Kinsale Capital Group, Inc. (Form: 10-Q, Received: 09/07/2016 15:00:29)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q



X	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 30, 2016



	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from _______ to _______

Commission File Number: 001-37848




	KINSALE CAPITAL GROUP, INC. (Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)		98-0664337 (I.R.S. Employer Identification Number)



	2221 Edward Holland Drive, Suite 600 Richmond, VA 23230
	(Address of principal executive offices)
	(804) 289-1300
	(Registrant's telephone number, including area code)

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 x

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Securities Exchange Act of 1934.



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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨ No x

Number of shares of the registrant's common shares outstanding at September 2, 2016: 20,968,707

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KINSALE CAPITAL GROUP, INC.

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		Page
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements
	Consolidated Balance Sheets as of June 30, 2016 and December 31, 2015	2
	Consolidated Statements of Income and Comprehensive Income for the Three and Six Months Ended June 30, 2016 and 2015	4
	Consolidated Statements of Changes in Stockholders' Equity for the Six Months Ended June 30, 2016 and 2015	6
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2016 and 2015	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	54
Item 4.	Controls and Procedures	55

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	56
Item IA.	Risk Factors	56
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	74
Item 6.	Exhibits	74

Signatures		75

Exhibit Index		76

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PART 1. FINANCIAL INFORMATION

Item 1. Financial Statements

KINSALE CAPITAL GROUP, INC. AND SUBSIDIARIES

Consolidated Balance Sheets (unaudited)



	June 30, 2016		December 31, 2015
	(in thousands, except share and per share data)
Assets
Investments:
Fixed maturity securities available-for-sale, at fair value (amortized cost: $370,758 in 2016; $326,953 in 2015)	$	378,423	$	327,602
Equity securities available-for-sale, at fair value (cost: $14,386 in 2016; $12,184 in 2015)	17,143		14,240
Short-term investments	6,653		2,299
Total investments	402,219		344,141
Cash and cash equivalents	22,236		24,544
Investment income due and accrued	1,897		1,844
Premiums receivable, net	16,667		15,550
Receivable from reinsurers	5,219		11,928
Reinsurance recoverables	75,542		95,670
Ceded unearned premiums	23,421		39,329
Deferred policy acquisition costs, net of ceding commissions	5,515		—
Intangible assets	3,538		3,538
Deferred income tax asset, net	4,601		6,822
Other assets	2,737		1,912
Total assets	$	563,592	$	545,278

Liabilities and Stockholders' Equity
Liabilities:
Reserves for unpaid losses and loss adjustment expenses	$	245,210	$	219,629
Unearned premiums	86,881		81,713
Payable to reinsurers	4,135		3,833
Funds held for reinsurers	49,887		87,206
Accounts payable and accrued expenses	4,870		7,410
Deferred policy acquisition costs, net of ceding commissions	—		1,696
Note payable	29,683		29,603
Other liabilities	13,101		737
Total liabilities	433,767		431,827
Commitments and contingencies

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KINSALE CAPITAL GROUP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (unaudited) (continued)

	June 30, 2016		December 31, 2015
	(in thousands, except share and per share data)
Stockholders’ equity:
Class A common stock, $0.0001 par value. Authorized 15,000,000 shares; issued and outstanding 13,803,183 shares in 2016 and 2015; liquidation preference $171,696 in 2016; $162,002 in 2015	1		1
Class B common stock, $0.0001 par value. Authorized 3,333,333 shares; issued and outstanding 1,676,456 shares in 2016 and 1,513,592 shares in 2015	—		—
Additional paid-in capital	80,273		80,229
Retained earnings	40,884		29,570
Accumulated other comprehensive income	8,667		3,651
Stockholders’ equity	129,825		113,451
Total liabilities and stockholders’ equity	$	563,592	$	545,278

See accompanying notes to condensed consolidated financial statements.

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KINSALE CAPITAL GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Income and Comprehensive Income (unaudited)



	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(in thousands, except share and per share data)
Revenues:
Gross written premiums	$	50,107		$	45,112		$	93,189		$	86,042
Ceded written premiums	(14,446		)	(26,274		)	(9,733		)	(50,218		)
Net written premiums	35,661			18,838			83,456			35,824
Change in unearned premiums	(3,878		)	(1,822		)	(21,076		)	(2,367		)
Net earned premiums	31,783			17,016			62,380			33,457
Net investment income	1,819			1,377			3,495			2,591
Net realized investment (losses) gains	(4		)	8			383			16
Other income	78			191			136			315
Total revenues	33,676			18,592			66,394			36,379

Expenses:
Losses and loss adjustment expenses	17,456			8,061			35,577			17,279
Underwriting, acquisition and insurance expenses	6,481			31			12,729			362
Other expenses	486			517			946			1,013
Total expenses	24,423			8,609			49,252			18,654
Income before income taxes	9,253			9,983			17,142			17,725
Total income tax expense	3,196			3,374			5,828			6,000
Net income	$	6,057		$	6,609		$	11,314		$	11,725

Other comprehensive income:
Unrealized gains (losses), net of taxes of $1,557 and $2,702 in 2016 and $(1,060) and $(653) in 2015	2,890			(1,970		)	5,016			(1,213		)
Total comprehensive income	$	8,947		$	4,639		$	16,330		$	10,512

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KINSALE CAPITAL GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Income and Comprehensive Income (unaudited) (continued)



	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(in thousands, except share and per share data)
Earnings per share:
Basic - Class A	$	0.42	$	0.44	$	0.79	$	0.80
Diluted - Class A	$	0.42	$	0.44	$	0.79	$	0.80

Weighted-average common shares outstanding:
Basic - Class A	13,803,183		13,795,530		13,803,183		13,795,530
Diluted - Class A	13,803,183		13,795,530		13,803,183		13,795,530

Earnings per share:
Basic - Class B	$	0.19	$	0.42	$	0.26	$	0.57
Diluted - Class B	$	0.18	$	0.42	$	0.25	$	0.56

Weighted-average common shares outstanding:
Basic - Class B	1,583,470		1,359,183		1,557,089		1,331,881
Diluted - Class B	1,665,936		1,369,738		1,649,971		1,350,411

See accompanying notes to condensed consolidated financial statements.

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KINSALE CAPITAL GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders' Equity (unaudited)



	Class A Common Stock		Class B Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Compre- hensive Income			Total Stock- holders' Equity
	(in thousands)
Balance at December 31, 2014	$	1	$	—	$	80,074	$	7,297	$	5,214		$	92,586
Restricted stock grants	—		—		50		—		—			50
Other comprehensive loss, net of tax	—		—		—		—		(1,213		)	(1,213		)
Net income	—		—		—		11,725		—			11,725
Balance at June 30, 2015	$	1	$	—	$	80,124	$	19,022	$	4,001		$	103,148

Balance at December 31, 2015	$	1	$	—	$	80,229	$	29,570	$	3,651		$	113,451
Restricted stock grants	—		—		44		—		—			44
Other comprehensive income, net of tax	—		—		—		—		5,016			5,016
Net income	—		—		—		11,314		—			11,314
Balance at June 30, 2016	$	1	$	—	$	80,273	$	40,884	$	8,667		$	129,825

See accompanying notes to condensed consolidated financial statements.

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KINSALE CAPITAL GROUP, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (unaudited)



	Six Months Ended June 30,
	2016			2015
	(in thousands)
Operating activities:
Net cash provided by operating activities	$	36,480		$	34,524

Investing activities:
Purchase of property and equipment	(236		)	(92		)
Change in short-term investments, net	(4,354		)	1,960
Securities available-for-sale:
Purchases – fixed maturity securities	(64,207		)	(66,472		)
Purchases – equity securities	(2,202		)	(81		)
Sales – fixed maturity securities	13,055			4,002
Maturities and calls – fixed maturity securities	19,223			21,345
Net cash used in investing activities	(38,721		)	(39,338		)

Financing activities:
Payments on capital lease	(67		)	(53		)
Net cash used in financing activities	(67		)	(53		)
Net change in cash and cash equivalents	(2,308		)	(4,867		)
Cash and cash equivalents at beginning of year	24,544			23,958
Cash and cash equivalents at end of period	$	22,236		$	19,091

See accompanying notes to condensed consolidated financial statements.

