state or federal legislation or NAIC initiatives may have on the conduct of our business. Furthermore, there can be no assurance that the regulatory requirements applicable to our business will not become more stringent in the future or result in materially higher costs than current requirements, or that creation of a federal insurance regulatory system will not adversely affect our business or disproportionately benefit our competitors. Changes in the regulation of our business may reduce our profitability, limit our growth or otherwise adversely affect our operations.

Our insurance subsidiary is subject to minimum capital and surplus requirements, and our failure to meet these requirements could subject us to regulatory action.

Our insurance subsidiary is subject to risk-based capital standards and other minimum capital and surplus requirements imposed under applicable state laws, including the laws of Texas. The risk-based capital standards, based upon the Risk-Based Capital Model Act adopted by the NAIC, require our insurance subsidiary to report its results of risk-based capital calculations to state departments of insurance and the NAIC. These risk-based capital standards provide for different levels of regulatory attention depending upon the ratio of an insurance company's total adjusted capital, as calculated in accordance with NAIC guidelines, to its authorized control level risk-based capital. Authorized control level risk-based capital is the number determined by applying the NAIC's risk-based capital formula, which measures the minimum amount of capital that an insurance company needs to support its overall business operations.

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Since beginning operations in 2006, the Company has been able to finance its operations and maintain the statutory required capital of its insurance subsidiary from its original organizational financing, results of operations, additional surplus contributions from its parent, and the small amount of interest income earned on invested assets. In 2013, HAMGA paid a dividend to the Company totaling $400,000. These funds were used for operating expenses of the Company. In 2013, HAHC contributed $100,000 to the Paid in Surplus of HAIC. In 2014, HAMGA paid a dividend to the Company totaling $325,000. These funds were used for operating expenses of the Company.

In addition, our insurance subsidiary is required to maintain certain minimum capital and surplus and to limit its net written premiums (direct premiums net of reinsurance premiums) to specified multiples of its capital and surplus. The insurance subsidiary could exceed these ratios if its volume increases faster than anticipated, if it cannot purchase adequate reinsurance, or if its surplus declines due to catastrophe or non-catastrophe losses or excessive underwriting and operational expenses.

Any failure by our insurance subsidiary to meet the applicable risk-based capital or minimum statutory capital requirements or the writings ratio limitations imposed by the laws of Texas (or other states where we may eventually conduct business) could subject it to further examination or corrective action imposed by state regulators, including limitations on our writing of additional business, state supervision or liquidation.

Any changes in existing risk-based capital requirements, minimum statutory capital requirements, or applicable writings ratios may require us to increase our statutory capital levels, which we may be unable to do.

Our status as an insurance holding company could adversely affect our ability to meet our obligations and pay dividends.

As an insurance holding company, we are in part dependent on dividends and other permitted payments from our insurance subsidiary to pay any cash dividends to our stockholders, to service debt and for our operating capital. The ability of our insurance subsidiary to pay dividends to us is subject to certain restrictions imposed under Texas insurance law. Business and regulatory considerations may impact the amount of dividends actually paid, and prior approval of the Texas Department of Insurance of dividend payments may be required.

Risks Related to an Investment in Our Securities

There has been no established public trading market for our securities and your investment may be illiquid for an indefinite amount of time.

There is currently no public market for our securities. The Company's application to have our stock quoted on one of the Over-the-Counter exchanges (OTCQB) was approved by the Financial Industry Regulatory Authority ("FINRA") on February 25, 2015. With this regulatory approval, the Company is now in the process of completing required filings with the exchange and its stock transfer agent to facilitate the trading of its shares.  The initial market price of the Company's securities is subject to review by FINRA.  Subsequent to our listing, the market price of the Company's shares could be subject to significant fluctuation in response to variations in quarterly and annual operating results, general trends in our company's industry, actions taken by competitors, the overall performance of the stock market, and other factors.

Future issuances or sales, or the potential for future issuances or sales, of shares of our common stock may cause the trading price of our securities to decline and could impair our ability to raise capital through subsequent equity offerings.

Future sales of shares of our common stock or other securities in the public markets, or the perception that these sales may occur, could cause the market price of our common stock to significantly decline, and could materially impair our ability to raise capital through the sale of additional securities. In addition, there are outstanding options to purchase 2,738,500 shares of our common stock. Actual sales, or the prospect of sales by our present stockholders, may have a negative effect on the market price of our common stock.

22

If our common stock is subject to the SEC's penny stock rules, broker-dealers may experience difficulty in completing customer transactions and trading activity in our securities may be adversely affected.

Unless our securities are listed on a national securities exchange, or we have net tangible assets of $5.0 million or more and our common stock has a market price per share of $5.00 or more, transactions in our common stock will be subject to the SEC's "penny stock" rules. If our common stock remains subject to the "penny stock" rules promulgated under the Exchange Act, broker-dealers may find it difficult to effectuate customer transactions and trading activity in our securities may be adversely affected. Under these rules, broker-dealers who recommend such securities to persons other than institutional accredited investors must: make a special written suitability determination for the purchaser; receive the purchaser's written agreement to the transaction prior to sale; provide the purchaser with risk disclosure documents which identify certain risks associated with investing in "penny stocks" and which describe the market for these "penny stocks" as well as a purchaser's legal remedies; and obtain a signed and dated acknowledgment from the purchaser demonstrating that the purchaser has actually received the required risk disclosure document before a transaction in a "penny stock" can be completed. As a result, if our common stock becomes subject to the penny stock rules, the market price of our securities may be depressed, and you may find it more difficult to sell shares of our common stock. 

We have never paid dividends on our common stock and do not anticipate paying dividends on our common stock for the foreseeable future; therefore, returns on your investment may only be realized by the appreciation in value of our securities.

We have never paid any cash dividends on our common stock and do not anticipate paying any cash dividends on our common stock in the foreseeable future. We plan to retain any future earnings to finance growth. Because of this, investors who purchase common stock may only realize a return on their investment if the value of our common stock appreciates. If we determine that we will pay dividends to the holders of our common stock, there is no assurance or guarantee that such dividends will be paid on a timely basis.

In addition, the declaration and payment of dividends will be at the discretion of our Board of Directors and will be dependent upon the profits and financial requirements of our company and other factors, including legal and regulatory restrictions on the payment of dividends, general business conditions and such other factors as our Board of Directors deems relevant.

Provisions in our Amended and Restated Certificate of Incorporation, may restrict the voting rights of our stock and may restrict the transferability of our stock.

Our Amended and Restated Certificate of Incorporation, generally provides that if any person owns, directly, indirectly or by attribution, more than 9.9% of the total combined voting power of our stock entitled to vote, the voting rights attached to such stock will be reduced so that such person may not exercise and is not attributed more than 9.9% of the total combined voting power. In addition, our board of directors may limit a stockholder's exercise of voting rights where it deems it necessary to do so to avoid non-de minimis adverse tax, legal or regulatory consequences to us, any of our subsidiaries or any of our stockholders.

Under our Amended and Restated Certificate of Incorporation, subject to waiver by our board of directors, no transfer of our stock is permitted if such transfer would result in a stockholder controlling more than 9.9% determined by value or by voting power of our outstanding stock. Our Amended and Restated Certificate of Incorporation, also provide that if our board of directors determines that stock ownership by a person may result in (i) stockholder owning directly, indirectly or by retribution, more than 9.9% of the total combined voting power of our stock entitled to vote, or (ii) any non-de minimis adverse tax, legal or regulatory consequences to us, any of our subsidiaries or any of our stockholders, then we have the option, but not the obligation, to require that stockholder to sell to us for fair market value the minimum number of shares of stock held by such person which is necessary so that after such purchase such stockholder will not own more than 9.9% of the total combined voting power, or is necessary to eliminate the non-de minimis adverse tax, legal or regulatory consequences. These provisions may restrict the voting rights and transferability of our shares, which could also affect the price that some investors are willing to pay for our common stock.

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Delaware law may discourage takeover attempts and may result in entrenchment of management.

Our certificate of incorporation, bylaws, and Delaware law contain provisions which could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by our board of directors. Our corporate governance documents include provisions; - authorizing "blank check" preferred stock, which could be issued by our board of directors without stockholder approval and may contain voting, liquidation, dividend, and other rights superior to our common stock; (i) limiting the liability of, and providing indemnification to, our directors and officers; (ii) limiting the ability of our stockholders to call and bring business before special meetings; (iii) controlling the procedures for the conduct and scheduling of board of directors and stockholder meetings; and (iv) providing our board of directors with the express power to postpone previously scheduled annual meetings and to cancel previously scheduled special meetings. These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management. As a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the Delaware General Corporation law, which prevents some stockholders holding more than 15% of our outstanding common stock from engaging in certain business combinations without approval of the holders of substantially all of our outstanding common stock. Any provision of our certificate of incorporation, bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.

ITEM 1B.  Unresolved Staff Comments

None.

ITEM 2.    Properties

As of December 31, 2014, we leased 9,450 square feet of office space in Irving, Texas and the monthly rent for this space was $11,597 payable in equal monthly installments. Rent may be increased each December 31st, with a maximum increase equal to 95% of our pro rata share, based on occupancy, of any increase in the landlord's operating costs. The cost of utilities is charged separately, prorated based on occupancy. The lease for this office space expires on May 31, 2017.

ITEM 3.    Legal Proceedings

We are subject to routine legal proceedings in the ordinary course of business. We believe that the ultimate resolution of these matters will not have a material adverse effect on our business, financial condition or results of operations.

ITEM 4.    Mine Safety Disclosures

Not applicable.

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PART II

ITEM 5.    Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

There is no public market for our common stock. Our application to have our stock quoted on one of the Over-the-Counter exchanges (OTCQB) was approved by FINRA on February 25, 2015. With this regulatory approval, the Company is now in the process of completing required filings with the exchange and our stock transfer agent to facilitate the trading of our shares. The initial price of our securities is subject to review by FINRA.

Holders of Common Equity

As of March 26, 2015, there are approximately 63 stockholders of record of our common stock.

Dividends

We have never declared or paid any cash dividends on our common stock and do not anticipate paying any dividends on our common stock in the foreseeable future. Any cash that might be available for payment of dividends will be used to expand our business. Payments of any cash dividends in the future will depend on our financial condition, results of operations and capital requirements, as well as other factors deemed relevant to our board of directors.

Recent Sales of Unregistered Securities

None.

Repurchases of Equity Securities

None.

ITEM 6.    Selected Financial Data

Not Applicable.

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ITEM 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion in conjunction with our consolidated financial statements and related notes and information included elsewhere in this annual report on Form 10-K. You should review the "Risk Factors" section of this annual report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Some of the information contained in this discussion and analysis or set forth elsewhere in this annual report on Form 10-K, including information with respect to our plans and strategy for our business and related financing includes forward-looking statements that involve risks and uncertainties.

OVERVIEW

General

HAHC is a property and casualty insurance holding company incorporated in Delaware in 2005. In May 2006, we began selling property and casualty insurance products in Texas and beginning April, 2014, we began offering property and casualty insurance products in Arizona through our subsidiary, Homeowners of America Insurance Company. Through the use of highly automated underwriting tools, we currently offer homeowners, dwelling fire and extended coverage, tenant and condominium owner's policies, within market segments which have proven to have long term profitability. Using internet-enabled applications, our products are offered to the public through independent insurance agents.

We have applied for licenses to write business in thirty-two additional states. To date, we have received certificates of authority from twenty-five including Alabama, Arkansas, Colorado, Delaware, Georgia, Indiana, Illinois, Iowa, Kentucky, Louisiana, Michigan, Missouri,  Montana, Nebraska, Nevada, North Carolina, North Dakota, Oregon, South Carolina, South Dakota, Tennessee, Utah, Virginia, Washington, and Wyoming to offer homeowners, dwelling fire and extended coverage, tenant and condominium owner's policies. As a condition of granting a Certificate of Authority, a number of states require alien insurance companies to maintain pledged assets for the purpose of meeting obligations to policyholders and creditors.

The Company began selling homeowners coverage in Arizona in 2014 and plans to begin selling homeowners products in South Carolina and Virginia during 2015. The Company is researching additional states for future expansion, which aren't planned for entry until 2016 or later.  Dwelling fire and extended coverage, tenant and condominium owners policies will be added to these expansion states, including Arizona, in the latter half of 2015.

The Company is seeing increased competition from companies entering Texas and has formulated marketing strategies to protect its market share.

As mentioned previously, the Company sells insurance policies predominately in Texas. As such, the health of the Texas economy and housing market has a direct impact on the Company's business activity. The following selected statistics published monthly by the Real Estate Center at Texas A&M University are key indicators that management monitors when evaluating the Company's current financial condition and operating results:

 Texas seasonally adjusted unemployment rate was 4.6% at December month end, as compared to the national U.S. rate of 5.6%.

 Single family building permits were up 29.3% year over year as of December month end and single family home sales were up 12.2% year over year as of December month end.

· Texas nonfarm employment rate increased 4.0% at December month end, as compared to an increase of the national U.S. rate of 2.2%.

These favorable employment and housing economic trends, along with our competitive pricing in our target markets have resulted in improved premium production during 2014. The resulting increase in earned premium, along with improved reinsurance terms for the 2014 - 2015 treaty year are all factors which aided in the positive results recorded by the Company for the year ended December 31, 2014.

The recent decline in the price of oil during the 4th quarter of 2014 is expected to have a negative impact on the Texas economy.  If so, this will affect job growth and home sales, both which were robust in 2014.  The Company is taking steps to at least partially ameliorate the effects of a downturn.  Expanding geographically into other states, as well as expansion into other parts of Texas is the main component of this strategy.

  The Company's private passenger automobile book of business, written in support of its homeowners programs in Texas, was terminated with our last policy expiring in October, 2013.  The Texas private passenger automobile program was discontinued as we were unable to capture a sufficient portion of the market at pricing which we deemed adequate to cover our expenses and provide a margin for profits.

Our principal revenues are earned premiums (which are reported net of reinsurance costs), ceding commissions and policy fees. We cede a substantial portion of our earned premium to reinsurers under a quota share program to mitigate high frequency risks as well as protect us from catastrophic events and under an excess of loss contract program to mitigate losses from catastrophic events. Our principal expenses are claims from policyholders, policy acquisition and other underwriting expenses, and general and administrative expenses.

Net income available to common stockholders was $2,164,125 for the year ended December 31, 2014. As of December 31, 2014 we had total assets of $88.1 million and stockholders' equity of $10.7 million.

At the end of 2014, our market share of the approximately $7.8 billion Texas homeowners insurance market was estimated to be 0.76% by SNL Financial, making us the 18^th largest Texas homeowners company in terms of Texas premium. As of December 31, 2014, our property insurance policy in force count of 74,698 represents annualized premiums of approximately $74.4 million as compared to the same time last year when our policy in force count was 60,873 and our in force premium was approximately $58.3 million as of December 31, 2013. Our policy growth year over year was 22.71 %, while our in force premium grew 27.62 %.

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RESULTS OF OPERATIONS

Year Ended December 31, 2014 compared to Year Ended December 31, 2013

The following table summarizes our results of operations for the years ended December 31, 2014 and 2013:

	2014			2013
Revenues:
Premiums earned	$	64,895,484		$	53,238,811
Ceded premiums		(60,484,640	)		(48,422,943	)
Net premiums earned		4,410,844			4,815,868
Policy fees		5,616,525			4,655,315
Ceding commissions and reinsurance profit share		16,651,464			11,805,811
Investment income, net of investment expenses		43,603			41,649
Loss adjustment and other fee income		1,530,234			1,232,123
Total revenue		28,252,670			22,550,766
Expenses:
Losses and loss adjustment expenses		2,930,295			2,259,107
Policy acquisition and other underwriting expenses		16,497,662			13,058,774
General and administrative expenses		5,496,391			4,224,898
Total expenses		24,924,348			19,542,779
Income before income taxes		3,328,322			3,007,987
Provision (benefit) for income taxes:
Current		1,748,911			1,155,634
Deferred		(584,714	)		(116,410	)
Total income taxes		1,164,197			1,039,224
Net income	$	2,164,125		$	1,968,763
Cumulative preferred stock dividends		-			(974,179	)
Net income available to common stockholders	$	2,164,125		$	994,584
Basic income per common share	$	0.13		$	0.15
Diluted income per common share	$	0.12		$	0.11
Cash dividend declared per common share	$	-		$	-
Losses and loss adjustment expenses to net earned premium		66.43	%		46.91	%
Expenses to direct earned premium		33.89	%		32.46	%
Acquisition & underwriting and other operating expenses to fee income		92.42	%		97.69	%
Combined loss & expense to total earned revenue		88.36	%		86.82	%

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Net income for the year ended December 31, 2014 was $2,164,125, as compared to net income of $1,968,763 for the year ended December 31, 2013. Results for the year ended December 31, 2014, improved over the same time frame last year primarily as a result of enhanced fee income from policy production and ceding commissions coming from our quota share reinsurance program.

Operating income for the year ended December 31, 2014 was unfavorably impacted by an increase in loss and loss adjustment expenses, primarily the result of increased severe convectional thunderstorm activity. During 2014, the Company sustained gross losses (prior to reinsurance recoveries) from such storms in the amount of $27.7 million as compared to $18.2 million of gross losses (prior to reinsurance recoveries) during 2013.

Our results of operations for the year ended December 31, 2014 reflect income available to common stockholders of $2,164,125, or $0.12 earnings per diluted common share, compared to income available to common stockholders of $994,584, or $0.11 earnings per diluted common share, for the year ended December 31, 2013.

Commencing April 1, 2014 and ending March 31, 2015, the Company reinsured its property and casualty risk under quota share reinsurance treaties with third party reinsurers.  The treaties cover 80% of its risk under property coverage on any one loss occurrence not to exceed $110 million; 10% of its risk under property coverage on any one loss occurrence not to exceed $4 million and approximately 64% of its risk under casualty coverages.

Property catastrophe treaties, which went into effect on the same day and having the same term as the quota share treaties, develop over four layers and 20% of our risk on property coverage on a gross loss of $110 million, excess of $4 million per occurrence.  The Company's net retention is $400,000 per loss occurrence.

Commencing August 1, 2014 and ending November 30, 2014, the Company increased its catastrophe coverage through fifth layer reinsurance with third party reinsurers. This layer extended the Company's coverage to $140 million, excess of $4 million of ultimate net loss arising out of each loss occurrence. The Company considered this increased coverage limit during the Atlantic hurricane season to be a prudent risk management decision, given the growth in both the number of policy holders, as well as total insured values. When this coverage was in force, the Company's net retention on each loss occurrence remained at $400,000.

Revenue

Premium production for the year ended December 31, 2014 was $73.6 million, an increase of $15.7 million or 27.03 % over the same period in 2013. The Company attributes this growth to the effects of an increased number of insured properties, increased pricing in selected markets and maintaining persistency on policies subject to renewal in its target markets.

Gross Premiums Earned for the year ended December 31, 2014 and 2013 were $64.9 million and $53.2 million, respectively. The $11.7 million increase or 21.90 %, is primarily the result of increased property insurance premium, which increased $15.8 million or 27.32 %. The increase in property insurance premium is partially offset by a reduction of $0.1 million in private passenger auto insurance written premium year over year. The Company has made the strategic decision to exit the private passenger auto insurance business, the last policy expired October 2013.

Premiums Ceded for the year ended December 31, 2014 and 2013 were approximately $60.5 million and $48.4 million, respectively. Our premiums ceded represent amounts paid to reinsurers to cover losses under both our quota share and excess of loss reinsurance treaties. Premiums ceded were 93.20 % and 90.95 % of gross premiums earned during the year ended December 31, 2014 and 2013, respectively, primarily the result of our 90% quota share reinsurance program. We expect our reinsurance premiums applicable to the current fiscal year, as well as the reinsurance treaty year, to remain in excess of 90% of direct earned premium, trending slightly upward reflecting our increase in in-force premium. The cost of additional catastrophe coverage the Company purchased during the Atlantic hurricane season was $831,550, which along with the Company's 22 % increase in premiums earned, led to our nearly 25 % increase in ceded earned premiums for the period.

Net Premiums Earned for the year ended December 31, 2014 and 2013 were $4.4 million and $4.8 million, respectively, and reflect the gross premiums earned less the appropriate reinsurance costs as described above.

Ceding Commission and Other Fee Income for the year ended December 31, 2014 was $22.1 million compared to $16.4 million for the year ended December 31, 2013. The primary factors for this improvement include increased earned premium, further supported by improved reinsurance terms for the 2014 - 2015 treaty year.

Reinsurance Profit Sharing income for the year ended December 31, 2014 was $1.7 million compared to $1.3 million for the year ended December 31, 2013.  Reinsurance profit sharing income, calculated on a treaty year basis (April - March), is recognized when earned, which includes adjustments to earned reinsurance profit share based on changes in incurred losses. The $400,000 increase in income reported in 2014 as compared to 2013 is primarily due to the positive 4th quarter treaty year 2013 results reported in calendar year 2014.

Net Premiums Written during the year ended December 31, 2014 and 2013 was $8.5 million and $6.3 million, respectively.   Net premiums written represent the premiums charged on policies issued during a fiscal period less any applicable quota share reinsurance costs.

The following is a reconciliation of our total net premiums written to net premiums earned for the year ended December 31, 2014 and 2013 (values in thousands):

	Year Ended December 31,
	2014			2013
Net Premiums Written	$	8,541		$	6,273
Change in Unearned Premium		(1,207	)		(389	)
Catastrophe & Excess of Loss Reinsurance Premium		(2,923	)		(1,068	)
Net Premiums Earned	$	4,411		$	4,816

Investment Income, Net of Investment Expenses increased approximately 4.69 % for the year ended December 31, 2014, reflecting the Company's change in its investment policy, beginning June 1, 2014.  This change included the decision to invest a portion of its excess cash in high quality municipal bonds.

Expenses

Our Losses and Loss Adjustment Expenses amounted to $2.9 million and $2.3 million, respectively, for the years ended December 31, 2014 and 2013. During the year ended December 31, 2014, we sustained gross losses (losses prior to reinsurance recoveries) totaling $27.7 million primarily from increased severe convectional thunderstorm activity occurring in the calendar year.  The same period in 2013, we incurred gross losses (losses prior to reinsurance recoveries) of $18.2 million in losses occurring in the calendar year. Our liability for losses and loss adjustment expense ("Reserves") is more fully described below under "Critical Accounting Policies and Estimates". These Reserves include both case reserves on reported claims and our reserves for incurred but not reported ("IBNR") losses. At each period-end date, the balance of our Reserves is based on our best estimate of the ultimate cost of each claim for those known cases and the IBNR loss reserves are estimated based primarily on our historical experience.

Policy Acquisition and Other Underwriting Expenses for the years ended December 31, 2014 and 2013 were $16.5 million and $13.1 million, respectively, which primarily reflect the amortization of deferred acquisition costs including commissions payable to agents for production and renewal of policies, premium taxes and other costs associated with the acquisition of insurance policies.The net increase from the corresponding period in 2013 is primarily attributable to the increase in our overall production.

General and Administrative Expenses for the years ended December 31, 2014 and 2013 were $5.5 million and $4.2 million, respectively.The $1.3 million increase includes increases of $0.6 million in employee related costs as our head count grew to support our growth in production, an increase of approximately $0.6 million in professional expenses related to being a public company as well as increases in technology, and other administrative costs. As of December 31, 2014, we had 43 employees all but one whom are full time compared to 39 employees as of December 31, 2013.

Income Taxes for the years ended December 31, 2014 and 2013 were $1.2 million and $1.0 million, respectively, for state and federal taxes resulting in an effective tax rate of 34.98 % for 2014 and 34.55 % for 2013. The effective tax rate for the year ended December 31, 2014 was impacted primarily as a result of permanent tax differences on meals and entertainment and stock-based compensation.

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Ratios:

The loss ratio applicable to the year ended December 31, 2014 (losses and loss adjustment expenses incurred related to net premiums earned) was 66.43 % compared to 46.91 % for the year ended December 31, 2013. The primary factor contributing to our increased loss ratio is the increase in ceded earned premium, discussed previously.

Our expenses (policy acquisition, underwriting, and other operating expenses), as a percentage of direct earned premium was 33.89 % for the year ended December 31, 2014, compared to 32.46 % for the year ended December 31, 2013. The increase in our expense ratio is primarily attributable to higher property inspections, the result of an increase in quoting the Company's product by its agency force, and other underwriting expenses, including an increase in agent's compensation, employee compensation and compensation-related costs.

Another important measurement of operational effectiveness of the Company is the margin between our fee income and acquisition, underwriting, and other operating expenses due to our reliance on quota share reinsurance, under which approximately 90% of our property insurance premium is ceded to reinsurers. The Company receives a ceding commission from reinsurers for the production of the business. This fee income, along with other policy related fees that the Company charges, are used to offset the underwriting and other operating expenses it incurs in the production of premium. For the year ended December 31, 2014 our acquisition and underwriting and other operating expenses were 92.42 %, of policy related fee income, as compared to 97.69 % for the year ended December 31, 2013.

Due to the impact our reinsurance costs have on net premiums earned from period to period, our management believes the combined loss and expense ratio measured to total earned revenues is more relevant in assessing overall performance. The combined loss and expense ratio to total earned revenue for the year ended December 31, 2014 was 88.36 % compared to 86.82 % for the year ended December 31, 2013.

Seasonality of Our Business

Trends within our insurance business are seasonal, both as they relate to premium production and as they relate to incurred losses.  Premium production tends to increase during the late spring and summer due to increased home purchases, while our claims activity increase with the occurrence of convectional thunderstorms which often produce strong winds, tornadoes and hail typically during the period from March 1 through June 30 each year.  With the commencement of our reinsurance treaty year on April 1, any variation in reinsurance costs whether due to changes in rates or in total values insured will be reflected in our financial results beginning April 1  each year.

Reinsurance Agreements

The Company has completed negotiations with a panel of third party reinsurers on what management considers to be favorable terms, including extending coverage on the quota share portions of its reinsurance program to the end of 2016.

In addition, the Company completed the placement of an excess of loss catastrophe reinsurance program, effective April 1, 2015, with a panel of third party reinsurers.  These treaties replace the Company's excess of loss reinsurance program expiring on March 31, 2015 and provides coverage on the Company's retained risk on its property insurance business.  Approximately 60% of the program will be for a period of 24 months, while the remaining 40% will have a term of 12 months.

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LIQUIDITY AND CAPITAL RESOURCES

HAIC's operational goals of premium growth and state expansion are dependent upon adequate capital and surplus.

Insurance companies capital and surplus levels are regularly monitored by the insurance department of its state of domicile.  The primary tool used to monitor an insurance company's capital adequacy is the National Association of Insurance Commissioner' Risk Based Capital Model or "RBC".  Remedial action of varying severity begin once an insurance company's RBC falls below under 200%.  HAIC's ratio at year end 2014 was 458% and 396% at the end of 2013.  The industry guidelines for net premium writings to surplus is approximately 3:1.  HAIC net writings to surplus were .46 in 2014 and .58 in 2013.

Since inception, we have financed our cash flow requirements through net premiums received and investment income. We believe our cash flow from net premiums and investment income will be sufficient to cover our cash outflows for at least the next 12 months. Beyond the next 12 months, our primary cash flow sources will continue to be from premiums and investment income.

In the insurance industry cash collected for premium from policies written is invested, interest and dividends earned thereon. Our primary cash outflows are claim payments and operating expense. In regard to claim payments, while the substantial portion of our claims are paid out within 90 – 180 days, the period of time payments are made varies by the circumstances of the claim, and loss settlement expenses can be paid over periods of more than one year. Additional cash outflow occurs through payments of underwriting costs such as commissions, taxes, payroll, and overhead expenses.

We believe that we maintain sufficient liquidity to pay claims and expense obligations of HAIC as well as to satisfy any unforeseen events including inadequate premium rates and reserve deficiencies. The Company maintains substantial reinsurance through reinsurers with superior financial ratings to provide sufficient liquidity in the case disasters impact the business we underwrite.

Deferred policy acquisition costs "DAC" are reviewed quarterly by management and are expected to be recoverable from future income, including investment income.  However, the amount of DAC considered recoverable could be reduced in the near term if management's estimates of future premium and investment income is reduced which could impair the Company's ability to recover these costs.

Cash Flows

Our cash flows from operating, investing and financing activities for the years ended December 31, 2014 and 2013 are summarized below.

Summary of Cash Flows

	Year Ended
	December 31,
	2014			2013
Net cash provided by (used in) operating activities	$	3,533,953		$	(1,883,572	)
Net cash used in investing activities	$	(5,997,835	)	$	(201,093	)
Net cash provided by (used in) financing activities	$	7,850		$	(5,400	)

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Cash Flows for the Year ended December 31, 2014

Net cash provided by operating activities for the year ended December 31, 2014 was approximately $3.5 million. Significant factors in this movement consisted primarily of an increase in cash received from net written premiums and policy related fees less cash disbursed for operating expenses and losses and loss adjustment expenses. Net cash used in investing activities of $6.0 million was primarily due to purchases of fixed-maturity securities, held as available-for-sale of $5.0 million, purchases of short-term investments of $4.3 million, purchases of long-term investments of $3.4 million and the purchases of furniture, equipment, and software of approximately $228,000, offset by redemptions of short-term and long-term investments of $4.4 million and $1.9 million, respectively and $0.6 million from early calls of several fixed-maturity securities, held as available-for-sale. Net cash provided by financing activities totaled $7,850 for proceeds from stock options exercised.

Cash Flows for the Year ended December 31, 2013

Net cash used by operating activities for the year ended December 31, 2013 was approximately $1.9 million. Significant factors in this movement consisted primarily of an increase in cash received from higher net written premiums, less cash used for paid claims and operating expenses, as well as increased disbursements related to the settlement of the Company's reinsurance treaties. Net cash used in investing activities of $0.2 million was primarily due to purchases of short-term investments of $1.8 million, purchases of long-term investments of $2.0 million and the purchases of furniture, equipment, and software of approximately $99,000, offset by maturities of short-term investments of $1.5 million and maturities of long-term investments of $2.2 million. Net cash used in financing activities total $5,400 for repurchase of common stock.

Credit Risk

Credit risk is a major factor in operating our business. We review credit risk from a variety of sources: financial institutions in regard to cash deposits; investment risk; counter-party risk from reinsurers; premium receivables; notes receivable and long-term investment assets; loss sensitive underwriting accounts; and key vendor relationships. We have established specific guidelines and procedures to evaluate our exposure, particularly with regard to our excess cash and investment holdings, and our receivable balances from insureds and reinsurers.

In regard to our investments and cash deposits as of December 31, 2014, we have limited our credit exposure to financial instruments by investing and holding our excess cash in bank demand and time deposits (i.e., CDs), money market accounts which are covered by FDIC insurance, and fixed-maturity securities, classified as available-for-sale. At times, the Company's bank deposits may exceed the FDIC limit. To meet liquidity needs, all bank demand and time deposits mature in no more than eighteen months. We mitigate the credit risk for our fixed-maturity securities by investing in fixed-maturity securities that are generally investment grade and by diversifying our investment portfolio to avoid concentrations in any single issuer or business sector.

The credit risk we are exposed to on ceded premium and losses recoverable from reinsurers is managed through the careful selection of reinsurance companies. When selecting reinsurance coverage, we consider the financial strength and stability of the providers, their history of responding to claims, and their overall reputation. We require that all reinsurers have an A.M. Best rating of A- (Excellent), or better, or an S&P rating of AA- or better, in order to minimize the risk of uncollectable balances. HAIC continually monitors the financial condition of its reinsurers with the aid of AON Benfield, its reinsurance broker. As of December 31, 2014, no reinsurance recoverable balance is outstanding beyond 30 days. We do not use credit default swaps to mitigate our credit exposure from either investments or counterparties.

Our key vendor (agent) and insured credit risk centers around the collectability of policy premium. Initially, overall premium collection credit risk is limited by our collection of approximately 62% of our property insurance policies through property mortgagee escrow accounts. Agent credit risk is limited through the daily sweep of all premiums paid directly to the agent by the insured. Finally, on any premium collected directly from an insured, we require a 17% down payment and limit the period over which the balance is collected to a maximum of 8 installments. Policies are cancelled as soon as any installment is past due, where the policy is out of equity.

Cyber Security Risks

In addition to physical security measures employed at the Company's offsite operations center, which is audited annually under SOC 1 (SSAE No.16) standards, the Company's third party operations center uses firewalls, intrusion detection systems, data base field encryption and other "best practices" to protect access to customer data.  Access to the databases is not allowed from outside our network, except for specific IP addresses which the Company has specified and has control over.  These configurations are reviewed quarterly, to ensure policies and procedures are followed.  The Company's third party operations site administration performs annual "ethical hack" tests to identify possible vulnerabilities.

Commitments and Other Contingencies

The Company leases its corporate office space and certain office equipment under non-cancelable operating leases.  None of these lease commitments subjects the Company to material uncertainties through escalation clauses or other cost adjustments.

OFF-BALANCE SHEET ARRANGEMENTS

As of December 31, 2014 and 2013, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K.

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

General

We are required to make estimates and assumptions in certain circumstances that affect amounts reported in our consolidated financial statements and related footnotes. We continually evaluate these estimates and assumptions based on historical developments, market conditions, industry trends and other information that we believe to be reasonable under the circumstances. There can be no assurance that actual results will conform to our estimates and assumptions, and that reported results of operation will not be materially adversely affected by the need to make accounting adjustments to reflect changes in these estimates and assumptions from time to time. We believe the following reserve liabilities are the most sensitive to estimates and judgments.

Reserves for Loss and Loss Adjustment Expenses

We establish reserves for the estimated total unpaid costs of losses including loss adjustment expenses, or LAE. Unless otherwise specified below, the term "loss reserves" shall encompass reserves for both losses and LAE. Loss reserves reflect management's best estimate of the total cost of (i) claims that have been incurred, but not yet paid, and (ii) claims that have been "incurred but not yet reported". Loss reserves established by us are not an exact calculation of our liability. Rather, loss reserves represent management's best estimate of our company's liability based on application of actuarial techniques and other projection methodology, taking into consideration other facts and circumstances known at the balance sheet date. The process of establishing loss reserves is complex and necessarily imprecise, as it involves judgment which is affected by many variables such as past loss experience, current claim trends and the prevailing social, economic and legal environments. The impact of both internal and external variables on ultimate loss and LAE costs is difficult to estimate. Our exposure is impacted by both the risk characteristics of the physical locations where we write policies, such as weather-related risks, as well as risks associated with varying social, judicial and legislative characteristics in Texas, the state in which we operate. In determining loss reserves, we give careful consideration to all available data and actuarial analyses, however this process involves significant judgment.

Case reserves on reported claims are established on a claim by claim basis. Supported by a property damage estimate software package, more fully described later, our experienced claim personnel estimate the ultimate expected loss amount as soon as possible after the claim event, but in no case greater than 30 days from receipt of the notice of loss. Being primarily a property insurance company, our case loss reserves are "short-tail", meaning that ultimate loss values are known and settled comparatively quickly. Most often, claims are paid out within 60 to 90 days of their reporting. Factoring into the claim cost is only damage to tangible property, requiring either its repair or replacement. The setting of case reserves for property related short-tail claims is far less complex. Claims rarely include coverage elements which routinely take many years to develop and are often paid out over long periods of time. As such, there is very little impact resulting from the "time value of money" on our reserve values, nor are there estimates of long term medical expenses, educational expenses and or the valuation of the loss of companionship, etc.

Assisting us in setting the case reserves, after first reviewing the elements of the claim and the coverage afforded under the policy, the Company uses a damage estimating software package called Xactimate, developed and owned by the industry leader, Insurance Service Office. The estimating software researches and reports on estimates of structural repair pricing and compares it to actual completed bids and market surveys. The research includes over 40,000 providers of materials, equipment and labor and over 80,000 surveys each year.

IBNR reserves are developed separately for non-catastrophe losses and catastrophe based claims. Both types of IBNR reserves contain factors for case development on known claims:

IBNR Factor Development – Non-Catastrophe Events:

Reserves are developed by using accident month / reported month grids, which are then rolled up into a cumulative incurred loss triangle. Loss factors are calculated based on aggregating the month to month diagonals (i.e. month 2 incurred / initial accident month incurred, month 3 incurred / month 2 incurred). For each accident month, development is reviewed for consistency, and outlying results (on the high and the low side) as well as the most recent couple of months, for which data is considered immature, are deleted from the data for smoothing purposes. Period to period development factors are then calculated, from which period to ultimate loss incurred factors are calculated. Factors are reviewed quarterly and adjusted as needed. Factor changes for the periods under review, from period to period, are considered to be insignificant. Therefore the methodology used is considered to be consistent from period to period. IBNR reserve calculations used during the 2011 year were extended from 13 months past the accident month to 24 months past the accident month to improve upon the estimation of the final loss incurred.

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IBNR Factor Development –Catastrophe Events:

Traditional monthly loss reserving factors are not deemed appropriate for determining IBNR estimates for catastrophic events as these events do not occur evenly throughout a month, as regular loss events do. So an alternative approach to loss development has to be used, one that takes into consideration development and reporting from a specific loss date, rather than from the end of a specific month. In addition, since the HAIC is subject to catastrophic loss events (hurricane and convectional thunderstorms) which have differing cycles for loss reporting and claim development, calculations need to be made for each type event. Each analysis is made by projecting the ultimate loss value into the future and subtracting it from the known incurred losses. The Company's claim system has the ability to track incurred claims on a "days to report" basis, so that we can look at incurred claim values for claims reported in the following bands:

Incident to Report Date

Same Day

1 > 5

6 > 15

16 > 30

31 > 60

61 > 90

91 > 120

121 > 360

>360

Data can be pulled in by event and by accident period. However, since events individually behave inconsistently, data is pulled on an accident year basis (so that variability could be reviewed), and rolled up to an ITD basis for this evaluation. For each of the above bands, the $ incurred and % of total incurred from claims reported during those time frames is calculated by accident year, as were cumulative values. This data is then spread out into days from the event (so that 1-5 band became individual days 1, 2, 3, 4, 5 and so on for the other bands) on a straight line basis, which is then adjusted to scale over the time period so that claim reporting was greater earlier in the bands than later in the bands (so for the 1-5 band, proportionally more was reported on day 1 than day 2, etc.). Initially, this is done on a daily basis for days 0-30, with subsequent periods grouped broken into bands of 5, 15 and 30 days. These factors are then rolled up into cumulative factors and further scaled so that reporting is maxed out at 365 days, when the vast majority of reported claims are thought to be known. In application, the factors are stratified to a daily scale, so that actual days from event are used to select the specific factor to be used.

Lastly, event losses are capped based on the company's catastrophe reinsurance coverage, so that no more than $4.0 million per event is included. Once the projected event limit reaches $4.0 million, no further retained IBNR is projected for the event, only gross and ceded IBNR.

We maintain IBNR reserves to provide for already incurred claims that have not yet been reported as well as developments on reported claims. The IBNR reserve is determined by estimating our insurance company's ultimate net liability for both reported and IBNR claims and then subtracting the case reserves and payments made to date for reported claims.

Because the establishment of loss reserves is an inherently uncertain process, we cannot be certain that ultimate losses will not exceed the established loss reserves and have a material adverse effect on our results of operations and financial condition. Changes in estimates, or differences between estimates and amounts ultimately paid, are reflected in the operating results of the period during which such adjustments are made.

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The following table sets forth the amount of the gross reserves for loss and loss adjustment expense:

	December 2014		December 2013		December 2012
Loss Reserves	$	4,580,284	$	4,190,593	$	5,265,200
Loss Adjustment Expense Reserves
Legal Defense Reserves		5,460,509		7,224,591		1,610,315
Claim Adjusting Reserves		160,522		148,080		168,690
Loss Reserves, Before IBNR	$	10,201,315	$	11,563,264	$	7,044,205
IBNR		4,808,191		4,320,798		4,597,091
Total Loss & Loss Adjustment Reserves	$	15,009,506	$	15,884,062	$	11,641,296

Our independent actuary who reviews our loss reserves at calendar year ends has not required, nor suggested, there be an increase to loss reserves established by management.

Reinsurance

Reinsurance recoverables recorded with respect to insurance losses ceded to reinsurers under reinsurance contracts are also subject to estimation error. The value of ceded losses are determined using the same methods as described above, and therefore, are subject to the same uncertainties as reserves for direct losses and LAE. Additionally, estimates of reinsurance recoverables may prove uncollectible if the reinsurer is unable or unwilling to perform under the contract. The ceding of insurance does not legally discharge the ceding company from its primary liability for the full amount of the policies, and the ceding company is required to pay the loss and bear collection risk if the reinsurer fails to meet its obligation under the reinsurance agreement. We evaluate the balances due from reinsurance companies for collectability, and when indicated, in management's opinion, issues of collectability exist, establish an allowance for doubtful accounts. For information about the risks of non-collectability of reinsurance, see the risk factor under Item 1A.entitled "We face a risk of non-collectability of reinsurance, which could materially and adversely affect our business, results of operations and/or financial condition".

Deferred Policy Acquisition Costs Recoverability

Deferred policy acquisitions costs ("DAC") consist of commissions, premium taxes and policy underwriting and production expenses which are incurred through and vary directly with, the level of production of new and renewal insurance business and are amortized over the terms of the policies they relate to. The method used in calculating DAC limits the amount of the deferred cost to their estimated realizable value, which gives effect to allocating their expense along with other period costs associated with the insurance business, in relation to the amount of gross premium earned on policies to which they relate and investment income. DAC is reviewed to determine if it is recoverable from future income, including investment income. The amount of DAC considered recoverable could be reduced in the near term if management's estimates of future premium and investment income is reduced which could impair the Company's ability to recover these costs.

Deferred Tax Assets and Liabilities

Deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities. Deferred tax liabilities are recognized for temporary differences that will result in taxable amounts in future years. Deferred tax assets are recognized for deductible temporary differences and tax operating loss and tax credit carry forwards and carry backs. The deferred tax assets and liabilities are measured by applying the enacted tax rates and laws in effect for the years in which such differences are expected to reverse.

Management utilizes the criteria established under Accounting Standards Codification (ASC) 740 to annually evaluate the need for a deferred tax valuation allowance.  All available evidence, including potential effects of both positive and negative evidence, is assessed in making the determination.  The Company has established a relatively consistent pattern of annual taxable income and currently has no operating loss carryback or carryforward balances.  Further, the majority of the deferred tax assets have a short recovery period from a future realization standpoint.  Accordingly, the deferred tax asset has been deemed to be a fully realized amount as of December 31, 2014.

Realization of any carry forward component of deferred tax assets depends upon our generation of sufficient taxable income in the future to recover tax benefits that cannot be recovered from taxes paid in the carryback period, generally two years.

Recently Issued Accounting Pronouncements

See Note 2 within Item 8. Financial Statements and Supplementary Data in our Notes to Consolidated Financial Statements for a discussion of recent accounting standards that may affect us.

ITEM 7A.  Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

34

ITEM 8.    Financial Statements and Supplementary Data

	Page
Report of Independent Registered Public Accounting Firm	36
Consolidated Balance Sheets as of December 31, 2014 and 2013	37
Consolidated Statements of Operations for the years ended December 31, 2014 and 2013	38
Consolidated Statements of Comprehensive Income for the years ended December 31, 2014 and 2013	39
Consolidated Statements of Stockholders' Equity for the years ended December 31, 2014 and 2013	40
Consolidated Statements of Cash Flows for the years ended December 31, 2014 and 2013	42
Notes to Consolidated Financial Statements	43

35

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Homeowners of America Holding Corporation

Irving, Texas

We have audited the accompanying consolidated balance sheets of Homeowners of America Holding Corporation and Subsidiaries (the Company) as of December 31, 2014 and 2013, and the related consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows for each of the two years in the period ended December 31, 2014.  The Company's management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Homeowners of America Holding Corporation and Subsidiaries as of December 31, 2014 and 2013, and the consolidated results of their operations and their cash flows for each of the two years in the period ended December, 2014, in conformity with accounting principles generally accepted in the United States of America.

WEAVER AND TIDWELL, L.L.P.

Dallas, Texas

March 27, 2015

36

Homeowners of America Holding Corporation

CONSOLIDATED BALANCE SHEETS

December 31, 2014 and 2013

	December 31, 2014			December 31, 2013
Assets:
Cash and cash equivalents	$	5,648,278		$	8,104,310
Short-term investments		1,231,881			4,151,011
Restricted cash and investments		3,790,000			1,000,000
Restricted fixed-maturity securities, available-for-sale, at fair value (amortized cost $539,558)		539,654			-
Fixed-maturity securities, available-for-sale, at fair value (amortized cost $3,827,268)		3,827,245			-
Long-term investments		3,430,000			1,960,000
Accrued investment income		55,908			8,853
Due and deferred premiums		5,089,131			4,169,824
Balance due from reinsurers		54,157,528			46,281,756
Property, equipment and software, net		344,495			244,516
Deferred policy acquisition costs		7,897,806			6,214,334
Prepaid expenses and other		552,728			128,195
Deferred tax assets, net		1,517,935			933,221
Total assets	$	88,082,589		$	73,196,020
Liabilities:
Loss and loss adjustment expenses	$	15,009,506		$	15,884,062
Advance premiums		74,172			90,854
Ceded reinsurance premiums payable		4,342,874			3,271,858
Unearned premiums		40,021,934			31,297,118
Unearned ceding commissions		11,200,317			8,067,162
Commissions payable, reinsurers and agents		3,754,929			3,716,423
General and other accrued expenses payable		2,232,547			1,906,265
Income tax payable		-			211,198
Taxes, licenses and other fees payable		765,782			474,503
Total liabilities		77,402,061			64,919,443
Stockholders' equity:
Common stock, $0.0001 par value per share; 40,000,000 shares authorized;
17,479,852 shares issued and 16,168,852 shares outstanding as of December 31, 2014 and 17,181,140 shares issued and 15,831,140 shares outstanding as of December 31, 2013		1,617			1,583
Treasury stock, $0.0001 par value per share; 1,311,000 common shares as of December 31, 2014 and 1,350,000 common shares as of December 31, 2013		(131	)		(135	)
Additional paid-in-capital		6,209,265			5,969,550
Accumulated other comprehensive income		73			-
Retained earnings		4,469,704			2,305,579
Total stockholders' equity		10,680,528			8,276,577
Total liabilities and stockholders' equity	$	88,082,589		$	73,196,020

See accompanying notes to consolidated financial statements.

37

Homeowners of America Holding Corporation

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Years Ended December 31, 2014 and 2013 

	2014			2013
Revenues:
Premiums earned	$	64,895,484		$	53,238,811
Ceded premiums		(60,484,640	)		(48,422,943	)
Net premiums earned		4,410,844			4,815,868
Policy fees		5,616,525			4,655,315
Ceding commissions and reinsurance profit share		16,651,464			11,805,811
Investment income, net of investment expenses		43,603			41,649
Loss adjustment and other fee income		1,530,234			1,232,123
Total revenue		28,252,670			22,550,766
Expenses:
Losses and loss adjustment expenses		2,930,295			2,259,107
Policy acquisition and other underwriting expenses		16,497,662			13,058,774
General and administrative expenses		5,496,391			4,224,898
Total expenses		24,924,348			19,542,779
Income before income taxes		3,328,322			3,007,987
Provision (benefit) for income taxes:
Current		1,748,911			1,155,634
Deferred		(584,714	)		(116,410	)
Total income taxes		1,164,197			1,039,224
Net income	$	2,164,125		$	1,968,763
Cumulative preferred stock dividends		-			(974,179	)
Net income available to common stockholders	$	2,164,125		$	994,584
Basic income per common share	$	0.13		$	0.15
Diluted income per common share	$	0.12		$	0.11
Cash dividend declared per common share	$	0		$	0

See accompanying notes to consolidated financial statements. 

38

Homeowners of America Holding Corporation

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Years Ended December 31, 2014 and 2013

	Year Ended
	December 31,
	2014		2013
Net income	$	2,164,125	$	1,968,763
Other comprehensive income:
Change in unrealized gain on investments:
Unrealized gain arising from the period		73		-
Deferred income taxes on securities		-		-
Total other comprehensive income, net of income taxes		73		-
Comprehensive income	$	2,164,198	$	1,968,763

See accompanying notes to consolidated financial statements.

39

Homeowners of America Holding Corporation

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

For the Year Ended December 31, 2014 

	Common Stock				Treasury Stock
	Shares		Amount		Shares			Amount			Additional Paid In Capital		Accumulated Other Comprehensive Income, net of Tax		Retained Earnings		Total Shareholders' Equity
Balance December 31, 2013		15,831,140	$	1,583		1,350,000		$	(135	)	$	5,969,550	$	-	$	2,305,579	$	8,276,577
Net Income		-		-		-			-			-		-		2,164,125		2,164,125
Total other comprehensive income, net of income taxes		-		-		-			-			-		73		-		73
Stock options exercised		10,250		1		-			-			7,849		-		-		7,850
Common stock issued		327,462		33		(39,000	)		4			170,243		-		-		170,280
Stock-based compensation		-		-		-			-			61,623		-		-		61,623
Balance December 31, 2014		16,168,852	$	1,617		1,311,000		$	(131	)	$	6,209,265	$	73	$	4,469,704	$	10,680,528

See accompanying notes to consolidated financial statements.

40

Homeowners of America Holding Corporation

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

For the Year Ended December 31, 2013 

	Preferred Stock Series A						Preferred Stock Series B						Common Stock				Treasury Stock
	Shares			Amount			Shares			Amount			Shares		Amount		Shares		Amount			Additional Paid-In Capital			Retained Earnings		Total Shareholders' Equity
Balance December 31, 2012		4,500,000		$	450			500,000		$	50			900,000	$	90		-	$	-		$	4,906,000		$	336,816	$	5,243,406
Net Income		-			-			-			-			-		-		-		-			-			1,968,763		1,968,763
Conversion of Series A Preferred Stock		(4,500,000	)		(450	)		-			-			11,250,000		1,125		-		-			-			-		675
Conversion of Series B Preferred Stock		-			-			(500,000	)		(50	)		1,250,000		125		-		-			-			-		75
Conversion of Convertible Note Payable		-			-			-			-			2,272,500		227		-		-			999,773			-		1,000,000
Conversion of Interest on Convertible Note Payable		-			-			-			-			158,640		16		-		-			69,792			-		69,808
Repurchase of Common Stock		-			-			-			-			-		-		1,350,000		(135	)		(5,265	)		-		(5,400	)
Adjustment of Par Value to reflect Forward Stock Split		-			-			-			-			-		-		-		-			(750	)		-		(750	)
Balance December 31, 2013		-		$	-			-		$	-			15,831,140	$	1,583		1,350,000	$	(135	)	$	5,969,550		$	2,305,579	$	8,276,577

See accompanying notes to consolidated financial statements.

41

Homeowners of America Holding Corporation

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2014 and 2013

	December 31, 2014			December 31, 2013
Cash flows from operating activities:
Net income	$	2,164,125		$	1,968,763
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation & amortization		128,107			88,770
Accounting charge related to stock-based compensation expense		61,623			-
Common stock compensation for management services		150,000			-
Other stock issuance expense		20,280			-
Amortization of premium/accretion of discount, net		62,053			-
Deferred tax assets		(584,714	)		(116,410	)
(Increase) decrease in:
Accrued investment income		(47,055	)		(418	)
Due and deferred premiums		(919,307	)		(526,688	)
Balance due from reinsurers		(7,875,772	)		(10,201,128	)
Deferred policy acquisition costs		(1,683,472	)		(939,819	)
Deferred ceding commissions		-			683,914
TWIA assessments		-			80,040
Prepaid and other		(424,533	)		2,101
Increase (decrease) in:
Losses and loss adjustment expenses		(874,556	)		4,242,766
Advance premiums		(16,682	)		54,355
Ceded reinsurance premiums payable		1,071,016			489,668
Unearned premiums		8,724,816			4,718,190
Ceded deferred premiums		-			(2,381,906	)
Unearned ceding commissions		3,133,155			1,240,384
Commissions payable, reinsurance & agents		38,506			(2,400,747	)
General and other accrued expenses		326,282			1,246,632
Funds held under reinsurance treaty		-			(36,573	)
Income tax payable		(211,198	)		(138,587	)
Taxes, licenses and other fees payable		291,279			43,121
Net cash provided by (used in) operating activities		3,533,953			(1,883,572	)
Cash flows from investing activities:
Purchases of long-term certificate of deposit		(3,430,000	)		(1,960,000	)
Maturities of long-term certificate of deposit		1,960,000			2,155,695
Purchases of short-term investments		(4,262,922	)		(1,752,658	)
Maturities of short-term investments		4,392,052			1,455,000
Purchases of fixed-maturity securities, available-for-sale		(5,033,879	)		-
Call or maturity of fixed-maturity securities, available-for-sale		605,000			-
Additions to furniture, equipment and software		(228,086	)		(99,130	)
Net cash used in investing activities		(5,997,835	)		(201,093	)
Cash flows from financing activities:
Repurchase of common stock		-			(5,400	)
Proceeds from stock options exercised		7,850			-
Net cash provided by (used in) financing activities		7,850			(5,400	)
Net decrease in cash and cash equivalents		(2,456,032	)		(2,090,065	)
Cash and cash equivalents, beginning of period		8,104,310			10,194,375
Cash and cash equivalents, end of the period	$	5,648,278		$	8,104,310
Supplemental disclosure of cash flow information:
Cash paid during the year for income tax	$	2,307,680		$	1,260,724
Non cash investing from financing activities
Repayment of debt on convertible note and conversion to common stock	$	-		$	1,000,000
Conversion of interest on convertible note	$	-		$	69,808

 See accompanying notes to consolidated financial statements.

42

Homeowners of America Holding Corporation

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Homeowners of America Holding Corporation ("HAHC") is an insurance holding company established to hold insurance entities for the purpose of marketing homeowner's insurance products on a national basis. HAHC owns 100% of Homeowners of America Insurance Company ("HAIC"). HAIC is domiciled in Texas, licensed in multiple states and is authorized to write various forms of homeowners and auto insurance. Coverage is concentrated in Texas. HAHC also owns 100% of Homeowners of America MGA, Inc. ("MGA"), a Texas Corporation, formed as a captive managing general agency to produce business for HAIC. HAHC, along with its subsidiaries HAIC and MGA, are collectively referred to as "the Company".

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Homeowners of America Holding Corporation and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). Certain reclassifications of prior year amounts have been made to conform to the current year presentation.

Cash and Cash Equivalents

Cash and cash equivalents include cash and highly liquid short-term investments, with original maturities of three months or less. The amount is carried at cost, which approximates fair value. At December 31, 2014 and 2013, cash and cash equivalents consist of cash on deposit with financial institutions, as well as money market mutual funds.

General and other accrued expenses payable as of December 31, 2014 and December 31, 2013, include $1.7 million and $1.2 million, respectively, of checks issued in excess of cash book balances, not yet presented for payment.

Investments

The Company's investments are comprised of short-term, restricted, long-term investments, and fixed-maturity securities classified as available-for-sale as of December 31, 2014 and short-term, restricted, and long-term investments as of December 31, 2013. Restricted investments and long-term investments are described below. Short-term investments include certificates of deposit with original maturities greater than three months and maturities of one year or less. Due to the short-term nature of these investments, significant changes in prevailing interest rates and economic conditions should not adversely affect the timing and amount of cash flows on such investments or their related values. Accordingly, certificates of deposit are carried at cost, which approximates fair value. Fixed-maturity securities are classified as available-for-sale when it is not management's intent to make profits by buying and selling the securities within a short period of time or when it is not management's intent to hold the securities to maturity.  Fixed-maturity securities classified as available-for-sale are carried at fair value. The unrealized holding gains and losses, net of applicable deferred income taxes, are shown as a separate component of stockholders' equity as a part of accumulated other comprehensive income (loss) and, as such, are not included in the determination of net income (loss).

As of December 31, 2014, the Company has restricted cash and investments, in the amount of $4.3 million, to the Department of Insurance in certain states as a condition of its Certificate of Authority for the purpose of meeting obligations to policyholders and creditors, which includes approximately $1.0 million of restricted assets. Restricted assets represent investments currently awaiting substitution with various states for matured securities. As of December 31, 2013, the Company had pledged to the Department of Insurance $1.0 million. Restricted and pledged assets are shown separately in the accompanying consolidated balance sheets as "Restricted cash and investments" and include money market accounts and certificates of deposits. "Restricted fixed-maturity securities, classified as available-for-sale" are shown separately in the accompanying consolidated balance sheets and recorded at fair value. With the approval of the Departments of Insurance, the Company may exchange the investments with other funds or investments. In respect to certificates of deposit, management intends to hold the portion of these restricted investments to their maturity. As such, these restricted certificates of deposit are carried at cost, which approximates fair value. Interest earned on these investments inures to the benefit of the Company.

The following table provides the Company's restricted cash and investments as of December 31, 2014 and December 31, 2013.

Restricted cash and investments	December 31, 2014		December 31, 2013
Money Market	$	300,000	$	215,000
Certificates of Deposit		3,490,000		785,000
US Treasury Bond		539,654		-
	$	4,329,654	$	1,000,000

As of December 31, 2014 and December 31, 2013, the Company's investments also include certificates of deposit that mature more than one year after the balance sheet date and are reflected on the consolidated balance sheets as Long-term investments. Based on management's intent to hold to maturity, these investments are carried at cost. Cost approximates fair value based on the rates currently offered for deposits of similar remaining maturities.

The Company's investments in certificates of deposits and money market accounts do not qualify as securities as defined in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 320, Investment – Debt and Equity Securities. Accordingly, the fair value disclosures required by FASB ASC Topic 820, Fair Value Measurements and Disclosures are not provided. The Company's fixed-maturity 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 where such securities are deemed to be other-than-temporarily impaired. Where applicable, the Company assesses investments of an issuer currently carrying a net unrealized loss. If in management's judgment, the decline in value is other than temporary, the cost of the investment is written down to fair value with a corresponding charge to earnings. Factors considered in determining whether an impairment exists include financial condition, business prospects and creditworthiness of the issuer, the length of time and magnitude that the asset value has been less than cost, and the ability and intent to hold such investments until the fair value recovers.

Comprehensive Income

FASB ASC Topic 220 - Comprehensive Income, requires that recognized revenues, expenses, gains and losses be included in net income (loss). Although certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the equity section of the consolidated balance sheet, these items, along with net income (loss), are components of comprehensive income. The Company characterizes their fixed income portfolio as available-for-sale securities when it is not management's intent to make profits by buying and selling the securities within a short period of time or when it is not management's intent to hold the securities to maturity, with appropriate adjustments to other comprehensive income. For the year ended December 31, 2014, the Company recorded $73 of unrealized gains on available-for-sale securities in other comprehensive income. There were no qualifying items reported in comprehensive income for the years ended December 31, 2013.

Recognition of Premium Revenues

Premiums are recognized as revenue on a daily pro rata basis over the policy term. The portion of premiums related to the unexpired term of policies in force as of the end of the measurement period and to be earned over the remaining term of those polices, is deferred and reported as unearned premiums.

Ceding Commissions and Reinsurance Profit Share

Ceding commissions represent acquisition costs associated with insurance risk ceded to reinsurers and is earned on a pro-rata basis over the life of the associated policy. Reinsurance profit share is additional ceding commissions payable to the Company based upon attaining specified loss ratios within individual treaty years.  Reinsurance profit share income is recognized when earned, which includes adjustments to earned reinsurance profit share based on changes in incurred losses.

Policy Fees

Policy fee income includes application fees which are intended to reimburse the Company for a portion of the costs incurred in establishing the insurance. Policy fees on policies where premium is traditionally paid in full upon inception of the policy are recognized when written, while fees charged on policies where premiums are paid in installments, are recognized when collected.

Loss Adjustment and Other Fee Income

Loss adjustment and other fee income is recognized as income when collected. There is no amount over 5 % of total revenue within this classification on the consolidated statements of operations for the year ended December 31, 2014 and December 31, 2013.

Property, Equipment and Software

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated on the straight-line method over the estimated useful lives of the assets, which range from three to five years. The cost and related accumulated depreciation of assets sold or disposed are removed from the accounts and the resulting gain or loss is included in the consolidated statements of operations. Maintenance and repairs are expensed as incurred.

Software installation and development is stated at cost, net of accumulated amortization. Amortization is calculated on a straight-line basis method over three years.

Impairment of Long-Lived Assets

Long-lived assets, such as property, equipment and software, are reviewed for impairment whenever business events or circumstances could lead to or indicate that the value of the asset may not be recoverable. The assessment of possible impairment is based on whether the carrying amount of the assets exceeds its fair value. The Company uses estimates of undiscounted future cash flows in determining the recoverability of long-lived assets. As of December 31, 2014 and 2013, no impairment has been recorded.

43

Homeowners of America Holding Corporation

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Deferred Policy and Acquisition Costs

Deferred policy acquisitions costs ("DAC") as of December 31, 2014 and 2013, consist of commissions, premium taxes and policy underwriting and production expenses which are incurred through and vary directly with, the level of production of new and renewal insurance business and are amortized over the terms of the policies they relate to. The method used in calculating DAC limits the amount of the deferred cost to their estimated realizable value, which gives effect to allocating their expense along with other period costs associated with the insurance business, in relation to the amount of gross premium earned on policies to which they relate and investment income. DAC is reviewed to determine if it is recoverable from future income, including investment income. The amount of DAC considered recoverable could be reduced in the near term if management's estimates of future premium and investment income is reduced which could impair the Company's ability to recover these costs.

Reserve for Losses and Loss Adjustment Expenses

The liability for losses and loss adjustment expenses ("LAE") are estimates of the amounts required to cover known incurred losses and LAE, developed through the review and assessment of loss reports, along with the development of known claims. In addition, loss and loss adjustment expense reserves include management's estimate of an amount for losses incurred but not reported ("IBNR"), determined from reviewing overall loss reporting patterns as well as the loss development cycles of individual claim cases. Such liabilities are necessarily based on estimates and while management believes that the amount is adequate, the ultimate liability may be more or less than the amounts provided. The approach and methods for making such estimates and for establishing the resulting liability are continually reviewed and any adjustments are reflected in current earnings.

Due and Deferred Premiums

Due and deferred premiums consist of uncollateralized premiums and agents' balances in the course of collection as well as premiums booked but not yet due.

Reinsurance

In the normal course of business, the Company seeks to reduce the overall exposure to losses that may arise from catastrophes or other events that cause unfavorable underwriting results by reinsuring certain levels of risk with other insurance enterprises or reinsurers. The Company uses only quality, financially rated reinsurers and continually monitors the financial ratings of these companies through its brokers. The amount and type of reinsurance purchased each year is based on management's analysis of liquidity and its estimate of its probable maximum loss and the conditions within the reinsurance market. The Company continually monitors its risk exposure through the use of the AIR modeling system and other modeling tools provided by its reinsurance brokers. Reinsurance premiums, expense reimbursements, and reserves related to reinsured business are accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts. Premiums paid for reinsurance are reported as reductions of earned premium income.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss carryforwards, and liabilities are measured using enacted tax rates expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. In assessing the realizable value of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.

44

Homeowners of America Holding Corporation

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Uncertain Tax Positions

The Company recognizes uncertain tax positions in the consolidated financial statements when it is more-likely-than-not the position will be sustained upon examination by the tax authorities. Such tax positions are initially and subsequently measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. The Company believes that it has appropriate support for the income tax positions taken and to be taken on its tax returns, and that its accruals for tax liabilities are adequate for all open tax years based on an assessment of many factors including experience and interpretations of tax laws applied to the facts of each matter. At December 31, 2014, the Company's tax years from 2010 through 2014 remain subject to examination.

Estimates

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 liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company's primary areas of estimate are for liabilities for unpaid losses and loss adjustment expenses, deferred policy acquisition costs, deferred tax asset valuation, and reinsurance. Actual results could differ significantly from those estimates.

Fair Value of Cash, Cash Equivalents and Short-term Investments

The carrying value for the Company's cash and cash equivalents and short-term investments approximate fair values as of December 31, 2014 and 2013 due to their short-term nature. Fair value for securities are based on the framework for measuring fair value established by FASB ASC Topic 820, Fair Value Measurements and Disclosures.

Fair Value Fixed-Maturity Securities held as Available-for-Sale

The Company's fixed-maturity securities held as available-for-sale are carried at fair value as of December 31, 2014. Fair value for securities are based on the framework for measuring fair value established by FASB ASC Topic 820, Fair Value Measurements and Disclosures.

Convertible Notes Payable

The Company accounts for convertible notes payable under FASB ASC Topic 470-20 – Debt with Conversion and Other Options, which requires issuers to assess whether or not an embedded conversion feature is required to be separately accounted for as a derivative liability for liability and equity components and if the conversion feature is beneficial to the holder. See Note 10 on Convertible Notes Payable for additional disclosure.

Stock Split

In August 2013, the Company effected a 2.5 for 1 forward stock split (the "Stock Split") of all of its issued and outstanding shares of common stock. All holders of the Company's Series A and Series B preferred shares converted their preferred shares to common stock prior to the effectiveness of the stock split. All share and per share information provided in this report reflects the effect of the split for all periods presented.

Stock Based Compensation

The Company accounts for stock-based compensation under the fair value recognition provisions of FASB ASC Topic 718 – Compensation – Stock Compensation, which requires the measurement and recognition of compensation for all stock-based awards made to employees and directors including stock options and restricted stock issuances based on estimated fair values. In accordance with FASB ASC Topic 718, the Company recognizes stock-based compensation, if any, in the consolidated statements of operations on a straight line basis over the vesting period of the stock award. For those stock awards vesting 100 % at the issue date, the Company recognizes stock-based compensation immediately.

Earnings (Loss) Per Share

Basic earnings (loss) per share of common stock is computed by dividing net income or loss, less cumulative preferred stock dividends for the period whether or not earned or paid, by the weighted-average number of common shares during the period.

Diluted earnings (loss) per share of common stock is computed by dividing net income or loss attributable to common stockholders, adjusted for the effect of potentially dilutive securities, by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include convertible notes payable, outstanding convertible preferred stock and common stock options.

45

Homeowners of America Holding Corporation

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.RECENT ACCOUNTING PRONOUNCEMENTS

Accounting Standards Update No. 2014-09. On May 28, 2014, the FASB issued Accounting Standards Update No. 2014-09 ("ASU 2014-09"), Revenue from Contracts with Customers, which modifies the guidance for revenue recognition. While insurance contracts are not within the scope of this updated guidance, the Company's fee income may be subject to this updated guidance. The Company is in the process of evaluating the new guidance, however, the adoption of this guidance is not expected to have a material effect on the Company's consolidated financial statements.  ASU 2014-09 is effective for annual and interim reporting periods beginning after December 16, 2016.

Accounting Standards Update No. 2014-12. On June 19, 2014, the FASB issued Accounting Standards Update No. 2014-12 ("ASU 2014-12"), Compensation-Stock Compensation: Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. ASU 2014-12 requires that a performance target that affects the vesting and that can be achieved after the requisite service period be treated as a performance condition. As of December 31, 2014, the Company has not issued stock options with performance targets under the 2005 Management Incentive Plan or the 2013 Equity Compensation Plan. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. The effective date of ASU 2014-12 is for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted.

Accounting Standards Update No. 2014-15. In August 2014, the FASB issued Accounting Standards Update No. 2014-15 ("ASU 2014-15"), Presentation of Financial Statements – Going Concern (Subtopic 205-40). The purpose of this update is to provide guidance about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 applies to all reporting entities and is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early adoption is permitted. Adoption of this guidance is expected to have no effect on the Company's consolidated financial statements.

3.RELATED PARTY TRANSACTIONS

In December 2012, HAHC entered into a Convertible Promissory Note with Inter-Atlantic Fund, L.P. and Phoenix Associates, Inc., ( companies controlled by a shareholder and former director, respectively). See Note 9 Convertible Notes Payable for additional disclosure.

In August 2013, HAHC entered into an agreement or the "Advisory Agreement", with Inter-Atlantic Advisors III, Ltd., or "Inter-Atlantic", under which Inter-Atlantic agrees to perform certain management services for the Company. A number of our directors are among the beneficial owners of Inter-Atlantic. The Advisory Agreement has an initial term of six years, to be automatically renewed from year-to-year thereafter, unless terminated by either party upon 60 days notice prior to the termination of the initial or any renewal term.  For its services, the Company will pay Inter-Atlantic an annual fee of $300,000, as well as, an annual grant of shares of our common stock with an aggregate fair market value of $150,000 at the time of grant, plus reimburse Inter-Atlantic's expenses incurred in connection with the performance of its service. As long as the Advisory Agreement is in effect and the fees and expense reimbursements are paid, the directors of the Company that are affiliated with Inter-Atlantic have agreed to waive any other compensation for their service as directors.

For the year ended December 31, 2014, the Company incurred an expense of $450,000 (of which $150,000 is represented by the issuance of 288,462 shares of common stock), for services performed under the Advisory Agreement.

For the year ended December 31, 2013, the Company incurred an expense of $125,000 for services performed under the Advisory Agreement.

4.INVESTMENTS

Investment income, net of investment expenses totaled $43,603 and $41,649 for the years ended December 31, 2014 and 2013, respectively.

For the year ended December 31, 2014, there were $73 in unrealized gains/(losses) on fixed-maturity securities held as available-for-sale. There were no realized gains or losses recognized for the periods due to the short term nature of the investments held. The intent is to hold to maturity certificates of deposit carried at amortized cost.

The following table provides the Company's short-term, restricted and long-term investment holdings by type of financial instruments that were used to estimate the fair value disclosures for financial instruments: 

	December 31, 2014						December 31, 2013
	Book Value			Fair Value Carrying Value			Book Value			Fair Value Carrying Value
Financial Assets:
Restricted certificates of deposit		$	3,490,000		$	3,490,000		$	785,000		$	785,000
Restricted money markets			300,000			300,000			215,000			215,000
Long-term investments			3,430,000			3,430,000			1,960,000			1,960,000
Short-term investments			1,231,881			1,231,881			4,151,011			4,151,011
		$	8,451,881		$	8,451,881		$	7,111,011		$	7,111,011

	December 31, 2014		December 31, 2013
	Range of Maturities	Interest Rates	Range of Maturities	Interest Rates
Restricted certificates of deposit	Less than 1 year	0.10% - 1.40%	Less than 1 year	0.10% - 0.25%
Restricted money markets	Less than 1 year	–	Less than 1 year	–
Long-term investments	More than 1 year	0.75% - 1.50%	More than 1 year	0.30% - 0.70%
Short-term investments	Less than 1 year	0.35% - 0.70%	Less than 1 year	0.20% - 1.24%

The following table provides the Company's fixed-maturity securities classified as available-for-sale which are carried at fair value as of December 31, 2014:

	December 31, 2014
			Gross Unrealized
	Amortized Cost		Gains		Losses			Fair Value
Fixed Maturities:
Obligations of states, municipalities and political subdivisions	$	3,827,268	$	6,331	$	(6,354	)	$	3,827,245
U.S. Treasury - held as restricted		539,558		96		-			539,654
Total Fixed Maturities	$	4,366,826	$	6,427	$	(6,354	)	$	4,366,899

The amortized cost and fair value of available-for-sale fixed-maturity securities at December 31, 2014, by contractual maturity, are shown in the following table.  Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	December 31, 2014
Remaining Time to Maturity	Amortized Cost Basis		Fair Value
Less than one year	$	570,236	$	569,734
One to five years		1,985,297		1,981,134
Five to ten years		162,124		162,519
More than ten years		1,649,169		1,653,512
Total	$	4,366,826	$	4,366,899

Other-than-temporary Impairment ("OTTI")

The Company regularly reviews its individual investment securities for OTTI. The Company considers various factors in determining whether each individual security is other-than-temporarily-impaired, including:

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

• the length of time and the extent to which the market value of the security has been below its cost or amortized cost;

• general market conditions and industry or sector specific factors;

• nonpayment by the issuer of its contractually obligated interest and principal payments; and

• the Company's intent and ability to hold the investment for a period of time sufficient to allow for the recovery of costs.

Securities with gross unrealized loss positions at December 31, 2014 were immaterial. The Company believes there were no fundamental issues such as credit losses or other factors with respect to any of its available-for-sale securities. The unrealized losses on investments in fixed-maturity securities were caused primarily by interest rate changes. It is expected that the securities would not be settled at a price less than par value of the investments. Because the declines in fair value are attributable to changes in interest rates or market conditions and not credit quality, and because the Company has the ability and intent to hold its available-for-sale investments until a market price recovery or maturity, the Company does not consider any of its investments to be other-than-temporarily impaired at December 31, 2014.

5.FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial assets carried at fair value have been classified, for disclosure purposes, based on the hierarchy established within FASB ASC Topic 820-10 – Fair Value Measurements and Disclosures. When market prices are not available, fair value is generally estimated utilizing valuation techniques that vary by asset class and incorporate available trade, bid and other market information, when available. The acceptable valuation techniques include (a) market approach, which uses prices or relevant information derived from market transactions for identical or comparable assets or liabilities, (b) the Income Approach, which converts future amounts such as cash flows or earnings to a single present value amount based on current market expectations about those future amounts, and (c) the Cost Approach, which is based on the amount that currently would be required to replace the service capacity of an asset. In certain circumstances, these valuation techniques may involve some level of management estimation and judgment which becomes significant with increasingly complex instruments or pricing models. Where appropriate, adjustments are included to reflect the risk premium inherent in a particular methodology, model or input used.

The fair value hierarchy is used to prioritize valuation inputs into three levels:

 Level 1 - unadjusted quoted prices in active markets for identical assets or liabilities. These inputs are considered to be the most reliable evidence of fair value.

 Level 2 – quoted prices for similar assets in active markets, quoted prices from those willing to trade in markets that are not active, or other inputs that are observable or can be corroborated by market data for the term of the investment. Such inputs include market interest rates and volatilities, spreads and yield curves.

 Level 3 – termed unobservable inputs which are utilized in situations where there is little or no market activity for the asset or liability at the measurement date. The approach typically involves a significant subjective management judgment toward the pricing of the security.

The Company's short-term investments comprised of certificates of deposit held at financial institutions which are not measured at fair value on a recurring basis. A portion of the Company's cash and cash equivalents include money market mutual fund accounts held at financial institutions which are measured at fair value on a recurring basis. Fixed-maturity securities held as available-for-sale are carried at fair value in our consolidated financial statements. The following tables provide information as of December 31, 2014 and 2013, about the Company's financial assets measured at fair value on a recurring basis:

	Fair Value Measurements Using
	Level 1		Level 2		Level 3		Total
As of December 31, 2014
Money market mutual funds	$	3,372,527	$	-	$	-	$	3,372,527
Restricted money market mutual funds		300,000		-		-		300,000
Securities-available-for-sale fixed-maturity:
Obligations of states, municipalities and political subdivisions		-		3,827,245		-		3,827,245
U.S. Treasury		-		539,654		-		539,654
Total	$	3,672,527	$	4,366,899	$	-	$	8,039,426

	Fair Value Measurements Using
	Level 1		Level 2		Level 3		Total
As of December 31, 2013
Money market mutual funds	$	5,903,478	$	-	$	-	$	5,903,478
Restricted money market mutual funds		-		-		-		-
Securities-available-for-sale fixed-maturity:
Obligations of states, municipalities and political subdivisions		-		-		-		-
U.S. Treasury		-		-		-		-
Total	$	5,903,478	$	-	$	-	$	5,903,478

The following methods and assumptions were used to estimate the fair value disclosures for financial instruments:

Money market mutual funds are valued at the closing price reported by the fund sponsor from an actively traded exchange. As the funds are generally maintained at a net asset value which does not fluctuate, cost approximates fair value. These are included as a Level 1 measurement in the table above. The fair values for available-for-sale fixed-maturity securities 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. 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 year ended December 31, 2014.

6.PROPERTY, EQUIPMENT, AND SOFTWARE NET

Property, equipment, and software net consist of the following as of December 31, 2014 and 2013, respectively:

	December 31, 2014			December 31, 2013			Useful Life
Computer equipment	$	231,860		$	222,225		3 years
Office equipment		17,409			13,999		5 years
Furniture and fixtures		142,450			106,524		5 years
Software installation and development		929,316			750,200		3 years
Total, at cost		1,321,035			1,092,948
Less accumulated depreciation and amortization		(976,540	)		(848,432	)
Property and equipment, net	$	344,495		$	244,516

Depreciation and amortization expense for property, equipment and software totaled $128,107 and $88,770 for the years ended December 31, 2014 and 2013, respectively.

7.DEFERRED POLICY ACQUISITION COSTS

Total capitalized deferred policy acquisition costs as of December 31, 2014 and December 31, 2013, comprised of commissions, premium taxes and costs associated with underwriting and issuing policies were $7,897,806 and $6,214,334, respectively.

Changes in deferred policy acquisition costs for the years ended December 31, 2014 and 2013 are as follows:

	2014			2013
Deferred policy acquisition charges, beginning of the period	$	6,214,334		$	5,274,515
Capitalized costs		14,429,241			11,451,353
Amortized costs		(12,745,769	)		(10,511,534	)
Deferred policy acquisition charges, end of the period	$	7,897,806		$	6,214,334

46

Homeowners of America Holding Corporation

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8.UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES

Losses and loss adjustment expenses (LAE), less related reinsurance and deductibles, are charged to operations as incurred. Unpaid losses and LAE are based on claims adjusters' estimates of the cost of settlement plus an estimate for losses IBNR based upon historical experience, industry loss experience, and management's estimates. Loss reserves reflect Company management's best estimate of the total cost of (i) claims that have been incurred but not yet paid, and (ii) claims that have been incurred, but not yet reported (IBNR). Loss reserves that are established by Company management are not an exact calculation of our liability, but rather loss reserves represent management's best estimate for our Company's liability based on the application of actuarial techniques and other projection methodology, taking into consideration other facts and circumstances known as of the balance sheet date. The process of setting reserves is complex and necessarily imprecise. The impact of both internal and external variables on ultimate loss and LAE costs is difficult to estimate. To arrive at its best estimate for losses, the Company uses damage estimating software developed and owned by acknowledged industry leader, Insurance Service Office. Reserve factors for IBNR are reviewed quarterly by an independent actuarial consultant. In addition, our appointed independent actuary attests to the adequacy of our unpaid claim reserve, including IBNR at calendar year end.

Losses and Loss Adjustment Expenses

The following table provides the reconciliation of the beginning and ending reserve balances for losses and LAE, gross of reinsurance for 2014 and 2013: 

	2014			2013
Reserve for losses and LAE, beginning of year	$	15,884,062		$	11,641,296
Reinsurance recoverables on losses and LAE		(15,090,175	)		(10,618,032	)
Reserve for losses and LAE, net of reinsurance recoverables at beginning of year		793,887			1,023,264
Add provision for claims and LAE occurring in:
Current year		2,882,295			2,015,107
Prior years		48,000			244,000
Net incurred losses and LAE during the current year		2,930,295			2,259,107
Deduct payments for claims and LAE occurring in:
Current year		2,111,930			1,927,482
Prior years		598,146			561,002
Net claim and LAE payments during the current year		2,710,076			2,488,484
Reserve for losses and LAE, net of reinsurance recoverables, at end of year		1,014,106			793,887
Reinsurance recoverables on losses and LAE		13,995,400			15,090,175
Losses and loss adjustment expenses at December 31	$	15,009,506		$	15,884,062

As a result of additional information on claims occurring in prior years becoming available to management, changes in estimates of provisions of claims and claim adjustment expenses were made resulting in an increase of $48,000 and $244,000 for the years ended December 31, 2014 and 2013, respectively.

9.CONVERTIBLE NOTES PAYABLE

As of December 31, 2013, the Convertible Promissory Note agreements with Inter-Atlantic Fund, L.P. and Phoenix Associates, Inc. (companies controlled by a shareholder and former director, respectively) in the amounts of $950,000 and $50,000, respectively, with an interest rate equal to 10 % per annum (accelerating to 12.5 % per annum in the event of default) were converted into 2,306,152 and 124,988 common shares, respectively.

During the year ended December 31, 2013, interest expense on these notes totaled $68,164.

10.STOCKHOLDERS' EQUITY

Preferred Stock

As of December 31, 2014 and December 31, 2013, the Company has 20,500,000 shares of preferred stock, convertible, 12.50 % cumulative, $0.0001 par value per share, authorized and none issued and outstanding.

Common Stock

As of December 31, 2014, the Company had 40,000,000 shares authorized and 17,479,852 shares issued and 16,168,852 shares outstanding of $0.0001 par value common stock. Holders of common stock are entitled to one (1) vote for each share of common stock held at all meetings of stockholders.

As of December 31, 2013, the Company had 40,000,000 shares authorized and 17,181,140 shares issued and 15,831,140 shares outstanding of $0.0001 par value common stock. Holders of common stock are entitled to one (1) vote for each share of common stock held at all meetings of stockholders.

There were no common stock warrants issued during the years ended December 31, 2014 and 2013.

11.EARNINGS (LOSS) PER SHARE

The following table represents the reconciliation of the Company's basic earnings per common share and diluted earnings per common share computations reported on the Consolidated Statements of Operations for the year ended December 31, 2014 and 2013:

	Year Ended
	December 31,
	2014		2013
Basic earnings per common share
Net income	$	2,164,125	$	1,968,763
Cumulative dividend		-		(974,179	)
Adjusted net income	$	2,164,125	$	994,584
Weighted average common shares outstanding		16,126,689		6,777,047
Basic earnings per common share	$	0.13	$	0.15
	Year Ended
	December 31,
		2014		2013
Diluted earnings per common share
Net income	$	2,164,125	$	1,968,763
Add interest expense on convertible promissory notes		-		45,540
Adjusted net income	$	2,164,125	$	2,014,303
Weighted average common shares outstanding		16,162,352		16,731,140
Effect of diluted securities:
Stock options		1,287,250		902,500
Diluted common shares outstanding		17,449,602		17,633,640
Diluted earnings per common share	$	0.12	$	0.11

12. STOCK BASED COMPENSATION

The Company accounts for stock-based compensation under the fair value recognition provision of FASB ASC Topic 718 – Compensation – Stock Compensation.

