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EXHIBIT 10.1.2


100% Quota Share Reinsurance Retrocessional Agreement


By and Between


Employers Mutual Casualty Company




EMC Reinsurance Company


This 100% Quota Share Reinsurance Retrocessional Agreement (the “100% QS Agreement”) is hereby made by and between Employers Mutual Casualty Company ("EMCC") and EMC Reinsurance Company ("EMC Re").


WHEREAS , EMCC and EMC Re have been operating under the terms of a Quota Share Reinsurance Retrocessional Agreement between the parties, as amended from time to time, since January 1, 1981 (the “Agreement”) and a Restated Quota Share Reinsurance Retrocessional Agreement between the parties, as amended from time to time, since January 1, 2006 (the "Restated Agreement"); and


WHEREAS , the parties now desire to restate the terms and coverage of the Restated Agreement and to restructure the reinsurance relationship between the parties, and the written agreements related thereto, in a manner that which conforms more closely with industry practices; and


WHEREAS, the respective Inter-Company Committees of the boards of directors of EMCC and of EMC Insurance Group Inc. (collectively, the "Inter-Company Committees") have each approved the restructured reinsurance relationship between the parties and the reinsurance agreements between the parties necessary to accomplish the desire of the parties;


NOW THEREFORE, in consideration of the mutual covenants and conditions contained herein, the parties hereto hereby agree as follows:







EMCC shall cede, and EMC Re shall accept as reinsurance, One Hundred Percent (100%) of all:




“Net Written Premium” ;




"Net Loss" incurred on "Occurrences" with an "Occurrence" date on or  after January 1, 2011;








Underwriting expense on reinsurance contracts;




Credit risk exposure on reinsurance contracts in force on or after January 1, 2004; and




Gain or loss on foreign currency on reinsurance contracts incepting on or after January 1, 2006;


arising out of "Subject to Cession" reinsurance contracts  (“Contract”).




All premium, loss, and expense shall be settled at least quarterly through the EMCC inter-company closing process, with settlement amounts due to be completed no later than forty-five (45) days after the end of the applicable quarter.







“Allocated Loss Expense” shall have the same meaning as ascribed in the Contracts, or, in the absence of any definition in a Contract, shall mean:  (a) expenses sustained in connection with adjustment, defense, settlement and litigation of claims and suits, satisfaction of judgments, resistance to or negotiations concerning a loss (which shall include the expenses and the pro rata share of the salaries of the insurer's field employees according to the time occupied in adjusting such loss and the expenses of the insurer's employees while diverted from their normal duties to the service of field adjustment but shall not include any salaries of officers or normal overhead expenses of the insurer); (b) legal expenses and costs incurred in connection with coverage questions regarding specific claims and legal actions, including declaratory judgment actions, connected thereto; (c) all interest on judgments other than prejudgment interest except when included in “Net Loss” ; and (d) expenses sustained to obtain recoveries, salvages or other reimbursements, or to secure the reversal or reduction of a verdict or judgment.




“Extra-contractual Obligations” means those liabilities not covered under any other provision of this 100% QS Agreement, including, but not limited to, compensatory, consequential, punitive or exemplary damages, other than that which is a “Loss Excess of Contract Limits” , together with any legal costs and expenses incurred in connection therewith, paid as damages or in settlement or in judgment by EMCC as a result of a demand, claim or an action by its insured, its insured's assignee, or other third party, which demand, claim or action alleges negligence, gross negligence, fraud, bad faith or other tortious behavior or conduct on the part of EMCC in the handling, adjustment, rejection or settlement of a claim under a Contract or bond covered by this 100% QS Agreement.  An “Extra-contractual Obligation” shall be deemed to have occurred on the same date as the loss covered or alleged to be covered under the Contract.  Notwithstanding anything stated herein, this 100% QS Agreement shall not apply to any “Extra-contractual Obligation” incurred by EMCC as a result of any fraudulent and/or criminal act directed against EMCC by any officers or directors of EMCC 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.








Ex-gratia Settlements” shall mean payments made for which EMCC has no legal obligation under the terms and conditions of any Contract, but which are made

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