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Kinsale Capital Group, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

1. Summary of significant accounting policies

Basis of presentation

The accompanying condensed consolidated financial statements and notes have been prepared in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP") for interim financial information and do not contain all of the information and footnotes required by U.S. GAAP for complete financial statements. For a more complete description of the Company’s business and accounting policies, these condensed consolidated interim financial statements should be read in conjunction with the 2015 audited consolidated financial statements of Kinsale Capital Group, Inc. and its wholly owned subsidiaries (the "Company") included in the final prospectus filed with the SEC on July 29, 2016. In the opinion of management, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. Such adjustments consist only of normal recurring items. All significant intercompany balances and transactions have been eliminated in consolidation. Interim results are not necessarily indicative of results of operations for the full year.

Use of estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management periodically reviews its estimates and assumptions.

Prospective accounting pronouncements

ASU 2015-09, Financial Services-Insurance (Topic 944): Disclosures about Short-Duration Contracts

In May 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2015-09, "Insurance (Topic 944), Disclosures about Short-Duration Contracts.” This ASU was issued to enhance disclosures about an entity’s insurance liabilities, including the nature, amount, timing and uncertainty of cash flows related to those liabilities. The new guidance requires the disclosure of the following information related to unpaid claims and claim adjustment expenses:


•	net incurred and paid claims development information by accident year for the number of years for which claims incurred typically remain outstanding, but need not exceed 10 years;


•	a reconciliation of incurred and paid claims development information to the aggregate carrying amount of the liability for unpaid claims and claim adjustment expenses, with separate disclosure of reinsurance recoverable on unpaid claims for each period presented in the statement of financial position;


•	for each accident year presented, the total of incurred-but-not-reported liabilities plus expected development on reported claims included in the liability for unpaid claims and claim adjustment expenses;

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•	for each accident year presented, quantitative information about claim frequency accompanied by a qualitative description of methodologies used for determining claim frequency information; and


•	for all claims, the average annual percentage payout of incurred claims by age.

This ASU is effective for annual reporting periods beginning after December 15, 2015 and for interim periods beginning after December 15, 2016. Early adoption is permitted. The Company has not early-adopted this ASU and while disclosures will be increased, the Company does not believe adoption will have a material effect on its financial statements.

ASU 2016-01, Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities

In January 2016, the FASB issued ASU 2016-01, "Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities," which requires equity investments to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. The amendments in this ASU are effective for public companies for annual reporting periods beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption on its consolidated financial statements.

ASU 2016-02, Leases (Topic 842)

In February 2016, the FASB issued ASU 2016-02, " Leases (Topic 842)" to improve the financial reporting of leasing transactions. Under this ASU, lessees will recognize a right-of-use asset and corresponding liability on the balance sheet for all leases, except for leases covering a period of fewer than 12 months. The liability is to be measured as the present value of the future minimum lease payments taking into account renewal options (if probable of exercise) plus initial incremental direct costs such as commissions. The minimum payments are discounted using the rate implicit in the lease or, if not known, the lessee’s incremental borrowing rate. The lessee’s income statement treatment for leases will vary depending on the nature of what is being leased. A financing type lease is present when, among other matters, the asset is being leased for a substantial portion of its economic life or has an end-of-term title transfer or a bargain purchase option. The payment of the liability set up for such leases will be apportioned between interest and principal; the right-of use asset will be generally amortized on a straight-line basis. If the lease does not qualify as a financing type lease, it will be accounted for on the income statement as rent on a straight-line basis. This ASU is effective for annual and interim reporting periods beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the impact of the adoption on its consolidated financial statements.

ASU 2016-13, Financial Instruments – Credit Losses (Topic 326)

On June 16, 2016, the FASB issued ASU 2016-13 , " Financial Instruments – Credit Losses (Topic 326)" to provide more useful information about the expected credit losses on financial instruments. Current GAAP delays the recognition of credit losses until it is probable a loss has been incurred. The update will require a financial asset measured at amortized cost to be presented at the net

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amount expected to be collected by means of an allowance for credit losses that runs through net income. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses. However, the amendments would limit the amount of the allowance to the amount by which fair value is below amortized cost. The measurement of credit losses on available-for-sale securities is similar under current GAAP, but the update requires the use of the allowance account through which amounts can be reversed, rather than through an irreversible write-down.

This ASU is effective for annual and interim reporting periods beginning after December 15, 2019. Early adoption is permitted beginning after December 15, 2018. Upon adoption, the update will be applied using the modified-retrospective approach, by which a cumulative-effect adjustment will be made to retained earnings as of the beginning of the first reporting period presented. The Company is currently evaluating the impact of the adoption on its consolidated financial statements.

There are no other prospective accounting standards which, upon their effective date, would have a material impact on the Company's financial statements.

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2. Investments

Available-for-sale investments

The following tables summarize the Company’s available-for-sale investments:



	June 30, 2016
	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Estimated Fair Value
	(in thousands)
Fixed maturities:
U.S. Treasury securities and obligations of U.S. government agencies	$	12,410	$	65	$	—		$	12,475
Obligations of states, municipalities and political subdivisions	62,488		4,619		(141		)	66,966
Corporate and other securities	131,482		1,295		(258		)	132,519
Asset-backed securities	72,148		801		(136		)	72,813
Residential mortgage-backed securities	92,230		1,479		(59		)	93,650
Total fixed maturities	370,758		8,259		(594		)	378,423

Equity securities:
Exchange traded funds	14,386		3,117		(360		)	17,143
Total available-for-sale investments	$	385,144	$	11,376	$	(954	)	$	395,566



	December 31, 2015
	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Estimated Fair Value
	(in thousands)
Fixed maturities:
U.S. Treasury securities and obligations of U.S. government agencies	$	3,422	$	13	$	(2	)	$	3,433
Obligations of states, municipalities and political subdivisions	69,997		2,562		(46		)	72,513
Corporate and other securities	130,758		306		(1,543		)	129,521
Asset-backed securities	58,680		58		(431		)	58,307
Residential mortgage-backed securities	64,096		760		(1,028		)	63,828
Total fixed maturities	326,953		3,699		(3,050		)	327,602

Equity securities:
Exchange traded funds	12,184		2,392		(336		)	14,240
Total available-for-sale investments	$	339,137	$	6,091	$	(3,386	)	$	341,842

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Available-for-sale securities in a loss position

The Company regularly reviews all securities with unrealized losses to assess whether the decline in the securities’ fair value is deemed to be an other-than-temporary impairment ("OTTI"). The Company considers a number of factors in completing its OTTI review, including the length of time and the extent to which fair value has been below cost and the financial condition and near-term prospects of an issuer. In addition to specific issuer information, the Company also evaluates the current market and interest rate environment. Generally, a change in a security's value caused by a change in the market or interest rate environment does not constitute an other-than-temporary impairment, but rather a temporary decline in fair value.

For fixed maturities, the Company considers whether it intends to sell the security or if it is more likely than not that it will be required to sell the security before recovery, the credit quality of the issuer and the ability to recover all amounts outstanding when contractually due. When assessing whether it intends to sell a fixed maturity or if it is likely to be required to sell a fixed maturity before recovery of its amortized cost, the Company evaluates facts and circumstances including, but not limited to, decisions to reposition the investment portfolio, potential sales of investments to meet cash flow needs and potential sales of investments to capitalize on favorable pricing. For equity securities, the ability and intent to hold the security for a period of time sufficient to allow for anticipated recovery is considered.

For fixed maturities where a decline in fair value is considered to be other-than-temporary and the Company intends to sell the security, or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost, an impairment is recognized in net income based on the fair value of the security at the time of assessment, resulting in a new cost basis for the security. If the decline in fair value of a fixed maturity security below its amortized cost is considered to be other-than-temporary based upon other considerations, the Company compares the estimated present value at the security's effective yield of the cash flows expected to be collected to the amortized cost of the security. The extent to which the estimated present value of the cash flows expected to be collected is less than the amortized cost of the security represents the credit-related portion of the OTTI, which is recognized in net income, resulting in a new cost basis for the security. Any remaining decline in fair value represents the noncredit portion of the OTTI, which is recognized in other comprehensive income (loss). For equity securities, a decline in fair value that is considered to be other-than-temporary is recognized in net income based on the fair value of the security at the time of assessment, resulting in a new cost basis for the security.