Incentive Plans

The Company's 2005 Management Incentive Plan (the "2005 Plan") provides for granting of stock options to enable the Company to obtain and retain the services of selected persons, both employees and directors, considered to be essential to the long-range success of the Company. Under the 2005 Plan, options may be granted to purchase a total not to exceed 789,475 shares in the aggregate (as adjusted for the 2.5:1 forward split), made up of original issue shares, treasury share or a combination of the two. Options have a life of 10 years and vest at a rate of 25% per year, beginning 12 months from their date of issue. At December 31, 2013, options to purchase 783,750 shares have been granted under the 2005 Plan.

On October 24, 2013, the Board of Directors ("the Board) of the Company unanimously approved and adopted the 2013 Equity Compensation Plan (the "2013 Plan") which became effective October 24, 2013. The 2013 Plan provides granting of stock options, incentive stock options, stock awards, and restricted stock units to enable the Company to obtain and retain the services of selected persons, both employees and directors, considered to be essential to the long-range success of the Company. Under the 2013 Plan, options may be granted to purchase a total not to exceed 2,925,000 shares, made up of original issue shares, treasury shares or a combination of the two. The 2013 Plan will terminate on October 23, 2023. At December 31, 2014, options to purchase 1,965,000 shares of common stock and 39,000 shares of common stock in the form of a stock award had been granted under the 2013 Plan.

At December 31, 2014, options to purchase under the 2005 Plan was 773,500 shares and under the 2013 Plan was 1,965,000 shares for a total of 2,738,500 shares.

A summary of the activity of the Company's stock option plan (as adjusted for the 2.5:1 forward split) for the years ended December 31, 2014 and 2013 is as follows:

	Number of Options			WeightedAvg. Exercise Price		Weighted Avg.Remaining Cont. Term		AggregateIntrinsic Value (in thousands)
Outstanding at December 31, 2012		783,750		$	0.78		5.91	$	-
Granted		1,925,000		$	0.50
Outstanding at December 31, 2013		2,708,750		$	0.58		8.41	$	4
Granted		40,000		$	1.00
Exercised		(10,250	)	$	0.50
Outstanding at December 31, 2014		2,738,500		$	0.59		7.32	$	226
Exercisable at December 31, 2014		1,287,250		$	0.67		5.95	$	75

The fair value of options granted is estimated using a market value approach and the Black-Scholes option pricing model using the following assumptions for the year ended December 31, 2014 and 2013:

	Year Ending December 31, 2014		Year Ending December 31, 2013
Dividend Yield		0.00 %		0.00 %
Expected Volatility		22 %		25 %
Risk-free interest rate		1.65 %		1.75 %
Expected life (in years)		5.21		5.21

The Company records stock-based compensation expense related to granting stock options in general and administrative expenses.  The Company recognized compensation expense as follows for the year ended December 31, 2014 and 2013:

	Year Ending
	December 31,
	2014			2013
Total gross compensation expense	$	61,623		$	-
Total tax benefit associated with compensation expense		(7,677	)		-
Total net compensation expense	$	53,946		$	-

As of December 31, 2014, the Company expects to record compensation expense in the future as follows:

	Year Ending December 31,
	2015			2016			2017			2018			2019
Total gross unrecognized compensation expense	$	34,944		$	34,944		$	34,944		$	28,365		$	81
Tax benefit associated with unrecognized compensation expense		(686	)		(686	)		(686	)		(556	)		-
Total net unrecognized compensation expense	$	34,258		$	34,258		$	34,258		$	27,809		$	81

Stock options granted in 2014 had a weighted average grant date fair value of $0.02. Stock options granted in 2013 had a weighted average grant date fair value of $0.10.

47

Homeowners of America Holding Corporation

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13.INCOME TAXES

The Company files a consolidated federal income tax return. Allocation of tax expense or refunds among the consolidated group is based on separate return calculations.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:

	2014		2013
Gross Deferred Tax Assets:
Loss reserve discount	$	14,915	$	12,713
Unearned premium reserve discount		339,224		235,548
Organization costs (net of amortization)		64,390		62,239
Unearned ceding commissions		3,808,108		2,742,835
Stock-based compensation		7,677		-
Total Deferred Tax Assets		4,234,314		3,053,335
Valuation allowance		-		-
Total Adjusted Deferred Tax Assets	$	4,234,314	$	3,053,335
Deferred Tax Liabilities
Deferred policy acquisition costs	$	2,685,253	$	2,112,873
Property, equipment and software		31,126		7,241
Total deferred tax liabilities		2,716,379		2,120,114
Net Deferred Tax Assets	$	1,517,935	$	933,221

As of December 31, 2014 and 2013, it was determined that no valuation allowance against deferred tax assets was considered necessary.

In assessing the realizability of deferred tax assets, management utilizes the criteria established under Accounting Standards Codification (ASC) 740 to annually evaluate the need for a deferred tax valuation allowance in order to determine whether it is more likely than not that some or all of the deferred tax assets will not be realized. Management considers the reversal of deferred tax liabilities and projected future taxable income in making this assessment. The results of operations during the years ended December 31, 2014 and 2013, continued growth in the Company's insurance policy and premium base with a wider demographic and geographic spread, as well as changes in the Company's reinsurance and catastrophe coverage were also considered important factors in assessing the realizability of deferred tax assets.

The total income tax provision (benefit) incurred is different from that which would be obtained by applying the statutory federal income tax rate to income before income taxes. The significant items causing this difference for 2014 and 2013 are as follows:

2014	Tax Effect		Tax Rate
Income before taxes at statutory rate	$	1,131,629		34.0	%
Meals and entertainment		9,613		0.29	%
Other		22,955		0.69	%
Total	$	1,164,197		34.98	%

2013	Tax Effect		Tax Rate
Income before taxes at statutory rate	$	1,022,716		34.0	%
Meals and entertainment		9,800		0.33	%
Other		6,708		0.22	%
Total	$	1,039,224		34.55	%

48

Homeowners of America Holding Corporation

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14.REINSURANCE

Certain premiums and benefits are ceded to other insurance companies under various reinsurance agreements. The reinsurance agreements provide HAIC with increased capacity to write larger risks and maintain its exposure to loss within its capital resources. Ceded reinsurance contracts do not relieve HAIC from its obligations to policyholders. HAIC remains liable to its policyholders for the portion reinsured to the extent that any reinsurer does not meet the obligations assumed under the reinsurance agreements. To minimize its exposure to significant losses from reinsurer insolvencies, HAIC evaluates the financial condition of its reinsurers and monitors concentrations of credit risk arising from similar geographic regions, activities, or economic characteristics of the reinsurers.

For the 12 month period commencing April 1, 2014 and ending March 31, 2015, the Company reinsured its property and casualty risk under quota share reinsurance treaties with third party reinsurers. The treaties cover 80% of its risk under property coverage on any one loss occurrence not to exceed $110 million; 10% of its risk under property coverage on any one loss occurrence not to exceed $4 million and approximately 64% of its risk under casualty coverage.

Property catastrophe treaties, which went into effect on the same day and having the same term as the quota share treaties, develop over four layers and 20% of our risk on property coverage on a gross loss of $110 million excess of $4 million per occurrence. The Company's net retention is $400,000 per loss occurrence.

Commencing August 1, 2014 and ending November 30, 2014, the Company purchased a fifth layer of property catastrophe reinsurance with third party reinsurers to cover its potential maximum loss during the 2014 hurricane season.  The layer extended the Company's coverage to $140 million, excess of $4 million of ultimate net loss arising out of each loss occurrence. When this coverage was in force, the Company's net retention on each loss occurrence remained at $400,000.

From April 1, 2013 through March 31, 2014, the Company reinsured with various third party reinsurers under residential quota share reinsurance treaties, 90% of its risk. The reinsurers' liability under the quota share arrangement beginning in respect to any one loss occurrence shall not exceed $80 million. Property catastrophe treaties, which went into effect on the same day and have the term as the quota share treaties, develop over four layers and cover a gross loss of $76 million excess of $4 million per occurrence. The Company's net retention is $400,000 per occurrence.

The Company also purchases reinsurance covering non-weather losses (two occurrences) in excess of a gross loss of $500,000 per occurrence for all coverage lines (a net loss of $50,000). This coverage, which was in force during 2014 and 2013, had been obtained principally to protect the Company in the event of a large fire loss.

The effects of reinsurance on premiums written and earned were as follows, for the years ended December 31, 2014 and December 31, 2013:

	2014								2013
	Written				Earned				Written				Earned
Direct premiums		$	73,620,300			$	64,895,484			$	57,957,011			$	53,238,811
Ceded premiums			(65,079,700	)			(60,484,640	)			(51,683,634	)			(48,422,943	)
Net Premiums		$	8,540,600			$	4,410,844			$	6,273,377			$	4,815,868

49

Homeowners of America Holding Corporation

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Following is a summary of HAIC's reinsurance balances under the above described reinsurance treaties as of December 31, 2014 and December 31, 2013:

	2014		2013
Ceded premiums payable	$	4,342,874	$	3,271,858
Ceded loss adjustment expenses	$	4,763,808	$	4,424,649
Ceded loss and loss adjustment expense reserve	$	13,995,400	$	15,090,175
Ceded unearned premium reserve	$	35,442,177	$	27,924,037
Ceded earned premiums	$	60,484,640	$	48,422,943

The following is a summary of the names of each of HAIC's significant reinsurer and the amount due from each for paid losses, LAE and unearned premium.

	2014						2013
	Paid Losses & LAE		Unearned Premium		Total Receivable		Paid Losses & LAE		Unearned Premium		Total Receivable
Maiden Reinsurance Company	$	85,203	$	-	$	85,203	$	84,395	$	-	$	84,395
NGM Insurance Company		53,033		-		53,033		11,630		-		11,630
Arch Reinsurance Company		378,977		-		378,977		460,006		7,511,308		7,971,314
Endurance Reinsurance Corp. of America		138,392		-		138,392		178,974		3,129,712		3,308,686
Catlin RE		214,945		4,002,194		4,217,139		-		-		-
Montpelier Insurance Company		107,472		2,001,097		2,108,569		-		-		-
Swiss Re		198,953		4,002,193		4,201,146		-		-		-
RLI Insurance Company		151,525		-		151,525		123,916		-		123,916
SCOR Reinsurance Company		396,192		4,002,194		4,398,386		213,273		3,129,712		3,342,985
Endurance Specialty		19,853		-		19,853		92		-		92
Houston Casualty		7,804		-		7,804		27		-		27
R+V Versicherung AG		590,652		4,913,513		5,504,165		308,614		3,825,256		4,133,870
Everest Re		490,410		8,024,398		8,514,808		177,864		6,259,424		6,437,288
Taiping		94,895		1,600,877		1,695,772		26,680		938,914		965,594
Qatar Re		276,910		4,894,615		5,171,525		-		-		-
SCOR Switzerland		-		-		-		44		-		44
Paladin CAT Management		-		-		-		49		-		49
Odyssey RE		137,195		2,001,097		2,138,292		88,981		3,129,712		3,218,693
SCOR Global		68,541		-		68,541		328		-		328
Lloyds Syndicates		60,451		-		60,451		603		-		603
Partner RE Europe LTD (France)		-		-		-		104		-		104
Total	$	3,471,403	$	35,442,178	$	38,913,581	$	1,675,580	$	27,924,038	$	29,599,618

15.CONCENTRATION OF CREDIT RISK

The Company has exposure and remains liable in the event of an insolvency of one of its primary reinsurers. Management and its reinsurance intermediary regularly assess the credit quality and ratings of its reinsurer base companies.

Financial instruments which potentially subject the Company to credit risk consist principally of cash, money market accounts on deposit with financial institutions, money market funds, certificates of deposit and fixed-maturity securities, as well as premium balance in the course of collection. At times, the Company's bank deposits may exceed the FDIC limit.

The concentration of credit risk with respect to premium balances in the course of collection is limited, due to the large number of insureds comprising the Company's customer base. However, substantially all of the Company's revenues are derived from customers in Texas, which could be adversely affected by economic conditions, an increase in competition, or other environmental changes.

50

Homeowners of America Holding Corporation

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

16.COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases its corporate office space and certain office equipment under non-cancelable operating leases which expire at various dates through 2019. Future minimum lease payments required under the non-cancelable operating leases are as follows for the years ending December 31:

2015	$	$166,848
2016		174,709
2017		91,284
2018		22,188
2019		12,519
	$	$467,548

Rent expense under such leases in the year ended December 31, 2014 and December 31, 2013 was $123,187 and $101,746, respectively.

Litigation

The Company is the defendant in routine litigation involving matters that are incidental to the claims function of the Company's insurance business for which estimated losses are included in unpaid loss and loss adjustment expense reserves in the Company's consolidated financial statements. It is management's opinion that these lawsuits are not material individually or in the aggregate to the Company's financial position, results of operations, or cash flow.

17.REGULATORY REQUIREMENTS AND RESTRICTIONS

HAIC is subject to the laws and regulations of the State of Texas and the regulations of any other states in which HAIC conducts business. State regulations cover all aspects of HAIC's business and are generally designed to protect the interests of insurance policyholders, as opposed to the interests of stockholders. The Texas Insurance Code requires all property and casualty insurers to have a minimum of $2.5 million in capital stock and $2.5 million in surplus. HAIC has capital and surplus in excess of this requirement.

As of December 31, 2013, HAIC's total statutory surplus was $8,963,573 (capital stock of $2,500,000 and surplus of $6,463,573).

As of December 31, 2014, HAIC's total statutory surplus was $12,317,735 (capital stock of $2,500,000 and surplus of $9,817,735).

As of December 31, 2014, HAIC had restricted cash and investments totaling $4.3 million pledged to the Department of Insurance in certain states as a condition of its Certificate of Authority for the purpose of meeting obligations to policyholders and creditors, which includes $1.0million of restricted assets.  Restricted assets represent investments currently awaiting substitution with various states for matured securities. As of December 31, 2013, HAIC had pledged to the Department of Insurance $1.0 million. See Note 1 Organization and Summary of Significant Accounting Policies, Investments for additional disclosure.

The Texas Insurance Code limits dividends from insurance companies to their stockholders to net income accumulated in the Company's surplus account, or "earned surplus".

The maximum dividend that may be paid without approval of the Insurance Commissioner is limited to the greater of 10% of the statutory surplus at the end of the preceding calendar year or the statutory net income of the preceding calendar year. No dividends were paid by HAIC in 2014 or 2013.

HAIC prepares its statutory-based financial statements in conformity with accounting practices prescribed or permitted by the Texas Department of Insurance. Prescribed statutory accounting practices primarily include those published as statements of SAP by the NAIC, as well as state laws, regulations and general administrative rules. Permitted statutory accounting practices encompass all accounting practice not so prescribed. As of December 31, 2014 and 2013, there were no material permitted statutory accounting practice utilized by HAIC.

51

Homeowners of America Holding Corporation

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

18.SUBSEQUENT EVENTS

On February 2, 2015, the Company issued 227,273 shares of common stock at $0.66 a share to Inter-Atlantic Management, Inc. or "Inter-Atlantic". A number of our directors are among the beneficial owners of Inter-Atlantic. Per the terms of the Advisory Agreement dated August 1, 2013, Inter-Atlantic Management, Inc. will be issued annually on February 1^st , a grant of the Company's common stock which in aggregate will have a fair market value of $150,000 at the time of grant.

On February 16, 2015 the Company completed placement of its new 2015 catastrophe reinsurance program with a panel of third party reinsurers, effective April 1, 2015. Coverage was extended to $150 million in excess of $5 million in the new treaty year.

On February 16, 2015, the Company completed placement of its new 2015 quota share reinsurance program with a panel of third party reinsurers, effective April 1, 2015. The quota share ratio remains the same (90%) as the current program. Certain participants on the program will change from the 2014 program.

52

ITEM 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

ITEM 9A.    Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain "disclosure controls and procedures," as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (our principal executive officer) and Chief Financial Officer (our principal financial officer), as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Management's Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over our financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that our receipts and expenditures are being made only in accordance with authorization of our management and directors, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect 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 the policies or procedures may deteriorate. Our management, with the participation of our principal executive officer and principal financial officer, conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of December 31, 2014, our internal control over financial reporting was effective.

53

This Form 10-K Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal controls over financial reporting. Management's report was not subject to attestation by our independent registered public accounting firm pursuant to the permanent exemption for smaller reporting company filers from the internal control audit requirement of Section 404(b) of the Sarbanes-Oxley Act of 2002.

Remediation of Previously Reported Material Weakness

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. For the year ended December 31, 2013, it was concluded that a material weakness existed in our internal control over financial reporting related to an incorrect classification of cash and cash equivalents, short-term investments, and general and other accrued expenses during the first, second, and third quarters of 2013.

This material weakness resulted in certain adjustments to the Consolidated Balance Sheets and Consolidated Statements of Cash Flows for the year to date period ended March 31, 2013, including comparatively presented periods, that we previously included in our Form S-1/A filed on August 9, 2013 and for the year to date period ended June 30, 2013 and September 30, 2013, including comparatively presented periods, that we previously included in our quarterly reports on Forms 10-Q filed in 2013. These restatements resulted in money market mutual fund accounts held at financial institutions which were previously classified as short-term investments to be now classified as cash and cash equivalents. In addition, checks issued in excess of cash book balances, not yet presented for payment, which were previously classified as cash and cash equivalents are now classified as general and other accrued expenses payable.

In response to the material weakness described above, our financial reporting review process now includes, a determination and review of (i) checks issued in excess of cash book balances, not yet presented for payment, classified as general and other accrued expenses payable and (ii) money market mutual fund accounts held at financial institutions classified as cash and cash equivalents in the Consolidated Balance Sheets.

Based on the measures taken and implemented, management has tested the newly implemented control activities and found them to be effective and has concluded that the material weakness described above has been remediated as of December 31, 2014.

Changes in Internal Control over Financial Reporting

The Company does not have any changes in our internal controls over financial reporting to report for the year ended December 31, 2014 which have materially affected or would likely materially affect our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the disclosures and procedures, we recognize that any controls and procedures no matter how well designed and operated can produce only reasonable assurance of achieving the desired control objectives.  In addition, implementation of possible controls and procedures depends on management's judgment in evaluation of their benefits relative to cost.

ITEM 9B.    Other Information

None.

54

PART III

ITEM 10.    Directors, Executive Officers and Corporate Governance

The following is a list of the names, ages and positions of our directors and executive officers. The directors hold office for one year terms and until their successors have been elected and qualified. The executive officers hold office for one year terms or until their successors are elected by the board of directors. The executive officers and directors of Homeowners of America Insurance Company are the same as our executive officers and directors, except Debbie L. Carter and Richard Backus are directors of Homeowners of America Insurance Company, but not the Company. Andrew S. Lerner is not a director of Homeowners of America Insurance Company.

Name	Age	Position
Spencer W. Tucker	69	Director and Chief Executive Officer
Frederick S. Hammer	78	Director
Brett G. Baris	40	Director
James F. Leary	85	Director
Richard L. Viton	49	Director
Andrew S. Lerner	49	Director
Michael C. Rosentraub	61	Chief Financial Officer, Treasurer, and Secretary
Debbie L. Carter	49	Senior Vice President of Operations
Michael S. Cox	47	Vice President, Director of Sales & Marketing
Brent W. Parker	48	Vice President, Director of Claims
Efram Ware	45	Vice President, Product Development

Directors and Executive Officers

Spencer W. Tucker is the Founder, President and Chief Executive Officer of Homeowners of America Holding Corporation "HAHC" and its subsidiaries. Mr. Tucker has served on our board of directors since 2005.  Mr. Tucker has been our Chief Executive Officer since April 2006. He has over 50 years of insurance industry experience. Before starting HAHC, Mr. Tucker started and managed the Texas programs of ASI Lloyds, a subsidiary of ARX Holding Corporation,  as a Vice President of that company. Mr. Tucker has served as President and CEO of American Capitol Insurance Company (Houston), Associates Insurance Group (Dallas), Associates Financial Life Insurance Company (Dallas), Associates Property and Casualty Insurance Company (Dallas), Southeast Surplus Underwriters (Beaumont). He has also served in senior executive capacities with Vesta County Mutual (Dallas), Ranchers and Farmers Mutual (Beaumont), and AVCO Financial Services (Newport Beach, California). Mr. Tucker is a Fellow of the Life Management Institute with specialties in Accounting and Finance. Mr. Tucker has a BS in Business Administration from Cal-State University, Hayward, California. Mr. Tucker's extensive experience in the insurance business, including in an executive capacity with various insurers, makes him qualified to serve on our board of directors.

Frederick S. Hammer has served on our board of directors since 2005. Mr. Hammer has been the Co-Chairman of Inter-Atlantic Group since 1994 and is a member of the firm's investment committee. Mr. Hammer served as Executive Vice President of The Chase Manhattan Bank, where he was responsible for the bank's global consumer activities including its retail branch network and consumer lending and deposit businesses. He also served as Chairman, President and Chief Executive Officer of Mutual of America Capital Management Corporation where he directed a $7 billion investment portfolio. Other positions held include President of SEI Asset Management Group, where he originated their multi-manager investment operations; Chairman and Chief Executive Officer of Meritor Financial Group; Executive Vice President of Associates Corp. of North America; and Vice President of Bankers Trust Co. where he was secretary of the Asset/Liability Management Committee. Mr. Hammer is a former Director of VISA and VISA International. Mr. Hammer holds an A.B. degree in Mathematics, magna cum laude, from Colgate University and received his M.S. and Ph.D. degrees in Economics from Carnegie-Mellon University. He taught Finance and Banking at The Wharton School, The University of Indiana, and New York University's Graduate School of Business Administration. Mr. Hammer's extensive knowledge and experience in the area of finance and investment, as well as his experience as a director of a publicly held company, makes him qualified to serve on our board of directors.

Brett G. Barishas served on our board of directors since 2005. Mr. Baris is a Partner of Inter-Atlantic Group, where he has been employed since 1998, and is a member of Inter-Atlantic Group's investment committee. From 2007-2009, Mr. Baris was also the Executive Vice President of special purpose acquisition company Inter-Atlantic Financial, Inc. Mr. Baris was a Vice President of Guggenheim Securities, LLC, Inter-Atlantic Group's former NASD broker-dealer operation, until 2003, and held series 7, series 24 and series 63 NASD licenses. Prior to joining Inter-Atlantic Group, Mr. Baris spent two years as an analyst in the Financial Institutions Group of Salomon Smith Barney Inc. At Salomon Smith Barney, Mr. Baris worked predominantly on collateralized debt offerings and securitizations in the student loan finance area. Mr. Baris is a Director of Inter-Atlantic portfolio companies Ceannate Corp., HedgeCo Networks, LLC, and Tio Networks, Inc. He is also a Founder and Director of Credibility Capital, Inc. Mr. Baris holds a B.A. in Economics, magna cum laude, from Tufts University and an M.B.A. from Columbia Business School. He is a member of the Phi Beta Kappa National Honor Society and the Beta Gamma Sigma International Honor Society. Mr. Baris's extensive experience in finances and investments, as well as prior board experience, makes him qualified to serve on our board.

James F. Learyhas served on our board of directors since 2005. Mr. Leary has been Managing Director of Benefit Capital SouthWest, Inc., a financial advisory firm located in Dallas, TX since 1999. Previously, he founded and was Managing General Partner of Sunwestern Investment Group, Dallas, TX, one of the largest venture capital groups in the Southwest. Under his leadership, Sunwestern formed domestic limited partnerships as well as offshore investment companies to invest in portfolio companies. Sunwestern was one of the first venture groups to use Small Business Investment Companies, partially funded by the U.S. government, to complement the Group's investments. During his professional career, Mr. Leary has held high level executive positions including Senior Executive Vice President, Director and Chief Financial Officer of The Associates First Capital Corporation, a large financial services conglomerate and now part of Citigroup, Inc. Before joining The Associates, Mr. Leary was employed by CIT Financial Corporation, New York, NY, as well as its banking subsidiary, National Bank of North America. Mr. Leary is a Director of several funds managed by Capstone Asset Management Company, Houston, TX. Mr. Leary earned his Undergraduate Degree from the School of Foreign Service, Georgetown University, and his Masters Degree in Banking and Finance from New York University. He also attended the advanced Management Program at the Graduate School of Business Administration at Harvard University. Mr. Leary's background in investment banking, extensive executive experience with a large financial services corporation, as well as his prior board experience, makes him qualified to serve on our board of directors.

Richard L. Viton has served on our board of directors since 2009. Mr. Viton is a Partner of Inter-Atlantic Group which he joined in 2008 and is a member of Inter-Atlantic Group's investment committee. Mr. Viton is currently a Managing Director for Samuel A. Ramirez & Co, Inc., the largest Hispanic-owned investment bank. With over 25 years of financial services experience as a senior level investment banker and previously in a corporate finance role, Mr. Viton has significant industry client relationships and extensive transaction execution experience. Mr. Viton has specialized in the insurance sector in Managing Director roles at UBS Investment Bank as well as Credit Suisse, with particular strength in its cross-over with other financial services sectors including asset management, transaction processing, finance companies, and banking. Mr. Viton holds a Master of Management degree from the J.L. Kellogg School of Management and a Bachelor of Arts in Economics from Northwestern University. Mr. Viton is a member of the Association of Insurance and Financial Analysts. Mr. Viton's over 25 years of experience of investment banking and corporate finance, his significant industry relationships and experience with the insurance industry, makes him qualified to serve on our board of directors.

Andrew S. Lerner was appointed to our board of directors in October 2012. Mr. Lerner is the Managing Partner of Inter-Atlantic Group, where he has been employed since 1995. From 2007-2009, Mr. Lerner was also the Chief Executive Officer of special purpose acquisition company Inter-Atlantic Financial, Inc. Mr. Lerner was also President and Managing Director of Guggenheim Securities, LLC, Inter-Atlantic Group's former broker-dealer operation, until 2003. He was responsible for its day-to-day affairs including all supervisory, financial, regulatory, compliance and broker-dealer activities. Mr. Lerner is a Director of HedgeCo Networks, LLC, a Director of Ceannate Corp. and an advisory board member of Tio Networks, Inc., which are portfolio companies of Inter-Atlantic. He is a former Director of Higher One Holdings, Inc. and several other Inter-Atlantic Group current and past portfolio companies. Mr. Lerner has over 20 years of experience in the financial services industry. Prior to joining Inter-Atlantic Group, he served as an investment banker in the Financial Institutions Group of Smith Barney Inc. for four years and in its Mortgage and Asset Finance Group for two years. Mr. Lerner holds a B.S.E. in Electrical Engineering and Computer Science from Princeton University and an M.B.A. in Finance from The Wharton School, University of Pennsylvania. Mr. Lerner's extensive experience in the financial services industry, understanding of regulatory and compliance matters, as well as his executive experience and prior board memberships, makes him qualified to serve on our board of directors.

Michael C. Rosentraubis the Chief Financial Officer of HOAIC since May 2011. Mr. Rosentraub graduated from The University at Albany with a Bachelor of Science degree in Accounting and Business Administration. Mr. Rosentraub has over 20 years of experience in the insurance and financial services industries within the United States, Europe, and Asia. Prior to joining Homeowners of America, Michael held senior management positions with Citibank, CitiFinancial, The Associates and Associates Insurance Group in finance, insurance product and program development, claims, risk management and vendor management.

Debbie L. Carteris the Senior Vice President, Operations of HOAIC since April 2006. Ms. Carter received her Bachelors of Business Administration in Business Management from the University of Texas at Arlington. Ms. Carter began working in the insurance industry while attending college and has spent most of her career in the personal lines area of property and casualty insurance. Just prior to joining Homeowners of America, Ms. Carter held a supervisory underwriting position with Wellington Financial Services. Ms. Carter served several years as Operations Manager for Clark & Co., Inc., a Texas MGA, where she obtained valuable experience in many aspects of insurance operations with a special emphasis on underwriting and claims.

Michael S. Cox is the Vice President, Director of Sales and Marketing of HOAIC since February 2009. Mr. Cox is a graduate of Stephen F. Austin State University where he received his Bachelor of Business Administration degree in Marketing. Mr. Cox has over 17 years of insurance industry experience with most of his career spent in property and casualty focused on personal lines. Prior to joining Homeowners of America, Mr. Cox worked with Safeco Insurance as a Regional Sales Manager in the Louisiana and Oklahoma markets. In addition, Mr. Cox worked for AIG Agency Auto as a Regional Sales and Marketing Manager overseeing the Texas, Colorado and New Mexico markets.

Brent W. Parker is the Vice President, Director of Claims of HOAIC since April 2010. Mr. Parker attended college at Texas Tech University and graduated from Tarleton State University where he received his Bachelor of Business Administration degree in General Business. Mr. Parker has over 20 years of insurance industry experience with property and casualty claims in both commercial and personal lines and catastrophe claims. Prior to joining Homeowners of America, Mr. Parker was a Claims Consultant with American Contractors Insurance Group. Before joining ACIG, he was a Vice President and Claims Manager with Beacon Insurance Group. Mr. Parker has claims experience in Texas, South Carolina and Virginia, in addition to his experience in over 20 other states. Mr. Parker has served on the Dallas/Fort Worth Claims Managers Council, as an officer for the Dallas Claims Association, a member of the Texas Claims Association, and has served on the Loss Committee for the Association of Fire and Casualty Companies of Texas. Mr. Parker obtained professional designations of CRIS as a Construction Risk and Insurance Specialist and MLIS as a Management Liability Insurance Specialist and he is currently a member of the Dallas Claims Association.

Efram Ware is the Vice President, Product Development since June 2014. Mr. Ware holds an MBA from Texas Southern University and an undergraduate degree from Georgia State University. Prior to joining Homeowners of America, Mr. Ware was the Product Development Manager at Assurant in Miami, Florida. Mr. Ware has over 15 years of insurance industry experience.

Section 16(a) Beneficial Ownership Reporting Compliance

The Company does not have a class of securities registered under the Exchange Act and therefore its directors, executive officers, and any persons holding more than ten percent of the Company's common stock are not required to comply with Section 16 of the Exchange Act.

Corporate Governance

The Company confirms there has been no material changes to the procedures by which security holders may recommend nominees to the Company's board of directors.

Code of Ethics

The Company has adopted a code of ethics applicable to all employees and directors, including our chief executive officer and chief financial officer. A copy may be obtained, without charge, by written request to the Company Attention: Corporate Secretary.

Information Relating to Our Audit Committee of the Board of Directors

The purpose of the Audit Committee is to assist our Board of Directors in the oversight of the integrity of the consolidated financial statements of our company, our company's compliance with legal and regulatory matters, the independent auditor's qualification and independence, and the performance of our company's independent auditors and independent actuaries. The primary responsibilities of the Audit Committee are set forth in its charter, and include various matters with respect to the oversight of our company's accounting and financial reporting process and audits of the consolidated financial statements of our company on behalf of our Board of Directors. The Audit Committee also selects the independent certified public accountants to conduct the annual audit of the consolidated financial statements of our company; reviews the proposed scope of such audit; reviews accounting and financial controls of our company with the independent public accountants and our financial accounting staff; and reviews and approves transactions between us and our directors, officers, and their affiliates. We are not required to have an Audit Committee consisting solely of independent directors, as we are neither listed on NASDAQ, nor the New York Stock Exchange. The Audit Committee currently consists of Messrs. Leary, Baris, and Viton. Mr. Leary, an independent director, serves as Chairman of the Audit Committee. The Board of Directors has determined that Mr. Leary qualifies as an "audit committee financial expert" in accordance with the applicable rules and regulations of the SEC.

55

ITEM 11.    Executive Compensation

Compensation of Executive Officers

The following table sets forth the 2014 and 2013 compensation for our named executive officers.

Name and Principal Position	Year	Salary		Bonus		Stock Award			Total
Spencer W. Tucker	2014	$	220,000	$	52,500	$	-		$	272,500
Chief Executive Officer	2013	$	200,476	$	-	$	-		$	200,476
Debbie L. Carter	2014	$	150,000	$	30,000	$	520	(1)	$	180,520
Senior Vice President of Operations	2013	$	137,636	$	-	$	-		$	137,636
Michael C. Rosentraub	2014	$	150,000	$	30,000	$	520	(1)	$	180,520
Chief Financial Officer	2013	$	137,887	$	-	$	-		$	137,887

(1) Represents 1,000 shares of common stock at $0.52 per share issued as a stock award under the Company's 2013 Equity Compensation Plan.

Employment Agreements

We entered into an employment agreement with Mr. Tucker on November 11, 2005, pursuant to which Mr. Tucker agreed to serve as chief executive officer of the Company. Mr. Tucker's employment agreement provides for an annual base salary of $100,000, which shall be reviewed by the board of directors annually and may be increased based on such factors the board considers relevant, and the board may also, in its sole discretion, provide an annual bonus. The employment agreement further entitles Mr. Tucker to participate in the Company's stock option, pension, retirement, deferred compensation, savings, life, medical, dental, disability or other welfare benefit plans maintained by the Company for its employees. Mr. Tucker may also participate in any perquisite programs determined by the board and be reimbursed for reasonable business travel. The agreement is terminable by the Company for cause with no severance payment. If the agreement is terminated without cause the Company shall pay a severance payment equal to the amount of the base salary, in the rate in effect immediately prior to the termination, for an 18 month period and the Company shall continue to provide any other benefits provided under the agreement for such time period. If the agreement is terminated due to death or disability, there is no severance payment. The agreement may also be terminated by Mr. Tucker for "good reason" (including assignment of significantly different duties, failure of Company to obtain assumption of the agreement upon change in control, certain relocation of place of business and material, sustained reduction in base salary) upon 30 days prior written notice. If the agreement is not renewed by the Company, (other than as a result of the executive's death, disability, termination for cause) or if the executive terminates the agreement for "good reason," the severance period shall be one (1) year. Mr. Tucker is subject to non-confidentially and non-disparagement obligations both during and after employment with the Company. He is further subject to non-solicitation obligation for 2 years after termination and non-compete obligations for a restriction period of 18 months from termination.

We have not entered into employment agreements with any of our other current executive officers.

Director Compensation

Our non-employee Directors received the following annual compensation in 2014:

Name	Fees Earned or paid in cash ($)		Option Awards ($)		All Other (1) Compensation		Total Compensation
Brett G. Baris (2)	$	-	$	-	$	957	$	957
Frederick S. Hammer (2)	$	-	$	-	$	2,806	$	2,806
James F. Leary	$	35,004	$	-	$	949	$	35,953
Andrew S. Lerner (2)	$	-	$	-	$	957	$	957
Richard L. Viton (2)	$	-	$	-	$	957	$	957

(1) Reflects reimbursement of expenses relating to participation in board meetings.

(2) In August 2013, we entered into an Advisory Agreement with Inter-Atlantic Advisors, III, Ltd., "Inter-Atlantic". Brett G. Baris, Frederick S. Hammer, Andrew S. Lerner, and Richard L. Viton are among the beneficial owners of Inter-Atlantic.  For its services, the Company will pay Inter-Atlantic an annual fee of $300,000, as well as, an annual grant of shares of our common stock with an aggregate fair market value of $150,000 at the time of grant, plus reimburse Inter-Atlantic's expenses incurred in connection with the performance of its service.  The directors of the Company that are affiliated with Inter-Atlantic have agreed to waive any other compensation for their service as our directors. During 2014, the Company paid Inter-Atlantic $300,000 for its services, as well as an annual grant of 288,462 shares of common stock with an aggregate fair market value of $150,000.

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Outstanding Equity Awards at Fiscal Year End

The following table sets forth all outstanding equity awards held by our named executive officers as of the end of last fiscal year. 

	Option Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable			Option Exercise Price ($)		Option Expiration Date
Spencer W. Tucker		-		1,000,000	(1)	$	0.50	10/23/2023
		-		1,000,000
Debbie L. Carter		25,000		-		$	0.40	1/8/2017
		62,500		-			0.50	4/9/2017
		162,500		-			0.80	12/18/2017
		-		200,000	(1)		0.50	10/23/2023
		250,000		200,000
Michael C. Rosentraub		62,500		-		$	0.60	4/30/2021
		-		225,000	(1)		0.50	10/23/2023
		62,500		225,000

(1)One-fifth of the stock options vest on each anniversary of the grant date, beginning October 24, 2014.

ITEM 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Securities Authorized for Issuance under Equity Compensation Plans

The following table sets forth information as of December 31, 2014 regarding securities authorized for issuance under the  2005 Management Incentive Plan and the 2013 Equity Compensation Plan, which has been approved by our shareholders.

	Number of securities to beissued upon exercise ofoutstanding options, warrants and rights		Weighted-averageexercise price ofoutstanding options, warrants and rights			Number of securitiesremaining available forfuture issuance underequity compensationplans (excludingsecurities reflected in column (a))
	( a )		( b )			( c )
Equity compensation plans approved by security holders (1)		2,738,500		$	0.59		921,000
Equity compensation plans not approved by security holders		-			-		-
Total		2,738,500		$	0.59		921,000

(1) Represents shares issuable upon the exercise of outstanding stock options issued under the 2005 Management Incentive Plan and the 2013 Equity Compensation Plan.

57

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information known to us regarding beneficial ownership of our common stock as of March 26, 2015 by our executive officers and directors (individually and as a group) and each person who is known by us to beneficially own more than five percent of our common stock.

Except as otherwise indicated, we believe that each of the beneficial owners and stockholders listed below has sole voting and investment power with respect to such shares, subject to community property laws, where applicable. Unless otherwise noted, the address of each stockholder is c/o Homeowners of America Holding Corporation, 1333 Corporate Drive, Suite 325, Irving, TX 75038.

Beneficial ownership is determined in accordance with the rules of the SEC, and includes any shares of common stock as to which a person has sole or shared voting power or investment power and any shares of common stock which the person has the right to acquire within 60 days through the exercise of any option, warrant or right, through conversion of any security or pursuant to the automatic termination of a power of attorney or revocation or a trust, discretionary account or similar arrangement. 

	Common Stock
Name of Beneficial Owner	Shares Beneficially Owned (1)		Percent of Class (2)
Executive Officers and Directors:
Andrew S. Lerner (3)		1,612,754		9.84 %
Spencer W. Tucker (4)		1,375,000		8.39 %
Brett G. Baris (5)		1,142,020		6.96 %
Frederick S. Hammer		731,468		4.46 %
Richard L. Viton		695,879		4.24 %
Debbie L. Carter (6)		353,500		2.16 %
Michael C. Rosentraub (7)		171,000		1.04 %
Michael S. Cox (8)		146,000		*
Brent W. Parker (9)		96,000		*
James F. Leary (10)		26,250		*
Efram Ware		-		-
Officers and Directors as a Group (11 persons)		6,349,871		38.73 %
Principal Stockholders:
Berco Limited (11)		2,043,851		12.46 %
Partners Group Secondary 2004 L.P. (12)		1,762,821		10.75 %
Pfizer Master Retirement Trust (13)		2,043,851		12.46 %
The Prudential Insurance Company of America (14)		1,021,925		6.23 %
* less than 1%

( 1) In determining beneficial ownership, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares (1) voting power which includes the power to vote, or to direct the voting of, such securities and/or (2) investment power which includes the power to dispose, or to direct the disposition, of such security. In addition, for the purposes of this chart, a person is deemed to be the beneficial owner of a security if that person has the right to acquire beneficial ownership of such security within 60 days, including, but not limited to, any right to acquire: (a) through exercise of an option, warrant or right; (b) through the conversion of security; (c) pursuant to the power to revoke a trust, discretionary account or similar arrangement; or (d) pursuant to the automatic termination of a trust, discretionary account or similar arrangement.

( 2)Based upon 16,397,125 shares of common stock issued and outstanding as of March 26, 2015. Shares of common stock that are subject to options currently exercisable within 60 days of March 27, 2015 are deemed outstanding for computing the percentage ownership of the person holding such options but not deemed outstanding for computing the percentage ownership of any other person.

( 3)Mr. Lerner beneficially owns more than 5% of our common stock. The address for Mr. Lerner is 419 Park Avenue South, Suite 807 New York, NY 10016.

( 4)Mr. Tucker beneficially owns more than 5% of our common stock and includes 200,000 shares underlying options that are exercisable on or within 60 days of March 27, 2015. The address for Mr. Tucker is 1333 Corporate Drive, Suite 325 Irving, TX 75038.  

( 5) Mr. Baris beneficially owns more than 5% of our common stock. The address for Mr. Baris is 419 Park Avenue South, Suite 807 New York, NY 10016.

( 6)Includes 290,000 shares underlying options that are exercisable on or within 60 days of March 27, 2015. 

( 7)Includes 170,000 shares underlying options that are exercisable on or within 60 days of March 27, 2015.

( 8)Includes 145,000 shares underlying options that are exercisable on or within 60 days of March 27, 2015.

( 9)Includes 95,000 shares underlying options that are exercisable on or within 60 days of March 27, 2015.

(10)Includes 20,000 shares underlying options that are exercisable on or within 60 days of March 27, 2015.

(11)The address of Berco Limited is c/o Misland Capital, 9 Upper Belgrave Street, London, Berkshire, UK SW1 X88D.

(12)The address of Partners Group Secondary 2004, L.P. is Tudor House, Le Bordage, St. Peter Port, Guernsey, UK, GY1 1DB.

(13)The address of Pfizer Master Retirement Trust is c/o Northern Trust Company, C1-N, 801 South Canal Street, Chicago, IL 60607.

(14)The address of The Prudential Insurance Company of America is 100 Mulberry Street GC2 10th Floor, Newark, NJ 07102.

58

ITEM 13.    Certain Relationships and Related Transactions, and Director Independence

Transactions with Related Persons

Inter-Atlantic Fund, L.P. Promissory Note

As of December 31, 2013, the Convertible Promissory Note agreement with Inter-Atlantic Fund, L.P. (a company controlled by a shareholder) in the amount of $950,000, with an interest rate equal to 10 % per annum (accelerating to 12.5 % per annum in the event of default) was converted into 2,306,152 common shares.

Advisory Agreement with Inter-Atlantic Advisors III, Ltd.

In August 2013, we entered into an agreement or the "Advisory Agreement", with Inter-Atlantic Advisors III, Ltd., or "Inter-Atlantic", under which Inter-Atlantic agrees to perform certain management services for the Company. A number of our directors are among the beneficial owners of Inter-Atlantic. The Advisory Agreement has an initial term of six years, to be automatically renewed from year-to-year thereafter, unless terminated by either party upon 60 days' notice prior to the termination of the initial or any renewal term. For its services, we will pay Inter-Atlantic an annual fee of $300,000, as well as, an annual grant of shares of our common stock with an aggregate fair market value of $150,000 at the time of grant, plus reimburse Inter-Atlantic's expenses incurred in connection with the performance of its service. As long as the Advisory Agreement is in effect and the fees and expense reimbursements are paid, the directors of the Company that are affiliated with Inter-Atlantic have agreed to waive any other compensation for their service as our directors.

Other than the agreements mentioned above and any compensation agreements and other arrangements which are described under "Executive Compensation," there have been no transactions or proposed transactions in which the amount involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years in which any of our directors, executive officers or beneficial holders of more than 5% of the outstanding shares of our common stock, or any of their respective relatives, spouses, associates or affiliates, has had or will have any direct or material indirect interest.

Director Independence

The Board of Directors is required to determine which directors satisfy the criteria for independence under the rules of its listing stock exchange. To be considered independent, a director may not maintain any relationship that would interfere with his or her independent judgment in completing the duties of a director. The rules state that certain relationships preclude a board finding of independence, including a director who is, or during the past three years was, employed by the company, and any director who accepts any payments from the company in excess of $120,000 during the current year or any of the past three years, other than director fees or payments arising solely from investments in the company's securities. Rules often provide that ownership of company stock by itself would not preclude a board finding of independence. Our Board of Directors consists of six directors, including five non-employee directors. Our Board of Directors has concluded there is at least one non-employee director whom is independent, Mr. James F. Leary.

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ITEM 14.    Principal Accounting Fees and Services

Principal Registered Public Accounting Firm

Weaver and Tidwell, L.L.P. was our principal registered accounting firm for fiscal years 2014 and 2013.

Audit Fees

The following table sets forth the aggregate fees for services provided by Weaver and Tidwell, L.L.P., our principal accountant for the years ended December 2014 and 2013: 

	Year Ended December 31, 2014		Year Ended December 31, 2013
Audit Fees	$	46,000	$	133,500
Audit Related Fees		900		9,000
Tax Fees		-		-
All Other Fees		-		253
Total	$	46,900	$	142,753

"Audit Fees" represent fees billed for professional services rendered for the audit of our annual financial statements, review of our quarterly financial statements included in our quarterly reports on Form 10-Q, and audit services provided in connection with other statutory and regulatory filings. "All Other Fees" represent fees billed for services provided to us not otherwise included in the categories above.

Pre-Approval Policies

All auditing services and non-auditing services are pre-approved by the audit committee.

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PART IV

ITEM 15.    Exhibits, Financial Statement Schedules

The following documents are filed as part of this Report:

(1) Consolidated Financial Statements. In Part II, Item 8, we have included our consolidated financial statements, the notes thereto and the report of the Independent Registered Public Accounting Firm.

(2) Financial Statement Schedules. Schedule VI – Supplemental Information Concerning Consolidated Property and Casualty Insurance Operations is filed as part hereof along with the related report of the Independent Registered Public Accounting Firm included in Part II, Item 8. All other schedules have been omitted because the information required to be set forth therein is not applicable or is included in the consolidated financial statements or notes thereto.

(3) Exhibits. We hereby file as part of this Annual Report on Form 10-K the Exhibits listed on the attached Exhibit Index. Exhibits which are incorporated herein by reference can be inspected and copied at the public reference facilities maintained by the SEC, 100 F Street, N.E. Room 1580, Washington D.C. 20549, at prescribed rates or on the SEC website at www.sec.gov.

Schedule VI. Supplemental Information Concerning Consolidated Property and Casualty Insurance Operations

The following table provides certain information related to the Company's property and casualty operations as of, and for the periods presented (in thousands): 

	As of December 31,			For the Year Ended December 31,
	Reserves for Unpaid Losses and LAE			Incurred Loss and LAE current year			Incurred Loss and LAE prior years			Paid Losses and LAE			Net Investment Income
2014		$	15,010		$	2,882		$	48		$	2,710		$	44
2013		$	15,884		$	2,015		$	244		$	2,488		$	42

	As of December 31,			For the Year Ended December 31,										As of December 31,
	Policy Deferred Acquisition Cost (DAC)			Amortization of DAC				Net Premiums Written			Net Premiums Earned			Unearned Premiums
2014		$	7,898		$	(12,746	)		$	8,541		$	4,411		$	40,022
2013		$	6,214		$	(10,512	)		$	6,273		$	4,816		$	31,297

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EXHIBIT INDEX

Exhibit Number	Description
3.1	Amended and Restated Certificate of Incorporation of Homeowners of America Holding Corporation. (Incorporated by reference to the correspondingly numbered exhibit to our Current Report on Form 8-K (File No. 333-189686), filed December 30, 2013.)
3.2	Bylaws of Homeowners of America Holding Corporation. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed August 8, 2013, effective August 9, 2013, as amended.)
4.1	Specimen Certificate Evidencing Shares of Common Stock. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.)
4.2	Specimen Certificate Evidencing Shares of Series A Preferred Stock. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.)
4.3	Specimen Certificate Evidencing Shares of Series B Preferred Stock. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.)
4.4	Investor Rights Agreement, dated November 11, 2005, between Homeowners of America Holding Corporation and certain of its security holders. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.)
4.5	Stock Restriction Agreement, dated November 11, 2005, between Homeowners of America Holding Corporation and Spencer W. Tucker. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.)
10.1	2005 Management Incentive Plan. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.)
10.2	Stock Purchase Agreement, dated September 15, 2005, between Homeowners of America Holding and Richard P. Backus. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.)
10.3	Amendment No. 1 to Stock Purchase Agreement, dated November 11, 2005, between Homeowners of America Holding and Richard P. Backus. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.)
10.4	Securities Purchase Agreement, dated November 11, 2005, between Homeowners of America Holding Corporation and certain investors. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.)
10.5	Employment Agreement, dated November 11, 2005, between Homeowners of America Holding Corporation and Spencer W. Tucker. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.)
10.6	Property Catastrophe Excess of Loss Reinsurance Contract, between Homeowners of America Insurance Company and participants American Standard Insurance Company of Wisconsin, Sirius International Insurance Group, Underwriters at Lloyds and SCOR Global P&C SE Paris. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.)
10.7	Property Per Risk Excess of Loss Reinsurance Contract, between Homeowners of America Insurance Company and participants Hannover Rueckversicherung-Aktiengesellschaft, Lloyds Syndicate No. 2791 MAP Underwriting (MAP), Lloyds Syndicate No. 2001 Amlin Underwriting Limited (AML) and Lloyds Syndicate No. 2987 BRIT (BRIT), effective April 1, 2012. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.)
10.8	Residential Quota Share Reinsurance Contract, between Homeowners of America Insurance Company and participants Arch Reinsurance Company, Endurance Reinsurance Corporation of America, SCOR Reinsurance Company and RLI Insurance Company, effective April 1, 2012. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.)
10.9	Residential Property Quota Share Reinsurance Contract, between Homeowners of America Insurance Company and participant R+V Versicherung AG, effective April 1, 2011. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.)
10.10	Private Passenger Automobile Excess of Loss Reinsurance Contract, between Homeowners of America Insurance Company and Maiden Reinsurance Services LLC, effective June 1, 2011. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.)
10.11	Addendum No. 1 to Private Passenger Automobile Excess of Loss Reinsurance Contract, between Homeowners of America Insurance Company and Maiden Reinsurance Services LLC, effective June 1, 2011. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.)
10.12	Private Passenger Automobile Quota Share Reinsurance Contract, between Homeowners of America Insurance Company, Maiden Reinsurance Services, LLC and NGM Insurance Company, effective June 1, 2011. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.)
10.13	Top Layer Property Catastrophe Excess of Loss Reinsurance Contract between Homeowners of America Insurance Company, Participants R+V Versicherung AG, Houston Casualty Company; UK Branch, SCOR Global P&C SE Paris, Lloyds Syndicate No. 1274 Antares (AUL), Lloyds Syndicate No. 2001 Amlin Underwriting Limited (AML), Lloyds Syndicate No.2987 BRIT (BRIT) and Walbaoum International/Sirius International Insurance Group, effective August 15, 2012. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.)
10.14	Top Layer Property Catastrophe Excess of Loss Reinsurance Contract between Homeowners of America Insurance Company and participants Houston Casualty Company; UK Branch, SCOR Global P&C SE Paris, Lloyds Syndicate No. 2001 Amlin Underwriting Limited (AML), Lloyds Syndicate No. 2791 MAP Underwriting (MAP) and Lloyds Syndicate No.2987 BRIT (BRIT), effective August 15, 2012. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.)
10.15	Underlying Property Catastrophe Excess Reinsurance Contract, between Homeowners of America Insurance Company and participant R+V Versicherung AG effective April 1, 2012. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.)
10.16	Print/Mail Service Contract, dated September 1, 2006, between Homeowners of America Insurance Company and PRIMORIS Services LLC. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.)
10.17	Policy Tracking System (PTS) Product and Service Agreement, dated January 12, 2006, between Homeowners of America Holding Corporation and Information Distribution & Marketing, Inc. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.)
10.18	Contract Addendum for Auto Line Business to PTS Contract, dated February 9, 2008, between Homeowners of America Holding Corporation and Information Distribution & Marketing, Inc. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.)
10.19	Underlying Property Catastrophe Excess of Loss Reinsurance Contract between Homeowners of America Insurance Company and R+V Veraicherung A.G., effective April 1, 2013. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.)
10.20	Property Catastrophe Excess of Reinsurance Contract, between Homeowners of America Insurance Company and participants Sirius International Insurance Company, Lloyd's Underwriters and Companies and R+V Veraicherung A.G., effective April 1, 2013. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.)
10.21	Property Per Risk Excess of Loss Reinsurance Contract between Homeowners of America Insurance Company , Everest Reinsurance Company and Hannover Rück SE, effective April 1, 2013. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.)
10.22	Residential Quota Share Reinsurance Contract between Homeowners of America Insurance Company and Odyssey Reinsurance Company, effective April 1, 2013. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.)
10.23	Residential Property Quota Share Reinsurance Contract between Homeowners of America Insurance Company and R+V Veraicherung A.G., effective April 1, 2013. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.)
10.24	Residential Quota Share Reinsurance Contract between Homeowners of America Insurance Company and participants Arch Reinsurance Company, Endurance Specialty Insurance Ltd., Everest Reinsurance Company, SCOR Reinsurance Company, ad Taiping Reinsurance Co. Ltd., effective April 1, 2013. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.)
10.25	Advisory Agreement between Homeowners of America Holding Company and Inter-Atlantic Advisors III, Ltd., effective on the effective date of this Registration Statement. (Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.)
10.26	Stock Purchase Agreement, dated as of August 31, 2013, by and among Homeowners of America Holding Company, Inc., Spencer Tucker and Richard Backus 8-K September 6, 2013. (Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K (File No. 333-189686), filed September 6, 2013.)
10.27	Homeowners of America Holding Company, Inc. 2013 Equity Compensation Plan 8-K October 30, 2013. (Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K (File No. 333-189686), filed December 30, 2013.)
10.28	Underlying Property Catastrophe Excess of Loss Reinsurance Contract between Homeowners of America Insurance Company and R+V Versicherung A.G., effective April 1, 2014. (Incorporated by reference to Exhibit 10.1 to our quarterly report on Form 10-Q for the period ended June 30, 2014 (File No. 333-189686), filed August 14, 2014.)
10.29	Property Catastrophe Excess of Loss Reinsurance Contract between Homeowners of America Insurance Company and participants Everest Reinsurance Company, Shelter Mutual Insurance Company, Sirius International Insurance Corporation, and Lloyd's Underwriters, effective April 1, 2014. (Incorporated by reference to Exhibit 10.2 to our quarterly report on Form 10-Q for the period ended June 30, 2014 (File No. 333-189686), filed August 14, 2014.)
10.30	Property Per Risk Excess of Loss Reinsurance Contract between Homeowners of America Insurance Company and participants Everest Reinsurance Company and Hannover Rück SE, effective April 1, 2014. (Incorporated by reference to Exhibit 10.3 to our quarterly report on Form 10-Q for the period ended June 30, 2014 (File No. 333-189686), filed August 14, 2014.)
10.31	Residential Quota Share Reinsurance Contract between Homeowners of America Insurance Company and participants Catlin Insurance Company Ltd., Everest Reinsurance Company, Montpelier Reinsurance Ltd., Odyssey Reinsurance Company, SCOR Reinsurance Company, and Taiping Reinsurance Co. Ltd., effective April 1, 2014. (Incorporated by reference to Exhibit 10.4 to our quarterly report on Form 10-Q for the period ended June 30, 2014 (File No. 333-189686), filed August 14, 2014.)
10.32	Addendum 1 to the Residential Quota Share Reinsurance Contract between Homeowners of America Insurance Company and participants Catlin Insurance Company Ltd., Everest Reinsurance Company, Montpelier Reinsurance Ltd., Odyssey Reinsurance Company, SCOR Reinsurance Company, and Taiping Reinsurance Co. Ltd., effective April 1, 2014. (Incorporated by reference to Exhibit 10.5 to our quarterly report on Form 10-Q for the period ended June 30, 2014 (File No. 333-189686), filed August 14, 2014.)
10.33	Residential Property Quota Share Reinsurance Contract between Homeowners of America Insurance Company and participants Q-RE LLC and R+V Versicherung A.G., effective April 1, 2014. (Incorporated by reference to Exhibit 10.6 to our quarterly report on Form 10-Q for the period ended June 30, 2014 (File No. 333-189686), filed August 14, 2014.)
10.34	Reinstatement Premium Protection Reinsurance Contract between Homeowners of America Insurance Company and Tokio Millennium Re AG, effective April 1, 2014. (Incorporated by reference to Exhibit 10.7 to our quarterly report on Form 10-Q for the period ended June 30, 2014 (File No. 333-189686), filed August 14, 2014.)
10.35	Multiple Line Quota Share Reinsurance Agreement between Homeowners of America Insurance Company and Swiss Reinsurance America Corporation, effective April 1, 2014. (Incorporated by reference to Exhibit 10.8 to our quarterly report on Form 10-Q for the period ended June 30, 2014 (File No. 333-189686), filed August 14, 2014.)
10.36	Top Layer Property Catastrophe Excess of Loss Reinsurance Contract between Homeowners of America Insurance Company and participants American Standard Insurance Company of Wisconsin, Everest Reinsurance Company, Hamilton Re, Ltd., Hannover Re Ltd., Shelter Reinsurance Company, XL Re Ltd., Fubon Insurance Co., Ltd., Sirius International Insurance Corporation for and on behalf of P.R.A.M., Taiping Reinsurance Co. Ltd., and Lloyd's Underwriters, effective August 1, 2014. (Incorporated by reference to Exhibit 10.1 to our quarterly report on Form 10-Q for the period ended September 30, 2014 (File No. 333-189686), filed November 14, 2014.)
10.37*†	Two-Year Property Catastrophe Excess of Loss Reinsurance Contract between Homeowners of America Insurance Company and participants Everest Reinsurance Company, Markel Bermuda Limited, Shelter Mutual Insurance Company, XL Re, Ltd., Sirius International Insurance Corporation for and on behalf of P.R.A.M., Lloyd's Underwriters, Allied World Assurance Company, Ltd., American Standard Insurance Company of Wisconsin, Hannover Re (Bermuda) Ltd., Mapfre Re, Compania De Reaseguros, S.A., MS Frontier Reinsurance Limited, American International Reinsurance Company, Ltd., and Fubon Insurance Co., Ltd. effective April 1, 2015.
10.38*†	Fourth Property Catastrophe Excess of Loss Reinsurance Contract between Homeowners of America Insurance Company and Certain Insurance Companies, effective April 1, 2015.
10.39*†	Residential Property Net Quota Share Reinsurance Contract between Homeowners of America Insurance Company and R+V Versicherung A.G., effective April 1, 2015.
10.40*†	Property Catastrophe Excess of Loss Reinsurance Contract between Homeowners of America Insurance Company and participants XL Re Ltd., Lloyd's Underwriters, and Hamilton Re, Ltd., effective April 1, 2015.
10.41*†	Residential Property Quota Share Reinsurance Contract between Homeowners of America Insurance Company and Qatar Reinsurance Company LLC, Bermuda Branch, effective April 1, 2015.
10.42*†	Residential Quota Share Reinsurance Contract between Homeowners of America Insurance Company and participants Catlin Re Switzerland Ltd. (Bermuda Branch), Everest Reinsurance Company, Odyssey Reinsurance Company, SCOR Reinsurance Company, and Taiping Reinsurance Co. Ltd., effective April 1, 2015.
10.43*†	Reinstatement Premium Protection Reinsurance Contract between Homeowners of America Insurance Company and Everest Reinsurance Company, effective April 1, 2015.
21.1	Subsidiaries of Homeowners of America Holding Corporation. Incorporated by reference to the correspondingly numbered exhibit to our Registration Statement on Form S-1 (File No. 333-189686), originally filed June 28, 2013, effective August 9, 2013, as amended.
23.1*	Consent of Weaver and Tidwell, L.L.P.
31.1	Certification of Chief Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002
32	Certifications 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

 *    Filed herewith

**    Furnished herewith

 †  Confidential treatment has been requested for the redacted portions of this agreement. A complete copy of this agreement, including the redacted portions, has been filed separately with the Securities and Exchange Commission.

** Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

62

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		HOMEOWNERS OF AMERICA HOLDING CORPORATION
March 27, 2015	By:	/s/  Spencer Tucker
		Spencer Tucker
		Chief Executive Officer
March 27, 2015	By:	/s/ Michael C. Rosentraub
		Michael C. Rosentraub
		Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Spencer Tucker	Chief Executive Officer	March 27, 2015
Spencer Tucker	(Principal Executive Officer)
/s/ Michael C. Rosentraub	Chief Financial Officer (Principal Financial Officer	March 27, 2015
Michael C. Rosentraub	and Principal Accounting Officer)
/s/ Frederick S. Hammer	Director	March 27, 2015
Frederick S. Hammer
/s/ Brett G. Baris	Director	March 27, 2015
Brett G. Baris
/s/ James F. Leary	Director	March 27, 2015
James F. Leary
/s/ Richard  L. Viton	Director	March 27, 2015
Richard  L. Viton
/s/ Andrew S. Lerner	Director	March 27, 2015
Andrew S. Lerner

63

EX-10.37

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Exhibit 10.37

Two-Year Property Catastrophe Excess of Loss

Reinsurance Contract

Effective:  April 1, 2015

Homeowners of America Insurance Company

Irving, Texas

15\H00H1063  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Two-Year Property Catastrophe Excess of Loss Reinsurance Contract

Effective:  April 1, 2015

Homeowners of America Insurance Company

Irving, Texas

First Property Catastrophe Excess of Loss Reinsurance
Reinsurer(s)	Participation(s)
Everest Reinsurance Company	1.25%
Markel Bermuda Limited	1.25%
Shelter Mutual Insurance Company*	0.50%
XL Re Ltd	3.00%
Through Aon UK Limited trading as Aon Benfield (Placement Only)
Sirius International Insurance Corporation   for and on behalf of P.R.A.M	3.00%
Through Aon UK Limited trading as Aon Benfield
Lloyd's Underwriters Per Signing Page(s)*	1.00%
Total	10.00%

Second Property Catastrophe Excess of Loss Reinsurance
Reinsurer(s)	Participation(s)
Allied World Assurance Company, Ltd	3.00%
American Standard Insurance Company of Wisconsin	4.00%
Everest Reinsurance Company	4.50%
Hannover Re (Bermuda) Ltd.	2.00%
Mapfre Re, Compañia De Reaseguros, S.A.	2.00%
Markel Bermuda Limited	2.50%
MS Frontier Reinsurance Limited	3.00%
Shelter Mutual Insurance Company*	1.50%
XL Re Ltd	2.00%
Through Aon UK Limited trading as Aon Benfield (Placement Only)
Sirius International Insurance Corporation   for and on behalf of P.R.A.M	4.00%
Through Aon UK Limited trading as Aon Benfield
Lloyd's Underwriters Per Signing Page(s)*	3.00%
Total	31.50%

15\H00H1063  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Third Property Catastrophe Excess of Loss Reinsurance
Reinsurer(s)	Participation(s)
Allied World Assurance Company, Ltd	3.00%
American Standard Insurance Company of Wisconsin	5.00%
Everest Reinsurance Company	6.00%
Hannover Re (Bermuda) Ltd.	3.50%
Mapfre Re, Compañia De Reaseguros, S.A.	2.00%
Markel Bermuda Limited	2.00%
MS Frontier Reinsurance Limited	5.00%
Shelter Mutual Insurance Company*	1.50%
XL Re Ltd	2.50%
Through Aon UK Limited trading as Aon Benfield (Placement Only)
American International Reinsurance Company, Ltd.	5.50%
Fubon Insurance Co., Ltd.	2.00%
Sirius International Insurance Corporation   for and on behalf of P.R.A.M	4.00%
Through Aon UK Limited trading as Aon Benfield
Lloyd's Underwriters Per Signing Page(s)*	2.75%
Total	44.75%

*Both the Company and the Subscribing Reinsurer sign the Interests and Liabilities Agreement.

15\H00H1063  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Table of Contents

Article		Page
	Preamble	1
1	Classes of Business Reinsured	1
2	Commencement and Termination	2
3	Territory (BRMA 51A)	3
4	Exclusions	3
5	Special Acceptances	5
6	Retention and Limit	5
7	Reinstatement	6
8	Definitions	6
9	Other Reinsurance	8
10	Loss Occurrence	8
11	Loss Notices and Settlements	10
12	Salvage and Subrogation	10
13	Reinsurance Premium	11
14	Sanctions	13
15	Late Payments	13
16	Offset (BRMA 36C)	14
17	Access to Records	14
18	Liability of the Reinsurer	15
19	Net Retained Lines	15
20	Errors and Omissions	15
21	Currency (BRMA 12A)	16
22	Taxes (BRMA 50B)	16
23	Federal Excise Tax (BRMA 17D)	16
24	Foreign Account Tax Compliance Act	16
25	Reserves	16
26	Insolvency	18
27	Arbitration	19
28	Service of Suit (BRMA 49G)	20
29	Confidentiality	21
30	Agency Agreement	22
31	Governing Law (BRMA 71B)	22
32	Severability (BRMA 72E)	22
33	Entire Agreement	22
34	Notices and Contract Execution	22
35	Intermediary	23
	Schedule A

15\H00H1063  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Two-Year Property Catastrophe Excess of Loss

Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

and

The Subscribing Reinsurer(s) Executing the

Interests and Liabilities Agreement(s)

Attached Hereto

(hereinafter referred to as the "Reinsurer")

Preamble

Whenever the word "Company" is used in this Contract, such term shall be held to include:

1. Any or all of the affiliated insurance companies of Homeowners of America Insurance Company, which are or may hereafter be under common control, provided that notice be given to the Reinsurer of any such newly affiliated insurance companies which may hereafter come under common control as soon as practicable with full particulars as to how such affiliation is likely to affect this Contract; and

2. Its Quota Share Reinsurers whose Participation Slips are attached hereto (hereinafter referred to as the "Quota Share Reinsurers").

In the event of the Company or the Reinsurer maintaining that such affiliation calls for alteration in existing terms, and an agreement for alteration not being arrived at, then the business of such newly affiliated insurance company is covered at existing terms only for a period of 45 days after notice by either party that it does not wish to cover such business.

Article 1 - Classes of Business Reinsured

By this Contract the Reinsurer agrees to reinsure the excess liability which may accrue to the Company under its policies in force at the effective date hereof or issued or renewed on or after that date, and classified by the Company as Dwelling, Tenant, Condominium Owners and Homeowners business (property coverages only, including Dwelling coverage, Personal Property coverage and Extensions of Coverage as defined in the Company's policies), subject to the terms, conditions and limitations set forth herein and in Schedule A attached to and forming part of this Contract.

Article 2 - Commencement and Termination

A. This Contract shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, with respect to losses arising out of loss occurrences commencing at or after that time and date, and shall remain in force until 12:01 a.m., Central Standard Time, April 1, 2017.

B. Notwithstanding the provisions of paragraph A above, the Company may terminate a Subscribing Reinsurer's percentage share in this Contract in the event any of the following circumstances occur as clarified by public announcement or upon discovery:

1. The Subscribing Reinsurer's policyholders' surplus (or its equivalent under the Subscribing Reinsurer's accounting system) after the earlier of:  (a) the inception of this Contract, or (b) the date lines are bound for this Contract, has been reduced by more than 20.0% of the amount of surplus (or the applicable equivalent) 12 months prior to that date; or

2. The Subscribing Reinsurer's policyholders' surplus (or its equivalent under the Subscribing Reinsurer's accounting system) at any time between the earlier of:  (a) the inception of this Contract, or (b) the date lines are bound for this Contract, and the date of termination of this Contract has been reduced by more than 20.0% of the amount of surplus (or the applicable equivalent) at the date of the Subscribing Reinsurer's most recent financial statement filed with regulatory authorities and available to the public as of the date lines are bound; or

3. A State Insurance Department or other legal authority has ordered the Subscribing Reinsurer to cease assuming business; or

4. The Subscribing Reinsurer has become insolvent or has been placed into liquidation, receivership, supervision, administration, winding-up or under a scheme of arrangement, or similar proceedings (whether voluntary or involuntary) or proceedings have been instituted against the Subscribing Reinsurer for the appointment of a receiver, liquidator, rehabilitator, supervisor, administrator, conservator or trustee in bankruptcy, or other agent known by whatever name, to take possession of its assets or control of its operations; or

5. The Subscribing Reinsurer has reinsured its entire liability under this Contract without the Company's prior written consent; or

6. The A.M. Best's rating for the Subscribing Reinsurer has been assigned or downgraded below A- (inclusive of "Not Rated" ratings), or the published rating issued by Standard & Poor's has been downgraded below BBB+ (inclusive of "Not Rated" ratings); or

7. The Subscribing Reinsurer has become merged with, acquired by or controlled by any other entity or individual(s) not controlling the Subscribing Reinsurer's operations previously; or

8. The Subscribing Reinsurer has ceased assuming new or renewal property or casualty treaty reinsurance business.

C. In the event a Subscribing Reinsurer experiences one or more of the circumstances specified in paragraph B above, the Subscribing Reinsurer shall notify the Company as promptly as possible and shall hereinafter be referred to as a "Special Circumstance Reinsurer."  To terminate a Special Circumstance Reinsurer's percentage share in this Contract, the Company must provide the Special Circumstance Reinsurer with written notice as set forth in the Notices and Contract Execution Article.  Such notice shall include the effective date of termination as selected by the Company and shall be one of the following:

1. The date of written notice provided by the Special Circumstance Reinsurer; or

2. The last day of the month prior to the date of written notice provided by the Special Circumstance Reinsurer; or

3. The last day of any month after the date of written notice provided by the Special Circumstance Reinsurer; or

4. The date of the Company's written notice to the Special Circumstance Reinsurer advising of the termination.

In the event the Subscribing Reinsurer fails to immediately provide written notice to the Company of any event outlined in subparagraphs 1 through 8 of paragraph B above, the Company may elect to substitute the date of public announcement or discovery as the equivalent of written notice.

D. If any Subscribing Reinsurer's percentage share in this Contract is terminated or 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 termination or expiration of this Contract, provided that no part of such loss occurrence is claimed against any renewal or replacement of this Contract.

Article 3 - Territory (BRMA 51A)

The territorial limits of this Contract shall be identical with those of the Company's policies.

Article 4 - Exclusions

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

1. Financial guarantee and insolvency.

2. Nuclear risks as defined in the "Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance (U.S.A.)" attached to and forming part of this Contract.

3. Loss or damage caused by or resulting from war, invasion, hostilities, acts of foreign enemies, civil war, rebellion, insurrection, military or usurped power, or martial law or confiscation by order of any government or public authority, but this exclusion shall not apply to loss or damage covered under a standard policy with a standard War Exclusion Clause.

4. Loss or liability excluded under the provisions of the "Pools, Associations and Syndicates Exclusion Clause" attached to and forming part of this Contract.

5. 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.

6. All third party liability, including Section II of Homeowners.

7. Loss or damage to growing or standing crops.

8. Pollution and seepage coverages excluded under the provisions of the "Pollution and Seepage Exclusion Clause (BRMA 39A)" attached to and forming part of this Contract.

9. Terrorism, as described in the provisions of the "Terrorism Exclusion (NMA 2930c)" attached to and forming part of this Contract.

10. Flood and/or earthquake when written as such.

11. Loss, damage, cost or expense arising from fungi unless directly or indirectly caused by or contributed to by or arising from a covered peril under the Company's original policy.  Losses arising from fungi shall not in and of themselves constitute an event for the purposes of recovery hereunder.  For the purposes of this Contract, "fungi" means any type or form of fungus, including mold or mildew and any mycotoxins, spores, scents or by products produced or released by "fungi."

12. Reinsurance assumed; however, this exclusion shall not apply to business assumed by the Quota Share Reinsurers.

13. Growing, standing or drying crops or timber.

B. Any exclusion set forth in paragraph A (except exclusions set forth in subparagraphs 1, 2, 3, 5, 6 and 9) shall be waived automatically when, in the opinion of the Company, the exposure excluded therein is incidental to the principal exposure on the risk in question.

C. If the Company is bound, without the knowledge and contrary to the instructions of the Company's supervisory underwriting personnel, on any business falling within the scope of one or more of the exclusions set forth in paragraph A (except exclusions set forth in subparagraphs 1, 2, 3, 5, 6 and 9), the exclusion shall be suspended with respect to such business until 30 days after an underwriting supervisor of the Company acquires knowledge thereof or until the minimum amount of time required by the applicable statute or regulatory authority to cancel such a policy has elapsed, whichever is greater.

D. If the Company is required to accept an assigned risk which conflicts with one or more of the exclusions set forth in paragraph A (except exclusions set forth in subparagraphs 1, 2, 3, 5, 6 and 9), reinsurance shall apply, but only for the difference between the Company's retention and the minimum limit required by the applicable state statute, and in no event shall the Reinsurer's liability exceed the applicable limits set forth in the Retention and Limit and Reinstatement Articles.

Article 5 - Special Acceptances

A. From time to time the Company may request a special acceptance of reinsurance falling outside the scope of the provisions of this Contract (except as respects the exclusions set forth in subparagraphs 1, 2, 3, 5, 6 and 9 of the Exclusions Article).  Within five days of receipt of such a request, each Subscribing Reinsurer shall accept such request, ask for additional information, or reject the request.  Any reinsurance that is specially accepted by the Reinsurer shall be covered under this Contract and shall be subject to the terms hereof, except as such terms shall be modified by the special acceptance.  If a Subscribing Reinsurer fails to respond to a special acceptance request within five days, the Subscribing Reinsurer will be deemed to have agreed to the special acceptance.

B. If Subscribing Reinsurers under each excess layer with percentage shares totaling more than 50.0% in the interests and liabilities of the Reinsurer for that excess layer agree to a special acceptance, such special acceptance shall be binding on all Subscribing Reinsurers with respect to their respective shares for that excess layer.  If such percentage agreement is not achieved, such special acceptance shall be made to the excess layer only with respect to the interests and liabilities of each Subscribing Reinsurer for that excess layer that agrees to the special acceptance.

C. 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.  Further, if one or more Subscribing Reinsurers under this Contract agreed to special acceptance(s) under the contract being replaced by this Contract, such special acceptance(s) shall be automatically covered hereunder with respect to the interests and liabilities of such Subscribing Reinsurer(s).

Article 6 - Retention and Limit

A. As respects each excess layer of reinsurance coverage provided by this Contract, the Company shall retain and be liable for the first amount of ultimate net loss, shown as "Company's Retention" for that excess layer in Schedule A attached hereto, arising out of each loss occurrence.  The Reinsurer shall then be liable, as respects each excess layer, for the amount by which such ultimate net loss exceeds the Company's applicable retention, but the liability of the Reinsurer under each excess layer shall not exceed the amount, shown as "Reinsurer's Per Occurrence Limit" for that excess layer in Schedule A attached hereto, as respects any one loss occurrence.

B. No claim shall be made hereunder in any one loss occurrence unless at least two risks insured by the Company are involved in such loss occurrence.  For the purposes of this Contract, the Company shall be the sole judge of what constitutes "one risk."

Article 7 - Reinstatement

A. In the event all or any portion of the reinsurance under any excess layer of reinsurance coverage provided by this Contract is exhausted by loss, the amount so exhausted shall be reinstated immediately from the time the loss occurrence commences hereon.  For each amount so reinstated, the Company agrees to pay additional premium in accordance with the provisions of the Reinsurance Premium Article.

B. Notwithstanding anything stated herein, the liability of the Reinsurer under any excess layer of reinsurance coverage provided by this Contract shall not exceed either of the following:

1. The amount, shown as "Reinsurer's Per Occurrence Limit" for that excess layer in Schedule A attached hereto, as respects loss or losses arising out of any one loss occurrence; or

2. The amount, shown as "Reinsurer's Contract Year Limit" for that excess layer in Schedule A attached hereto, in all during any one contract year.

Article 8 - Definitions

A. "Contract year" as used herein shall mean the period from 12:01 a.m., Central Standard Time, April 1, 2015, to 12:01 a.m., Central Standard Time, April 1, 2016, and each respective 12‑month period thereafter that this Contract continues in force shall be a separate contract year.  However, if this Contract or the participation of a Subscribing Reinsurer is terminated, the final contract year shall be from the beginning of the current contract year until the effective time and date of termination.

B. "Loss adjustment expense" as used herein shall mean costs and expenses assignable to the investigation, appraisal, adjustment, settlement, litigation, defense and/or appeal of claims, regardless of how such expenses are classified for statutory reporting purposes.  Loss adjustment expense shall include, but not be limited to:

1. Interest on judgments;

2. Expenses of outside adjusters and adjuster expenses incurred by Homeowners of America MGA, Inc.;

3. Expenses and a pro rata share of salaries of the Company's field employees and expenses of other employees of the Company who have been temporarily diverted from their normal and customary duties and assigned to the adjustment of losses covered by this Contract;

4. Expenses of the Company's officials incurred in connection with losses covered by this Contract;

5. Declaratory judgment expenses or other legal expenses and costs incurred in connection with coverage questions and legal actions connected thereto;

6. Advertising or other extraordinary communication expenses incurred as a result of a covered loss;

7. Court costs;

8. Costs of supersedeas and appeal bonds;

9. Monitoring counsel expenses;

10. Extraordinary expenses arising out of a loss, whether or not they are allocable to a specific "claim."

However, loss adjustment expense shall not include normal office expenses or salaries of the Company's regular employees, except as provided for in subparagraph 3 above.

C. "Loss in excess of policy limits" and "extra contractual obligations" as used herein shall mean:

1. "Loss in excess of policy limits" shall mean 90.0% of any amount paid or payable by the Company in excess of its policy limits, but otherwise within the terms of its policy, such loss in excess of the Company's policy limits arising from the handling of any claim on business covered hereunder; such liabilities arising, because of, but not limited to, failure by the Company to settle within the policy limits or by reason of the Company's alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of an action against its insured or reinsured or in the preparation or prosecution of an appeal consequent upon such an action.

2. "Extra contractual obligations" shall mean 90.0% of any punitive, exemplary, compensatory or consequential damages paid or payable by the Company, not covered by any other provision of this Contract and which arise from the handling of any claim on business subject to this Contract, such liabilities arising because of, but not limited to, failure by the Company to settle within the policy limits or by reason of the Company's alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of an action against its insured or reinsured or in the preparation or prosecution of an appeal consequent upon such an action.  An extra contractual obligation shall be deemed, in all circumstances, to have occurred on the same date as the loss covered or alleged to be covered under the policy.

Notwithstanding anything stated herein, this Contract shall not apply to any loss in excess of policy limits or any extra contractual obligation incurred by the Company as a result of any fraudulent and/or criminal act by any officer or director of the Company acting individually or collectively or in collusion with any individual or corporation or any other organization or party involved in the presentation, defense or settlement of any claim covered hereunder.

Savings Clause (Applicable only if the Subscribing Reinsurer is domiciled in the State of New York):  In no event shall coverage be provided to the extent that such coverage is not permitted under New York law.

D. "Policies" as used herein shall mean all policies, contracts and binders of insurance, whether held covered provisionally or otherwise.

E. "Ultimate net loss" as used herein shall mean the sum or sums (including loss in excess of policy limits, extra contractual obligations and loss adjustment expense, as defined herein) paid or payable by the Company in settlement of claims and in satisfaction of judgments rendered on account of such claims, after deduction of all claims on inuring reinsurance, whether collectible or not, and all salvage and other recoveries.  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 foregoing, it is understood and agreed that reinsurance, if any, effected by the Quota Share Reinsurers (except as respects reinsurance assumed by the Quota Share Reinsurers covering business set forth in the Classes of Business Reinsured Article) shall not be taken into account in computing the ultimate net loss, nor in any way affect the amount recoverable hereunder.

Article 9 - Other Reinsurance

A. The Company shall maintain in force property per risk excess of loss treaty reinsurance, recoveries under which shall inure to the benefit of this Contract.

B. The Company shall be permitted to carry other 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.

Article 10 - Loss Occurrence

A. "Loss occurrence" as used herein shall mean the sum of all individual losses directly occasioned by any one disaster, accident or loss or series of disasters, accidents or losses arising out of one event which occurs within the area of one state of the United States or province of Canada and states or provinces contiguous thereto and to one another.  However, the duration and extent of any one "loss occurrence" shall be limited to all individual losses sustained by the Company occurring during any period of 168 consecutive hours arising out of and directly occasioned by the same event, except that the term "loss occurrence" shall be further defined as follows:

1. As regards windstorm, hail, tornado, hurricane, cyclone, including ensuing collapse and water damage, all individual losses sustained by the Company occurring during any period of 120 consecutive hours arising out of and directly occasioned by the same event.  However, the event need not be limited to one state or province or states or provinces contiguous thereto.

2. As regards riot, riot attending a strike, civil commotion, vandalism and malicious mischief, all individual losses sustained by the Company occurring during any period of 72 consecutive hours within the area of one municipality or county and the municipalities or counties contiguous thereto arising out of and directly occasioned by the same event.  The maximum duration of 72 consecutive hours may be extended in respect of individual losses which occur beyond such 72 consecutive hours during the continued occupation of an assured's premises by strikers, provided such occupation commenced during the aforesaid period.

3. As regards earthquake (the epicenter of which need not necessarily be within the territorial confines referred to in the introductory portion of this paragraph) and fire following directly occasioned by the earthquake, only those individual fire losses which commence during the period of 168 consecutive hours may be included in the Company's "loss occurrence."

4. As regards "freeze," only individual losses directly occasioned by collapse, breakage of glass and water damage (caused by bursting of frozen pipes and tanks or freezing and/or melting snow or sleet) may be included in the Company's "loss occurrence."

5. As regards firestorms, brush fires and any other fires or series of fires, irrespective of origin (except as provided in subparagraphs 2 and 3 above), all individual losses sustained by the Company which commence during any period of 168 consecutive hours within a 150-mile radius of any fixed point selected by the Company may be included in the Company's "loss occurrence."  However, an individual loss subject to this subparagraph cannot be included in more than one "loss occurrence."

B. For all those "loss occurrences" other than those referred to in subparagraph 2 of paragraph A above, the Company may choose the date and time when any such period of consecutive hours commences, provided that it is not earlier than the date and time of the occurrence of the first recorded individual loss sustained by the Company arising out of that disaster, accident or loss, and provided that only one such period of 168 consecutive hours shall apply with respect to one event, except for any loss occurrence referred to in subparagraph 1 of paragraph A above where only one such period of 120 consecutive hours shall apply with respect to one event.

C. As respects those "loss occurrences" referred to in subparagraph 2 of paragraph A above, if the disaster, accident or loss occasioned by the event is of greater duration than 72 consecutive hours, then the Company may divide that disaster, accident or loss into two or more "loss occurrences," provided no two periods overlap and no individual loss is included in more than one such period and provided that no period commences earlier than the date and time of the occurrence of the first recorded individual loss sustained by the Company arising out of that disaster, accident or loss.

D. It is understood that losses arising from a combination of two or more perils as a result of the same event shall be considered as having arisen from one "loss occurrence."  Notwithstanding the foregoing, the hourly limitations as stated in paragraph A shall not be exceeded as respects the applicable perils and no single "loss occurrence" shall encompass a time period greater than 168 consecutive hours.

Article 11 - Loss Notices and Settlements

A. Whenever losses paid or reserved by the Company appear likely, in the opinion of the Company, to result in a claim hereunder, the Company shall notify the Reinsurer, and the Company shall notify the Reinsurer of all subsequent developments that may materially affect the position of the Reinsurer.

B. The Company alone and at its full discretion shall adjust, settle or compromise all claims and losses subject to this Contract.  The Reinsurer shall be bound by the judgment of the Company as to the obligations and liabilities of the Company under any policy.

C. All loss settlements made by the Company, whether under strict policy terms or by way of compromise (including loss in excess of policy limits and extra contractual obligations) shall be binding upon the Reinsurer, and the Reinsurer agrees to pay or allow, as the case may be, all amounts for which it may be liable immediately upon receipt of reasonable evidence of the amount paid (or scheduled to be paid) by the Company.  The Company shall be the sole judge as to:

1. What constitutes a claim or loss covered under any policy;

2. The Company's liability thereunder;

3. The amount or amounts proper for the Company to pay thereunder.

D. A Special Circumstance Reinsurer shall not have the right to deny payment of a claim under any excess layer hereunder if the sum of the percentage shares of Active Subscribing Reinsurers that have paid the claim under that excess layer exceeds 50.0% of the sum of the percentage shares of all Active Subscribing Reinsurers for that excess layer.  "Active Subscribing Reinsurer" as used herein shall mean a Subscribing Reinsurer that is not a Special Circumstance Reinsurer as of the due date of the claim (as specified in the Late Payments Article).

Article 12 - Salvage and Subrogation

The Reinsurer shall be credited with salvage (i.e., reimbursement obtained or recovery made by the Company, less the actual cost, excluding salaries of officials and employees of the Company and sums paid to attorneys as retainer, of obtaining such reimbursement or making such recovery) on account of claims and settlements involving reinsurance hereunder.  Salvage thereon shall always be used to reimburse the excess carriers in the reverse order of their priority according to their participation before being used in any way to reimburse the Company for its primary loss.  The Company hereby agrees to enforce its rights to salvage or subrogation relating to any loss, a part of which loss was sustained by the Reinsurer, and to prosecute all claims arising out of such rights if, in the Company's opinion, it is reasonable to do so.

Article 13 - Reinsurance Premium

A. As premium for each excess layer of reinsurance coverage provided hereunder during each contract year, the Company shall pay the Reinsurer the greater of the following:

1. The amount, shown as "Contract Year Minimum Premium" for that excess layer in Schedule A attached hereto; or

2. The percentage, shown as "Premium Rate" for that excess layer in Schedule A attached hereto, of the Company's net earned premium for the contract year.

B. As respects each contract year hereunder, the Company shall pay the Reinsurer an annual deposit premium for each excess layer of the amount, shown as "Contract Year Deposit Premium" for that excess layer in Schedule A attached hereto, in four equal installments of the amount, shown as "Contract Year Quarterly Deposit Premium" for that excess layer in Schedule A attached hereto, on April 1, July 1, October 1 and January 1 of that contract year.

C. Within 45 days after the expiration of each contract year, the Company shall provide a report to the Reinsurer setting forth the premium due hereunder for each excess layer, computed in accordance with paragraph A above, and any additional premium due the Reinsurer or return premium due the Company for each such excess layer shall be remitted promptly.

D. For each amount of limit reinstated for each excess layer in accordance with the Reinstatement Article, the Company agrees to pay additional premium equal to the product of the following:

1. The percentage of the occurrence limit for the excess layer reinstated (based on the loss paid by the Reinsurer under that excess layer); times

2. The earned reinsurance premium, as calculated in accordance with paragraph C above, for the excess layer reinstated for the contract year (exclusive of reinstatement premium).

E. Whenever the Company requests payment by the Reinsurer of any loss under any excess layer hereunder, the Company shall submit a statement to the Reinsurer of reinstatement premium due the Reinsurer for that excess layer.  If the earned reinsurance premium for any excess layer for the contract year has not been finally determined as of the date of any such statement, the calculation of reinstatement premium due for that excess layer shall be based on the annual deposit premium for that excess layer and shall be readjusted when the earned reinsurance premium for that excess layer for the contract year has been finally determined.  Any reinstatement premium shown to be due the Reinsurer for any excess layer as reflected by any such statement (less prior payments, if any, for that excess layer) shall be payable by the Company concurrently with payment by the Reinsurer of the requested loss for that excess layer.  Any return reinstatement premium shown to be due the Company shall be remitted by the Reinsurer as promptly as possible after receipt and verification of the Company's statement.

F. In the event a Subscribing Reinsurer's participation in this Contract is terminated under the provisions of paragraph B of the Commencement and Termination Article, no deposit premium shall be due after the effective date of termination, the minimum premium shall be waived, and the reinsurance premium and reinstatement premium, if applicable, will be calculated in accordance with the following formulas:

1. Reinsurance premium for the contract year shall be the number of days the Subscribing Reinsurer participates on this Contract during the contract year divided by the number of days of the original term of the contract year and the quotient thereof shall be multiplied by the Subscribing Reinsurer's percentage share of the final adjusted premium for that contract year reported in accordance with paragraph C above.

2. Reinstatement premium shall be the product of subparagraphs D(1) and F(1) above.

3. In the event the incurred loss for an excess layer in Schedule A attached hereto is greater than the sum of subparagraphs F(1) and F(2) above that is applicable to the same excess layer, in lieu of the provisions of subparagraphs F(1) and F(2) above, the Subscribing Reinsurer will receive premium equal to the lesser of:

a. An amount equal to the Subscribing Reinsurer's percentage share of the full reinsurance premium for the contract year calculated in accordance with paragraph A (without regard to the termination of the Subscribing Reinsurer's share in accordance with the provisions of the Commencement and Termination Article) plus any reinstatement premium calculated in accordance with subparagraph F(2) above; or

b. The Subscribing Reinsurer's percentage share of the incurred loss for the same excess layer.

G. Within 45 days after the termination of a Subscribing Reinsurer's participation in this Contract as set forth above, the Company shall provide a report to the Subscribing Reinsurer setting forth the premium due hereunder for each excess layer, computed in accordance with paragraph F above, and any additional premium due the Subscribing Reinsurer or return premium due the Company for each such excess layer shall be remitted promptly.

H. "Net earned premium" as used herein shall mean 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.

I. "Incurred loss" as used herein shall mean, as respects each contract year separately, the Company's ceded ultimate net loss plus the Company's ceded outstanding loss and loss adjustment expense reserves (including all case reserves plus any reasonable amount estimated to be unreported from known loss occurrences as established by the Company).

Article 14 - Sanctions

Neither the Company nor any Subscribing Reinsurer shall be liable for premium or loss under this Contract if it would result in a violation of any mandatory sanction, prohibition or restriction under United Nations resolutions or the trade or economic sanctions, laws or regulations of the European Union, United Kingdom or United States of America that are applicable to either party.

Article 15 - Late Payments

A. The provisions of this Article shall not be implemented unless specifically invoked, in writing, by one of the parties to this Contract.

B. In the event any premium, loss or other payment due either party is not received by the intermediary named in the Intermediary Article (hereinafter referred to as the "Intermediary") by the payment due date, the party to which 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 charge 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

2. 1/365th of the sum of 4.0% and the U.S. prime rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made; 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 charges have been received by the Intermediary.

Notwithstanding the provisions of subparagraph 2 above and the immediately preceding sentence, the interest rate for a Special Circumstance Reinsurer will increase by 1.0% for every month that payment of the claim is past due, subject to a maximum annual interest rate of 10.0%.

C. If the interest rate provided under this Article exceeds the maximum interest rate allowed by any applicable law or is held unenforceable by a court of competent jurisdiction, such interest rate shall be modified to the highest rate permitted by the applicable law, and all remaining provisions of this Article and Contract shall remain in full force and effect without being impaired or invalidated in any way.

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

1. As respects the payment of routine deposits and premiums due the Reinsurer, the due date shall be as provided for in the applicable section of this Contract.  In the event a due date is not specifically stated for a given payment, it shall be deemed due 30 days after the date of transmittal by the Intermediary of the initial billing for each such payment.

2. Any claim or loss payment due the Company hereunder shall be deemed due 30 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 30 days, interest will accrue on the payment or amount overdue in accordance with paragraph B above, from the date the proof of loss or demand for payment was transmitted to the Reinsurer.

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.  In the event a due date is not specifically stated for a given payment, it shall be deemed due 30 days following transmittal of written notification that the provisions of this Article have been invoked.

For purposes of interest calculations only, amounts due hereunder shall be deemed paid upon receipt by the Intermediary.

E. Nothing herein shall be construed as limiting or prohibiting a Subscribing Reinsurer from contesting the validity of any claim, or from participating in the defense of any claim or suit, or prohibiting either party from contesting the validity of any payment or from initiating any arbitration or other proceeding in accordance with the provisions of this Contract.  If the debtor party prevails in an arbitration or other proceeding, then any interest charges due hereunder on the amount in dispute shall be null and void.  If the debtor party loses in such proceeding, then the interest charge on the amount determined to be due hereunder shall be calculated in accordance with the provisions set forth above unless otherwise determined by such proceedings.  If a debtor party advances payment of any amount it is contesting, and proves to be correct in its contestation, either in whole or in part, the other party shall reimburse the debtor party for any such excess payment made plus interest on the excess amount calculated in accordance with this Article.

F. Interest charges arising out of the application of this Article that are $250 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 16 - Offset (BRMA 36C)

The Company and the Reinsurer shall have the right to offset any balance or amounts due from one party to the other under the terms of this Contract.  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.

Article 17 - Access to Records

A. Provided the Company has received at least 60 days prior notice, the Reinsurer or its designated representatives shall have access during regular business hours to all records of the Company which pertain in any way to this reinsurance.  However:

1. A Special Circumstance Reinsurer shall not have any right of access to the records of the Company without the Company's prior consent; and

2. A Subscribing Reinsurer or its designated representatives shall not have any right of access to the records of the Company if it is not current in all undisputed payments due the Company.  "Undisputed" as used herein shall mean any amount that the Subscribing Reinsurer has not contested in writing to the Company specifying the reason(s) why the payments are disputed.

B. The provisions of this Article shall extend beyond the expiration or invalidation of this Contract, or the termination of a Subscribing Reinsurer's percentage share in this Contract, until all claims and losses hereunder are settled.

Article 18 - Liability of the Reinsurer

A. The liability of the Reinsurer shall follow that of the Company in every case, including judicial interpretation and policy reformation, and be subject in all respects to all the general and specific stipulations, clauses, waivers and modifications of the Company's policies and any endorsements thereon.  However, in no event shall this be construed in any way to provide coverage outside the terms and conditions set forth in this Contract.

B. Nothing herein shall in any manner create any obligations or establish any rights against the Reinsurer in favor of any third party or any persons not parties to this Contract.

Article 19 - 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.  For purposes of this Contract, amounts ceded to Quota Share Reinsurers on business reinsured hereunder, if applicable, shall be considered retained net by the Company.

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.

Article 20 - Errors and Omissions

Inadvertent delays, errors or omissions made in complying with this Contract or any transaction hereunder shall not relieve either party from any liability which would have attached had such delay, error or omission not occurred, provided always that such error or omission is rectified as soon as possible after discovery.

Article 21 - Currency (BRMA 12A)

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 22 - Taxes (BRMA 50B)

In consideration of the terms under which this Contract is issued, the Company will not claim a deduction in respect of the premium hereon when making tax returns, other than income or profits tax returns, to any state or territory of the United States of America or the District of Columbia.

Article 23 - Federal Excise Tax (BRMA 17D)

A. The Reinsurer has agreed to allow for the purpose of paying the Federal Excise Tax the applicable percentage of the premium payable hereon (as imposed under Section 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 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 24 - Foreign Account Tax Compliance Act

A. To the extent the Reinsurer is subject to the deduction and withholding of premium payable hereon as set forth in the Foreign Account Tax Compliance Act (Sections 1471-1474 of the Internal Revenue Code), the Reinsurer shall allow such deduction and withholding from the premium payable under this Contract.

B. In the event of any return of premium becoming due hereunder, the return premium will be determined and paid in full without regard to any amounts deducted or withheld under paragraph A of this Article.  In the event the Company or its agent recovers such premium deductions and withholdings on the return premium from the United States Government, the Company or its agent will reimburse the Reinsurer for such amounts.

Article 25 - Reserves

A. The Reinsurer agrees to fund its share of the Company's ceded outstanding loss and loss adjustment expense reserves (including all case reserves plus any reasonable amount estimated to be unreported from known loss occurrences as established by the Company), and any other outstanding balances which it shall be required by applicable regulation or law to set up under this Contract (the "funding obligation") by:

1. Clean, irrevocable and unconditional letters of credit issued and confirmed, if confirmation is required by the insurance regulatory authorities involved, by a bank or banks meeting the NAIC Securities Valuation Office credit standards for issuers of letters of credit and acceptable to said insurance regulatory authorities; and/or

2. Escrow accounts for the benefit of the Company; and/or

3. Cash advances;

if the Reinsurer:

1. Is unauthorized in any state of the United States of America or the District of Columbia and if, without such funding, a penalty would accrue to the Company on any financial statement it is required to file with the insurance regulatory authorities involved; or

2. Is a Special Circumstance Reinsurer.

The Reinsurer, at its sole option, may fund in other than cash if its method and form of funding are acceptable to the insurance regulatory authorities involved.

Notwithstanding the provisions of the Arbitration Article, if a Special Circumstance Reinsurer fails to fund its share of the funding obligation as set forth above, the Company retains its right to apply to a court of competent jurisdiction for equitable or interim relief.

B. With regard to funding in whole or in part by letters of credit, it is agreed that each letter of credit will be in a form acceptable to insurance regulatory authorities involved, will be issued for a term of at least one year and will include an "evergreen clause," which automatically extends the term for at least one additional year at each expiration date unless written notice of non-renewal is given to the Company not less than 30 days prior to said expiration date.  The Company and the Reinsurer further agree, notwithstanding anything to the contrary in this Contract, that said letters of credit may be drawn upon by the Company or its successors in interest at any time, without diminution because of the insolvency of the Company or the Reinsurer, but only for one or more of the following purposes:

1. To reimburse itself for the Reinsurer's share of losses and/or loss adjustment expense paid under the terms of policies reinsured hereunder, unless paid in cash by the Reinsurer;

2. To reimburse itself for the Reinsurer's share of any other amounts claimed to be due hereunder, unless paid in cash by the Reinsurer;

3. To fund a cash account in an amount equal to the Reinsurer's funding obligation funded by means of a letter of credit which is under non-renewal notice, if said letter of credit has not been renewed or replaced by the Reinsurer 10 days prior to its expiration date;

4. To refund to the Reinsurer any sum in excess of the actual amount required to fund the Reinsurer's funding obligation, if so requested by the Reinsurer.

In the event the amount drawn by the Company on any letter of credit is in excess of the actual amount required for B(1) or B(3), or in the case of B(2), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.

C. If a Subscribing Reinsurer fails to fulfill its funding obligation (if any) under this Article, the Company may, at its option, require the Subscribing Reinsurer to pay, and the Subscribing Reinsurer agrees to pay, an interest charge on the funding obligation calculated on the last business day of each month as follows:

1. The number of full days that have expired since the earliest of the applicable following dates:

a. As respects a Subscribing Reinsurer that is unauthorized in any state of the United States of America or District of Columbia having jurisdiction over the Company, December 31 of the calendar year in which the funding was required; or

b. As respects a Special Circumstance Reinsurer, the first date such reinsurer becomes a Special Circumstance Reinsurer;

times:

2. 1/365th of the sum of 4.0% and the U.S. prime rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made; times

3. The greater of (a) the funding obligation, less the amount, if any, funded by the Subscribing Reinsurer prior to the applicable date determined in subparagraph 1 above or (b) $100,000.

It is agreed that interest shall accumulate until the full interest charge amount as provided for in this paragraph and the funding obligation are paid.

If the interest rate provided under this Article exceeds the maximum interest rate allowed by any applicable law or is held unenforceable by an arbitrator or a court of competent jurisdiction, such interest rate shall be modified to the highest rate permitted by the applicable law, and all remaining provisions of this Article and Contract shall remain in full force and effect without being impaired or invalidated in any way.

Article 26 - Insolvency

A. In the event of the insolvency of one or more of the reinsured companies, this reinsurance shall be payable directly to the company or to its liquidator, receiver, conservator or statutory successor on the basis of the liability of the company without diminution because of the insolvency of the company or because the liquidator, receiver, conservator or statutory successor of the company has failed to pay all or a portion of any claim.  It is agreed, however, that the liquidator, receiver, conservator or statutory successor of the company shall give written notice to the Reinsurer of the pendency of a claim against the company indicating the policy or bond reinsured which claim would involve a possible liability on the part of the Reinsurer within a reasonable time after such claim is filed in the conservation or liquidation proceeding or in the receivership, and that during the pendency of such claim, the Reinsurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated, any defense or defenses that it may deem available to the company or its liquidator, receiver, conservator or statutory successor.  The expense thus incurred by the Reinsurer shall be chargeable, subject to the approval of the Court, against the company as part of the expense of conservation or liquidation to the extent of a pro rata share of the benefit which may accrue to the company solely as a result of the defense undertaken by the Reinsurer.

B. Where two or more reinsurers are involved in the same claim and a majority in interest elect to interpose defense to such claim, the expense shall be apportioned in accordance with the terms of this Contract as though such expense had been incurred by the company.

C. It is further understood and agreed that, in the event of the insolvency of one or more of the reinsured companies, the reinsurance under this Contract shall be payable directly by the Reinsurer to the company or to its liquidator, receiver or statutory successor, except as provided by Section 4118(a) of the New York Insurance Law or except (1) 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 payees under such policies and in substitution for the obligations of the company to such payees.

Article 27 - Arbitration

A. As a condition precedent to any right of action hereunder, in the event of any dispute or difference of opinion hereafter arising with respect to this Contract, it is hereby mutually agreed that such dispute or difference of opinion shall be submitted to arbitration.  One Arbiter shall be chosen by the Company, the other by the Reinsurer, and an Umpire shall be chosen by the two Arbiters before they enter upon arbitration, all of whom shall be active or retired disinterested executive officers of insurance or reinsurance companies or Lloyd's London Underwriters.  In the event that either party should fail to choose an Arbiter within 30 days following a written request by the other party to do so, the requesting party may choose two Arbiters who shall in turn choose an Umpire before entering upon arbitration.  If the two Arbiters fail to agree upon the selection of an Umpire within 30 days following their appointment, each Arbiter shall nominate three candidates within 10 days thereafter, two of whom the other shall decline, and the decision shall be made by drawing lots.  Notwithstanding the above, in the event the dispute or difference of opinion involves a Special Circumstance Reinsurer, the Company may, at its option, choose to forego arbitration and may bring an action in any court of competent jurisdiction.

B. Each party shall present its case to the Arbiters within 30 days following the date of appointment of the Umpire.  The Arbiters shall consider this Contract as an honorable engagement rather than merely as a legal obligation and they are relieved of all judicial formalities and may abstain from following the strict rules of law.  The decision of the Arbiters shall be final and binding on both parties; but failing to agree, they shall call in the Umpire and the decision of the majority shall be final and binding upon both parties.  Judgment upon the final decision of the Arbiters may be entered in any court of competent jurisdiction and the Arbiters are empowered to grant interim relief as they may deem appropriate.

C. If more than one reinsurer is involved in the same dispute, all such reinsurers shall, at the option of the Company, constitute and act as one party for purposes of this Article and communications shall be made by the Company to each of the reinsurers constituting one party, provided, however, that nothing herein shall impair the rights of such reinsurers to assert several, rather than joint, defenses or claims, nor be construed as changing the liability of the reinsurers participating under the terms of this Contract from several to joint.

D. Each party shall bear the expense of its own Arbiter, and shall jointly and equally bear with the other the expense of the Umpire and of the arbitration.  In the event that the two Arbiters are chosen by one party, as above provided, the expense of the Arbiters, the Umpire and the arbitration shall be equally divided between the two parties.

E. Any arbitration proceedings shall take place in Irving, Texas, or at a location mutually agreed upon by the parties to this Contract, but notwithstanding the location of the arbitration, all proceedings pursuant hereto shall be governed by the law of the State of Texas.

Article 28 - Service of Suit (BRMA 49G)

(Applicable if the Reinsurer is not domiciled in the United States of America, and/or is not authorized in any State, Territory or District of the United States where authorization is required by insurance regulatory authorities)

A. This Article will not be read to conflict with or override the obligations of the parties to arbitrate their disputes as provided for in the Arbitration Article.  This Article is intended as an aid to compelling arbitration or enforcing such arbitration or arbitral award, not as an alternative to the Arbitration Article for resolving disputes arising out of this Contract.

B. In the event the Reinsurer fails to pay any amount claimed to be due hereunder, the Reinsurer, at the request of the Company, will submit to the jurisdiction of a court of competent jurisdiction within the United States.  Nothing in this Article constitutes or should be understood to constitute a waiver of the Reinsurer'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 Reinsurer, once the appropriate Court is accepted by the Reinsurer or is determined by removal, transfer or otherwise, as provided for above, will comply with all requirements necessary to give said Court jurisdiction and, in any suit instituted against any of the Subscribing Reinsurers upon this Contract, will abide by the final decision of such Court or of any Appellate Court in the event of an appeal.

C. Further, pursuant to any statute of any state, territory or district of the United States which makes provision therefor, the Reinsurer hereby designates the party named in its Interests and Liabilities Agreement, or if no party is named therein, the Superintendent, Commissioner or Director of Insurance or other officer specified for that purpose in the statute, or his or her successor or successors in office, as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Company or any beneficiary hereunder arising out of this Contract.

Article 29 - Confidentiality

A. The Reinsurer hereby acknowledges that the documents, information and data provided to it 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.  Confidential Information shall not include documents, information or data that the Reinsurer can show:

1. Are publicly known or have become publicly known through no unauthorized act of the Reinsurer;

2. Have been rightfully received from a third person without obligation of confidentiality; or

3. Were known by the Reinsurer prior to the placement of this Contract without an obligation of confidentiality.

B. Absent the written consent of the Company, the Reinsurer shall not disclose any Confidential Information to any third parties, excluding any affiliated companies, except:

1. When required by retrocessionaires subject to the business ceded to this Contract;

2. When required by state regulators performing an audit of the Reinsurer's records and/or financial condition;

3. When required by external auditors performing an audit of the Reinsurer's records in the normal course of business; or

4. When required by attorneys or arbitrators in connection with an actual or potential dispute hereunder.

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

C. 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 with written notice of same at least 10 days prior to such release or disclosure and to use its best efforts to assist the Company in maintaining the confidentiality provided for in this Article.

D. The provisions of this Article shall extend to the officers, directors and employees of the Reinsurer and its affiliates, and shall be binding upon their successors and assigns.

Article 30 - Agency Agreement

If more than one reinsured company is named as a party to this Contract, the first named company shall be deemed the agent of the other reinsured companies for purposes of sending or receiving notices required by the terms and conditions of this Contract, and for purposes of remitting or receiving any monies due any party.

Article 31 - Governing Law (BRMA 71B)

This Contract shall be governed by and construed in accordance with the laws of the State of Texas.

Article 32 - Severability (BRMA 72E)

If any provision of this Contract shall be rendered illegal or unenforceable by the laws, regulations or public policy of any state, such provision shall be considered void in such state, but this shall not affect the validity or enforceability of any other provision of this Contract or the enforceability of such provision in any other jurisdiction.

Article 33 - Entire Agreement

This written Contract constitutes the entire agreement between the parties hereto with respect to the business being reinsured hereunder, and there are no understandings between the parties hereto other than as expressed in this Contract.  Any change or modification to this Contract will be made by amendment to this Contract and signed by the parties hereto.

Article 34 - Notices and Contract Execution

A. Whenever a notice, statement, report or any other written communication is required by this Contract, unless otherwise specified, such notice, statement, report or other written communication may be transmitted by certified or registered mail, nationally or internationally recognized express delivery service, personal delivery, electronic mail, or facsimile.  With the exception of notices of termination, first class mail is also acceptable.

B. The use of any of the following shall constitute a valid execution of this Contract or any amendments thereto:

1. Paper documents with an original ink signature;

2. Facsimile or electronic copies of paper documents showing an original ink signature; and/or

3. Electronic records with an electronic signature made via an electronic agent.  For the purposes of this Contract, the terms "electronic record," "electronic signature" and "electronic agent" shall have the meanings set forth in the Electronic Signatures in Global and National Commerce Act of 2000 or any amendments thereto.

C. This Contract may be executed in one or more counterparts, each of which, when duly executed, shall be deemed an original.

Article 35 - Intermediary

Aon Benfield Inc., or one of its affiliated corporations duly licensed as a reinsurance intermediary, is hereby recognized as the Intermediary negotiating this Contract for all business hereunder.  All communications (including but not limited to notices, statements, premiums, return premiums, commissions, taxes, losses, loss adjustment expense, salvages and loss settlements) relating to this Contract will be transmitted to the Company or the Reinsurer through the Intermediary.  Payments by the Company to the Intermediary will be deemed payment to the Reinsurer.  Payments by the Reinsurer to the Intermediary will be deemed payment to the Company only to the extent that such payments are actually received by the Company.

15\H00H1063  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Schedule A

Two-Year Property Catastrophe Excess of Loss

Reinsurance Contract

Effective:  April 1, 2015

Homeowners of America Insurance Company

Irving, Texas

	First		Second		Third
	Excess		Excess		Excess
Company's Retention	$	5,000,000	$	20,000,000	$	50,000,000
Reinsurer's Per Occurrence Limit	$	15,000,000	$	30,000,000	$	100,000,000
Reinsurer's Contract Year Limit	$	30,000,000	$	60,000,000	$	200,000,000
Contract Year Minimum Premium		[****]		[****]		[****]
Premium Rate		[****]		[****]		[****]
Contract Year Deposit Premium		[****]		[****]		[****]
Contract Year Quarterly Deposit Premium		[****]		[****]		[****]

The figures listed above for each excess layer shall apply to each Subscribing Reinsurer in the percentage share for that excess layer as expressed in its Interests and Liabilities Agreement attached hereto.

15\H00H1063  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Participation Slip

attached to and forming part of the

Two-Year Property Catastrophe Excess of Loss

Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

including any or all of the affiliated insurance companies of

Homeowners of America Insurance Company and its Quota Share Reinsurers

in accordance with the provisions of the Preamble to the attached Contract

(hereinafter referred to collectively as the "Company")

and

Homeowners of America Insurance Company

Irving, Texas

including any or all of the affiliated insurance companies of

Homeowners of America Insurance Company

in accordance with the provisions of the Preamble to the attached Contract

(hereinafter referred to collectively as the "Subscribing Company")

The Subscribing Company hereby accepts the following percentage shares in the interests and liabilities of the "Company" as set forth in the attached Contract captioned above:

100.00%  of the First Property Catastrophe Excess of Loss Reinsurance

100.00%  of the Second Property Catastrophe Excess of Loss Reinsurance

  81.63%  of the Third Property Catastrophe Excess of Loss Reinsurance

This Participation Slip shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until 12:01 a.m., Central Standard Time, April 1, 2017, unless earlier terminated in accordance with the provisions of this Contract.

The Subscribing Company's share in the attached Contract shall be separate and apart from the shares of the other named reinsured companies, and shall not be joint with the shares of the other named reinsured companies, it being understood that the Subscribing Company shall in no event participate in the interests and liabilities of the other named reinsured companies.

In Witness Whereof, the Subscribing Company by its duly authorized representative has executed this Contract as of the date specified below:

This ________________ day of ____________________________ in the year ____________.

Homeowners of America Insurance Company (for and on behalf of the "Company")

_______________________________________________________

15\H00H1063  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Participation Slip

attached to and forming part of the

Two-Year Property Catastrophe Excess of Loss

Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

including any or all of the affiliated insurance companies of

Homeowners of America Insurance Company and its Quota Share Reinsurers

in accordance with the provisions of the Preamble to the attached Contract

(hereinafter referred to collectively as the "Company")

and

Qatar Reinsurance Company LLC, Bermuda Branch

Pembroke, Bermuda

 (hereinafter referred to as the "Subscribing Company")

The Subscribing Company hereby accepts the following percentage shares in the interests and liabilities of the "Company" as set forth in the attached Contract captioned above:

  0%  of the First Property Catastrophe Excess of Loss Reinsurance

  0%  of the Second Property Catastrophe Excess of Loss Reinsurance

18.37%  of the Third Property Catastrophe Excess of Loss Reinsurance

This Participation Slip shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until 12:01 a.m., Central Standard Time, April 1, 2017, unless earlier terminated in accordance with the provisions of this Contract.

The Subscribing Company's share in the attached Contract shall be separate and apart from the shares of the other named reinsured companies, and shall not be joint with the shares of the other named reinsured companies, it being understood that the Subscribing Company shall in no event participate in the interests and liabilities of the other named reinsured companies.

In Witness Whereof, the Subscribing Company by its duly authorized representative has executed this Contract as of the date specified below:

This ________________ day of ____________________________ in the year ____________.

Qatar Reinsurance Company LLC, Bermuda Branch

_______________________________________________________

15\H00H1063  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance (U.S.A.)

1. This Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly and whether as Insurer or Reinsurer, from any Pool of Insurers or Reinsurers formed for the purpose of covering Atomic or Nuclear Energy risks.

2. Without in any way restricting the operation of paragraph (1) of this Clause, this Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly and whether as Insurer or Reinsurer, from any insurance against Physical Damage (including business interruption or consequential loss arising out of such Physical Damage) to:

I. Nuclear reactor power plants including all auxiliary property on the site, or

II. Any other nuclear reactor installation, including laboratories handling radioactive materials in connection with reactor installations, and "critical facilities" as such, or

III. Installations for fabricating complete fuel elements or for processing substantial quantities of "special nuclear material," and for reprocessing, salvaging, chemically separating, storing or disposing of "spent" nuclear fuel or waste materials, or

IV. Installations other than those listed in paragraph (2) III above using substantial quantities of radioactive isotopes or other products of nuclear fission.

3. Without in any way restricting the operations of paragraphs (1) and (2) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any insurance on property which is on the same site as a nuclear reactor power plant or other nuclear installation and which normally would be insured therewith except that this paragraph (3) shall not operate

(a) where Reassured does not have knowledge of such nuclear reactor power plant or nuclear installation, or

(b) where said insurance contains a provision excluding coverage for damage to property caused by or resulting from radioactive contamination, however caused.  However on and after 1st January 1960 this sub-paragraph (b) shall only apply provided the said radioactive contamination exclusion provision has been approved by the Governmental Authority having jurisdiction thereof.

4. Without in any way restricting the operations of paragraphs (1), (2) and (3) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, when such radioactive contamination is a named hazard specifically insured against.

5. It is understood and agreed that this Clause shall not extend to risks using radioactive isotopes in any form where the nuclear exposure is not considered by the Reassured to be the primary hazard.

6. The term "special nuclear material" shall have the meaning given it in the Atomic Energy Act of 1954 or by any law amendatory thereof.

7. Reassured to be sole judge of what constitutes:

(a) substantial quantities, and

(b) the extent of installation, plant or site.

Note.-Without in any way restricting the operation of paragraph (1) hereof, it is understood and agreed that

(a) all policies issued by the Reassured on or before 31st December 1957 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

(b) with respect to any risk located in Canada policies issued by the Reassured on or before 31st December 1958 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

12/12/57

N.M.A. 1119

BRMA 35B

15\H00H1063  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Pools, Associations and Syndicates Exclusion Clause

Section A:

Excluding:

(a) All business derived directly or indirectly from any Pool, Association or Syndicate which maintains its own reinsurance facilities.

(b) Any Pool or Scheme (whether voluntary or mandatory) formed after March 1, 1968 for the purpose of insuring property whether on a country-wide basis or in respect of designated areas.  This exclusion shall not apply to so-called Automobile Insurance Plans or other Pools formed to provide coverage for Automobile Physical Damage.

Section B:

It is agreed that business written by the Company for the same perils, which is known at the time to be insured by, or in excess of underlying amounts, whether by way of insurance or reinsurance, by any Pool, Association or Syndicate formed for the purpose of writing:

Oil, Gas or Petro-Chemical Plants;

Oil or Gas Drilling Rigs; and/or

Aviation Risks;

is excluded hereunder.

Section B does not apply:

(a) Where the Total Insured Value over all interests of the risk in question is less than $250,000,000.

(b) To interests traditionally underwritten as Inland Marine or stock and/or contents written on a blanket basis.

(c) To Contingent Business Interruption, except when the Company is aware that the key location is known at the time to be insured in any Pool, Association or Syndicate named above, other than as provided for under Section B(a).

(d) To risks as follows:

Offices, Hotels, Apartments, Hospitals, Educational Establishments, Public Utilities (other than railroad schedules) and builder's risks on the classes of risks specified in this subsection (d) only.

Where this clause attaches to Catastrophe Excesses, the following Sections C and D are added:

Section C:

Nevertheless the Reinsurer specifically agrees that liability accruing to the Company from its participation in residual market mechanisms including but not limited to:

(1) The following so-called "Coastal Pools":

Alabama Insurance Underwriting Association

Louisiana Citizens Property Insurance Corporation

Mississippi Windstorm Underwriting Association

North Carolina Insurance Underwriting Association

South Carolina Windstorm and Hail Underwriting Association

Texas Windstorm Insurance Association

AND

(2) All "Fair Plan" and "Rural Risk Plan" business

AND

(3) Citizens Property Insurance Corporation ("CPIC") and the California Earthquake Authority ("CEA")

for all perils otherwise protected hereunder shall not be excluded, except, however, that this reinsurance does not include any increase in such liability resulting from:

(i) The inability of any other participant in such "Coastal Pool" and/or "Fair Plan" and/or "Rural Risk Plan" and/or Residual Market Mechanisms to meet its liability.

(ii) Any claim against such "Coastal Pool" and/or "Fair Plan" and/or "Rural Risk Plan" and/or Residual Market Mechanisms, or any participant therein, including the Company, whether by way of subrogation or otherwise, brought by or on behalf of any insolvency fund.

Section D:

(1) Notwithstanding Section C above, in respect of the CEA, where an assessment is made against the Company by the CEA, the Company may include in its Ultimate Net Loss only that assessment directly attributable to each separate loss occurrence covered hereunder.  The Company's initial capital contribution to the CEA shall not be included in the Ultimate Net Loss.

(2) Notwithstanding Section C above, in respect of CPIC, where an assessment is made against the Company by CPIC, the maximum loss that the Company may include in the Ultimate Net Loss in respect of any loss occurrence hereunder shall not exceed the lesser of:

(a) The Company's assessment from CPIC for the accounting year in which the loss occurrence commenced, or

(b) The product of the following:

(i) The Company's percentage participation in CPIC for the accounting year in which the loss occurrence commenced; and

(ii) CPIC's total losses in such loss occurrence.

Notwithstanding Section C above, in respect of CPIC, the Ultimate Net Loss hereunder shall not include any monies expended to purchase or retire bonds as a consequence of being a member of CPIC.  For the purposes of this Contract, the Company may not include in the Ultimate Net Loss any assessment or any percentage assessment levied by CPIC to meet the obligations of an insolvent insurer member or other party, or to meet any obligations arising from the deferment by CPIC of the collection of monies.

NOTES: Wherever used herein the terms:

"Company" shall be understood to mean "Company," "Reinsured," "Reassured" or whatever other term is used in the attached reinsurance document to designate the reinsured company or companies.

"Agreement" shall be understood to mean "Agreement," "Contract," "Policy" or whatever other term is used to designate the attached reinsurance document.

"Reinsurers" shall be understood to mean "Reinsurers," "Underwriters" or whatever other term is used in the attached reinsurance document to designate the reinsurer or reinsurers.

15\H00H1063  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Pollution and Seepage Exclusion Clause

This Contract excludes loss and/or damage and/or costs and/or expenses arising from seepage and/or pollution and/or contamination, other than contamination from smoke.  Nevertheless, this exclusion does not preclude payment of the cost of removing debris of property damaged by a loss otherwise covered hereunder, subject always to a limit of 25.0% of the Company's property loss under the applicable original policy.

BRMA 39A

15\H00H1063  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Terrorism Exclusion

(Property Treaty Reinsurance)

Notwithstanding any provision to the contrary within this Contract or any amendment thereto, it is agreed that this Contract excludes loss, damage, cost or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any act of terrorism, as defined herein, regardless of any other cause or event contributing concurrently or in any other sequence to the loss.

An act of terrorism includes any act, or preparation in respect of action, or threat of action designed to influence the government de jure or de facto of any nation or any political division thereof, or in pursuit of political, religious, ideological or similar purposes to intimidate the public or a section of the public of any nation by any person or group(s) of persons whether acting alone or on behalf of or in connection with any organization(s) or government(s) de jure or de facto, and which:

1.Involves violence against one or more persons; or

2.Involves damage to property; or

3.Endangers life other than that of the person committing the action; or

4.Creates a risk to health or safety of the public or a section of the public; or

5.Is designed to interfere with or to disrupt an electronic system.

This Contract also excludes loss, damage, cost, or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any action in controlling, preventing, suppressing, retaliating against, or responding to any act of terrorism.

Notwithstanding the above and subject otherwise to the terms, conditions, and limitations of this Contract, in respect only of personal lines this Contract will pay actual loss or damage (but not related cost or expense) caused by any act of terrorism provided such act is not directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with biological, chemical, radioactive or nuclear pollution or contamination or explosion.

N.M.A. 2930c

22/11/02

Form approved by Lloyd's Market Association [Non-Marine]

15\H00H1063  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Interests and Liabilities Agreement

attached to and forming part of the

Two-Year Property Catastrophe Excess of Loss Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

and

Allied World Assurance Company, LtdHamilton, Bermuda

(hereinafter referred to as the "Subscribing Reinsurer")

The Subscribing Reinsurer hereby accepts the following percentage share(s) in the interests and liabilities of the "Reinsurer" as set forth in the attached Contract captioned above:

0%	of the First Property Catastrophe Excess of Loss Reinsurance
3.00%	of the Second Property Catastrophe Excess of Loss Reinsurance
3.00%	of the Third Property Catastrophe Excess of Loss Reinsurance

This Agreement shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until 12:01 a.m., Central Standard Time, April 1, 2017, unless earlier terminated in accordance with the provisions of the attached Contract.

The Subscribing Reinsurer's share in the attached Contract shall be separate and apart from the shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it being understood that the Subscribing Reinsurer shall in no event participate in the interests and liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed this Agreement as of the date specified below:

This ________________ day of ___________________________ in the year ____________.

Allied World Assurance Company, Ltd

_______________________________________________________

15\H00H1063\3CF  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Interests and Liabilities Agreement

attached to and forming part of the

Two-Year Property Catastrophe Excess of Loss Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

and

American Standard Insurance Company of WisconsinMadison, Wisconsin

(hereinafter referred to as the "Subscribing Reinsurer")

The Subscribing Reinsurer hereby accepts the following percentage share(s) in the interests and liabilities of the "Reinsurer" as set forth in the attached Contract captioned above:

0%	of the First Property Catastrophe Excess of Loss Reinsurance
4.00%	of the Second Property Catastrophe Excess of Loss Reinsurance
5.00%	of the Third Property Catastrophe Excess of Loss Reinsurance

This Agreement shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until 12:01 a.m., Central Standard Time, April 1, 2017, unless earlier terminated in accordance with the provisions of the attached Contract.

The Subscribing Reinsurer's share in the attached Contract shall be separate and apart from the shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it being understood that the Subscribing Reinsurer shall in no event participate in the interests and liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed this Agreement as of the date specified below:

This ________________ day of ___________________________ in the year ____________.

American Standard Insurance Company of Wisconsin

_______________________________________________________

15\H00H1063\114K  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Interests and Liabilities Agreement

attached to and forming part of the

Two-Year Property Catastrophe Excess of Loss Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

and

Everest Reinsurance CompanyA Delaware Corporation

(hereinafter referred to as the "Subscribing Reinsurer")

The Subscribing Reinsurer hereby accepts the following percentage share(s) in the interests and liabilities of the "Reinsurer" as set forth in the attached Contract captioned above:

1.25%	of the First Property Catastrophe Excess of Loss Reinsurance
4.50%	of the Second Property Catastrophe Excess of Loss Reinsurance
6.00%	of the Third Property Catastrophe Excess of Loss Reinsurance

This Agreement shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until 12:01 a.m., Central Standard Time, April 1, 2017, unless earlier terminated in accordance with the provisions of the attached Contract.

The Subscribing Reinsurer's share in the attached Contract shall be separate and apart from the shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it being understood that the Subscribing Reinsurer shall in no event participate in the interests and liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed this Agreement as of the date specified below:

This ________________ day of ___________________________ in the year ____________.

Everest Reinsurance Company

_______________________________________________________

15\H00H1063\03R  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Interests and Liabilities Agreement

attached to and forming part of the

Two-Year Property Catastrophe Excess of Loss Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

and

Hannover Re (Bermuda) Ltd.Hamilton, Bermuda

(hereinafter referred to as the "Subscribing Reinsurer")

The Subscribing Reinsurer hereby accepts the following percentage share(s) in the interests and liabilities of the "Reinsurer" as set forth in the attached Contract captioned above:

0%	of the First Property Catastrophe Excess of Loss Reinsurance
2.00%	of the Second Property Catastrophe Excess of Loss Reinsurance
3.50%	of the Third Property Catastrophe Excess of Loss Reinsurance

This Agreement shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until 12:01 a.m., Central Standard Time, April 1, 2017, unless earlier terminated in accordance with the provisions of the attached Contract.

The Subscribing Reinsurer's share in the attached Contract shall be separate and apart from the shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it being understood that the Subscribing Reinsurer shall in no event participate in the interests and liabilities of the other reinsurers.

In any action, suit or proceeding to enforce the Subscribing Reinsurer's obligations under the attached Contract, service of process may be made upon Mendes & Mount, LLP, 750 Seventh Avenue, New York, New York  10019.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed this Agreement as of the date specified below:

This ________________ day of ___________________________ in the year ____________.

Hannover Re (Bermuda) Ltd.

_______________________________________________________

15\H00H1063\3BL  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Interests and Liabilities Agreement

attached to and forming part of the

Two-Year Property Catastrophe Excess of Loss Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

and

Mapfre Re, Compañia De Reaseguros, S.A.Madrid, Spain

(hereinafter referred to as the "Subscribing Reinsurer")

The Subscribing Reinsurer hereby accepts the following percentage share(s) in the interests and liabilities of the "Reinsurer" as set forth in the attached Contract captioned above:

0%	of the First Property Catastrophe Excess of Loss Reinsurance
2.00%	of the Second Property Catastrophe Excess of Loss Reinsurance
2.00%	of the Third Property Catastrophe Excess of Loss Reinsurance

This Agreement shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until 12:01 a.m., Central Standard Time, April 1, 2017, unless earlier terminated in accordance with the provisions of the attached Contract.

The Subscribing Reinsurer's share in the attached Contract shall be separate and apart from the shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it being understood that the Subscribing Reinsurer shall in no event participate in the interests and liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed this Agreement as of the date specified below:

This ________________ day of ___________________________ in the year ____________.

Mapfre Re, Compañia De Reaseguros, S.A.

_______________________________________________________

15\H00H1063\52L  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Interests and Liabilities Agreement

attached to and forming part of the

Two-Year Property Catastrophe Excess of Loss Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

and

Markel Bermuda LimitedHamilton, Bermuda

(hereinafter referred to as the "Subscribing Reinsurer")

The Subscribing Reinsurer hereby accepts the following percentage share(s) in the interests and liabilities of the "Reinsurer" as set forth in the attached Contract captioned above:

1.25%	of the First Property Catastrophe Excess of Loss Reinsurance
2.50%	of the Second Property Catastrophe Excess of Loss Reinsurance
2.00%	of the Third Property Catastrophe Excess of Loss Reinsurance

This Agreement shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until 12:01 a.m., Central Standard Time, April 1, 2017, unless earlier terminated in accordance with the provisions of the attached Contract.

The Subscribing Reinsurer's share in the attached Contract shall be separate and apart from the shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it being understood that the Subscribing Reinsurer shall in no event participate in the interests and liabilities of the other reinsurers.

In any action, suit or proceeding to enforce the Subscribing Reinsurer's obligations under the attached Contract, service of process may be made upon Mendes & Mount, LLP, 750 Seventh Avenue, New York, New York  10019.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed this Agreement as of the date specified below:

This ________________ day of ___________________________ in the year ____________.

Markel Bermuda Limited

_______________________________________________________

15\H00H1063\1144  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Interests and Liabilities Agreement

attached to and forming part of the

Two-Year Property Catastrophe Excess of Loss Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

and

MS Frontier Reinsurance LimitedHamilton, Bermuda

(hereinafter referred to as the "Subscribing Reinsurer")

The Subscribing Reinsurer hereby accepts the following percentage share(s) in the interests and liabilities of the "Reinsurer" as set forth in the attached Contract captioned above:

0%	of the First Property Catastrophe Excess of Loss Reinsurance
3.00%	of the Second Property Catastrophe Excess of Loss Reinsurance
5.00%	of the Third Property Catastrophe Excess of Loss Reinsurance

This Agreement shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until 12:01 a.m., Central Standard Time, April 1, 2017, unless earlier terminated in accordance with the provisions of the attached Contract.

The Subscribing Reinsurer's share in the attached Contract shall be separate and apart from the shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it being understood that the Subscribing Reinsurer shall in no event participate in the interests and liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed this Agreement as of the date specified below:

This ________________ day of ___________________________ in the year ____________.

MS Frontier Reinsurance Limited

_______________________________________________________

15\H00H1063\3UB  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Interests and Liabilities Agreement

attached to and forming part of the

Two-Year Property Catastrophe Excess of Loss Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

and

Shelter Mutual Insurance CompanyColumbia, Missouri

(hereinafter referred to as the "Subscribing Reinsurer")

The Subscribing Reinsurer hereby accepts the following percentage share(s) in the interests and liabilities of the "Reinsurer" as set forth in the attached Contract captioned above:

0.50%	of the First Property Catastrophe Excess of Loss Reinsurance
1.50%	of the Second Property Catastrophe Excess of Loss Reinsurance
1.50%	of the Third Property Catastrophe Excess of Loss Reinsurance

This Agreement shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until 12:01 a.m., Central Standard Time, April 1, 2017, unless earlier terminated in accordance with the provisions of the attached Contract.

The Subscribing Reinsurer's share in the attached Contract shall be separate and apart from the shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it being understood that the Subscribing Reinsurer shall in no event participate in the interests and liabilities of the other reinsurers.

As respects the Subscribing Reinsurer's share in the attached Contract, in lieu of the provisions of subparagraph B(5) of Article 2 - Commencement and Termination - the following shall apply:

"5. The Subscribing Reinsurer has reinsured its entire liability under this Contract without the Company's prior written consent, except for inter-company pooling arrangements; or"

15\H00H1063\OJ1 Page 1 of 2  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

In Witness Whereof, the parties hereto by their respective duly authorized representatives have executed this Agreement as of the dates specified below:

This ________________ day of ___________________________ in the year ____________.

Homeowners of America Insurance Company (for and on behalf of the "Company")

_______________________________________________________

This ________________ day of ____________________________ in the year ____________.

Qatar Reinsurance Company LLC, Bermuda Branch

_______________________________________________________

This ________________ day of ___________________________ in the year ____________.

Shelter Mutual Insurance Company

_______________________________________________________

15\H00H1063\OJ1 Page 2 of 2  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Interests and Liabilities Agreement

attached to and forming part of the

Two-Year Property Catastrophe Excess of Loss Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

and

XL Re LtdHamilton, Bermuda

(hereinafter referred to as the "Subscribing Reinsurer")

The Subscribing Reinsurer hereby accepts the following percentage share(s) in the interests and liabilities of the "Reinsurer" as set forth in the attached Contract captioned above:

3.00%	of the First Property Catastrophe Excess of Loss Reinsurance
2.00%	of the Second Property Catastrophe Excess of Loss Reinsurance
2.50%	of the Third Property Catastrophe Excess of Loss Reinsurance

This Agreement shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until 12:01 a.m., Central Standard Time, April 1, 2017, unless earlier terminated in accordance with the provisions of the attached Contract.

The Subscribing Reinsurer's share in the attached Contract shall be separate and apart from the shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it being understood that the Subscribing Reinsurer shall in no event participate in the interests and liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed this Agreement as of the date specified below:

This ________________ day of ___________________________ in the year ____________.

XL Re Ltd

_______________________________________________________

15\H00H1063\22K  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Interests and Liabilities Agreement

attached to and forming part of the

Two-Year Property Catastrophe Excess of Loss Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

and

American International Reinsurance Company, Ltd.Pembroke, Bermuda

(hereinafter referred to as the "Subscribing Reinsurer")

The Subscribing Reinsurer hereby accepts the following percentage share(s) in the interests and liabilities of the "Reinsurer" as set forth in the attached Contract captioned above:

0%	of the First Property Catastrophe Excess of Loss Reinsurance
0%	of the Second Property Catastrophe Excess of Loss Reinsurance
5.50%	of the Third Property Catastrophe Excess of Loss Reinsurance

This Agreement shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until 12:01 a.m., Central Standard Time, April 1, 2017, unless earlier terminated in accordance with the provisions of the attached Contract.

The Subscribing Reinsurer's share in the attached Contract shall be separate and apart from the shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it being understood that the Subscribing Reinsurer shall in no event participate in the interests and liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed this Agreement as of the date specified below:

This ________________ day of ___________________________ in the year ____________.

American International Reinsurance Company, Ltd.

_______________________________________________________

15\H00H1063\0ER  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Interests and Liabilities Agreement

attached to and forming part of the

Two-Year Property Catastrophe Excess of Loss Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

and

Fubon Insurance Co., Ltd.Taipei, Taiwan

(hereinafter referred to as the "Subscribing Reinsurer")

The Subscribing Reinsurer hereby accepts the following percentage share(s) in the interests and liabilities of the "Reinsurer" as set forth in the attached Contract captioned above:

0%	of the First Property Catastrophe Excess of Loss Reinsurance
0%	of the Second Property Catastrophe Excess of Loss Reinsurance
2.00%	of the Third Property Catastrophe Excess of Loss Reinsurance

This Agreement shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until 12:01 a.m., Central Standard Time, April 1, 2017, unless earlier terminated in accordance with the provisions of the attached Contract.

The Subscribing Reinsurer's share in the attached Contract shall be separate and apart from the shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it being understood that the Subscribing Reinsurer shall in no event participate in the interests and liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed this Agreement as of the date specified below:

This ________________ day of ___________________________ in the year ____________.

Fubon Insurance Co., Ltd.

_______________________________________________________

15\H00H1063\8WZ  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Interests and Liabilities Agreement

attached to and forming part of the

Two-Year Property Catastrophe Excess of Loss Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

and

Sirius International Insurance CorporationStockholm, Sweden as the fronting company for P.R.A.M. subscriptions

(hereinafter referred to as the "Subscribing Reinsurer")

The Subscribing Reinsurer hereby accepts the following percentage share(s) in the interests and liabilities of the "Reinsurer" as set forth in the attached Contract captioned above:

3.00%	of the First Property Catastrophe Excess of Loss Reinsurance
4.00%	of the Second Property Catastrophe Excess of Loss Reinsurance
4.00%	of the Third Property Catastrophe Excess of Loss Reinsurance

This Agreement shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until 12:01 a.m., Central Standard Time, April 1, 2017, unless earlier terminated in accordance with the provisions of the attached Contract.

The Subscribing Reinsurer's share in the attached Contract shall be separate and apart from the shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it being understood that the Subscribing Reinsurer shall in no event participate in the interests and liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed this Agreement as of the date specified below:

This ________________ day of ___________________________ in the year ____________.

Sirius International Insurance Corporation

for and on behalf of P.R.A.M.

_______________________________

15\H00H1063\52B  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Interests and Liabilities Agreement

attached to and forming part of the

Two-Year Property Catastrophe Excess of Loss Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

and

Certain Underwriting Members of Lloyd's

shown in the Signing Page(s) attached hereto

(hereinafter referred to as the "Subscribing Reinsurer")

The Subscribing Reinsurer hereby accepts the following percentage share(s) in the interests and liabilities of the "Reinsurer" as set forth in the attached Contract captioned above:

1.00%	of the First Property Catastrophe Excess of Loss Reinsurance
3.00%	of the Second Property Catastrophe Excess of Loss Reinsurance
2.75%	of the Third Property Catastrophe Excess of Loss Reinsurance

This Agreement shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until 12:01 a.m., Central Standard Time, April 1, 2017, unless earlier terminated in accordance with the provisions of the attached Contract.

As respects the Subscribing Reinsurer's share in the attached Contract, the funding provisions of Article 25 - Reserves - shall not apply to the extent that funding is provided by the Lloyd's United States Credit for Reinsurance Trust Fund.

In any action, suit or proceeding to enforce the Subscribing Reinsurer's obligations under the attached Contract, service of process may be made upon Mendes & Mount, LLP, 750 Seventh Avenue, New York, New York  10019.

15\H00H1063\Lloyd's Page 1 of 2  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

In Witness Whereof, the Subscribing Companies hereto by their respective duly authorized representatives have executed this Agreement as of the dates specified below:

This ________________ day of ___________________________ in the year ____________.

Homeowners of America Insurance Company (for and on behalf of the "Company")

_______________________________________________________

This ________________ day of ____________________________ in the year ____________.

Qatar Reinsurance Company LLC, Bermuda Branch

_______________________________________________________

Signed for and on behalf of the Subscribing Reinsurer in the Signing Page(s) attached hereto.

15\H00H1063\Lloyd's Page 2 of 2  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Signing Page

attached to and forming part of the

Interests and Liabilities Agreement

with respect to the

Two-Year Property Catastrophe Excess of Loss Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company, as specified in the above-captioned Contract

and

Certain Underwriting Members of Lloyd's

(Re)Insurer's Liability Clause - LMA3333

(Re)Insurer's liability several not joint

The liability of a (re)insurer under this contract is several and not joint with other (re)insurers party to this contract. A (re)insurer is liable only for the proportion of liability it has underwritten. A (re)insurer is not jointly liable for the proportion of liability underwritten by any other (re)insurer. Nor is a (re)insurer otherwise responsible for any liability of any other (re)insurer that may underwrite this contract.

The proportion of liability under this contract underwritten by a (re)insurer (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 (re)insurer. 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 (re)insurer 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 (re)insurer (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 (re)insurer (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 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.

15\H00H1063\Lloyd's  

EX-10.38

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Exhibit 10.38

Fourth Property Catastrophe Excess of Loss

Reinsurance Contract

Effective:  April 1, 2015

Homeowners of America Insurance Company

Irving, Texas

15\H00H1059  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Fourth Property Catastrophe Excess of Loss Reinsurance Contract

Effective:  April 1, 2015

Homeowners of America Insurance Company

Irving, Texas

Reinsurer(s)	Participation(s)
Through Aon UK Limited trading as Aon Benfield
Companies Per Signing Page(s)	65.0%
Total	65.0%

15\H00H1059  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Table of Contents

Article		Page
	Preamble	1
1	Classes of Business Reinsured	1
2	Commencement and Termination	2
3	Territory (BRMA 51A)	3
4	Exclusions	3
5	Special Acceptances	5
6	Retention and Limit	5
7	Reinstatement	6
8	Definitions	6
9	Other Reinsurance	8
10	Loss Occurrence	8
11	Loss Notices and Settlements	9
12	Salvage and Subrogation	10
13	Reinsurance Premium	10
14	Sanctions	12
15	Late Payments	12
16	Offset (BRMA 36C)	13
17	Access to Records	14
18	Liability of the Reinsurer	14
19	Net Retained Lines	14
20	Errors and Omissions	15
21	Currency (BRMA 12A)	15
22	Taxes (BRMA 50B)	15
23	Federal Excise Tax (BRMA 17D)	15
24	Foreign Account Tax Compliance Act	15
25	Reserves	16
26	Insolvency	18
27	Arbitration	18
28	Service of Suit (BRMA 49G)	19
29	Confidentiality	20
30	Agency Agreement	21
31	Governing Law (BRMA 71B)	21
32	Severability (BRMA 72E)	21
33	Entire Agreement	21
34	Notices and Contract Execution	21
35	Intermediary	22

15\H00H1059  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Fourth Property Catastrophe Excess of Loss

Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

and

The Subscribing Reinsurer(s) Executing the

Interests and Liabilities Agreement(s)

Attached Hereto

(hereinafter referred to as the "Reinsurer")

Preamble

Whenever the word "Company" is used in this Contract, such term shall be held to include:

1. Any or all of the affiliated insurance companies of Homeowners of America Insurance Company, which are or may hereafter be under common control, provided that notice be given to the Reinsurer of any such newly affiliated insurance companies which may hereafter come under common control as soon as practicable with full particulars as to how such affiliation is likely to affect this Contract; and

2. Its Quota Share Reinsurers whose Participation Slips are attached hereto (hereinafter referred to as the "Quota Share Reinsurers").

In the event of the Company or the Reinsurer maintaining that such affiliation calls for alteration in existing terms, and an agreement for alteration not being arrived at, then the business of such newly affiliated insurance company is covered at existing terms only for a period of 45 days after notice by either party that it does not wish to cover such business.

Article 1 - Classes of Business Reinsured

By this Contract the Reinsurer agrees to reinsure the excess liability which may accrue to the Company under its policies in force at the effective date hereof or issued or renewed on or after that date, and classified by the Company as Dwelling, Tenant, Condominium Owners and Homeowners business (property coverages only, including Dwelling coverage, Personal Property coverage and Extensions of Coverage as defined in the Company's policies), subject to the terms, conditions and limitations hereinafter set forth.

Article 2 - Commencement and Termination

A. This Contract shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, with respect to losses arising out of loss occurrences commencing at or after that time and date, and shall remain in force until 12:01 a.m., Central Standard Time, April 1, 2016.

B. Notwithstanding the provisions of paragraph A above, the Company may terminate a Subscribing Reinsurer's percentage share in this Contract in the event any of the following circumstances occur as clarified by public announcement or upon discovery:

1. The Subscribing Reinsurer's policyholders' surplus (or its equivalent under the Subscribing Reinsurer's accounting system) after the earlier of:  (a) the inception of this Contract, or (b) the date lines are bound for this Contract, has been reduced by more than 20.0% of the amount of surplus (or the applicable equivalent) 12 months prior to that date; or

2. The Subscribing Reinsurer's policyholders' surplus (or its equivalent under the Subscribing Reinsurer's accounting system) at any time between the earlier of:  (a) the inception of this Contract, or (b) the date lines are bound for this Contract, and the date of termination of this Contract has been reduced by more than 20.0% of the amount of surplus (or the applicable equivalent) at the date of the Subscribing Reinsurer's most recent financial statement filed with regulatory authorities and available to the public as of the date lines are bound; or

3. A State Insurance Department or other legal authority has ordered the Subscribing Reinsurer to cease assuming business; or

4. The Subscribing Reinsurer has become insolvent or has been placed into liquidation, receivership, supervision, administration, winding-up or under a scheme of arrangement, or similar proceedings (whether voluntary or involuntary) or proceedings have been instituted against the Subscribing Reinsurer for the appointment of a receiver, liquidator, rehabilitator, supervisor, administrator, conservator or trustee in bankruptcy, or other agent known by whatever name, to take possession of its assets or control of its operations; or

5. The Subscribing Reinsurer has reinsured its entire liability under this Contract without the Company's prior written consent; or

6. The A.M. Best's rating for the Subscribing Reinsurer has been assigned or downgraded below A- (inclusive of "Not Rated" ratings), or the published rating issued by Standard & Poor's has been downgraded below BBB+ (inclusive of "Not Rated" ratings); or

7. The Subscribing Reinsurer has become merged with, acquired by or controlled by any other entity or individual(s) not controlling the Subscribing Reinsurer's operations previously; or

8. The Subscribing Reinsurer has ceased assuming new or renewal property or casualty treaty reinsurance business.

C. In the event a Subscribing Reinsurer experiences one or more of the circumstances specified in paragraph B above, the Subscribing Reinsurer shall notify the Company as promptly as possible and shall hereinafter be referred to as a "Special Circumstance Reinsurer."  To terminate a Special Circumstance Reinsurer's percentage share in this Contract, the Company must provide the Special Circumstance Reinsurer with written notice as set forth in the Notices and Contract Execution Article.  Such notice shall include the effective date of termination as selected by the Company and shall be one of the following:

1. The date of written notice provided by the Special Circumstance Reinsurer; or

2. The last day of the month prior to the date of written notice provided by the Special Circumstance Reinsurer; or

3. The last day of any month after the date of written notice provided by the Special Circumstance Reinsurer; or

4. The date of the Company's written notice to the Special Circumstance Reinsurer advising of the termination.

In the event the Subscribing Reinsurer fails to immediately provide written notice to the Company of any event outlined in subparagraphs 1 through 8 of paragraph B above, the Company may elect to substitute the date of public announcement or discovery as the equivalent of written notice.

D. If any Subscribing Reinsurer's percentage share in this Contract is terminated or 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 termination or expiration of this Contract, provided that no part of such loss occurrence is claimed against any renewal or replacement of this Contract.

Article 3 - Territory (BRMA 51A)

The territorial limits of this Contract shall be identical with those of the Company's policies.

Article 4 - Exclusions

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

1. Financial guarantee and insolvency.

2. Nuclear risks as defined in the "Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance (U.S.A.)" attached to and forming part of this Contract.

3. Loss or damage caused by or resulting from war, invasion, hostilities, acts of foreign enemies, civil war, rebellion, insurrection, military or usurped power, or martial law or confiscation by order of any government or public authority, but this exclusion shall not apply to loss or damage covered under a standard policy with a standard War Exclusion Clause.

4. Loss or liability excluded under the provisions of the "Pools, Associations and Syndicates Exclusion Clause" attached to and forming part of this Contract.

5. 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.

6. All third party liability, including Section II of Homeowners.

7. Loss or damage to growing or standing crops.

8. Pollution and seepage coverages excluded under the provisions of the "Pollution and Seepage Exclusion Clause (BRMA 39A)" attached to and forming part of this Contract.

9. Terrorism, as described in the provisions of the "Terrorism Exclusion (NMA 2930c)" attached to and forming part of this Contract.

10. Flood and/or earthquake when written as such.

11. Loss, damage, cost or expense arising from fungi unless directly or indirectly caused by or contributed to by or arising from a covered peril under the Company's original policy.  Losses arising from fungi shall not in and of themselves constitute an event for the purposes of recovery hereunder.  For the purposes of this Contract, "fungi" means any type or form of fungus, including mold or mildew and any mycotoxins, spores, scents or by products produced or released by "fungi."

12. Reinsurance assumed; however, this exclusion shall not apply to business assumed by the Quota Share Reinsurers.

13. Growing, standing or drying crops or timber.

B. Any exclusion set forth in paragraph A (except exclusions set forth in subparagraphs 1, 2, 3, 5, 6 and 9) shall be waived automatically when, in the opinion of the Company, the exposure excluded therein is incidental to the principal exposure on the risk in question.

C. If the Company is bound, without the knowledge and contrary to the instructions of the Company's supervisory underwriting personnel, on any business falling within the scope of one or more of the exclusions set forth in paragraph A (except exclusions set forth in subparagraphs 1, 2, 3, 5, 6 and 9), the exclusion shall be suspended with respect to such business until 30 days after an underwriting supervisor of the Company acquires knowledge thereof or until the minimum amount of time required by the applicable statute or regulatory authority to cancel such a policy has elapsed, whichever is greater.

D. If the Company is required to accept an assigned risk which conflicts with one or more of the exclusions set forth in paragraph A (except exclusions set forth in subparagraphs 1, 2, 3, 5, 6 and 9), reinsurance shall apply, but only for the difference between the Company's retention and the minimum limit required by the applicable state statute, and in no event shall the Reinsurer's liability exceed the applicable limits set forth in the Retention and Limit and Reinstatement Articles.

Article 5 - Special Acceptances

A. From time to time the Company may request a special acceptance of reinsurance falling outside the scope of the provisions of this Contract (except as respects the exclusions set forth in subparagraphs 1, 2, 3, 5, 6 and 9 of the Exclusions Article).  Within 10 days of receipt of such a request, each Subscribing Reinsurer shall accept such request, ask for additional information, or reject the request.  Any reinsurance that is specially accepted by the Reinsurer shall be covered under this Contract and shall be subject to the terms hereof, except as such terms shall be modified by the special acceptance.  If a Subscribing Reinsurer fails to respond to a special acceptance request within 10 days, the Subscribing Reinsurer will be deemed to have agreed to the special acceptance.

B. If Subscribing Reinsurers with percentage shares totaling more than 50.0% in the interests and liabilities of the Reinsurer agree to a special acceptance, such special acceptance shall be binding on all Subscribing Reinsurers with respect to their respective shares.  If such percentage 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 that agrees to the special acceptance.

C. 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.  Further, if one or more Subscribing Reinsurers under this Contract agreed to special acceptance(s) under the contract being replaced by this Contract, such special acceptance(s) shall be automatically covered hereunder with respect to the interests and liabilities of such Subscribing Reinsurer(s).

Article 6 - Retention and Limit

A. The Company shall retain and be liable for the first $150,000,000 of ultimate net loss arising out of each loss occurrence.  The Reinsurer shall then be liable for the amount by which such ultimate net loss exceeds the Company's retention, but the liability of the Reinsurer shall not exceed $25,000,000 as respects any one loss occurrence.

B. No claim shall be made hereunder in any one loss occurrence unless at least two risks insured by the Company are involved in such loss occurrence.  For the purposes of this Contract, the Company shall be the sole judge of what constitutes "one risk."

Article 7 - Reinstatement

A. In the event all or any portion of the reinsurance coverage provided hereunder is exhausted by loss, the amount so exhausted shall be reinstated immediately from the time the loss occurrence commences hereon.  For each amount so reinstated, the Company agrees to pay additional premium in accordance with the provisions of the Reinsurance Premium Article.

B. Notwithstanding anything stated herein, the liability of the Reinsurer hereunder shall not exceed $25,000,000 as respects loss or losses arising out of any one loss occurrence, nor shall it exceed $50,000,000 in all during the term of this Contract.

Article 8 - Definitions

A. "Loss adjustment expense" as used herein shall mean costs and expenses assignable to the investigation, appraisal, adjustment, settlement, litigation, defense and/or appeal of claims, regardless of how such expenses are classified for statutory reporting purposes.  Loss adjustment expense shall include, but not be limited to:

1. Interest on judgments;

2. Expenses of outside adjusters and adjuster expenses incurred by Homeowners of America MGA, Inc.;

3. Expenses and a pro rata share of salaries of the Company's field employees and expenses of other employees of the Company who have been temporarily diverted from their normal and customary duties and assigned to the adjustment of losses covered by this Contract;

4. Expenses of the Company's officials incurred in connection with losses covered by this Contract;

5. Declaratory judgment expenses or other legal expenses and costs incurred in connection with coverage questions and legal actions connected thereto;

6. Advertising or other extraordinary communication expenses incurred as a result of a covered loss;

7. Court costs;

8. Costs of supersedeas and appeal bonds;

9. Monitoring counsel expenses;

10. Extraordinary expenses arising out of a loss, whether or not they are allocable to a specific "claim."

However, loss adjustment expense shall not include normal office expenses or salaries of the Company's regular employees, except as provided for in subparagraph 3 above.

B. "Loss in excess of policy limits" and "extra contractual obligations" as used herein shall mean:

1. "Loss in excess of policy limits" shall mean 90.0% of any amount paid or payable by the Company in excess of its policy limits, but otherwise within the terms of its policy, such loss in excess of the Company's policy limits arising from the handling of any claim on business covered hereunder; such liabilities arising, because of, but not limited to, failure by the Company to settle within the policy limits or by reason of the Company's alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of an action against its insured or reinsured or in the preparation or prosecution of an appeal consequent upon such an action.

2. "Extra contractual obligations" shall mean 90.0% of any punitive, exemplary, compensatory or consequential damages paid or payable by the Company, not covered by any other provision of this Contract and which arise from the handling of any claim on business subject to this Contract, such liabilities arising because of, but not limited to, failure by the Company to settle within the policy limits or by reason of the Company's alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of an action against its insured or reinsured or in the preparation or prosecution of an appeal consequent upon such an action.  An extra contractual obligation shall be deemed, in all circumstances, to have occurred on the same date as the loss covered or alleged to be covered under the policy.

Notwithstanding anything stated herein, this Contract shall not apply to any loss in excess of policy limits or any extra contractual obligation incurred by the Company as a result of any fraudulent and/or criminal act by any officer or director of the Company acting individually or collectively or in collusion with any individual or corporation or any other organization or party involved in the presentation, defense or settlement of any claim covered hereunder.

Savings Clause (Applicable only if the Subscribing Reinsurer is domiciled in the State of New York):  In no event shall coverage be provided to the extent that such coverage is not permitted under New York law.

C. "Policies" as used herein shall mean all policies, contracts and binders of insurance, whether held covered provisionally or otherwise.

D. "Term of this Contract" as used herein shall mean the period from 12:01 a.m., Central Standard Time, April 1, 2015, to 12:01 a.m., Central Standard Time, April 1, 2016.  However, if this Contract or the participation of a Subscribing Reinsurer is terminated, "term of this Contract" as used herein shall mean the period from 12:01 a.m., Central Standard Time, April 1, 2015, to the effective time and date of termination.

E. "Ultimate net loss" as used herein shall mean the sum or sums (including loss in excess of policy limits, extra contractual obligations and loss adjustment expense, as defined herein) paid or payable by the Company in settlement of claims and in satisfaction of judgments rendered on account of such claims, after deduction of all claims on inuring reinsurance, whether collectible or not, and all salvage and other recoveries.  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 foregoing, it is understood and agreed that reinsurance, if any, effected by the Quota Share Reinsurers (except as respects reinsurance assumed by the Quota Share Reinsurers covering business set forth in the Classes of Business Reinsured Article) shall not be taken into account in computing the ultimate net loss, nor in any way affect the amount recoverable hereunder.

Article 9 - Other Reinsurance

A. The Company shall maintain in force property per risk excess of loss treaty reinsurance, recoveries under which shall inure to the benefit of this Contract.

B. The Company shall be permitted to carry other 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.

Article 10 - Loss Occurrence

A. "Loss occurrence" as used herein shall mean the sum of all individual losses directly occasioned by any one disaster, accident or loss or series of disasters, accidents or losses arising out of one event which occurs within the area of one state of the United States or province of Canada and states or provinces contiguous thereto and to one another.  However, the duration and extent of any one "loss occurrence" shall be limited to all individual losses sustained by the Company occurring during any period of 168 consecutive hours arising out of and directly occasioned by the same event, except that the term "loss occurrence" shall be further defined as follows:

1. As regards windstorm, hail, tornado, hurricane, cyclone, including ensuing collapse and water damage, all individual losses sustained by the Company occurring during any period of 120 consecutive hours arising out of and directly occasioned by the same event.  However, the event need not be limited to one state or province or states or provinces contiguous thereto.

2. As regards riot, riot attending a strike, civil commotion, vandalism and malicious mischief, all individual losses sustained by the Company occurring during any period of 72 consecutive hours within the area of one municipality or county and the municipalities or counties contiguous thereto arising out of and directly occasioned by the same event.  The maximum duration of 72 consecutive hours may be extended in respect of individual losses which occur beyond such 72 consecutive hours during the continued occupation of an assured's premises by strikers, provided such occupation commenced during the aforesaid period.

3. As regards earthquake (the epicenter of which need not necessarily be within the territorial confines referred to in the introductory portion of this paragraph) and fire following directly occasioned by the earthquake, only those individual fire losses which commence during the period of 168 consecutive hours may be included in the Company's "loss occurrence."

4. As regards "freeze," only individual losses directly occasioned by collapse, breakage of glass and water damage (caused by bursting of frozen pipes and tanks or freezing and/or melting snow or sleet) may be included in the Company's "loss occurrence."

5. As regards firestorms, brush fires and any other fires or series of fires, irrespective of origin (except as provided in subparagraphs 2 and 3 above), all individual losses sustained by the Company which commence during any period of 168 consecutive hours within a 150-mile radius of any fixed point selected by the Company may be included in the Company's "loss occurrence."  However, an individual loss subject to this subparagraph cannot be included in more than one "loss occurrence."

B. For all those "loss occurrences" other than those referred to in subparagraph 2 of paragraph A above, the Company may choose the date and time when any such period of consecutive hours commences, provided that it is not earlier than the date and time of the occurrence of the first recorded individual loss sustained by the Company arising out of that disaster, accident or loss, and provided that only one such period of 168 consecutive hours shall apply with respect to one event, except for any loss occurrence referred to in subparagraph 1 of paragraph A above where only one such period of 120 consecutive hours shall apply with respect to one event.

C. As respects those "loss occurrences" referred to in subparagraph 2 of paragraph A above, if the disaster, accident or loss occasioned by the event is of greater duration than 72 consecutive hours, then the Company may divide that disaster, accident or loss into two or more "loss occurrences," provided no two periods overlap and no individual loss is included in more than one such period and provided that no period commences earlier than the date and time of the occurrence of the first recorded individual loss sustained by the Company arising out of that disaster, accident or loss.

D. It is understood that losses arising from a combination of two or more perils as a result of the same event shall be considered as having arisen from one "loss occurrence."  Notwithstanding the foregoing, the hourly limitations as stated in paragraph A shall not be exceeded as respects the applicable perils and no single "loss occurrence" shall encompass a time period greater than 168 consecutive hours.

Article 11 - Loss Notices and Settlements

A. Whenever losses paid or reserved by the Company appear likely, in the opinion of the Company, to result in a claim hereunder, the Company shall notify the Reinsurer, and the Company shall notify the Reinsurer of all subsequent developments that may materially affect the position of the Reinsurer.

B. The Company alone and at its full discretion shall adjust, settle or compromise all claims and losses subject to this Contract.  The Reinsurer shall be bound by the judgment of the Company as to the obligations and liabilities of the Company under any policy.

C. All loss settlements made by the Company, whether under strict policy terms or by way of compromise (including loss in excess of policy limits and extra contractual obligations) shall be binding upon the Reinsurer, and the Reinsurer agrees to pay or allow, as the case may be, all amounts for which it may be liable immediately upon receipt of reasonable evidence of the amount paid (or scheduled to be paid) by the Company.  The Company shall be the sole judge as to:

1. What constitutes a claim or loss covered under any policy;

2. The Company's liability thereunder;

3. The amount or amounts proper for the Company to pay thereunder.

D. A Special Circumstance Reinsurer shall not have the right to deny payment of a claim if the sum of the percentage shares of Active Subscribing Reinsurers that have paid the claim exceeds 50.0% of the sum of the percentage shares of all Active Subscribing Reinsurers.  "Active Subscribing Reinsurer" as used herein shall mean a Subscribing Reinsurer that is not a Special Circumstance Reinsurer as of the due date of the claim (as specified in the Late Payments Article).

Article 12 - Salvage and Subrogation

The Reinsurer shall be credited with salvage (i.e., reimbursement obtained or recovery made by the Company, less the actual cost, excluding salaries of officials and employees of the Company and sums paid to attorneys as retainer, of obtaining such reimbursement or making such recovery) on account of claims and settlements involving reinsurance hereunder.  Salvage thereon shall always be used to reimburse the excess carriers in the reverse order of their priority according to their participation before being used in any way to reimburse the Company for its primary loss.  The Company hereby agrees to enforce its rights to salvage or subrogation relating to any loss, a part of which loss was sustained by the Reinsurer, and to prosecute all claims arising out of such rights if, in the Company's opinion, it is reasonable to do so.

Article 13 - Reinsurance Premium

A. As premium for the reinsurance provided hereunder, the Company shall pay the Reinsurer [****] of the Company's net earned premium for the term of this Contract, subject to a minimum premium of [****].

B. The Company shall pay the Reinsurer an annual deposit premium of [****] in four equal installments of [****] on April 1, July 1 and October 1 of 2015 and January 1 of 2016.

C. Within 45 days after the expiration of this Contract, the Company shall provide a report to the Reinsurer setting forth the premium due hereunder for the term of this Contract, computed in accordance with paragraph A above, and any additional premium due the Reinsurer or return premium due the Company shall be remitted promptly.

D. For each amount of limit reinstated in accordance with the Reinstatement Article, the Company agrees to pay additional premium equal to the product of the following:

1. The percentage of the occurrence limit reinstated (based on the loss paid by the Reinsurer); times

2. The earned reinsurance premium, as calculated in accordance with paragraph C above, for the term of this Contract (exclusive of reinstatement premium).

E. Whenever the Company requests payment by the Reinsurer of any loss hereunder, the Company shall submit a statement to the Reinsurer of reinstatement premium due the Reinsurer.  If the earned reinsurance premium for the term of this Contract has not been finally determined as of the date of any such statement, the calculation of reinstatement premium due shall be based on the annual deposit premium and shall be readjusted when the earned reinsurance premium for the term of this Contract has been finally determined.  Any reinstatement premium shown to be due the Reinsurer as reflected by any such statement (less prior payments, if any) shall be payable by the Company concurrently with payment by the Reinsurer of the requested loss.  Any return reinstatement premium shown to be due the Company shall be remitted by the Reinsurer as promptly as possible after receipt and verification of the Company's statement.

F. In the event a Subscribing Reinsurer's participation in this Contract is terminated under the provisions of paragraph B of the Commencement and Termination Article, no deposit premium shall be due after the effective date of termination, the minimum premium shall be waived, and the reinsurance premium and reinstatement premium, if applicable, will be calculated in accordance with the following formulas:

1. Reinsurance premium shall be the number of days the Subscribing Reinsurer participates on this Contract divided by the number of days of the original term of this Contract and the quotient thereof shall be multiplied by the Subscribing Reinsurer's percentage share of the final adjusted premium reported in accordance with paragraph C above.

2. Reinstatement premium shall be the product of subparagraphs D(1) and F(1) above.

3. In the event the incurred loss is greater than the sum of subparagraphs F(1) and F(2) above, in lieu of the provisions of subparagraphs F(1) and F(2) above, the Subscribing Reinsurer will receive premium equal to the lesser of:

a. An amount equal to the Subscribing Reinsurer's percentage share of the full reinsurance premium calculated in accordance with paragraph A above (without regard to the termination of the Subscribing Reinsurer's share in accordance with the provisions of the Commencement and Termination Article) plus any reinstatement premium calculated in accordance with subparagraph F(2) above; or

b. The Subscribing Reinsurer's percentage share of the incurred loss.

G. Within 45 days after the termination of a Subscribing Reinsurer's participation in this Contract as set forth above, the Company shall provide a report to the Subscribing Reinsurer setting forth the premium due hereunder, computed in accordance with paragraph F above, and any additional premium due the Subscribing Reinsurer or return premium due the Company shall be remitted promptly.

H. "Net earned premium" as used herein shall mean 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.

I. "Incurred loss" as used herein shall mean the Company's ceded ultimate net loss plus the Company's ceded outstanding loss and loss adjustment expense reserves (including all case reserves plus any reasonable amount estimated to be unreported from known loss occurrences as established by the Company).

Article 14 - Sanctions

Neither the Company nor any Subscribing Reinsurer shall be liable for premium or loss under this Contract if it would result in a violation of any mandatory sanction, prohibition or restriction under United Nations resolutions or the trade or economic sanctions, laws or regulations of the European Union, United Kingdom or United States of America that are applicable to either party.

Article 15 - Late Payments

A. The provisions of this Article shall not be implemented unless specifically invoked, in writing, by one of the parties to this Contract.

B. In the event any premium, loss or other payment due either party is not received by the intermediary named in the Intermediary Article (hereinafter referred to as the "Intermediary") by the payment due date, the party to which 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 charge 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

2. 1/365th of the sum of 4.0% and the U.S. prime rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made; 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 charges have been received by the Intermediary.

Notwithstanding the provisions of subparagraph 2 above and the immediately preceding sentence, the interest rate for a Special Circumstance Reinsurer will increase by 1.0% for every month that payment of the claim is past due, subject to a maximum annual interest rate of 10.0%.

C. If the interest rate provided under this Article exceeds the maximum interest rate allowed by any applicable law or is held unenforceable by a court of competent jurisdiction, such interest rate shall be modified to the highest rate permitted by the applicable law, and all remaining provisions of this Article and Contract shall remain in full force and effect without being impaired or invalidated in any way.

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

1. As respects the payment of routine deposits and premiums due the Reinsurer, the due date shall be as provided for in the applicable section of this Contract.  In the event a due date is not specifically stated for a given payment, it shall be deemed due 30 days after the date of transmittal by the Intermediary of the initial billing for each such payment.

2. Any claim or loss payment due the Company hereunder shall be deemed due 30 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 30 days, interest will accrue on the payment or amount overdue in accordance with paragraph B above, from the date the proof of loss or demand for payment was transmitted to the Reinsurer.