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The following tables summarize gross unrealized losses and fair value for available-for-sale securities by length of time that the securities have continuously been in an unrealized loss position:



	June 30, 2016
	Less than 12 Months					12 Months or Longer					Total
	Estimated Fair Value		Gross Unrealized Holding Losses			Estimated Fair Value		Gross Unrealized Holding Losses			Estimated Fair Value		Gross Unrealized Holding Losses
	(in thousands)
Fixed maturities:
U.S. Treasury securities and obligations of U.S. government agencies	$	—	$	—		$	—	$	—		$	—	$	—
Obligations of states, municipalities and political subdivisions	4,385		(80		)	2,536		(61		)	6,921		(141		)
Corporate and other securities	17,882		(39		)	15,559		(219		)	33,441		(258		)
Asset-backed securities	7,815		(6		)	15,076		(130		)	22,891		(136		)
Residential mortgage-backed securities	4,949		(20		)	9,178		(39		)	14,127		(59		)
Total fixed maturities	35,031		(145		)	42,349		(449		)	77,380		(594		)

Equity securities:
Exchange traded funds	1,209		(103		)	1,592		(257		)	2,801		(360		)
Total	$	36,240	$	(248	)	$	43,941	$	(706	)	$	80,181	$	(954	)

At June 30, 2016 , the Company held 69 fixed maturity securities with a total estimated fair value of $77.4 million and gross unrealized losses of $0.6 million . Of these securities, 36 were in a continuous unrealized loss position for greater than one year. As discussed above, the Company regularly reviews all securities within its investment portfolio to determine whether any impairment has occurred. Unrealized losses were caused by interest rate changes or other market factors and were not credit specific issues. Substantially all fixed maturity securities are of high credit quality and continue to pay the expected coupon payments under the contractual terms of the securities. Management concluded that there were no other-than-temporary impairments from fixed maturity or equity securities with unrealized losses for the six months ended June 30, 2016 .

At June 30, 2016 , the Company held three exchange traded funds ("ETFs") in its equity portfolio with a total estimated fair value of $2.8 million and gross unrealized losses of $0.4 million . One of these securities were in a continuous unrealized loss position for greater than one year. Given the Company's intent to hold and expectation of recovery to cost within a reasonable time, the Company did not consider any of the equities securities to be other-than-temporarily impaired at June 30, 2016 .

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	December 31, 2015
	Less than 12 Months					12 Months or Longer					Total
	Estimated Fair Value		Gross Unrealized Holding Losses			Estimated Fair Value		Gross Unrealized Holding Losses			Estimated Fair Value		Gross Unrealized Holding Losses
	(in thousands)
Fixed maturities:
U.S. Treasury securities and obligations of U.S. government agencies	$	2,999	$	(2	)	$	—	$	—		$	2,999	$	(2	)
Obligations of states, municipalities and political subdivisions	844		(2		)	2,550		(44		)	3,394		(46		)
Corporate and other securities	89,334		(1,515		)	6,978		(28		)	96,312		(1,543		)
Asset-backed securities	30,002		(209		)	13,070		(222		)	43,072		(431		)
Residential mortgage-backed securities	30,243		(434		)	16,072		(594		)	46,315		(1,028		)
Total fixed maturities	153,422		(2,162		)	38,670		(888		)	192,092		(3,050		)

Equity securities:
Exchange traded funds	3,256		(331		)	26		(5		)	3,282		(336		)
Total	$	156,678	$	(2,493	)	$	38,696	$	(893	)	$	195,374	$	(3,386	)

At December 31, 2015 , the Company held 156 fixed maturity securities with a total estimated fair value of $192.1 million and gross unrealized losses of $3.1 million . Of those securities, 36 were in a continuous unrealized loss position for greater than one year. Unrealized losses were caused by interest rate changes or other market factors and were not credit specific issues. Unrealized losses related to corporate fixed maturity securities in the energy sector were approximately $1.1 million at December 31, 2015 . Substantially all fixed maturity securities are of high credit quality and continue to pay the expected coupon payments under the contractual terms of the securities. Based on its review, the Company concluded that none of the fixed maturity securities with an unrealized loss at December 31, 2015 experienced an other-than-temporary impairment.

At December 31, 2015 , the Company held five ETFs in its equity portfolio with a total estimated fair value of $3.3 million and gross unrealized losses of $0.3 million . One of these securities was in a continuous unrealized loss position for greater than one year. Given the Company's intent to hold and expectation of recovery to cost within a reasonable time, the Company did not consider any of the equities securities to be other-than-temporarily impaired at December 31, 2015 .

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Contractual maturities of available-for-sale fixed maturity securities

The amortized cost and estimated fair value of available-for-sale fixed maturity securities at June 30, 2016 are summarized, by contractual maturity, as follows:



	Amortized		Estimated
	Cost		Fair Value
	(in thousands)
Due in one year or less	$	36,817	$	36,855
Due after one year through five years	104,397		105,535
Due after five years through ten years	24,932		26,280
Due after ten years	40,234		43,290
Asset-backed securities	72,148		72,813
Residential mortgage-backed securities	92,230		93,650
Total fixed maturities	$	370,758	$	378,423

Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties, and the lenders may have the right to put the securities back to the borrower.

Net investment income

The following table presents the components of net investment income:



	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(in thousands)
Interest:
Municipal bonds (tax exempt)	$	1,524		$	1,144		$	2,913		$	2,084
Taxable bonds	375			313			781			694
Cash, cash equivalents, and short-term investments	12			2			20			4
Dividends on equity securities	118			106			202			180
Gross investment income	2,029			1,565			3,916			2,962
Investment expenses	(210		)	(188		)	(421		)	(371		)
Net investment income	$	1,819		$	1,377		$	3,495		$	2,591

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Net investment gains and losses

There were no significant realized investment gains or losses for the three months ended June 30, 2016 . Realized investment gains for the six months ended June 30, 2016 of $0.4 million resulted from the sales of fixed maturity securities. There were no significant realized investment gains or losses for the three months and six months ended June 30, 2015 .

Change in net unrealized gains (losses) on investments

The following table presents the change in available-for-sale net unrealized gains (losses) by investment type:



	Three Months Ended June 30,					Six Months Ended June 30,
	2016		2015			2016		2015
	(in thousands)
Change in net unrealized gains (losses):
Fixed maturities	$	4,087	$	(2,915	)	$	7,016	$	(1,923	)
Equity securities	360		(115		)	701		57
Net increase (decrease)	$	4,447	$	(3,030	)	$	7,717	$	(1,866	)

Insurance – statutory deposits

The Company had invested assets with a carrying value of $7.5 million and $7.2 million on deposit with state regulatory authorities at June 30, 2016 and December 31, 2015 , respectively.

Payable for investments purchased

At June 30, 2016, payable for investments purchased, a non-cash transaction, was $12.3 million and was included in the "other liabilities" line item of the balance sheet. There were no payables for investments purchased at December 31, 2015.

3. Fair value measurements

Fair value was estimated for each class of financial instrument for which it was practical to estimate fair value. Fair value is defined as the price in the principal market that would be received for an asset to facilitate an orderly transaction between market participants on the measurement date. Market participants are assumed to be independent, knowledgeable, able and willing to transact an exchange and not acting under duress. Fair value hierarchy disclosures are based on the quality of inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Adjustments to transaction prices or quoted market prices may be required in illiquid or disorderly markets in order to estimate fair value. The three levels of the fair value hierarchy are described below:

The three levels of the fair value hierarchy are defined as follows:

Level 1 - Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities traded in active markets.

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Level 2 - Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and market-corroborated inputs.

Level 3 - Inputs to the valuation methodology are unobservable for the asset or liability and are significant to the fair value measurement.