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.  In the event a due date is not specifically stated for a given payment, it shall be deemed due 30 days following transmittal of written notification that the provisions of this Article have been invoked.

For purposes of interest calculations only, amounts due hereunder shall be deemed paid upon receipt by the Intermediary.

E. Nothing herein shall be construed as limiting or prohibiting a Subscribing Reinsurer from contesting the validity of any claim, or from participating in the defense of any claim or suit, or prohibiting either party from contesting the validity of any payment or from initiating any arbitration or other proceeding in accordance with the provisions of this Contract.  If the debtor party prevails in an arbitration or other proceeding, then any interest charges due hereunder on the amount in dispute shall be null and void.  If the debtor party loses in such proceeding, then the interest charge on the amount determined to be due hereunder shall be calculated in accordance with the provisions set forth above unless otherwise determined by such proceedings.  If a debtor party advances payment of any amount it is contesting, and proves to be correct in its contestation, either in whole or in part, the other party shall reimburse the debtor party for any such excess payment made plus interest on the excess amount calculated in accordance with this Article.

F. Interest charges arising out of the application of this Article that are $250 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 16 - Offset (BRMA 36C)

The Company and the Reinsurer shall have the right to offset any balance or amounts due from one party to the other under the terms of this Contract.  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.

Article 17 - Access to Records

A. Provided the Company has received at least 10 days prior notice, the Reinsurer or its designated representatives shall have access during regular business hours to all records of the Company which pertain in any way to this reinsurance.  However:

1. A Special Circumstance Reinsurer shall not have any right of access to the records of the Company without the Company's prior consent; and

2. A Subscribing Reinsurer or its designated representatives shall not have any right of access to the records of the Company if it is not current in all undisputed payments due the Company.  "Undisputed" as used herein shall mean any amount that the Subscribing Reinsurer has not contested in writing to the Company specifying the reason(s) why the payments are disputed.

B. The provisions of this Article shall extend beyond the expiration or invalidation of this Contract, or the termination of a Subscribing Reinsurer's percentage share in this Contract, until all claims and losses hereunder are settled.

Article 18 - Liability of the Reinsurer

A. The liability of the Reinsurer shall follow that of the Company in every case, including judicial interpretation and policy reformation, and be subject in all respects to all the general and specific stipulations, clauses, waivers and modifications of the Company's policies and any endorsements thereon.  However, in no event shall this be construed in any way to provide coverage outside the terms and conditions set forth in this Contract.

B. Nothing herein shall in any manner create any obligations or establish any rights against the Reinsurer in favor of any third party or any persons not parties to this Contract.

Article 19 - 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.  For purposes of this Contract, amounts ceded to Quota Share Reinsurers on business reinsured hereunder, if applicable, shall be considered retained net by the Company.

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.

Article 20 - Errors and Omissions

Inadvertent delays, errors or omissions made in complying with this Contract or any transaction hereunder shall not relieve either party from any liability which would have attached had such delay, error or omission not occurred, provided always that such error or omission is rectified as soon as possible after discovery.

Article 21 - Currency (BRMA 12A)

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 22 - Taxes (BRMA 50B)

In consideration of the terms under which this Contract is issued, the Company will not claim a deduction in respect of the premium hereon when making tax returns, other than income or profits tax returns, to any state or territory of the United States of America or the District of Columbia.

Article 23 - Federal Excise Tax (BRMA 17D)

A. The Reinsurer has agreed to allow for the purpose of paying the Federal Excise Tax the applicable percentage of the premium payable hereon (as imposed under Section 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 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 24 - Foreign Account Tax Compliance Act

A. To the extent the Reinsurer is subject to the deduction and withholding of premium payable hereon as set forth in the Foreign Account Tax Compliance Act (Sections 1471-1474 of the Internal Revenue Code), the Reinsurer shall allow such deduction and withholding from the premium payable under this Contract.

B. In the event of any return of premium becoming due hereunder, the return premium will be determined and paid in full without regard to any amounts deducted or withheld under paragraph A of this Article.  In the event the Company or its agent recovers such premium deductions and withholdings on the return premium from the United States Government, the Company or its agent will reimburse the Reinsurer for such amounts.

Article 25 - Reserves

A. The Reinsurer agrees to fund its share of the Company's ceded outstanding loss and loss adjustment expense reserves (including all case reserves plus any reasonable amount estimated to be unreported from known loss occurrences as established by the Company), and any other outstanding balances which it shall be required by applicable regulation or law to set up under this Contract (the "funding obligation") by:

1. Clean, irrevocable and unconditional letters of credit issued and confirmed, if confirmation is required by the insurance regulatory authorities involved, by a bank or banks meeting the NAIC Securities Valuation Office credit standards for issuers of letters of credit and acceptable to said insurance regulatory authorities; and/or

2. Escrow accounts for the benefit of the Company; and/or

3. Cash advances;

if the Reinsurer:

1. Is unauthorized in any state of the United States of America or the District of Columbia and if, without such funding, a penalty would accrue to the Company on any financial statement it is required to file with the insurance regulatory authorities involved; or

2. Is a Special Circumstance Reinsurer.

The Reinsurer, at its sole option, may fund in other than cash if its method and form of funding are acceptable to the insurance regulatory authorities involved.

Notwithstanding the provisions of the Arbitration Article, if a Special Circumstance Reinsurer fails to fund its share of the funding obligation as set forth above, the Company retains its right to apply to a court of competent jurisdiction for equitable or interim relief.

B. With regard to funding in whole or in part by letters of credit, it is agreed that each letter of credit will be in a form acceptable to insurance regulatory authorities involved, will be issued for a term of at least one year and will include an "evergreen clause," which automatically extends the term for at least one additional year at each expiration date unless written notice of non-renewal is given to the Company not less than 30 days prior to said expiration date.  The Company and the Reinsurer further agree, notwithstanding anything to the contrary in this Contract, that said letters of credit may be drawn upon by the Company or its successors in interest at any time, without diminution because of the insolvency of the Company or the Reinsurer, but only for one or more of the following purposes:

1. To reimburse itself for the Reinsurer's share of losses and/or loss adjustment expense paid under the terms of policies reinsured hereunder, unless paid in cash by the Reinsurer;

2. To reimburse itself for the Reinsurer's share of any other amounts claimed to be due hereunder, unless paid in cash by the Reinsurer;

3. To fund a cash account in an amount equal to the Reinsurer's funding obligation funded by means of a letter of credit which is under non-renewal notice, if said letter of credit has not been renewed or replaced by the Reinsurer 10 days prior to its expiration date;

4. To refund to the Reinsurer any sum in excess of the actual amount required to fund the Reinsurer's funding obligation, if so requested by the Reinsurer.

In the event the amount drawn by the Company on any letter of credit is in excess of the actual amount required for B(1) or B(3), or in the case of B(2), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.

C. If a Subscribing Reinsurer fails to fulfill its funding obligation (if any) under this Article, the Company may, at its option, require the Subscribing Reinsurer to pay, and the Subscribing Reinsurer agrees to pay, an interest charge on the funding obligation calculated on the last business day of each month as follows:

1. The number of full days that have expired since the earliest of the applicable following dates:

a. As respects a Subscribing Reinsurer that is unauthorized in any state of the United States of America or District of Columbia having jurisdiction over the Company, December 31 of the calendar year in which the funding was required; or

b. As respects a Special Circumstance Reinsurer, the first date such reinsurer becomes a Special Circumstance Reinsurer;

times:

2. 1/365th of the sum of 4.0% and the U.S. prime rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made; times

3. The greater of (a) the funding obligation, less the amount, if any, funded by the Subscribing Reinsurer prior to the applicable date determined in subparagraph 1 above or (b) $100,000.

It is agreed that interest shall accumulate until the full interest charge amount as provided for in this paragraph and the funding obligation are paid.

If the interest rate provided under this Article exceeds the maximum interest rate allowed by any applicable law or is held unenforceable by an arbitrator or a court of competent jurisdiction, such interest rate shall be modified to the highest rate permitted by the applicable law, and all remaining provisions of this Article and Contract shall remain in full force and effect without being impaired or invalidated in any way.

Article 26 - Insolvency

A. In the event of the insolvency of one or more of the reinsured companies, this reinsurance shall be payable directly to the company or to its liquidator, receiver, conservator or statutory successor on the basis of the liability of the company without diminution because of the insolvency of the company or because the liquidator, receiver, conservator or statutory successor of the company has failed to pay all or a portion of any claim.  It is agreed, however, that the liquidator, receiver, conservator or statutory successor of the company shall give written notice to the Reinsurer of the pendency of a claim against the company indicating the policy or bond reinsured which claim would involve a possible liability on the part of the Reinsurer within a reasonable time after such claim is filed in the conservation or liquidation proceeding or in the receivership, and that during the pendency of such claim, the Reinsurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated, any defense or defenses that it may deem available to the company or its liquidator, receiver, conservator or statutory successor.  The expense thus incurred by the Reinsurer shall be chargeable, subject to the approval of the Court, against the company as part of the expense of conservation or liquidation to the extent of a pro rata share of the benefit which may accrue to the company solely as a result of the defense undertaken by the Reinsurer.

B. Where two or more reinsurers are involved in the same claim and a majority in interest elect to interpose defense to such claim, the expense shall be apportioned in accordance with the terms of this Contract as though such expense had been incurred by the company.

C. It is further understood and agreed that, in the event of the insolvency of one or more of the reinsured companies, the reinsurance under this Contract shall be payable directly by the Reinsurer to the company or to its liquidator, receiver or statutory successor, except as provided by Section 4118(a) of the New York Insurance Law or except (1) 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 payees under such policies and in substitution for the obligations of the company to such payees.

Article 27 - Arbitration

A. As a condition precedent to any right of action hereunder, in the event of any dispute or difference of opinion hereafter arising with respect to this Contract, it is hereby mutually agreed that such dispute or difference of opinion shall be submitted to arbitration.  One Arbiter shall be chosen by the Company, the other by the Reinsurer, and an Umpire shall be chosen by the two Arbiters before they enter upon arbitration, all of whom shall be active or retired disinterested executive officers of insurance or reinsurance companies or Lloyd's London Underwriters.  In the event that either party should fail to choose an Arbiter within 30 days following a written request by the other party to do so, the requesting party may choose two Arbiters who shall in turn choose an Umpire before entering upon arbitration.  If the two Arbiters fail to agree upon the selection of an Umpire within 30 days following their appointment, each Arbiter shall nominate three candidates within 10 days thereafter, two of whom the other shall decline, and the decision shall be made by drawing lots.  Notwithstanding the above, in the event the dispute or difference of opinion involves a Special Circumstance Reinsurer, the Company may, at its option, choose to forego arbitration and may bring an action in any court of competent jurisdiction.

B. Each party shall present its case to the Arbiters within 30 days following the date of appointment of the Umpire.  The Arbiters shall consider this Contract as an honorable engagement rather than merely as a legal obligation and they are relieved of all judicial formalities and may abstain from following the strict rules of law.  The decision of the Arbiters shall be final and binding on both parties; but failing to agree, they shall call in the Umpire and the decision of the majority shall be final and binding upon both parties.  Judgment upon the final decision of the Arbiters may be entered in any court of competent jurisdiction and the Arbiters are empowered to grant interim relief as they may deem appropriate.

C. If more than one reinsurer is involved in the same dispute, all such reinsurers shall, at the option of the Company, constitute and act as one party for purposes of this Article and communications shall be made by the Company to each of the reinsurers constituting one party, provided, however, that nothing herein shall impair the rights of such reinsurers to assert several, rather than joint, defenses or claims, nor be construed as changing the liability of the reinsurers participating under the terms of this Contract from several to joint.

D. Each party shall bear the expense of its own Arbiter, and shall jointly and equally bear with the other the expense of the Umpire and of the arbitration.  In the event that the two Arbiters are chosen by one party, as above provided, the expense of the Arbiters, the Umpire and the arbitration shall be equally divided between the two parties.

E. Any arbitration proceedings shall take place in Irving, Texas, or at a location mutually agreed upon by the parties to this Contract, but notwithstanding the location of the arbitration, all proceedings pursuant hereto shall be governed by the law of the State of Texas.

Article 28 - Service of Suit (BRMA 49G)

(Applicable if the Reinsurer is not domiciled in the United States of America, and/or is not authorized in any State, Territory or District of the United States where authorization is required by insurance regulatory authorities)

A. This Article will not be read to conflict with or override the obligations of the parties to arbitrate their disputes as provided for in the Arbitration Article.  This Article is intended as an aid to compelling arbitration or enforcing such arbitration or arbitral award, not as an alternative to the Arbitration Article for resolving disputes arising out of this Contract.

B. In the event the Reinsurer fails to pay any amount claimed to be due hereunder, the Reinsurer, at the request of the Company, will submit to the jurisdiction of a court of competent jurisdiction within the United States.  Nothing in this Article constitutes or should be understood to constitute a waiver of the Reinsurer'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 Reinsurer, once the appropriate Court is accepted by the Reinsurer or is determined by removal, transfer or otherwise, as provided for above, will comply with all requirements necessary to give said Court jurisdiction and, in any suit instituted against any of the Subscribing Reinsurers upon this Contract, will abide by the final decision of such Court or of any Appellate Court in the event of an appeal.

C. Further, pursuant to any statute of any state, territory or district of the United States which makes provision therefor, the Reinsurer hereby designates the party named in its Interests and Liabilities Agreement, or if no party is named therein, the Superintendent, Commissioner or Director of Insurance or other officer specified for that purpose in the statute, or his or her successor or successors in office, as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Company or any beneficiary hereunder arising out of this Contract.

Article 29 - Confidentiality

A. The Reinsurer hereby acknowledges that the documents, information and data provided to it 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.  Confidential Information shall not include documents, information or data that the Reinsurer can show:

1. Are publicly known or have become publicly known through no unauthorized act of the Reinsurer;

2. Have been rightfully received from a third person without obligation of confidentiality; or

3. Were known by the Reinsurer prior to the placement of this Contract without an obligation of confidentiality.

B. Absent the written consent of the Company, the Reinsurer shall not disclose any Confidential Information to any third parties, excluding any affiliated companies, except:

1. When required by retrocessionaires subject to the business ceded to this Contract;

2. When required by state regulators performing an audit of the Reinsurer's records and/or financial condition;

3. When required by external auditors performing an audit of the Reinsurer's records in the normal course of business; or

4. When required by attorneys or arbitrators in connection with an actual or potential dispute hereunder.

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

C. 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 with written notice of same at least 10 days prior to such release or disclosure and to use its best efforts to assist the Company in maintaining the confidentiality provided for in this Article.

D. The provisions of this Article shall extend to the officers, directors and employees of the Reinsurer and its affiliates, and shall be binding upon their successors and assigns.

Article 30 - Agency Agreement

If more than one reinsured company is named as a party to this Contract, the first named company shall be deemed the agent of the other reinsured companies for purposes of sending or receiving notices required by the terms and conditions of this Contract, and for purposes of remitting or receiving any monies due any party.

Article 31 - Governing Law (BRMA 71B)

This Contract shall be governed by and construed in accordance with the laws of the State of Texas.

Article 32 - Severability (BRMA 72E)

If any provision of this Contract shall be rendered illegal or unenforceable by the laws, regulations or public policy of any state, such provision shall be considered void in such state, but this shall not affect the validity or enforceability of any other provision of this Contract or the enforceability of such provision in any other jurisdiction.

Article 33 - Entire Agreement

This written Contract constitutes the entire agreement between the parties hereto with respect to the business being reinsured hereunder, and there are no understandings between the parties hereto other than as expressed in this Contract.  Any change or modification to this Contract will be made by amendment to this Contract and signed by the parties hereto.

Article 34 - Notices and Contract Execution

A. Whenever a notice, statement, report or any other written communication is required by this Contract, unless otherwise specified, such notice, statement, report or other written communication may be transmitted by certified or registered mail, nationally or internationally recognized express delivery service, personal delivery, electronic mail, or facsimile.  With the exception of notices of termination, first class mail is also acceptable.

B. The use of any of the following shall constitute a valid execution of this Contract or any amendments thereto:

1. Paper documents with an original ink signature;

2. Facsimile or electronic copies of paper documents showing an original ink signature; and/or

3. Electronic records with an electronic signature made via an electronic agent.  For the purposes of this Contract, the terms "electronic record," "electronic signature" and "electronic agent" shall have the meanings set forth in the Electronic Signatures in Global and National Commerce Act of 2000 or any amendments thereto.

C. This Contract may be executed in one or more counterparts, each of which, when duly executed, shall be deemed an original.

Article 35 - Intermediary

Aon Benfield Inc., or one of its affiliated corporations duly licensed as a reinsurance intermediary, is hereby recognized as the Intermediary negotiating this Contract for all business hereunder.  All communications (including but not limited to notices, statements, premiums, return premiums, commissions, taxes, losses, loss adjustment expense, salvages and loss settlements) relating to this Contract will be transmitted to the Company or the Reinsurer through the Intermediary.  Payments by the Company to the Intermediary will be deemed payment to the Reinsurer.  Payments by the Reinsurer to the Intermediary will be deemed payment to the Company only to the extent that such payments are actually received by the Company.

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Participation Slip

attached to and forming part of the

Fourth Property Catastrophe Excess of Loss

Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

including any or all of the affiliated insurance companies of

Homeowners of America Insurance Company and its Quota Share Reinsurers

in accordance with the provisions of the Preamble to the attached Contract

(hereinafter referred to collectively as the "Company")

and

Homeowners of America Insurance Company

Irving, Texas

including any or all of the affiliated insurance companies of

Homeowners of America Insurance Company

in accordance with the provisions of the Preamble to the attached Contract

(hereinafter referred to collectively as the "Subscribing Company")

The Subscribing Company hereby accepts a 76.92% share in the interests and liabilities of the "Company" as set forth in the attached Contract captioned above.

This Participation Slip shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until 12:01 a.m., Central Standard Time, April 1, 2016, unless earlier terminated in accordance with the provisions of this Contract.

The Subscribing Company's share in the attached Contract shall be separate and apart from the shares of the other named reinsured companies, and shall not be joint with the shares of the other named reinsured companies, it being understood that the Subscribing Company shall in no event participate in the interests and liabilities of the other named reinsured companies.

In Witness Whereof, the Subscribing Company by its duly authorized representative has executed this Contract as of the date specified below:

This ________________ day of ____________________________ in the year ____________.

Homeowners of America Insurance Company (for and on behalf of the "Company")

_______________________________________________________

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Participation Slip

attached to and forming part of the

Fourth Property Catastrophe Excess of Loss

Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

including any or all of the affiliated insurance companies of

Homeowners of America Insurance Company and its Quota Share Reinsurers

in accordance with the provisions of the Preamble to the attached Contract

(hereinafter referred to collectively as the "Company")

and

Qatar Reinsurance Company LLC, Bermuda Branch

Pembroke, Bermuda

 (hereinafter referred to as the "Subscribing Company")

The Subscribing Company hereby accepts a 23.08% share in the interests and liabilities of the "Company" as set forth in the attached Contract captioned above.

This Participation Slip shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until 12:01 a.m., Central Standard Time, April 1, 2016, unless earlier terminated in accordance with the provisions of this Contract.

The Subscribing Company's share in the attached Contract shall be separate and apart from the shares of the other named reinsured companies, and shall not be joint with the shares of the other named reinsured companies, it being understood that the Subscribing Company shall in no event participate in the interests and liabilities of the other named reinsured companies.

In Witness Whereof, the Subscribing Company by its duly authorized representative has executed this Contract as of the date specified below:

This ________________ day of ____________________________ in the year ____________.

Qatar Reinsurance Company LLC, Bermuda Branch

_______________________________________________________

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Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance (U.S.A.)

1. This Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly and whether as Insurer or Reinsurer, from any Pool of Insurers or Reinsurers formed for the purpose of covering Atomic or Nuclear Energy risks.

2. Without in any way restricting the operation of paragraph (1) of this Clause, this Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly and whether as Insurer or Reinsurer, from any insurance against Physical Damage (including business interruption or consequential loss arising out of such Physical Damage) to:

I. Nuclear reactor power plants including all auxiliary property on the site, or

II. Any other nuclear reactor installation, including laboratories handling radioactive materials in connection with reactor installations, and "critical facilities" as such, or

III. Installations for fabricating complete fuel elements or for processing substantial quantities of "special nuclear material," and for reprocessing, salvaging, chemically separating, storing or disposing of "spent" nuclear fuel or waste materials, or

IV. Installations other than those listed in paragraph (2) III above using substantial quantities of radioactive isotopes or other products of nuclear fission.

3. Without in any way restricting the operations of paragraphs (1) and (2) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any insurance on property which is on the same site as a nuclear reactor power plant or other nuclear installation and which normally would be insured therewith except that this paragraph (3) shall not operate

(a) where Reassured does not have knowledge of such nuclear reactor power plant or nuclear installation, or

(b) where said insurance contains a provision excluding coverage for damage to property caused by or resulting from radioactive contamination, however caused.  However on and after 1st January 1960 this sub-paragraph (b) shall only apply provided the said radioactive contamination exclusion provision has been approved by the Governmental Authority having jurisdiction thereof.

4. Without in any way restricting the operations of paragraphs (1), (2) and (3) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, when such radioactive contamination is a named hazard specifically insured against.

5. It is understood and agreed that this Clause shall not extend to risks using radioactive isotopes in any form where the nuclear exposure is not considered by the Reassured to be the primary hazard.

6. The term "special nuclear material" shall have the meaning given it in the Atomic Energy Act of 1954 or by any law amendatory thereof.

7. Reassured to be sole judge of what constitutes:

(a) substantial quantities, and

(b) the extent of installation, plant or site.

Note.-Without in any way restricting the operation of paragraph (1) hereof, it is understood and agreed that

(a) all policies issued by the Reassured on or before 31st December 1957 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

(b) with respect to any risk located in Canada policies issued by the Reassured on or before 31st December 1958 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

12/12/57

N.M.A. 1119

BRMA 35B

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Pools, Associations and Syndicates Exclusion Clause

Section A:

Excluding:

(a) All business derived directly or indirectly from any Pool, Association or Syndicate which maintains its own reinsurance facilities.

(b) Any Pool or Scheme (whether voluntary or mandatory) formed after March 1, 1968 for the purpose of insuring property whether on a country-wide basis or in respect of designated areas.  This exclusion shall not apply to so-called Automobile Insurance Plans or other Pools formed to provide coverage for Automobile Physical Damage.

Section B:

It is agreed that business written by the Company for the same perils, which is known at the time to be insured by, or in excess of underlying amounts, whether by way of insurance or reinsurance, by any Pool, Association or Syndicate formed for the purpose of writing:

Oil, Gas or Petro-Chemical Plants;

Oil or Gas Drilling Rigs; and/or

Aviation Risks;

is excluded hereunder.

Section B does not apply:

(a) Where the Total Insured Value over all interests of the risk in question is less than $250,000,000.

(b) To interests traditionally underwritten as Inland Marine or stock and/or contents written on a blanket basis.

(c) To Contingent Business Interruption, except when the Company is aware that the key location is known at the time to be insured in any Pool, Association or Syndicate named above, other than as provided for under Section B(a).

(d) To risks as follows:

Offices, Hotels, Apartments, Hospitals, Educational Establishments, Public Utilities (other than railroad schedules) and builder's risks on the classes of risks specified in this subsection (d) only.

Where this clause attaches to Catastrophe Excesses, the following Sections C and D are added:

Section C:

Nevertheless the Reinsurer specifically agrees that liability accruing to the Company from its participation in residual market mechanisms including but not limited to:

(1) The following so-called "Coastal Pools":

Alabama Insurance Underwriting Association

Louisiana Citizens Property Insurance Corporation

Mississippi Windstorm Underwriting Association

North Carolina Insurance Underwriting Association

South Carolina Windstorm and Hail Underwriting Association

Texas Windstorm Insurance Association

AND

(2) All "Fair Plan" and "Rural Risk Plan" business

AND

(3) Citizens Property Insurance Corporation ("CPIC") and the California Earthquake Authority ("CEA")

for all perils otherwise protected hereunder shall not be excluded, except, however, that this reinsurance does not include any increase in such liability resulting from:

(i) The inability of any other participant in such "Coastal Pool" and/or "Fair Plan" and/or "Rural Risk Plan" and/or Residual Market Mechanisms to meet its liability.

(ii) Any claim against such "Coastal Pool" and/or "Fair Plan" and/or "Rural Risk Plan" and/or Residual Market Mechanisms, or any participant therein, including the Company, whether by way of subrogation or otherwise, brought by or on behalf of any insolvency fund.

Section D:

(1) Notwithstanding Section C above, in respect of the CEA, where an assessment is made against the Company by the CEA, the Company may include in its Ultimate Net Loss only that assessment directly attributable to each separate loss occurrence covered hereunder.  The Company's initial capital contribution to the CEA shall not be included in the Ultimate Net Loss.

(2) Notwithstanding Section C above, in respect of CPIC, where an assessment is made against the Company by CPIC, the maximum loss that the Company may include in the Ultimate Net Loss in respect of any loss occurrence hereunder shall not exceed the lesser of:

(a) The Company's assessment from CPIC for the accounting year in which the loss occurrence commenced, or

(b) The product of the following:

(i) The Company's percentage participation in CPIC for the accounting year in which the loss occurrence commenced; and

(ii) CPIC's total losses in such loss occurrence.

Notwithstanding Section C above, in respect of CPIC, the Ultimate Net Loss hereunder shall not include any monies expended to purchase or retire bonds as a consequence of being a member of CPIC.  For the purposes of this Contract, the Company may not include in the Ultimate Net Loss any assessment or any percentage assessment levied by CPIC to meet the obligations of an insolvent insurer member or other party, or to meet any obligations arising from the deferment by CPIC of the collection of monies.

NOTES: Wherever used herein the terms:

"Company" shall be understood to mean "Company," "Reinsured," "Reassured" or whatever other term is used in the attached reinsurance document to designate the reinsured company or companies.

"Agreement" shall be understood to mean "Agreement," "Contract," "Policy" or whatever other term is used to designate the attached reinsurance document.

"Reinsurers" shall be understood to mean "Reinsurers," "Underwriters" or whatever other term is used in the attached reinsurance document to designate the reinsurer or reinsurers.

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Pollution and Seepage Exclusion Clause

This Contract excludes loss and/or damage and/or costs and/or expenses arising from seepage and/or pollution and/or contamination, other than contamination from smoke.  Nevertheless, this exclusion does not preclude payment of the cost of removing debris of property damaged by a loss otherwise covered hereunder, subject always to a limit of 25.0% of the Company's property loss under the applicable original policy.

BRMA 39A

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Terrorism Exclusion

(Property Treaty Reinsurance)

Notwithstanding any provision to the contrary within this Contract or any amendment thereto, it is agreed that this Contract excludes loss, damage, cost or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any act of terrorism, as defined herein, regardless of any other cause or event contributing concurrently or in any other sequence to the loss.

An act of terrorism includes any act, or preparation in respect of action, or threat of action designed to influence the government de jure or de facto of any nation or any political division thereof, or in pursuit of political, religious, ideological or similar purposes to intimidate the public or a section of the public of any nation by any person or group(s) of persons whether acting alone or on behalf of or in connection with any organization(s) or government(s) de jure or de facto, and which:

1.Involves violence against one or more persons; or

2.Involves damage to property; or

3.Endangers life other than that of the person committing the action; or

4.Creates a risk to health or safety of the public or a section of the public; or

5.Is designed to interfere with or to disrupt an electronic system.

This Contract also excludes loss, damage, cost, or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any action in controlling, preventing, suppressing, retaliating against, or responding to any act of terrorism.

Notwithstanding the above and subject otherwise to the terms, conditions, and limitations of this Contract, in respect only of personal lines this Contract will pay actual loss or damage (but not related cost or expense) caused by any act of terrorism provided such act is not directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with biological, chemical, radioactive or nuclear pollution or contamination or explosion.

N.M.A. 2930c

22/11/02

Form approved by Lloyd's Market Association [Non-Marine]

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Interests and Liabilities Agreement

attached to and forming part of the

Fourth Property Catastrophe Excess of Loss Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

and

Certain Insurance Companies

shown in the Signing Page(s) attached hereto

(hereinafter referred to as the "Subscribing Reinsurer")

The Subscribing Reinsurer hereby accepts a 65.0% share in the interests and liabilities of the "Reinsurer" as set forth in the attached Contract captioned above.

This Agreement shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until 12:01 a.m., Central Standard Time, April 1, 2016, unless earlier terminated in accordance with the provisions of the attached Contract.

In any action, suit or proceeding to enforce the Subscribing Reinsurer's obligations under the attached Contract, service of process may be made upon Mendes & Mount, LLP, 750 Seventh Avenue, New York, New York  10019.

Signed for and on behalf of the Subscribing Reinsurer in the Signing Page(s) attached hereto.

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Signing Page

attached to and forming part of the

Interests and Liabilities Agreement

with respect to the

Fourth Property Catastrophe Excess of Loss Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company, as specified in the above-captioned Contract

and

Certain Insurance Companies

(Re)Insurer's Liability Clause - LMA3333

(Re)Insurer's liability several not joint

The liability of a (re)insurer under this contract is several and not joint with other (re)insurers party to this contract. A (re)insurer is liable only for the proportion of liability it has underwritten. A (re)insurer is not jointly liable for the proportion of liability underwritten by any other (re)insurer. Nor is a (re)insurer otherwise responsible for any liability of any other (re)insurer that may underwrite this contract.

The proportion of liability under this contract underwritten by a (re)insurer (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 (re)insurer. 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 (re)insurer 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 (re)insurer (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 (re)insurer (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 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.

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EX-10.39

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Exhibit 10.39

Residential Property Net Quota Share

Reinsurance Contract

Effective:  April 1, 2015

Homeowners of America Insurance Company

Irving, Texas

including any and/or all companies that are or may hereafter become affiliated therewith

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Residential Property Net Quota Share Reinsurance Contract

Effective:  April 1, 2015

Homeowners of America Insurance Company

Irving, Texas

including any and/or all companies that are or may hereafter become affiliated therewith

Reinsurer(s)	Participation(s)
R+V Versicherung AG	40.0%
Total	40.0%

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Table of Contents

Article		Page
1	Classes of Business Reinsured	1
2	Commencement and Termination	1
3	Territory (BRMA 51A)	3
4	Exclusions	3
5	Special Acceptances	5
6	Retention and Limit	5
7	Loss in Excess of Policy Limits/Extra Contractual Obligations	8
8	Other Reinsurance	8
9	Claims and Loss Adjustment Expense	9
10	Special Commutation	10
11	Assessments	12
12	Salvage and Subrogation	12
13	Original Conditions	12
14	Commission (BMRA 10A)	13
15	Reports and Remittances	13
16	Sanctions	14
17	Late Payments	14
18	Offset	15
19	Access to Records	16
20	Errors, Omissions and Inadvertent Binding	16
21	Currency (BRMA 12A)	16
22	Taxes (BRMA 50B)	16
23	Federal Excise Tax (BRMA 17D)	17
24	Foreign Account Tax Compliance Act	17
25	Reserves	17
26	Insolvency	19
27	Arbitration	20
28	Service of Suit	21
29	Confidentiality	22
30	Agency Agreement	22
31	Governing Law (BRMA 71B)	23
32	Severability (BRMA 72E)	23
33	Entire Agreement	23
34	Notices and Contract Execution	23
35	Intermediary	24

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Residential Property Net Quota Share

Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

including any and/or all companies that are or may hereafter become affiliated therewith

(hereinafter referred to collectively as the "Company")

and

The Subscribing Reinsurer(s) Executing the

Interests and Liabilities Agreement(s)

Attached Hereto

(hereinafter referred to as the "Reinsurer")

Article 1 - Classes of Business Reinsured

A. By this Contract the Company obligates itself to cede to the Reinsurer and the Reinsurer obligates itself to accept quota share reinsurance of the Company's net liability under policies in force at the effective date hereof or issued or renewed on or after that date, and classified by the Company as Dwelling Fire, Tenant, Condominium Owners and Homeowners business (property coverages only, including Dwelling coverage, Personal Property coverage and Extensions of Coverage as defined in the Company's policies).

B. "Net liability" as used herein shall mean the Company's gross liability remaining after cessions, if any, to inuring reinsurance.

C. The liability of the Reinsurer with respect to each cession hereunder shall commence obligatorily and simultaneously with that of the Company, subject to the terms, conditions and limitations hereinafter set forth.

D. "Policies" as used herein shall mean all policies, contracts and binders of insurance, whether held covered provisionally or otherwise.

Article 2 - Commencement and Termination

A. This Contract shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, with respect to losses arising out of loss occurrences commencing at or after that time and date, and shall remain in force until 12:01 a.m., Central Standard Time, January 1, 2017.

B. Notwithstanding the provisions of paragraph A above, the Company may terminate a Subscribing Reinsurer's percentage share in this Contract in the event any of the following circumstances occur as clarified by public announcement or upon discovery:

1. The Subscribing Reinsurer's policyholders' surplus (or its equivalent under the Subscribing Reinsurer's accounting system) after the earlier of:  (a) the inception of this Contract, or (b) the date lines are bound for this Contract, has been reduced by more than 20.0% of the amount of surplus (or the applicable equivalent) 12 months prior to that date; or

2. The Subscribing Reinsurer's policyholders' surplus (or its equivalent under the Subscribing Reinsurer's accounting system) at any time between the earlier of:  (a) the inception of this Contract, or (b) the date lines are bound for this Contract, and the date of termination of this Contract has been reduced by more than 20.0% of the amount of surplus (or the applicable equivalent) at the date of the Subscribing Reinsurer's most recent financial statement filed with regulatory authorities and available to the public as of the date lines are bound; or

3. A State Insurance Department or other legal authority has ordered the Subscribing Reinsurer to cease assuming business; or

4. The Subscribing Reinsurer has become insolvent or has been placed into liquidation, receivership, supervision, administration, winding-up or under a scheme of arrangement, or similar proceedings (whether voluntary or involuntary) or proceedings have been instituted against the Subscribing Reinsurer for the appointment of a receiver, liquidator, rehabilitator, supervisor, administrator, conservator or trustee in bankruptcy, or other agent known by whatever name, to take possession of its assets or control of its operations; or

5. The Subscribing Reinsurer has reinsured its entire liability under this Contract without the Company's prior written consent; or

6. The A.M. Best's rating for the Subscribing Reinsurer has been assigned or downgraded below A- (inclusive of "Not Rated" ratings), or the published rating issued by Standard & Poor's has been downgraded below BBB+ (inclusive of "Not Rated" ratings); or

7. The Subscribing Reinsurer has become merged with, acquired by or controlled by any other entity or individual(s) not controlling the Subscribing Reinsurer's operations previously; or

8. The Subscribing Reinsurer has ceased assuming new or renewal property or casualty treaty reinsurance business; or

9. The Subscribing Reinsurer has hired an unaffiliated runoff claims manager that is compensated on a contingent basis or is otherwise provided with financial incentives based on the quantum of claims paid.

C. In the event a Subscribing Reinsurer experiences one or more of the circumstances specified in paragraph B above, the Subscribing Reinsurer shall notify the Company as promptly as possible and shall hereinafter be referred to as a "Special Circumstance Reinsurer."  To terminate a Special Circumstance Reinsurer's percentage share in this Contract, the Company must provide the Special Circumstance Reinsurer with written notice as set forth in the Notices and Contract Execution Article.  Such notice shall include the effective date of termination as selected by the Company and shall be one of the following:

1. The date of written notice provided by the Special Circumstance Reinsurer; or

2. The last day of the month prior to the date of written notice provided by the Special Circumstance Reinsurer; or

3. The last day of any month after the date of written notice provided by the Special Circumstance Reinsurer; or

4. The date of the Company's written notice to the Special Circumstance Reinsurer advising of the termination.

In the event the Subscribing Reinsurer fails to immediately provide written notice to the Company of any event outlined in subparagraphs 1 through 9 of paragraph B above, the Company may elect to substitute the date of public announcement or discovery as the equivalent of written notice.

D. Unless the Company elects to reassume the ceded unearned premium in force on the effective date of termination or expiration, and so notifies the Reinsurer prior to or as promptly as possible after the effective date of termination or expiration, reinsurance hereunder on business in force on the effective date of termination or expiration shall remain in full force and effect until expiration, cancellation or next premium anniversary of such business, whichever first occurs, but in no event beyond 12 months plus odd time following the effective date of termination or expiration.

E. Notwithstanding the provisions of paragraph D above, if the Company is prohibited or precluded by the appropriate regulatory authorities, or by law (in those states where applicable and enforced), from arranging mid-term cancellation or non-renewal of any policies subject to this Contract beyond their natural expiry, the Reinsurer agrees to extend coverage under this Contract until such policies may be terminated or non-renewed by the Company, but in no event beyond 18 months after the effective date of termination or expiration.

Article 3 - Territory (BRMA 51A)

The territorial limits of this Contract shall be identical with those of the Company's policies.

Article 4 - Exclusions

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

1. Financial guarantee and insolvency.

2. Nuclear risks as defined in the "Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance (U.S.A.)" attached to and forming part of this Contract.

3. Loss or damage caused by or resulting from war, invasion, hostilities, acts of foreign enemies, civil war, rebellion, insurrection, military or usurped power, or martial law or confiscation by order of any government or public authority, but this exclusion shall not apply to loss or damage covered under a standard policy with a standard War Exclusion Clause.

4. Liability as a member, subscriber or reinsurer of any Pool, Syndicate or Association; and any combination of insurers or reinsurers formed for the purpose of covering specific perils, specific classes of business or for the purpose of insuring risks located in specific geographical areas.  However, this exclusion shall not apply to residual market mechanisms, including but not limited to FAIR Plans, Joint Underwriting Associations, or to Coastal Pools, Beach Plans or similar plans, however styled.  It is understood and agreed, however, that this reinsurance does not include any increase in liability to the Company resulting from (a) the inability of any other participant in a residual market mechanism, including but not limited to a FAIR Plan, Joint Underwriting Association, Coastal Pool, Beach Plan or similar plan, to meet its liability, or (b) any claim against such a residual market mechanism, including but not limited to a FAIR Plan, Joint Underwriting Association, Coastal Pool, Beach Plan or similar plan, or any participant therein, including the Company, whether by way of subrogation or otherwise, brought by or on behalf of any insolvency fund.

5. 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.  However, this exclusion shall not apply to assessments from the Texas Property and Casualty Insurance Guaranty Association.  "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.

6. All third party liability.

7. Fidelity, Surety and Credit business.

8. Loss or damage to growing or standing crops.

9. Livestock.

10. Mortgage impairment.

11. Pollution and seepage coverages excluded under the provisions of the "Pollution and Seepage Exclusion Clause (BRMA 39A)" attached to and forming part of this Contract.

12. Terrorism, as described in the provisions of the "Terrorism Exclusion (NMA 2930c)" attached to and forming part of this Contract.

13. Flood and/or earthquake when written as such.

14. Title insurance.

15. Loss, damage, cost or expense arising from fungi unless directly or indirectly caused by or contributed to by or arising from a covered peril under the Company's original policy.  Losses arising from fungi shall not in and of themselves constitute an event for the purposes of recovery hereunder.  For the purposes of this Contract, "fungi" means any type or form of fungus, including mold or mildew and any mycotoxins, spores, scents or by products produced or released by "fungi."

16. Reinsurance assumed.

B. Any exclusion set forth in paragraph A (except exclusions set forth in subparagraphs 1, 2, 3, 5, 6 and 12) shall be waived automatically when, in the opinion of the Company, the exposure excluded therein is incidental to the principal exposure on the risk in question.

C. If the Company is required to accept an assigned risk which conflicts with one or more of the exclusions set forth in paragraph A (except exclusions set forth in subparagraphs 1, 2, 3, 5, 6 and 12), reinsurance shall apply, but in no event shall the Reinsurer's liability exceed the applicable limits set forth in the Retention and Limit Article.

Article 5 - Special Acceptances

A. From time to time the Company may request a special acceptance of reinsurance falling outside the scope of the provisions of this Contract (except as respects the exclusions set forth in subparagraphs 1, 2, 3, 5, 6 and 12 of the Exclusions Article).  Within five days of receipt of such a request, each Subscribing Reinsurer shall accept such request, ask for additional information, or reject the request.  Any reinsurance that is specially accepted by the Reinsurer shall be covered under this Contract and shall be subject to the terms hereof, except as such terms shall be modified by the special acceptance.  If a Subscribing Reinsurer fails to respond to a special acceptance request within five days, the Subscribing Reinsurer will be deemed to have agreed to the special acceptance.

B. If Subscribing Reinsurers with percentage shares totaling more than 50.0% in the interests and liabilities of the Reinsurer agree to a special acceptance, such special acceptance shall be binding on all Subscribing Reinsurers with respect to their respective shares.  If such percentage 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 that agrees to the special acceptance.

C. 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.  Further, if one or more Subscribing Reinsurers under this Contract agreed to special acceptance(s) under the contract being replaced by this Contract, such special acceptance(s) shall be automatically covered hereunder with respect to the interests and liabilities of such Subscribing Reinsurer(s).

Article 6 - Retention and Limit

A. As respects business subject to this Contract, the Company shall cede to the Reinsurer and the Reinsurer agrees to accept 100% of the Company's net liability.

B. The Company shall retain at least a 10.0% part of 100% share in the interests and liabilities of the Reinsurer hereunder.

C. The Company shall purchase or be deemed to have purchased inuring excess facultative reinsurance to limit its loss subject hereto from any one coverage, any one policy (exclusive of loss in excess of policy limits, extra contractual obligations and loss adjustment expense) to the following amounts:

1. Dwelling, $750,000;

2. Personal Property (contents) Homeowners policies, 75.0% of the Dwelling limit;

3. Personal Property (contents) Dwelling Fire policies, 40.0% of the Dwelling limit;

4. Other Structures, 20.0% of the Dwelling limit;

5. Loss of Use, 20.0% of the Dwelling limit.

D. The total insured value for any one property risk is subject to a maximum limit of $1,612,500, or so deemed, inclusive of all additional and optional coverages.

E. Notwithstanding the provisions above, the liability of the Reinsurer hereunder (including loss in excess of policy limits, extra contractual obligations, loss adjustment expense and any assessment, including but not limited to the Texas Windstorm Insurance Association, and any Guarantee Fund or any Fair Plan Assessment) shall not exceed:

1. [****] as respects losses arising out of any one loss occurrence; or

2. [**** in all during the term of this Contract as respects losses arising out of catastrophe events.  "Catastrophe event" as used herein shall mean a loss occurrence that is numbered by Property Claim Services and results in losses to the Company of [****] or greater.

F. "Loss occurrence" as used herein shall mean the sum of all individual losses directly occasioned by any one disaster, accident or loss or series of disasters, accidents or losses arising out of one event which occurs within the area of one state of the United States or province of Canada and states or provinces contiguous thereto and to one another.  However, the duration and extent of any one "loss occurrence" shall be limited to all individual losses sustained by the Company occurring during any period of 168 consecutive hours arising out of and directly occasioned by the same event, except that the term "loss occurrence" shall be further defined as follows:

1. As regards windstorm, hail, tornado, hurricane, cyclone, including ensuing collapse and water damage, all individual losses sustained by the Company occurring during any period of 72 consecutive hours arising out of and directly occasioned by the same event.  However, the event need not be limited to one state or province or states or provinces contiguous thereto.

2. As regards riot, riot attending a strike, civil commotion, vandalism and malicious mischief, all individual losses sustained by the Company occurring during any period of 72 consecutive hours within the area of one municipality or county and the municipalities or counties contiguous thereto arising out of and directly occasioned by the same event.  The maximum duration of 72 consecutive hours may be extended in respect of individual losses which occur beyond such 72 consecutive hours during the continued occupation of an assured's premises by strikers, provided such occupation commenced during the aforesaid period.

3. As regards earthquake (the epicenter of which need not necessarily be within the territorial confines referred to in the introductory portion of this paragraph) and fire following directly occasioned by the earthquake, only those individual fire losses which commence during the period of 168 consecutive hours may be included in the Company's "loss occurrence."

4 As regards "freeze," only individual losses directly occasioned by collapse, breakage of glass and water damage (caused by bursting of frozen pipes and tanks or freezing and/or melting snow or sleet) may be included in the Company's "loss occurrence."

5. As regards firestorms, brush fires and any other fires or series of fires, irrespective of origin (except as provided in subparagraphs 2 and 3 above), all individual losses sustained by the Company which commence during any period of 168 consecutive hours within a 150-mile radius of any fixed point selected by the Company may be included in the Company's "loss occurrence."  However, an individual loss subject to this subparagraph cannot be included in more than one "loss occurrence."

If the disaster, accident or loss occasioned by the event is of greater duration than 168 consecutive hours, or 72 consecutive hours as respects subparagraphs 1 and 2 above, then the Company may divide that disaster, accident or loss into two or more "loss occurrences," provided no two periods overlap and no individual loss is included in more than one such period and provided that no period commences earlier than the date and time of the occurrence of the first recorded individual loss sustained by the Company arising out of that disaster, accident or loss.

It is understood that losses arising from a combination of two or more perils as a result of the same event shall be considered as having arisen from one "loss occurrence."  Notwithstanding the foregoing, the hourly limitations as stated above shall not be exceeded as respects the applicable perils and no single "loss occurrence" shall encompass a time period greater than 168 consecutive hours.

G. "Total insured value" as used herein shall mean the sum value of dwellings, other structures, contents and loss of use for each property risk reinsured hereunder.

H. "Term of this Contract" as used herein shall mean the period from 12:01 a.m., Central Standard Time, April 1, 2015, to 12:01 a.m., Central Standard Time, January 1, 2017.  However, if this Contract or the participation of a Subscribing Reinsurer is terminated on a "cutoff" basis, "term of this Contract" as used herein shall mean the period from 12:01 a.m., Central Standard Time, April 1, 2015, to the effective time and date of termination.  In the event this Contract or the participation of a Subscribing Reinsurer is terminated or expires on a "runoff" basis, "term of this Contract" as used herein shall mean the period from 12:01 a.m., Central Standard Time, April 1, 2015, through the end of the "runoff" period.

Article 7 - Loss in Excess of Policy Limits/Extra Contractual Obligations

A. In the event the Company pays or is held liable to pay an amount of loss in excess of its policy limit, but otherwise within the terms of its policy (hereinafter called "loss in excess of policy limits") or any punitive, exemplary, compensatory or consequential damages, other than loss in excess of policy limits (hereinafter called "extra contractual obligations"), arising from the handling of any claim on business covered hereunder; such liabilities arising, because of, but not limited to, the following: failure to settle within the policy limit, or by reason of alleged or actual bad faith, negligence or fraud in rejecting an offer of settlement, in the preparation of the defense, in the trial of an action against its insured or in the preparation or prosecution of an appeal consequent upon such an action, or in otherwise handling a claim under a policy subject to this Contract, the loss in excess of policy limits and/or the extra contractual obligations shall be added to the Company's loss, if any, under the policy involved, and the sum thereof shall be subject to the provisions of paragraph A of the Retention and Limit Article.

B. An extra contractual obligation shall be deemed, in all circumstances, to have occurred on the same date as the loss covered or alleged to be covered under the policy.

C. Notwithstanding anything stated herein, this Contract shall not apply to any loss in excess of policy limits or any extra contractual obligation incurred by the Company as a result of any fraudulent and/or criminal act by any officer or director of the Company acting individually or collectively or in collusion with any individual or corporation or any other organization or party involved in the presentation, defense or settlement of any claim covered hereunder.

D. Savings Clause (Applicable only if the Subscribing Reinsurer is domiciled in the State of New York):  In no event shall coverage be provided to the extent that such coverage is not permitted under New York law.

Article 8 - Other Reinsurance

A. The Company shall maintain in force or shall be deemed to have maintained in force $1,112,500 excess of $500,000 as respects any one risk, each loss (subject to a $12,237,500 aggregate limit) per risk treaty reinsurance, recoveries under which shall inure to the benefit of this Contract, for policies covering risks with a total insured value greater than $500,000 (property coverages only, including Personal Property coverage and Extensions of Coverage as defined in the Company's policies), subject to the exclusions of such per risk treaty.

B. The Company shall be permitted to carry facultative reinsurance on any risk subject hereunder, recoveries under which shall inure to the benefit of this Contract.

C. The Company shall be permitted to carry other treaty 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.

Article 9 - Claims and Loss Adjustment Expense

A. Losses shall be reported by the Company in summary form as hereinafter provided, but the Company alone and at its full discretion shall adjust, settle or compromise all claims and losses hereunder.  The Company shall be the sole judge as to:

1. What constitutes a claim or loss covered under any policy;

2. The Company's liability thereunder;

3. The amount or amounts proper for the Company to pay thereunder.

The Reinsurer shall be bound by the judgment of the Company as to the obligations and liabilities of the Company under any policy.

B. All loss settlements made by the Company, whether under strict policy conditions or by way of compromise (including loss in excess of policy limits and extra contractual obligations), shall be binding upon the Reinsurer, and the Reinsurer agrees to pay or allow, as the case may be, its proportion of each such settlement in accordance with the Reports and Remittances Article.  It is agreed, however, that if the Reinsurer's share of any loss is equal to or greater than $100,000, the Reinsurer, if requested by the Company, will pay its share of said loss within 10 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 (as specified in the Late Payments Article) from the date the proof of loss or demand for payment was transmitted to the Reinsurer.

C. In the event of a claim under a policy subject hereto, the Reinsurer shall be liable for its proportionate share of loss adjustment expense incurred by the Company in connection therewith, and shall be credited with its proportionate share of any recoveries of such expense.

D. A Special Circumstance Reinsurer shall not have the right to deny payment of a claim if the sum of the percentage shares of Active Subscribing Reinsurers that have paid the claim exceeds 50.0% of the sum of the percentage shares of all Active Subscribing Reinsurers.  "Active Subscribing Reinsurer" as used herein shall mean a Subscribing Reinsurer that is not a Special Circumstance Reinsurer as of the due date of the claim (as specified in the Late Payments Article).

E. As respects its share of any claims payable under this Contract, a Special Circumstance Reinsurer shall not have the right to hire an unaffiliated runoff claims manager that is compensated on a contingent basis or is otherwise provided with financial incentives based on the quantum of claims paid.

F. "Loss adjustment expense" as used herein shall mean costs and expenses assignable to the investigation, appraisal, adjustment, settlement, litigation, defense and/or appeal of claims, regardless of how such expenses are classified for statutory reporting purposes.  Loss adjustment expense shall include, but not be limited to:

1. Interest on judgments;

2. Expenses of outside adjusters and adjuster expenses incurred by Homeowners of America MGA, Inc.;

3. Expenses and a pro rata share of salaries of the Company's field employees and expenses of other employees of the Company who have been temporarily diverted from their normal and customary duties and assigned to the adjustment of losses covered by this Contract;

4. Expenses of the Company's officials incurred in connection with losses covered by this Contract;

5. Declaratory judgment expenses or other legal expenses and costs incurred in connection with coverage questions and legal actions connected thereto;

6. Advertising or other extraordinary communication expenses incurred as a result of a covered loss;

7. Court costs;

8. Costs of supersedeas and appeal bonds;

9. Monitoring counsel expenses;

10. Extraordinary expenses arising out of a loss, whether or not they are allocable to a specific "claim."

However, loss adjustment expense shall not include normal office expenses or salaries of the Company's regular employees, except as provided for in subparagraph 3 above.

Article 10 - Special Commutation

A. The Company may require commutation of that portion of any loss hereunder represented by any outstanding claim or claims, including any related loss adjustment expense, plus unearned premium hereunder, if any remains, if the Subscribing Reinsurer is a Special Circumstance Reinsurer.

"Outstanding claim or claims" shall include claims incurred but not reported, as established by the Company, including any billed yet unpaid claims.

B. If the Company elects to require commutation as provided in paragraph A above, the Company shall submit a Statement of Valuation of the outstanding claim or claims as of the last day of the month immediately preceding the month in which the Company elects to require commutation, as determined by the Company.  Such Statement of Valuation shall include the elements considered reasonable to establish the loss and shall set forth or attach the information relied upon by the Company and the methodology employed to calculate the loss.  The Subscribing Reinsurer shall then pay the amount requested within 10 days of receipt of such Statement of Valuation, unless the Subscribing Reinsurer needs additional information from the Company to assess the Company's Statement of Valuation or contests such amount.

C. If the Subscribing Reinsurer needs additional information from the Company to assess the Company's Statement of Valuation or contests the amount requested, the Subscribing Reinsurer shall so notify the Company within 15 days of receipt of the Company's Statement of Valuation.  The Company shall supply any reasonably requested information to the Subscribing Reinsurer within 15 days of receipt of the notification.  Within 30 days of the date of the notification or of the receipt of the information, whichever is later, the Subscribing Reinsurer shall provide the Company with its Statement of Valuation of the outstanding claim or claims as of the last day of the month immediately preceding the month in which the Company elects to require commutation, as determined by the Subscribing Reinsurer.  Such Statement of Valuation shall include the elements considered reasonable to establish the loss and shall set forth or attach the information relied upon by the Subscribing Reinsurer and the methodology employed to calculate the loss.  The Subscribing Reinsurer shall pay the amount due the Company, if any, plus any ceded unearned premium reserves with its Statement of Valuation.

D. In the event the Subscribing Reinsurer's Statement of Valuation of the outstanding claim or claims is viewed as unacceptable to the Company, the Company may either abandon the commutation effort, or may seek to settle any difference by using an independent actuary agreed to by the parties.

E. If the parties cannot agree on an acceptable independent actuary within 15 days of the date of the Subscribing Reinsurer's Statement of Valuation, then each party shall appoint an actuary as party actuaries for the limited and sole purpose of selecting an independent actuary.  If the party actuaries fail to agree upon an acceptable independent actuary within 15 days following the date of their appointment, the Company shall supply the Subscribing Reinsurer with a list of at least five proposed independent actuaries, and the Subscribing Reinsurer shall select the independent actuary from that list.

F. Upon selection of the independent actuary, both parties shall present their respective written submissions to the independent actuary.  The independent actuary may, at his or her discretion, request additional information.  The independent actuary shall issue his or her decision within 45 days after the written submissions have been filed and any additional information has been provided.  Any amount due the Company (including any ceded unearned premium reserves) shall be paid by the Subscribing Reinsurer within 15 calendar days after such decision has been issued.

G. The decision of the independent actuary shall be final and binding.  The expense of the independent actuary shall be equally divided between the two parties.  For the purposes of this Article, unless mutually agreed otherwise, an "independent actuary" shall be an actuary who satisfies each of the following criteria:

1. Is regularly engaged in the valuation of claims resulting from lines of business subject to this Contract; and

2. Is either a Fellow of the Casualty Actuarial Society or of the American Academy of Actuaries; and

3. Is disinterested and impartial regarding this commutation.

H. In the event that the Subscribing Reinsurer no longer meets the criteria set forth in paragraph A above, this commutation may continue on a mutually agreed basis.

I. Payment by the Subscribing Reinsurer of the amount requested in accordance with paragraph B, C or F above, shall release the Subscribing Reinsurer from all further liability for outstanding claim or claims, known or unknown, and any unearned premium under this Contract and shall release the Company from all further liability for payments of salvage or subrogation amounts, known or unknown, to the Subscribing Reinsurer under this Contract.

J. In the event of any conflict between this Article and any other article of this Contract, the terms of this Article shall control.

K. This Article shall survive the expiration of this Contract and/or the termination of a Subscribing Reinsurer's percentage share in this Contract.

Article 11 - Assessments

A. The provisions of the quota share participation will apply to the proportion of any assessments made against the Company pursuant to those laws and regulations creating obligatory funds (excluding insurance guaranty and insolvency funds to the extent such costs are transferable to the policyholders), pools, joint underwriting associations, FAIR plans, and similar plans; said proportion to be the proportion of the Company's total premiums causing the assessment which were or are subject to this Contract.  All offsets from such assessments, if any, including credits allowed to the Company against its premium taxes, are subject to the provisions of the Salvage and Subrogation Article.

B. At the termination or expiration of this Contract, the provisions of the quota share participation shall continue to apply until the Company may legally terminate its liability for assessments that are a result of the business reinsured hereunder.

Article 12 - Salvage and Subrogation

The Reinsurer shall be credited with its proportionate share of salvage (i.e., reimbursement obtained or recovery made by the Company, less the actual cost, excluding salaries of officials and employees of the Company and sums paid to attorneys as retainer, of obtaining such reimbursement or making such recovery) on account of claims and settlements involving reinsurance hereunder.  The Company hereby agrees to enforce its rights to salvage or subrogation relating to any loss, a part of which loss was sustained by the Reinsurer, and to prosecute all claims arising out of such rightsif, in the Company's opinion, it is reasonable to do so.

Article 13 - Original Conditions

A. All reinsurance under this Contract shall be subject to the same rates, terms, conditions, waivers and interpretations, including judicial interpretation and policy reformation, and to the same modifications and alterations as the respective policies of the Company.  The Reinsurer shall be credited with its exact proportion of the original premiums received by the Company, prior to disbursement of any dividends, but after deduction of premiums, if any, ceded by the Company for inuring reinsurance.

B. Nothing herein shall in any manner create any obligations or establish any rights against the Reinsurer in favor of any third party or any persons not parties to this Contract.

Article 14 - Commission (BRMA 10A)

A. The Reinsurer shall allow the Company a [****] commission on all premiums ceded to the Reinsurer hereunder.  The Company shall allow the Reinsurer return commission on return premiums at the same rate.

B. It is expressly agreed that the ceding commission allowed the Company includes provision for all dividends, commissions, taxes, assessments, and all other expenses of whatever nature, except loss adjustment expense.

Article 15 - Reports and Remittances

A. As promptly as possible after the effective date of this Contract, the Company shall remit the Reinsurer's share of the unearned premium (less commission thereon) applicable to subject business in force at the effective date of this Contract.

B. Within 30 days after the end of each month, the Company shall report to the Reinsurer:

1. Ceded subject written premium during the month;

2. Commission on (1) above;

3. Ceded losses and loss adjustment expense paid during the month (net of any recoveries during the month under the "cash call" provisions of the Claims and Loss Adjustment Expense Article);

4. The Reinsurer's share of salvage and subrogation;

5. Premium (including reinstatement premium) for reinsurance which inures to the benefit of this Contract;

6. Recoveries from reinsurance which inures to the benefit of this Contract;

7. Ceded unearned premiums and ceded outstanding loss and loss adjustment expense reserves (including incurred but not reported loss reserves as established by the Company) as of the end of the month.

The positive balance of (1) less (2) less (3) plus (4) less (5) plus (6) shall be remitted by the Company within 60 days after the end of the month of account.  Any balance shown to be due the Company shall be remitted by the Reinsurer as promptly as possible (not exceeding 15 days, however) after receipt and verification of the Company's report.

Furthermore, as respects subparagraph 3 above, the Company shall identify losses and loss adjustment expense by PCS catastrophe number, where applicable.

C. Annually, the Company shall furnish the Reinsurer with such information as the Reinsurer may require to complete its Annual Convention Statement.

Article 16 - Sanctions

Neither the Company nor any Subscribing Reinsurer shall be liable for premium or loss under this Contract if it would result in a violation of any mandatory sanction, prohibition or restriction under United Nations resolutions or the trade or economic sanctions, laws or regulations of the European Union, United Kingdom or United States of America that are applicable to either party.  However, this Article shall not apply to the Subscribing Reinsurer concerning the sanction regimes of the United Kingdom or the United States of America.

Article 17 - Late Payments

A. The provisions of this Article shall not be implemented unless specifically invoked, in writing, by one of the parties to this Contract.

B. In the event any premium, loss or other payment due either party is not received by the intermediary named in the Intermediary Article (hereinafter referred to as the "Intermediary") by the payment due date, the party to which 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 charge 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

2. 1/365th of the sum of 4.0% and the U.S. prime rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made; 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 charges have been received by the Intermediary.

Notwithstanding the provisions of subparagraph 2 above and the immediately preceding sentence, the interest rate for a Special Circumstance Reinsurer will increase by 1.0% for every month that payment of the claim is past due, subject to a maximum annual interest rate of 10.0%.

C. If the interest rate provided under this Article exceeds the maximum interest rate allowed by any applicable law or is held unenforceable by a court of competent jurisdiction, such interest rate shall be modified to the highest rate permitted by the applicable law, and all remaining provisions of this Article and Contract shall remain in full force and effect without being impaired or invalidated in any way.

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

1. As respects any routine payment, adjustment or return due either party, the due date shall be as provided for in the applicable section of this Contract.  In the event a due date is not specifically stated for a given payment, it shall be deemed due 30 days after the date of transmittal by the Intermediary of the initial billing for each such payment.

2. As respects any payment, adjustment or return due either party not otherwise provided for in subparagraph 1 of this paragraph, the due date shall be deemed due 30 days following transmittal of written notification that the provisions of this Article have been invoked.

For purposes of interest calculations only, amounts due hereunder shall be deemed paid upon receipt by the Intermediary.

E. Nothing herein shall be construed as limiting or prohibiting a Subscribing Reinsurer from contesting the validity of any claim, or from participating in the defense of any claim or suit, or prohibiting either party from contesting the validity of any payment or from initiating any arbitration or other proceeding in accordance with the provisions of this Contract.  If the debtor party prevails in an arbitration or other proceeding, then any interest charges due hereunder on the amount in dispute shall be null and void.  If the debtor party loses in such proceeding, then the interest charge on the amount determined to be due hereunder shall be calculated in accordance with the provisions set forth above unless otherwise determined by such proceedings.  If a debtor party advances payment of any amount it is contesting, and proves to be correct in its contestation, either in whole or in part, the other party shall reimburse the debtor party for any such excess payment made plus interest on the excess amount calculated in accordance with this Article.

F. Interest charges arising out of the application of this Article that are $250 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 18 - Offset

A.    The Company and the Reinsurer shall have the right to offset any balance or amounts due from one party to the other under the terms of this Contract or any other contracts between the parties.  The party asserting the right of offset may exercise such right any time.

B.    Notwithstanding the provisions of paragraph A above, a Special Circumstance Reinsurer shall not offset balances as outlined above without the prior consent of the Company.

Article 19 - Access to Records

A. Provided the Company has received at least 10 days prior notice, the Reinsurer or its designated representatives shall have access during regular business hours to all records of the Company which pertain in any way to this reinsurance.  However:

1. A Special Circumstance Reinsurer shall not have any right of access to the records of the Company without the Company's prior consent; and

2. A Subscribing Reinsurer or its designated representatives shall not have any right of access to the records of the Company if it is not current in all undisputed payments due the Company.  "Undisputed" as used herein shall mean any amount that the Subscribing Reinsurer has not contested in writing to the Company specifying the reason(s) why the payments are disputed.

B. The provisions of this Article shall extend beyond the expiration or invalidation of this Contract, or the termination of a Subscribing Reinsurer's percentage share in this Contract, until all claims and losses hereunder are settled.

Article 20 - Errors, Omissions and Inadvertent Binding

A. Inadvertent delays, errors or omissions made in connection with this Contract or any transaction hereunder shall not relieve either party from any liability which would have attached had such delay, error or omission not occurred, provided always that such error or omission is rectified as soon as possible after discovery.

B. If the Company is bound, without the knowledge and contrary to the instructions of the Company's supervisory underwriting personnel, on any business falling outside the scope of this Contract, reinsurance shall apply to such business until 30 days after an underwriting supervisor of the Company acquires knowledge thereof or until the minimum amount of time required by the applicable statute or regulatory authority to cancel such a policy has elapsed, whichever is greater.

Article 21 - Currency (BRMA 12A)

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 22 - Taxes (BRMA 50B)

In consideration of the terms under which this Contract is issued, the Company will not claim a deduction in respect of the premium hereon when making tax returns, other than income or profits tax returns, to any state or territory of the United States of America or the District of Columbia.

Article 23 - Federal Excise Tax (BRMA 17D)

A. The Reinsurer has agreed to allow for the purpose of paying the Federal Excise Tax the applicable percentage of the premium payable hereon (as imposed under Section 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 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 24 - Foreign Account Tax Compliance Act

A. To the extent the Reinsurer is subject to the deduction and withholding of premium payable hereon as set forth in the Foreign Account Tax Compliance Act (Sections 1471-1474 of the Internal Revenue Code), the Reinsurer shall allow such deduction and withholding from the premium payable under this Contract.

B. In the event of any return of premium becoming due hereunder, the return premium will be determined and paid in full without regard to any amounts deducted or withheld under paragraph A of this Article.  In the event the Company or its agent recovers such premium deductions and withholdings on the return premium from the United States Government, the Company or its agent will reimburse the Reinsurer for such amounts.

Article 25 - Reserves

A. The Reinsurer agrees to fund its share of the Company's ceded unearned premium, outstanding loss and loss adjustment expense reserves (including incurred but not reported loss reserves as established by the Company), and any other outstanding balances which it shall be required by applicable regulation or law to set up under this Contract (the "funding obligation") by:

1. Clean, irrevocable and unconditional letters of credit issued and confirmed, if confirmation is required by the insurance regulatory authorities involved, by a bank or banks meeting the NAIC Securities Valuation Office credit standards for issuers of letters of credit and acceptable to said insurance regulatory authorities; and/or

2. Escrow accounts for the benefit of the Company;and/or

3. Cash advances;

if the Reinsurer:

1. Is unauthorized in any state of the United States of America or the District of Columbia and if, without such funding, a penalty would accrue to the Company on any financial statement it is required to file with the insurance regulatory authorities involved; or

2. Is a Special Circumstance Reinsurer.

The Reinsurer, at its sole option, may fund in other than cash if its method and form of funding are acceptable to the insurance regulatory authorities involved.

Notwithstanding the provisions of the Arbitration Article, if a Special Circumstance Reinsurer fails to fund its share of the funding obligation as set forth above, the Company retains its right to apply to a court of competent jurisdiction for equitable or interim relief.

B. With regard to funding in whole or in part by letters of credit, it is agreed that each letter of credit will be in a form acceptable to insurance regulatory authorities involved, will be issued for a term of at least one year and will include an "evergreen clause," which automatically extends the term for at least one additional year at each expiration date unless written notice of non-renewal is given to the Company not less than 30 days prior to said expiration date.  The Company and the Reinsurer further agree, notwithstanding anything to the contrary in this Contract, that said letters of credit may be drawn upon by the Company or its successors in interest at any time, without diminution because of the insolvency of the Company or the Reinsurer, but only for one or more of the following purposes:

1. To reimburse itself for the Reinsurer's share of unearned premiums returned to insureds on account of policy cancellations, unless paid in cash by the Reinsurer;

2. To reimburse itself for the Reinsurer's share of losses and/or loss adjustment expense paid under the terms of policies reinsured hereunder, unless paid in cash by the Reinsurer;

3. To reimburse itself for the Reinsurer's share of any other amounts claimed to be due hereunder, unless paid in cash by the Reinsurer;

4. To fund a cash account in an amount equal to the Reinsurer's funding obligation funded by means of a letter of credit which is under non-renewal notice, if said letter of credit has not been renewed or replaced by the Reinsurer 10 days prior to its expiration date;

5. To refund to the Reinsurer any sum in excess of the actual amount required to fund the Reinsurer's funding obligation, if so requested by the Reinsurer.

In the event the amount drawn by the Company on any letter of credit is in excess of the actual amount required for B(1), B(2) or B(4), or in the case of B(3), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.

C. If a Subscribing Reinsurer fails to fulfill its funding obligation (if any) under this Article, the Company may, at its option, require the Subscribing Reinsurer to pay, and the Subscribing Reinsurer agrees to pay, an interest charge on the funding obligation calculated on the last business day of each month as follows:

1. The number of full days that have expired since the earliest of the applicable following dates:

a. As respects a Subscribing Reinsurer that is unauthorized in any state of the United States of America or District of Columbia having jurisdiction over the Company, December 31 of the calendar year in which the funding was required; or

b. As respects a Special Circumstance Reinsurer, the first date such reinsurer becomes a Special Circumstance Reinsurer;

times:

2. 1/365th of the sum of 4.0% and the U.S. prime rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made; times

3. The greater of (a) the funding obligation, less the amount, if any, funded by the Subscribing Reinsurer prior to the applicable date determined in subparagraph 1 above or (b) $100,000.

It is agreed that interest shall accumulate until the full interest charge amount as provided for in this paragraph and the funding obligation are paid.

If the interest rate provided under this Article exceeds the maximum interest rate allowed by any applicable law or is held unenforceable by an arbitrator or a court of competent jurisdiction, such interest rate shall be modified to the highest rate permitted by the applicable law, and all remaining provisions of this Article and Contract shall remain in full force and effect without being impaired or invalidated in any way.

Article 26 - Insolvency

A. In the event of the insolvency of one or more of the reinsured companies, this reinsurance shall be payable directly to the company or to its liquidator, receiver, conservator or statutory successor on the basis of the liability of the company without diminution because of the insolvency of the company or because the liquidator, receiver, conservator or statutory successor of the company has failed to pay all or a portion of any claim.  It is agreed, however, that the liquidator, receiver, conservator or statutory successor of the company shall give written notice to the Reinsurer of the pendency of a claim against the company indicating the policy or bond reinsured which claim would involve a possible liability on the part of the Reinsurer within a reasonable time after such claim is filed in the conservation or liquidation proceeding or in the receivership, and that during the pendency of such claim, the Reinsurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated, any defense or defenses that it may deem available to the company or its liquidator, receiver, conservator or statutory successor.  The expense thus incurred by the Reinsurer shall be chargeable, subject to the approval of the Court, against the company as part of the expense of conservation or liquidation to the extent of a pro rata share of the benefit which may accrue to the company solely as a result of the defense undertaken by the Reinsurer.

B. Where two or more reinsurers are involved in the same claim and a majority in interest elect to interpose defense to such claim, the expense shall be apportioned in accordance with the terms of this Contract as though such expense had been incurred by the company.

C. It is further understood and agreed that, in the event of the insolvency of one or more of the reinsured companies, the reinsurance under this Contract shall be payable directly by the Reinsurer to the company or to its liquidator, receiver or statutory successor, except as provided by Section 4118(a) of the New York Insurance Law or except (1) 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 payees under such policies and in substitution for the obligations of the company to such payees.

Article 27 - Arbitration

A. As a condition precedent to any right of action hereunder, in the event of any dispute or difference of opinion hereafter arising with respect to this Contract, it is hereby mutually agreed that such dispute or difference of opinion shall be submitted to arbitration.  One Arbiter shall be chosen by the Company, the other by the Reinsurer, and an Umpire shall be chosen by the two Arbiters before they enter upon arbitration, all of whom shall be active or retired disinterested executive officers of insurance or reinsurance companies or Lloyd's London Underwriters.  In the event that either party should fail to choose an Arbiter within 30 days following a written request by the other party to do so, the requesting party may choose two Arbiters who shall in turn choose an Umpire before entering upon arbitration.  If the two Arbiters fail to agree upon the selection of an Umpire within 30 days following their appointment, each Arbiter shall nominate three candidates within 10 days thereafter, two of whom the other shall decline, and the decision shall be made by drawing lots.  Notwithstanding the above, in the event the dispute or difference of opinion involves a Special Circumstance Reinsurer, the Company may, at its option, choose to forego arbitration and may bring an action in any court of competent jurisdiction.

B. Each party shall present its case to the Arbiters within 30 days following the date of appointment of the Umpire.  The Arbiters shall consider this Contract as an honorable engagement rather than merely as a legal obligation and they are relieved of all judicial formalities and may abstain from following the strict rules of law.  The decision of the Arbiters shall be final and binding on both parties; but failing to agree, they shall call in the Umpire and the decision of the majority shall be final and binding upon both parties.  Judgment upon the final decision of the Arbiters may be entered in any court of competent jurisdiction and the Arbiters are empowered to grant interim relief as they may deem appropriate.

C. If more than one reinsurer is involved in the same dispute, all such reinsurers shall, at the option of the Company, constitute and act as one party for purposes of this Article and communications shall be made by the Company to each of the reinsurers constituting one party, provided, however, that nothing herein shall impair the rights of such reinsurers to assert several, rather than joint, defenses or claims, nor be construed as changing the liability of the reinsurers participating under the terms of this Contract from several to joint.

D. Each party shall bear the expense of its own Arbiter, and shall jointly and equally bear with the other the expense of the Umpire and of the arbitration.  In the event that the two Arbiters are chosen by one party, as above provided, the expense of the Arbiters, the Umpire and the arbitration shall be equally divided between the two parties.

E. Any arbitration proceedings shall take place in Irving, Texas, or at a location mutually agreed upon by the parties to this Contract, but notwithstanding the location of the arbitration, all proceedings pursuant hereto shall be governed by the law of the State of Texas.

Article 28 - Service of Suit

(Applicable if the Reinsurer is not domiciled in the United States of America, and/or is not authorized in any State, Territory or District of the United States where authorization is required by insurance regulatory authorities)

A. This Article will not be read to conflict with or override the obligations of the parties to arbitrate their disputes as provided for in the Arbitration Article.  This Article is intended as an aid to compelling arbitration or enforcing such arbitration or arbitral award, not as an alternative to the Arbitration Article for resolving disputes arising out of this Contract.

B. In the event the Reinsurer fails to pay any amount claimed to be due hereunder, the Reinsurer, at the request of the Company, will submit to the jurisdiction of a court of competent jurisdiction within the United States.  Nothing in this Article constitutes or should be understood to constitute a waiver of the Reinsurer'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 Reinsurer, once the appropriate Court is accepted by the Reinsurer or is determined by removal, transfer or otherwise, as provided for above, will comply with all requirements necessary to give said Court jurisdiction and, in any suit instituted against any of the Subscribing Reinsurers upon this Contract, will abide by the final decision of such Court or of any Appellate Court in the event of an appeal.

C. Further, pursuant to any statute of any state, territory or district of the United States which makes provision therefor, the Reinsurer hereby designates Eridania Perez, Squire Patton Boggs LLP, 30 Rockefeller Plaza, New York, New York 10112, or if that party is unable to comply with the request, the Superintendent, Commissioner or Director of Insurance or other officer specified for that purpose in the statute, or his or her successor or successors in office, as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Company or any beneficiary hereunder arising out of this Contract.

Article 29 - Confidentiality

A. The Reinsurer hereby acknowledges that the documents, information and data provided to it 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.  Confidential Information shall not include documents, information or data that the Reinsurer can show:

1. Are publicly known or have become publicly known through no unauthorized act of the Reinsurer;

2. Have been rightfully received from a third person without obligation of confidentiality; or

3. Were known by the Reinsurer prior to the placement of this Contract without an obligation of confidentiality.

B. Absent the written consent of the Company, the Reinsurer shall not disclose any Confidential Information to any third parties, including any affiliated companies, except:

1. When required by retrocessionaires subject to the business ceded to this Contract;

2. When required by state regulators performing an audit of the Reinsurer's records and/or financial condition;

3. When required by external auditors performing an audit of the Reinsurer's records in the normal course of business; or

4. When required by attorneys or arbitrators in connection with an actual or potential dispute hereunder.

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

C. 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 with written notice of same at least 10 days prior to such release or disclosure and to use its best efforts to assist the Company in maintaining the confidentiality provided for in this Article.

D. The provisions of this Article shall extend to the officers, directors and employees of the Reinsurer and its affiliates, and shall be binding upon their successors and assigns.

Article 30 - Agency Agreement

If more than one reinsured company is named as a party to this Contract, the first named company shall be deemed the agent of the other reinsured companies for purposes of sending or receiving notices required by the terms and conditions of this Contract, and for purposes of remitting or receiving any monies due any party.

Article 31 - Governing Law (BRMA 71B)

This Contract shall be governed by and construed in accordance with the laws of the State of Texas.

Article 32 - Severability (BRMA 72E)

If any provision of this Contract shall be rendered illegal or unenforceable by the laws, regulations or public policy of any state, such provision shall be considered void in such state, but this shall not affect the validity or enforceability of any other provision of this Contract or the enforceability of such provision in any other jurisdiction.

Article 33 - Entire Agreement

This written Contract constitutes the entire agreement between the parties hereto with respect to the business being reinsured hereunder, and there are no understandings between the parties hereto other than as expressed in this Contract.  Any change or modification to this Contract will be made by amendment to this Contract and signed by the parties hereto.

Article 34 - Notices and Contract Execution

A. Whenever a notice, statement, report or any other written communication is required by this Contract, unless otherwise specified, such notice, statement, report or other written communication may be transmitted by certified or registered mail, nationally or internationally recognized express delivery service, personal delivery, electronic mail, or facsimile.  With the exception of notices of termination, first class mail is also acceptable.

B. The use of any of the following shall constitute a valid execution of this Contract or any amendments thereto:

1. Paper documents with an original ink signature;

2. Facsimile or electronic copies of paper documents showing an original ink signature; and/or

3. Electronic records with an electronic signature made via an electronic agent.  For the purposes of this Contract, the terms "electronic record," "electronic signature" and "electronic agent" shall have the meanings set forth in the Electronic Signatures in Global and National Commerce Act of 2000 or any amendments thereto.

C. This Contract may be executed in one or more counterparts, each of which, when duly executed, shall be deemed an original.

Article 35 - Intermediary

Aon Benfield Inc., or one of its affiliated corporations duly licensed as a reinsurance intermediary, is hereby recognized as the Intermediary negotiating this Contract for all business hereunder.  All communications (including but not limited to notices, statements, premiums, return premiums, commissions, taxes, losses, loss adjustment expense, salvages and loss settlements) relating to this Contract will be transmitted to the Company or the Reinsurer through the Intermediary.  Payments by the Company to the Intermediary will be deemed payment to the Reinsurer.  Payments by the Reinsurer to the Intermediary will be deemed 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:

This ________________ day of ____________________________ in the year ____________.

Homeowners of America Insurance Company (for and on behalf of the "Company")

___________________________________________________________

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance (U.S.A.)

1. This Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly and whether as Insurer or Reinsurer, from any Pool of Insurers or Reinsurers formed for the purpose of covering Atomic or Nuclear Energy risks.

2. Without in any way restricting the operation of paragraph (1) of this Clause, this Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly and whether as Insurer or Reinsurer, from any insurance against Physical Damage (including business interruption or consequential loss arising out of such Physical Damage) to:

I. Nuclear reactor power plants including all auxiliary property on the site, or

II. Any other nuclear reactor installation, including laboratories handling radioactive materials in connection with reactor installations, and "critical facilities" as such, or

III. Installations for fabricating complete fuel elements or for processing substantial quantities of "special nuclear material," and for reprocessing, salvaging, chemically separating, storing or disposing of "spent" nuclear fuel or waste materials, or

IV. Installations other than those listed in paragraph (2) III above using substantial quantities of radioactive isotopes or other products of nuclear fission.

3. Without in any way restricting the operations of paragraphs (1) and (2) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any insurance on property which is on the same site as a nuclear reactor power plant or other nuclear installation and which normally would be insured therewith except that this paragraph (3) shall not operate

(a) where Reassured does not have knowledge of such nuclear reactor power plant or nuclear installation, or

(b) where said insurance contains a provision excluding coverage for damage to property caused by or resulting from radioactive contamination, however caused.  However on and after 1st January 1960 this sub-paragraph (b) shall only apply provided the said radioactive contamination exclusion provision has been approved by the Governmental Authority having jurisdiction thereof.

4. Without in any way restricting the operations of paragraphs (1), (2) and (3) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, when such radioactive contamination is a named hazard specifically insured against.

5. It is understood and agreed that this Clause shall not extend to risks using radioactive isotopes in any form where the nuclear exposure is not considered by the Reassured to be the primary hazard.

6. The term "special nuclear material" shall have the meaning given it in the Atomic Energy Act of 1954 or by any law amendatory thereof.

7. Reassured to be sole judge of what constitutes:

(a) substantial quantities, and

(b) the extent of installation, plant or site.

Note.-Without in any way restricting the operation of paragraph (1) hereof, it is understood and agreed that

(a) all policies issued by the Reassured on or before 31st December 1957 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

(b) with respect to any risk located in Canada policies issued by the Reassured on or before 31st December 1958 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

12/12/57

N.M.A. 1119

BRMA 35B

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Pollution and Seepage Exclusion Clause

This Contract excludes loss and/or damage and/or costs and/or expenses arising from seepage and/or pollution and/or contamination, other than contamination from smoke.  Nevertheless, this exclusion does not preclude payment of the cost of removing debris of property damaged by a loss otherwise covered hereunder, subject always to a limit of 25.0% of the Company's property loss under the applicable original policy.

BRMA 39A

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Terrorism Exclusion

(Property Treaty Reinsurance)

Notwithstanding any provision to the contrary within this Contract or any amendment thereto, it is agreed that this Contract excludes loss, damage, cost or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any act of terrorism, as defined herein, regardless of any other cause or event contributing concurrently or in any other sequence to the loss.

An act of terrorism includes any act, or preparation in respect of action, or threat of action designed to influence the government de jure or de facto of any nation or any political division thereof, or in pursuit of political, religious, ideological or similar purposes to intimidate the public or a section of the public of any nation by any person or group(s) of persons whether acting alone or on behalf of or in connection with any organization(s) or government(s) de jure or de facto, and which:

1. Involves violence against one or more persons; or

2. Involves damage to property; or

3. Endangers life other than that of the person committing the action; or

4. Creates a risk to health or safety of the public or a section of the public; or

5. Is designed to interfere with or to disrupt an electronic system.

This Contract also excludes loss, damage, cost, or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any action in controlling, preventing, suppressing, retaliating against, or responding to any act of terrorism.

Notwithstanding the above and subject otherwise to the terms, conditions, and limitations of this Contract, in respect only of personal lines this Contract will pay actual loss or damage (but not related cost or expense) caused by any act of terrorism provided such act is not directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with biological, chemical, radioactive or nuclear pollution or contamination or explosion.