Fair values of the Company's investment portfolio are estimated using unadjusted prices obtained by its investment manager from third party pricing services, where available. For securities where the Company is unable to obtain fair values from a pricing service or broker, fair values are estimated using information obtained from the Company's investment manager. Management performs several procedures to ascertain the reasonableness of investment values included in the condensed consolidated financial statements including 1) obtaining and reviewing internal control reports from the Company's investment manager that obtain fair values from third party pricing services, 2) discussing with the Company's investment manager its process for reviewing and validating pricing obtained from outside pricing services and 3) reviewing the security pricing received from the Company's investment manager and monitoring changes in unrealized gains and losses. The Company has evaluated the various types of securities in its investment portfolio to determine an appropriate fair value hierarchy level based upon trading activity and the observability of market inputs.

The following tables present the balances of assets measured at fair value on a recurring basis as of June 30, 2016 and December 31, 2015 , by level within the fair value hierarchy.



	June 30, 2016
	Level 1		Level 2		Level 3		Total
	(in thousands)
Assets
Fixed maturities:
U.S. Treasury securities and obligations of U.S. government agencies	$	12,475	$	—	$	—	$	12,475
Obligations of states, municipalities and political subdivisions	—		66,966		—		66,966
Corporate and other securities	—		132,519		—		132,519
Asset-backed securities	—		72,813		—		72,813
Residential mortgage-backed securities	—		93,650		—		93,650
Total fixed maturities	12,475		365,948		—		378,423

Equity securities:
Exchange traded funds	17,143		—		—		17,143
Short-term investments	—		6,653		—		6,653
Total	$	29,618	$	372,601	$	—	$	402,219

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	December 31, 2015
	Level 1		Level 2		Level 3		Total
	(in thousands)
Assets
Fixed maturities:
U.S. Treasury securities and obligations of U.S. government agencies	$	3,433	$	—	$	—	$	3,433
Obligations of states, municipalities and political subdivisions	—		72,513		—		72,513
Corporate and other securities	—		129,521		—		129,521
Asset-backed securities	—		58,307		—		58,307
Residential mortgage-backed securities	—		63,828		—		63,828
Total fixed maturities	3,433		324,169		—		327,602

Equity securities:
Exchange traded funds	14,240		—		—		14,240
Short-term investments	—		2,299		—		2,299
Total	$	17,673	$	326,468	$	—	$	344,141

There were no transfers into or out of Level 1 and Level 2 during the three and six months ended June 30, 2016 . There were no assets or liabilities measured at fair value on a nonrecurring basis as of June 30, 2016 and December 31, 2015 .

Due to the relatively short-term nature of cash, cash equivalents, receivables and payables, their carrying amounts are reasonable estimates of fair value. Additionally, due to variable interest rates and no change in the Company's credit standing, the carrying value of the note payable approximates fair value as of June 30, 2016 and December 31, 2015 .

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4. Deferred policy acquisition costs

The following table presents the amounts of policy acquisition costs deferred and amortized for the three and six months ended June 30, 2016 and 2015 :



	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(in thousands)
Balance, beginning of period	$	5,305		$	(3,821	)	$	(1,696	)	$	(3,762	)
Policy acquisition costs deferred:
Direct commissions	7,448			6,687			13,848			12,769
Ceding commissions	(4,995		)	(9,831		)	(2,204		)	(18,738		)
Other underwriting and policy acquisition costs	700			822			1,426			1,601
Policy acquisition costs deferred	3,153			(2,322		)	13,070			(4,368		)
Amortization of net policy acquisition costs	(2,943		)	2,093			(5,859		)	4,080
Balance, end of period	$	5,515		$	(4,050	)	$	5,515		$	(4,050	)

For the three and six months ended June 30, 2016 , the deferred ceding commissions decreased as a result of the change in the ceding percentage under the Company’s multi-line quota share reinsurance treaty ("MLQS"). The negative, or liability, balance at June 30, 2015 was also due to the effect of the deferred ceding commissions related to the MLQS. See note 8 for further details regarding the MLQS.

5. Underwriting, acquisition and insurance expenses

Underwriting, acquisition and insurance expenses consist of the following:



	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(in thousands)
Underwriting, acquisition and insurance expenses incurred:
Gross commissions	$	6,668		$	6,085		$	13,074		$	12,048
Ceding commissions	(5,218		)	(10,817		)	(10,626		)	(20,897		)
Other operating expenses	5,031			4,763			10,281			9,211
Total	$	6,481		$	31		$	12,729		$	362

Other operating expenses within underwriting, acquisition and insurance expenses include salaries, bonus and employee benefits expenses of $4.2 million and $3.9 million for the three months ended June 30, 2016 and 2015 . Salaries, bonus and employee benefits expenses were $8.8 million and $7.6 million for the six months ended June 30, 2016 and 2015 .

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6. Earnings per share

Earnings per share for Class A and Class B common stock were calculated using the two-class method. Under the two-class method, net income attributable to Class A and Class B common stockholders was determined by allocating undistributed earnings to each class of stock. The net income per share attributable to common stockholders was allocated based on the contractual participation rights of the Class A common stock and Class B common stock as if the income for the period has been distributed. Net income attributable to Class A common stockholders equaled the sum of dividends at the rate per annum of 12% compounding annually during the period ("Accruing Dividends") plus seventy-five percent of any remaining assets of the Company available for distribution to its stockholders in the event of a liquidation, dissolution, winding up or sale of the Company after payment of the Accruing Dividends ("Residual Proceeds"). Net income attributable to Class B common stockholders equaled twenty-five percent of the Residual Proceeds.

Basic earnings per share for each class of common stock was computed by dividing the net income attributable to the common stockholders by the weighted-average number of shares of each respective class of common stock outstanding during the period. Diluted earnings per share attributable to each class of common stock was computed by dividing net income attributable to common stockholders by the weighted-average shares outstanding for each respective class of common stock outstanding during the period, including potentially dilutive shares of common stock for the period determined using the treasury stock method. There were no potentially dilutive shares attributable to Class A common stockholders. For purposes of the diluted earnings per share attributable to Class B common stockholders calculation, unvested restricted grants of common stock were considered to be potentially dilutive shares of common stock.

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The following represents a reconciliation of the numerator and denominator of the basic and diluted earnings per share computations contained in the consolidated financial statements:



	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(in thousands, except share and per share data)
Earnings per share - Class A stockholders:
Numerator for earnings per share:
Net income	$	6,057	$	6,609	$	11,314	$	11,725
Less: net income attributable to Class B stockholders	303		571		405		754
Net income attributable to Class A stockholders	$	5,754	$	6,038	$	10,909	$	10,971

Denominator for earnings per share:
Weighted average shares outstanding - basic	13,803,183		13,795,530		13,803,183		13,795,530
Weighted average shares outstanding - diluted	13,803,183		13,795,530		13,803,183		13,795,530

Earnings per Class A common share - basic	$	0.42	$	0.44	$	0.79	$	0.80
Earnings per Class A common share - diluted	$	0.42	$	0.44	$	0.79	$	0.80

Earnings per share - Class B stockholders:
Numerator for earnings per share:
Net income attributable to Class B stockholders	$	303	$	571	$	405	$	754

Denominator for earnings per share:
Weighted average shares outstanding - basic	1,583,470		1,359,183		1,557,089		1,331,881
Unvested restricted stock grants	82,466		10,555		92,882		18,530
Weighted average shares outstanding - diluted	1,665,936		1,369,738		1,649,971		1,350,411

Earnings per Class B common share - basic	$	0.19	$	0.42	$	0.26	$	0.57
Earnings per Class B common share - diluted	$	0.18	$	0.42	$	0.25	$	0.56

There were no material anti-dilutive Class B shares for the three months and six months ended June 30, 2016 and 2015. See note 12 for details regarding changes to the Company's equity structure subsequent to June 30, 2016.