N.M.A. 2930c

22/11/02

Form approved by Lloyd's Market Association [Non-Marine]

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Interests and Liabilities Agreement

attached to and forming part of the

Residential Property Net Quota Share Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

including any and/or all companies that are or may hereafter become affiliated therewith

and

R+V Versicherung AGWiesbaden, Germany

(hereinafter referred to as the "Subscribing Reinsurer")

The Subscribing Reinsurer hereby accepts a 40.0% share in the interests and liabilities of the "Reinsurer" as set forth in the attached Contract captioned above.

This Agreement shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until 12:01 a.m., Central Standard Time, January 1, 2017, unless earlier terminated in accordance with the provisions of the attached Contract.

The Subscribing Reinsurer's share in the attached Contract shall be separate and apart from the shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it being understood that the Subscribing Reinsurer shall in no event participate in the interests and liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed this Agreement as of the date specified below:

This ________________ day of ___________________________ in the year ____________.

R+V Versicherung AG

_______________________________________________________

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EX-10.40

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Exhibit 10.40

Property Catastrophe Excess of Loss

Reinsurance Contract

Effective:  April 1, 2015

Homeowners of America Insurance Company

Irving, Texas

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Property Catastrophe Excess of Loss Reinsurance Contract

Effective:  April 1, 2015

Homeowners of America Insurance Company

Irving, Texas

Second Property Catastrophe Excess of Loss Reinsurance
Reinsurer(s)	Participation(s)
XL Re Ltd	2.0%
Through Aon UK Limited trading as Aon Benfield
Lloyd's Underwriters Per Signing Page(s)*	16.5%
Total	18.5%

Third Property Catastrophe Excess of Loss Reinsurance
Reinsurer(s)	Participation(s)
Hamilton Re, Ltd.	2.0%
XL Re Ltd	2.5%
Through Aon UK Limited trading as Aon Benfield
Lloyd's Underwriters Per Signing Page(s)*	12.0%
Total	16.5%

*Both the Company and the Subscribing Reinsurer sign the Interests and Liabilities Agreement.

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Table of Contents

Article		Page
	Preamble	1
1	Classes of Business Reinsured	1
2	Commencement and Termination	2
3	Territory (BRMA 51A)	3
4	Exclusions	3
5	Special Acceptances	5
6	Retention and Limit	5
7	Reinstatement	6
8	Definitions	6
9	Other Reinsurance	8
10	Loss Occurrence	8
11	Loss Notices and Settlements	10
12	Salvage and Subrogation	10
13	Reinsurance Premium	11
14	Sanctions	12
15	Late Payments	13
16	Offset (BRMA 36C)	14
17	Access to Records	14
18	Liability of the Reinsurer	15
19	Net Retained Lines	15
20	Errors and Omissions	15
21	Currency (BRMA 12A)	15
22	Taxes (BRMA 50B)	16
23	Federal Excise Tax (BRMA 17D)	16
24	Foreign Account Tax Compliance Act	16
25	Reserves	16
26	Insolvency	18
27	Arbitration	19
28	Service of Suit (BRMA 49G)	20
29	Confidentiality	21
30	Agency Agreement	21
31	Governing Law (BRMA 71B)	22
32	Severability (BRMA 72E)	22
33	Entire Agreement	22
34	Notices and Contract Execution	22
35	Intermediary	23
	Schedule A

15\H00H1002  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Property Catastrophe Excess of Loss

Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

and

The Subscribing Reinsurer(s) Executing the

Interests and Liabilities Agreement(s)

Attached Hereto

(hereinafter referred to as the "Reinsurer")

Preamble

Whenever the word "Company" is used in this Contract, such term shall be held to include:

1. Any or all of the affiliated insurance companies of Homeowners of America Insurance Company, which are or may hereafter be under common control, provided that notice be given to the Reinsurer of any such newly affiliated insurance companies which may hereafter come under common control as soon as practicable with full particulars as to how such affiliation is likely to affect this Contract; and

2. Its Quota Share Reinsurers whose Participation Slips are attached hereto (hereinafter referred to as the "Quota Share Reinsurers").

In the event of the Company or the Reinsurer maintaining that such affiliation calls for alteration in existing terms, and an agreement for alteration not being arrived at, then the business of such newly affiliated insurance company is covered at existing terms only for a period of 45 days after notice by either party that it does not wish to cover such business.

Article 1 - Classes of Business Reinsured

By this Contract the Reinsurer agrees to reinsure the excess liability which may accrue to the Company under its policies in force at the effective date hereof or issued or renewed on or after that date, and classified by the Company as Dwelling, Tenant, Condominium Owners and Homeowners business (property coverages only, including Dwelling coverage, Personal Property coverage and Extensions of Coverage as defined in the Company's policies), subject to the terms, conditions and limitations set forth herein and in Schedule A attached to and forming part of this Contract.

Article 2 - Commencement and Termination

A. This Contract shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, with respect to losses arising out of loss occurrences commencing at or after that time and date, and shall remain in force until 12:01 a.m., Central Standard Time, April 1, 2016.

B. Notwithstanding the provisions of paragraph A above, the Company may terminate a Subscribing Reinsurer's percentage share in this Contract in the event any of the following circumstances occur as clarified by public announcement or upon discovery:

1. The Subscribing Reinsurer's policyholders' surplus (or its equivalent under the Subscribing Reinsurer's accounting system) after the earlier of:  (a) the inception of this Contract, or (b) the date lines are bound for this Contract, has been reduced by more than 20.0% of the amount of surplus (or the applicable equivalent) 12 months prior to that date; or

2. The Subscribing Reinsurer's policyholders' surplus (or its equivalent under the Subscribing Reinsurer's accounting system) at any time between the earlier of:  (a) the inception of this Contract, or (b) the date lines are bound for this Contract, and the date of termination of this Contract has been reduced by more than 20.0% of the amount of surplus (or the applicable equivalent) at the date of the Subscribing Reinsurer's most recent financial statement filed with regulatory authorities and available to the public as of the date lines are bound; or

3. A State Insurance Department or other legal authority has ordered the Subscribing Reinsurer to cease assuming business; or

4. The Subscribing Reinsurer has become insolvent or has been placed into liquidation, receivership, supervision, administration, winding-up or under a scheme of arrangement, or similar proceedings (whether voluntary or involuntary) or proceedings have been instituted against the Subscribing Reinsurer for the appointment of a receiver, liquidator, rehabilitator, supervisor, administrator, conservator or trustee in bankruptcy, or other agent known by whatever name, to take possession of its assets or control of its operations; or

5. The Subscribing Reinsurer has reinsured its entire liability under this Contract without the Company's prior written consent; or

6. The A.M. Best's rating for the Subscribing Reinsurer has been assigned or downgraded below A- (inclusive of "Not Rated" ratings), or the published rating issued by Standard & Poor's has been downgraded below BBB+ (inclusive of "Not Rated" ratings); or

7. The Subscribing Reinsurer has become merged with, acquired by or controlled by any other entity or individual(s) not controlling the Subscribing Reinsurer's operations previously; or

8. The Subscribing Reinsurer has ceased assuming new or renewal property or casualty treaty reinsurance business.

C. In the event a Subscribing Reinsurer experiences one or more of the circumstances specified in paragraph B above, the Subscribing Reinsurer shall notify the Company as promptly as possible and shall hereinafter be referred to as a "Special Circumstance Reinsurer."  To terminate a Special Circumstance Reinsurer's percentage share in this Contract, the Company must provide the Special Circumstance Reinsurer with written notice as set forth in the Notices and Contract Execution Article.  Such notice shall include the effective date of termination as selected by the Company and shall be one of the following:

1. The date of written notice provided by the Special Circumstance Reinsurer; or

2. The last day of the month prior to the date of written notice provided by the Special Circumstance Reinsurer; or

3. The last day of any month after the date of written notice provided by the Special Circumstance Reinsurer; or

4. The date of the Company's written notice to the Special Circumstance Reinsurer advising of the termination.

In the event the Subscribing Reinsurer fails to immediately provide written notice to the Company of any event outlined in subparagraphs 1 through 8 of paragraph B above, the Company may elect to substitute the date of public announcement or discovery as the equivalent of written notice.

D. If any Subscribing Reinsurer's percentage share in this Contract is terminated or 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 termination or expiration of this Contract, provided that no part of such loss occurrence is claimed against any renewal or replacement of this Contract.

Article 3 - Territory (BRMA 51A)

The territorial limits of this Contract shall be identical with those of the Company's policies.

Article 4 - Exclusions

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

1. Financial guarantee and insolvency.

2. Nuclear risks as defined in the "Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance (U.S.A.)" attached to and forming part of this Contract.

3. Loss or damage caused by or resulting from war, invasion, hostilities, acts of foreign enemies, civil war, rebellion, insurrection, military or usurped power, or martial law or confiscation by order of any government or public authority, but this exclusion shall not apply to loss or damage covered under a standard policy with a standard War Exclusion Clause.

4. Loss or liability excluded under the provisions of the "Pools, Associations and Syndicates Exclusion Clause" attached to and forming part of this Contract.

5. 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.

6. All third party liability, including Section II of Homeowners.

7. Loss or damage to growing or standing crops.

8. Pollution and seepage coverages excluded under the provisions of the "Pollution and Seepage Exclusion Clause (BRMA 39A)" attached to and forming part of this Contract.

9. Terrorism, as described in the provisions of the "Terrorism Exclusion (NMA 2930c)" attached to and forming part of this Contract.

10. Flood and/or earthquake when written as such.

11. Loss, damage, cost or expense arising from fungi unless directly or indirectly caused by or contributed to by or arising from a covered peril under the Company's original policy.  Losses arising from fungi shall not in and of themselves constitute an event for the purposes of recovery hereunder.  For the purposes of this Contract, "fungi" means any type or form of fungus, including mold or mildew and any mycotoxins, spores, scents or by products produced or released by "fungi."

12. Reinsurance assumed; however, this exclusion shall not apply to business assumed by the Quota Share Reinsurers.

13. Growing, standing or drying crops or timber.

B. Any exclusion set forth in paragraph A (except exclusions set forth in subparagraphs 1, 2, 3, 5, 6 and 9) shall be waived automatically when, in the opinion of the Company, the exposure excluded therein is incidental to the principal exposure on the risk in question.

C. If the Company is bound, without the knowledge and contrary to the instructions of the Company's supervisory underwriting personnel, on any business falling within the scope of one or more of the exclusions set forth in paragraph A (except exclusions set forth in subparagraphs 1, 2, 3, 5, 6 and 9), the exclusion shall be suspended with respect to such business until 30 days after an underwriting supervisor of the Company acquires knowledge thereof or until the minimum amount of time required by the applicable statute or regulatory authority to cancel such a policy has elapsed, whichever is greater.

D. If the Company is required to accept an assigned risk which conflicts with one or more of the exclusions set forth in paragraph A (except exclusions set forth in subparagraphs 1, 2, 3, 5, 6 and 9), reinsurance shall apply, but only for the difference between the Company's retention and the minimum limit required by the applicable state statute, and in no event shall the Reinsurer's liability exceed the applicable limits set forth in the Retention and Limit and Reinstatement Articles.

Article 5 - Special Acceptances

A. From time to time the Company may request a special acceptance of reinsurance falling outside the scope of the provisions of this Contract (except as respects the exclusions set forth in subparagraphs 1, 2, 3, 5, 6 and 9 of the Exclusions Article).  Within five days of receipt of such a request, each Subscribing Reinsurer shall accept such request, ask for additional information, or reject the request.  Any reinsurance that is specially accepted by the Reinsurer shall be covered under this Contract and shall be subject to the terms hereof, except as such terms shall be modified by the special acceptance.  If a Subscribing Reinsurer fails to respond to a special acceptance request within five days, the Subscribing Reinsurer will be deemed to have agreed to the special acceptance.

B. If Subscribing Reinsurers under each excess layer with percentage shares totaling more than 50.0% in the interests and liabilities of the Reinsurer for that excess layer agree to a special acceptance, such special acceptance shall be binding on all Subscribing Reinsurers with respect to their respective shares for that excess layer.  If such percentage agreement is not achieved, such special acceptance shall be made to the excess layer only with respect to the interests and liabilities of each Subscribing Reinsurer for that excess layer that agrees to the special acceptance.

C. 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.  Further, if one or more Subscribing Reinsurers under this Contract agreed to special acceptance(s) under the contract being replaced by this Contract, such special acceptance(s) shall be automatically covered hereunder with respect to the interests and liabilities of such Subscribing Reinsurer(s).

Article 6 - Retention and Limit

A. As respects each excess layer of reinsurance coverage provided by this Contract, the Company shall retain and be liable for the first amount of ultimate net loss, shown as "Company's Retention" for that excess layer in Schedule A attached hereto, arising out of each loss occurrence.  The Reinsurer shall then be liable, as respects each excess layer, for the amount by which such ultimate net loss exceeds the Company's applicable retention, but the liability of the Reinsurer under each excess layer shall not exceed the amount, shown as "Reinsurer's Per Occurrence Limit" for that excess layer in Schedule A attached hereto, as respects any one loss occurrence.

B. No claim shall be made hereunder in any one loss occurrence unless at least two risks insured by the Company are involved in such loss occurrence.  For the purposes of this Contract, the Company shall be the sole judge of what constitutes "one risk."

Article 7 - Reinstatement

A. In the event all or any portion of the reinsurance under any excess layer of reinsurance coverage provided by this Contract is exhausted by loss, the amount so exhausted shall be reinstated immediately from the time the loss occurrence commences hereon.  For each amount so reinstated, the Company agrees to pay additional premium in accordance with the provisions of the Reinsurance Premium Article.

B. Notwithstanding anything stated herein, the liability of the Reinsurer under any excess layer of reinsurance coverage provided by this Contract shall not exceed either of the following:

1. The amount, shown as "Reinsurer's Per Occurrence Limit" for that excess layer in Schedule A attached hereto, as respects loss or losses arising out of any one loss occurrence; or

2. The amount, shown as "Reinsurer's Term Limit" for that excess layer in Schedule A attached hereto, in all during the term of this Contract.

Article 8 - Definitions

A. "Loss adjustment expense" as used herein shall mean costs and expenses assignable to the investigation, appraisal, adjustment, settlement, litigation, defense and/or appeal of claims, regardless of how such expenses are classified for statutory reporting purposes.  Loss adjustment expense shall include, but not be limited to:

1. Interest on judgments;

2. Expenses of outside adjusters and adjuster expenses incurred by Homeowners of America MGA, Inc.;

3. Expenses and a pro rata share of salaries of the Company's field employees and expenses of other employees of the Company who have been temporarily diverted from their normal and customary duties and assigned to the adjustment of losses covered by this Contract;

4. Expenses of the Company's officials incurred in connection with losses covered by this Contract;

5. Declaratory judgment expenses or other legal expenses and costs incurred in connection with coverage questions and legal actions connected thereto;

6. Advertising or other extraordinary communication expenses incurred as a result of a covered loss;

7. Court costs;

8. Costs of supersedeas and appeal bonds;

9. Monitoring counsel expenses;

10. Extraordinary expenses arising out of a loss, whether or not they are allocable to a specific "claim."

However, loss adjustment expense shall not include normal office expenses or salaries of the Company's regular employees, except as provided for in subparagraph 3 above.

B. "Loss in excess of policy limits" and "extra contractual obligations" as used herein shall mean:

1. "Loss in excess of policy limits" shall mean 90.0% of any amount paid or payable by the Company in excess of its policy limits, but otherwise within the terms of its policy, such loss in excess of the Company's policy limits arising from the handling of any claim on business covered hereunder; such liabilities arising, because of, but not limited to, failure by the Company to settle within the policy limits or by reason of the Company's alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of an action against its insured or reinsured or in the preparation or prosecution of an appeal consequent upon such an action.

2. "Extra contractual obligations" shall mean 90.0% of any punitive, exemplary, compensatory or consequential damages paid or payable by the Company, not covered by any other provision of this Contract and which arise from the handling of any claim on business subject to this Contract, such liabilities arising because of, but not limited to, failure by the Company to settle within the policy limits or by reason of the Company's alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or in the preparation of the defense or in the trial of an action against its insured or reinsured or in the preparation or prosecution of an appeal consequent upon such an action.  An extra contractual obligation shall be deemed, in all circumstances, to have occurred on the same date as the loss covered or alleged to be covered under the policy.

Notwithstanding anything stated herein, this Contract shall not apply to any loss in excess of policy limits or any extra contractual obligation incurred by the Company as a result of any fraudulent and/or criminal act by any officer or director of the Company acting individually or collectively or in collusion with any individual or corporation or any other organization or party involved in the presentation, defense or settlement of any claim covered hereunder.

Savings Clause (Applicable only if the Subscribing Reinsurer is domiciled in the State of New York):  In no event shall coverage be provided to the extent that such coverage is not permitted under New York law.

C. "Policies" as used herein shall mean all policies, contracts and binders of insurance, whether held covered provisionally or otherwise.

D. "Term of this Contract" as used herein shall mean the period from 12:01 a.m., Central Standard Time, April 1, 2015, to 12:01 a.m., Central Standard Time, April 1, 2016.  However, if this Contract or the participation of a Subscribing Reinsurer is terminated, "term of this Contract" as used herein shall mean the period from 12:01 a.m., Central Standard Time, April 1, 2015, to the effective time and date of termination.

E. "Ultimate net loss" as used herein shall mean the sum or sums (including loss in excess of policy limits, extra contractual obligations and loss adjustment expense, as defined herein) paid or payable by the Company in settlement of claims and in satisfaction of judgments rendered on account of such claims, after deduction of all claims on inuring reinsurance, whether collectible or not, and all salvage and other recoveries.  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 foregoing, it is understood and agreed that reinsurance, if any, effected by the Quota Share Reinsurers (except as respects reinsurance assumed by the Quota Share Reinsurers covering business set forth in the Classes of Business Reinsured Article) shall not be taken into account in computing the ultimate net loss, nor in any way affect the amount recoverable hereunder.

Article 9 - Other Reinsurance

A. The Company shall maintain in force property per risk excess of loss treaty reinsurance, recoveries under which shall inure to the benefit of this Contract.

B. The Company shall be permitted to carry other 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.

Article 10 - Loss Occurrence

A. "Loss occurrence" as used herein shall mean the sum of all individual losses directly occasioned by any one disaster, accident or loss or series of disasters, accidents or losses arising out of one event which occurs within the area of one state of the United States or province of Canada and states or provinces contiguous thereto and to one another.  However, the duration and extent of any one "loss occurrence" shall be limited to all individual losses sustained by the Company occurring during any period of 168 consecutive hours arising out of and directly occasioned by the same event, except that the term "loss occurrence" shall be further defined as follows:

1. As regards windstorm, hail, tornado, hurricane, cyclone, including ensuing collapse and water damage, all individual losses sustained by the Company occurring during any period of 120 consecutive hours arising out of and directly occasioned by the same event.  However, the event need not be limited to one state or province or states or provinces contiguous thereto.

2. As regards riot, riot attending a strike, civil commotion, vandalism and malicious mischief, all individual losses sustained by the Company occurring during any period of 72 consecutive hours within the area of one municipality or county and the municipalities or counties contiguous thereto arising out of and directly occasioned by the same event.  The maximum duration of 72 consecutive hours may be extended in respect of individual losses which occur beyond such 72 consecutive hours during the continued occupation of an assured's premises by strikers, provided such occupation commenced during the aforesaid period.

3. As regards earthquake (the epicenter of which need not necessarily be within the territorial confines referred to in the introductory portion of this paragraph) and fire following directly occasioned by the earthquake, only those individual fire losses which commence during the period of 168 consecutive hours may be included in the Company's "loss occurrence."

4. As regards "freeze," only individual losses directly occasioned by collapse, breakage of glass and water damage (caused by bursting of frozen pipes and tanks or freezing and/or melting snow or sleet) may be included in the Company's "loss occurrence."

5. As regards firestorms, brush fires and any other fires or series of fires, irrespective of origin (except as provided in subparagraphs 2 and 3 above), all individual losses sustained by the Company which commence during any period of 168 consecutive hours within a 150-mile radius of any fixed point selected by the Company may be included in the Company's "loss occurrence."  However, an individual loss subject to this subparagraph cannot be included in more than one "loss occurrence."

B. For all those "loss occurrences" other than those referred to in subparagraph 2 of paragraph A above, the Company may choose the date and time when any such period of consecutive hours commences, provided that it is not earlier than the date and time of the occurrence of the first recorded individual loss sustained by the Company arising out of that disaster, accident or loss, and provided that only one such period of 168 consecutive hours shall apply with respect to one event, except for any loss occurrence referred to in subparagraph 1 of paragraph A above where only one such period of 120 consecutive hours shall apply with respect to one event.

C. As respects those "loss occurrences" referred to in subparagraph 2 of paragraph A above, if the disaster, accident or loss occasioned by the event is of greater duration than 72 consecutive hours, then the Company may divide that disaster, accident or loss into two or more "loss occurrences," provided no two periods overlap and no individual loss is included in more than one such period and provided that no period commences earlier than the date and time of the occurrence of the first recorded individual loss sustained by the Company arising out of that disaster, accident or loss.

D. It is understood that losses arising from a combination of two or more perils as a result of the same event shall be considered as having arisen from one "loss occurrence."  Notwithstanding the foregoing, the hourly limitations as stated in paragraph A shall not be exceeded as respects the applicable perils and no single "loss occurrence" shall encompass a time period greater than 168 consecutive hours.

Article 11 - Loss Notices and Settlements

A. Whenever losses paid or reserved by the Company appear likely, in the opinion of the Company, to result in a claim hereunder, the Company shall notify the Reinsurer, and the Company shall notify the Reinsurer of all subsequent developments that may materially affect the position of the Reinsurer.

B. The Company alone and at its full discretion shall adjust, settle or compromise all claims and losses subject to this Contract.  The Reinsurer shall be bound by the judgment of the Company as to the obligations and liabilities of the Company under any policy.

C. All loss settlements made by the Company, whether under strict policy terms or by way of compromise (including loss in excess of policy limits and extra contractual obligations) shall be binding upon the Reinsurer, and the Reinsurer agrees to pay or allow, as the case may be, all amounts for which it may be liable immediately upon receipt of reasonable evidence of the amount paid (or scheduled to be paid) by the Company.  The Company shall be the sole judge as to:

1. What constitutes a claim or loss covered under any policy;

2. The Company's liability thereunder;

3. The amount or amounts proper for the Company to pay thereunder.

D. A Special Circumstance Reinsurer shall not have the right to deny payment of a claim under any excess layer hereunder if the sum of the percentage shares of Active Subscribing Reinsurers that have paid the claim under that excess layer exceeds 50.0% of the sum of the percentage shares of all Active Subscribing Reinsurers for that excess layer.  "Active Subscribing Reinsurer" as used herein shall mean a Subscribing Reinsurer that is not a Special Circumstance Reinsurer as of the due date of the claim (as specified in the Late Payments Article).

Article 12 - Salvage and Subrogation

The Reinsurer shall be credited with salvage (i.e., reimbursement obtained or recovery made by the Company, less the actual cost, excluding salaries of officials and employees of the Company and sums paid to attorneys as retainer, of obtaining such reimbursement or making such recovery) on account of claims and settlements involving reinsurance hereunder.  Salvage thereon shall always be used to reimburse the excess carriers in the reverse order of their priority according to their participation before being used in any way to reimburse the Company for its primary loss.  The Company hereby agrees to enforce its rights to salvage or subrogation relating to any loss, a part of which loss was sustained by the Reinsurer, and to prosecute all claims arising out of such rights if, in the Company's opinion, it is reasonable to do so.

Article 13 - Reinsurance Premium

A. As premium for each excess layer of reinsurance coverage provided by this Contract, the Company shall pay the Reinsurer the greater of the following:

1. The amount, shown as "Annual Minimum Premium" for that excess layer in Schedule A attached hereto; or

2. The percentage, shown as "Premium Rate" for that excess layer in Schedule A attached hereto, of the Company's net earned premium for the term of this Contract.

B. The Company shall pay the Reinsurer an annual deposit premium for each excess layer of the amount, shown as "Annual Deposit Premium" for that excess layer in Schedule A attached hereto, in four equal installments of the amount, shown as "Quarterly Deposit Premium" for that excess layer in Schedule A attached hereto, on April 1, July 1 and October 1 of 2015 and January 1 of 2016.

C. Within 45 days after the expiration of this Contract, the Company shall provide a report to the Reinsurer setting forth the premium due hereunder for each excess layer, computed in accordance with paragraph A above, and any additional premium due the Reinsurer or return premium due the Company for each such excess layer shall be remitted promptly.

D. For each amount of limit reinstated for each excess layer in accordance with the Reinstatement Article, the Company agrees to pay additional premium equal to the product of the following:

1. The percentage of the occurrence limit for the excess layer reinstated (based on the loss paid by the Reinsurer under that excess layer); times

2. The earned reinsurance premium, as calculated in accordance with paragraph C above, for the excess layer reinstated for the term of this Contract (exclusive of reinstatement premium).

E. Whenever the Company requests payment by the Reinsurer of any loss under any excess layer hereunder, the Company shall submit a statement to the Reinsurer of reinstatement premium due the Reinsurer for that excess layer.  If the earned reinsurance premium for any excess layer for the term of this Contract has not been finally determined as of the date of any such statement, the calculation of reinstatement premium due for that excess layer shall be based on the annual deposit premium for that excess layer and shall be readjusted when the earned reinsurance premium for that excess layer for the term of this Contract has been finally determined.  Any reinstatement premium shown to be due the Reinsurer for any excess layer as reflected by any such statement (less prior payments, if any, for that excess layer) shall be payable by the Company concurrently with payment by the Reinsurer of the requested loss for that excess layer.  Any return reinstatement premium shown to be due the Company shall be remitted by the Reinsurer as promptly as possible after receipt and verification of the Company's statement.

F. In the event a Subscribing Reinsurer's participation in this Contract is terminated under the provisions of paragraph B of the Commencement and Termination Article, no deposit premium shall be due after the effective date of termination, the minimum premium shall be waived, and the reinsurance premium and reinstatement premium, if applicable, will be calculated in accordance with the following formulas:

1. Reinsurance premium shall be the number of days the Subscribing Reinsurer participates on this Contract divided by the number of days of the original term of this Contract and the quotient thereof shall be multiplied by the Subscribing Reinsurer's percentage share of the final adjusted premium reported in accordance with paragraph C above.

2. Reinstatement premium shall be the product of subparagraphs D(1) and F(1) above.

3. In the event the incurred loss for an excess layer in Schedule A attached hereto is greater than the sum of subparagraphs F(1) and F(2) above that is applicable to the same excess layer, in lieu of the provisions of subparagraphs F(1) and F(2) above, the Subscribing Reinsurer will receive premium equal to the lesser of:

a. An amount equal to the Subscribing Reinsurer's percentage share of the full reinsurance premium calculated in accordance with paragraph A (without regard to the termination of the Subscribing Reinsurer's share in accordance with the provisions of the Commencement and Termination Article) plus any reinstatement premium calculated in accordance with subparagraph F(2) above; or

b. The Subscribing Reinsurer's percentage share of the incurred loss for the same excess layer.

G. Within 45 days after the termination of a Subscribing Reinsurer's participation in this Contract as set forth above, the Company shall provide a report to the Subscribing Reinsurer setting forth the premium due hereunder for each excess layer, computed in accordance with paragraph F above, and any additional premium due the Subscribing Reinsurer or return premium due the Company for each such excess layer shall be remitted promptly.

H. "Net earned premium" as used herein shall mean 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.

I. "Incurred loss" as used herein shall mean the Company's ceded ultimate net loss plus the Company's ceded outstanding loss and loss adjustment expense reserves (including all case reserves plus any reasonable amount estimated to be unreported from known loss occurrences as established by the Company).

Article 14 - Sanctions

Neither the Company nor any Subscribing Reinsurer shall be liable for premium or loss under this Contract if it would result in a violation of any mandatory sanction, prohibition or restriction under United Nations resolutions or the trade or economic sanctions, laws or regulations of the European Union, United Kingdom or United States of America that are applicable to either party.

Article 15 - Late Payments

A. The provisions of this Article shall not be implemented unless specifically invoked, in writing, by one of the parties to this Contract.

B. In the event any premium, loss or other payment due either party is not received by the intermediary named in the Intermediary Article (hereinafter referred to as the "Intermediary") by the payment due date, the party to which 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 charge 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

2. 1/365th of the sum of 4.0% and the U.S. prime rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made; 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 charges have been received by the Intermediary.

Notwithstanding the provisions of subparagraph 2 above and the immediately preceding sentence, the interest rate for a Special Circumstance Reinsurer will increase by 1.0% for every month that payment of the claim is past due, subject to a maximum annual interest rate of 10.0%.

C. If the interest rate provided under this Article exceeds the maximum interest rate allowed by any applicable law or is held unenforceable by a court of competent jurisdiction, such interest rate shall be modified to the highest rate permitted by the applicable law, and all remaining provisions of this Article and Contract shall remain in full force and effect without being impaired or invalidated in any way.

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

1. As respects the payment of routine deposits and premiums due the Reinsurer, the due date shall be as provided for in the applicable section of this Contract.  In the event a due date is not specifically stated for a given payment, it shall be deemed due 30 days after the date of transmittal by the Intermediary of the initial billing for each such payment.

2. Any claim or loss payment due the Company hereunder shall be deemed due 30 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 30 days, interest will accrue on the payment or amount overdue in accordance with paragraph B above, from the date the proof of loss or demand for payment was transmitted to the Reinsurer.

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.  In the event a due date is not specifically stated for a given payment, it shall be deemed due 30 days following transmittal of written notification that the provisions of this Article have been invoked.

For purposes of interest calculations only, amounts due hereunder shall be deemed paid upon receipt by the Intermediary.

E. Nothing herein shall be construed as limiting or prohibiting a Subscribing Reinsurer from contesting the validity of any claim, or from participating in the defense of any claim or suit, or prohibiting either party from contesting the validity of any payment or from initiating any arbitration or other proceeding in accordance with the provisions of this Contract.  If the debtor party prevails in an arbitration or other proceeding, then any interest charges due hereunder on the amount in dispute shall be null and void.  If the debtor party loses in such proceeding, then the interest charge on the amount determined to be due hereunder shall be calculated in accordance with the provisions set forth above unless otherwise determined by such proceedings.  If a debtor party advances payment of any amount it is contesting, and proves to be correct in its contestation, either in whole or in part, the other party shall reimburse the debtor party for any such excess payment made plus interest on the excess amount calculated in accordance with this Article.

F. Interest charges arising out of the application of this Article that are $250 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 16 - Offset (BRMA 36C)

The Company and the Reinsurer shall have the right to offset any balance or amounts due from one party to the other under the terms of this Contract.  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.

Article 17 - Access to Records

A. Provided the Company has received at least 60 days prior notice, the Reinsurer or its designated representatives shall have access during regular business hours to all records of the Company which pertain in any way to this reinsurance.  However:

1. A Special Circumstance Reinsurer shall not have any right of access to the records of the Company without the Company's prior consent; and

2. A Subscribing Reinsurer or its designated representatives shall not have any right of access to the records of the Company if it is not current in all undisputed payments due the Company.  "Undisputed" as used herein shall mean any amount that the Subscribing Reinsurer has not contested in writing to the Company specifying the reason(s) why the payments are disputed.

B. The provisions of this Article shall extend beyond the expiration or invalidation of this Contract, or the termination of a Subscribing Reinsurer's percentage share in this Contract, until all claims and losses hereunder are settled.

Article 18 - Liability of the Reinsurer

A. The liability of the Reinsurer shall follow that of the Company in every case, including judicial interpretation and policy reformation, and be subject in all respects to all the general and specific stipulations, clauses, waivers and modifications of the Company's policies and any endorsements thereon.  However, in no event shall this be construed in any way to provide coverage outside the terms and conditions set forth in this Contract.

B. Nothing herein shall in any manner create any obligations or establish any rights against the Reinsurer in favor of any third party or any persons not parties to this Contract.

Article 19 - 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.  For purposes of this Contract, amounts ceded to Quota Share Reinsurers on business reinsured hereunder, if applicable, shall be considered retained net by the Company.

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.

Article 20 - Errors and Omissions

Inadvertent delays, errors or omissions made in complying with this Contract or any transaction hereunder shall not relieve either party from any liability which would have attached had such delay, error or omission not occurred, provided always that such error or omission is rectified as soon as possible after discovery.

Article 21 - Currency (BRMA 12A)

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 22 - Taxes (BRMA 50B)

In consideration of the terms under which this Contract is issued, the Company will not claim a deduction in respect of the premium hereon when making tax returns, other than income or profits tax returns, to any state or territory of the United States of America or the District of Columbia.

Article 23 - Federal Excise Tax (BRMA 17D)

A. The Reinsurer has agreed to allow for the purpose of paying the Federal Excise Tax the applicable percentage of the premium payable hereon (as imposed under Section 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 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 24 - Foreign Account Tax Compliance Act

A. To the extent the Reinsurer is subject to the deduction and withholding of premium payable hereon as set forth in the Foreign Account Tax Compliance Act (Sections 1471-1474 of the Internal Revenue Code), the Reinsurer shall allow such deduction and withholding from the premium payable under this Contract.

B. In the event of any return of premium becoming due hereunder, the return premium will be determined and paid in full without regard to any amounts deducted or withheld under paragraph A of this Article.  In the event the Company or its agent recovers such premium deductions and withholdings on the return premium from the United States Government, the Company or its agent will reimburse the Reinsurer for such amounts.

Article 25 - Reserves

A. The Reinsurer agrees to fund its share of the Company's ceded outstanding loss and loss adjustment expense reserves (including all case reserves plus any reasonable amount estimated to be unreported from known loss occurrences as established by the Company), and any other outstanding balances which it shall be required by applicable regulation or law to set up under this Contract (the "funding obligation") by:

1. Clean, irrevocable and unconditional letters of credit issued and confirmed, if confirmation is required by the insurance regulatory authorities involved, by a bank or banks meeting the NAIC Securities Valuation Office credit standards for issuers of letters of credit and acceptable to said insurance regulatory authorities; and/or

2. Escrow accounts for the benefit of the Company; and/or

3. Cash advances;

if the Reinsurer:

1. Is unauthorized in any state of the United States of America or the District of Columbia and if, without such funding, a penalty would accrue to the Company on any financial statement it is required to file with the insurance regulatory authorities involved; or

2. Is a Special Circumstance Reinsurer.

The Reinsurer, at its sole option, may fund in other than cash if its method and form of funding are acceptable to the insurance regulatory authorities involved.

Notwithstanding the provisions of the Arbitration Article, if a Special Circumstance Reinsurer fails to fund its share of the funding obligation as set forth above, the Company retains its right to apply to a court of competent jurisdiction for equitable or interim relief.

B. With regard to funding in whole or in part by letters of credit, it is agreed that each letter of credit will be in a form acceptable to insurance regulatory authorities involved, will be issued for a term of at least one year and will include an "evergreen clause," which automatically extends the term for at least one additional year at each expiration date unless written notice of non-renewal is given to the Company not less than 30 days prior to said expiration date.  The Company and the Reinsurer further agree, notwithstanding anything to the contrary in this Contract, that said letters of credit may be drawn upon by the Company or its successors in interest at any time, without diminution because of the insolvency of the Company or the Reinsurer, but only for one or more of the following purposes:

1. To reimburse itself for the Reinsurer's share of losses and/or loss adjustment expense paid under the terms of policies reinsured hereunder, unless paid in cash by the Reinsurer;

2. To reimburse itself for the Reinsurer's share of any other amounts claimed to be due hereunder, unless paid in cash by the Reinsurer;

3. To fund a cash account in an amount equal to the Reinsurer's funding obligation funded by means of a letter of credit which is under non-renewal notice, if said letter of credit has not been renewed or replaced by the Reinsurer 10 days prior to its expiration date;

4. To refund to the Reinsurer any sum in excess of the actual amount required to fund the Reinsurer's funding obligation, if so requested by the Reinsurer.

In the event the amount drawn by the Company on any letter of credit is in excess of the actual amount required for B(1) or B(3), or in the case of B(2), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.

C. If a Subscribing Reinsurer fails to fulfill its funding obligation (if any) under this Article, the Company may, at its option, require the Subscribing Reinsurer to pay, and the Subscribing Reinsurer agrees to pay, an interest charge on the funding obligation calculated on the last business day of each month as follows:

1. The number of full days that have expired since the earliest of the applicable following dates:

a. As respects a Subscribing Reinsurer that is unauthorized in any state of the United States of America or District of Columbia having jurisdiction over the Company, December 31 of the calendar year in which the funding was required; or

b. As respects a Special Circumstance Reinsurer, the first date such reinsurer becomes a Special Circumstance Reinsurer;

times:

2. 1/365th of the sum of 4.0% and the U.S. prime rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made; times

3. The greater of (a) the funding obligation, less the amount, if any, funded by the Subscribing Reinsurer prior to the applicable date determined in subparagraph 1 above or (b) $100,000.

It is agreed that interest shall accumulate until the full interest charge amount as provided for in this paragraph and the funding obligation are paid.

If the interest rate provided under this Article exceeds the maximum interest rate allowed by any applicable law or is held unenforceable by an arbitrator or a court of competent jurisdiction, such interest rate shall be modified to the highest rate permitted by the applicable law, and all remaining provisions of this Article and Contract shall remain in full force and effect without being impaired or invalidated in any way.

Article 26 - Insolvency

A. In the event of the insolvency of one or more of the reinsured companies, this reinsurance shall be payable directly to the company or to its liquidator, receiver, conservator or statutory successor on the basis of the liability of the company without diminution because of the insolvency of the company or because the liquidator, receiver, conservator or statutory successor of the company has failed to pay all or a portion of any claim.  It is agreed, however, that the liquidator, receiver, conservator or statutory successor of the company shall give written notice to the Reinsurer of the pendency of a claim against the company indicating the policy or bond reinsured which claim would involve a possible liability on the part of the Reinsurer within a reasonable time after such claim is filed in the conservation or liquidation proceeding or in the receivership, and that during the pendency of such claim, the Reinsurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated, any defense or defenses that it may deem available to the company or its liquidator, receiver, conservator or statutory successor.  The expense thus incurred by the Reinsurer shall be chargeable, subject to the approval of the Court, against the company as part of the expense of conservation or liquidation to the extent of a pro rata share of the benefit which may accrue to the company solely as a result of the defense undertaken by the Reinsurer.

B. Where two or more reinsurers are involved in the same claim and a majority in interest elect to interpose defense to such claim, the expense shall be apportioned in accordance with the terms of this Contract as though such expense had been incurred by the company.

C. It is further understood and agreed that, in the event of the insolvency of one or more of the reinsured companies, the reinsurance under this Contract shall be payable directly by the Reinsurer to the company or to its liquidator, receiver or statutory successor, except as provided by Section 4118(a) of the New York Insurance Law or except (1) 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 payees under such policies and in substitution for the obligations of the company to such payees.

Article 27 - Arbitration

A. As a condition precedent to any right of action hereunder, in the event of any dispute or difference of opinion hereafter arising with respect to this Contract, it is hereby mutually agreed that such dispute or difference of opinion shall be submitted to arbitration.  One Arbiter shall be chosen by the Company, the other by the Reinsurer, and an Umpire shall be chosen by the two Arbiters before they enter upon arbitration, all of whom shall be active or retired disinterested executive officers of insurance or reinsurance companies or Lloyd's London Underwriters.  In the event that either party should fail to choose an Arbiter within 30 days following a written request by the other party to do so, the requesting party may choose two Arbiters who shall in turn choose an Umpire before entering upon arbitration.  If the two Arbiters fail to agree upon the selection of an Umpire within 30 days following their appointment, each Arbiter shall nominate three candidates within 10 days thereafter, two of whom the other shall decline, and the decision shall be made by drawing lots.  Notwithstanding the above, in the event the dispute or difference of opinion involves a Special Circumstance Reinsurer, the Company may, at its option, choose to forego arbitration and may bring an action in any court of competent jurisdiction.

B. Each party shall present its case to the Arbiters within 30 days following the date of appointment of the Umpire.  The Arbiters shall consider this Contract as an honorable engagement rather than merely as a legal obligation and they are relieved of all judicial formalities and may abstain from following the strict rules of law.  The decision of the Arbiters shall be final and binding on both parties; but failing to agree, they shall call in the Umpire and the decision of the majority shall be final and binding upon both parties.  Judgment upon the final decision of the Arbiters may be entered in any court of competent jurisdiction and the Arbiters are empowered to grant interim relief as they may deem appropriate.

C. If more than one reinsurer is involved in the same dispute, all such reinsurers shall, at the option of the Company, constitute and act as one party for purposes of this Article and communications shall be made by the Company to each of the reinsurers constituting one party, provided, however, that nothing herein shall impair the rights of such reinsurers to assert several, rather than joint, defenses or claims, nor be construed as changing the liability of the reinsurers participating under the terms of this Contract from several to joint.

D. Each party shall bear the expense of its own Arbiter, and shall jointly and equally bear with the other the expense of the Umpire and of the arbitration.  In the event that the two Arbiters are chosen by one party, as above provided, the expense of the Arbiters, the Umpire and the arbitration shall be equally divided between the two parties.

E. Any arbitration proceedings shall take place in Irving, Texas, or at a location mutually agreed upon by the parties to this Contract, but notwithstanding the location of the arbitration, all proceedings pursuant hereto shall be governed by the law of the State of Texas.

Article 28 - Service of Suit (BRMA 49G)

(Applicable if the Reinsurer is not domiciled in the United States of America, and/or is not authorized in any State, Territory or District of the United States where authorization is required by insurance regulatory authorities)

A. This Article will not be read to conflict with or override the obligations of the parties to arbitrate their disputes as provided for in the Arbitration Article.  This Article is intended as an aid to compelling arbitration or enforcing such arbitration or arbitral award, not as an alternative to the Arbitration Article for resolving disputes arising out of this Contract.

B. In the event the Reinsurer fails to pay any amount claimed to be due hereunder, the Reinsurer, at the request of the Company, will submit to the jurisdiction of a court of competent jurisdiction within the United States.  Nothing in this Article constitutes or should be understood to constitute a waiver of the Reinsurer'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 Reinsurer, once the appropriate Court is accepted by the Reinsurer or is determined by removal, transfer or otherwise, as provided for above, will comply with all requirements necessary to give said Court jurisdiction and, in any suit instituted against any of the Subscribing Reinsurers upon this Contract, will abide by the final decision of such Court or of any Appellate Court in the event of an appeal.

C. Further, pursuant to any statute of any state, territory or district of the United States which makes provision therefor, the Reinsurer hereby designates the party named in its Interests and Liabilities Agreement, or if no party is named therein, the Superintendent, Commissioner or Director of Insurance or other officer specified for that purpose in the statute, or his or her successor or successors in office, as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Company or any beneficiary hereunder arising out of this Contract.

Article 29 - Confidentiality

A. The Reinsurer hereby acknowledges that the documents, information and data provided to it 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.  Confidential Information shall not include documents, information or data that the Reinsurer can show:

1. Are publicly known or have become publicly known through no unauthorized act of the Reinsurer;

2. Have been rightfully received from a third person without obligation of confidentiality; or

3. Were known by the Reinsurer prior to the placement of this Contract without an obligation of confidentiality.

B. Absent the written consent of the Company, the Reinsurer shall not disclose any Confidential Information to any third parties, excluding any affiliated companies, except:

1. When required by retrocessionaires subject to the business ceded to this Contract;

2. When required by state regulators performing an audit of the Reinsurer's records and/or financial condition;

3. When required by external auditors performing an audit of the Reinsurer's records in the normal course of business; or

4. When required by attorneys or arbitrators in connection with an actual or potential dispute hereunder.

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

C. 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 with written notice of same at least 10 days prior to such release or disclosure and to use its best efforts to assist the Company in maintaining the confidentiality provided for in this Article.

D. The provisions of this Article shall extend to the officers, directors and employees of the Reinsurer and its affiliates, and shall be binding upon their successors and assigns.

Article 30 - Agency Agreement

If more than one reinsured company is named as a party to this Contract, the first named company shall be deemed the agent of the other reinsured companies for purposes of sending or receiving notices required by the terms and conditions of this Contract, and for purposes of remitting or receiving any monies due any party.

Article 31 - Governing Law (BRMA 71B)

This Contract shall be governed by and construed in accordance with the laws of the State of Texas.

Article 32 - Severability (BRMA 72E)

If any provision of this Contract shall be rendered illegal or unenforceable by the laws, regulations or public policy of any state, such provision shall be considered void in such state, but this shall not affect the validity or enforceability of any other provision of this Contract or the enforceability of such provision in any other jurisdiction.

Article 33 - Entire Agreement

This written Contract constitutes the entire agreement between the parties hereto with respect to the business being reinsured hereunder, and there are no understandings between the parties hereto other than as expressed in this Contract.  Any change or modification to this Contract will be made by amendment to this Contract and signed by the parties hereto.

Article 34 - Notices and Contract Execution

A. Whenever a notice, statement, report or any other written communication is required by this Contract, unless otherwise specified, such notice, statement, report or other written communication may be transmitted by certified or registered mail, nationally or internationally recognized express delivery service, personal delivery, electronic mail, or facsimile.  With the exception of notices of termination, first class mail is also acceptable.

B. The use of any of the following shall constitute a valid execution of this Contract or any amendments thereto:

1. Paper documents with an original ink signature;

2. Facsimile or electronic copies of paper documents showing an original ink signature; and/or

3. Electronic records with an electronic signature made via an electronic agent.  For the purposes of this Contract, the terms "electronic record," "electronic signature" and "electronic agent" shall have the meanings set forth in the Electronic Signatures in Global and National Commerce Act of 2000 or any amendments thereto.

C. This Contract may be executed in one or more counterparts, each of which, when duly executed, shall be deemed an original.

Article 35 - Intermediary

Aon Benfield Inc., or one of its affiliated corporations duly licensed as a reinsurance intermediary, is hereby recognized as the Intermediary negotiating this Contract for all business hereunder.  All communications (including but not limited to notices, statements, premiums, return premiums, commissions, taxes, losses, loss adjustment expense, salvages and loss settlements) relating to this Contract will be transmitted to the Company or the Reinsurer through the Intermediary.  Payments by the Company to the Intermediary will be deemed payment to the Reinsurer.  Payments by the Reinsurer to the Intermediary will be deemed payment to the Company only to the extent that such payments are actually received by the Company.

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Schedule A

Property Catastrophe Excess of Loss

Reinsurance Contract

Effective:  April 1, 2015

Homeowners of America Insurance Company

Irving, Texas

	Second		Third
	Excess		Excess
Company's Retention	$	20,000,000	$	50,000,000
Reinsurer's Per Occurrence Limit	$	30,000,000	$	100,000,000
Reinsurer's Term Limit	$	60,000,000	$	200,000,000
Annual Minimum Premium		[****]		[****]
Premium Rate		[****]		[****]
Annual Deposit Premium		[****]		[****]
Quarterly Deposit Premium		[****]		[****]

The figures listed above for each excess layer shall apply to each Subscribing Reinsurer in the percentage share for that excess layer as expressed in its Interests and Liabilities Agreement attached hereto.

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Participation Slip

attached to and forming part of the

Property Catastrophe Excess of Loss

Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

including any or all of the affiliated insurance companies of

Homeowners of America Insurance Company and its Quota Share Reinsurers

in accordance with the provisions of the Preamble to the attached Contract

(hereinafter referred to collectively as the "Company")

and

Homeowners of America Insurance Company

Irving, Texas

including any or all of the affiliated insurance companies of

Homeowners of America Insurance Company

in accordance with the provisions of the Preamble to the attached Contract

(hereinafter referred to collectively as the "Subscribing Company")

The Subscribing Company hereby accepts the following percentage shares in the interests and liabilities of the "Company" as set forth in the attached Contract captioned above:

100.00%  of the Second Property Catastrophe Excess of Loss Reinsurance

 81.63%  of the Third Property Catastrophe Excess of Loss Reinsurance

This Participation Slip shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until 12:01 a.m., Central Standard Time, April 1, 2016, unless earlier terminated in accordance with the provisions of this Contract.

The Subscribing Company's share in the attached Contract shall be separate and apart from the shares of the other named reinsured companies, and shall not be joint with the shares of the other named reinsured companies, it being understood that the Subscribing Company shall in no event participate in the interests and liabilities of the other named reinsured companies.

In Witness Whereof, the Subscribing Company by its duly authorized representative has executed this Contract as of the date specified below:

This ________________ day of ____________________________ in the year ____________.

Homeowners of America Insurance Company (for and on behalf of the "Company")

_______________________________________________________

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Participation Slip

attached to and forming part of the

Property Catastrophe Excess of Loss

Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

including any or all of the affiliated insurance companies of

Homeowners of America Insurance Company and its Quota Share Reinsurers

in accordance with the provisions of the Preamble to the attached Contract

(hereinafter referred to collectively as the "Company")

and

Qatar Reinsurance Company LLC, Bermuda Branch

Pembroke, Bermuda

 (hereinafter referred to as the "Subscribing Company")

The Subscribing Company hereby accepts the following percentage shares in the interests and liabilities of the "Company" as set forth in the attached Contract captioned above:

       0%  of the Second Property Catastrophe Excess of Loss Reinsurance

18.37%  of the Third Property Catastrophe Excess of Loss Reinsurance

This Participation Slip shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until 12:01 a.m., Central Standard Time, April 1, 2016, unless earlier terminated in accordance with the provisions of this Contract.

The Subscribing Company's share in the attached Contract shall be separate and apart from the shares of the other named reinsured companies, and shall not be joint with the shares of the other named reinsured companies, it being understood that the Subscribing Company shall in no event participate in the interests and liabilities of the other named reinsured companies.

In Witness Whereof, the Subscribing Company by its duly authorized representative has executed this Contract as of the date specified below:

This ________________ day of ____________________________ in the year ____________.

Qatar Reinsurance Company LLC, Bermuda Branch

_______________________________________________________

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance (U.S.A.)

1. This Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly and whether as Insurer or Reinsurer, from any Pool of Insurers or Reinsurers formed for the purpose of covering Atomic or Nuclear Energy risks.

2. Without in any way restricting the operation of paragraph (1) of this Clause, this Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly and whether as Insurer or Reinsurer, from any insurance against Physical Damage (including business interruption or consequential loss arising out of such Physical Damage) to:

I. Nuclear reactor power plants including all auxiliary property on the site, or

II. Any other nuclear reactor installation, including laboratories handling radioactive materials in connection with reactor installations, and "critical facilities" as such, or

III. Installations for fabricating complete fuel elements or for processing substantial quantities of "special nuclear material," and for reprocessing, salvaging, chemically separating, storing or disposing of "spent" nuclear fuel or waste materials, or

IV. Installations other than those listed in paragraph (2) III above using substantial quantities of radioactive isotopes or other products of nuclear fission.

3. Without in any way restricting the operations of paragraphs (1) and (2) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any insurance on property which is on the same site as a nuclear reactor power plant or other nuclear installation and which normally would be insured therewith except that this paragraph (3) shall not operate

(a) where Reassured does not have knowledge of such nuclear reactor power plant or nuclear installation, or

(b) where said insurance contains a provision excluding coverage for damage to property caused by or resulting from radioactive contamination, however caused.  However on and after 1st January 1960 this sub-paragraph (b) shall only apply provided the said radioactive contamination exclusion provision has been approved by the Governmental Authority having jurisdiction thereof.

4. Without in any way restricting the operations of paragraphs (1), (2) and (3) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, when such radioactive contamination is a named hazard specifically insured against.

5. It is understood and agreed that this Clause shall not extend to risks using radioactive isotopes in any form where the nuclear exposure is not considered by the Reassured to be the primary hazard.

6. The term "special nuclear material" shall have the meaning given it in the Atomic Energy Act of 1954 or by any law amendatory thereof.

7. Reassured to be sole judge of what constitutes:

(a) substantial quantities, and

(b) the extent of installation, plant or site.

Note.-Without in any way restricting the operation of paragraph (1) hereof, it is understood and agreed that

(a) all policies issued by the Reassured on or before 31st December 1957 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

(b) with respect to any risk located in Canada policies issued by the Reassured on or before 31st December 1958 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

12/12/57

N.M.A. 1119

BRMA 35B

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Pools, Associations and Syndicates Exclusion Clause

Section A:

Excluding:

(a) All business derived directly or indirectly from any Pool, Association or Syndicate which maintains its own reinsurance facilities.

(b) Any Pool or Scheme (whether voluntary or mandatory) formed after March 1, 1968 for the purpose of insuring property whether on a country-wide basis or in respect of designated areas.  This exclusion shall not apply to so-called Automobile Insurance Plans or other Pools formed to provide coverage for Automobile Physical Damage.

Section B:

It is agreed that business written by the Company for the same perils, which is known at the time to be insured by, or in excess of underlying amounts, whether by way of insurance or reinsurance, by any Pool, Association or Syndicate formed for the purpose of writing:

Oil, Gas or Petro-Chemical Plants;

Oil or Gas Drilling Rigs; and/or

Aviation Risks;

is excluded hereunder.

Section B does not apply:

(a) Where the Total Insured Value over all interests of the risk in question is less than $250,000,000.

(b) To interests traditionally underwritten as Inland Marine or stock and/or contents written on a blanket basis.

(c) To Contingent Business Interruption, except when the Company is aware that the key location is known at the time to be insured in any Pool, Association or Syndicate named above, other than as provided for under Section B(a).

(d) To risks as follows:

Offices, Hotels, Apartments, Hospitals, Educational Establishments, Public Utilities (other than railroad schedules) and builder's risks on the classes of risks specified in this subsection (d) only.

Where this clause attaches to Catastrophe Excesses, the following Sections C and D are added:

Section C:

Nevertheless the Reinsurer specifically agrees that liability accruing to the Company from its participation in residual market mechanisms including but not limited to:

(1) The following so-called "Coastal Pools":

Alabama Insurance Underwriting Association

Louisiana Citizens Property Insurance Corporation

Mississippi Windstorm Underwriting Association

North Carolina Insurance Underwriting Association

South Carolina Windstorm and Hail Underwriting Association

Texas Windstorm Insurance Association

AND

(2) All "Fair Plan" and "Rural Risk Plan" business

AND

(3) Citizens Property Insurance Corporation ("CPIC") and the California Earthquake Authority ("CEA")

for all perils otherwise protected hereunder shall not be excluded, except, however, that this reinsurance does not include any increase in such liability resulting from:

(i) The inability of any other participant in such "Coastal Pool" and/or "Fair Plan" and/or "Rural Risk Plan" and/or Residual Market Mechanisms to meet its liability.

(ii) Any claim against such "Coastal Pool" and/or "Fair Plan" and/or "Rural Risk Plan" and/or Residual Market Mechanisms, or any participant therein, including the Company, whether by way of subrogation or otherwise, brought by or on behalf of any insolvency fund.

Section D:

(1) Notwithstanding Section C above, in respect of the CEA, where an assessment is made against the Company by the CEA, the Company may include in its Ultimate Net Loss only that assessment directly attributable to each separate loss occurrence covered hereunder.  The Company's initial capital contribution to the CEA shall not be included in the Ultimate Net Loss.

(2) Notwithstanding Section C above, in respect of CPIC, where an assessment is made against the Company by CPIC, the maximum loss that the Company may include in the Ultimate Net Loss in respect of any loss occurrence hereunder shall not exceed the lesser of:

(a) The Company's assessment from CPIC for the accounting year in which the loss occurrence commenced, or

(b) The product of the following:

(i) The Company's percentage participation in CPIC for the accounting year in which the loss occurrence commenced; and

(ii) CPIC's total losses in such loss occurrence.

Notwithstanding Section C above, in respect of CPIC, the Ultimate Net Loss hereunder shall not include any monies expended to purchase or retire bonds as a consequence of being a member of CPIC.  For the purposes of this Contract, the Company may not include in the Ultimate Net Loss any assessment or any percentage assessment levied by CPIC to meet the obligations of an insolvent insurer member or other party, or to meet any obligations arising from the deferment by CPIC of the collection of monies.

NOTES: Wherever used herein the terms:

"Company" shall be understood to mean "Company," "Reinsured," "Reassured" or whatever other term is used in the attached reinsurance document to designate the reinsured company or companies.

"Agreement" shall be understood to mean "Agreement," "Contract," "Policy" or whatever other term is used to designate the attached reinsurance document.

"Reinsurers" shall be understood to mean "Reinsurers," "Underwriters" or whatever other term is used in the attached reinsurance document to designate the reinsurer or reinsurers.

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Pollution and Seepage Exclusion Clause

This Contract excludes loss and/or damage and/or costs and/or expenses arising from seepage and/or pollution and/or contamination, other than contamination from smoke.  Nevertheless, this exclusion does not preclude payment of the cost of removing debris of property damaged by a loss otherwise covered hereunder, subject always to a limit of 25.0% of the Company's property loss under the applicable original policy.

BRMA 39A

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Terrorism Exclusion

(Property Treaty Reinsurance)

Notwithstanding any provision to the contrary within this Contract or any amendment thereto, it is agreed that this Contract excludes loss, damage, cost or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any act of terrorism, as defined herein, regardless of any other cause or event contributing concurrently or in any other sequence to the loss.

An act of terrorism includes any act, or preparation in respect of action, or threat of action designed to influence the government de jure or de facto of any nation or any political division thereof, or in pursuit of political, religious, ideological or similar purposes to intimidate the public or a section of the public of any nation by any person or group(s) of persons whether acting alone or on behalf of or in connection with any organization(s) or government(s) de jure or de facto, and which:

1.Involves violence against one or more persons; or

2.Involves damage to property; or

3.Endangers life other than that of the person committing the action; or

4.Creates a risk to health or safety of the public or a section of the public; or

5.Is designed to interfere with or to disrupt an electronic system.

This Contract also excludes loss, damage, cost, or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any action in controlling, preventing, suppressing, retaliating against, or responding to any act of terrorism.

Notwithstanding the above and subject otherwise to the terms, conditions, and limitations of this Contract, in respect only of personal lines this Contract will pay actual loss or damage (but not related cost or expense) caused by any act of terrorism provided such act is not directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with biological, chemical, radioactive or nuclear pollution or contamination or explosion.

N.M.A. 2930c

22/11/02

Form approved by Lloyd's Market Association [Non-Marine]

15\H00H1002  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Interests and Liabilities Agreement

attached to and forming part of the

Property Catastrophe Excess of Loss Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

and

Hamilton Re, Ltd.Hamilton, Bermuda

(hereinafter referred to as the "Subscribing Reinsurer")

The Subscribing Reinsurer hereby accepts the following percentage share(s) in the interests and liabilities of the "Reinsurer" as set forth in the attached Contract captioned above:

0%	of the Second Property Catastrophe Excess of Loss Reinsurance
2.0%	of the Third Property Catastrophe Excess of Loss Reinsurance

This Agreement shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until 12:01 a.m., Central Standard Time, April 1, 2016, unless earlier terminated in accordance with the provisions of the attached Contract.

The Subscribing Reinsurer's share in the attached Contract shall be separate and apart from the shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it being understood that the Subscribing Reinsurer shall in no event participate in the interests and liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed this Agreement as of the date specified below:

This ________________ day of ___________________________ in the year ____________.

Hamilton Re, Ltd.

_______________________________________________________

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Interests and Liabilities Agreement

attached to and forming part of the

Property Catastrophe Excess of Loss Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

and

XL Re LtdHamilton, Bermuda

(hereinafter referred to as the "Subscribing Reinsurer")

The Subscribing Reinsurer hereby accepts the following percentage share(s) in the interests and liabilities of the "Reinsurer" as set forth in the attached Contract captioned above:

2.0%	of the Second Property Catastrophe Excess of Loss Reinsurance
2.5%	of the Third Property Catastrophe Excess of Loss Reinsurance

This Agreement shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until 12:01 a.m., Central Standard Time, April 1, 2016, unless earlier terminated in accordance with the provisions of the attached Contract.

The Subscribing Reinsurer's share in the attached Contract shall be separate and apart from the shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it being understood that the Subscribing Reinsurer shall in no event participate in the interests and liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed this Agreement as of the date specified below:

This ________________ day of ___________________________ in the year ____________.

XL Re Ltd

_______________________________________________________

15\H00H1002\22K  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Interests and Liabilities Agreement

attached to and forming part of the

Property Catastrophe Excess of Loss Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

and

Certain Underwriting Members of Lloyd's

shown in the Signing Page(s) attached hereto

(hereinafter referred to as the "Subscribing Reinsurer")

The Subscribing Reinsurer hereby accepts the following percentage share(s) in the interests and liabilities of the "Reinsurer" as set forth in the attached Contract captioned above:

16.5%	of the Second Property Catastrophe Excess of Loss Reinsurance
12.0%	of the Third Property Catastrophe Excess of Loss Reinsurance

This Agreement shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until 12:01 a.m., Central Standard Time, April 1, 2016, unless earlier terminated in accordance with the provisions of the attached Contract.

As respects the Subscribing Reinsurer's share in the attached Contract, the funding provisions of Article 25 - Reserves - shall not apply to the extent that funding is provided by the Lloyd's United States Credit for Reinsurance Trust Fund.

In any action, suit or proceeding to enforce the Subscribing Reinsurer's obligations under the attached Contract, service of process may be made upon Mendes & Mount, LLP, 750 Seventh Avenue, New York, New York  10019.

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

In Witness Whereof, the Subscribing Companies by their respective duly authorized representatives have executed this Agreement as of the dates specified below:

This ________________ day of ____________________________ in the year ____________.

Homeowners of America Insurance Company (for and on behalf of the "Company")

_______________________________________________________

This ________________ day of ____________________________ in the year ____________.

Qatar Reinsurance Company LLC, Bermuda Branch

_______________________________________________________

Signed for and on behalf of the Subscribing Reinsurer in the Signing Page(s) attached hereto.

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Signing Page

attached to and forming part of the

Interests and Liabilities Agreement

with respect to the

Property Catastrophe Excess of Loss Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company, as specified in the above-captioned Contract

and

Certain Underwriting Members of Lloyd's

(Re)Insurer's Liability Clause - LMA3333

(Re)Insurer's liability several not joint

The liability of a (re)insurer under this contract is several and not joint with other (re)insurers party to this contract. A (re)insurer is liable only for the proportion of liability it has underwritten. A (re)insurer is not jointly liable for the proportion of liability underwritten by any other (re)insurer. Nor is a (re)insurer otherwise responsible for any liability of any other (re)insurer that may underwrite this contract.

The proportion of liability under this contract underwritten by a (re)insurer (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 (re)insurer. 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 (re)insurer 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 (re)insurer (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 (re)insurer (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 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.

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EX-10.41

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Exhibit 10.41

Residential Property Quota Share

Reinsurance Contract

Effective:  April 1, 2015

Homeowners of America Insurance Company

Irving, Texas

including any and/or all companies that are or may hereafter become affiliated therewith

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Residential Property Quota Share Reinsurance Contract

Effective:  April 1, 2015

Homeowners of America Insurance Company

Irving, Texas

including any and/or all companies that are or may hereafter become affiliated therewith

Reinsurer(s)	Participation(s)
Qatar Reinsurance Company LLC, Bermuda Branch	15.0%
Total	15.0%

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Table of Contents

Article		Page
1	Classes of Business Reinsured	1
2	Commencement and Termination	1
3	Territory (BRMA 51A)	3
4	Exclusions	3
5	Special Acceptances	5
6	Retention and Limit	6
7	Loss in Excess of Policy Limits/Extra Contractual Obligations	8
8	Other Reinsurance	9
9	Claims and Loss Adjustment Expense	9
10	Special Commutation	11
11	Assessments	12
12	Salvage and Subrogation	13
13	Original Conditions	13
14	Sliding Scale Commission	13
15	Reports and Remittances	15
16	Sanctions	16
17	Late Payments	16
18	Offset	17
19	Access to Records	17
20	Errors, Omissions and Inadvertent Binding	18
21	Currency (BRMA 12A)	18
22	Taxes (BRMA 50B)	18
23	Federal Excise Tax (BRMA 17D)	18
24	Foreign Account Tax Compliance Act	19
25	Reserves	19
26	Insolvency	21
27	Arbitration	22
28	Service of Suit (BRMA 49G)	23
29	Confidentiality	23
30	Agency Agreement	24
31	Governing Law (BRMA 71B)	24
32	Severability (BRMA 72E)	24
33	Entire Agreement	25
34	Notices and Contract Execution	25
35	Intermediary	25

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Residential Property Quota Share

Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

including any and/or all companies that are or may hereafter become affiliated therewith

(hereinafter referred to collectively as the "Company")

and

The Subscribing Reinsurer(s) Executing the

Interests and Liabilities Agreement(s)

Attached Hereto

(hereinafter referred to as the "Reinsurer")

Article 1 - Classes of Business Reinsured

A. By this Contract the Company obligates itself to cede to the Reinsurer and the Reinsurer obligates itself to accept quota share reinsurance of the Company's net liability under policies in force at the effective date hereof or issued or renewed on or after that date, and classified by the Company as Dwelling Fire, Tenant, Condominium Owners and Homeowners business (property coverages only, including Dwelling coverage, Personal Property coverage and Extensions of Coverage as defined in the Company's policies).

B. "Net liability" as used herein shall mean the Company's gross liability remaining after cessions, if any, to inuring reinsurance.

C. The liability of the Reinsurer with respect to each cession hereunder shall commence obligatorily and simultaneously with that of the Company, subject to the terms, conditions and limitations hereinafter set forth.

D. "Policies" as used herein shall mean all policies, contracts and binders of insurance, whether held covered provisionally or otherwise.

Article 2 - Commencement and Termination

A. This Contract shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, with respect to losses arising out of loss occurrences commencing at or after that time and date, and shall continue in force thereafter until terminated.

B. Either party may terminate this Contract at 12:01 a.m., Central Standard Time, on January 1, 2017 or on any January 1 thereafter, by giving the other party not less than 90 days prior written notice as set forth in the Notices and Contract Execution Article.

C. Notwithstanding the provisions of paragraphs A and B above, the Company may terminate a Subscribing Reinsurer's percentage share in this Contract in the event any of the following circumstances occur as clarified by public announcement or upon discovery:

1. The Subscribing Reinsurer's policyholders' surplus (or its equivalent under the Subscribing Reinsurer's accounting system) after the earlier of:  (a) the inception of this Contract, or (b) the date lines are bound for this Contract, has been reduced by more than 20.0% of the amount of surplus (or the applicable equivalent) 12 months prior to that date; or

2. The Subscribing Reinsurer's policyholders' surplus (or its equivalent under the Subscribing Reinsurer's accounting system) at any time between the earlier of:  (a) the inception of this Contract, or (b) the date lines are bound for this Contract, and the date of termination of this Contract has been reduced by more than 20.0% of the amount of surplus (or the applicable equivalent) at the date of the Subscribing Reinsurer's most recent financial statement filed with regulatory authorities and available to the public as of the date lines are bound; or

3. A State Insurance Department or other legal authority has ordered the Subscribing Reinsurer to cease assuming business; or

4. The Subscribing Reinsurer has become insolvent or has been placed into liquidation, receivership, supervision, administration, winding-up or under a scheme of arrangement, or similar proceedings (whether voluntary or involuntary) or proceedings have been instituted against the Subscribing Reinsurer for the appointment of a receiver, liquidator, rehabilitator, supervisor, administrator, conservator or trustee in bankruptcy, or other agent known by whatever name, to take possession of its assets or control of its operations; or

5. The Subscribing Reinsurer has reinsured its entire liability under this Contract without the Company's prior written consent; or

6. The A.M. Best's rating for the Subscribing Reinsurer has been assigned or downgraded below A- (inclusive of "Not Rated" ratings), or the published rating issued by Standard & Poor's has been downgraded below BBB+ (inclusive of "Not Rated" ratings); or

7. The Subscribing Reinsurer has become merged with, acquired by or controlled by any other entity or individual(s) not controlling the Subscribing Reinsurer's operations previously; or

8. The Subscribing Reinsurer has ceased assuming new or renewal property or casualty treaty reinsurance business; or

9. The Subscribing Reinsurer has hired an unaffiliated runoff claims manager that is compensated on a contingent basis or is otherwise provided with financial incentives based on the quantum of claims paid.

D. In the event a Subscribing Reinsurer experiences one or more of the circumstances specified in paragraph C above, the Subscribing Reinsurer shall notify the Company as promptly as possible and shall hereinafter be referred to as a "Special Circumstance Reinsurer."  To terminate a Special Circumstance Reinsurer's percentage share in this Contract, the Company must provide the Special Circumstance Reinsurer with written notice as set forth in the Notices and Contract Execution Article.  Such notice shall include the effective date of termination as selected by the Company and shall be one of the following:

1. The date of written notice provided by the Special Circumstance Reinsurer; or

2. The last day of the month prior to the date of written notice provided by the Special Circumstance Reinsurer; or

3. The last day of any month after the date of written notice provided by the Special Circumstance Reinsurer; or

4. The date of the Company's written notice to the Special Circumstance Reinsurer advising of the termination.

In the event the Subscribing Reinsurer fails to immediately provide written notice to the Company of any event outlined in subparagraphs 1 through 9 of paragraph C above, the Company may elect to substitute the date of public announcement or discovery as the equivalent of written notice.

E. Unless the Company elects to reassume the ceded unearned premium in force on the effective date of termination, and so notifies the Reinsurer prior to or as promptly as possible after the effective date of termination, reinsurance hereunder on business in force on the effective date of termination shall remain in full force and effect until expiration, cancellation or next premium anniversary of such business, whichever first occurs, but in no event beyond 12 months plus odd time following the effective date of termination.

F. Notwithstanding the provisions of paragraph E above, if the Company is prohibited or precluded by the appropriate regulatory authorities, or by law (in those states where applicable and enforced), from arranging mid-term cancellation or non-renewal of any policies subject to this Contract beyond their natural expiry, the Reinsurer agrees to extend coverage under this Contract until such policies may be terminated or non-renewed by the Company, but in no event beyond 18 months after the effective date of termination.

Article 3 - Territory (BRMA 51A)

The territorial limits of this Contract shall be identical with those of the Company's policies.

Article 4 - Exclusions

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

1. Financial guarantee and insolvency.

2. Nuclear risks as defined in the "Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance (U.S.A.)" attached to and forming part of this Contract.

3. Loss or damage caused by or resulting from war, invasion, hostilities, acts of foreign enemies, civil war, rebellion, insurrection, military or usurped power, or martial law or confiscation by order of any government or public authority, but this exclusion shall not apply to loss or damage covered under a standard policy with a standard War Exclusion Clause.

4. Liability as a member, subscriber or reinsurer of any Pool, Syndicate or Association; and any combination of insurers or reinsurers formed for the purpose of covering specific perils, specific classes of business or for the purpose of insuring risks located in specific geographical areas.  However, this exclusion shall not apply to residual market mechanisms, including but not limited to FAIR Plans, Joint Underwriting Associations, or to Coastal Pools, Beach Plans or similar plans, however styled.  It is understood and agreed, however, that this reinsurance does not include any increase in liability to the Company resulting from (a) the inability of any other participant in a residual market mechanism, including but not limited to a FAIR Plan, Joint Underwriting Association, Coastal Pool, Beach Plan or similar plan, to meet its liability, or (b) any claim against such a residual market mechanism, including but not limited to a FAIR Plan, Joint Underwriting Association, Coastal Pool, Beach Plan or similar plan, or any participant therein, including the Company, whether by way of subrogation or otherwise, brought by or on behalf of any insolvency fund.

5. 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.  However, this exclusion shall not apply to assessments from the Texas Property and Casualty Insurance Guaranty Association.  "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.

6. All third party liability.

7. Fidelity, Surety and Credit business.

8. Loss or damage to growing or standing crops.

9. Livestock.

10. Mortgage impairment.

11. Pollution and seepage coverages excluded under the provisions of the "Pollution and Seepage Exclusion Clause (BRMA 39A)" attached to and forming part of this Contract.

12. Terrorism, as described in the provisions of the "Terrorism Exclusion (NMA 2930c)" attached to and forming part of this Contract.

13. Flood and/or earthquake when written as such.

14. Title insurance.

15. Loss, damage, cost or expense arising from fungi unless directly or indirectly caused by or contributed to by or arising from a covered peril under the Company's original policy.  Losses arising from fungi shall not in and of themselves constitute an event for the purposes of recovery hereunder.  For the purposes of this Contract, "fungi" means any type or form of fungus, including mold or mildew and any mycotoxins, spores, scents or by products produced or released by "fungi."

16. Reinsurance assumed.

B. Any exclusion set forth in paragraph A (except exclusions set forth in subparagraphs 1, 2, 3, 5, 6 and 12) shall be waived automatically when, in the opinion of the Company, the exposure excluded therein is incidental to the principal exposure on the risk in question.

C. If the Company is required to accept an assigned risk which conflicts with one or more of the exclusions set forth in paragraph A (except exclusions set forth in subparagraphs 1, 2, 3, 5, 6 and 12), reinsurance shall apply, but in no event shall the Reinsurer's liability exceed the applicable limits set forth in the Retention and Limit Article.

Article 5 - Special Acceptances

A. From time to time the Company may request a special acceptance of reinsurance falling outside the scope of the provisions of this Contract (except as respects the exclusions set forth in subparagraphs 1, 2, 3, 5, 6 and 12 of the Exclusions Article).  Within five days of receipt of such a request, each Subscribing Reinsurer shall accept such request, ask for additional information, or reject the request.  Any reinsurance that is specially accepted by the Reinsurer shall be covered under this Contract and shall be subject to the terms hereof, except as such terms shall be modified by the special acceptance.  If a Subscribing Reinsurer fails to respond to a special acceptance request within five days, the Subscribing Reinsurer will be deemed to have agreed to the special acceptance.

B. If Subscribing Reinsurers with percentage shares totaling more than 50.0% in the interests and liabilities of the Reinsurer agree to a special acceptance, such special acceptance shall be binding on all Subscribing Reinsurers with respect to their respective shares.  If such percentage 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 that agrees to the special acceptance.

C. 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.  Further, if one or more Subscribing Reinsurers under this Contract agreed to special acceptance(s) under the contract being replaced by this Contract, such special acceptance(s) shall be automatically covered hereunder with respect to the interests and liabilities of such Subscribing Reinsurer(s).

Article 6 - Retention and Limit

A. As respects business subject to this Contract, the Company shall cede to the Reinsurer and the Reinsurer agrees to accept 100% of the Company's net liability.

B. The Company shall retain at least a 10.0% part of 100% share in the interests and liabilities of the Reinsurer hereunder.

C. The Company shall purchase or be deemed to have purchased inuring excess facultative reinsurance to limit its loss subject hereto from any one coverage, any one policy (exclusive of loss in excess of policy limits, extra contractual obligations and loss adjustment expense) to the following amounts:

1. Dwelling, $750,000;

2. Personal Property (contents) Homeowners policies, 75.0% of the Dwelling limit;

3. Personal Property (contents) Dwelling Fire policies, 40.0% of the Dwelling limit;

4. Other Structures, 20.0% of the Dwelling limit;

5. Loss of Use, 20.0% of the Dwelling limit.

D. The total insured value for any one property risk is subject to a maximum limit of $1,612,500, or so deemed, inclusive of all additional and optional coverages.

E. Notwithstanding the provisions above, the liability of the Reinsurer hereunder as respects losses arising out of any one loss occurrence (including loss in excess of policy limits, extra contractual obligations, loss adjustment expense and any assessment, including but not limited to the Texas Windstorm Insurance Association, and any Guarantee Fund or any Fair Plan Assessment) shall not exceed:

1. [****] during the period extending from April 1, 2015 through December 31, 2015; or

2. [****] of the premiums earned during each respective 12‑month period thereafter that this Contract continues in force.  The liability of the Reinsurer for each such loss occurrence shall be adjusted as promptly as possible after the end of the contract year, if applicable.

F. "Loss occurrence" as used herein shall mean the sum of all individual losses directly occasioned by any one disaster, accident or loss or series of disasters, accidents or losses arising out of one event which occurs within the area of one state of the United States or province of Canada and states or provinces contiguous thereto and to one another.  However, the duration and extent of any one "loss occurrence" shall be limited to all individual losses sustained by the Company occurring during any period of 168 consecutive hours arising out of and directly occasioned by the same event, except that the term "loss occurrence" shall be further defined as follows:

1. As regards windstorm, hail, tornado, hurricane, cyclone, including ensuing collapse and water damage, all individual losses sustained by the Company occurring during any period of 72 consecutive hours arising out of and directly occasioned by the same event.  However, the event need not be limited to one state or province or states or provinces contiguous thereto.

2. As regards riot, riot attending a strike, civil commotion, vandalism and malicious mischief, all individual losses sustained by the Company occurring during any period of 72 consecutive hours within the area of one municipality or county and the municipalities or counties contiguous thereto arising out of and directly occasioned by the same event.  The maximum duration of 72 consecutive hours may be extended in respect of individual losses which occur beyond such 72 consecutive hours during the continued occupation of an assured's premises by strikers, provided such occupation commenced during the aforesaid period.

3. As regards earthquake (the epicenter of which need not necessarily be within the territorial confines referred to in the introductory portion of this paragraph) and fire following directly occasioned by the earthquake, only those individual fire losses which commence during the period of 168 consecutive hours may be included in the Company's "loss occurrence."

4 As regards "freeze," only individual losses directly occasioned by collapse, breakage of glass and water damage (caused by bursting of frozen pipes and tanks or freezing and/or melting snow or sleet) may be included in the Company's "loss occurrence."

5. As regards firestorms, brush fires and any other fires or series of fires, irrespective of origin (except as provided in subparagraphs 2 and 3 above), all individual losses sustained by the Company which commence during any period of 168 consecutive hours within a 150-mile radius of any fixed point selected by the Company may be included in the Company's "loss occurrence."  However, an individual loss subject to this subparagraph cannot be included in more than one "loss occurrence."

If the disaster, accident or loss occasioned by the event is of greater duration than 168 consecutive hours, or 72 consecutive hours as respects subparagraphs 1 and 2 above, then the Company may divide that disaster, accident or loss into two or more "loss occurrences," provided no two periods overlap and no individual loss is included in more than one such period and provided that no period commences earlier than the date and time of the occurrence of the first recorded individual loss sustained by the Company arising out of that disaster, accident or loss.

It is understood that losses arising from a combination of two or more perils as a result of the same event shall be considered as having arisen from one "loss occurrence."  Notwithstanding the foregoing, the hourly limitations as stated above shall not be exceeded as respects the applicable perils and no single "loss occurrence" shall encompass a time period greater than 168 consecutive hours.

G. "Total insured value" as used herein shall mean the sum value of dwellings, other structures, contents and loss of use for each property risk reinsured hereunder.

H. "Premiums earned" as used herein shall mean ceded unearned premiums at the beginning of the contract year under consideration, plus ceded net written premiums during the contract year, less ceded unearned premiums at the end of the contract year.

I. "Contract year" as used herein shall mean the period from 12:01 a.m., Central Standard Time, April 1, 2015, to 12:01 a.m., Central Standard Time, January 1, 2016, and each respective 12‑month period thereafter that this Contract continues in force shall be a separate contract year.  However, if this Contract or the participation of a Subscribing Reinsurer is terminated on a "cutoff" basis, the final contract year, as applicable, shall be from the beginning of the then current contract year until the effective time and date of termination.  In the event this Contract or the participation of a Subscribing Reinsurer is terminated on a "runoff" basis, the period after the effective time and date of termination through the end of the "runoff" period shall be considered a separate contract year.

Article 7 - Loss in Excess of Policy Limits/Extra Contractual Obligations

A. In the event the Company pays or is held liable to pay an amount of loss in excess of its policy limit, but otherwise within the terms of its policy (hereinafter called "loss in excess of policy limits") or any punitive, exemplary, compensatory or consequential damages, other than loss in excess of policy limits (hereinafter called "extra contractual obligations"), arising from the handling of any claim on business covered hereunder; such liabilities arising, because of, but not limited to, the following: failure to settle within the policy limit, or by reason of alleged or actual bad faith, negligence or fraud in rejecting an offer of settlement, in the preparation of the defense, in the trial of an action against its insured or in the preparation or prosecution of an appeal consequent upon such an action, or in otherwise handling a claim under a policy subject to this Contract, the loss in excess of policy limits and/or the extra contractual obligations shall be added to the Company's loss, if any, under the policy involved, and the sum thereof shall be subject to the provisions of paragraph A of the Retention and Limit Article.

B. An extra contractual obligation shall be deemed, in all circumstances, to have occurred on the same date as the loss covered or alleged to be covered under the policy.

C. Notwithstanding anything stated herein, this Contract shall not apply to any loss in excess of policy limits or any extra contractual obligation incurred by the Company as a result of any fraudulent and/or criminal act by any officer or director of the Company acting individually or collectively or in collusion with any individual or corporation or any other organization or party involved in the presentation, defense or settlement of any claim covered hereunder.

D. Savings Clause (Applicable only if the Subscribing Reinsurer is domiciled in the State of New York):  In no event shall coverage be provided to the extent that such coverage is not permitted under New York law.

Article 8 - Other Reinsurance

A. The Company shall maintain in force or shall be deemed to have maintained in force $1,112,500 excess of $500,000 as respects any one risk, each loss (subject to a $12,237,500 aggregate limit) per risk treaty reinsurance, recoveries under which shall inure to the benefit of this Contract, for policies covering risks with a total insured value greater than $500,000 (property coverages only, including Personal Property coverage and Extensions of Coverage as defined in the Company's policies), subject to the exclusions of such per risk treaty.

B. The Company shall be permitted to carry facultative reinsurance on any risk subject hereunder, recoveries under which shall inure to the benefit of this Contract.

C. The Company shall be permitted to carry other treaty 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.

Article 9 - Claims and Loss Adjustment Expense

A. Losses shall be reported by the Company in summary form as hereinafter provided, but the Company alone and at its full discretion shall adjust, settle or compromise all claims and losses hereunder.  The Company shall be the sole judge as to:

1. What constitutes a claim or loss covered under any policy;

2. The Company's liability thereunder;

3. The amount or amounts proper for the Company to pay thereunder.

The Reinsurer shall be bound by the judgment of the Company as to the obligations and liabilities of the Company under any policy.