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7. Reserves for unpaid losses and loss adjustment expenses

The following table presents a reconciliation of consolidated beginning and ending reserves for unpaid losses and loss adjustment expenses:



	June 30,
	2016			2015
	(in thousands)
Net reserves for unpaid losses and loss adjustment expenses, beginning of year	$	124,126		$	91,970
Commutation of MLQS	24,296			8,587
Adjusted net reserves for losses and loss adjustment expenses, beginning of year	148,422			100,557
Incurred losses and loss adjustment expenses:
Current year	40,984			24,094
Prior years	(5,407		)	(6,815		)
Total net losses and loss adjustment expenses incurred	35,577			17,279

Payments:
Current year	1,078			605
Prior years	13,026			9,237
Total payments	14,104			9,842
Net reserves for unpaid losses and loss adjustment expenses, end of period	169,895			107,994
Reinsurance recoverable on unpaid losses	75,315			77,848
Gross reserves for unpaid losses and loss adjustment expenses, end of period	$	245,210		$	185,842

During the six months ended June 30, 2016, $5.4 million of redundancy developed on the reserves for unpaid losses and loss adjustment expenses held at December 31, 2015. This favorable development was primarily attributable to the Company’s casualty lines for accident years 2014 and 2015, which were below the Company's initial expected loss ratios.

During the six months ended June 30, 2015, $6.8 million of redundancy developed on the reserves for unpaid losses and loss adjustment expenses held at December 31, 2014. The favorable development was attributable primarily to the Company’s casualty lines for accident years 2013 and 2014, which were below the Company's initial expected loss ratios.

See note 8 for further details regarding the commutation of the MLQS.

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8. Reinsurance

The following table summarizes the effect of reinsurance on premiums written and earned:



	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(in thousands)
Written:
Direct	$	50,161		$	45,075		$	93,151		$	85,898
Assumed	(54		)	37			38			144
Ceded	(14,446		)	(26,274		)	(9,733		)	(50,218		)
Net written	$	35,661		$	18,838		$	83,456		$	35,824

Earned:
Direct	$	44,895		$	41,129		$	87,987		$	81,205
Assumed	2			37			34			75
Ceded	(13,114		)	(24,150		)	(25,641		)	(47,823		)
Net earned	$	31,783		$	17,016		$	62,380		$	33,457

Incurred losses and loss adjustment expenses were net of reinsurance (ceded incurred losses and loss adjustment expenses) of $3.4 million and $10.6 million for the three months ended June 30, 2016 and 2015 , respectively. Ceded incurred losses and loss adjustment expenses were $7.8 million and $21.5 million for the six months ended June 30, 2016 and 2015 respectively. At June 30, 2016 , reinsurance recoverables on paid and unpaid losses were $0.2 million and $75.3 million , respectively. At December 31, 2015 , reinsurance recoverables on paid and unpaid losses were and $0.2 million and $95.5 million , respectively.

Multi-line quota share reinsurance

The Company participates in a MLQS treaty that transfers a proportion of the risk related to certain lines of business written by its subsidiary, Kinsale Insurance Company, an Arkansas insurance company ("Kinsale Insurance"), to reinsurers in exchange for a proportion of the direct written premiums on that business. Under the terms of the MLQS covering the period January 1, 2015 to December 31, 2015 (the "2015 MLQS"), Kinsale Insurance received a provisional ceding commission equal to 41% of ceded written premiums and paid a reinsurance margin equal to 4.00% of ceded written premium. The 2015 MLQS contract includes a sliding scale commission provision that can adjust the ceding commissions within a range of 25% to 41% based on the loss experience of the business ceded. The 2015 MLQS ceding percentage during the first nine months of 2015 was 50% . The ceding percentage remained at 50% until October 1, 2015, at which time the Company decreased the percentage to 40% . Effective January 1, 2016, the Company further reduced the ceding percentage from 40% to 15% . The change in the ceding percentage reduced ceded written premiums by $17.0 million at January 1, 2016, with a corresponding reduction to ceded unearned premiums.

Effective January 1, 2016, the Company commuted the MLQS covering the period January 1, 2014 to December 31, 2014 (the "2014 MLQS"). The commutation reduced reinsurance recoverables on unpaid losses and receivable from reinsurers by $34.2 million at January 1, 2016, with a

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corresponding reduction to funds held for reinsurers. Effective January 1, 2015, the Company commuted 55% of the treaty covering the period July 1, 2012 to December 31, 2013 (the "2013 MLQS"). The commutation reduced reinsurance recoverables on unpaid losses and receivable from reinsurers by $11.9 million at January 1, 2015, with a corresponding reduction to funds held for reinsurers. The commutations did not have any effect on the Company's results of operations or cash flows for the applicable periods.

9. Credit facility

The Company has a loan and security agreement (the "Credit Agreement") with The PrivateBank and Trust Company ("PrivateBank") with a five -year secured term loan in the amount of $30.0 million . Pursuant to the terms of the Credit Agreement, the applicable interest rate on the term loan accrues daily at a rate equal to the 3 month LIBOR plus a margin, and is payable on the last day of each calendar quarter. The term loan has a maturity of December 4, 2020. The Company's wholly-owned subsidiaries, Kinsale Management, Inc. ("Kinsale Management") and Aspera Insurance Services Inc. ("Aspera"), are guarantors of the term loan. The assets of Kinsale Management and the stock of Kinsale Insurance have been pledged as collateral to PrivateBank.

On June 28, 2016, the Company amended and restated its Credit Agreement to, among other things, (i) increase the materiality thresholds and grace periods for events of default thereunder, (ii) add additional permitted categories to the debt, lien, restricted payments, mergers, disposals, transactions with affiliates and investment covenants, as well as to increase the general permitted baskets under the debt, lien, restricted payments and investment covenants, (iii) remove certain representations and warranties and affirmative covenants, (iv) add materiality qualifiers to certain representations and warranties, (v) add reinvestment rights and a minimum threshold with respect to net cash proceeds of certain asset disposals (other than disposals of the stock of Kinsale Insurance, which has been pledged as collateral to PrivateBank) which must be used to prepay the outstanding term loans and (vi) make the creation and perfection requirements with respect to collateral less onerous.

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10. Other comprehensive income (loss)

The following table summarizes the components of other comprehensive income (loss):



	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
	(in thousands)
Unrealized gains (losses) arising during the period, before income taxes	$	4,421		$	(3,022	)	$	8,079		$	(1,850	)
Income taxes	(1,548		)	1,057			(2,828		)	647
Unrealized gains (losses) arising during the period, net of income taxes	2,873			(1,965		)	5,251			(1,203		)
Less reclassification adjustment:
Net realized investment gains (losses)	(26		)	8			361			16
Income taxes	9			(3		)	(126		)	(6		)
Reclassification adjustment included in net income	(17		)	5			235			10
Other comprehensive income (loss)	$	2,890		$	(1,970	)	$	5,016		$	(1,213	)

The sale of an available-for-sale security results in amounts being reclassified from accumulated other comprehensive income to realized gains or losses in current period earnings. The related tax effect of the reclassification adjustment is recorded in income tax expense in current period earnings. See note 2 for additional information.

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11. Underwriting information

The Company has one reportable segment, the Excess and Surplus Lines Insurance segment, which primarily offers commercial excess and surplus lines liability and property insurance products through its underwriting divisions. Gross written premiums by underwriting division are presented below:



	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
	(in thousands)
Commercial:
Construction	$	12,053	$	9,528	$	21,305	$	17,640
Small Business	6,896		5,042		13,328		9,328
Professional Liability	4,040		3,936		7,985		8,212
Excess Casualty	4,858		4,465		8,503		8,305
Energy	3,515		4,227		7,159		8,615
General Casualty	4,771		5,269		7,857		10,269
Life Sciences	3,015		3,167		5,874		5,728
Allied Health	2,271		1,924		4,397		3,955
Products Liability	2,779		2,876		4,870		4,943
Healthcare	1,275		1,287		3,152		3,179
Commercial Property	1,268		1,873		2,386		3,397
Management Liability	531		—		1,148		—
Inland Marine	245		—		631		—
Environmental	428		245		756		376
Public Entity	—		—		223		—
Commercial Insurance	105		—		215		—
Total commercial	48,050		43,839		89,789		83,947
Personal:
Personal insurance	2,057		1,273		3,400		2,095
Total	$	50,107	$	45,112	$	93,189	$	86,042

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12. Subsequent events

Amendment of Certificate of Incorporation and Reclassification of Common Stock

At December 31, 2015, the Company was authorized to issue 18,333,333 shares of Common Stock, $0.0001 par value per share ("Common Stock"), of which 15,000,000 shares were designated as Class A Common Voting Shares ("Class A Common Stock") and 3,333,333 were designated as Class B Common Non-Voting Shares ("Class B Common Stock"). On July 28, 2016, in connection with the initial public offering (the "IPO"), the Company amended and restated its certificate of incorporation to recapitalize the Company's authorized capital stock to consist of 400,000,000 shares of common stock, par value $0.01 per share, and 100,000,000 shares of preferred stock, par value $0.01 per share.

In addition, the amended and restated certificate of incorporation provided for automatic reclassification of the Company's Class A Common Stock and Class B Common Stock into a single class of common stock. All shares of Class A Common Stock were reclassified into 14,682,671 shares of common stock, which were equal to the sum of:


•	the number of shares of common stock equal to the amount of accrued and unpaid dividends based on a reclassification date of July 28, 2016, or $90.3 million , divided by the initial public offering price of $16.00 per share, plus


•	the number of shares of common stock equal to a conversion ratio of 0.65485975 , calculated on the IPO price of $16.00 per share.

On July 28, 2016, the Company had outstanding grants of 1,783,858 restricted shares of Class B Common Stock. At that date, all restricted shares of Class B Common Stock were reclassified into 1,286,036 shares of common stock equal to a conversion ratio of 0.72095061 . The conversion ratio was calculated on the IPO price of $16.00 per share.

All fractional shares resulting from the reclassification of Class A Common Stock and Class B Common Stock into a single class of common stock were settled in cash.

Initial Public Offering

On August 2, 2016, the Company completed its IPO of 7,590,000 shares of common stock at a price to the public of $16.00 per share. The Company issued 5,000,000 shares of common stock and the selling stockholders sold 2,590,000 shares of common stock, which included 990,000 shares sold to the underwriters pursuant to the underwriter's option to purchase additional shares. After underwriter discounts and commissions and estimated offering expenses, the Company received net proceeds from the offering of approximately $72.4 million . The Company did not receive any net proceeds from the sale of shares of common stock by the selling stockholders. The issuance of common stock by the Company and the related net proceeds will be recorded in the consolidated financial statements on August 2, 2016, the closing date of the IPO.

Equity-based Compensation

On July 27, 2016, the Kinsale Capital Group, Inc. 2016 Omnibus Incentive Plan (the "2016 Incentive Plan"), became effective. The 2016 Incentive Plan provides for grants of stock options, stock appreciation rights, restricted stock, other stock-based awards and other cash-based awards to directors, officers and other employees, as well as independent contractors or consultants providing consulting or advisory services to the Company. The number of shares of common stock available for issuance under the 2016 Incentive Plan may not exceed 2,073,832 . On July 27, 2016, the Board of Directors approved and the Company granted 1,036,916 stock options with an exercise price equal to the IPO price per share of $16.00 , a maximum contractual term of 10 years , and a vesting period in which the options vest in 4 equal annual installments following the date of the grant.

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Dividend Declaration

On August 30, 2016 , the Company's Board of Directors declared a cash dividend of $0.05 per share of common stock. This dividend is payable on September 30, 2016 to all stockholders of record on September 15, 2016 .

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Management's Discussion and Analysis of Financial Condition and Results of Operations

The discussion and analysis below includes certain forward-looking statements that are subject to risks, uncertainties and other factors described in "Risk Factors" in this Quarterly Report on Form 10-Q (this "Quarterly Report"). Our actual results could differ materially from those anticipated in these forward-looking statements as a result of many factors.

The results of operations for the three and six months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the full year ended December 31, 2016, or for any other future period. The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included in Part I, Item 1 of this Quarterly Report, and in conjunction with our audited consolidated financial statements and the notes thereto included in the final prospectus filed with the Securities and Exchange Commission ("SEC") on July 29, 2016.

References to the "Company," "we," "us," and "our" are to Kinsale Capital Group, Inc. and its subsidiaries, unless the context otherwise requires.

Overview

Founded in 2009, we are an established and growing specialty insurance company. We focus exclusively on the excess and surplus lines ("E&S") market in the U.S., where we can use our underwriting expertise to write coverages for hard-to-place small business risks. We market and sell these insurance products in all 50 states and the District of Columbia through a network of independent insurance brokers.

We have one reportable segment, our Excess and Surplus Lines Insurance segment, which offers property and casualty ("P&C") insurance products through the E&S market. For the first six months of 2016, the percentage breakdown of our gross written premiums was 93.1% casualty and 6.9% property. Our commercial lines offerings include construction, small business, general casualty, energy, excess casualty, professional liability, life sciences, product liability, allied health, health care, commercial property, environmental, management liability, inland marine and commercial insurance. We also write a small amount of homeowners insurance in the personal lines market, which in aggregate represented 3.6% of our gross written premiums in the first half of 2016.

Factors affecting our results of operations

The MLQS

Historically, a significant amount of our business has been reinsured through our MLQS with third-party reinsurers. This agreement allows us to cede a portion of the risk related to certain of the insurance that we underwrite in exchange for a portion of our direct written premiums on that business, less a ceding commission. The MLQS is subject to annual renewal; however, we can adjust the amount of business we cede on a quarterly basis in accordance with the terms of the MLQS. We continually monitor the ceding percentage under the MLQS and adjust this percentage based on our projected direct written premiums. The counterparties under the MLQS for calendar year 2016 were Tokio Millennium Re AG (40%), Munich Reinsurance America, Inc. (32.5%), Everest Reinsurance Co. (20%) and Berkley Insurance Co. (7.5%).

Effective January 1, 2015, the ceding percentage under the MLQS was 50% and the provisional ceding commission rate was 41%.The ceding percentage remained at 50% until October 1, 2015, at which time

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we decreased the percentage to 40%, while the ceding commission rate remained at 41%. A lower ceding percentage generally results in higher net earned premiums and a reduction in ceding commissions in future periods.

Effective January 1, 2016, we reduced the ceding percentage from 40% to 15% while maintaining the provisional ceding commission rate at 41%. We reduced the ceding percentage under the MLQS as a result of Kinsale Insurance’s capital position growing more strongly from the profitability of the business relative to the growth rate of gross written premiums. We may adjust the ceding percentage under the MLQS for future periods depending on future business conditions in our industry. Generally, we would consider increasing the ceding percentage when gross written premiums are growing more strongly relative to the growth rate of Kinsale Insurance’s capital position, and decreasing the ceding percentage when Kinsale Insurance’s capital position is growing more strongly relative to the growth rate of gross written premiums. In periods of high premium rates and shortages of underwriting capacity (known as a hard market), the E&S market may grow significantly more rapidly than the standard insurance market as business may shift from the standard market to the E&S market dramatically. Additionally, under the terms of the 2016 MLQS, we have the ability to terminate and commute the contract as early as September 30, 2016 as a result of the Company's initial public offering that closed on August 2, 2016. We intend to commute such contract on October 1, 2016.