B. All loss settlements made by the Company, whether under strict policy conditions or by way of compromise (including loss in excess of policy limits and extra contractual obligations), shall be binding upon the Reinsurer, and the Reinsurer agrees to pay or allow, as the case may be, its proportion of each such settlement in accordance with the Reports and Remittances Article.  It is agreed, however, that if the Reinsurer's share of any loss is equal to or greater than $100,000, the Reinsurer, if requested by the Company, will pay its share of said loss within 10 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 (as specified in the Late Payments Article) from the date the proof of loss or demand for payment was transmitted to the Reinsurer.

C. In the event of a claim under a policy subject hereto, the Reinsurer shall be liable for its proportionate share of loss adjustment expense incurred by the Company in connection therewith, and shall be credited with its proportionate share of any recoveries of such expense.

D. A Special Circumstance Reinsurer shall not have the right to deny payment of a claim if the sum of the percentage shares of Active Subscribing Reinsurers that have paid the claim exceeds 50.0% of the sum of the percentage shares of all Active Subscribing Reinsurers.  "Active Subscribing Reinsurer" as used herein shall mean a Subscribing Reinsurer that is not a Special Circumstance Reinsurer as of the due date of the claim (as specified in the Late Payments Article).

E. As respects its share of any claims payable under this Contract, a Special Circumstance Reinsurer shall not have the right to hire an unaffiliated runoff claims manager that is compensated on a contingent basis or is otherwise provided with financial incentives based on the quantum of claims paid.

F. "Loss adjustment expense" as used herein shall mean costs and expenses assignable to the investigation, appraisal, adjustment, settlement, litigation, defense and/or appeal of claims, regardless of how such expenses are classified for statutory reporting purposes.  Loss adjustment expense shall include, but not be limited to:

1. Interest on judgments;

2. Expenses of outside adjusters and adjuster expenses incurred by Homeowners of America MGA, Inc.;

3. Expenses and a pro rata share of salaries of the Company's field employees and expenses of other employees of the Company who have been temporarily diverted from their normal and customary duties and assigned to the adjustment of losses covered by this Contract;

4. Expenses of the Company's officials incurred in connection with losses covered by this Contract;

5. Declaratory judgment expenses or other legal expenses and costs incurred in connection with coverage questions and legal actions connected thereto;

6. Advertising or other extraordinary communication expenses incurred as a result of a covered loss;

7. Court costs;

8. Costs of supersedeas and appeal bonds;

9. Monitoring counsel expenses;

10. Extraordinary expenses arising out of a loss, whether or not they are allocable to a specific "claim."

However, loss adjustment expense shall not include normal office expenses or salaries of the Company's regular employees, except as provided for in subparagraph 3 above.

Article 10 - Special Commutation

A. The Company may require commutation of that portion of any loss hereunder represented by any outstanding claim or claims, including any related loss adjustment expense, plus unearned premium hereunder, if any remains, if the Subscribing Reinsurer is a Special Circumstance Reinsurer.

"Outstanding claim or claims" shall include claims incurred but not reported, as established by the Company, including any billed yet unpaid claims.

B. If the Company elects to require commutation as provided in paragraph A above, the Company shall submit a Statement of Valuation of the outstanding claim or claims as of the last day of the month immediately preceding the month in which the Company elects to require commutation, as determined by the Company.  Such Statement of Valuation shall include the elements considered reasonable to establish the loss and shall set forth or attach the information relied upon by the Company and the methodology employed to calculate the loss.  The Subscribing Reinsurer shall then pay the amount requested within 10 days of receipt of such Statement of Valuation, unless the Subscribing Reinsurer needs additional information from the Company to assess the Company's Statement of Valuation or contests such amount.

C. If the Subscribing Reinsurer needs additional information from the Company to assess the Company's Statement of Valuation or contests the amount requested, the Subscribing Reinsurer shall so notify the Company within 15 days of receipt of the Company's Statement of Valuation.  The Company shall supply any reasonably requested information to the Subscribing Reinsurer within 15 days of receipt of the notification.  Within 30 days of the date of the notification or of the receipt of the information, whichever is later, the Subscribing Reinsurer shall provide the Company with its Statement of Valuation of the outstanding claim or claims as of the last day of the month immediately preceding the month in which the Company elects to require commutation, as determined by the Subscribing Reinsurer.  Such Statement of Valuation shall include the elements considered reasonable to establish the loss and shall set forth or attach the information relied upon by the Subscribing Reinsurer and the methodology employed to calculate the loss.  The Subscribing Reinsurer shall pay the amount due the Company, if any, plus any ceded unearned premium reserves with its Statement of Valuation.

D. In the event the Subscribing Reinsurer's Statement of Valuation of the outstanding claim or claims is viewed as unacceptable to the Company, the Company may either abandon the commutation effort, or may seek to settle any difference by using an independent actuary agreed to by the parties.

E. If the parties cannot agree on an acceptable independent actuary within 15 days of the date of the Subscribing Reinsurer's Statement of Valuation, then each party shall appoint an actuary as party actuaries for the limited and sole purpose of selecting an independent actuary.  If the party actuaries fail to agree upon an acceptable independent actuary within 15 days following the date of their appointment, the Company shall supply the Subscribing Reinsurer with a list of at least five proposed independent actuaries, and the Subscribing Reinsurer shall select the independent actuary from that list.

F. Upon selection of the independent actuary, both parties shall present their respective written submissions to the independent actuary.  The independent actuary may, at his or her discretion, request additional information.  The independent actuary shall issue his or her decision within 45 days after the written submissions have been filed and any additional information has been provided.  Any amount due the Company (including any ceded unearned premium reserves) shall be paid by the Subscribing Reinsurer within 15 calendar days after such decision has been issued.

G. The decision of the independent actuary shall be final and binding.  The expense of the independent actuary shall be equally divided between the two parties.  For the purposes of this Article, unless mutually agreed otherwise, an "independent actuary" shall be an actuary who satisfies each of the following criteria:

1. Is regularly engaged in the valuation of claims resulting from lines of business subject to this Contract; and

2. Is either a Fellow of the Casualty Actuarial Society or of the American Academy of Actuaries; and

3. Is disinterested and impartial regarding this commutation.

H. In the event that the Subscribing Reinsurer no longer meets the criteria set forth in paragraph A above, this commutation may continue on a mutually agreed basis.

I. Payment by the Subscribing Reinsurer of the amount requested in accordance with paragraph B, C or F above, shall release the Subscribing Reinsurer from all further liability for outstanding claim or claims, known or unknown, and any unearned premium under this Contract and shall release the Company from all further liability for payments of salvage or subrogation amounts, known or unknown, to the Subscribing Reinsurer under this Contract.

J. In the event of any conflict between this Article and any other article of this Contract, the terms of this Article shall control.

K. This Article shall survive the termination of this Contract and/or a Subscribing Reinsurer's percentage share in this Contract.

Article 11 - Assessments

A. The provisions of the quota share participation will apply to the proportion of any assessments made against the Company pursuant to those laws and regulations creating obligatory funds (excluding insurance guaranty and insolvency funds to the extent such costs are transferable to the policyholders), pools, joint underwriting associations, FAIR plans, and similar plans; said proportion to be the proportion of the Company's total premiums causing the assessment which were or are subject to this Contract.  All offsets from such assessments, if any, including credits allowed to the Company against its premium taxes, are subject to the provisions of the Salvage and Subrogation Article.

B. At the termination of this Contract, the provisions of the quota share participation shall continue to apply until the Company may legally terminate its liability for assessments that are a result of the business reinsured hereunder.

Article 12 - Salvage and Subrogation

The Reinsurer shall be credited with its proportionate share of salvage (i.e., reimbursement obtained or recovery made by the Company, less the actual cost, excluding salaries of officials and employees of the Company and sums paid to attorneys as retainer, of obtaining such reimbursement or making such recovery) on account of claims and settlements involving reinsurance hereunder.  The Company hereby agrees to enforce its rights to salvage or subrogation relating to any loss, a part of which loss was sustained by the Reinsurer, and to prosecute all claims arising out of such rightsif, in the Company's opinion, it is reasonable to do so.

Article 13 - Original Conditions

A. All reinsurance under this Contract shall be subject to the same rates, terms, conditions, waivers and interpretations, including judicial interpretation and policy reformation, and to the same modifications and alterations as the respective policies of the Company.  The Reinsurer shall be credited with its exact proportion of the original premiums received by the Company, prior to disbursement of any dividends, but after deduction of premiums, if any, ceded by the Company for inuring reinsurance.

B. Nothing herein shall in any manner create any obligations or establish any rights against the Reinsurer in favor of any third party or any persons not parties to this Contract.

Article 14 - Sliding Scale Commission

A. The Reinsurer shall allow the Company a [****] provisional commission on all premiums ceded to the Reinsurer hereunder.  The Company shall allow the Reinsurer return commission on return premiums at the same rate.

B. The provisional commission allowed the Company shall be adjusted periodically in accordance with the provisions set forth herein.  The adjusted commission rate shall be calculated as follows and be applied to premiums earned for the contract year under consideration:

1. If the ratio of losses incurred to premiums earned is [****] or greater, the adjusted commission rate for the contract year under consideration shall be [****];

2. If the ratio of losses incurred to premiums earned is less than [****], but not less than [****], the adjusted commission rate for the contract year under consideration shall be [****], plus [****] of the difference in percentage points between [****] and the actual ratio of losses incurred to premiums earned;

3. If the ratio of losses incurred to premiums earned is less than [****], but not less than [****], the adjusted commission rate for the contract year under consideration shall be [****], plus [****] of the difference in percentage points between [****] and the actual ratio of losses incurred to premiums earned;

4. If the ratio of losses incurred to premiums earned is [****] or less, the adjusted commission rate for the contract year under consideration shall be [****].

C. If the ratio of losses incurred to premiums earned for any contract year is less than [****], the difference in percentage points between [****] and the actual ratio of losses incurred to premiums earned shall be multiplied by premiums earned for the contract year and the product shall be carried forward to the next contract year as a credit to losses incurred.

D. Except as provided in the next paragraph, the Company shall calculate and report the adjusted commission on premiums earned within 45 days after the end of each contract year, and within 45 days after the end of each 12‑month period thereafter until all losses subject hereto have been finally settled.  Each such calculation shall be based on cumulative transactions hereunder from the beginning of the contract year through the date of adjustment, including, as respects losses incurred, any credit from the preceding contract year.  If the adjusted commission on premiums earned for the contract year as of the date of adjustment is less than commissions previously allowed by the Reinsurer on premiums earned for the same contract year, the Company shall remit the difference to the Reinsurer with its report.  If the adjusted commission on premiums earned for the contract year as of the date of adjustment is greater than commissions previously allowed by the Reinsurer on premiums earned for the same contract year, the Reinsurer shall remit the difference to the Company as promptly as possible after receipt and verification of the Company's report.

E. As respects the final contract year, the Company shall calculate and report the adjusted commission on premiums earned within 45 days after the date of termination of this Contract or the termination of a Subscribing Reinsurer's percentage share in this Contract, and within 45 days after the end of each 12‑month period thereafter until all losses subject hereto have been finally settled.  Each such calculation shall be based on cumulative transactions hereunder from the beginning of the final contract year through the date of adjustment, including, as respects losses incurred, any credit from the preceding contract year.  If the adjusted commission on premiums earned for the final contract year as of the date of adjustment is less than commissions previously allowed by the Reinsurer on premiums earned for the same contract year, the Company shall remit the difference to the Reinsurer with its report.  If the adjusted commission on premiums earned for the final contract year as of the date of adjustment is greater than commissions previously allowed by the Reinsurer on premiums earned for the same contract year, the Reinsurer shall remit the difference to the Company as promptly as possible after receipt and verification of the Company's report.

F. "Losses incurred" as used herein shall mean ceded losses and loss adjustment expense paid as of the effective date of calculation, plus the ceded reserves for losses and loss adjustment expense outstanding as of the same date, all as respects losses occurring during the contract year under consideration, minus the credit from the preceding contract year.

As respects the first contract year hereunder, for any Subscribing Reinsurer participating under this Contract that also participated under the Company's Residential Property Quota Share Reinsurance Contract, effective 12:01 a.m., Central Standard Time, April 1, 2014 (the "expired contract"), "losses incurred" as used herein shall also include each such Subscribing Reinsurer's share of any credit under the expired contract.

G. It is expressly agreed that the ceding commission allowed the Company includes provision for all dividends, commissions, taxes, assessments, and all other expenses of whatever nature, except loss adjustment expense.

Article 15 - Reports and Remittances

A. As promptly as possible after the effective date of this Contract, the Company shall remit the Reinsurer's share of the unearned premium (less provisional commission thereon) applicable to subject business in force at the effective date of this Contract.

B. Within 30 days after the end of each month, the Company shall report to the Reinsurer:

1. Ceded net written premium during the month;

2. Provisional commission on (1) above;

3. Ceded losses and loss adjustment expense paid during the month (net of any recoveries during the month under the "cash call" provisions of the Claims and Loss Adjustment Expense Article);

4. The Reinsurer's share of salvage and subrogation;

5. Premium (including reinstatement premium) for reinsurance which inures to the benefit of this Contract;

6. Recoveries from reinsurance which inures to the benefit of this Contract;

7. Ceded unearned premiums and ceded outstanding loss and loss adjustment expense reserves (including incurred but not reported loss reserves as established by the Company) as of the end of the month.

The positive balance of (1) less (2) less (3) plus (4) less (5) plus (6) shall be remitted by the Company within 60 days after the end of the month of account.  Any balance shown to be due the Company shall be remitted by the Reinsurer as promptly as possible (not exceeding 15 days, however) after receipt and verification of the Company's report.

Furthermore, as respects subparagraph 3 above, the Company shall identify losses and loss adjustment expense by PCS catastrophe number, where applicable.

C. Annually, the Company shall furnish the Reinsurer with such information as the Reinsurer may require to complete its Annual Convention Statement.

Article 16 - Sanctions

Neither the Company nor any Subscribing Reinsurer shall be liable for premium or loss under this Contract if it would result in a violation of any mandatory sanction, prohibition or restriction under United Nations resolutions or the trade or economic sanctions, laws or regulations of the European Union, United Kingdom or United States of America that are applicable to either party.

Article 17 - Late Payments

A. The provisions of this Article shall not be implemented unless specifically invoked, in writing, by one of the parties to this Contract.

B. In the event any premium, loss or other payment due either party is not received by the intermediary named in the Intermediary Article (hereinafter referred to as the "Intermediary") by the payment due date, the party to which 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 charge 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

2. 1/365th of the sum of 4.0% and the U.S. prime rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made; 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 charges have been received by the Intermediary.

Notwithstanding the provisions of subparagraph 2 above and the immediately preceding sentence, the interest rate for a Special Circumstance Reinsurer will increase by 1.0% for every month that payment of the claim is past due, subject to a maximum annual interest rate of 10.0%.

C. If the interest rate provided under this Article exceeds the maximum interest rate allowed by any applicable law or is held unenforceable by a court of competent jurisdiction, such interest rate shall be modified to the highest rate permitted by the applicable law, and all remaining provisions of this Article and Contract shall remain in full force and effect without being impaired or invalidated in any way.

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

1. As respects any routine payment, adjustment or return due either party, the due date shall be as provided for in the applicable section of this Contract.  In the event a due date is not specifically stated for a given payment, it shall be deemed due 30 days after the date of transmittal by the Intermediary of the initial billing for each such payment.

2. As respects any payment, adjustment or return due either party not otherwise provided for in subparagraph 1 of this paragraph, the due date shall be deemed due 30 days following transmittal of written notification that the provisions of this Article have been invoked.

For purposes of interest calculations only, amounts due hereunder shall be deemed paid upon receipt by the Intermediary.

E. Nothing herein shall be construed as limiting or prohibiting a Subscribing Reinsurer from contesting the validity of any claim, or from participating in the defense of any claim or suit, or prohibiting either party from contesting the validity of any payment or from initiating any arbitration or other proceeding in accordance with the provisions of this Contract.  If the debtor party prevails in an arbitration or other proceeding, then any interest charges due hereunder on the amount in dispute shall be null and void.  If the debtor party loses in such proceeding, then the interest charge on the amount determined to be due hereunder shall be calculated in accordance with the provisions set forth above unless otherwise determined by such proceedings.  If a debtor party advances payment of any amount it is contesting, and proves to be correct in its contestation, either in whole or in part, the other party shall reimburse the debtor party for any such excess payment made plus interest on the excess amount calculated in accordance with this Article.

F. Interest charges arising out of the application of this Article that are $250 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 18 - Offset

A.    The Company and the Reinsurer shall have the right to offset any balance or amounts due from one party to the other under the terms of this Contract or any other contracts between the parties.  The party asserting the right of offset may exercise such right any time.

B.    Notwithstanding the provisions of paragraph A above, a Special Circumstance Reinsurer shall not offset balances as outlined above without the prior consent of the Company.

Article 19 - Access to Records

A. Provided the Company has received at least 60 days prior notice, the Reinsurer or its designated representatives shall have access during regular business hours to all records of the Company which pertain in any way to this reinsurance.  However:

1. A Special Circumstance Reinsurer shall not have any right of access to the records of the Company without the Company's prior consent; and

2. A Subscribing Reinsurer or its designated representatives shall not have any right of access to the records of the Company if it is not current in all undisputed payments due the Company.  "Undisputed" as used herein shall mean any amount that the Subscribing Reinsurer has not contested in writing to the Company specifying the reason(s) why the payments are disputed.

B. The provisions of this Article shall extend beyond the expiration or invalidation of this Contract, or the termination of a Subscribing Reinsurer's percentage share in this Contract, until all claims and losses hereunder are settled.

Article 20 - Errors, Omissions and Inadvertent Binding

A. Inadvertent delays, errors or omissions made in connection with this Contract or any transaction hereunder shall not relieve either party from any liability which would have attached had such delay, error or omission not occurred, provided always that such error or omission is rectified as soon as possible after discovery.

B. If the Company is bound, without the knowledge and contrary to the instructions of the Company's supervisory underwriting personnel, on any business falling outside the scope of this Contract, reinsurance shall apply to such business until 30 days after an underwriting supervisor of the Company acquires knowledge thereof or until the minimum amount of time required by the applicable statute or regulatory authority to cancel such a policy has elapsed, whichever is greater.

Article 21 - Currency (BRMA 12A)

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 22 - Taxes (BRMA 50B)

In consideration of the terms under which this Contract is issued, the Company will not claim a deduction in respect of the premium hereon when making tax returns, other than income or profits tax returns, to any state or territory of the United States of America or the District of Columbia.

Article 23 - Federal Excise Tax (BRMA 17D)

A. The Reinsurer has agreed to allow for the purpose of paying the Federal Excise Tax the applicable percentage of the premium payable hereon (as imposed under Section 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 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 24 - Foreign Account Tax Compliance Act

A. To the extent the Reinsurer is subject to the deduction and withholding of premium payable hereon as set forth in the Foreign Account Tax Compliance Act (Sections 1471-1474 of the Internal Revenue Code), the Reinsurer shall allow such deduction and withholding from the premium payable under this Contract.

B. In the event of any return of premium becoming due hereunder, the return premium will be determined and paid in full without regard to any amounts deducted or withheld under paragraph A of this Article.  In the event the Company or its agent recovers such premium deductions and withholdings on the return premium from the United States Government, the Company or its agent will reimburse the Reinsurer for such amounts.

Article 25 - Reserves

A. The Reinsurer agrees to fund its share of the Company's ceded unearned premium, outstanding loss and loss adjustment expense reserves (including incurred but not reported loss reserves as established by the Company), and any other outstanding balances which it shall be required by applicable regulation or law to set up under this Contract (the "funding obligation") by:

1. Clean, irrevocable and unconditional letters of credit issued and confirmed, if confirmation is required by the insurance regulatory authorities involved, by a bank or banks meeting the NAIC Securities Valuation Office credit standards for issuers of letters of credit and acceptable to said insurance regulatory authorities; and/or

2. Escrow accounts for the benefit of the Company;and/or

3. Cash advances;

if the Reinsurer:

1. Is unauthorized in any state of the United States of America or the District of Columbia and if, without such funding, a penalty would accrue to the Company on any financial statement it is required to file with the insurance regulatory authorities involved; or

2. Is a Special Circumstance Reinsurer.

The Reinsurer, at its sole option, may fund in other than cash if its method and form of funding are acceptable to the insurance regulatory authorities involved.

Notwithstanding the provisions of the Arbitration Article, if a Special Circumstance Reinsurer fails to fund its share of the funding obligation as set forth above, the Company retains its right to apply to a court of competent jurisdiction for equitable or interim relief.

B. With regard to funding in whole or in part by letters of credit, it is agreed that each letter of credit will be in a form acceptable to insurance regulatory authorities involved, will be issued for a term of at least one year and will include an "evergreen clause," which automatically extends the term for at least one additional year at each expiration date unless written notice of non-renewal is given to the Company not less than 30 days prior to said expiration date.  The Company and the Reinsurer further agree, notwithstanding anything to the contrary in this Contract, that said letters of credit may be drawn upon by the Company or its successors in interest at any time, without diminution because of the insolvency of the Company or the Reinsurer, but only for one or more of the following purposes:

1. To reimburse itself for the Reinsurer's share of unearned premiums returned to insureds on account of policy cancellations, unless paid in cash by the Reinsurer;

2. To reimburse itself for the Reinsurer's share of losses and/or loss adjustment expense paid under the terms of policies reinsured hereunder, unless paid in cash by the Reinsurer;

3. To reimburse itself for the Reinsurer's share of any other amounts claimed to be due hereunder, unless paid in cash by the Reinsurer;

4. To fund a cash account in an amount equal to the Reinsurer's funding obligation funded by means of a letter of credit which is under non-renewal notice, if said letter of credit has not been renewed or replaced by the Reinsurer 10 days prior to its expiration date;

5. To refund to the Reinsurer any sum in excess of the actual amount required to fund the Reinsurer's funding obligation, if so requested by the Reinsurer.

In the event the amount drawn by the Company on any letter of credit is in excess of the actual amount required for B(1), B(2) or B(4), or in the case of B(3), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.

C. If a Subscribing Reinsurer fails to fulfill its funding obligation (if any) under this Article, the Company may, at its option, require the Subscribing Reinsurer to pay, and the Subscribing Reinsurer agrees to pay, an interest charge on the funding obligation calculated on the last business day of each month as follows:

1. The number of full days that have expired since the earliest of the applicable following dates:

a. As respects a Subscribing Reinsurer that is unauthorized in any state of the United States of America or District of Columbia having jurisdiction over the Company, December 31 of the calendar year in which the funding was required; or

b. As respects a Special Circumstance Reinsurer, the first date such reinsurer becomes a Special Circumstance Reinsurer;

times:

2. 1/365th of the sum of 4.0% and the U.S. prime rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made; times

3. The greater of (a) the funding obligation, less the amount, if any, funded by the Subscribing Reinsurer prior to the applicable date determined in subparagraph 1 above or (b) $100,000.

It is agreed that interest shall accumulate until the full interest charge amount as provided for in this paragraph and the funding obligation are paid.

If the interest rate provided under this Article exceeds the maximum interest rate allowed by any applicable law or is held unenforceable by an arbitrator or a court of competent jurisdiction, such interest rate shall be modified to the highest rate permitted by the applicable law, and all remaining provisions of this Article and Contract shall remain in full force and effect without being impaired or invalidated in any way.

Article 26 - Insolvency

A. In the event of the insolvency of one or more of the reinsured companies, this reinsurance shall be payable directly to the company or to its liquidator, receiver, conservator or statutory successor on the basis of the liability of the company without diminution because of the insolvency of the company or because the liquidator, receiver, conservator or statutory successor of the company has failed to pay all or a portion of any claim.  It is agreed, however, that the liquidator, receiver, conservator or statutory successor of the company shall give written notice to the Reinsurer of the pendency of a claim against the company indicating the policy or bond reinsured which claim would involve a possible liability on the part of the Reinsurer within a reasonable time after such claim is filed in the conservation or liquidation proceeding or in the receivership, and that during the pendency of such claim, the Reinsurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated, any defense or defenses that it may deem available to the company or its liquidator, receiver, conservator or statutory successor.  The expense thus incurred by the Reinsurer shall be chargeable, subject to the approval of the Court, against the company as part of the expense of conservation or liquidation to the extent of a pro rata share of the benefit which may accrue to the company solely as a result of the defense undertaken by the Reinsurer.

B. Where two or more reinsurers are involved in the same claim and a majority in interest elect to interpose defense to such claim, the expense shall be apportioned in accordance with the terms of this Contract as though such expense had been incurred by the company.

C. It is further understood and agreed that, in the event of the insolvency of one or more of the reinsured companies, the reinsurance under this Contract shall be payable directly by the Reinsurer to the company or to its liquidator, receiver or statutory successor, except as provided by Section 4118(a) of the New York Insurance Law or except (1) 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 payees under such policies and in substitution for the obligations of the company to such payees.

Article 27 - Arbitration

A. As a condition precedent to any right of action hereunder, in the event of any dispute or difference of opinion hereafter arising with respect to this Contract, it is hereby mutually agreed that such dispute or difference of opinion shall be submitted to arbitration.  One Arbiter shall be chosen by the Company, the other by the Reinsurer, and an Umpire shall be chosen by the two Arbiters before they enter upon arbitration, all of whom shall be active or retired disinterested executive officers of insurance or reinsurance companies or Lloyd's London Underwriters.  In the event that either party should fail to choose an Arbiter within 30 days following a written request by the other party to do so, the requesting party may choose two Arbiters who shall in turn choose an Umpire before entering upon arbitration.  If the two Arbiters fail to agree upon the selection of an Umpire within 30 days following their appointment, each Arbiter shall nominate three candidates within 10 days thereafter, two of whom the other shall decline, and the decision shall be made by drawing lots.  Notwithstanding the above, in the event the dispute or difference of opinion involves a Special Circumstance Reinsurer, the Company may, at its option, choose to forego arbitration and may bring an action in any court of competent jurisdiction.

B. Each party shall present its case to the Arbiters within 30 days following the date of appointment of the Umpire.  The Arbiters shall consider this Contract as an honorable engagement rather than merely as a legal obligation and they are relieved of all judicial formalities and may abstain from following the strict rules of law.  The decision of the Arbiters shall be final and binding on both parties; but failing to agree, they shall call in the Umpire and the decision of the majority shall be final and binding upon both parties.  Judgment upon the final decision of the Arbiters may be entered in any court of competent jurisdiction and the Arbiters are empowered to grant interim relief as they may deem appropriate.

C. If more than one reinsurer is involved in the same dispute, all such reinsurers shall, at the option of the Company, constitute and act as one party for purposes of this Article and communications shall be made by the Company to each of the reinsurers constituting one party, provided, however, that nothing herein shall impair the rights of such reinsurers to assert several, rather than joint, defenses or claims, nor be construed as changing the liability of the reinsurers participating under the terms of this Contract from several to joint.

D. Each party shall bear the expense of its own Arbiter, and shall jointly and equally bear with the other the expense of the Umpire and of the arbitration.  In the event that the two Arbiters are chosen by one party, as above provided, the expense of the Arbiters, the Umpire and the arbitration shall be equally divided between the two parties.

E. Any arbitration proceedings shall take place in Irving, Texas, or at a location mutually agreed upon by the parties to this Contract, but notwithstanding the location of the arbitration, all proceedings pursuant hereto shall be governed by the law of the State of Texas.

Article 28 - Service of Suit (BRMA 49G)

(Applicable if the Reinsurer is not domiciled in the United States of America, and/or is not authorized in any State, Territory or District of the United States where authorization is required by insurance regulatory authorities)

A. This Article will not be read to conflict with or override the obligations of the parties to arbitrate their disputes as provided for in the Arbitration Article.  This Article is intended as an aid to compelling arbitration or enforcing such arbitration or arbitral award, not as an alternative to the Arbitration Article for resolving disputes arising out of this Contract.

B. In the event the Reinsurer fails to pay any amount claimed to be due hereunder, the Reinsurer, at the request of the Company, will submit to the jurisdiction of a court of competent jurisdiction within the United States.  Nothing in this Article constitutes or should be understood to constitute a waiver of the Reinsurer'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 Reinsurer, once the appropriate Court is accepted by the Reinsurer or is determined by removal, transfer or otherwise, as provided for above, will comply with all requirements necessary to give said Court jurisdiction and, in any suit instituted against any of the Subscribing Reinsurers upon this Contract, will abide by the final decision of such Court or of any Appellate Court in the event of an appeal.

C. Further, pursuant to any statute of any state, territory or district of the United States which makes provision therefor, the Reinsurer hereby designates the party named in its Interests and Liabilities Agreement, or if no party is named therein, the Superintendent, Commissioner or Director of Insurance or other officer specified for that purpose in the statute, or his or her successor or successors in office, as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Company or any beneficiary hereunder arising out of this Contract.

Article 29 - Confidentiality

A. The Reinsurer hereby acknowledges that the documents, information and data provided to it 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.  Confidential Information shall not include documents, information or data that the Reinsurer can show:

1. Are publicly known or have become publicly known through no unauthorized act of the Reinsurer;

2. Have been rightfully received from a third person without obligation of confidentiality; or

3. Were known by the Reinsurer prior to the placement of this Contract without an obligation of confidentiality.

B. Absent the written consent of the Company, the Reinsurer shall not disclose any Confidential Information to any third parties, including any affiliated companies, except:

1. When required by retrocessionaires subject to the business ceded to this Contract;

2. When required by state regulators performing an audit of the Reinsurer's records and/or financial condition;

3. When required by external auditors performing an audit of the Reinsurer's records in the normal course of business; or

4. When required by attorneys or arbitrators in connection with an actual or potential dispute hereunder.

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

C. 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 with written notice of same at least 10 days prior to such release or disclosure and to use its best efforts to assist the Company in maintaining the confidentiality provided for in this Article.

D. The provisions of this Article shall extend to the officers, directors and employees of the Reinsurer and its affiliates, and shall be binding upon their successors and assigns.

Article 30 - Agency Agreement

If more than one reinsured company is named as a party to this Contract, the first named company shall be deemed the agent of the other reinsured companies for purposes of sending or receiving notices required by the terms and conditions of this Contract, and for purposes of remitting or receiving any monies due any party.

Article 31 - Governing Law (BRMA 71B)

This Contract shall be governed by and construed in accordance with the laws of the State of Texas.

Article 32 - Severability (BRMA 72E)

If any provision of this Contract shall be rendered illegal or unenforceable by the laws, regulations or public policy of any state, such provision shall be considered void in such state, but this shall not affect the validity or enforceability of any other provision of this Contract or the enforceability of such provision in any other jurisdiction.

Article 33 - Entire Agreement

This written Contract constitutes the entire agreement between the parties hereto with respect to the business being reinsured hereunder, and there are no understandings between the parties hereto other than as expressed in this Contract.  Any change or modification to this Contract will be made by amendment to this Contract and signed by the parties hereto.

Article 34 - Notices and Contract Execution

A. Whenever a notice, statement, report or any other written communication is required by this Contract, unless otherwise specified, such notice, statement, report or other written communication may be transmitted by certified or registered mail, nationally or internationally recognized express delivery service, personal delivery, electronic mail, or facsimile.  With the exception of notices of termination, first class mail is also acceptable.

B. The use of any of the following shall constitute a valid execution of this Contract or any amendments thereto:

1. Paper documents with an original ink signature;

2. Facsimile or electronic copies of paper documents showing an original ink signature; and/or

3. Electronic records with an electronic signature made via an electronic agent.  For the purposes of this Contract, the terms "electronic record," "electronic signature" and "electronic agent" shall have the meanings set forth in the Electronic Signatures in Global and National Commerce Act of 2000 or any amendments thereto.

C. This Contract may be executed in one or more counterparts, each of which, when duly executed, shall be deemed an original.

Article 35 - Intermediary

Aon Benfield Inc., or one of its affiliated corporations duly licensed as a reinsurance intermediary, is hereby recognized as the Intermediary negotiating this Contract for all business hereunder.  All communications (including but not limited to notices, statements, premiums, return premiums, commissions, taxes, losses, loss adjustment expense, salvages and loss settlements) relating to this Contract will be transmitted to the Company or the Reinsurer through the Intermediary.  Payments by the Company to the Intermediary will be deemed payment to the Reinsurer.  Payments by the Reinsurer to the Intermediary will be deemed 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:

This ________________ day of ____________________________ in the year ____________.

Homeowners of America Insurance Company (for and on behalf of the "Company")

___________________________________________________________

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance (U.S.A.)

1. This Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly and whether as Insurer or Reinsurer, from any Pool of Insurers or Reinsurers formed for the purpose of covering Atomic or Nuclear Energy risks.

2. Without in any way restricting the operation of paragraph (1) of this Clause, this Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly and whether as Insurer or Reinsurer, from any insurance against Physical Damage (including business interruption or consequential loss arising out of such Physical Damage) to:

I. Nuclear reactor power plants including all auxiliary property on the site, or

II. Any other nuclear reactor installation, including laboratories handling radioactive materials in connection with reactor installations, and "critical facilities" as such, or

III. Installations for fabricating complete fuel elements or for processing substantial quantities of "special nuclear material," and for reprocessing, salvaging, chemically separating, storing or disposing of "spent" nuclear fuel or waste materials, or

IV. Installations other than those listed in paragraph (2) III above using substantial quantities of radioactive isotopes or other products of nuclear fission.

3. Without in any way restricting the operations of paragraphs (1) and (2) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any insurance on property which is on the same site as a nuclear reactor power plant or other nuclear installation and which normally would be insured therewith except that this paragraph (3) shall not operate

(a) where Reassured does not have knowledge of such nuclear reactor power plant or nuclear installation, or

(b) where said insurance contains a provision excluding coverage for damage to property caused by or resulting from radioactive contamination, however caused.  However on and after 1st January 1960 this sub-paragraph (b) shall only apply provided the said radioactive contamination exclusion provision has been approved by the Governmental Authority having jurisdiction thereof.

4. Without in any way restricting the operations of paragraphs (1), (2) and (3) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, when such radioactive contamination is a named hazard specifically insured against.

5. It is understood and agreed that this Clause shall not extend to risks using radioactive isotopes in any form where the nuclear exposure is not considered by the Reassured to be the primary hazard.

6. The term "special nuclear material" shall have the meaning given it in the Atomic Energy Act of 1954 or by any law amendatory thereof.

7. Reassured to be sole judge of what constitutes:

(a) substantial quantities, and

(b) the extent of installation, plant or site.

Note.-Without in any way restricting the operation of paragraph (1) hereof, it is understood and agreed that

(a) all policies issued by the Reassured on or before 31st December 1957 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

(b) with respect to any risk located in Canada policies issued by the Reassured on or before 31st December 1958 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

12/12/57

N.M.A. 1119

BRMA 35B

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Pollution and Seepage Exclusion Clause

This Contract excludes loss and/or damage and/or costs and/or expenses arising from seepage and/or pollution and/or contamination, other than contamination from smoke.  Nevertheless, this exclusion does not preclude payment of the cost of removing debris of property damaged by a loss otherwise covered hereunder, subject always to a limit of 25.0% of the Company's property loss under the applicable original policy.

BRMA 39A

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Terrorism Exclusion

(Property Treaty Reinsurance)

Notwithstanding any provision to the contrary within this Contract or any amendment thereto, it is agreed that this Contract excludes loss, damage, cost or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any act of terrorism, as defined herein, regardless of any other cause or event contributing concurrently or in any other sequence to the loss.

An act of terrorism includes any act, or preparation in respect of action, or threat of action designed to influence the government de jure or de facto of any nation or any political division thereof, or in pursuit of political, religious, ideological or similar purposes to intimidate the public or a section of the public of any nation by any person or group(s) of persons whether acting alone or on behalf of or in connection with any organization(s) or government(s) de jure or de facto, and which:

1. Involves violence against one or more persons; or

2. Involves damage to property; or

3. Endangers life other than that of the person committing the action; or

4. Creates a risk to health or safety of the public or a section of the public; or

5. Is designed to interfere with or to disrupt an electronic system.

This Contract also excludes loss, damage, cost, or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any action in controlling, preventing, suppressing, retaliating against, or responding to any act of terrorism.

Notwithstanding the above and subject otherwise to the terms, conditions, and limitations of this Contract, in respect only of personal lines this Contract will pay actual loss or damage (but not related cost or expense) caused by any act of terrorism provided such act is not directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with biological, chemical, radioactive or nuclear pollution or contamination or explosion.

N.M.A. 2930c

22/11/02

Form approved by Lloyd's Market Association [Non-Marine]

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Interests and Liabilities Agreement

attached to and forming part of the

Residential Property Quota Share Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

including any and/or all companies that are or may hereafter become affiliated therewith

and

Qatar Reinsurance Company LLC, Bermuda Branch

Pembroke, Bermuda

 (hereinafter referred to as the "Subscribing Reinsurer")

The Subscribing Reinsurer hereby accepts a 15.0% share in the interests and liabilities of the "Reinsurer" as set forth in the attached Contract captioned above.

This Agreement shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until terminated in accordance with the provisions of the attached Contract..

The Subscribing Reinsurer's share in the attached Contract shall be separate and apart from the shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it being understood that the Subscribing Reinsurer shall in no event participate in the interests and liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed this Agreement as of the date specified below:

This ________________ day of ___________________________ in the year ____________.

Qatar Reinsurance Company LLC, Bermuda Branch

_______________________________________________________

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EX-10.42

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Exhibit 10.42

Residential Quota Share

Reinsurance Contract

Effective:  April 1, 2015

Homeowners of America Insurance Company

Irving, Texas

including any and/or all companies that are or may hereafter become affiliated therewith

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Residential Quota Share Reinsurance Contract

Effective:  April 1, 2015

Homeowners of America Insurance Company

Irving, Texas

including any and/or all companies that are or may hereafter become affiliated therewith

Reinsurer(s)	Participation(s)
Catlin Re Switzerland Ltd. (Bermuda Branch)	5.0%
Everest Reinsurance Company	15.0%
Odyssey Reinsurance Company*	2.5%
SCOR Reinsurance Company*	10.0%
Through Aon UK Limited trading as Aon Benfield (Placement Only)
Taiping Reinsurance Co. Ltd.	2.5%
Total	35.0%

*Both the Company and the Subscribing Reinsurer sign the Interests and Liabilities Agreement.

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Table of Contents

Article		Page
1	Classes of Business Reinsured	1
2	Commencement and Termination	1
3	Territory (BRMA 51A)	3
4	Exclusions	3
5	Special Acceptances	5
6	Retention and Limit	6
7	Loss in Excess of Policy Limits/Extra Contractual Obligations	8
8	Other Reinsurance	9
9	Claims and Loss Adjustment Expense	9
10	Special Commutation	11
11	Assessments	12
12	Salvage and Subrogation	13
13	Original Conditions	13
14	Sliding Scale Commission	13
15	Reports and Remittances	15
16	Sanctions	15
17	Late Payments	16
18	Offset	17
19	Access to Records	17
20	Errors, Omissions and Inadvertent Binding	18
21	Currency (BRMA 12A)	18
22	Taxes (BRMA 50B)	18
23	Federal Excise Tax (BRMA 17D)	18
24	Foreign Account Tax Compliance Act	18
25	Reserves	19
26	Insolvency	21
27	Arbitration	22
28	Service of Suit (BRMA 49G)	23
29	Confidentiality	23
30	Agency Agreement	24
31	Governing Law (BRMA 71B)	24
32	Severability (BRMA 72E)	24
33	Entire Agreement	25
34	Notices and Contract Execution	25
35	Intermediary	25

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Residential Quota Share

Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

including any and/or all companies that are or may hereafter become affiliated therewith

(hereinafter referred to collectively as the "Company")

and

The Subscribing Reinsurer(s) Executing the

Interests and Liabilities Agreement(s)

Attached Hereto

(hereinafter referred to as the "Reinsurer")

Article 1 - Classes of Business Reinsured

A. By this Contract the Company obligates itself to cede to the Reinsurer and the Reinsurer obligates itself to accept quota share reinsurance of the Company's net liability under policies in force at the effective date hereof or issued or renewed on or after that date, and classified by the Company as Dwelling Fire, Tenant, Condominium Owners and Homeowners business.

B. "Net liability" as used herein shall mean the Company's gross liability remaining after cessions, if any, to inuring reinsurance.

C. The liability of the Reinsurer with respect to each cession hereunder shall commence obligatorily and simultaneously with that of the Company, subject to the terms, conditions and limitations hereinafter set forth.

D. "Policies" as used herein shall mean all policies, contracts and binders of insurance, whether held covered provisionally or otherwise.

Article 2 - Commencement and Termination

A. This Contract shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, with respect to losses arising out of loss occurrences commencing at or after that time and date, and shall continue in force thereafter until terminated.

B. Either party may terminate this Contract at 12:01 a.m., Central Standard Time, on January 1, 2017 or on any January 1 thereafter, by giving the other party not less than 90 days prior written notice as set forth in the Notices and Contract Execution Article.

C. Notwithstanding the provisions of paragraphs A and B above, the Company may terminate a Subscribing Reinsurer's percentage share in this Contract in the event any of the following circumstances occur as clarified by public announcement or upon discovery:

1. The Subscribing Reinsurer's policyholders' surplus (or its equivalent under the Subscribing Reinsurer's accounting system) after the earlier of:  (a) the inception of this Contract, or (b) the date lines are bound for this Contract, has been reduced by more than 20.0% of the amount of surplus (or the applicable equivalent) 12 months prior to that date; or

2. The Subscribing Reinsurer's policyholders' surplus (or its equivalent under the Subscribing Reinsurer's accounting system) at any time between the earlier of:  (a) the inception of this Contract, or (b) the date lines are bound for this Contract, and the date of termination of this Contract has been reduced by more than 20.0% of the amount of surplus (or the applicable equivalent) at the date of the Subscribing Reinsurer's most recent financial statement filed with regulatory authorities and available to the public as of the date lines are bound; or

3. A State Insurance Department or other legal authority has ordered the Subscribing Reinsurer to cease assuming business; or

4. The Subscribing Reinsurer has become insolvent or has been placed into liquidation, receivership, supervision, administration, winding-up or under a scheme of arrangement, or similar proceedings (whether voluntary or involuntary) or proceedings have been instituted against the Subscribing Reinsurer for the appointment of a receiver, liquidator, rehabilitator, supervisor, administrator, conservator or trustee in bankruptcy, or other agent known by whatever name, to take possession of its assets or control of its operations; or

5. The Subscribing Reinsurer has reinsured its entire liability under this Contract without the Company's prior written consent; or

6. The A.M. Best's rating for the Subscribing Reinsurer has been assigned or downgraded below A- (inclusive of "Not Rated" ratings), or the published rating issued by Standard & Poor's has been downgraded below BBB+ (inclusive of "Not Rated" ratings); or

7. The Subscribing Reinsurer has become merged with, acquired by or controlled by any other entity or individual(s) not controlling the Subscribing Reinsurer's operations previously; or

8. The Subscribing Reinsurer has ceased assuming new or renewal property or casualty treaty reinsurance business; or

9. The Subscribing Reinsurer has hired an unaffiliated runoff claims manager that is compensated on a contingent basis or is otherwise provided with financial incentives based on the quantum of claims paid.

D. In the event a Subscribing Reinsurer experiences one or more of the circumstances specified in paragraph C above, the Subscribing Reinsurer shall notify the Company as promptly as possible and shall hereinafter be referred to as a "Special Circumstance Reinsurer."  To terminate a Special Circumstance Reinsurer's percentage share in this Contract, the Company must provide the Special Circumstance Reinsurer with written notice as set forth in the Notices and Contract Execution Article.  Such notice shall include the effective date of termination as selected by the Company and shall be one of the following:

1. The date of written notice provided by the Special Circumstance Reinsurer; or

2. The last day of the month prior to the date of written notice provided by the Special Circumstance Reinsurer; or

3. The last day of any month after the date of written notice provided by the Special Circumstance Reinsurer; or

4. The date of the Company's written notice to the Special Circumstance Reinsurer advising of the termination.

In the event the Subscribing Reinsurer fails to immediately provide written notice to the Company of any event outlined in subparagraphs 1 through 9 of paragraph C above, the Company may elect to substitute the date of public announcement or discovery as the equivalent of written notice.

E. Unless the Company elects to reassume the ceded unearned premium in force on the effective date of termination, and so notifies the Reinsurer prior to or as promptly as possible after the effective date of termination, reinsurance hereunder on business in force on the effective date of termination shall remain in full force and effect until expiration, cancellation or next premium anniversary of such business, whichever first occurs, but in no event beyond 12 months plus odd time following the effective date of termination.

F. Notwithstanding the provisions of paragraph E above, if the Company is prohibited or precluded by the appropriate regulatory authorities, or by law (in those states where applicable and enforced), from arranging mid-term cancellation or non-renewal of any policies subject to this Contract beyond their natural expiry, the Reinsurer agrees to extend coverage under this Contract until such policies may be terminated or non-renewed by the Company, but in no event beyond 18 months after the effective date of termination.

Article 3 - Territory (BRMA 51A)

The territorial limits of this Contract shall be identical with those of the Company's policies.

Article 4 - Exclusions

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

1. Financial guarantee and insolvency.

2. Nuclear risks as defined in the "Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance (U.S.A.)" and the "Nuclear Incident Exclusion Clause - Liability - Reinsurance (U.S.A.)" attached to and forming part of this Contract.

3. Loss or damage caused by or resulting from war, invasion, hostilities, acts of foreign enemies, civil war, rebellion, insurrection, military or usurped power, or martial law or confiscation by order of any government or public authority, but this exclusion shall not apply to loss or damage covered under a standard policy with a standard War Exclusion Clause.

4. Liability as a member, subscriber or reinsurer of any Pool, Syndicate or Association; and any combination of insurers or reinsurers formed for the purpose of covering specific perils, specific classes of business or for the purpose of insuring risks located in specific geographical areas.  However, this exclusion shall not apply to residual market mechanisms, including but not limited to FAIR Plans, Joint Underwriting Associations, or to Coastal Pools, Beach Plans or similar plans, however styled.  It is understood and agreed, however, that this reinsurance does not include any increase in liability to the Company resulting from (a) the inability of any other participant in a residual market mechanism, including but not limited to a FAIR Plan, Joint Underwriting Association, Coastal Pool, Beach Plan or similar plan, to meet its liability, or (b) any claim against such a residual market mechanism, including but not limited to a FAIR Plan, Joint Underwriting Association, Coastal Pool, Beach Plan or similar plan, or any participant therein, including the Company, whether by way of subrogation or otherwise, brought by or on behalf of any insolvency fund.

5. 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.  However, this exclusion shall not apply to assessments from the Texas Property and Casualty Insurance Guaranty Association.  "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.

6. All third party liability, except Liability written in conjunction with residential risks, including but not limited to Section II of Homeowners, Comprehensive Personal Liability written in conjunction with Dwelling policies, and Liability written in conjunction with Tenant and Condominium Owners policies.

7. Fidelity, Surety and Credit business.

8. Loss or damage to growing or standing crops.

9. Livestock.

10. Mortgage impairment.

11. Pollution and seepage coverages excluded under the provisions of the "Pollution and Seepage Exclusion Clause (BRMA 39A)" attached to and forming part of this Contract.

12. Terrorism, as described in the provisions of the "Terrorism Exclusion (NMA 2930c)" attached to and forming part of this Contract.

13. Flood and/or earthquake when written as such.

14. Title insurance.

15. Loss, damage, cost or expense arising from fungi unless directly or indirectly caused by or contributed to by or arising from a covered peril under the Company's original policy.  Losses arising from fungi shall not in and of themselves constitute an event for the purposes of recovery hereunder.  For the purposes of this Contract, "fungi" means any type or form of fungus, including mold or mildew and any mycotoxins, spores, scents or by products produced or released by "fungi."

16. Reinsurance assumed.

B. Any exclusion set forth in paragraph A (except exclusions set forth in subparagraphs 1, 2, 3, 5 and 12) shall be waived automatically when, in the opinion of the Company, the exposure excluded therein is incidental to the principal exposure on the risk in question.

C. If the Company is required to accept an assigned risk which conflicts with one or more of the exclusions set forth in paragraph A (except exclusions set forth in subparagraphs 1, 2, 3, 5 and 12), reinsurance shall apply, but in no event shall the Reinsurer's liability exceed the applicable limits set forth in the Retention and Limit Article.

Article 5 - Special Acceptances

A. From time to time the Company may request a special acceptance of reinsurance falling outside the scope of the provisions of this Contract (except as respects the exclusions set forth in subparagraphs 1, 2, 3, 5 and 12 of the Exclusions Article).  Within five days of receipt of such a request, each Subscribing Reinsurer shall accept such request, ask for additional information, or reject the request.  Any reinsurance that is specially accepted by the Reinsurer shall be covered under this Contract and shall be subject to the terms hereof, except as such terms shall be modified by the special acceptance.  If a Subscribing Reinsurer fails to respond to a special acceptance request within five days, the Subscribing Reinsurer will be deemed to have agreed to the special acceptance.

B. If Subscribing Reinsurers with percentage shares totaling more than 50.0% in the interests and liabilities of the Reinsurer agree to a special acceptance, such special acceptance shall be binding on all Subscribing Reinsurers with respect to their respective shares.  If such percentage 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 that agrees to the special acceptance.

C. 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.  Further, if one or more Subscribing Reinsurers under this Contract agreed to special acceptance(s) under the contract being replaced by this Contract, such special acceptance(s) shall be automatically covered hereunder with respect to the interests and liabilities of such Subscribing Reinsurer(s).

Article 6 - Retention and Limit

A. As respects business subject to this Contract, the Company shall cede to the Reinsurer and the Reinsurer agrees to accept 100% of the Company's net liability.

B. The Company shall retain at least a 10.0% part of 100% share in the interests and liabilities of the Reinsurer hereunder.

C. The Company shall purchase or be deemed to have purchased inuring excess facultative reinsurance to limit its loss subject hereto from any one coverage, any one policy (exclusive of loss in excess of policy limits, extra contractual obligations and loss adjustment expense) to the following amounts:

1. Dwelling, $750,000;

2. Personal Property (contents) Homeowners policies, 75.0% of the Dwelling limit;

3. Personal Property (contents) Dwelling Fire policies, 40.0% of the Dwelling limit;

4. Other Structures, 20.0% of the Dwelling limit;

5. Loss of Use, 20.0% of the Dwelling limit;

6. Medical Payments, $5,000;

7. Comprehensive Personal Liability (Homeowners Section II) and Comprehensive Personal Liability written as an optional coverage in conjunction with Dwelling policies, Tenant policies and Condominium Owners policies, $500,000.

D. The total insured value for any one property risk is subject to a maximum limit of $1,612,500, or so deemed, inclusive of all additional and optional coverages.

E. Notwithstanding the provisions above, the liability of the Reinsurer hereunder as respects losses arising out of any one loss occurrence (including loss in excess of policy limits, extra contractual obligations, loss adjustment expense and any assessment, including but not limited to the Texas Windstorm Insurance Association, and any Guarantee Fund or any Fair Plan Assessment) shall not exceed:

1. [****] during the period extending from April 1, 2015 through December 31, 2015; or

2. [****] of the premiums earned during each respective 12‑month period thereafter that this Contract continues in force.  The liability of the Reinsurer for each such loss occurrence shall be adjusted as promptly as possible after the end of the contract year, if applicable.

F. As respects Property business subject hereunder, the term "loss occurrence" shall mean the sum of all individual losses directly occasioned by any one disaster, accident or loss or series of disasters, accidents or losses arising out of one event which occurs within the area of one state of the United States or province of Canada and states or provinces contiguous thereto and to one another.  However, the duration and extent of any one "loss occurrence" shall be limited to all individual losses sustained by the Company occurring during any period of 168 consecutive hours arising out of and directly occasioned by the same event, except that the term "loss occurrence" shall be further defined as follows:

1. As regards windstorm, hail, tornado, hurricane, cyclone, including ensuing collapse and water damage, all individual losses sustained by the Company occurring during any period of 72 consecutive hours arising out of and directly occasioned by the same event.  However, the event need not be limited to one state or province or states or provinces contiguous thereto.

2. As regards riot, riot attending a strike, civil commotion, vandalism and malicious mischief, all individual losses sustained by the Company occurring during any period of 72 consecutive hours within the area of one municipality or county and the municipalities or counties contiguous thereto arising out of and directly occasioned by the same event.  The maximum duration of 72 consecutive hours may be extended in respect of individual losses which occur beyond such 72 consecutive hours during the continued occupation of an assured's premises by strikers, provided such occupation commenced during the aforesaid period.

3. As regards earthquake (the epicenter of which need not necessarily be within the territorial confines referred to in the introductory portion of this paragraph) and fire following directly occasioned by the earthquake, only those individual fire losses which commence during the period of 168 consecutive hours may be included in the Company's "loss occurrence."

4. As regards "freeze," only individual losses directly occasioned by collapse, breakage of glass and water damage (caused by bursting of frozen pipes and tanks or freezing and/or melting snow or sleet) may be included in the Company's "loss occurrence."

5. As regards firestorms, brush fires and any other fires or series of fires, irrespective of origin (except as provided in subparagraphs 2 and 3 above), all individual losses sustained by the Company which commence during any period of 168 consecutive hours within a 150-mile radius of any fixed point selected by the Company may be included in the Company's "loss occurrence."  However, an individual loss subject to this subparagraph cannot be included in more than one "loss occurrence."

If the disaster, accident or loss occasioned by the event is of greater duration than 168 consecutive hours, or 72 consecutive hours as respects subparagraphs 1 and 2 above, then the Company may divide that disaster, accident or loss into two or more "loss occurrences," provided no two periods overlap and no individual loss is included in more than one such period and provided that no period commences earlier than the date and time of the occurrence of the first recorded individual loss sustained by the Company arising out of that disaster, accident or loss.

It is understood that losses arising from a combination of two or more perils as a result of the same event shall be considered as having arisen from one "loss occurrence."  Notwithstanding the foregoing, the hourly limitations as stated above shall not be exceeded as respects the applicable perils and no single "loss occurrence" shall encompass a time period greater than 168 consecutive hours.

G. As respects Casualty business subject hereunder, "loss occurrence" as used herein shall mean an accident or occurrence or a series of accidents or occurrences arising out of or caused by one event.

H. "Total insured value" as used herein shall mean the sum value of dwellings, other structures, contents and loss of use for each property risk reinsured hereunder.

I. "Premiums earned" as used herein shall mean ceded unearned premiums at the beginning of the contract year under consideration, plus ceded net written premiums during the contract year, less ceded unearned premiums at the end of the contract year.

J. "Contract year" as used herein shall mean the period from 12:01 a.m., Central Standard Time, April 1, 2015, to 12:01 a.m., Central Standard Time, January 1, 2016, and each respective 12‑month period thereafter that this Contract continues in force shall be a separate contract year.  However, if this Contract or the participation of a Subscribing Reinsurer is terminated on a "cutoff" basis, the final contract year, as applicable, shall be from the beginning of the then current contract year until the effective time and date of termination.  In the event this Contract or the participation of a Subscribing Reinsurer is terminated on a "runoff" basis, the period after the effective time and date of termination through the end of the "runoff" period shall be considered a separate contract year.

Article 7 - Loss in Excess of Policy Limits/Extra Contractual Obligations

A. In the event the Company pays or is held liable to pay an amount of loss in excess of its policy limit, but otherwise within the terms of its policy (hereinafter called "loss in excess of policy limits") or any punitive, exemplary, compensatory or consequential damages, other than loss in excess of policy limits (hereinafter called "extra contractual obligations"), arising from the handling of any claim on business covered hereunder; such liabilities arising, because of, but not limited to, the following: failure to settle within the policy limit, or by reason of alleged or actual bad faith, negligence or fraud in rejecting an offer of settlement, in the preparation of the defense, in the trial of an action against its insured or in the preparation or prosecution of an appeal consequent upon such an action, or in otherwise handling a claim under a policy subject to this Contract, the loss in excess of policy limits and/or the extra contractual obligations shall be added to the Company's loss, if any, under the policy involved, and the sum thereof shall be subject to the provisions of paragraph A of the Retention and Limit Article.

B. An extra contractual obligation shall be deemed, in all circumstances, to have occurred on the same date as the loss covered or alleged to be covered under the policy.

C. Notwithstanding anything stated herein, this Contract shall not apply to any loss in excess of policy limits or any extra contractual obligation incurred by the Company as a result of any fraudulent and/or criminal act by any officer or director of the Company acting individually or collectively or in collusion with any individual or corporation or any other organization or party involved in the presentation, defense or settlement of any claim covered hereunder.

D. Savings Clause (Applicable only if the Subscribing Reinsurer is domiciled in the State of New York):  In no event shall coverage be provided to the extent that such coverage is not permitted under New York law.

Article 8 - Other Reinsurance

A. The Company shall maintain in force or shall be deemed to have maintained in force $1,112,500 excess of $500,000 as respects any one risk, each loss (subject to a $12,237,500 aggregate limit) per risk treaty reinsurance, recoveries under which shall inure to the benefit of this Contract, for policiescovering risks with a total insured value greater than $500,000 (property coverages only, including Personal Property coverage and Extensions of Coverage as defined in the Company's policies), subject to the exclusions of such per risk treaty.

B. The Company shall be permitted to carry facultative reinsurance on any risk subject hereunder, recoveries under which shall inure to the benefit of this Contract.

C. The Company shall be permitted to carry other treaty 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.

Article 9 - Claims and Loss Adjustment Expense

A. Losses shall be reported by the Company in summary form as hereinafter provided, but the Company alone and at its full discretion shall adjust, settle or compromise all claims and losses hereunder.  The Company shall be the sole judge as to:

1. What constitutes a claim or loss covered under any policy;

2. The Company's liability thereunder;

3. The amount or amounts proper for the Company to pay thereunder.

The Reinsurer shall be bound by the judgment of the Company as to the obligations and liabilities of the Company under any policy.

B. All loss settlements made by the Company, whether under strict policy conditions or by way of compromise (including loss in excess of policy limits and extra contractual obligations), shall be binding upon the Reinsurer, and the Reinsurer agrees to pay or allow, as the case may be, its proportion of each such settlement in accordance with the Reports and Remittances Article.  It is agreed, however, that if the Reinsurer's share of any loss is equal to or greater than $100,000, the Reinsurer, if requested by the Company, will pay its share of said loss within 10 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 (as specified in the Late Payments Article) from the date the proof of loss or demand for payment was transmitted to the Reinsurer.

C. In the event of a claim under a policy subject hereto, the Reinsurer shall be liable for its proportionate share of loss adjustment expense incurred by the Company in connection therewith, and shall be credited with its proportionate share of any recoveries of such expense.

D. A Special Circumstance Reinsurer shall not have the right to deny payment of a claim if the sum of the percentage shares of Active Subscribing Reinsurers that have paid the claim exceeds 50.0% of the sum of the percentage shares of all Active Subscribing Reinsurers.  "Active Subscribing Reinsurer" as used herein shall mean a Subscribing Reinsurer that is not a Special Circumstance Reinsurer as of the due date of the claim (as specified in the Late Payments Article).

E. As respects its share of any claims payable under this Contract, a Special Circumstance Reinsurer shall not have the right to hire an unaffiliated runoff claims manager that is compensated on a contingent basis or is otherwise provided with financial incentives based on the quantum of claims paid.

F. "Loss adjustment expense" as used herein shall mean costs and expenses assignable to the investigation, appraisal, adjustment, settlement, litigation, defense and/or appeal of claims, regardless of how such expenses are classified for statutory reporting purposes.  Loss adjustment expense shall include, but not be limited to:

1. Interest on judgments;

2. Expenses of outside adjusters and adjuster expenses incurred by Homeowners of America MGA, Inc.;

3. Expenses and a pro rata share of salaries of the Company's field employees and expenses of other employees of the Company who have been temporarily diverted from their normal and customary duties and assigned to the adjustment of losses covered by this Contract;

4. Expenses of the Company's officials incurred in connection with losses covered by this Contract;

5. Declaratory judgment expenses or other legal expenses and costs incurred in connection with coverage questions and legal actions connected thereto;

6. Advertising or other extraordinary communication expenses incurred as a result of a covered loss;

7. Court costs;

8. Costs of supersedeas and appeal bonds;

9. Monitoring counsel expenses;

10. Extraordinary expenses arising out of a loss, whether or not they are allocable to a specific "claim."

However, loss adjustment expense shall not include normal office expenses or salaries of the Company's regular employees, except as provided for in subparagraph 3 above.

Article 10 - Special Commutation

A. The Company may require commutation of that portion of any loss hereunder represented by any outstanding claim or claims, including any related loss adjustment expense, plus unearned premium hereunder, if any remains, if the Subscribing Reinsurer is a Special Circumstance Reinsurer.

"Outstanding claim or claims" shall include claims incurred but not reported, as established by the Company, including any billed yet unpaid claims.

B. If the Company elects to require commutation as provided in paragraph A above, the Company shall submit a Statement of Valuation of the outstanding claim or claims as of the last day of the month immediately preceding the month in which the Company elects to require commutation, as determined by the Company.  Such Statement of Valuation shall include the elements considered reasonable to establish the loss and shall set forth or attach the information relied upon by the Company and the methodology employed to calculate the loss.  The Subscribing Reinsurer shall then pay the amount requested within 10 days of receipt of such Statement of Valuation, unless the Subscribing Reinsurer needs additional information from the Company to assess the Company's Statement of Valuation or contests such amount.

C. If the Subscribing Reinsurer needs additional information from the Company to assess the Company's Statement of Valuation or contests the amount requested, the Subscribing Reinsurer shall so notify the Company within 15 days of receipt of the Company's Statement of Valuation.  The Company shall supply any reasonably requested information to the Subscribing Reinsurer within 15 days of receipt of the notification.  Within 30 days of the date of the notification or of the receipt of the information, whichever is later, the Subscribing Reinsurer shall provide the Company with its Statement of Valuation of the outstanding claim or claims as of the last day of the month immediately preceding the month in which the Company elects to require commutation, as determined by the Subscribing Reinsurer.  Such Statement of Valuation shall include the elements considered reasonable to establish the loss and shall set forth or attach the information relied upon by the Subscribing Reinsurer and the methodology employed to calculate the loss.  The Subscribing Reinsurer shall pay the amount due the Company, if any, plus any ceded unearned premium reserves with its Statement of Valuation.

D. In the event the Subscribing Reinsurer's Statement of Valuation of the outstanding claim or claims is viewed as unacceptable to the Company, the Company may either abandon the commutation effort, or may seek to settle any difference by using an independent actuary agreed to by the parties.

E. If the parties cannot agree on an acceptable independent actuary within 15 days of the date of the Subscribing Reinsurer's Statement of Valuation, then each party shall appoint an actuary as party actuaries for the limited and sole purpose of selecting an independent actuary.  If the party actuaries fail to agree upon an acceptable independent actuary within 15 days following the date of their appointment, the Company shall supply the Subscribing Reinsurer with a list of at least five proposed independent actuaries, and the Subscribing Reinsurer shall select the independent actuary from that list.

F. Upon selection of the independent actuary, both parties shall present their respective written submissions to the independent actuary.  The independent actuary may, at his or her discretion, request additional information.  The independent actuary shall issue his or her decision within 45 days after the written submissions have been filed and any additional information has been provided.  Any amount due the Company (including any ceded unearned premium reserves) shall be paid by the Subscribing Reinsurer within 15 calendar days after such decision has been issued.

G. The decision of the independent actuary shall be final and binding.  The expense of the independent actuary shall be equally divided between the two parties.  For the purposes of this Article, unless mutually agreed otherwise, an "independent actuary" shall be an actuary who satisfies each of the following criteria:

1. Is regularly engaged in the valuation of claims resulting from lines of business subject to this Contract; and

2. Is either a Fellow of the Casualty Actuarial Society or of the American Academy of Actuaries; and

3. Is disinterested and impartial regarding this commutation.

H. In the event that the Subscribing Reinsurer no longer meets the criteria set forth in paragraph A above, this commutation may continue on a mutually agreed basis.

I. Payment by the Subscribing Reinsurer of the amount requested in accordance with paragraph B, C or F above, shall release the Subscribing Reinsurer from all further liability for outstanding claim or claims, known or unknown, and any unearned premium under this Contract and shall release the Company from all further liability for payments of salvage or subrogation amounts, known or unknown, to the Subscribing Reinsurer under this Contract.

J. In the event of any conflict between this Article and any other article of this Contract, the terms of this Article shall control.

K. This Article shall survive the termination of this Contract and/or a Subscribing Reinsurer's percentage share in this Contract.

Article 11 - Assessments

A. The provisions of the quota share participation will apply to the proportion of any assessments made against the Company pursuant to those laws and regulations creating obligatory funds (excluding insurance guaranty and insolvency funds to the extent such costs are transferable to the policyholders), pools, joint underwriting associations, FAIR plans, and similar plans; said proportion to be the proportion of the Company's total premiums causing the assessment which were or are subject to this Contract.  All offsets from such assessments, if any, including credits allowed to the Company against its premium taxes, are subject to the provisions of the Salvage and Subrogation Article.

B. At the termination of this Contract, the provisions of the quota share participation shall continue to apply until the Company may legally terminate its liability for assessments that are a result of the business reinsured hereunder.

Article 12 - Salvage and Subrogation

The Reinsurer shall be credited with its proportionate share of salvage (i.e., reimbursement obtained or recovery made by the Company, less the actual cost, excluding salaries of officials and employees of the Company and sums paid to attorneys as retainer, of obtaining such reimbursement or making such recovery) on account of claims and settlements involving reinsurance hereunder.  The Company hereby agrees to enforce its rights to salvage or subrogation relating to any loss, a part of which loss was sustained by the Reinsurer, and to prosecute all claims arising out of such rightsif, in the Company's opinion, it is reasonable to do so.

Article 13 - Original Conditions

A. All reinsurance under this Contract shall be subject to the same rates, terms, conditions, waivers and interpretations, including judicial interpretation and policy reformation, and to the same modifications and alterations as the respective policies of the Company.  The Reinsurer shall be credited with its exact proportion of the original premiums received by the Company, prior to disbursement of any dividends, but after deduction of premiums, if any, ceded by the Company for inuring reinsurance.

B. Nothing herein shall in any manner create any obligations or establish any rights against the Reinsurer in favor of any third party or any persons not parties to this Contract.

Article 14 - Sliding Scale Commission

A. The Reinsurer shall allow the Company a [****] provisional commission on all premiums ceded to the Reinsurer hereunder.  The Company shall allow the Reinsurer return commission on return premiums at the same rate.

B. The provisional commission allowed the Company shall be adjusted periodically in accordance with the provisions set forth herein.  The adjusted commission rate shall be calculated as follows and be applied to premiums earned for the contract year under consideration:

1. If the ratio of losses incurred to premiums earned is [****] or greater, the adjusted commission rate for the contract year under consideration shall be [****];

2. If the ratio of losses incurred to premiums earned is less than [****], but not less than [****], the adjusted commission rate for the contract year under consideration shall be [****], plus [****] of the difference in percentage points between [****] and the actual ratio of losses incurred to premiums earned;

3. If the ratio of losses incurred to premiums earned is less than [****], but not less than [****], the adjusted commission rate for the contract year under consideration shall be [****], plus [****] of the difference in percentage points between [****] and the actual ratio of losses incurred to premiums earned;

4. If the ratio of losses incurred to premiums earned is [****] or less, the adjusted commission rate for the contract year under consideration shall be [****].

C. If the ratio of losses incurred to premiums earned for any contract year is less than [****], the difference in percentage points between [****] and the actual ratio of losses incurred to premiums earned shall be multiplied by premiums earned for the contract year and the product shall be carried forward to the next contract year as a credit to losses incurred.

D. Except as provided in the next paragraph, the Company shall calculate and report the adjusted commission on premiums earned within 45 days after the end of each contract year, and within 45 days after the end of each 12‑month period thereafter until all losses subject hereto have been finally settled.  Each such calculation shall be based on cumulative transactions hereunder from the beginning of the contract year through the date of adjustment, including, as respects losses incurred, any credit from the preceding contract year.  If the adjusted commission on premiums earned for the contract year as of the date of adjustment is less than commissions previously allowed by the Reinsurer on premiums earned for the same contract year, the Company shall remit the difference to the Reinsurer with its report.  If the adjusted commission on premiums earned for the contract year as of the date of adjustment is greater than commissions previously allowed by the Reinsurer on premiums earned for the same contract year, the Reinsurer shall remit the difference to the Company as promptly as possible after receipt and verification of the Company's report.

E. As respects the final contract year, the Company shall calculate and report the adjusted commission on premiums earned within 45 days after the date of termination of this Contract or the termination of a Subscribing Reinsurer's percentage share in this Contract, and within 45 days after the end of each 12‑month period thereafter until all losses subject hereto have been finally settled.  Each such calculation shall be based on cumulative transactions hereunder from the beginning of the final contract year through the date of adjustment, including, as respects losses incurred, any credit from the preceding contract year.  If the adjusted commission on premiums earned for the final contract year as of the date of adjustment is less than commissions previously allowed by the Reinsurer on premiums earned for the same contract year, the Company shall remit the difference to the Reinsurer with its report.  If the adjusted commission on premiums earned for the final contract year as of the date of adjustment is greater than commissions previously allowed by the Reinsurer on premiums earned for the same contract year, the Reinsurer shall remit the difference to the Company as promptly as possible after receipt and verification of the Company's report.

F. "Losses incurred" as used herein shall mean ceded losses and loss adjustment expense paid as of the effective date of calculation, plus the ceded reserves for losses and loss adjustment expense outstanding as of the same date, all as respects losses occurring during the contract year under consideration, minus the credit from the preceding contract year.

As respects the first contract year hereunder, for any Subscribing Reinsurer participating under this Contract that also participated under the Company's Residential Quota Share Reinsurance Contract, effective 12:01 a.m., Central Standard Time, April 1, 2014 (the "expired contract"), "losses incurred" as used herein shall also include each such Subscribing Reinsurer's share of any credit under the expired contract.

G. It is expressly agreed that the ceding commission allowed the Company includes provision for all dividends, commissions, taxes, assessments, and all other expenses of whatever nature, except loss adjustment expense.

Article 15 - Reports and Remittances

A. As promptly as possible after the effective date of this Contract, the Company shall remit the Reinsurer's share of the unearned premium (less provisional commission thereon) applicable to subject business in force at the effective date of this Contract.

B. Within 30 days after the end of each month, the Company shall report to the Reinsurer:

1. Ceded net written premium during the month;

2. Provisional commission on (1) above;

3. Ceded losses and loss adjustment expense paid during the month (net of any recoveries during the month under the "cash call" provisions of the Claims and Loss Adjustment Expense Article);

4. The Reinsurer's share of salvage and subrogation;

5. Premium (including reinstatement premium) for reinsurance which inures to the benefit of this Contract;

6. Recoveries from reinsurance which inures to the benefit of this Contract;

7. Ceded unearned premiums and ceded outstanding loss and loss adjustment expense reserves (including incurred but not reported loss reserves as established by the Company) as of the end of the month.

The positive balance of (1) less (2) less (3) plus (4) less (5) plus (6) shall be remitted by the Company within 60 days after the end of the month of account.  Any balance shown to be due the Company shall be remitted by the Reinsurer as promptly as possible (not exceeding 15 days, however) after receipt and verification of the Company's report.

Furthermore, as respects subparagraph 3 above, the Company shall identify losses and loss adjustment expense by PCS catastrophe number, where applicable.

C. Annually, the Company shall furnish the Reinsurer with such information as the Reinsurer may require to complete its Annual Convention Statement.

Article 16 - Sanctions

Neither the Company nor any Subscribing Reinsurer shall be liable for premium or loss under this Contract if it would result in a violation of any mandatory sanction, prohibition or restriction under United Nations resolutions or the trade or economic sanctions, laws or regulations of the European Union, United Kingdom or United States of America that are applicable to either party.

Article 17 - Late Payments

A. The provisions of this Article shall not be implemented unless specifically invoked, in writing, by one of the parties to this Contract.

B. In the event any premium, loss or other payment due either party is not received by the intermediary named in the Intermediary Article (hereinafter referred to as the "Intermediary") by the payment due date, the party to which 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 charge 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

2. 1/365th of the sum of 4.0% and the U.S. prime rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made; 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 charges have been received by the Intermediary.

Notwithstanding the provisions of subparagraph 2 above and the immediately preceding sentence, the interest rate for a Special Circumstance Reinsurer will increase by 1.0% for every month that payment of the claim is past due, subject to a maximum annual interest rate of 10.0%.

C. If the interest rate provided under this Article exceeds the maximum interest rate allowed by any applicable law or is held unenforceable by a court of competent jurisdiction, such interest rate shall be modified to the highest rate permitted by the applicable law, and all remaining provisions of this Article and Contract shall remain in full force and effect without being impaired or invalidated in any way.

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

1. As respects any routine payment, adjustment or return due either party, the due date shall be as provided for in the applicable section of this Contract.  In the event a due date is not specifically stated for a given payment, it shall be deemed due 30 days after the date of transmittal by the Intermediary of the initial billing for each such payment.

2. As respects any payment, adjustment or return due either party not otherwise provided for in subparagraph 1 of this paragraph, the due date shall be deemed due 30 days following transmittal of written notification that the provisions of this Article have been invoked.

For purposes of interest calculations only, amounts due hereunder shall be deemed paid upon receipt by the Intermediary.

E. Nothing herein shall be construed as limiting or prohibiting a Subscribing Reinsurer from contesting the validity of any claim, or from participating in the defense of any claim or suit, or prohibiting either party from contesting the validity of any payment or from initiating any arbitration or other proceeding in accordance with the provisions of this Contract.  If the debtor party prevails in an arbitration or other proceeding, then any interest charges due hereunder on the amount in dispute shall be null and void.  If the debtor party loses in such proceeding, then the interest charge on the amount determined to be due hereunder shall be calculated in accordance with the provisions set forth above unless otherwise determined by such proceedings.  If a debtor party advances payment of any amount it is contesting, and proves to be correct in its contestation, either in whole or in part, the other party shall reimburse the debtor party for any such excess payment made plus interest on the excess amount calculated in accordance with this Article.

F. Interest charges arising out of the application of this Article that are $250 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 18 - Offset

A.    The Company and the Reinsurer shall have the right to offset any balance or amounts due from one party to the other under the terms of this Contract or any other contracts between the parties.  The party asserting the right of offset may exercise such right any time.

B.    Notwithstanding the provisions of paragraph A above, a Special Circumstance Reinsurer shall not offset balances as outlined above without the prior consent of the Company.

Article 19 - Access to Records

A. Provided the Company has received at least 60 days prior notice, the Reinsurer or its designated representatives shall have access during regular business hours to all records of the Company which pertain in any way to this reinsurance. However:

1. A Special Circumstance Reinsurer shall not have any right of access to the records of the Company without the Company's prior consent; and

2. A Subscribing Reinsurer or its designated representatives shall not have any right of access to the records of the Company if it is not current in all undisputed payments due the Company.  "Undisputed" as used herein shall mean any amount that the Subscribing Reinsurer has not contested in writing to the Company specifying the reason(s) why the payments are disputed.

B. The provisions of this Article shall extend beyond the expiration or invalidation of this Contract, or the termination of a Subscribing Reinsurer's percentage share in this Contract, until all claims and losses hereunder are settled.

Article 20 - Errors, Omissions and Inadvertent Binding

A. Inadvertent delays, errors or omissions made in connection with this Contract or any transaction hereunder shall not relieve either party from any liability which would have attached had such delay, error or omission not occurred, provided always that such error or omission is rectified as soon as possible after discovery.

B. If the Company is bound, without the knowledge and contrary to the instructions of the Company's supervisory underwriting personnel, on any business falling outside the scope of this Contract, reinsurance shall apply to such business until 30 days after an underwriting supervisor of the Company acquires knowledge thereof or until the minimum amount of time required by the applicable statute or regulatory authority to cancel such a policy has elapsed, whichever is greater.

Article 21 - Currency (BRMA 12A)

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 22 - Taxes (BRMA 50B)

In consideration of the terms under which this Contract is issued, the Company will not claim a deduction in respect of the premium hereon when making tax returns, other than income or profits tax returns, to any state or territory of the United States of America or the District of Columbia.

Article 23 - Federal Excise Tax (BRMA 17D)

A. The Reinsurer has agreed to allow for the purpose of paying the Federal Excise Tax the applicable percentage of the premium payable hereon (as imposed under Section 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 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 24 - Foreign Account Tax Compliance Act

A. To the extent the Reinsurer is subject to the deduction and withholding of premium payable hereon as set forth in the Foreign Account Tax Compliance Act (Sections 1471-1474 of the Internal Revenue Code), the Reinsurer shall allow such deduction and withholding from the premium payable under this Contract.

B. In the event of any return of premium becoming due hereunder, the return premium will be determined and paid in full without regard to any amounts deducted or withheld under paragraph A of this Article.  In the event the Company or its agent recovers such premium deductions and withholdings on the return premium from the United States Government, the Company or its agent will reimburse the Reinsurer for such amounts.

Article 25 - Reserves

A. The Reinsurer agrees to fund its share of the Company's ceded unearned premium, outstanding loss and loss adjustment expense reserves (including incurred but not reported loss reserves as established by the Company), and any other outstanding balances which it shall be required by applicable regulation or law to set up under this Contract (the "funding obligation") by:

1. Clean, irrevocable and unconditional letters of credit issued and confirmed, if confirmation is required by the insurance regulatory authorities involved, by a bank or banks meeting the NAIC Securities Valuation Office credit standards for issuers of letters of credit and acceptable to said insurance regulatory authorities; and/or

2. Escrow accounts for the benefit of the Company;and/or

3. Cash advances;

if the Reinsurer:

1. Is unauthorized in any state of the United States of America or the District of Columbia and if, without such funding, a penalty would accrue to the Company on any financial statement it is required to file with the insurance regulatory authorities involved; or

2. Is a Special Circumstance Reinsurer.

The Reinsurer, at its sole option, may fund in other than cash if its method and form of funding are acceptable to the insurance regulatory authorities involved.

Notwithstanding the provisions of the Arbitration Article, if a Special Circumstance Reinsurer fails to fund its share of the funding obligation as set forth above, the Company retains its right to apply to a court of competent jurisdiction for equitable or interim relief.

B. With regard to funding in whole or in part by letters of credit, it is agreed that each letter of credit will be in a form acceptable to insurance regulatory authorities involved, will be issued for a term of at least one year and will include an "evergreen clause," which automatically extends the term for at least one additional year at each expiration date unless written notice of non-renewal is given to the Company not less than 30 days prior to said expiration date.  The Company and the Reinsurer further agree, notwithstanding anything to the contrary in this Contract, that said letters of credit may be drawn upon by the Company or its successors in interest at any time, without diminution because of the insolvency of the Company or the Reinsurer, but only for one or more of the following purposes:

1. To reimburse itself for the Reinsurer's share of unearned premiums returned to insureds on account of policy cancellations, unless paid in cash by the Reinsurer;

2. To reimburse itself for the Reinsurer's share of losses and/or loss adjustment expense paid under the terms of policies reinsured hereunder, unless paid in cash by the Reinsurer;

3. To reimburse itself for the Reinsurer's share of any other amounts claimed to be due hereunder, unless paid in cash by the Reinsurer;

4. To fund a cash account in an amount equal to the Reinsurer's funding obligation funded by means of a letter of credit which is under non-renewal notice, if said letter of credit has not been renewed or replaced by the Reinsurer 10 days prior to its expiration date;

5. To refund to the Reinsurer any sum in excess of the actual amount required to fund the Reinsurer's funding obligation, if so requested by the Reinsurer.

In the event the amount drawn by the Company on any letter of credit is in excess of the actual amount required for B(1), B(2) or B(4), or in the case of B(3), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.

C. If a Subscribing Reinsurer fails to fulfill its funding obligation (if any) under this Article, the Company may, at its option, require the Subscribing Reinsurer to pay, and the Subscribing Reinsurer agrees to pay, an interest charge on the funding obligation calculated on the last business day of each month as follows:

1. The number of full days that have expired since the earliest of the applicable following dates:

a. As respects a Subscribing Reinsurer that is unauthorized in any state of the United States of America or District of Columbia having jurisdiction over the Company, December 31 of the calendar year in which the funding was required; or

b. As respects a Special Circumstance Reinsurer, the first date such reinsurer becomes a Special Circumstance Reinsurer;

times:

2. 1/365th of the sum of 4.0% and the U.S. prime rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made; times

3. The greater of (a) the funding obligation, less the amount, if any, funded by the Subscribing Reinsurer prior to the applicable date determined in subparagraph 1 above or (b) $100,000.

It is agreed that interest shall accumulate until the full interest charge amount as provided for in this paragraph and the funding obligation are paid.

If the interest rate provided under this Article exceeds the maximum interest rate allowed by any applicable law or is held unenforceable by an arbitrator or a court of competent jurisdiction, such interest rate shall be modified to the highest rate permitted by the applicable law, and all remaining provisions of this Article and Contract shall remain in full force and effect without being impaired or invalidated in any way.

Article 26 - Insolvency

A. In the event of the insolvency of one or more of the reinsured companies, this reinsurance shall be payable directly to the company or to its liquidator, receiver, conservator or statutory successor on the basis of the liability of the company without diminution because of the insolvency of the company or because the liquidator, receiver, conservator or statutory successor of the company has failed to pay all or a portion of any claim.  It is agreed, however, that the liquidator, receiver, conservator or statutory successor of the company shall give written notice to the Reinsurer of the pendency of a claim against the company indicating the policy or bond reinsured which claim would involve a possible liability on the part of the Reinsurer within a reasonable time after such claim is filed in the conservation or liquidation proceeding or in the receivership, and that during the pendency of such claim, the Reinsurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated, any defense or defenses that it may deem available to the company or its liquidator, receiver, conservator or statutory successor.  The expense thus incurred by the Reinsurer shall be chargeable, subject to the approval of the Court, against the company as part of the expense of conservation or liquidation to the extent of a pro rata share of the benefit which may accrue to the company solely as a result of the defense undertaken by the Reinsurer.