The impact of the MLQS on our results of operations is primarily reflected in our ceded written premiums, losses and loss adjustment expenses, as well as our underwriting, acquisition and insurance expenses. The following tables summarize the effect of the MLQS on our underwriting income for the three and six months ended June 30, 2016 and 2015:



	Three Months Ended June 30, 2016									Three Months Ended June 30, 2015
($ in thousands)	Including Quota Share			Effect of Quota Share			Excluding Quota Share			Including Quota Share			Effect of Quota Share			Excluding Quota Share

Gross written premiums	$	50,107		$	—		$	50,107		$	45,112		$	—		$	45,112
Ceded written premiums	(14,446		)	(6,363		)	(8,083		)	(26,274		)	(18,706		)	(7,568		)
Net written premiums	$	35,661		$	(6,363	)	$	42,024		$	18,838		$	(18,706	)	$	37,544
Net retention ⁽¹⁾	71.2		%				83.9		%	41.8		%				83.2		%

Net earned premiums	$	31,783		$	(5,692	)	$	37,475		$	17,016		$	(17,291	)	$	34,307
Losses and loss adjustment expenses	(17,456		)	2,385			(19,841		)	(8,061		)	7,654			(15,715		)
Underwriting, acquisition and insurance expenses	(6,481		)	3,080			(9,561		)	(31		)	8,945			(8,976		)
Underwriting income ⁽²⁾	$	7,846		$	(227	)	$	8,073		$	8,924		$	(692	)	$	9,616

Loss ratio	54.9		%	41.9		%	—			47.4		%	44.3		%	—
Expense ratio	20.4		%	54.1		%	—			0.2		%	51.7		%	—
Combined ratio	75.3		%	96.0		%	—			47.6		%	96.0		%	—

Adjusted loss ratio ⁽³⁾	—			—			52.9		%	—			—			45.8		%
Adjusted expense ratio ⁽³⁾	—			—			25.5		%	—			—			26.2		%
Adjusted combined ratio ⁽³⁾	—			—			78.4		%	—			—			72.0		%

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	Six Months Ended June 30, 2016									Six Months Ended June 30, 2015
($ in thousands)	Including Quota Share			Effect of Quota Share			Excluding Quota Share			Including Quota Share			Effect of Quota Share			Excluding Quota Share

Gross written premiums	$	93,189		$	—		$	93,189		$	86,042		$	—		$	86,042
Ceded written premiums	(9,733		)	5,226			(14,959		)	(50,218		)	(35,910		)	(14,308		)
Net written premiums	$	83,456		$	5,226		$	78,230		$	35,824		$	(35,910	)	$	71,734
Net retention ⁽¹⁾	89.6		%				83.9		%	41.6		%				83.4		%

Net earned premiums	$	62,380		$	(11,124	)	$	73,504		$	33,457		$	(33,994	)	$	67,451
Losses and loss adjustment expenses	(35,577		)	4,195			(39,772		)	(17,279		)	15,475			(32,754		)
Underwriting, acquisition and insurance expenses	(12,729		)	6,485			(19,214		)	(362		)	17,159			(17,521		)
Underwriting income ⁽²⁾	$	14,074		$	(444	)	$	14,518		$	15,816		$	(1,360	)	$	17,176

Loss ratio	57.0		%	37.7		%	—			51.6		%	45.5		%	—
Expense ratio	20.4		%	58.3		%	—			1.1		%	50.5		%	—
Combined ratio	77.4		%	96.0		%	—			52.7		%	96.0		%	—

Adjusted loss ratio ⁽³⁾	—			—			54.1		%	—			—			48.6		%
Adjusted expense ratio ⁽³⁾	—			—			26.1		%	—			—			26.0		%
Adjusted combined ratio ⁽³⁾	—			—			80.2		%	—			—			74.6		%

⁽¹⁾ The ratio of net written premiums to gross written premiums.

⁽²⁾ Underwriting income is a non-GAAP financial measure. See "— Reconciliation of non-GAAP financial measures" for a reconciliation of underwriting income to net income in accordance with GAAP.

⁽³⁾ Our adjusted loss ratio, adjusted expense ratio and adjusted combined ratio are non-GAAP financial measures. We define our adjusted loss ratio, adjusted expense ratio and adjusted combined ratio as each of our loss ratio, expense ratio and combined ratio, respectively, excluding the effects of the MLQS. We use these adjusted ratios as an internal performance measure in the management of our operations because we believe they give our management and other users of our financial information useful insight into our results of operations and our underlying business performance. Our adjusted loss ratio, adjusted expense ratio and adjusted combined ratio should not be viewed as substitutes for our loss ratio, expense ratio and combined ratio, respectively, which are presented in accordance with GAAP.

Our results of operations may be difficult to compare from year to year as we may make periodic adjustments to the amount of business we cede under the terms of the MLQS, may change the negotiated terms of the MLQS upon renewal, and may increase or decrease the ceding commission under the MLQS based on the loss experience of the business ceded. In light of the impact of the MLQS on our results of operations, we internally evaluate our financial performance both including and excluding the effect of the MLQS.

Components of our results of operations

Gross written premiums

Gross written premiums are the amount received or to be received for insurance policies written or assumed by us during a specific period of time without reduction for policy acquisition costs, reinsurance costs or other deductions. The volume of our gross written premiums in any given period are generally influenced by:


•	New business submissions;

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•	Binding of new business submissions into policies;


•	Renewals of existing policies; and


•	Average size and premium rate of new and existing policies.

We earn insurance premiums on a pro rata basis over the term of a policy. Our insurance policies generally have a term of one year. Net earned premiums represent the earned portion of our gross written premiums, less that portion of our gross written premiums that is ceded to third-party reinsurers under our reinsurance agreements.

Ceded written premiums

Ceded written premiums are the amount of gross written premiums ceded to reinsurers. We enter into reinsurance contracts to limit our exposure to potential large losses as well as to provide additional capacity for growth. Ceded written premiums are earned over the reinsurance contract period in proportion to the period of risk covered. The volume of our ceded written premiums is impacted by the level of our gross written premiums and any decision we make to increase or decrease retention levels. Since we reduced the ceding percentage under the MLQS from 40% to 15% effective January 1, 2016, we anticipate that our ceded written premiums will decline significantly relative to our gross written premiums in future periods.

Net investment income

Net investment income is an important component of our results of operations. We earn investment income on our portfolio of cash and invested assets. Our cash and invested assets are primarily comprised of fixed maturity securities, but also include cash and cash equivalents, equity securities and short-term investments. The principal factors that influence net investment income are the size of our investment portfolio and the yield on that portfolio. As measured by amortized cost (which excludes changes in fair market value, such as from changes in interest rates), the size of our investment portfolio is mainly a function of our invested equity capital along with premiums we receive from our insureds less payments on policyholder claims.

Net investment gains

Net investment gains are a function of the difference between the amount received by us on the sale of a security and the security's amortized cost, as well as any "other-than-temporary" impairments recognized in earnings.

Other income

Other income primarily consists of the commissions retained by our affiliate broker, Aspera.

Losses and loss adjustment expenses

Losses and loss adjustment expenses are a function of the amount and type of insurance contracts we write and the loss experience associated with the underlying coverage. In general, our losses and loss adjustment expenses are affected by:


•	Frequency of claims associated with the particular types of insurance contracts that we write;


•	Trends in the average size of losses incurred on a particular type of business;


•	Mix of business written by us;


•	Changes in the legal or regulatory environment related to the business we write;


•	Trends in legal defense costs;


•	Wage inflation; and

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•	Inflation in medical costs.

Losses and loss adjustment expenses are based on an actuarial analysis of the estimated losses, including losses incurred during the period and changes in estimates from prior periods. Losses and loss adjustment expenses may be paid out over a period of years.

Underwriting, acquisition and insurance expenses

Underwriting, acquisition and insurance expenses include policy acquisition costs and other underwriting expenses. Policy acquisition costs are principally comprised of the commissions we pay our brokers, net of ceding commissions we receive on business ceded under certain reinsurance contracts. Policy acquisition costs that are directly related to the successful acquisition of those policies are deferred. The amortization of such policy acquisition costs is charged to expense in proportion to premium earned over the policy life. Other underwriting expenses represent the general and administrative expenses of our insurance business including employment costs, telecommunication and technology costs, the costs of our lease, and legal and auditing fees. As we have reduced the ceding percentage under the MLQS from 40% to 15% effective January 1, 2016, we expect to receive lower ceding commissions and therefore anticipate that our underwriting, acquisition and insurance expenses will increase significantly during 2016.

Other expenses

Other expenses are comprised principally of interest expense related to our credit facility and expenses relating to Aspera, our affiliate broker.

Income tax expense

Currently all of our income tax expense relates to federal income taxes. Kinsale Insurance is generally not subject to income taxes in the states in which it operates; however, our non-insurance subsidiaries are subject to state income taxes. The amount of income tax expense or benefit recorded in future periods will be dependent on the jurisdictions in which we operate and the tax laws and regulations in effect.

Key metrics

We discuss certain key metrics, described below, which provide useful information about our business and the operational factors underlying our financial performance.