B. Where two or more reinsurers are involved in the same claim and a majority in interest elect to interpose defense to such claim, the expense shall be apportioned in accordance with the terms of this Contract as though such expense had been incurred by the company.

C. It is further understood and agreed that, in the event of the insolvency of one or more of the reinsured companies, the reinsurance under this Contract shall be payable directly by the Reinsurer to the company or to its liquidator, receiver or statutory successor, except as provided by Section 4118(a) of the New York Insurance Law or except (1) 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 payees under such policies and in substitution for the obligations of the company to such payees.

Article 27 - Arbitration

A. As a condition precedent to any right of action hereunder, in the event of any dispute or difference of opinion hereafter arising with respect to this Contract, it is hereby mutually agreed that such dispute or difference of opinion shall be submitted to arbitration.  One Arbiter shall be chosen by the Company, the other by the Reinsurer, and an Umpire shall be chosen by the two Arbiters before they enter upon arbitration, all of whom shall be active or retired disinterested executive officers of insurance or reinsurance companies or Lloyd's London Underwriters.  In the event that either party should fail to choose an Arbiter within 30 days following a written request by the other party to do so, the requesting party may choose two Arbiters who shall in turn choose an Umpire before entering upon arbitration.  If the two Arbiters fail to agree upon the selection of an Umpire within 30 days following their appointment, each Arbiter shall nominate three candidates within 10 days thereafter, two of whom the other shall decline, and the decision shall be made by drawing lots.  Notwithstanding the above, in the event the dispute or difference of opinion involves a Special Circumstance Reinsurer, the Company may, at its option, choose to forego arbitration and may bring an action in any court of competent jurisdiction.

B. Each party shall present its case to the Arbiters within 30 days following the date of appointment of the Umpire.  The Arbiters shall consider this Contract as an honorable engagement rather than merely as a legal obligation and they are relieved of all judicial formalities and may abstain from following the strict rules of law.  The decision of the Arbiters shall be final and binding on both parties; but failing to agree, they shall call in the Umpire and the decision of the majority shall be final and binding upon both parties.  Judgment upon the final decision of the Arbiters may be entered in any court of competent jurisdiction and the Arbiters are empowered to grant interim relief as they may deem appropriate.

C. If more than one reinsurer is involved in the same dispute, all such reinsurers shall, at the option of the Company, constitute and act as one party for purposes of this Article and communications shall be made by the Company to each of the reinsurers constituting one party, provided, however, that nothing herein shall impair the rights of such reinsurers to assert several, rather than joint, defenses or claims, nor be construed as changing the liability of the reinsurers participating under the terms of this Contract from several to joint.

D. Each party shall bear the expense of its own Arbiter, and shall jointly and equally bear with the other the expense of the Umpire and of the arbitration.  In the event that the two Arbiters are chosen by one party, as above provided, the expense of the Arbiters, the Umpire and the arbitration shall be equally divided between the two parties.

E. Any arbitration proceedings shall take place in Irving, Texas, or at a location mutually agreed upon by the parties to this Contract, but notwithstanding the location of the arbitration, all proceedings pursuant hereto shall be governed by the law of the State of Texas.

Article 28 - Service of Suit (BRMA 49G)

(Applicable if the Reinsurer is not domiciled in the United States of America, and/or is not authorized in any State, Territory or District of the United States where authorization is required by insurance regulatory authorities)

A. This Article will not be read to conflict with or override the obligations of the parties to arbitrate their disputes as provided for in the Arbitration Article.  This Article is intended as an aid to compelling arbitration or enforcing such arbitration or arbitral award, not as an alternative to the Arbitration Article for resolving disputes arising out of this Contract.

B. In the event the Reinsurer fails to pay any amount claimed to be due hereunder, the Reinsurer, at the request of the Company, will submit to the jurisdiction of a court of competent jurisdiction within the United States.  Nothing in this Article constitutes or should be understood to constitute a waiver of the Reinsurer'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 Reinsurer, once the appropriate Court is accepted by the Reinsurer or is determined by removal, transfer or otherwise, as provided for above, will comply with all requirements necessary to give said Court jurisdiction and, in any suit instituted against any of the Subscribing Reinsurers upon this Contract, will abide by the final decision of such Court or of any Appellate Court in the event of an appeal.

C. Further, pursuant to any statute of any state, territory or district of the United States which makes provision therefor, the Reinsurer hereby designates the party named in its Interests and Liabilities Agreement, or if no party is named therein, the Superintendent, Commissioner or Director of Insurance or other officer specified for that purpose in the statute, or his or her successor or successors in office, as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Company or any beneficiary hereunder arising out of this Contract.

Article 29 - Confidentiality

A. The Reinsurer hereby acknowledges that the documents, information and data provided to it 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.  Confidential Information shall not include documents, information or data that the Reinsurer can show:

1. Are publicly known or have become publicly known through no unauthorized act of the Reinsurer;

2. Have been rightfully received from a third person without obligation of confidentiality; or

3. Were known by the Reinsurer prior to the placement of this Contract without an obligation of confidentiality.

B. Absent the written consent of the Company, the Reinsurer shall not disclose any Confidential Information to any third parties, including any affiliated companies, except:

1. When required by retrocessionaires subject to the business ceded to this Contract;

2. When required by state regulators performing an audit of the Reinsurer's records and/or financial condition;

3. When required by external auditors performing an audit of the Reinsurer's records in the normal course of business; or

4. When required by attorneys or arbitrators in connection with an actual or potential dispute hereunder.

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

C. 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 with written notice of same at least 10 days prior to such release or disclosure and to use its best efforts to assist the Company in maintaining the confidentiality provided for in this Article.

D. The provisions of this Article shall extend to the officers, directors and employees of the Reinsurer and its affiliates, and shall be binding upon their successors and assigns.

Article 30 - Agency Agreement

If more than one reinsured company is named as a party to this Contract, the first named company shall be deemed the agent of the other reinsured companies for purposes of sending or receiving notices required by the terms and conditions of this Contract, and for purposes of remitting or receiving any monies due any party.

Article 31 - Governing Law (BRMA 71B)

This Contract shall be governed by and construed in accordance with the laws of the State of Texas.

Article 32 - Severability (BRMA 72E)

If any provision of this Contract shall be rendered illegal or unenforceable by the laws, regulations or public policy of any state, such provision shall be considered void in such state, but this shall not affect the validity or enforceability of any other provision of this Contract or the enforceability of such provision in any other jurisdiction.

Article 33 - Entire Agreement

This written Contract constitutes the entire agreement between the parties hereto with respect to the business being reinsured hereunder, and there are no understandings between the parties hereto other than as expressed in this Contract.  Any change or modification to this Contract will be made by amendment to this Contract and signed by the parties hereto.

Article 34 - Notices and Contract Execution

A. Whenever a notice, statement, report or any other written communication is required by this Contract, unless otherwise specified, such notice, statement, report or other written communication may be transmitted by certified or registered mail, nationally or internationally recognized express delivery service, personal delivery, electronic mail, or facsimile.  With the exception of notices of termination, first class mail is also acceptable.

B. The use of any of the following shall constitute a valid execution of this Contract or any amendments thereto:

1. Paper documents with an original ink signature;

2. Facsimile or electronic copies of paper documents showing an original ink signature; and/or

3. Electronic records with an electronic signature made via an electronic agent.  For the purposes of this Contract, the terms "electronic record," "electronic signature" and "electronic agent" shall have the meanings set forth in the Electronic Signatures in Global and National Commerce Act of 2000 or any amendments thereto.

C. This Contract may be executed in one or more counterparts, each of which, when duly executed, shall be deemed an original.

Article 35 - Intermediary

Aon Benfield Inc., or one of its affiliated corporations duly licensed as a reinsurance intermediary, is hereby recognized as the Intermediary negotiating this Contract for all business hereunder.  All communications (including but not limited to notices, statements, premiums, return premiums, commissions, taxes, losses, loss adjustment expense, salvages and loss settlements) relating to this Contract will be transmitted to the Company or the Reinsurer through the Intermediary.  Payments by the Company to the Intermediary will be deemed payment to the Reinsurer.  Payments by the Reinsurer to the Intermediary will be deemed 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:

This ________________ day of ____________________________ in the year ____________.

Homeowners of America Insurance Company (for and on behalf of the "Company")

___________________________________________________________

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance (U.S.A.)

1. This Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly and whether as Insurer or Reinsurer, from any Pool of Insurers or Reinsurers formed for the purpose of covering Atomic or Nuclear Energy risks.

2. Without in any way restricting the operation of paragraph (1) of this Clause, this Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly and whether as Insurer or Reinsurer, from any insurance against Physical Damage (including business interruption or consequential loss arising out of such Physical Damage) to:

I. Nuclear reactor power plants including all auxiliary property on the site, or

II. Any other nuclear reactor installation, including laboratories handling radioactive materials in connection with reactor installations, and "critical facilities" as such, or

III. Installations for fabricating complete fuel elements or for processing substantial quantities of "special nuclear material," and for reprocessing, salvaging, chemically separating, storing or disposing of "spent" nuclear fuel or waste materials, or

IV. Installations other than those listed in paragraph (2) III above using substantial quantities of radioactive isotopes or other products of nuclear fission.

3. Without in any way restricting the operations of paragraphs (1) and (2) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any insurance on property which is on the same site as a nuclear reactor power plant or other nuclear installation and which normally would be insured therewith except that this paragraph (3) shall not operate

(a) where Reassured does not have knowledge of such nuclear reactor power plant or nuclear installation, or

(b) where said insurance contains a provision excluding coverage for damage to property caused by or resulting from radioactive contamination, however caused.  However on and after 1st January 1960 this sub-paragraph (b) shall only apply provided the said radioactive contamination exclusion provision has been approved by the Governmental Authority having jurisdiction thereof.

4. Without in any way restricting the operations of paragraphs (1), (2) and (3) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, when such radioactive contamination is a named hazard specifically insured against.

5. It is understood and agreed that this Clause shall not extend to risks using radioactive isotopes in any form where the nuclear exposure is not considered by the Reassured to be the primary hazard.

6. The term "special nuclear material" shall have the meaning given it in the Atomic Energy Act of 1954 or by any law amendatory thereof.

7. Reassured to be sole judge of what constitutes:

(a) substantial quantities, and

(b) the extent of installation, plant or site.

Note.-Without in any way restricting the operation of paragraph (1) hereof, it is understood and agreed that

(a) all policies issued by the Reassured on or before 31st December 1957 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

(b) with respect to any risk located in Canada policies issued by the Reassured on or before 31st December 1958 shall be free from the application of the other provisions of this Clause until expiry date or 31st December 1960 whichever first occurs whereupon all the provisions of this Clause shall apply.

12/12/57

N.M.A. 1119

BRMA 35B

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Nuclear Incident Exclusion Clause - Liability - Reinsurance (U.S.A.)

(Approved by Lloyd's Underwriters' Fire and Non-Marine Association)

(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.

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.

(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 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.

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Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

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

(c) the

(injury, sickness, disease, death or destruction

(bodily injury or property damage

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 or 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

15\H00H1006  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Pollution and Seepage Exclusion Clause

This Contract excludes loss and/or damage and/or costs and/or expenses arising from seepage and/or pollution and/or contamination, other than contamination from smoke.  Nevertheless, this exclusion does not preclude payment of the cost of removing debris of property damaged by a loss otherwise covered hereunder, subject always to a limit of 25.0% of the Company's property loss under the applicable original policy.

BRMA 39A

15\H00H1006  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Terrorism Exclusion

(Property Treaty Reinsurance)

Notwithstanding any provision to the contrary within this Contract or any amendment thereto, it is agreed that this Contract excludes loss, damage, cost or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any act of terrorism, as defined herein, regardless of any other cause or event contributing concurrently or in any other sequence to the loss.

An act of terrorism includes any act, or preparation in respect of action, or threat of action designed to influence the government de jure or de facto of any nation or any political division thereof, or in pursuit of political, religious, ideological or similar purposes to intimidate the public or a section of the public of any nation by any person or group(s) of persons whether acting alone or on behalf of or in connection with any organization(s) or government(s) de jure or de facto, and which:

1. Involves violence against one or more persons; or

2. Involves damage to property; or

3. Endangers life other than that of the person committing the action; or

4. Creates a risk to health or safety of the public or a section of the public; or

5. Is designed to interfere with or to disrupt an electronic system.

This Contract also excludes loss, damage, cost, or expense directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with any action in controlling, preventing, suppressing, retaliating against, or responding to any act of terrorism.

Notwithstanding the above and subject otherwise to the terms, conditions, and limitations of this Contract, in respect only of personal lines this Contract will pay actual loss or damage (but not related cost or expense) caused by any act of terrorism provided such act is not directly or indirectly caused by, contributed to by, resulting from, or arising out of or in connection with biological, chemical, radioactive or nuclear pollution or contamination or explosion.

N.M.A. 2930c

22/11/02

Form approved by Lloyd's Market Association [Non-Marine]

15\H00H1006  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Interests and Liabilities Agreement

attached to and forming part of the

Residential Quota Share Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

including any and/or all companies that are or may hereafter become affiliated therewith

and

Catlin Re Switzerland Ltd. (Bermuda Branch)Zurich, Switzerland

(hereinafter referred to as the "Subscribing Reinsurer")

The Subscribing Reinsurer hereby accepts a 5.0% share in the interests and liabilities of the "Reinsurer" as set forth in the attached Contract captioned above.

This Agreement shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until terminated in accordance with the provisions of the attached Contract.

The Subscribing Reinsurer's share in the attached Contract shall be separate and apart from the shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it being understood that the Subscribing Reinsurer shall in no event participate in the interests and liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed this Agreement as of the date specified below:

This ________________ day of ___________________________ in the year ____________.

Catlin Re Switzerland Ltd. (Bermuda Branch)

_______________________________________________________

15\H00H1006\11QD  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Interests and Liabilities Agreement

attached to and forming part of the

Residential Quota Share Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

including any and/or all companies that are or may hereafter become affiliated therewith

and

Everest Reinsurance CompanyA Delaware Corporation

(hereinafter referred to as the "Subscribing Reinsurer")

The Subscribing Reinsurer hereby accepts a 15.0% share in the interests and liabilities of the "Reinsurer" as set forth in the attached Contract captioned above.

This Agreement shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until terminated in accordance with the provisions of the attached Contract.

The Subscribing Reinsurer's share in the attached Contract shall be separate and apart from the shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it being understood that the Subscribing Reinsurer shall in no event participate in the interests and liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed this Agreement as of the date specified below:

This ________________ day of ___________________________ in the year ____________.

Everest Reinsurance Company

_______________________________________________________

15\H00H1006\03R  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Interests and Liabilities Agreement

attached to and forming part of the

Residential Quota Share Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

including any and/or all companies that are or may hereafter become affiliated therewith

and

Odyssey Reinsurance CompanyStamford, Connecticut

(hereinafter referred to as the "Subscribing Reinsurer")

The Subscribing Reinsurer hereby accepts a 2.5% share in the interests and liabilities of the "Reinsurer" as set forth in the attached Contract captioned above.

This Agreement shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until terminated in accordance with the provisions of the attached Contract.

The Subscribing Reinsurer's share in the attached Contract shall be separate and apart from the shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it being understood that the Subscribing Reinsurer shall in no event participate in the interests and liabilities of the other reinsurers.

As respects the Subscribing Reinsurer's share in the attached Contract, in lieu of the provisions of paragraph F of Article 14 - Sliding Scale Commission - the following shall apply:

"F. 'Losses incurred' as used herein shall mean ceded losses and loss adjustment expense paid as of the effective date of calculation, plus the ceded reserves for losses and loss adjustment expense outstanding as of the same date, all as respects losses occurring during the contract year under consideration, minus the credit from the preceding contract year.

As respects the first contract year hereunder, for any Subscribing Reinsurer participating under this Contract that also participated under the Company's Residential Quota Share Reinsurance Contract, effective 12:01 a.m., Central Standard Time, April 1, 2014 (the 'expired contract'), 'losses incurred' as used herein shall not include the Subscribing Reinsurer's share of any debit or credit under the expired contract."

15\H00H1006\1FL Page 1 of 2  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

In Witness Whereof, the parties hereto by their respective duly authorized representatives have executed this Agreement as of the dates specified below:

This ________________ day of ___________________________ in the year ____________.

Homeowners of America Insurance Company (for and on behalf of the "Company")

_______________________________________________________

This ________________ day of ___________________________ in the year ____________.

Odyssey Reinsurance Company

_______________________________________________________

15\H00H1006\1FL Page 2 of 2  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Interests and Liabilities Agreement

attached to and forming part of the

Residential Quota Share Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

including any and/or all companies that are or may hereafter become affiliated therewith

and

SCOR Reinsurance CompanyNew York, New York

(hereinafter referred to as the "Subscribing Reinsurer")

The Subscribing Reinsurer hereby accepts a 10.0% share in the interests and liabilities of the "Reinsurer" as set forth in the attached Contract captioned above.

This Agreement shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until terminated in accordance with the provisions of the attached Contract.

The Subscribing Reinsurer's share in the attached Contract shall be separate and apart from the shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it being understood that the Subscribing Reinsurer shall in no event participate in the interests and liabilities of the other reinsurers.

The provisions of Article 28 - Service of Suit (BRMA 49G) - in the attached Contract shall apply to the Subscribing Reinsurer, except that service of process shall be made upon General Counsel, SCOR Reinsurance Company, 199 Water Street, New York, NY  10038, and, where required by law, shall additionally be made upon the Superintendent, Commissioner, or Director of Insurance in the state of the Company's domicile.

15\H00H1006\045  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

In Witness Whereof, the parties hereto by their respective duly authorized representatives have executed this Agreement as of the dates specified below:

This ________________ day of ___________________________ in the year ____________.

Homeowners of America Insurance Company (for and on behalf of the "Company")

_______________________________________________________

This ________________ day of ___________________________ in the year ____________.

SCOR Reinsurance Company

_______________________________________________________

15\H00H1006\045  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Interests and Liabilities Agreement

attached to and forming part of the

Residential Quota Share Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

including any and/or all companies that are or may hereafter become affiliated therewith

and

Taiping Reinsurance Co. Ltd.Hong Kong

(hereinafter referred to as the "Subscribing Reinsurer")

The Subscribing Reinsurer hereby accepts a 2.5% share in the interests and liabilities of the "Reinsurer" as set forth in the attached Contract captioned above.

This Agreement shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until terminated in accordance with the provisions of the attached Contract.

The Subscribing Reinsurer's share in the attached Contract shall be separate and apart from the shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it being understood that the Subscribing Reinsurer shall in no event participate in the interests and liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed this Agreement as of the date specified below:

This ________________ day of ___________________________ in the year ____________.

Taiping Reinsurance Co. Ltd.

_______________________________________________________

15\H00H1006\33R  

EX-10.43

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Exhibit 10.43

Reinstatement Premium Protection

Reinsurance Contract

Effective:  April 1, 2015

Homeowners of America Insurance Company

Irving, Texas

15\H00H1048  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Reinstatement Premium Protection Reinsurance Contract

Effective:  April 1, 2015

Homeowners of America Insurance Company

Irving, Texas

Reinsurer(s)	Participation(s)
Everest Reinsurance Company	100.0%
Total	100.0%

15\H00H1048  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Table of Contents

Article		Page
	Preamble	1
1	Coverage	1
2	Commencement and Termination	2
3	Concurrency of Conditions	3
4	Premium	4
5	Loss Notices and Settlements	4
6	Sanctions	4
7	Late Payments	5
8	Offset (BRMA 36C)	6
9	Access to Records	6
10	Errors and Omissions	7
11	Currency (BRMA 12A)	7
12	Taxes (BRMA 50B)	7
13	Federal Excise Tax (BRMA 17D)	7
14	Foreign Account Tax Compliance Act	7
15	Reserves	8
16	Insolvency	10
17	Arbitration	10
18	Service of Suit (BRMA 49G)	11
19	Confidentiality	12
20	Agency Agreement	13
21	Governing Law (BRMA 71B)	13
22	Severability (BRMA 72E)	13
23	Entire Agreement	13
24	Notices and Contract Execution	13
25	Intermediary	14
	Schedule A

15\H00H1048  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Reinstatement Premium Protection

Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

and

The Subscribing Reinsurer(s) Executing the

Interests and Liabilities Agreement(s)

Attached Hereto

(hereinafter referred to as the "Reinsurer")

Preamble

Whenever the word "Company" is used in this Contract, such term shall be held to include any or all of the affiliated insurance companies of Homeowners of America Insurance Company, which are or may hereafter be under common control, provided that notice be given to the Reinsurer of any such newly affiliated insurance companies which may hereafter come under common control as soon as practicable with full particulars as to how such affiliation is likely to affect this Contract.  In the event of either party maintaining that such affiliation calls for alteration in existing terms, and an agreement for alteration not being arrived at, then the business of such newly affiliated insurance company is covered at existing terms only for a period of 45 days after notice by either party that it does not wish to cover such business.

Article 1 - Coverage

A. By this Contract the Reinsurer agrees to indemnify the Company for 100% of any net reinstatement premium calculated under each excess layer of the Company's Two-Year Property Catastrophe Excess of Loss Reinsurance Contract, effective April 1, 2015 (hereinafter referred to as the "Original Contract" and described in Schedule A attached to and forming part of this Contract) as a result of loss occurrences commencing during any contract year of this Contract, subject to the terms, conditions and limitations set forth herein.

B. For purposes of the coverage provided under this Contract, each excess layer of the Original Contract shall be deemed to be placed at the following percentages:

1. First Excess Layer:  10.0%;

2. Second Excess Layer:  50.0%;

3. Third Excess Layer:  50.0%.

Article 2 - Commencement and Termination

A. This Contract shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, with respect to reinstatement premium calculated under the provisions of the Original Contract as a result of losses arising out of loss occurrences commencing at or after that time and date, and shall remain in force until 12:01 a.m., Central Standard Time, April 1, 2017.

B. Notwithstanding the provisions of paragraph A above, the Company may terminate a Subscribing Reinsurer's percentage share in this Contract in the event any of the following circumstances occur as clarified by public announcement or upon discovery:

1. The Subscribing Reinsurer's policyholders' surplus (or its equivalent under the Subscribing Reinsurer's accounting system) after the earlier of:  (a) the inception of this Contract, or (b) the date lines are bound for this Contract, has been reduced by more than 20.0% of the amount of surplus (or the applicable equivalent) 12 months prior to that date; or

2. The Subscribing Reinsurer's policyholders' surplus (or its equivalent under the Subscribing Reinsurer's accounting system) at any time between the earlier of:  (a) the inception of this Contract, or (b) the date lines are bound for this Contract, and the date of termination of this Contract has been reduced by more than 20.0% of the amount of surplus (or the applicable equivalent) at the date of the Subscribing Reinsurer's most recent financial statement filed with regulatory authorities and available to the public as of the date lines are bound; or

3. A State Insurance Department or other legal authority has ordered the Subscribing Reinsurer to cease assuming business; or

4. The Subscribing Reinsurer has become insolvent or has been placed into liquidation, receivership, supervision, administration, winding-up or under a scheme of arrangement, or similar proceedings (whether voluntary or involuntary) or proceedings have been instituted against the Subscribing Reinsurer for the appointment of a receiver, liquidator, rehabilitator, supervisor, administrator, conservator or trustee in bankruptcy, or other agent known by whatever name, to take possession of its assets or control of its operations; or

5. The Subscribing Reinsurer has reinsured its entire liability under this Contract without the Company's prior written consent; or

6. The A.M. Best's rating for the Subscribing Reinsurer has been assigned or downgraded below A- (inclusive of "Not Rated" ratings), or the published rating issued by Standard & Poor's has been downgraded below BBB+ (inclusive of "Not Rated" ratings); or

7. The Subscribing Reinsurer has become merged with, acquired by or controlled by any other entity or individual(s) not controlling the Subscribing Reinsurer's operations previously; or

8. The Subscribing Reinsurer has ceased assuming new or renewal property or casualty treaty reinsurance business.

C. In the event a Subscribing Reinsurer experiences one or more of the circumstances specified in paragraph B above, the Subscribing Reinsurer shall notify the Company as promptly as possible and shall hereinafter be referred to as a "Special Circumstance Reinsurer."  To terminate a Special Circumstance Reinsurer's percentage share in this Contract, the Company must provide the Special Circumstance Reinsurer with written notice as set forth in the Notices and Contract Execution Article.  Such notice shall include the effective date of termination as selected by the Company and shall be one of the following:

1. The date of written notice provided by the Special Circumstance Reinsurer; or

2. The last day of the month prior to the date of written notice provided by the Special Circumstance Reinsurer; or

3. The last day of any month after the date of written notice provided by the Special Circumstance Reinsurer; or

4. The date of the Company's written notice to the Special Circumstance Reinsurer advising of the termination.

In the event the Subscribing Reinsurer fails to immediately provide written notice to the Company of any event outlined in subparagraphs 1 through 8 of paragraph B above, the Company may elect to substitute the date of public announcement or discovery as the equivalent of written notice.

D. If any Subscribing Reinsurer's percentage share in this Contract is terminated or 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 termination or expiration of this Contract, provided that no part of such loss occurrence is claimed against any renewal or replacement of this Contract.

E. "Contract year" as used herein shall mean the period from 12:01 a.m., Central Standard Time, April 1, 2015, to 12:01 a.m., Central Standard Time, April 1, 2016, and each respective 12‑month period thereafter that this Contract continues in force shall be a separate contract year.  However, if this Contract or the participation of a Subscribing Reinsurer is terminated, the final contract year shall be from the beginning of the current contract year until the effective time and date of termination.

Article 3 - Concurrency of Conditions

A. It is agreed that this Contract will follow the terms, conditions, exclusions, definitions, warranties and settlements of the Company under the Original Contract, which are not inconsistent with the provisions of this Contract.

B. The Company shall advise the Reinsurer of any material changes in the Original Contract which may affect the liability of the Reinsurer under this Contract.

Article 4 - Premium

A. As premium for the reinsurance coverage provided hereunder during each contract year, the Company shall pay the Reinsurer [****] of the Company's net earned premium (as defined in the Original Contract) for the contract year, subject to a minimum premium of [****] for each contract year.

B. The Company shall pay the Reinsurer an annual deposit premium of [****] for each contract year in four equal installments of [****], on April 1, July 1, October 1 and January 1 of each contract year.

C. Within 45 days after the expiration of each contract year, the Company shall provide a report to the Reinsurer setting forth the premium due hereunder, computed in accordance with paragraph A above, and any additional premium due the Reinsurer or return premium due the Company shall be remitted promptly.

D. In the event a Subscribing Reinsurer's participation in this Contract is terminated under the provisions of paragraph C of the Commencement and Termination Article, no deposit premium shall be due after the effective date of termination, the minimum premium shall be waived, and the reinsurance premium for the contract year shall be calculated as the number of days the Subscribing Reinsurer participates on this Contract for the contract year divided by the number of days of the original contract year of this Contract and the quotient thereof shall be multiplied by the Subscribing Reinsurer's percentage share of the final adjusted premium for the contract year reported in accordance with paragraph C above.

Article 5 - Loss Notices and Settlements

A. The Company shall notify the Reinsurer of all settlements made by the Company arising from loss occurrences subject to the Original Contract.  The Company will advise the Reinsurer of all subsequent developments relating to such claims that, in the opinion of the Company, may materially affect the position of the Reinsurer.

B. All reinstatement premium calculations made by the Company under the Original Contract, provided they are based on the terms of the Original Contract and are within the terms of this Contract, shall be binding upon the Reinsurer, and the Reinsurer agrees to pay all amounts for which it may be liable as promptly as possible upon receipt of reasonable evidence of the amount paid (or scheduled to be paid) by the Company for loss occurrences covered under the Original Contract.

Article 6 - Sanctions

Neither the Company nor any Subscribing Reinsurer shall be liable for premium or loss under this Contract if it would result in a violation of any mandatory sanction, prohibition or restriction under United Nations resolutions or the trade or economic sanctions, laws or regulations of the European Union, United Kingdom or United States of America that are applicable to either party.

Article 7 - Late Payments

A. The provisions of this Article shall not be implemented unless specifically invoked, in writing, by one of the parties to this Contract.

B. In the event any premium, loss or other payment due either party is not received by the intermediary named in the Intermediary Article (hereinafter referred to as the "Intermediary") by the payment due date, the party to which 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 charge 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

2. 1/365th of the sum of 4.0% and the U.S. prime rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made; 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 charges have been received by the Intermediary.

Notwithstanding the provisions of subparagraph 2 above and the immediately preceding sentence, the interest rate for a Special Circumstance Reinsurer will increase by 1.0% for every month that payment of the claim is past due, subject to a maximum annual interest rate of 10.0%.

C. If the interest rate provided under this Article exceeds the maximum interest rate allowed by any applicable law or is held unenforceable by a court of competent jurisdiction, such interest rate shall be modified to the highest rate permitted by the applicable law, and all remaining provisions of this Article and Contract shall remain in full force and effect without being impaired or invalidated in any way.

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

1. As respects the payment of routine deposits and premiums due the Reinsurer, the due date shall be as provided for in the applicable section of this Contract.  In the event a due date is not specifically stated for a given payment, it shall be deemed due 30 days after the date of transmittal by the Intermediary of the initial billing for each such payment.

2. Any claim or loss payment due the Company hereunder shall be deemed due 30 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 30 days, interest will accrue on the payment or amount overdue in accordance with paragraph B above, from the date the proof of loss or demand for payment was transmitted to the Reinsurer.

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.  In the event a due date is not specifically stated for a given payment, it shall be deemed due 30 days following transmittal of written notification that the provisions of this Article have been invoked.

For purposes of interest calculations only, amounts due hereunder shall be deemed paid upon receipt by the Intermediary.

E. Nothing herein shall be construed as limiting or prohibiting a Subscribing Reinsurer from contesting the validity of any claim, or from participating in the defense of any claim or suit, or prohibiting either party from contesting the validity of any payment or from initiating any arbitration or other proceeding in accordance with the provisions of this Contract.  If the debtor party prevails in an arbitration or other proceeding, then any interest charges due hereunder on the amount in dispute shall be null and void.  If the debtor party loses in such proceeding, then the interest charge on the amount determined to be due hereunder shall be calculated in accordance with the provisions set forth above unless otherwise determined by such proceedings.  If a debtor party advances payment of any amount it is contesting, and proves to be correct in its contestation, either in whole or in part, the other party shall reimburse the debtor party for any such excess payment made plus interest on the excess amount calculated in accordance with this Article.

F. Interest charges arising out of the application of this Article that are $250 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 8 - Offset (BRMA 36C)

The Company and the Reinsurer shall have the right to offset any balance or amounts due from one party to the other under the terms of this Contract.  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.

Article 9 - Access to Records

A. Provided the Company has received at least 60 days prior notice, the Reinsurer or its designated representatives shall have access during regular business hours to all records of the Company which pertain in any way to this reinsurance.  However:

1. A Special Circumstance Reinsurer shall not have any right of access to the records of the Company without the Company's prior consent; and

2. A Subscribing Reinsurer or its designated representatives shall not have any right of access to the records of the Company if it is not current in all undisputed payments due the Company.  "Undisputed" as used herein shall mean any amount that the Subscribing Reinsurer has not contested in writing to the Company specifying the reason(s) why the payments are disputed.

B. The provisions of this Article shall extend beyond the expiration or invalidation of this Contract, or the termination of a Subscribing Reinsurer's percentage share in this Contract, until all claims and losses hereunder are settled.

Article 10 - Errors and Omissions

Inadvertent delays, errors or omissions made in complying with this Contract or any transaction hereunder shall not relieve either party from any liability which would have attached had such delay, error or omission not occurred, provided always that such error or omission is rectified as soon as possible after discovery.

Article 11 - Currency (BRMA 12A)

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 12 - Taxes (BRMA 50B)

In consideration of the terms under which this Contract is issued, the Company will not claim a deduction in respect of the premium hereon when making tax returns, other than income or profits tax returns, to any state or territory of the United States of America or the District of Columbia.

Article 13 - Federal Excise Tax (BRMA 17D)

A. The Reinsurer has agreed to allow for the purpose of paying the Federal Excise Tax the applicable percentage of the premium payable hereon (as imposed under Section 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 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 14 - Foreign Account Tax Compliance Act

A. To the extent the Reinsurer is subject to the deduction and withholding of premium payable hereon as set forth in the Foreign Account Tax Compliance Act (Sections 1471-1474 of the Internal Revenue Code), the Reinsurer shall allow such deduction and withholding from the premium payable under this Contract.

B. In the event of any return of premium becoming due hereunder, the return premium will be determined and paid in full without regard to any amounts deducted or withheld under paragraph A of this Article.  In the event the Company or its agent recovers such premium deductions and withholdings on the return premium from the United States Government, the Company or its agent will reimburse the Reinsurer for such amounts.

Article 15 - Reserves

A. The Reinsurer agrees to fund its share of the Company's ceded outstanding loss reserves (being the sum of all reinstatement premiums calculated by the Company under the Original Contract but not yet recovered from the Reinsurer, plus the Company's reserves for reinstatement premiums calculated under the Original Contract, if any), and any other outstanding balances which it shall be required by applicable regulation or law to set up under this Contract (the "funding obligation") by:

1. Clean, irrevocable and unconditional letters of credit issued and confirmed, if confirmation is required by the insurance regulatory authorities involved, by a bank or banks meeting the NAIC Securities Valuation Office credit standards for issuers of letters of credit and acceptable to said insurance regulatory authorities; and/or

2. Escrow accounts for the benefit of the Company; and/or

3. Cash advances;

if the Reinsurer:

1. Is unauthorized in any state of the United States of America or the District of Columbia and if, without such funding, a penalty would accrue to the Company on any financial statement it is required to file with the insurance regulatory authorities involved; or

2. Is a Special Circumstance Reinsurer.

The Reinsurer, at its sole option, may fund in other than cash if its method and form of funding are acceptable to the insurance regulatory authorities involved.

Notwithstanding the provisions of the Arbitration Article, if a Special Circumstance Reinsurer fails to fund its share of the funding obligation as set forth above, the Company retains its right to apply to a court of competent jurisdiction for equitable or interim relief.

B. With regard to funding in whole or in part by letters of credit, it is agreed that each letter of credit will be in a form acceptable to insurance regulatory authorities involved, will be issued for a term of at least one year and will include an "evergreen clause," which automatically extends the term for at least one additional year at each expiration date unless written notice of non-renewal is given to the Company not less than 30 days prior to said expiration date.  The Company and the Reinsurer further agree, notwithstanding anything to the contrary in this Contract, that said letters of credit may be drawn upon by the Company or its successors in interest at any time, without diminution because of the insolvency of the Company or the Reinsurer, but only for one or more of the following purposes:

1. To reimburse itself for the Reinsurer's share of reinstatement premiums calculated by the Company under the terms of the Original Contract, unless paid in cash by the Reinsurer;

2. To reimburse itself for the Reinsurer's share of any other amounts claimed to be due hereunder, unless paid in cash by the Reinsurer;

3. To fund a cash account in an amount equal to the Reinsurer's funding obligation funded by means of a letter of credit which is under non-renewal notice, if said letter of credit has not been renewed or replaced by the Reinsurer 10 days prior to its expiration date;

4. To refund to the Reinsurer any sum in excess of the actual amount required to fund the Reinsurer's funding obligation, if so requested by the Reinsurer.

In the event the amount drawn by the Company on any letter of credit is in excess of the actual amount required for B(1) or B(3), or in the case of B(2), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.

C. If a Subscribing Reinsurer fails to fulfill its funding obligation (if any) under this Article, the Company may, at its option, require the Subscribing Reinsurer to pay, and the Subscribing Reinsurer agrees to pay, an interest charge on the funding obligation calculated on the last business day of each month as follows:

1. The number of full days that have expired since the earliest of the applicable following dates:

a. As respects a Subscribing Reinsurer that is unauthorized in any state of the United States of America or District of Columbia having jurisdiction over the Company, December 31 of the calendar year in which the funding was required; or

b. As respects a Special Circumstance Reinsurer, the first date such reinsurer becomes a Special Circumstance Reinsurer;

times:

2. 1/365th of the sum of 4.0% and the U.S. prime rate as quoted in The Wall Street Journal on the first business day of the month for which the calculation is made; times

3. The greater of (a) the funding obligation, less the amount, if any, funded by the Subscribing Reinsurer prior to the applicable date determined in subparagraph 1 above or (b) $100,000.

It is agreed that interest shall accumulate until the full interest charge amount as provided for in this paragraph and the funding obligation are paid.

If the interest rate provided under this Article exceeds the maximum interest rate allowed by any applicable law or is held unenforceable by an arbitrator or a court of competent jurisdiction, such interest rate shall be modified to the highest rate permitted by the applicable law, and all remaining provisions of this Article and Contract shall remain in full force and effect without being impaired or invalidated in any way.

Article 16 - Insolvency

A. In the event of the insolvency of one or more of the reinsured companies, this reinsurance shall be payable directly to the company or to its liquidator, receiver, conservator or statutory successor on the basis of the liability of the company without diminution because of the insolvency of the company or because the liquidator, receiver, conservator or statutory successor of the company has failed to pay all or a portion of any claim.  It is agreed, however, that the liquidator, receiver, conservator or statutory successor of the company shall give written notice to the Reinsurer of the pendency of a claim against the company indicating the policy or bond reinsured which claim would involve a possible liability on the part of the Reinsurer within a reasonable time after such claim is filed in the conservation or liquidation proceeding or in the receivership, and that during the pendency of such claim, the Reinsurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated, any defense or defenses that it may deem available to the company or its liquidator, receiver, conservator or statutory successor.  The expense thus incurred by the Reinsurer shall be chargeable, subject to the approval of the Court, against the company as part of the expense of conservation or liquidation to the extent of a pro rata share of the benefit which may accrue to the company solely as a result of the defense undertaken by the Reinsurer.

B. Where two or more reinsurers are involved in the same claim and a majority in interest elect to interpose defense to such claim, the expense shall be apportioned in accordance with the terms of this Contract as though such expense had been incurred by the company.

C. It is further understood and agreed that, in the event of the insolvency of one or more of the reinsured companies, the reinsurance under this Contract shall be payable directly by the Reinsurer to the company or to its liquidator, receiver or statutory successor, except as provided by Section 4118(a) of the New York Insurance Law or except (1) 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 payees under such policies and in substitution for the obligations of the company to such payees.

Article 17 - Arbitration

A. As a condition precedent to any right of action hereunder, in the event of any dispute or difference of opinion hereafter arising with respect to this Contract, it is hereby mutually agreed that such dispute or difference of opinion shall be submitted to arbitration.  One Arbiter shall be chosen by the Company, the other by the Reinsurer, and an Umpire shall be chosen by the two Arbiters before they enter upon arbitration, all of whom shall be active or retired disinterested executive officers of insurance or reinsurance companies or Lloyd's London Underwriters.  In the event that either party should fail to choose an Arbiter within 30 days following a written request by the other party to do so, the requesting party may choose two Arbiters who shall in turn choose an Umpire before entering upon arbitration.  If the two Arbiters fail to agree upon the selection of an Umpire within 30 days following their appointment, each Arbiter shall nominate three candidates within 10 days thereafter, two of whom the other shall decline, and the decision shall be made by drawing lots.  Notwithstanding the above, in the event the dispute or difference of opinion involves a Special Circumstance Reinsurer, the Company may, at its option, choose to forego arbitration and may bring an action in any court of competent jurisdiction.

B. Each party shall present its case to the Arbiters within 30 days following the date of appointment of the Umpire.  The Arbiters shall consider this Contract as an honorable engagement rather than merely as a legal obligation and they are relieved of all judicial formalities and may abstain from following the strict rules of law.  The decision of the Arbiters shall be final and binding on both parties; but failing to agree, they shall call in the Umpire and the decision of the majority shall be final and binding upon both parties.  Judgment upon the final decision of the Arbiters may be entered in any court of competent jurisdiction and the Arbiters are empowered to grant interim relief as they may deem appropriate.

C. If more than one reinsurer is involved in the same dispute, all such reinsurers shall, at the option of the Company, constitute and act as one party for purposes of this Article and communications shall be made by the Company to each of the reinsurers constituting one party, provided, however, that nothing herein shall impair the rights of such reinsurers to assert several, rather than joint, defenses or claims, nor be construed as changing the liability of the reinsurers participating under the terms of this Contract from several to joint.

D. Each party shall bear the expense of its own Arbiter, and shall jointly and equally bear with the other the expense of the Umpire and of the arbitration.  In the event that the two Arbiters are chosen by one party, as above provided, the expense of the Arbiters, the Umpire and the arbitration shall be equally divided between the two parties.

E. Any arbitration proceedings shall take place in Irving, Texas, or at a location mutually agreed upon by the parties to this Contract, but notwithstanding the location of the arbitration, all proceedings pursuant hereto shall be governed by the law of the State of Texas.

Article 18 - Service of Suit (BRMA 49G)

(Applicable if the Reinsurer is not domiciled in the United States of America, and/or is not authorized in any State, Territory or District of the United States where authorization is required by insurance regulatory authorities)

A. This Article will not be read to conflict with or override the obligations of the parties to arbitrate their disputes as provided for in the Arbitration Article.  This Article is intended as an aid to compelling arbitration or enforcing such arbitration or arbitral award, not as an alternative to the Arbitration Article for resolving disputes arising out of this Contract.

B. In the event the Reinsurer fails to pay any amount claimed to be due hereunder, the Reinsurer, at the request of the Company, will submit to the jurisdiction of a court of competent jurisdiction within the United States.  Nothing in this Article constitutes or should be understood to constitute a waiver of the Reinsurer'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 Reinsurer, once the appropriate Court is accepted by the Reinsurer or is determined by removal, transfer or otherwise, as provided for above, will comply with all requirements necessary to give said Court jurisdiction and, in any suit instituted against any of the Subscribing Reinsurers upon this Contract, will abide by the final decision of such Court or of any Appellate Court in the event of an appeal.

C. Further, pursuant to any statute of any state, territory or district of the United States which makes provision therefor, the Reinsurer hereby designates the party named in its Interests and Liabilities Agreement, or if no party is named therein, the Superintendent, Commissioner or Director of Insurance or other officer specified for that purpose in the statute, or his or her successor or successors in office, as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Company or any beneficiary hereunder arising out of this Contract.

Article 19 - Confidentiality

A. The Reinsurer hereby acknowledges that the documents, information and data provided to it 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.  Confidential Information shall not include documents, information or data that the Reinsurer can show:

1. Are publicly known or have become publicly known through no unauthorized act of the Reinsurer;

2. Have been rightfully received from a third person without obligation of confidentiality; or

3. Were known by the Reinsurer prior to the placement of this Contract without an obligation of confidentiality.

B. Absent the written consent of the Company, the Reinsurer shall not disclose any Confidential Information to any third parties, excluding any affiliated companies, except:

1. When required by retrocessionaires subject to the business ceded to this Contract;

2. When required by state regulators performing an audit of the Reinsurer's records and/or financial condition;

3. When required by external auditors performing an audit of the Reinsurer's records in the normal course of business; or

4. When required by attorneys or arbitrators in connection with an actual or potential dispute hereunder.

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

C. 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 with written notice of same at least 10 days prior to such release or disclosure and to use its best efforts to assist the Company in maintaining the confidentiality provided for in this Article.

D. The provisions of this Article shall extend to the officers, directors and employees of the Reinsurer and its affiliates, and shall be binding upon their successors and assigns.

Article 20 - Agency Agreement

If more than one reinsured company is named as a party to this Contract, the first named company shall be deemed the agent of the other reinsured companies for purposes of sending or receiving notices required by the terms and conditions of this Contract, and for purposes of remitting or receiving any monies due any party.

Article 21 - Governing Law (BRMA 71B)

This Contract shall be governed by and construed in accordance with the laws of the State of Texas.

Article 22 - Severability (BRMA 72E)

If any provision of this Contract shall be rendered illegal or unenforceable by the laws, regulations or public policy of any state, such provision shall be considered void in such state, but this shall not affect the validity or enforceability of any other provision of this Contract or the enforceability of such provision in any other jurisdiction.

Article 23 - Entire Agreement

This written Contract constitutes the entire agreement between the parties hereto with respect to the business being reinsured hereunder, and there are no understandings between the parties hereto other than as expressed in this Contract.  Any change or modification to this Contract will be made by amendment to this Contract and signed by the parties hereto.

Article 24 - Notices and Contract Execution

A. Whenever a notice, statement, report or any other written communication is required by this Contract, unless otherwise specified, such notice, statement, report or other written communication may be transmitted by certified or registered mail, nationally or internationally recognized express delivery service, personal delivery, electronic mail, or facsimile.  With the exception of notices of termination, first class mail is also acceptable.

B. The use of any of the following shall constitute a valid execution of this Contract or any amendments thereto:

1. Paper documents with an original ink signature;

2. Facsimile or electronic copies of paper documents showing an original ink signature; and/or

3. Electronic records with an electronic signature made via an electronic agent.  For the purposes of this Contract, the terms "electronic record," "electronic signature" and "electronic agent" shall have the meanings set forth in the Electronic Signatures in Global and National Commerce Act of 2000 or any amendments thereto.

C. This Contract may be executed in one or more counterparts, each of which, when duly executed, shall be deemed an original.

Article 25 - Intermediary

Aon Benfield Inc., or one of its affiliated corporations duly licensed as a reinsurance intermediary, is hereby recognized as the Intermediary negotiating this Contract for all business hereunder.  All communications (including but not limited to notices, statements, premiums, return premiums, commissions, taxes, losses, loss adjustment expense, salvages and loss settlements) relating to this Contract will be transmitted to the Company or the Reinsurer through the Intermediary.  Payments by the Company to the Intermediary will be deemed payment to the Reinsurer.  Payments by the Reinsurer to the Intermediary will be deemed 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:

This ________________ day of ____________________________ in the year ____________.

Homeowners of America Insurance Company (for and on behalf of the "Company")

_______________________________________________________

15\H00H1048  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Schedule A

Reinstatement Premium Protection

Reinsurance Contract

Effective:  April 1, 2015

Homeowners of America Insurance Company

Irving, Texas

	First Excess		Second Excess		Third Excess
Original Contract Retention	$	5,000,000	$	20,000,000	$	50,000,000
Original Contract Reinsurer's Per Occurrence Limit	$	15,000,000	$	30,000,000	$	100,000,000
Original Contract Reinsurer's Contract Year Limit	$	30,000,000	$	60,000,000	$	200,000,000
Original Contract Year Minimum Premium		[****]		[****]		[****]
Original Contract Premium Rate		[****]		[****]		[****]
Original Contract Year Deposit Premium		[****]		[****]		[****]

15\H00H1048  

Portions of this agreement have been omitted based upon a request for confidential treatment.  This agreement, including the non-public information, has been filed separately with the Securities and Exchange Commission. "[****]" designates portions of this document that have been redacted pursuant to the request for confidential treatment filed with the Securities and Exchange Commission.

Interests and Liabilities Agreement

attached to and forming part of the

Reinstatement Premium Protection Reinsurance Contract

Effective:  April 1, 2015

entered into by and between

Homeowners of America Insurance Company

Irving, Texas

and

Everest Reinsurance CompanyA Delaware Corporation

(hereinafter referred to as the "Subscribing Reinsurer")

The Subscribing Reinsurer hereby accepts a 100% share in the interests and liabilities of the "Reinsurer" as set forth in the attached Contract captioned above.

This Agreement shall become effective at 12:01 a.m., Central Standard Time, April 1, 2015, and shall continue in force until 12:01 a.m., Central Standard Time, April 1, 2017, unless earlier terminated in accordance with the provisions of the attached Contract.

The Subscribing Reinsurer's share in the attached Contract shall be separate and apart from the shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it being understood that the Subscribing Reinsurer shall in no event participate in the interests and liabilities of the other reinsurers.

In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has executed this Agreement as of the date specified below:

This ________________ day of ___________________________ in the year ____________.

Everest Reinsurance Company

_______________________________________________________

15\H00H1048\03R  

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Amendment No. 3 to Registration Statement Form S-1 (File No. 333-189686) of our report dated March 27, 2015 with respect to the audited consolidated financial statements of Homeowners of America Holding Corporation and Subsidiaries as of and for the years ended December 31, 2014 and 2013, which appear in this Annual Report on Form 10-K of Homeowners of America Holding Corporation for the year ended December 31, 2014.

/s/ Weaver and Tidwell, L.L.P.

WEAVER AND TIDWELL, L.L.P.

Dallas, Texas

March 27, 2015

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO

SECTION 302 OF THE SARBANES OXLEY ACT OF 2002

I, Spencer Tucker, certify that:

1. I have reviewed this annual report on Form 10-K of Homeowners of America Holding Corporation;

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 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 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.

March 27, 2015

/s/ Spencer Tucker

Name: Spencer Tucker

Title: Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO

SECTION 302 OF THE SARBANES OXLEY ACT OF 2002

I, Michael C. Rosentraub, certify that:

1. I have reviewed this annual report on Form 10-K of Homeowners of America Holding Corporation;

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 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 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.

March 27, 2015

/s / Michael C. Rosentraub

Name: Michael C. Rosentraub

Title: Chief Financial Officer

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of Homeowners of America Holding Corporation. (the “Company”) on Form 10-K for the fiscal year ended December 31, 2014 as filed with the Securities and Exchange Commission (the “Report”), the undersigned principal executive officer and principal financial officer of the Company, each hereby certify, solely for purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

1. The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Spencer Tucker	/s/ Michael C. Rosentraub
Spencer Tucker	Michael C. Rosentraub
Chief Executive Officer	Chief Financial Officer
March 27, 2015	March 27, 2015

The foregoing certification is being furnished (but not filed) solely pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

XML

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]
Noncontrolling interest, ownership percentage by Parent (in hundredths)	100.00%	100.00%
Cash and Cash Equivalents [Abstract]
Checks issued in excess of cash book balances not yet presented for payment	$ 1,700,000	$ 1,200,000
Restricted Cash and Investments [Abstract]
Restricted cash and investments	4,329,654	1,000,000
Restricted Assets	1,000,000	0
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, before Tax	73	0
Loss Adjustment and Other Fee Income [Abstract]
Loss adjustment and other fee income as a percentage of total revenue, minimum (in hundredths)	5.00%
Impairment of Long-Lived Assets [Abstract]
Impairment charges	0	0
Uncertain Tax Positions [Abstract]
Percentage of settlement with tax authority (in hundredths)	50.00%
Stock Split [Abstract]
Stock Split		2.5 for 1
Stock Based Compensation [Abstract]
Vesting percentage of stock awards (in hundredths)	100.00%
Property and Equipment [Member] | Maximum [Member]
Property, Equipment and Software [Abstract]
Useful life (in years)	5 years
Property and Equipment [Member] | Minimum [Member]
Property, Equipment and Software [Abstract]
Useful life (in years)	3 years
Software Installation and Development [Member]
Property, Equipment and Software [Abstract]
Useful life (in years)	3 years
Money Market [Member]
Restricted Cash and Investments [Abstract]
Restricted cash and investments	300,000	215,000
Certificates of Deposit [Member]
Restricted Cash and Investments [Abstract]
Restricted cash and investments	3,490,000	785,000
US Treasury Bond [Member]
Restricted Cash and Investments [Abstract]
Restricted cash and investments	$ 539,654	$ 0

XML

INCOME TAXES, Reconciliation of Statutory to Effective Tax Rate (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
INCOME TAXES [Abstract]
Income before taxes at statutory rate	$ 1,131,629	$ 1,022,716
Meals and entertainment	9,613	9,800
Other	22,955	6,708
Total income taxes	$ 1,164,197	$ 1,039,224
Income before taxes at statutory rate (in hundredths)	34.00%	34.00%
Meals and entertainment (in hundredths)	0.29%	0.33%
Other (in hundredths)	0.69%	0.22%
Total (in hundredths)	34.98%	34.55%

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EARNINGS (LOSS) PER SHARE (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Basic earnings per common share [Abstract]
Net income	$ 2,164,125	$ 1,968,763
Cumulative dividend	0	(974,179)
Net income (loss) available to common stockholders	2,164,125	994,584
Weighted average common shares outstanding (in shares)	16,126,689	6,777,047
Basic earnings per common share (in dollars per share)	$ 0.13	$ 0.15
Diluted earnings per common share [Abstract]
Net income	2,164,125	1,968,763
Add interest expense on covertible promissory notes	0	45,540
Adjusted net income	$ 2,164,125	$ 2,014,303
Weighted average common shares outstanding (in shares)	16,162,352	16,731,140
Effect of diluted securities [Abstract]
Stock options (in shares)	1,287,250	902,500
Diluted common shares outstanding (in shares)	17,449,602	17,633,640
Diluted earnings per common share (in dollars per share)	$ 0.12	$ 0.11

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REINSURANCE, Reinsurance Agreements (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Feb. 16, 2015
Effects of Reinsurance [Line Items]
Retention payable, total		$ 5,000,000
Property Insurance Treaties on Any One Loss Occurrence not to Exceed $110 Million [Member] | Treaties from April 1, 2014 through March 31, 2015 [Member]
Effects of Reinsurance [Line Items]
Percentage reinsured (in hundredths)	80.00%
Property Insurance Treaties on Any One Loss Occurrence not to Exceed $110 Million [Member] | Treaties from April 1, 2014 through March 31, 2015 [Member] | Maximum [Member]
Effects of Reinsurance [Line Items]
Reinsurance recoverables on losses and LAE	110,000,000
Property Insurance Treaties on Any One Loss Occurrence not to Exceed $4 Million [Member] | Treaties from April 1, 2014 through March 31, 2015 [Member]
Effects of Reinsurance [Line Items]
Percentage reinsured (in hundredths)	10.00%
Property Insurance Treaties on Any One Loss Occurrence not to Exceed $4 Million [Member] | Treaties from April 1, 2014 through March 31, 2015 [Member] | Maximum [Member]
Effects of Reinsurance [Line Items]
Reinsurance recoverables on losses and LAE	4,000,000
Casualty Insurance Treaties [Member] | Treaties from April 1, 2014 through March 31, 2015 [Member]
Effects of Reinsurance [Line Items]
Percentage reinsured (in hundredths)	64.00%
Property Catastrophe Treaties [Member] | Treaties from April 1, 2014 through March 31, 2015 [Member]
Effects of Reinsurance [Line Items]
Percentage reinsured (in hundredths)	20.00%
Gross loss covered	110,000,000
Retention payable, total	4,000,000
Net retention amount under reinsurance liability	400,000
Property Catastrophe Treaties [Member] | Treaties from August 1, 2014 through November 30, 2014 [Member]
Effects of Reinsurance [Line Items]
Number of layers for reinsurance	5
Gross loss covered	140,000,000
Retention payable, total	4,000,000
Net retention amount under reinsurance liability	400,000
Residential Quota Share Reinsurance Treaties [Member] | Treaties from April 1, 2013 through March 31, 2014 [Member]
Effects of Reinsurance [Line Items]
Percentage reinsured (in hundredths)	90.00%
Number of layers for reinsurance	4
Gross loss covered	76,000,000
Retention payable, total	4,000,000
Net retention amount under reinsurance liability	400,000
Residential Quota Share Reinsurance Treaties [Member] | Treaties from April 1, 2013 through March 31, 2014 [Member] | Maximum [Member]
Effects of Reinsurance [Line Items]
Reinsurance recoverables on losses and LAE	80,000,000
Non-Weather Losses [Member]
Effects of Reinsurance [Line Items]
Gross loss covered	500,000
Net loss covered	50,000
Number of loss occurrences	2

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CONVERTIBLE NOTES PAYABLE (Details) (Convertible Promissory Note Agreements [Member], USD $)	12 Months Ended
	Dec. 31, 2013
Debt Instrument [Line Items]
Convertible note interest rate (in hundredths)	10.00%
Convertible note interest rate on default (in hundredths)	12.50%
Interest expense, convertible note	$ 68,164
Inter-Atlantic Fund, L.P [Member]
Debt Instrument [Line Items]
Convertible promissory note	950,000
Number of shares converted (in shares)	2,306,152
Phoenix Associates, Inc [Member]
Debt Instrument [Line Items]
Convertible promissory note	$ 50,000
Number of shares converted (in shares)	124,988

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UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES (Tables)

12 Months Ended

Dec. 31, 2014

UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES [Abstract]

Liability for unpaid claims adjustment expense by expense type

The following table provides the reconciliation of the beginning and ending reserve balances for losses and LAE, gross of reinsurance for 2014 and 2013: 

	2014			2013
Reserve for losses and LAE, beginning of year	$	15,884,062		$	11,641,296
Reinsurance recoverables on losses and LAE		(15,090,175	)		(10,618,032	)
Reserve for losses and LAE, net of reinsurance recoverables at beginning of year		793,887			1,023,264
Add provision for claims and LAE occurring in:
Current year		2,882,295			2,015,107
Prior years		48,000			244,000
Net incurred losses and LAE during the current year		2,930,295			2,259,107
Deduct payments for claims and LAE occurring in:
Current year		2,111,930			1,927,482
Prior years		598,146			561,002
Net claim and LAE payments during the current year		2,710,076			2,488,484
Reserve for losses and LAE, net of reinsurance recoverables, at end of year		1,014,106			793,887
Reinsurance recoverables on losses and LAE		13,995,400			15,090,175
Losses and loss adjustment expenses at December 31	$	15,009,506		$	15,884,062

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REINSURANCE, Reinsurance Balances (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
REINSURANCE [Abstract]
Ceded premiums payable	$ 4,342,874	$ 3,271,858
Ceded loss adjustment expenses	4,763,808	4,424,649
Ceded loss and loss adjustment expense reserve	13,995,400	15,090,175
Ceded unearned premium reserve	35,442,177	27,924,037
Ceded earned premiums	$ 60,484,640	$ 48,422,943

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SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2014

SUBSEQUENT EVENTS [Abstract]

SUBSEQUENT EVENTS

On February 2, 2015, the Company issued 227,273 shares of common stock at $0.66 a share to Inter-Atlantic Management, Inc. or "Inter-Atlantic". A number of our directors are among the beneficial owners of Inter-Atlantic. Per the terms of the Advisory Agreement dated August 1, 2013, Inter-Atlantic Management, Inc. will be issued annually on February 1^st , a grant of the Company's common stock which in aggregate will have a fair market value of $150,000 at the time of grant.

On February 16, 2015 the Company completed placement of its new 2015 catastrophe reinsurance program with a panel of third party reinsurers, effective April 1, 2015. Coverage was extended to $150 million in excess of $5 million in the new treaty year.

On February 16, 2015, the Company completed placement of its new 2015 quota share reinsurance program with a panel of third party reinsurers, effective April 1, 2015. The quota share ratio remains the same (90%) as the current program. Certain participants on the program will change from the 2014 program.

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STOCK BASED COMPENSATION, Assumptions (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Fair value assumptions and methodology [Abstract]
Dividend Yield (in hundredths)	0.00%	0.00%
Expected Volatility (in hundredths)	22.00%	25.00%
Risk-free interest rate (in hundredths)	1.65%	1.75%
Expected life (in years)	5 years 2 months 16 days	5 years 2 months 16 days
Weighted average grant date fair value (in dollars per share)	$ 0.02	$ 0.10

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Fair Value of Financial Assets [Abstract]
Money market mutual funds	$ 3,372,527	$ 5,903,478
Restricted money market mutual funds	300,000	0
Securities-available-for-sale fixed maturity [Abstract]
Obligations of states, municipalities and political subdivisions	3,827,245	0
U.S. treasury	539,654	0
Total assets	8,039,426	5,903,478
Transfers Between Level 1 and Level 2 [Abstract]
Transfers from Level 1 to Level 2	0
Transfers from Level 2 to Level 1	0
Level 1 [Member]
Fair Value of Financial Assets [Abstract]
Money market mutual funds	3,372,527	5,903,478
Restricted money market mutual funds	300,000	0
Securities-available-for-sale fixed maturity [Abstract]
Obligations of states, municipalities and political subdivisions	0	0
U.S. treasury	0	0
Total assets	3,672,527	5,903,478
Level 2 [Member]
Fair Value of Financial Assets [Abstract]
Money market mutual funds	0	0
Restricted money market mutual funds	0	0
Securities-available-for-sale fixed maturity [Abstract]
Obligations of states, municipalities and political subdivisions	3,827,245	0
U.S. treasury	539,654	0
Total assets	4,366,899	0
Level 3 [Member]
Fair Value of Financial Assets [Abstract]
Money market mutual funds	0	0
Restricted money market mutual funds	0	0
Securities-available-for-sale fixed maturity [Abstract]
Obligations of states, municipalities and political subdivisions	0	0
U.S. treasury	0	0
Total assets	$ 0	$ 0

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REINSURANCE (Tables)

12 Months Ended

Dec. 31, 2014

REINSURANCE [Abstract]

Effects of reinsurance on premiums written and earned

The effects of reinsurance on premiums written and earned were as follows, for the years ended December 31, 2014 and December 31, 2013:

	2014								2013
	Written				Earned				Written				Earned
Direct premiums		$	73,620,300			$	64,895,484			$	57,957,011			$	53,238,811
Ceded premiums			(65,079,700	)			(60,484,640	)			(51,683,634	)			(48,422,943	)
Net Premiums		$	8,540,600			$	4,410,844			$	6,273,377			$	4,815,868

Summary of reinsurance balance

Following is a summary of HAIC's reinsurance balances under the above described reinsurance treaties as of December 31, 2014 and December 31, 2013:

	2014		2013
Ceded premiums payable	$	4,342,874	$	3,271,858
Ceded loss adjustment expenses	$	4,763,808	$	4,424,649
Ceded loss and loss adjustment expense reserve	$	13,995,400	$	15,090,175
Ceded unearned premium reserve	$	35,442,177	$	27,924,037
Ceded earned premiums	$	60,484,640	$	48,422,943

Effects of reinsurance

The following is a summary of the names of each of HAIC's significant reinsurer and the amount due from each for paid losses, LAE and unearned premium.

	2014						2013
	Paid Losses & LAE		Unearned Premium		Total Receivable		Paid Losses & LAE		Unearned Premium		Total Receivable
Maiden Reinsurance Company	$	85,203	$	-	$	85,203	$	84,395	$	-	$	84,395
NGM Insurance Company		53,033		-		53,033		11,630		-		11,630
Arch Reinsurance Company		378,977		-		378,977		460,006		7,511,308		7,971,314
Endurance Reinsurance Corp. of America		138,392		-		138,392		178,974		3,129,712		3,308,686
Catlin RE		214,945		4,002,194		4,217,139		-		-		-
Montpelier Insurance Company		107,472		2,001,097		2,108,569		-		-		-
Swiss Re		198,953		4,002,193		4,201,146		-		-		-
RLI Insurance Company		151,525		-		151,525		123,916		-		123,916
SCOR Reinsurance Company		396,192		4,002,194		4,398,386		213,273		3,129,712		3,342,985
Endurance Specialty		19,853		-		19,853		92		-		92
Houston Casualty		7,804		-		7,804		27		-		27
R+V Versicherung AG		590,652		4,913,513		5,504,165		308,614		3,825,256		4,133,870
Everest Re		490,410		8,024,398		8,514,808		177,864		6,259,424		6,437,288
Taiping		94,895		1,600,877		1,695,772		26,680		938,914		965,594
Qatar Re		276,910		4,894,615		5,171,525		-		-		-
SCOR Switzerland		-		-		-		44		-		44
Paladin CAT Management		-		-		-		49		-		49
Odyssey RE		137,195		2,001,097		2,138,292		88,981		3,129,712		3,218,693
SCOR Global		68,541		-		68,541		328		-		328
Lloyds Syndicates		60,451		-		60,451		603		-		603
Partner RE Europe LTD (France)		-		-		-		104		-		104
Total	$	3,471,403	$	35,442,178	$	38,913,581	$	1,675,580	$	27,924,038	$	29,599,618

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STOCK BASED COMPENSATION, Future Compensation Expense (Details) (USD $)	Dec. 31, 2014
STOCK BASED COMPENSATION [Abstract]
Total gross unrecognized compensation expense, Year ending December 31, 2015	$ 34,944
Tax benefit associated with unrecognized compensation expense, Year ending December 31, 2015	(686)
Total net unrecognized compensation expense, Year ending December 31, 2015	34,258
Total gross unrecognized compensation expense, Year ending December 31, 2016	34,944
Tax benefit associated with unrecognized compensation expense, Year ending December 31, 2016	(686)
Total net unrecognized compensation expense, Year ending December 31, 2016	34,258
Total gross unrecognized compensation expense, Year ending December 31, 2017	34,944
Tax benefit associated with unrecognized compensation expense, Year ending December 31, 2017	(686)
Total net unrecognized compensation expense, Year ending December 31, 2017	34,258
Total gross unrecognized compensation expense, Year ending December 31, 2018	28,365
Tax benefit associated with unrecognized compensation expense, Year ending December 31, 2018	(556)
Total net unrecognized compensation expense, Year ending December 31, 2018	27,809
Total gross unrecognized compensation expense, Year ending December 31, 2019	81
Tax benefit associated with unrecognized compensation expense, Year ending December 31, 2019	0
Total net unrecognized compensation expense, Year ending December 31, 2019	$ 81

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SUBSEQUENT EVENTS (Details) (USD $)	0 Months Ended
	Jan. 24, 2014	Feb. 02, 2015	Feb. 16, 2015	Feb. 01, 2014
Subsequent Event [Line Items]
Retention payable, total			$ 5,000,000
Subsequent Event [Member]
Subsequent Event [Line Items]
Quota share ratio reinsurance program, third party reinsurers (in hundredths)	90.00%
Subsequent Event [Member] | Catastrophe Reinsurance Program [Member]
Subsequent Event [Line Items]
Liability for claims and claims adjustment expense			150,000,000
Subsequent Event [Member] | Inter Atlantic Management Inc [Member]
Subsequent Event [Line Items]
Stock issued for services (in shares)		227,273
Sale of stock (in dollars per share)				$ 0.66
Common stock issued		$ 150,000

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STOCKHOLDERS' EQUITY (Details) (USD $)	12 Months Ended
	Dec. 31, 2014 Vote	Dec. 31, 2013 Vote
Class of Stock [Line Items]
Preferred stock, shares authorized (in shares)	20,500,000	20,500,000
Preferred stock, convertible cumulative percentage (in hundredths)	12.50%	12.50%
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, shares authorized (in shares)	40,000,000	40,000,000
Common stock, shares issued (in shares)	17,479,852	17,181,140
Common stock, shares outstanding (in shares)	16,168,852	15,831,140
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, voting rights	one (1) vote for each share of common stock held	one (1) vote for each share of common stock held
Number of votes for each share of common stock held	1	1
Common stock warrants issued	$ 0	$ 0

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RECENT ACCOUNTING PRONOUNCEMENTS

12 Months Ended

Dec. 31, 2014

RECENT ACCOUNTING PRONOUNCEMENTS [Abstract]

RECENT ACCOUNTING PRONOUNCEMENTS

2.RECENT ACCOUNTING PRONOUNCEMENTS

Accounting Standards Update No. 2014-09. On May 28, 2014, the FASB issued Accounting Standards Update No. 2014-09 ("ASU 2014-09"), Revenue from Contracts with Customers, which modifies the guidance for revenue recognition. While insurance contracts are not within the scope of this updated guidance, the Company's fee income may be subject to this updated guidance. The Company is in the process of evaluating the new guidance, however, the adoption of this guidance is not expected to have a material effect on the Company's consolidated financial statements.  ASU 2014-09 is effective for annual and interim reporting periods beginning after December 16, 2016.

Accounting Standards Update No. 2014-12. On June 19, 2014, the FASB issued Accounting Standards Update No. 2014-12 ("ASU 2014-12"), Compensation-Stock Compensation: Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. ASU 2014-12 requires that a performance target that affects the vesting and that can be achieved after the requisite service period be treated as a performance condition. As of December 31, 2014, the Company has not issued stock options with performance targets under the 2005 Management Incentive Plan or the 2013 Equity Compensation Plan. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. The effective date of ASU 2014-12 is for interim and annual reporting periods beginning after December 15, 2015, with early adoption permitted.

Accounting Standards Update No. 2014-15. In August 2014, the FASB issued Accounting Standards Update No. 2014-15 ("ASU 2014-15"), Presentation of Financial Statements – Going Concern (Subtopic 205-40). The purpose of this update is to provide guidance about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 applies to all reporting entities and is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early adoption is permitted. Adoption of this guidance is expected to have no effect on the Company's consolidated financial statements.

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SCHEDULE VI. SUPPLEMENTAL INFORMATION CONCERNING CONSOLIDATED PROPERTY AND CASUALTY INSURANCE OPERATIONS (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Schedule VI. Supplemental Information Concerning Consolidated Property and Casualty Insurance Operations [Abstract]
Reserves for Unpaid Losses and LAE	$ 15,009,506	$ 15,884,062
Incurred Loss and LAE current year	2,882,295	2,015,107
Incurred Loss and LAE prior years	48,000	244,000
Paid Losses and LAE	2,710,076	2,488,484
Net Investment Income	43,603	41,649
Deferred Policy Acquisition Cost (DAC)	7,897,806	6,214,334
Amortization of DAC	(12,745,771)	(10,511,534)
Net Premiums Written	8,540,600	6,273,377
Net Premiums Earned	4,410,844	4,815,868
Unearned Premiums	$ 40,021,934	$ 31,297,118

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PROPERTY, EQUIPMENT, AND SOFTWARE NET (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Property, Plant and Equipment [Line Items]
Total, at cost	$ 1,321,035	$ 1,092,948
Less accumulated depreciation and amortization	(976,540)	(848,432)
Property and equipment, net	344,495	244,516
Depreciation and amortization expense	128,107	88,770
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Total, at cost	231,860	222,225
Property, plant and equipment, useful life (in years)	3 years
Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Total, at cost	17,409	13,999
Property, plant and equipment, useful life (in years)	5 years
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Total, at cost	142,450	106,524
Property, plant and equipment, useful life (in years)	5 years
Software Installation and Development [Member]
Property, Plant and Equipment [Line Items]
Total, at cost	$ 929,316	$ 750,200
Property, plant and equipment, useful life (in years)	3 years

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INVESTMENTS (Tables)

12 Months Ended

Dec. 31, 2014

INVESTMENTS [Abstract]

Short-term, restricted and long-term investment holdings

The following table provides the Company's short-term, restricted and long-term investment holdings by type of financial instruments that were used to estimate the fair value disclosures for financial instruments: 

	December 31, 2014						December 31, 2013
	Book Value			Fair Value Carrying Value			Book Value			Fair Value Carrying Value
Financial Assets:
Restricted certificates of deposit		$	3,490,000		$	3,490,000		$	785,000		$	785,000
Restricted money markets			300,000			300,000			215,000			215,000
Long-term investments			3,430,000			3,430,000			1,960,000			1,960,000
Short-term investments			1,231,881			1,231,881			4,151,011			4,151,011
		$	8,451,881		$	8,451,881		$	7,111,011		$	7,111,011

	December 31, 2014		December 31, 2013
	Range of Maturities	Interest Rates	Range of Maturities	Interest Rates
Restricted certificates of deposit	Less than 1 year	0.10% - 1.40%	Less than 1 year	0.10% - 0.25%
Restricted money markets	Less than 1 year	–	Less than 1 year	–
Long-term investments	More than 1 year	0.75% - 1.50%	More than 1 year	0.30% - 0.70%
Short-term investments	Less than 1 year	0.35% - 0.70%	Less than 1 year	0.20% - 1.24%

Fixed-maturity securities classified as available-for-sale

The following table provides the Company's fixed-maturity securities classified as available-for-sale which are carried at fair value as of December 31, 2014:

	December 31, 2014
			Gross Unrealized
	Amortized Cost		Gains		Losses			Fair Value
Fixed Maturities:
Obligations of states, municipalities and political subdivisions	$	3,827,268	$	6,331	$	(6,354	)	$	3,827,245
U.S. Treasury - held as restricted		539,558		96		-			539,654
Total Fixed Maturities	$	4,366,826	$	6,427	$	(6,354	)	$	4,366,899

Available-for-sale fixed-maturity securities by contractual maturity

The amortized cost and fair value of available-for-sale fixed-maturity securities at December 31, 2014, by contractual maturity, are shown in the following table.  Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	December 31, 2014
Remaining Time to Maturity	Amortized Cost Basis		Fair Value
Less than one year	$	570,236	$	569,734
One to five years		1,985,297		1,981,134
Five to ten years		162,124		162,519
More than ten years		1,649,169		1,653,512
Total	$	4,366,826	$	4,366,899

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2014

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

Restricted cash and investments

The following table provides the Company's restricted cash and investments as of December 31, 2014 and December 31, 2013.

Restricted cash and investments	December 31, 2014		December 31, 2013
Money Market	$	300,000	$	215,000
Certificates of Deposit		3,490,000		785,000
US Treasury Bond		539,654		-
	$	4,329,654	$	1,000,000

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REINSURANCE, Effects of Reinsurance on Premiums Written and Earned (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
REINSURANCE [Abstract]
Direct premiums, Written	$ 73,620,300	$ 57,957,011
Ceded premiums, Written	(65,079,700)	(51,683,634)
Net Premiums, Written	8,540,600	6,273,377
Direct premiums, Earned	64,895,484	53,238,811
Ceded premiums, Earned	(60,484,640)	(48,422,943)
Net premiums earned	$ 4,410,844	$ 4,815,868

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DEFERRED POLICY ACQUISITION COSTS (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Deferred Acquisition Costs [Line Items]
Deferred policy acquisition charges, end of the period	$ 7,897,806	$ 6,214,334
Deferred Policy Acquisition Costs [Member]
Deferred Acquisition Costs [Line Items]
Deferred policy acquisition charges, beginning of the period	6,214,334	5,274,515
Capitalized costs	14,429,241	11,451,353
Amortized costs	(12,745,769)	(10,511,534)
Deferred policy acquisition charges, end of the period	$ 7,897,806	$ 6,214,334

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2014

FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]

Fair value, assets measured on recurring basis

The Company's short-term investments comprised of certificates of deposit held at financial institutions which are not measured at fair value on a recurring basis. A portion of the Company's cash and cash equivalents include money market mutual fund accounts held at financial institutions which are measured at fair value on a recurring basis. Fixed-maturity securities held as available-for-sale are carried at fair value in our consolidated financial statements. The following tables provide information as of December 31, 2014 and 2013, about the Company's financial assets measured at fair value on a recurring basis:

	Fair Value Measurements Using
	Level 1		Level 2		Level 3		Total
As of December 31, 2014
Money market mutual funds	$	3,372,527	$	-	$	-	$	3,372,527
Restricted money market mutual funds		300,000		-		-		300,000
Securities-available-for-sale fixed-maturity:
Obligations of states, municipalities and political subdivisions		-		3,827,245		-		3,827,245
U.S. Treasury		-		539,654		-		539,654
Total	$	3,672,527	$	4,366,899	$	-	$	8,039,426

	Fair Value Measurements Using
	Level 1		Level 2		Level 3		Total
As of December 31, 2013
Money market mutual funds	$	5,903,478	$	-	$	-	$	5,903,478
Restricted money market mutual funds		-		-		-		-
Securities-available-for-sale fixed-maturity:
Obligations of states, municipalities and political subdivisions		-		-		-		-
U.S. Treasury		-		-		-		-
Total	$	5,903,478	$	-	$	-	$	5,903,478

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PROPERTY, EQUIPMENT, AND SOFTWARE NET (Tables)

12 Months Ended

Dec. 31, 2014

PROPERTY, EQUIPMENT, AND SOFTWARE NET [Abstract]

Property, equipment, and software net

Property, equipment, and software net consist of the following as of December 31, 2014 and 2013, respectively:

	December 31, 2014			December 31, 2013			Useful Life
Computer equipment	$	231,860		$	222,225		3 years
Office equipment		17,409			13,999		5 years
Furniture and fixtures		142,450			106,524		5 years
Software installation and development		929,316			750,200		3 years
Total, at cost		1,321,035			1,092,948
Less accumulated depreciation and amortization		(976,540	)		(848,432	)
Property and equipment, net	$	344,495		$	244,516

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2014

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Homeowners of America Holding Corporation ("HAHC") is an insurance holding company established to hold insurance entities for the purpose of marketing homeowner's insurance products on a national basis. HAHC owns 100% of Homeowners of America Insurance Company ("HAIC"). HAIC is domiciled in Texas, licensed in multiple states and is authorized to write various forms of homeowners and auto insurance. Coverage is concentrated in Texas. HAHC also owns 100% of Homeowners of America MGA, Inc. ("MGA"), a Texas Corporation, formed as a captive managing general agency to produce business for HAIC. HAHC, along with its subsidiaries HAIC and MGA, are collectively referred to as "the Company".

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Homeowners of America Holding Corporation and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). Certain reclassifications of prior year amounts have been made to conform to the current year presentation.

Cash and Cash Equivalents

Cash and cash equivalents include cash and highly liquid short-term investments, with original maturities of three months or less. The amount is carried at cost, which approximates fair value. At December 31, 2014 and 2013, cash and cash equivalents consist of cash on deposit with financial institutions, as well as money market mutual funds.

General and other accrued expenses payable as of December 31, 2014 and December 31, 2013, include $1.7 million and $1.2 million, respectively, of checks issued in excess of cash book balances, not yet presented for payment.

Investments

The Company's investments are comprised of short-term, restricted, long-term investments, and fixed-maturity securities classified as available-for-sale as of December 31, 2014 and short-term, restricted, and long-term investments as of December 31, 2013. Restricted investments and long-term investments are described below. Short-term investments include certificates of deposit with original maturities greater than three months and maturities of one year or less. Due to the short-term nature of these investments, significant changes in prevailing interest rates and economic conditions should not adversely affect the timing and amount of cash flows on such investments or their related values. Accordingly, certificates of deposit are carried at cost, which approximates fair value. Fixed-maturity securities are classified as available-for-sale when it is not management's intent to make profits by buying and selling the securities within a short period of time or when it is not management's intent to hold the securities to maturity.  Fixed-maturity securities classified as available-for-sale are carried at fair value. The unrealized holding gains and losses, net of applicable deferred income taxes, are shown as a separate component of stockholders' equity as a part of accumulated other comprehensive income (loss) and, as such, are not included in the determination of net income (loss).

As of December 31, 2014, the Company has restricted cash and investments, in the amount of $4.3 million, to the Department of Insurance in certain states as a condition of its Certificate of Authority for the purpose of meeting obligations to policyholders and creditors, which includes approximately $1.0 million of restricted assets. Restricted assets represent investments currently awaiting substitution with various states for matured securities. As of December 31, 2013, the Company had pledged to the Department of Insurance $1.0 million. Restricted and pledged assets are shown separately in the accompanying consolidated balance sheets as "Restricted cash and investments" and include money market accounts and certificates of deposits. "Restricted fixed-maturity securities, classified as available-for-sale" are shown separately in the accompanying consolidated balance sheets and recorded at fair value. With the approval of the Departments of Insurance, the Company may exchange the investments with other funds or investments. In respect to certificates of deposit, management intends to hold the portion of these restricted investments to their maturity. As such, these restricted certificates of deposit are carried at cost, which approximates fair value. Interest earned on these investments inures to the benefit of the Company.

The following table provides the Company's restricted cash and investments as of December 31, 2014 and December 31, 2013.

Restricted cash and investments	December 31, 2014		December 31, 2013
Money Market	$	300,000	$	215,000
Certificates of Deposit		3,490,000		785,000
US Treasury Bond		539,654		-
	$	4,329,654	$	1,000,000

As of December 31, 2014 and December 31, 2013, the Company's investments also include certificates of deposit that mature more than one year after the balance sheet date and are reflected on the consolidated balance sheets as Long-term investments. Based on management's intent to hold to maturity, these investments are carried at cost. Cost approximates fair value based on the rates currently offered for deposits of similar remaining maturities.

The Company's investments in certificates of deposits and money market accounts do not qualify as securities as defined in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 320, Investment – Debt and Equity Securities. Accordingly, the fair value disclosures required by FASB ASC Topic 820, Fair Value Measurements and Disclosures are not provided. The Company's fixed-maturity 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 where such securities are deemed to be other-than-temporarily impaired. Where applicable, the Company assesses investments of an issuer currently carrying a net unrealized loss. If in management's judgment, the decline in value is other than temporary, the cost of the investment is written down to fair value with a corresponding charge to earnings. Factors considered in determining whether an impairment exists include financial condition, business prospects and creditworthiness of the issuer, the length of time and magnitude that the asset value has been less than cost, and the ability and intent to hold such investments until the fair value recovers.

Comprehensive Income

FASB ASC Topic 220 - Comprehensive Income, requires that recognized revenues, expenses, gains and losses be included in net income (loss). Although certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the equity section of the consolidated balance sheet, these items, along with net income (loss), are components of comprehensive income. The Company characterizes their fixed income portfolio as available-for-sale securities when it is not management's intent to make profits by buying and selling the securities within a short period of time or when it is not management's intent to hold the securities to maturity, with appropriate adjustments to other comprehensive income. For the year ended December 31, 2014, the Company recorded $73 of unrealized gains on available-for-sale securities in other comprehensive income. There were no qualifying items reported in comprehensive income for the years ended December 31, 2013.

Recognition of Premium Revenues

Premiums are recognized as revenue on a daily pro rata basis over the policy term. The portion of premiums related to the unexpired term of policies in force as of the end of the measurement period and to be earned over the remaining term of those polices, is deferred and reported as unearned premiums.

Ceding Commissions and Reinsurance Profit Share

Ceding commissions represent acquisition costs associated with insurance risk ceded to reinsurers and is earned on a pro-rata basis over the life of the associated policy. Reinsurance profit share is additional ceding commissions payable to the Company based upon attaining specified loss ratios within individual treaty years.  Reinsurance profit share income is recognized when earned, which includes adjustments to earned reinsurance profit share based on changes in incurred losses.

Policy Fees

Policy fee income includes application fees which are intended to reimburse the Company for a portion of the costs incurred in establishing the insurance. Policy fees on policies where premium is traditionally paid in full upon inception of the policy are recognized when written, while fees charged on policies where premiums are paid in installments, are recognized when collected.

Loss Adjustment and Other Fee Income

Loss adjustment and other fee income is recognized as income when collected. There is no amount over 5 % of total revenue within this classification on the consolidated statements of operations for the year ended December 31, 2014 and December 31, 2013.

Property, Equipment and Software

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated on the straight-line method over the estimated useful lives of the assets, which range from three to five years. The cost and related accumulated depreciation of assets sold or disposed are removed from the accounts and the resulting gain or loss is included in the consolidated statements of operations. Maintenance and repairs are expensed as incurred.

Software installation and development is stated at cost, net of accumulated amortization. Amortization is calculated on a straight-line basis method over three years.

Impairment of Long-Lived Assets

Long-lived assets, such as property, equipment and software, are reviewed for impairment whenever business events or circumstances could lead to or indicate that the value of the asset may not be recoverable. The assessment of possible impairment is based on whether the carrying amount of the assets exceeds its fair value. The Company uses estimates of undiscounted future cash flows in determining the recoverability of long-lived assets. As of December 31, 2014 and 2013, no impairment has been recorded.

Deferred Policy and Acquisition Costs

Deferred policy acquisitions costs ("DAC") as of December 31, 2014 and 2013, consist of commissions, premium taxes and policy underwriting and production expenses which are incurred through and vary directly with, the level of production of new and renewal insurance business and are amortized over the terms of the policies they relate to. The method used in calculating DAC limits the amount of the deferred cost to their estimated realizable value, which gives effect to allocating their expense along with other period costs associated with the insurance business, in relation to the amount of gross premium earned on policies to which they relate and investment income. DAC is reviewed to determine if it is recoverable from future income, including investment income. The amount of DAC considered recoverable could be reduced in the near term if management's estimates of future premium and investment income is reduced which could impair the Company's ability to recover these costs.

Reserve for Losses and Loss Adjustment Expenses

The liability for losses and loss adjustment expenses ("LAE") are estimates of the amounts required to cover known incurred losses and LAE, developed through the review and assessment of loss reports, along with the development of known claims. In addition, loss and loss adjustment expense reserves include management's estimate of an amount for losses incurred but not reported ("IBNR"), determined from reviewing overall loss reporting patterns as well as the loss development cycles of individual claim cases. Such liabilities are necessarily based on estimates and while management believes that the amount is adequate, the ultimate liability may be more or less than the amounts provided. The approach and methods for making such estimates and for establishing the resulting liability are continually reviewed and any adjustments are reflected in current earnings.

Due and Deferred Premiums

Due and deferred premiums consist of uncollateralized premiums and agents' balances in the course of collection as well as premiums booked but not yet due.

Reinsurance

In the normal course of business, the Company seeks to reduce the overall exposure to losses that may arise from catastrophes or other events that cause unfavorable underwriting results by reinsuring certain levels of risk with other insurance enterprises or reinsurers. The Company uses only quality, financially rated reinsurers and continually monitors the financial ratings of these companies through its brokers. The amount and type of reinsurance purchased each year is based on management's analysis of liquidity and its estimate of its probable maximum loss and the conditions within the reinsurance market. The Company continually monitors its risk exposure through the use of the AIR modeling system and other modeling tools provided by its reinsurance brokers. Reinsurance premiums, expense reimbursements, and reserves related to reinsured business are accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts. Premiums paid for reinsurance are reported as reductions of earned premium income.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss carryforwards, and liabilities are measured using enacted tax rates expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. In assessing the realizable value of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.

Uncertain Tax Positions

The Company recognizes uncertain tax positions in the consolidated financial statements when it is more-likely-than-not the position will be sustained upon examination by the tax authorities. Such tax positions are initially and subsequently measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. The Company believes that it has appropriate support for the income tax positions taken and to be taken on its tax returns, and that its accruals for tax liabilities are adequate for all open tax years based on an assessment of many factors including experience and interpretations of tax laws applied to the facts of each matter. At December 31, 2014, the Company's tax years from 2010 through 2014 remain subject to examination.

Estimates

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 liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company's primary areas of estimate are for liabilities for unpaid losses and loss adjustment expenses, deferred policy acquisition costs, deferred tax asset valuation, and reinsurance. Actual results could differ significantly from those estimates.

Fair Value of Cash, Cash Equivalents and Short-term Investments

The carrying value for the Company's cash and cash equivalents and short-term investments approximate fair values as of December 31, 2014 and 2013 due to their short-term nature. Fair value for securities are based on the framework for measuring fair value established by FASB ASC Topic 820, Fair Value Measurements and Disclosures.

Fair Value Fixed-Maturity Securities held as Available-for-Sale

The Company's fixed-maturity securities held as available-for-sale are carried at fair value as of December 31, 2014. Fair value for securities are based on the framework for measuring fair value established by FASB ASC Topic 820, Fair Value Measurements and Disclosures.

Convertible Notes Payable

The Company accounts for convertible notes payable under FASB ASC Topic 470-20 – Debt with Conversion and Other Options, which requires issuers to assess whether or not an embedded conversion feature is required to be separately accounted for as a derivative liability for liability and equity components and if the conversion feature is beneficial to the holder. See Note 10 on Convertible Notes Payable for additional disclosure.

Stock Split

In August 2013, the Company effected a 2.5 for 1 forward stock split (the "Stock Split") of all of its issued and outstanding shares of common stock. All holders of the Company's Series A and Series B preferred shares converted their preferred shares to common stock prior to the effectiveness of the stock split. All share and per share information provided in this report reflects the effect of the split for all periods presented.

Stock Based Compensation

The Company accounts for stock-based compensation under the fair value recognition provisions of FASB ASC Topic 718 – Compensation – Stock Compensation, which requires the measurement and recognition of compensation for all stock-based awards made to employees and directors including stock options and restricted stock issuances based on estimated fair values. In accordance with FASB ASC Topic 718, the Company recognizes stock-based compensation, if any, in the consolidated statements of operations on a straight line basis over the vesting period of the stock award. For those stock awards vesting 100 % at the issue date, the Company recognizes stock-based compensation immediately.

Earnings (Loss) Per Share

Basic earnings (loss) per share of common stock is computed by dividing net income or loss, less cumulative preferred stock dividends for the period whether or not earned or paid, by the weighted-average number of common shares during the period.

Diluted earnings (loss) per share of common stock is computed by dividing net income or loss attributable to common stockholders, adjusted for the effect of potentially dilutive securities, by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include convertible notes payable, outstanding convertible preferred stock and common stock options.

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DEFERRED POLICY ACQUISITION COSTS (Tables)

12 Months Ended

Dec. 31, 2014

DEFERRED POLICY ACQUISITION COSTS [Abstract]

Deferred policy acquisition costs

Changes in deferred policy acquisition costs for the years ended December 31, 2014 and 2013 are as follows:

	2014			2013
Deferred policy acquisition charges, beginning of the period	$	6,214,334		$	5,274,515
Capitalized costs		14,429,241			11,451,353
Amortized costs		(12,745,769	)		(10,511,534	)
Deferred policy acquisition charges, end of the period	$	7,897,806		$	6,214,334

8.UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES

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RELATED PARTY TRANSACTIONS (Details) (USD $)	1 Months Ended	12 Months Ended
	Aug. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Inter-Atlantic Advisors III, Ltd. [Member]
Related Party Transaction [Line Items]
Initial term of Advisory Agreement	6 years
Number of days notice required for termination of Advisory Agreement	60 days
Inter-Atlantic Advisors III, Ltd. [Member] | Annual Advisory Fee [Member]
Related Party Transaction [Line Items]
Related party transaction amount	$ 300,000	$ 450,000	$ 125,000
Inter-Atlantic Advisors III, Ltd. [Member] | Annual Grant of Shares [Member]
Related Party Transaction [Line Items]
Common stock issued	150,000
Directors [Member] | Annual Grant of Shares [Member]
Related Party Transaction [Line Items]
Common stock issued		$ 150,000
Shares of common stock issued (in shares)		288,462

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INCOME TAXES, Deferred Tax Assets and Liabilities (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Gross Deferred Tax Assets:
Loss reserve discount	$ 14,915	$ 12,713
Unearned premium reserve discount	339,224	235,548
Organization costs (net of amortization)	64,390	62,239
Unearned ceding commissions	3,808,108	2,742,835
Stock-based compensation	7,677	0
Total Deferred Tax Assets	4,234,314	3,053,335
Valuation allowance	0	0
Total Adjusted Deferred Tax Assets	4,234,314	3,053,335
Deferred Tax Liabilities
Deferred policy acquisition costs	2,685,253	2,112,873
Property, equipment and software	31,126	7,241
Total deferred tax liabilities	2,716,379	2,120,114
Net Deferred Tax Assets	$ 1,517,935	$ 933,221

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CONSOLIDATED BALANCE SHEETS (USD $)	Dec. 31, 2014	Dec. 31, 2013
Assets:
Cash and cash equivalents	$ 5,648,278	$ 8,104,310
Short-term investments	1,231,881	4,151,011
Restricted cash and investments	3,790,000	1,000,000
Restricted fixed-maturity securities, available-for-sale, at fair value (amortized cost $539,558)	539,654	0
Fixed-maturity securities, available-for-sale, at fair value (amortized cost $3,827,268)	3,827,245	0
Long-term investments	3,430,000	1,960,000
Accrued investment income	55,908	8,853
Due and deferred premiums	5,089,131	4,169,824
Balance due from reinsurers	54,157,528	46,281,756
Property, equipment and software, net	344,495	244,516
Deferred policy acquisition costs	7,897,806	6,214,334
Prepaid expenses and other	552,728	128,195
Deferred tax assets, net	1,517,935	933,221
Total assets	88,082,589	73,196,020
Liabilities:
Loss and loss adjustment expenses	15,009,506	15,884,062
Advance premiums	74,172	90,854
Ceded reinsurance premiums payable	4,342,874	3,271,858
Unearned premiums	40,021,934	31,297,118
Unearned ceding commissions	11,200,317	8,067,162
Commissions payable, reinsurers and agents	3,754,929	3,716,423
General and other accrued expenses payable	2,232,547	1,906,265
Income tax payable	0	211,198
Taxes, licenses and other fees payable	765,782	474,503
Total liabilities	77,402,061	64,919,443
Stockholders' equity:
Common stock, $0.0001 par value per share; 40,000,000 shares authorized; 17,479,852 shares issued and 16,168,852 shares outstanding as of December 31, 2014 and 17,181,140 shares issued and 15,831,140 shares outstanding as of December 31, 2013	1,617	1,583
Treasury stock, $0.0001 par value per share; 1,311,000 common shares as of December 31, 2014 and 1,350,000 common shares as of December 31, 2013	(131)	(135)
Additional paid-in-capital	6,209,265	5,969,550
Accumulated other comprehensive income	73	0
Retained earnings	4,469,704	2,305,579
Total stockholders' equity	10,680,528	8,276,577
Total liabilities and stockholders' equity	$ 88,082,589	$ 73,196,020

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UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES [Abstract]
Reserve for losses and LAE, beginning of year	$ 15,884,062	$ 11,641,296
Reinsurance recoverables on losses and LAE	(15,090,175)	(10,618,032)
Reserve for losses and LAE, net of reinsurance recoverables at beginning of year	793,887	1,023,264
Add provision for claims and LAE occurring in:
Current year	2,882,295	2,015,107
Prior years	48,000	244,000
Net incurred losses and LAE during the current period	2,930,295	2,259,107
Deduct payments for claims and LAE occurring in:
Current year	2,111,930	1,927,482
Prior years	598,146	561,002
Net claim and LAE payments during the current year	2,710,076	2,488,484
Reserve for losses and LAE, net of reinsurance recoverables, at end of year	1,014,106	793,887
Reinsurance recoverables on losses and LAE	13,995,400	15,090,175
Losses and loss adjustment expenses at December 31	$ 15,009,506	$ 15,884,062

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $)	Total	Preferred Stock [Member] Preferred Stock Series A [Member]	Preferred Stock [Member] Preferred Stock Series B Member]	Common Stock [Member]	Treasury Stock [Member]	Additional Paid-In Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]
Balance at Dec. 31, 2012	$ 5,243,406	$ 450	$ 50	$ 90	$ 0	$ 4,906,000	$ 336,816
Balance (in shares) at Dec. 31, 2012		4,500,000	500,000	900,000	0
Net Income	1,968,763	0	0	0	0	0	1,968,763
Total other comprehensive income, net of income taxes	0
Conversion of Series A Preferred Stock	675	(450)	0	1,125	0	0	0
Conversion of Series A Preferred Stock (in shares)		(4,500,000)		11,250,000
Conversion of Series B Preferred Stock	75		(50)	125	0	0	0
Conversion of Series B Preferred Stock (in shares)			(500,000)	1,250,000
Conversion of Convertible Note Payable	1,000,000		0	227	0	999,773	0
Conversion of Convertible Note Payable (in shares)				2,272,500
Conversion of Interest on Convertible Note Payable	69,808		0	16	0	69,792	0
Conversion of Interest on Convertible Note Payable (in shares)				158,640
Repurchase of Common Stock	(5,400)		0	0	(135)	(5,265)	0
Repurchase of Common Stock (in shares)					1,350,000
Adjustment of Par Value to reflect Forward Stock Split	(750)		0	0	0	(750)	0
Balance at Dec. 31, 2013	8,276,577	0	0	1,583	(135)	5,969,550	2,305,579	0
Balance (in shares) at Dec. 31, 2013		0	0	15,831,140	1,350,000
Net Income	2,164,125			0	0	0	2,164,125	0
Total other comprehensive income, net of income taxes	73			0	0	0	0	73
Stock options exercised	7,850			1	0	7,849	0	0
Stock options exercised (in shares)	10,250			10,250	0
Common stock issued	170,280			33	4	170,243	0	0
Common stock issued (in shares)				327,462	(39,000)
Stock-based compensation	61,623			0	0	61,623	0	0
Balance at Dec. 31, 2014	$ 10,680,528			$ 1,617	$ (131)	$ 6,209,265	$ 4,469,704	$ 73
Balance (in shares) at Dec. 31, 2014				16,168,852	1,311,000

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COMMITMENTS AND CONTINGENCIES (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
COMMITMENTS AND CONTINGENCIES [Abstract]
2015	$ 166,848
2016	174,709
2017	91,284
2018	22,188
2019	12,519
Total	467,548
Operating leases, rent expense	$ 123,187	$ 101,746

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STOCK BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2014

STOCK BASED COMPENSATION [Abstract]

Summary of activity of the Company's stock option plan

A summary of the activity of the Company's stock option plan (as adjusted for the 2.5:1 forward split) for the years ended December 31, 2014 and 2013 is as follows:

	Number of Options			WeightedAvg. Exercise Price		Weighted Avg.Remaining Cont. Term		AggregateIntrinsic Value (in thousands)
Outstanding at December 31, 2012		783,750		$	0.78		5.91	$	-
Granted		1,925,000		$	0.50
Outstanding at December 31, 2013		2,708,750		$	0.58		8.41	$	4
Granted		40,000		$	1.00
Exercised		(10,250	)	$	0.50
Outstanding at December 31, 2014		2,738,500		$	0.59		7.32	$	226
Exercisable at December 31, 2014		1,287,250		$	0.67		5.95	$	75

Schedule of share-based payment award, employee stock purchase plan, valuation assumptions

The fair value of options granted is estimated using a market value approach and the Black-Scholes option pricing model using the following assumptions for the year ended December 31, 2014 and 2013:

	Year Ending December 31, 2014		Year Ending December 31, 2013
Dividend Yield		0.00 %		0.00 %
Expected Volatility		22 %		25 %
Risk-free interest rate		1.65 %		1.75 %
Expected life (in years)		5.21		5.21

Schedule of compensation expense

The Company records stock-based compensation expense related to granting stock options in general and administrative expenses.  The Company recognized compensation expense as follows for the year ended December 31, 2014 and 2013:

	Year Ending
	December 31,
	2014			2013
Total gross compensation expense	$	61,623		$	-
Total tax benefit associated with compensation expense		(7,677	)		-
Total net compensation expense	$	53,946		$	-

Schedule of future compensation expense

As of December 31, 2014, the Company expects to record compensation expense in the future as follows:

	Year Ending December 31,
	2015			2016			2017			2018			2019
Total gross unrecognized compensation expense	$	34,944		$	34,944		$	34,944		$	28,365		$	81
Tax benefit associated with unrecognized compensation expense		(686	)		(686	)		(686	)		(556	)		-
Total net unrecognized compensation expense	$	34,258		$	34,258		$	34,258		$	27,809		$	81

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CONCENTRATION OF CREDIT RISK

12 Months Ended

Dec. 31, 2014

CONCENTRATION OF CREDIT RISK [Abstract]

CONCENTRATION OF CREDIT RISK

15.CONCENTRATION OF CREDIT RISK

The Company has exposure and remains liable in the event of an insolvency of one of its primary reinsurers. Management and its reinsurance intermediary regularly assess the credit quality and ratings of its reinsurer base companies.

Financial instruments which potentially subject the Company to credit risk consist principally of cash, money market accounts on deposit with financial institutions, money market funds, certificates of deposit and fixed-maturity securities, as well as premium balance in the course of collection. At times, the Company's bank deposits may exceed the FDIC limit.

The concentration of credit risk with respect to premium balances in the course of collection is limited, due to the large number of insureds comprising the Company's customer base. However, substantially all of the Company's revenues are derived from customers in Texas, which could be adversely affected by economic conditions, an increase in competition, or other environmental changes.

16.COMMITMENTS AND CONTINGENCIES

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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2014

INCOME TAXES [Abstract]

Schedule of deferred tax assets and liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:

	2014		2013
Gross Deferred Tax Assets:
Loss reserve discount	$	14,915	$	12,713
Unearned premium reserve discount		339,224		235,548
Organization costs (net of amortization)		64,390		62,239
Unearned ceding commissions		3,808,108		2,742,835
Stock-based compensation		7,677		-
Total Deferred Tax Assets		4,234,314		3,053,335
Valuation allowance		-		-
Total Adjusted Deferred Tax Assets	$	4,234,314	$	3,053,335
Deferred Tax Liabilities
Deferred policy acquisition costs	$	2,685,253	$	2,112,873
Property, equipment and software		31,126		7,241
Total deferred tax liabilities		2,716,379		2,120,114
Net Deferred Tax Assets	$	1,517,935	$	933,221

Schedule of effective income tax rate reconciliation

The total income tax provision (benefit) incurred is different from that which would be obtained by applying the statutory federal income tax rate to income before income taxes. The significant items causing this difference for 2014 and 2013 are as follows:

2014	Tax Effect		Tax Rate
Income before taxes at statutory rate	$	1,131,629		34.0	%
Meals and entertainment		9,613		0.29	%
Other		22,955		0.69	%
Total	$	1,164,197		34.98	%

2013	Tax Effect		Tax Rate
Income before taxes at statutory rate	$	1,022,716		34.0	%
Meals and entertainment		9,800		0.33	%
Other		6,708		0.22	%
Total	$	1,039,224		34.55	%

14.REINSURANCE

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REGULATORY REQUIREMENTS AND RESTRICTIONS

12 Months Ended

Dec. 31, 2014

REGULATORY REQUIREMENTS AND RESTRICTIONS [Abstract]

REGULATORY REQUIREMENTS AND RESTRICTIONS

17.REGULATORY REQUIREMENTS AND RESTRICTIONS

HAIC is subject to the laws and regulations of the State of Texas and the regulations of any other states in which HAIC conducts business. State regulations cover all aspects of HAIC's business and are generally designed to protect the interests of insurance policyholders, as opposed to the interests of stockholders. The Texas Insurance Code requires all property and casualty insurers to have a minimum of $2.5 million in capital stock and $2.5 million in surplus. HAIC has capital and surplus in excess of this requirement.

As of December 31, 2013, HAIC's total statutory surplus was $8,963,573 (capital stock of $2,500,000 and surplus of $6,463,573).

As of December 31, 2014, HAIC's total statutory surplus was $12,317,735 (capital stock of $2,500,000 and surplus of $9,817,735).

As of December 31, 2014, HAIC had restricted cash and investments totaling $4.3 million pledged to the Department of Insurance in certain states as a condition of its Certificate of Authority for the purpose of meeting obligations to policyholders and creditors, which includes $1.0million of restricted assets.  Restricted assets represent investments currently awaiting substitution with various states for matured securities. As of December 31, 2013, HAIC had pledged to the Department of Insurance $1.0 million. See Note 1 Organization and Summary of Significant Accounting Policies, Investments for additional disclosure.

The Texas Insurance Code limits dividends from insurance companies to their stockholders to net income accumulated in the Company's surplus account, or "earned surplus".

The maximum dividend that may be paid without approval of the Insurance Commissioner is limited to the greater of 10% of the statutory surplus at the end of the preceding calendar year or the statutory net income of the preceding calendar year. No dividends were paid by HAIC in 2014 or 2013.

HAIC prepares its statutory-based financial statements in conformity with accounting practices prescribed or permitted by the Texas Department of Insurance. Prescribed statutory accounting practices primarily include those published as statements of SAP by the NAIC, as well as state laws, regulations and general administrative rules. Permitted statutory accounting practices encompass all accounting practice not so prescribed. As of December 31, 2014 and 2013, there were no material permitted statutory accounting practice utilized by HAIC.

18.SUBSEQUENT EVENTS

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Cash flows from operating activities:
Net income	$ 2,164,125	$ 1,968,763
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation & amortization	128,107	88,770
Accounting charge related to stock-based compensation expense	61,623	0
Common stock compensation for management services	150,000	0
Other stock issuance expense	20,280	0
Amortization of premium/accretion of discount, net	62,053	0
Deferred tax assets	(584,714)	(116,410)
(Increase) decrease in:
Accrued investment income	(47,055)	(418)
Due and deferred premiums	(919,307)	(526,688)
Balance due from reinsurers	(7,875,772)	(10,201,128)
Deferred policy acquisition costs	(1,683,472)	(939,819)
Deferred ceding commissions	0	683,914
TWIA assessments	0	80,040
Prepaid and other	(424,533)	2,101
Increase (decrease) in:
Losses and loss adjustment expenses	(874,556)	4,242,766
Advance premiums	(16,682)	54,355
Ceded reinsurance premiums payable	1,071,016	489,668
Unearned premiums	8,724,816	4,718,190
Ceded deferred premiums	0	(2,381,906)
Unearned ceding commissions	3,133,155	1,240,384
Commissions payable, reinsurance & agents	38,506	(2,400,747)
General and other accrued expenses	326,282	1,246,632
Funds held under reinsurance treaty	0	(36,573)
Income tax payable	(211,198)	(138,587)
Taxes, licenses and other fees payable	291,279	43,121
Net cash provided by (used in) operating activities	3,533,953	(1,883,572)
Cash flows from investing activities:
Purchases of long-term certificate of deposit	(3,430,000)	(1,960,000)
Maturities of long-term certificate of deposit	1,960,000	2,155,695
Purchases of short-term investments	(4,262,922)	(1,752,658)
Maturities of short-term investments	4,392,052	1,455,000
Purchases of fixed-maturity securities, available-for-sale	(5,033,879)	0
Call or maturity of fixed-maturity securities, available-for-sale	605,000	0
Additions to furniture, equipment and software	(228,086)	(99,130)
Net cash used in investing activities	(5,997,835)	(201,093)
Cash flows from financing activities:
Repurchase of common stock	0	(5,400)
Proceeds from stock options exercised	7,850	0
Net cash provided by (used in) financing activities	7,850	(5,400)
Net decrease in cash and cash equivalents	(2,456,032)	(2,090,065)
Cash and cash equivalents, beginning of period	8,104,310	10,194,375
Cash and cash equivalents, end of the period	5,648,278	8,104,310
Supplemental disclosure of cash flow information:
Cash paid during the year for income tax	2,307,680	1,260,724
Non cash investing from financing activities
Repayment of debt on convertible note and conversion to common stock	0	1,000,000
Conversion of interest on convertible note	$ 0	$ 69,808

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Assets:
Restricted fixed-maturity securities, available for sale, amortized cost	$ 539,558	$ 0
Fixed-maturity securities, available for sale, amortized cost	$ 3,827,268	$ 0
Stockholders' equity:
Common stock, par or stated value per share (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	40,000,000	40,000,000
Common stock, shares issued (in shares)	17,479,852	17,181,140
Common stock, shares outstanding (in shares)	16,168,852	15,831,140
Treasury stock par value (in dollars per share)	$ 0.0001	$ 0.0001
Treasury stock, shares (in shares)	1,311,000	1,350,000

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STOCKHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2014

STOCKHOLDERS' EQUITY [Abstract]

STOCKHOLDERS' EQUITY

10.STOCKHOLDERS' EQUITY

Preferred Stock

As of December 31, 2014 and December 31, 2013, the Company has 20,500,000 shares of preferred stock, convertible, 12.50 % cumulative, $0.0001 par value per share, authorized and none issued and outstanding.

Common Stock

As of December 31, 2014, the Company had 40,000,000 shares authorized and 17,479,852 shares issued and 16,168,852 shares outstanding of $0.0001 par value common stock. Holders of common stock are entitled to one (1) vote for each share of common stock held at all meetings of stockholders.

As of December 31, 2013, the Company had 40,000,000 shares authorized and 17,181,140 shares issued and 15,831,140 shares outstanding of $0.0001 par value common stock. Holders of common stock are entitled to one (1) vote for each share of common stock held at all meetings of stockholders.

There were no common stock warrants issued during the years ended December 31, 2014 and 2013.

XML

Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2014	Mar. 26, 2015	Jun. 30, 2014
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY
Entity Public Float			$ 0
Entity Common Stock, Shares Outstanding		16,397,125
Entity Registrant Name	Homeowners of America Holding Corp
Entity Central Index Key	0001346922
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company

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EARNINGS (LOSS) PER SHARE

12 Months Ended

Dec. 31, 2014

EARNINGS (LOSS) PER SHARE [Abstract]

EARNINGS (LOSS) PER SHARE [Text Block]

11.EARNINGS (LOSS) PER SHARE

The following table represents the reconciliation of the Company's basic earnings per common share and diluted earnings per common share computations reported on the Consolidated Statements of Operations for the year ended December 31, 2014 and 2013:

	Year Ended
	December 31,
	2014		2013
Basic earnings per common share
Net income	$	2,164,125	$	1,968,763
Cumulative dividend		-		(974,179	)
Adjusted net income	$	2,164,125	$	994,584
Weighted average common shares outstanding		16,126,689		6,777,047
Basic earnings per common share	$	0.13	$	0.15
	Year Ended
	December 31,
		2014		2013
Diluted earnings per common share
Net income	$	2,164,125	$	1,968,763
Add interest expense on convertible promissory notes		-		45,540
Adjusted net income	$	2,164,125	$	2,014,303
Weighted average common shares outstanding		16,162,352		16,731,140
Effect of diluted securities:
Stock options		1,287,250		902,500
Diluted common shares outstanding		17,449,602		17,633,640
Diluted earnings per common share	$	0.12	$	0.11

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Revenues:
Premiums earned	$ 64,895,484	$ 53,238,811
Ceded premiums	(60,484,640)	(48,422,943)
Net premiums earned	4,410,844	4,815,868
Policy fees	5,616,525	4,655,315
Ceding commissions and reinsurance profit share	16,651,464	11,805,811
Investment income, net of investment expenses	43,603	41,649
Loss adjustment and other fee income	1,530,234	1,232,123
Total revenue	28,252,670	22,550,766
Expenses:
Losses and loss adjustment expenses	2,930,295	2,259,107
Policy acquisition and other underwriting expenses	16,497,662	13,058,774
General and administrative expenses	5,496,391	4,224,898
Total expenses	24,924,348	19,542,779
Income before income taxes	3,328,322	3,007,987
Provision (benefit) for income taxes:
Current	1,748,911	1,155,634
Deferred	(584,714)	(116,410)
Total income taxes	1,164,197	1,039,224
Net income	2,164,125	1,968,763
Cumulative preferred stock dividends	0	(974,179)
Net income (loss) available to common stockholders	$ 2,164,125	$ 994,584
Basic income (loss) per common share (in dollars per share)	$ 0.13	$ 0.15
Diluted income (loss) per common share (in dollars per share)	$ 0.12	$ 0.11
Cash dividend declared per common share (in dollars per share)	$ 0	$ 0

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FAIR VALUE OF FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2014

FAIR VALUE OF FINANCIAL INSTRUMENTS [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

5.FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial assets carried at fair value have been classified, for disclosure purposes, based on the hierarchy established within FASB ASC Topic 820-10 – Fair Value Measurements and Disclosures. When market prices are not available, fair value is generally estimated utilizing valuation techniques that vary by asset class and incorporate available trade, bid and other market information, when available. The acceptable valuation techniques include (a) market approach, which uses prices or relevant information derived from market transactions for identical or comparable assets or liabilities, (b) the Income Approach, which converts future amounts such as cash flows or earnings to a single present value amount based on current market expectations about those future amounts, and (c) the Cost Approach, which is based on the amount that currently would be required to replace the service capacity of an asset. In certain circumstances, these valuation techniques may involve some level of management estimation and judgment which becomes significant with increasingly complex instruments or pricing models. Where appropriate, adjustments are included to reflect the risk premium inherent in a particular methodology, model or input used.

The fair value hierarchy is used to prioritize valuation inputs into three levels:

 Level 1 - unadjusted quoted prices in active markets for identical assets or liabilities. These inputs are considered to be the most reliable evidence of fair value.

 Level 2 – quoted prices for similar assets in active markets, quoted prices from those willing to trade in markets that are not active, or other inputs that are observable or can be corroborated by market data for the term of the investment. Such inputs include market interest rates and volatilities, spreads and yield curves.

 Level 3 – termed unobservable inputs which are utilized in situations where there is little or no market activity for the asset or liability at the measurement date. The approach typically involves a significant subjective management judgment toward the pricing of the security.

The Company's short-term investments comprised of certificates of deposit held at financial institutions which are not measured at fair value on a recurring basis. A portion of the Company's cash and cash equivalents include money market mutual fund accounts held at financial institutions which are measured at fair value on a recurring basis. Fixed-maturity securities held as available-for-sale are carried at fair value in our consolidated financial statements. The following tables provide information as of December 31, 2014 and 2013, about the Company's financial assets measured at fair value on a recurring basis:

	Fair Value Measurements Using
	Level 1		Level 2		Level 3		Total
As of December 31, 2014
Money market mutual funds	$	3,372,527	$	-	$	-	$	3,372,527
Restricted money market mutual funds		300,000		-		-		300,000
Securities-available-for-sale fixed-maturity:
Obligations of states, municipalities and political subdivisions		-		3,827,245		-		3,827,245
U.S. Treasury		-		539,654		-		539,654
Total	$	3,672,527	$	4,366,899	$	-	$	8,039,426

	Fair Value Measurements Using
	Level 1		Level 2		Level 3		Total
As of December 31, 2013
Money market mutual funds	$	5,903,478	$	-	$	-	$	5,903,478
Restricted money market mutual funds		-		-		-		-
Securities-available-for-sale fixed-maturity:
Obligations of states, municipalities and political subdivisions		-		-		-		-
U.S. Treasury		-		-		-		-
Total	$	5,903,478	$	-	$	-	$	5,903,478

The following methods and assumptions were used to estimate the fair value disclosures for financial instruments:

Money market mutual funds are valued at the closing price reported by the fund sponsor from an actively traded exchange. As the funds are generally maintained at a net asset value which does not fluctuate, cost approximates fair value. These are included as a Level 1 measurement in the table above. The fair values for available-for-sale fixed-maturity securities 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. 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 year ended December 31, 2014.

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INVESTMENTS

12 Months Ended

Dec. 31, 2014

INVESTMENTS [Abstract]

INVESTMENTS

4.INVESTMENTS

Investment income, net of investment expenses totaled $43,603 and $41,649 for the years ended December 31, 2014 and 2013, respectively.

For the year ended December 31, 2014, there were $73 in unrealized gains/(losses) on fixed-maturity securities held as available-for-sale. There were no realized gains or losses recognized for the periods due to the short term nature of the investments held. The intent is to hold to maturity certificates of deposit carried at amortized cost.

The following table provides the Company's short-term, restricted and long-term investment holdings by type of financial instruments that were used to estimate the fair value disclosures for financial instruments: 

	December 31, 2014						December 31, 2013
	Book Value			Fair Value Carrying Value			Book Value			Fair Value Carrying Value
Financial Assets:
Restricted certificates of deposit		$	3,490,000		$	3,490,000		$	785,000		$	785,000
Restricted money markets			300,000			300,000			215,000			215,000
Long-term investments			3,430,000			3,430,000			1,960,000			1,960,000
Short-term investments			1,231,881			1,231,881			4,151,011			4,151,011
		$	8,451,881		$	8,451,881		$	7,111,011		$	7,111,011

	December 31, 2014		December 31, 2013
	Range of Maturities	Interest Rates	Range of Maturities	Interest Rates
Restricted certificates of deposit	Less than 1 year	0.10% - 1.40%	Less than 1 year	0.10% - 0.25%
Restricted money markets	Less than 1 year	–	Less than 1 year	–
Long-term investments	More than 1 year	0.75% - 1.50%	More than 1 year	0.30% - 0.70%
Short-term investments	Less than 1 year	0.35% - 0.70%	Less than 1 year	0.20% - 1.24%

The following table provides the Company's fixed-maturity securities classified as available-for-sale which are carried at fair value as of December 31, 2014:

	December 31, 2014
			Gross Unrealized
	Amortized Cost		Gains		Losses			Fair Value
Fixed Maturities:
Obligations of states, municipalities and political subdivisions	$	3,827,268	$	6,331	$	(6,354	)	$	3,827,245
U.S. Treasury - held as restricted		539,558		96		-			539,654
Total Fixed Maturities	$	4,366,826	$	6,427	$	(6,354	)	$	4,366,899

The amortized cost and fair value of available-for-sale fixed-maturity securities at December 31, 2014, by contractual maturity, are shown in the following table.  Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	December 31, 2014
Remaining Time to Maturity	Amortized Cost Basis		Fair Value
Less than one year	$	570,236	$	569,734
One to five years		1,985,297		1,981,134
Five to ten years		162,124		162,519
More than ten years		1,649,169		1,653,512
Total	$	4,366,826	$	4,366,899

Other-than-temporary Impairment ("OTTI")

The Company regularly reviews its individual investment securities for OTTI. The Company considers various factors in determining whether each individual security is other-than-temporarily-impaired, including:

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

• the length of time and the extent to which the market value of the security has been below its cost or amortized cost;

• general market conditions and industry or sector specific factors;

• nonpayment by the issuer of its contractually obligated interest and principal payments; and

• the Company's intent and ability to hold the investment for a period of time sufficient to allow for the recovery of costs.

Securities with gross unrealized loss positions at December 31, 2014 were immaterial. The Company believes there were no fundamental issues such as credit losses or other factors with respect to any of its available-for-sale securities. The unrealized losses on investments in fixed-maturity securities were caused primarily by interest rate changes. It is expected that the securities would not be settled at a price less than par value of the investments. Because the declines in fair value are attributable to changes in interest rates or market conditions and not credit quality, and because the Company has the ability and intent to hold its available-for-sale investments until a market price recovery or maturity, the Company does not consider any of its investments to be other-than-temporarily impaired at December 31, 2014.

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COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2014

COMMITMENTS AND CONTINGENCIES [Abstract]

COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases its corporate office space and certain office equipment under non-cancelable operating leases which expire at various dates through 2019. Future minimum lease payments required under the non-cancelable operating leases are as follows for the years ending December 31:

2015	$	$166,848
2016		174,709
2017		91,284
2018		22,188
2019		12,519
	$	$467,548

Rent expense under such leases in the year ended December 31, 2014 and December 31, 2013 was $123,187 and $101,746, respectively.

Litigation

The Company is the defendant in routine litigation involving matters that are incidental to the claims function of the Company's insurance business for which estimated losses are included in unpaid loss and loss adjustment expense reserves in the Company's consolidated financial statements. It is management's opinion that these lawsuits are not material individually or in the aggregate to the Company's financial position, results of operations, or cash flow.

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STOCK BASED COMPENSATION

12 Months Ended

Dec. 31, 2014

STOCK BASED COMPENSATION [Abstract]

STOCK BASED COMPENSATION

12. STOCK BASED COMPENSATION

The Company accounts for stock-based compensation under the fair value recognition provision of FASB ASC Topic 718 – Compensation – Stock Compensation.

Incentive Plans

The Company's 2005 Management Incentive Plan (the "2005 Plan") provides for granting of stock options to enable the Company to obtain and retain the services of selected persons, both employees and directors, considered to be essential to the long-range success of the Company. Under the 2005 Plan, options may be granted to purchase a total not to exceed 789,475 shares in the aggregate (as adjusted for the 2.5:1 forward split), made up of original issue shares, treasury share or a combination of the two. Options have a life of 10 years and vest at a rate of 25% per year, beginning 12 months from their date of issue. At December 31, 2013, options to purchase 783,750 shares have been granted under the 2005 Plan.

On October 24, 2013, the Board of Directors ("the Board) of the Company unanimously approved and adopted the 2013 Equity Compensation Plan (the "2013 Plan") which became effective October 24, 2013. The 2013 Plan provides granting of stock options, incentive stock options, stock awards, and restricted stock units to enable the Company to obtain and retain the services of selected persons, both employees and directors, considered to be essential to the long-range success of the Company. Under the 2013 Plan, options may be granted to purchase a total not to exceed 2,925,000 shares, made up of original issue shares, treasury shares or a combination of the two. The 2013 Plan will terminate on October 23, 2023. At December 31, 2014, options to purchase 1,965,000 shares of common stock and 39,000 shares of common stock in the form of a stock award had been granted under the 2013 Plan.

At December 31, 2014, options to purchase under the 2005 Plan was 773,500 shares and under the 2013 Plan was 1,965,000 shares for a total of 2,738,500 shares.

A summary of the activity of the Company's stock option plan (as adjusted for the 2.5:1 forward split) for the years ended December 31, 2014 and 2013 is as follows:

	Number of Options			WeightedAvg. Exercise Price		Weighted Avg.Remaining Cont. Term		AggregateIntrinsic Value (in thousands)
Outstanding at December 31, 2012		783,750		$	0.78		5.91	$	-
Granted		1,925,000		$	0.50
Outstanding at December 31, 2013		2,708,750		$	0.58		8.41	$	4
Granted		40,000		$	1.00
Exercised		(10,250	)	$	0.50
Outstanding at December 31, 2014		2,738,500		$	0.59		7.32	$	226
Exercisable at December 31, 2014		1,287,250		$	0.67		5.95	$	75

The fair value of options granted is estimated using a market value approach and the Black-Scholes option pricing model using the following assumptions for the year ended December 31, 2014 and 2013:

	Year Ending December 31, 2014		Year Ending December 31, 2013
Dividend Yield		0.00 %		0.00 %
Expected Volatility		22 %		25 %
Risk-free interest rate		1.65 %		1.75 %
Expected life (in years)		5.21		5.21

The Company records stock-based compensation expense related to granting stock options in general and administrative expenses.  The Company recognized compensation expense as follows for the year ended December 31, 2014 and 2013:

	Year Ending
	December 31,
	2014			2013
Total gross compensation expense	$	61,623		$	-
Total tax benefit associated with compensation expense		(7,677	)		-
Total net compensation expense	$	53,946		$	-

As of December 31, 2014, the Company expects to record compensation expense in the future as follows:

	Year Ending December 31,
	2015			2016			2017			2018			2019
Total gross unrecognized compensation expense	$	34,944		$	34,944		$	34,944		$	28,365		$	81
Tax benefit associated with unrecognized compensation expense		(686	)		(686	)		(686	)		(556	)		-
Total net unrecognized compensation expense	$	34,258		$	34,258		$	34,258		$	27,809		$	81

Stock options granted in 2014 had a weighted average grant date fair value of $0.02. Stock options granted in 2013 had a weighted average grant date fair value of $0.10.

13.INCOME TAXES

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UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES

12 Months Ended

Dec. 31, 2014

UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES [Abstract]

UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES

Losses and loss adjustment expenses (LAE), less related reinsurance and deductibles, are charged to operations as incurred. Unpaid losses and LAE are based on claims adjusters' estimates of the cost of settlement plus an estimate for losses IBNR based upon historical experience, industry loss experience, and management's estimates. Loss reserves reflect Company management's best estimate of the total cost of (i) claims that have been incurred but not yet paid, and (ii) claims that have been incurred, but not yet reported (IBNR). Loss reserves that are established by Company management are not an exact calculation of our liability, but rather loss reserves represent management's best estimate for our Company's liability based on the application of actuarial techniques and other projection methodology, taking into consideration other facts and circumstances known as of the balance sheet date. The process of setting reserves is complex and necessarily imprecise. The impact of both internal and external variables on ultimate loss and LAE costs is difficult to estimate. To arrive at its best estimate for losses, the Company uses damage estimating software developed and owned by acknowledged industry leader, Insurance Service Office. Reserve factors for IBNR are reviewed quarterly by an independent actuarial consultant. In addition, our appointed independent actuary attests to the adequacy of our unpaid claim reserve, including IBNR at calendar year end.

Losses and Loss Adjustment Expenses

The following table provides the reconciliation of the beginning and ending reserve balances for losses and LAE, gross of reinsurance for 2014 and 2013: 

	2014			2013
Reserve for losses and LAE, beginning of year	$	15,884,062		$	11,641,296
Reinsurance recoverables on losses and LAE		(15,090,175	)		(10,618,032	)
Reserve for losses and LAE, net of reinsurance recoverables at beginning of year		793,887			1,023,264
Add provision for claims and LAE occurring in:
Current year		2,882,295			2,015,107
Prior years		48,000			244,000
Net incurred losses and LAE during the current year		2,930,295			2,259,107
Deduct payments for claims and LAE occurring in:
Current year		2,111,930			1,927,482
Prior years		598,146			561,002
Net claim and LAE payments during the current year		2,710,076			2,488,484
Reserve for losses and LAE, net of reinsurance recoverables, at end of year		1,014,106			793,887
Reinsurance recoverables on losses and LAE		13,995,400			15,090,175
Losses and loss adjustment expenses at December 31	$	15,009,506		$	15,884,062

As a result of additional information on claims occurring in prior years becoming available to management, changes in estimates of provisions of claims and claim adjustment expenses were made resulting in an increase of $48,000 and $244,000 for the years ended December 31, 2014 and 2013, respectively.

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REGULATORY REQUIREMENTS AND RESTRICTIONS (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
REGULATORY REQUIREMENTS AND RESTRICTIONS [Abstract]
Minimum in capital stock requires by insurance regulator	$ 2,500,000
Minimum in surplus requires by insurance regulator	2,500,000
Statutory accounting practices, statutory capital and surplus, balance	12,317,735	8,963,573
Statutory accounting practices statutory capital balance	2,500,000	2,500,000
Statutory accounting practices statutory surplus balance	9,817,735	6,463,573
Statutory accounting practices, future dividend payments restrictions	The maximum dividend that may be paid without approval of the Insurance Commissioner is limited to the greater of 10% of the statutory surplus at the end of the preceding calendar year
Maximum dividend limit without insurance commissioners approval (in hundredths)	0.1
Dividend paid	0	0
Financial Instruments Owned and Pledged as Collateral [Line Items]
Restricted cash and investments	3,790,000	1,000,000
Restricted Assets	1,000,000	0
Restricted Assets Pledged [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Restricted Assets	1,000,000
Restricted Cash and Investments Pledged to Department of Insurance [Member]
Financial Instruments Owned and Pledged as Collateral [Line Items]
Restricted cash and investments	$ 4,300,000	$ 1,000,000

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PROPERTY, EQUIPMENT, AND SOFTWARE NET

12 Months Ended

Dec. 31, 2014

PROPERTY, EQUIPMENT, AND SOFTWARE NET [Abstract]

PROPERTY, EQUIPMENT, AND SOFTWARE NET

6.PROPERTY, EQUIPMENT, AND SOFTWARE NET

Property, equipment, and software net consist of the following as of December 31, 2014 and 2013, respectively:

	December 31, 2014			December 31, 2013			Useful Life
Computer equipment	$	231,860		$	222,225		3 years
Office equipment		17,409			13,999		5 years
Furniture and fixtures		142,450			106,524		5 years
Software installation and development		929,316			750,200		3 years
Total, at cost		1,321,035			1,092,948
Less accumulated depreciation and amortization		(976,540	)		(848,432	)
Property and equipment, net	$	344,495		$	244,516

Depreciation and amortization expense for property, equipment and software totaled $128,107 and $88,770 for the years ended December 31, 2014 and 2013, respectively.

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DEFERRED POLICY ACQUISITION COSTS

12 Months Ended

Dec. 31, 2014

DEFERRED POLICY ACQUISITION COSTS [Abstract]

DEFERRED POLICY ACQUISITION COSTS

7.DEFERRED POLICY ACQUISITION COSTS

Total capitalized deferred policy acquisition costs as of December 31, 2014 and December 31, 2013, comprised of commissions, premium taxes and costs associated with underwriting and issuing policies were $7,897,806 and $6,214,334, respectively.

Changes in deferred policy acquisition costs for the years ended December 31, 2014 and 2013 are as follows:

	2014			2013
Deferred policy acquisition charges, beginning of the period	$	6,214,334		$	5,274,515
Capitalized costs		14,429,241			11,451,353
Amortized costs		(12,745,769	)		(10,511,534	)
Deferred policy acquisition charges, end of the period	$	7,897,806		$	6,214,334

8.UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES

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CONVERTIBLE NOTES PAYABLE

12 Months Ended

Dec. 31, 2014

CONVERTIBLE NOTES PAYABLE [Abstract]

CONVERTIBLE NOTES PAYABLE

9.CONVERTIBLE NOTES PAYABLE

As of December 31, 2013, the Convertible Promissory Note agreements with Inter-Atlantic Fund, L.P. and Phoenix Associates, Inc. (companies controlled by a shareholder and former director, respectively) in the amounts of $950,000 and $50,000, respectively, with an interest rate equal to 10 % per annum (accelerating to 12.5 % per annum in the event of default) were converted into 2,306,152 and 124,988 common shares, respectively.

During the year ended December 31, 2013, interest expense on these notes totaled $68,164.

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EARNINGS (LOSS) PER SHARE (Tables)

12 Months Ended

Dec. 31, 2014

EARNINGS (LOSS) PER SHARE [Abstract]

Basic and diluted earnings per share

	Year Ended
	December 31,
	2014		2013
Basic earnings per common share
Net income	$	2,164,125	$	1,968,763
Cumulative dividend		-		(974,179	)
Adjusted net income	$	2,164,125	$	994,584
Weighted average common shares outstanding		16,126,689		6,777,047
Basic earnings per common share	$	0.13	$	0.15
	Year Ended
	December 31,
		2014		2013
Diluted earnings per common share
Net income	$	2,164,125	$	1,968,763
Add interest expense on convertible promissory notes		-		45,540
Adjusted net income	$	2,164,125	$	2,014,303
Weighted average common shares outstanding		16,162,352		16,731,140
Effect of diluted securities:
Stock options		1,287,250		902,500
Diluted common shares outstanding		17,449,602		17,633,640
Diluted earnings per common share	$	0.12	$	0.11

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STOCK BASED COMPENSATION, Compensation Expense (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
STOCK BASED COMPENSATION [Abstract]
Total gross compensation expense	$ 61,623	$ 0
Total tax benefit associated with compensation expense	(7,677)	0
Total net compensation expense	$ 53,946	$ 0

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REINSURANCE

12 Months Ended

Dec. 31, 2014

REINSURANCE [Abstract]

REINSURANCE

Certain premiums and benefits are ceded to other insurance companies under various reinsurance agreements. The reinsurance agreements provide HAIC with increased capacity to write larger risks and maintain its exposure to loss within its capital resources. Ceded reinsurance contracts do not relieve HAIC from its obligations to policyholders. HAIC remains liable to its policyholders for the portion reinsured to the extent that any reinsurer does not meet the obligations assumed under the reinsurance agreements. To minimize its exposure to significant losses from reinsurer insolvencies, HAIC evaluates the financial condition of its reinsurers and monitors concentrations of credit risk arising from similar geographic regions, activities, or economic characteristics of the reinsurers.

For the 12 month period commencing April 1, 2014 and ending March 31, 2015, the Company reinsured its property and casualty risk under quota share reinsurance treaties with third party reinsurers. The treaties cover 80% of its risk under property coverage on any one loss occurrence not to exceed $110 million; 10% of its risk under property coverage on any one loss occurrence not to exceed $4 million and approximately 64% of its risk under casualty coverage.

Property catastrophe treaties, which went into effect on the same day and having the same term as the quota share treaties, develop over four layers and 20% of our risk on property coverage on a gross loss of $110 million excess of $4 million per occurrence. The Company's net retention is $400,000 per loss occurrence.

Commencing August 1, 2014 and ending November 30, 2014, the Company purchased a fifth layer of property catastrophe reinsurance with third party reinsurers to cover its potential maximum loss during the 2014 hurricane season.  The layer extended the Company's coverage to $140 million, excess of $4 million of ultimate net loss arising out of each loss occurrence. When this coverage was in force, the Company's net retention on each loss occurrence remained at $400,000.

From April 1, 2013 through March 31, 2014, the Company reinsured with various third party reinsurers under residential quota share reinsurance treaties, 90% of its risk. The reinsurers' liability under the quota share arrangement beginning in respect to any one loss occurrence shall not exceed $80 million. Property catastrophe treaties, which went into effect on the same day and have the term as the quota share treaties, develop over four layers and cover a gross loss of $76 million excess of $4 million per occurrence. The Company's net retention is $400,000 per occurrence.

The Company also purchases reinsurance covering non-weather losses (two occurrences) in excess of a gross loss of $500,000 per occurrence for all coverage lines (a net loss of $50,000). This coverage, which was in force during 2014 and 2013, had been obtained principally to protect the Company in the event of a large fire loss.

The effects of reinsurance on premiums written and earned were as follows, for the years ended December 31, 2014 and December 31, 2013:

	2014								2013
	Written				Earned				Written				Earned
Direct premiums		$	73,620,300			$	64,895,484			$	57,957,011			$	53,238,811
Ceded premiums			(65,079,700	)			(60,484,640	)			(51,683,634	)			(48,422,943	)
Net Premiums		$	8,540,600			$	4,410,844			$	6,273,377			$	4,815,868

Following is a summary of HAIC's reinsurance balances under the above described reinsurance treaties as of December 31, 2014 and December 31, 2013:

	2014		2013
Ceded premiums payable	$	4,342,874	$	3,271,858
Ceded loss adjustment expenses	$	4,763,808	$	4,424,649
Ceded loss and loss adjustment expense reserve	$	13,995,400	$	15,090,175
Ceded unearned premium reserve	$	35,442,177	$	27,924,037
Ceded earned premiums	$	60,484,640	$	48,422,943

The following is a summary of the names of each of HAIC's significant reinsurer and the amount due from each for paid losses, LAE and unearned premium.

	2014						2013
	Paid Losses & LAE		Unearned Premium		Total Receivable		Paid Losses & LAE		Unearned Premium		Total Receivable
Maiden Reinsurance Company	$	85,203	$	-	$	85,203	$	84,395	$	-	$	84,395
NGM Insurance Company		53,033		-		53,033		11,630		-		11,630
Arch Reinsurance Company		378,977		-		378,977		460,006		7,511,308		7,971,314
Endurance Reinsurance Corp. of America		138,392		-		138,392		178,974		3,129,712		3,308,686
Catlin RE		214,945		4,002,194		4,217,139		-		-		-
Montpelier Insurance Company		107,472		2,001,097		2,108,569		-		-		-
Swiss Re		198,953		4,002,193		4,201,146		-		-		-
RLI Insurance Company		151,525		-		151,525		123,916		-		123,916
SCOR Reinsurance Company		396,192		4,002,194		4,398,386		213,273		3,129,712		3,342,985
Endurance Specialty		19,853		-		19,853		92		-		92
Houston Casualty		7,804		-		7,804		27		-		27
R+V Versicherung AG		590,652		4,913,513		5,504,165		308,614		3,825,256		4,133,870
Everest Re		490,410		8,024,398		8,514,808		177,864		6,259,424		6,437,288
Taiping		94,895		1,600,877		1,695,772		26,680		938,914		965,594
Qatar Re		276,910		4,894,615		5,171,525		-		-		-
SCOR Switzerland		-		-		-		44		-		44
Paladin CAT Management		-		-		-		49		-		49
Odyssey RE		137,195		2,001,097		2,138,292		88,981		3,129,712		3,218,693
SCOR Global		68,541		-		68,541		328		-		328
Lloyds Syndicates		60,451		-		60,451		603		-		603
Partner RE Europe LTD (France)		-		-		-		104		-		104
Total	$	3,471,403	$	35,442,178	$	38,913,581	$	1,675,580	$	27,924,038	$	29,599,618

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SCHEDULE VI. SUPPLEMENTAL INFORMATION CONCERNING CONSOLIDATED PROPERTY AND CASUALTY INSURANCE OPERATIONS

12 Months Ended

Dec. 31, 2014

Schedule VI. Supplemental Information Concerning Consolidated Property and Casualty Insurance Operations [Abstract]

Schedule VI. Supplemental Information Concerning Consolidated Property and Casualty Insurance Operations

Schedule VI. Supplemental Information Concerning Consolidated Property and Casualty Insurance Operations

The following table provides certain information related to the Company's property and casualty operations as of, and for the periods presented (in thousands): 

	As of December 31,			For the Year Ended December 31,
	Reserves for Unpaid Losses and LAE			Incurred Loss and LAE current year			Incurred Loss and LAE prior years			Paid Losses and LAE			Net Investment Income
2014		$	15,010		$	2,882		$	48		$	2,710		$	44
2013		$	15,884		$	2,015		$	244		$	2,488		$	42

	As of December 31,			For the Year Ended December 31,										As of December 31,
	Policy Deferred Acquisition Cost (DAC)			Amortization of DAC				Net Premiums Written			Net Premiums Earned			Unearned Premiums
2014		$	7,898		$	(12,746	)		$	8,541		$	4,411		$	40,022
2013		$	6,214		$	(10,512	)		$	6,273		$	4,816		$	31,297

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STOCK BASED COMPENSATION, Stock Option Plan Activity (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage (in hundredths)	100.00%
Stock option plan activity [Roll Forward]
Number of options outstanding (in shares)	2,708,750	783,750
Number of options, granted (in shares)	40,000	1,925,000
Stock options exercised (in shares)	(10,250)
Number of options outstanding (in shares)	2,738,500	2,708,750	783,750
Number of options, exercisable (in shares)	1,287,250
Weighted Average Exercise Price, Outstanding (in dollars per shares)	$ 0.58	$ 0.78
Weighted Average Exercise Price, Granted (in dollars per share)	$ 1.00	$ 0.50
Weighted Average Exercise Price, Exercised (in dollars per share)	$ 0.50
Weighted Average Exercise Price, Outstanding (in dollars per shares)	$ 0.59	$ 0.58	$ 0.78
Weighted Average Exercise Price, Exercisable (in dollars per share)	$ 0.67
Weighted Average Remaining Contractual Term, Outstanding	7 years 3 months 25 days	8 years 4 months 28 days	5 years 10 months 28 days
Weighted Average Remaining Contractual Term, Exercisable	5 years 11 months 12 days
Aggregate Intrinsic Value, Outstanding (in dollars)	$ 226,000	$ 4	$ 0
Aggregate Intrinsic Value, Outstanding Exercisable (in dollars)	$ 75,000
2005 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum number of shares to purchase by employees under the plan (in shares)	789,475
Forward stock split	2.5
Vesting period	10 years
Vesting percentage (in hundredths)	25.00%
Stock option plan activity [Roll Forward]
Number of options, granted (in shares)	783,750
Number of options outstanding (in shares)	773,500
2013 Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum number of shares to purchase by employees under the plan (in shares)	2,925,000
Stock option plan activity [Roll Forward]
Shares of common stock granted in the form of a stock award (in shares)	39,000
Number of options, granted (in shares)	1,965,000
Number of options outstanding (in shares)	1,965,000

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INVESTMENTS (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
INVESTMENTS [Abstract]
Net Investment Income	$ 43,603	$ 41,649
Unrealized gain arising from the period	73	0
Schedule of Investments [Line Items]
Financial Assets Book Value	8,451,881	7,111,011
Financial Assets Fair Value / Carrying Value	8,451,881	7,111,011
Schedule of Available-for-sale Securities [Line Items]
Gross Unrealized Amortized Cost	3,827,268	0
Gross Unrealized Fair Value	3,827,245	0
Available-for-sale Securities, Debt Maturities, Single Maturity Date, Amortized Cost Basis [Abstract]
Less than one year, Amortized Cost Basis	570,236
One to five years, Amortized Cost Basis	1,985,297
Five to ten years, Amortized Cost Basis	162,124
More than ten years, Amortized Cost Basis	1,649,169
Total, Amortized Cost Basis	4,366,826
Available-for-sale Securities, Debt Maturities, Single Maturity Date, Rolling Maturity [Abstract]
Less than one year, Fair Value	569,734
One to five years, Fair Value	1,981,134
Five to ten years, Fair Value	162,519
More than ten years, Fair Value	1,653,512
Total, Fair Value	4,366,899
Obligations of States, Municipalities and Political Subdivisions [Member]
Schedule of Available-for-sale Securities [Line Items]
Gross Unrealized Amortized Cost	3,827,268
Gross Unrealized Gain	6,331
Gross Unrealized Losses	(6,354)
Gross Unrealized Fair Value	3,827,245
U.S. Treasury - Held as Restricted [Member]
Schedule of Available-for-sale Securities [Line Items]
Gross Unrealized Amortized Cost	539,558
Gross Unrealized Gain	96
Gross Unrealized Losses	0
Gross Unrealized Fair Value	539,654
Fixed Maturities [Member]
Schedule of Available-for-sale Securities [Line Items]
Gross Unrealized Amortized Cost	4,366,826
Gross Unrealized Gain	6,427
Gross Unrealized Losses	(6,354)
Gross Unrealized Fair Value	4,366,899
Restricted certificates of deposit [Member]
Schedule of Investments [Line Items]
Financial Assets Book Value	3,490,000	785,000
Financial Assets Fair Value / Carrying Value	3,490,000	785,000
Range of Maturities	Less than 1 year	Less than 1 year
Interest Rates (in hundredths)	0.00%
Restricted certificates of deposit [Member] | Maximum [Member]
Schedule of Investments [Line Items]
Interest Rates (in hundredths)	1.40%	0.25%
Restricted certificates of deposit [Member] | Minimum [Member]
Schedule of Investments [Line Items]
Interest Rates (in hundredths)	0.10%	0.10%
Restricted money markets [Member]
Schedule of Investments [Line Items]
Financial Assets Book Value	300,000	215,000
Financial Assets Fair Value / Carrying Value	300,000	215,000
Range of Maturities	Less than 1 year
Long-term investments [Member]
Schedule of Investments [Line Items]
Financial Assets Book Value	3,430,000	1,960,000
Financial Assets Fair Value / Carrying Value	3,430,000	1,960,000
Range of Maturities	More than 1 year	More than 1 year
Long-term investments [Member] | Maximum [Member]
Schedule of Investments [Line Items]
Interest Rates (in hundredths)	1.50%	0.70%
Long-term investments [Member] | Minimum [Member]
Schedule of Investments [Line Items]
Interest Rates (in hundredths)	0.75%	0.30%
Short-term investments [Member]
Schedule of Investments [Line Items]
Financial Assets Book Value	1,231,881	4,151,011
Financial Assets Fair Value / Carrying Value	$ 1,231,881	$ 4,151,011
Range of Maturities	Less than 1 year	Less than 1 year
Short-term investments [Member] | Maximum [Member]
Schedule of Investments [Line Items]
Interest Rates (in hundredths)	0.70%	1.24%
Short-term investments [Member] | Minimum [Member]
Schedule of Investments [Line Items]
Interest Rates (in hundredths)	0.35%	0.20%

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract]
Net income	$ 2,164,125	$ 1,968,763
Change in unrealized gain on investments:
Unrealized gain arising from the period	73	0
Deferred income taxes on securities	0	0
Total other comprehensive income, net of income taxes	73	0
Comprehensive income	$ 2,164,198	$ 1,968,763

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RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2014

RELATED PARTY TRANSACTIONS [Abstract]

RELATED PARTY TRANSACTIONS

3.RELATED PARTY TRANSACTIONS

In December 2012, HAHC entered into a Convertible Promissory Note with Inter-Atlantic Fund, L.P. and Phoenix Associates, Inc., ( companies controlled by a shareholder and former director, respectively). See Note 9 Convertible Notes Payable for additional disclosure.

In August 2013, HAHC entered into an agreement or the "Advisory Agreement", with Inter-Atlantic Advisors III, Ltd., or "Inter-Atlantic", under which Inter-Atlantic agrees to perform certain management services for the Company. A number of our directors are among the beneficial owners of Inter-Atlantic. The Advisory Agreement has an initial term of six years, to be automatically renewed from year-to-year thereafter, unless terminated by either party upon 60 days notice prior to the termination of the initial or any renewal term.  For its services, the Company will pay Inter-Atlantic an annual fee of $300,000, as well as, an annual grant of shares of our common stock with an aggregate fair market value of $150,000 at the time of grant, plus reimburse Inter-Atlantic's expenses incurred in connection with the performance of its service. As long as the Advisory Agreement is in effect and the fees and expense reimbursements are paid, the directors of the Company that are affiliated with Inter-Atlantic have agreed to waive any other compensation for their service as directors.

For the year ended December 31, 2014, the Company incurred an expense of $450,000 (of which $150,000 is represented by the issuance of 288,462 shares of common stock), for services performed under the Advisory Agreement.

For the year ended December 31, 2013, the Company incurred an expense of $125,000 for services performed under the Advisory Agreement.

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REINSURANCE, Significant Reinsurers (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Reinsurance Retention Policy [Line Items]
Paid Losses & LAE	$ 3,471,403	$ 1,675,580
Unearned Premium	35,442,178	27,924,038
Total Receivable	38,913,581	29,599,618
Maiden Reinsurance Company [Member]
Reinsurance Retention Policy [Line Items]
Paid Losses & LAE	85,203	84,395
Unearned Premium	0	0
Total Receivable	85,203	84,395
NGM Insurance Company [Member]
Reinsurance Retention Policy [Line Items]
Paid Losses & LAE	53,033	11,630
Unearned Premium	0	0
Total Receivable	53,033	11,630
Arch Reinsurance Company [Member]
Reinsurance Retention Policy [Line Items]
Paid Losses & LAE	378,977	460,006
Unearned Premium	0	7,511,308
Total Receivable	378,977	7,971,314
Endurance Reinsurance Corp. of America [Member]
Reinsurance Retention Policy [Line Items]
Paid Losses & LAE	138,392	178,974
Unearned Premium	0	3,129,712
Total Receivable	138,392	3,308,686
Catlin RE [Member]
Reinsurance Retention Policy [Line Items]
Paid Losses & LAE	214,945	0
Unearned Premium	4,002,194	0
Total Receivable	4,217,139	0
Montpelier Insurance Company [Member]
Reinsurance Retention Policy [Line Items]
Paid Losses & LAE	107,472	0
Unearned Premium	2,001,097	0
Total Receivable	2,108,569	0
Swiss RE [Member]
Reinsurance Retention Policy [Line Items]
Paid Losses & LAE	198,953	0
Unearned Premium	4,002,193	0
Total Receivable	4,201,146	0
RLI Insurance Company [Member]
Reinsurance Retention Policy [Line Items]
Paid Losses & LAE	151,525	123,916
Unearned Premium	0	0
Total Receivable	151,525	123,916
SCOR Reinsurance Company [Member]
Reinsurance Retention Policy [Line Items]
Paid Losses & LAE	396,192	213,273
Unearned Premium	4,002,194	3,129,712
Total Receivable	4,398,386	3,342,985
Endurance Specialty [Member]
Reinsurance Retention Policy [Line Items]
Paid Losses & LAE	19,853	92
Unearned Premium	0	0
Total Receivable	19,853	92
Houston Casualty [Member]
Reinsurance Retention Policy [Line Items]
Paid Losses & LAE	7,804	27
Unearned Premium	0	0
Total Receivable	7,804	27
R+V Versicherung AG [Member]
Reinsurance Retention Policy [Line Items]
Paid Losses & LAE	590,652	308,614
Unearned Premium	4,913,513	3,825,256
Total Receivable	5,504,165	4,133,870
Everest Re [Member]
Reinsurance Retention Policy [Line Items]
Paid Losses & LAE	490,410	177,864
Unearned Premium	8,024,398	6,259,424
Total Receivable	8,514,808	6,437,288
Taiping [Member]
Reinsurance Retention Policy [Line Items]
Paid Losses & LAE	94,895	26,680
Unearned Premium	1,600,877	938,914
Total Receivable	1,695,772	965,594
Qatar Re [Member]
Reinsurance Retention Policy [Line Items]
Paid Losses & LAE	276,910	0
Unearned Premium	4,894,615	0
Total Receivable	5,171,525	0
SCOR Switzerland [Member]
Reinsurance Retention Policy [Line Items]
Paid Losses & LAE	0	44
Unearned Premium	0	0
Total Receivable	0	44
Paladin CAT Management [Member]
Reinsurance Retention Policy [Line Items]
Paid Losses & LAE	0	49
Unearned Premium	0	0
Total Receivable	0	49
Odyssey RE [Member]
Reinsurance Retention Policy [Line Items]
Paid Losses & LAE	137,195	88,981
Unearned Premium	2,001,097	3,129,712
Total Receivable	2,138,292	3,218,693
SCOR Global [Member]
Reinsurance Retention Policy [Line Items]
Paid Losses & LAE	68,541	328
Unearned Premium	0	0
Total Receivable	68,541	328
Lloyds Syndicates [Member]
Reinsurance Retention Policy [Line Items]
Paid Losses & LAE	60,451	603
Unearned Premium	0	0
Total Receivable	60,451	603
Partner RE Europe LTD France [Member]
Reinsurance Retention Policy [Line Items]
Paid Losses & LAE	0	104
Unearned Premium	0	0
Total Receivable	$ 0	$ 104

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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2014

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

Principles of consolidation

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Homeowners of America Holding Corporation and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Basis of Presentation

Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). Certain reclassifications of prior year amounts have been made to conform to the current year presentation.

Cash and cash equivalents

Cash and Cash Equivalents

Cash and cash equivalents include cash and highly liquid short-term investments, with original maturities of three months or less. The amount is carried at cost, which approximates fair value. At December 31, 2014 and 2013, cash and cash equivalents consist of cash on deposit with financial institutions, as well as money market mutual funds.

General and other accrued expenses payable as of December 31, 2014 and December 31, 2013, include $1.7 million and $1.2 million, respectively, of checks issued in excess of cash book balances, not yet presented for payment.

Investments

Investments

The Company's investments are comprised of short-term, restricted, long-term investments, and fixed-maturity securities classified as available-for-sale as of December 31, 2014 and short-term, restricted, and long-term investments as of December 31, 2013. Restricted investments and long-term investments are described below. Short-term investments include certificates of deposit with original maturities greater than three months and maturities of one year or less. Due to the short-term nature of these investments, significant changes in prevailing interest rates and economic conditions should not adversely affect the timing and amount of cash flows on such investments or their related values. Accordingly, certificates of deposit are carried at cost, which approximates fair value. Fixed-maturity securities are classified as available-for-sale when it is not management's intent to make profits by buying and selling the securities within a short period of time or when it is not management's intent to hold the securities to maturity.  Fixed-maturity securities classified as available-for-sale are carried at fair value. The unrealized holding gains and losses, net of applicable deferred income taxes, are shown as a separate component of stockholders' equity as a part of accumulated other comprehensive income (loss) and, as such, are not included in the determination of net income (loss).

As of December 31, 2014, the Company has restricted cash and investments, in the amount of $4.3 million, to the Department of Insurance in certain states as a condition of its Certificate of Authority for the purpose of meeting obligations to policyholders and creditors, which includes approximately $1.0 million of restricted assets. Restricted assets represent investments currently awaiting substitution with various states for matured securities. As of December 31, 2013, the Company had pledged to the Department of Insurance $1.0 million. Restricted and pledged assets are shown separately in the accompanying consolidated balance sheets as "Restricted cash and investments" and include money market accounts and certificates of deposits. "Restricted fixed-maturity securities, classified as available-for-sale" are shown separately in the accompanying consolidated balance sheets and recorded at fair value. With the approval of the Departments of Insurance, the Company may exchange the investments with other funds or investments. In respect to certificates of deposit, management intends to hold the portion of these restricted investments to their maturity. As such, these restricted certificates of deposit are carried at cost, which approximates fair value. Interest earned on these investments inures to the benefit of the Company.

The following table provides the Company's restricted cash and investments as of December 31, 2014 and December 31, 2013.

Restricted cash and investments	December 31, 2014		December 31, 2013
Money Market	$	300,000	$	215,000
Certificates of Deposit		3,490,000		785,000
US Treasury Bond		539,654		-
	$	4,329,654	$	1,000,000

As of December 31, 2014 and December 31, 2013, the Company's investments also include certificates of deposit that mature more than one year after the balance sheet date and are reflected on the consolidated balance sheets as Long-term investments. Based on management's intent to hold to maturity, these investments are carried at cost. Cost approximates fair value based on the rates currently offered for deposits of similar remaining maturities.

The Company's investments in certificates of deposits and money market accounts do not qualify as securities as defined in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 320, Investment – Debt and Equity Securities. Accordingly, the fair value disclosures required by FASB ASC Topic 820, Fair Value Measurements and Disclosures are not provided. The Company's fixed-maturity 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 where such securities are deemed to be other-than-temporarily impaired. Where applicable, the Company assesses investments of an issuer currently carrying a net unrealized loss. If in management's judgment, the decline in value is other than temporary, the cost of the investment is written down to fair value with a corresponding charge to earnings. Factors considered in determining whether an impairment exists include financial condition, business prospects and creditworthiness of the issuer, the length of time and magnitude that the asset value has been less than cost, and the ability and intent to hold such investments until the fair value recovers.

Comprehensive Income

Comprehensive Income

FASB ASC Topic 220 - Comprehensive Income, requires that recognized revenues, expenses, gains and losses be included in net income (loss). Although certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the equity section of the consolidated balance sheet, these items, along with net income (loss), are components of comprehensive income. The Company characterizes their fixed income portfolio as available-for-sale securities when it is not management's intent to make profits by buying and selling the securities within a short period of time or when it is not management's intent to hold the securities to maturity, with appropriate adjustments to other comprehensive income. For the year ended December 31, 2014, the Company recorded $73 of unrealized gains on available-for-sale securities in other comprehensive income. There were no qualifying items reported in comprehensive income for the years ended December 31, 2013.

Recognition of Premium Revenues

Recognition of Premium Revenues

Premiums are recognized as revenue on a daily pro rata basis over the policy term. The portion of premiums related to the unexpired term of policies in force as of the end of the measurement period and to be earned over the remaining term of those polices, is deferred and reported as unearned premiums.

Ceding Commission and Reinsurance Profit Share

Ceding Commissions and Reinsurance Profit Share

Ceding commissions represent acquisition costs associated with insurance risk ceded to reinsurers and is earned on a pro-rata basis over the life of the associated policy. Reinsurance profit share is additional ceding commissions payable to the Company based upon attaining specified loss ratios within individual treaty years.  Reinsurance profit share income is recognized when earned, which includes adjustments to earned reinsurance profit share based on changes in incurred losses.

Policy Fees

Policy Fees

Policy fee income includes application fees which are intended to reimburse the Company for a portion of the costs incurred in establishing the insurance. Policy fees on policies where premium is traditionally paid in full upon inception of the policy are recognized when written, while fees charged on policies where premiums are paid in installments, are recognized when collected.

Loss Adjustment and Other Fee Income

Loss Adjustment and Other Fee Income

Loss adjustment and other fee income is recognized as income when collected. There is no amount over 5 % of total revenue within this classification on the consolidated statements of operations for the year ended December 31, 2014 and December 31, 2013.

Property, Equipment and Software

Property, Equipment and Software

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated on the straight-line method over the estimated useful lives of the assets, which range from three to five years. The cost and related accumulated depreciation of assets sold or disposed are removed from the accounts and the resulting gain or loss is included in the consolidated statements of operations. Maintenance and repairs are expensed as incurred.

Software installation and development is stated at cost, net of accumulated amortization. Amortization is calculated on a straight-line basis method over three years.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

Long-lived assets, such as property, equipment and software, are reviewed for impairment whenever business events or circumstances could lead to or indicate that the value of the asset may not be recoverable. The assessment of possible impairment is based on whether the carrying amount of the assets exceeds its fair value. The Company uses estimates of undiscounted future cash flows in determining the recoverability of long-lived assets. As of December 31, 2014 and 2013, no impairment has been recorded.

Deferred Policy and Acquisition Costs

Deferred Policy and Acquisition Costs

Deferred policy acquisitions costs ("DAC") as of December 31, 2014 and 2013, consist of commissions, premium taxes and policy underwriting and production expenses which are incurred through and vary directly with, the level of production of new and renewal insurance business and are amortized over the terms of the policies they relate to. The method used in calculating DAC limits the amount of the deferred cost to their estimated realizable value, which gives effect to allocating their expense along with other period costs associated with the insurance business, in relation to the amount of gross premium earned on policies to which they relate and investment income. DAC is reviewed to determine if it is recoverable from future income, including investment income. The amount of DAC considered recoverable could be reduced in the near term if management's estimates of future premium and investment income is reduced which could impair the Company's ability to recover these costs.

Reserve for Losses and Loss Adjustment Expenses

Reserve for Losses and Loss Adjustment Expenses

The liability for losses and loss adjustment expenses ("LAE") are estimates of the amounts required to cover known incurred losses and LAE, developed through the review and assessment of loss reports, along with the development of known claims. In addition, loss and loss adjustment expense reserves include management's estimate of an amount for losses incurred but not reported ("IBNR"), determined from reviewing overall loss reporting patterns as well as the loss development cycles of individual claim cases. Such liabilities are necessarily based on estimates and while management believes that the amount is adequate, the ultimate liability may be more or less than the amounts provided. The approach and methods for making such estimates and for establishing the resulting liability are continually reviewed and any adjustments are reflected in current earnings.

Due and Deferred Premiums

Due and Deferred Premiums

Due and deferred premiums consist of uncollateralized premiums and agents' balances in the course of collection as well as premiums booked but not yet due.

Reinsurance

Reinsurance

In the normal course of business, the Company seeks to reduce the overall exposure to losses that may arise from catastrophes or other events that cause unfavorable underwriting results by reinsuring certain levels of risk with other insurance enterprises or reinsurers. The Company uses only quality, financially rated reinsurers and continually monitors the financial ratings of these companies through its brokers. The amount and type of reinsurance purchased each year is based on management's analysis of liquidity and its estimate of its probable maximum loss and the conditions within the reinsurance market. The Company continually monitors its risk exposure through the use of the AIR modeling system and other modeling tools provided by its reinsurance brokers. Reinsurance premiums, expense reimbursements, and reserves related to reinsured business are accounted for on a basis consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts. Premiums paid for reinsurance are reported as reductions of earned premium income.

Income Taxes

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss carryforwards, and liabilities are measured using enacted tax rates expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. In assessing the realizable value of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.

Uncertain Tax Positions

Uncertain Tax Positions

The Company recognizes uncertain tax positions in the consolidated financial statements when it is more-likely-than-not the position will be sustained upon examination by the tax authorities. Such tax positions are initially and subsequently measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. The Company believes that it has appropriate support for the income tax positions taken and to be taken on its tax returns, and that its accruals for tax liabilities are adequate for all open tax years based on an assessment of many factors including experience and interpretations of tax laws applied to the facts of each matter. At December 31, 2014, the Company's tax years from 2010 through 2014 remain subject to examination.

Estimates

Estimates

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 liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company's primary areas of estimate are for liabilities for unpaid losses and loss adjustment expenses, deferred policy acquisition costs, deferred tax asset valuation, and reinsurance. Actual results could differ significantly from those estimates.

Fair Value Cash, Cash Equivalents and Short-term Investments

Fair Value of Cash, Cash Equivalents and Short-term Investments

The carrying value for the Company's cash and cash equivalents and short-term investments approximate fair values as of December 31, 2014 and 2013 due to their short-term nature. Fair value for securities are based on the framework for measuring fair value established by FASB ASC Topic 820, Fair Value Measurements and Disclosures.

Fair Value of Fixed-Maturity Securities held as Available-for-Sale

Fair Value Fixed-Maturity Securities held as Available-for-Sale

The Company's fixed-maturity securities held as available-for-sale are carried at fair value as of December 31, 2014. Fair value for securities are based on the framework for measuring fair value established by FASB ASC Topic 820, Fair Value Measurements and Disclosures.

Convertible Notes Payable

Convertible Notes Payable

The Company accounts for convertible notes payable under FASB ASC Topic 470-20 – Debt with Conversion and Other Options, which requires issuers to assess whether or not an embedded conversion feature is required to be separately accounted for as a derivative liability for liability and equity components and if the conversion feature is beneficial to the holder. See Note 10 on Convertible Notes Payable for additional disclosure.

Stock Split

Stock Split

In August 2013, the Company effected a 2.5 for 1 forward stock split (the "Stock Split") of all of its issued and outstanding shares of common stock. All holders of the Company's Series A and Series B preferred shares converted their preferred shares to common stock prior to the effectiveness of the stock split. All share and per share information provided in this report reflects the effect of the split for all periods presented.

Stock Based Compensation

Stock Based Compensation

The Company accounts for stock-based compensation under the fair value recognition provisions of FASB ASC Topic 718 – Compensation – Stock Compensation, which requires the measurement and recognition of compensation for all stock-based awards made to employees and directors including stock options and restricted stock issuances based on estimated fair values. In accordance with FASB ASC Topic 718, the Company recognizes stock-based compensation, if any, in the consolidated statements of operations on a straight line basis over the vesting period of the stock award. For those stock awards vesting 100 % at the issue date, the Company recognizes stock-based compensation immediately.

Earnings (Loss) Per Share

Earnings (Loss) Per Share

Basic earnings (loss) per share of common stock is computed by dividing net income or loss, less cumulative preferred stock dividends for the period whether or not earned or paid, by the weighted-average number of common shares during the period.

Diluted earnings (loss) per share of common stock is computed by dividing net income or loss attributable to common stockholders, adjusted for the effect of potentially dilutive securities, by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include convertible notes payable, outstanding convertible preferred stock and common stock options.

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COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2014

COMMITMENTS AND CONTINGENCIES [Abstract]

Schedule of future minimum rental payments for operating leases

The Company leases its corporate office space and certain office equipment under non-cancelable operating leases which expire at various dates through 2019. Future minimum lease payments required under the non-cancelable operating leases are as follows for the years ending December 31:

2015	$	$166,848
2016		174,709
2017		91,284
2018		22,188
2019		12,519
	$	$467,548

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INCOME TAXES

12 Months Ended

Dec. 31, 2014

INCOME TAXES [Abstract]

INCOME TAXES

The Company files a consolidated federal income tax return. Allocation of tax expense or refunds among the consolidated group is based on separate return calculations.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:

	2014		2013
Gross Deferred Tax Assets:
Loss reserve discount	$	14,915	$	12,713
Unearned premium reserve discount		339,224		235,548
Organization costs (net of amortization)		64,390		62,239
Unearned ceding commissions		3,808,108		2,742,835
Stock-based compensation		7,677		-
Total Deferred Tax Assets		4,234,314		3,053,335
Valuation allowance		-		-
Total Adjusted Deferred Tax Assets	$	4,234,314	$	3,053,335
Deferred Tax Liabilities
Deferred policy acquisition costs	$	2,685,253	$	2,112,873
Property, equipment and software		31,126		7,241
Total deferred tax liabilities		2,716,379		2,120,114
Net Deferred Tax Assets	$	1,517,935	$	933,221

As of December 31, 2014 and 2013, it was determined that no valuation allowance against deferred tax assets was considered necessary.

In assessing the realizability of deferred tax assets, management utilizes the criteria established under Accounting Standards Codification (ASC) 740 to annually evaluate the need for a deferred tax valuation allowance in order to determine whether it is more likely than not that some or all of the deferred tax assets will not be realized. Management considers the reversal of deferred tax liabilities and projected future taxable income in making this assessment. The results of operations during the years ended December 31, 2014 and 2013, continued growth in the Company's insurance policy and premium base with a wider demographic and geographic spread, as well as changes in the Company's reinsurance and catastrophe coverage were also considered important factors in assessing the realizability of deferred tax assets.

The total income tax provision (benefit) incurred is different from that which would be obtained by applying the statutory federal income tax rate to income before income taxes. The significant items causing this difference for 2014 and 2013 are as follows:

2014	Tax Effect		Tax Rate
Income before taxes at statutory rate	$	1,131,629		34.0	%
Meals and entertainment		9,613		0.29	%
Other		22,955		0.69	%
Total	$	1,164,197		34.98	%

2013	Tax Effect		Tax Rate
Income before taxes at statutory rate	$	1,022,716		34.0	%
Meals and entertainment		9,800		0.33	%
Other		6,708		0.22	%
Total	$	1,039,224		34.55	%

14.REINSURANCE