Underwriting income is a non-GAAP financial measure. We define underwriting income as net income, excluding net investment income, net investment gains and losses, and other income and expenses. See "—Reconciliation of non-GAAP financial measures" for a reconciliation of underwriting income to net income in accordance with GAAP.

Loss ratio , expressed as a percentage, is the ratio of losses and loss adjustment expenses to net earned premiums, net of the effects of reinsurance.

Expense ratio, expressed as a percentage, is the ratio of underwriting, acquisition and insurance expenses to net earned premiums.

Combined ratio is the sum of the loss ratio and the expense ratio. A combined ratio under 100% generally indicates an underwriting profit. A combined ratio over 100% generally indicates an underwriting loss.

Adjusted loss ratio is a non-GAAP financial measure. We define adjusted loss ratio as the loss ratio, excluding the effects of the MLQS. For additional detail on the impact of the MLQS on our results of operations, see "—Factors affecting our results of operations — The MLQS."

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Adjusted expense ratio is a non-GAAP financial measure. We define adjusted expense ratio as the expense ratio, excluding the effects of the MLQS. For additional detail on the impact of the MLQS on our results of operations, see "—Factors affecting our results of operations — The MLQS."

Adjusted combined ratio is a non-GAAP financial measure. We define adjusted combined ratio as the loss ratio, excluding the effects of the MLQS. For additional detail on the impact of the MLQS on our results of operations, see "—Factors affecting our results of operations — The MLQS."

Return on equity is our net income expressed on an annualized basis as a percentage of average beginning and ending stockholders’ equity during the period. Our overall financial goal is to produce a return on equity of at least 15% over the long-term.

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Results of operations

Three months ended June 30, 2016 compared to three months ended June 30, 2015

The following table summarizes our results of operations for the three months ended June 30, 2016 and June 30, 2015 :



	Three Months Ended June 30,
($ in thousands)	2016			2015			Change

Gross written premiums	$	50,107		$	45,112		$	4,995
Ceded written premiums	(14,446		)	(26,274		)	11,828
Net written premiums	$	35,661		$	18,838		$	16,823

Net earned premiums	$	31,783		$	17,016		$	14,767
Losses and loss adjustment expenses	17,456			8,061			9,395
Underwriting, acquisition and insurance expenses	6,481			31			6,450
Underwriting income ⁽¹⁾	7,846			8,924			(1,078		)
Other expenses, net	(408		)	(326		)	(82		)
Net investment income	1,819			1,377			442
Net investment gains	(4		)	8			(12		)
Income before taxes	9,253			9,983			(730		)
Income tax expense	3,196			3,374			(178		)
Net income	$	6,057		$	6,609		$	(552	)

Return on equity	19.3		%	26.2		%

Loss ratio	54.9		%	47.4		%
Expense ratio	20.4		%	0.2		%
Combined ratio	75.3		%	47.6		%

⁽¹⁾ Underwriting income is a non-GAAP financial measure. See "—Reconciliation of non-GAAP financial measures" for a reconciliation of underwriting income to net income in accordance with GAAP.

Our net income was $6.1 million for the three months ended June 30, 2016 compared to $6.6 million for the three months ended June 30, 2015 , a decrease of 8.4% . Our underwriting income decreased by $1.1 million , or 12.1% , to $7.8 million for the three months ended June 30, 2016 compared to $8.9 million for the three months ended June 30, 2015 . The decrease in our underwriting income in the period was primarily due to lower favorable loss development from prior accident years, during the second quarter of 2016 compared to the same period in 2015.

On January 1, 2015, we renewed the MLQS and maintained the ceding percentage at 50%, which resulted in a net retention ratio of 41.8% , for the three months ended June 30, 2015 . The provisional ceding commission rate for the MLQS was increased slightly to 41%.The ceding percentage remained at 50% until October 1, 2015, at which time we decreased the percentage to 40%. Upon renewal of the MLQS on January 1, 2016, we further reduced the ceding percentage from 40% to 15%, which resulted in a net retention ratio of 71.2% for the three months ended

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June 30, 2016 , while maintaining the provisional ceding commission rate at 41%. Excluding the effect of the MLQS, our net retention ratio was 83.9% for the three months ended June 30, 2016 compared to 83.2% for the three months ended June 30, 2015 .

In addition, excluding the effect of the MLQS, our underwriting income was $8.1 million for the three months ended June 30, 2016 compared to $9.6 million for the three months ended June 30, 2015 , a decrease of $1.5 million , or 16.0% . The corresponding adjusted combined ratio was 78.4% for the three months ended June 30, 2016 compared to 72.0% for the three months ended June 30, 2015 .

Premiums

Our gross written premiums were $50.1 million for the three months ended June 30, 2016 compared to $45.1 million for the three months ended June 30, 2015 , an increase of $5.0 million , or 11.1% . Premium growth in the second quarter of 2016 was principally due to a greater number of policies written, offset in part by a decrease in the average premium per policy. The average premium on a policy written by us in the second quarter of 2016 was $8,669 compared to $9,996 in the second quarter of 2015. The increase in gross written premiums was most notable in the construction, small business and personal insurance lines of business, offset in part by lower premiums written in the energy line of business.

Net written premiums increased by $16.8 million , or 89.3% , to $35.7 million for the three months ended June 30, 2016 from $18.8 million for the three months ended June 30, 2015 . This increase in net written premiums was primarily due to the decrease in the ceding percentage on the MLQS and higher gross written premiums in the second quarter of 2016 compared to the second quarter 2015. Effective January 1, 2016, we decreased the ceding percentage on the MLQS from 40% to 15%.

Net earned premiums increased by $14.8 million , or 86.8% , to $31.8 million for the three months ended June 30, 2016 from $17.0 million for the three months ended June 30, 2015 due to higher net written premiums in the second quarter of 2016 compared to the second quarter of 2015. Excluding the effect of the MLQS, net earned premiums increased by $3.2 million , or 9.2% , to $37.5 million for the three months ended June 30, 2016 from $34.3 million for the three months ended June 30, 2015 .

Loss ratio

Our loss ratio was 54.9% for the three months ended June 30, 2016 compared to 47.4% for the three months ended June 30, 2015 , or an increase of 7.5 basis points. This increase in the loss ratio for the second quarter of 2016 was due primarily to lower favorable development of prior accident years during the second quarter of 2016 compared to the same period in 2015.

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The following tables summarize the effect of the factors indicated above on the loss ratio for the three months ended June 30, 2016 and 2015 :



	Three Months Ended June 30,
	2016					2015
($ in thousands)	Losses and loss adjustment expenses			% of Earned Premiums		Losses and loss adjustment expenses			% of Earned Premiums
Loss ratio:
Current accident year	$	20,140		63.3	%	$	11,286		66.3	%
Effect of prior year development	(2,684		)	(8.4	)	(3,225		)	(18.9	)
	$	17,456		54.9	%	$	8,061		47.4	%



	Three Months Ended June 30,
	2016					2015
($ in thousands)	Losses and loss adjustment expenses			% of Earned Premiums		Losses and loss adjustment expenses			% of Earned Premiums
Adjusted loss ratio:
Current accident year	$	23,287		62.1	%	$	20,926		61.0	%
Effect of prior year development	(3,446		)	(9.2	)	(5,211		)	(15.2	)
	$	19,841		52.9	%	$	15,715		45.8	%

Expense ratio

Our expense ratio was 20.4% for the three months ended June 30, 2016 compared to 0.2% for the three months ended June 30, 2015 . As a result of the MLQS, our expense ratio in the second quarter of 2015 was low from ceding commissions we received under the MLQS and certain other reinsurance contracts.

The following table summarizes the effect of the factors indicated above on the expense ratio for the three months ended June 30, 2016 and 2015 :



	Three Months Ended June 30,
	2016					2015
($ in thousands)	Underwriting Expenses			% of Earned Premiums		Underwriting Expenses			% of Earned Premiums
Commissions incurred:
Direct	$	6,668		21.0	%	$	6,085		35.8	%
Ceding - MLQS	(3,080		)	(9.7	)%	(8,945		)	(52.6	)%
Ceding - other	(2,138		)	(6.7	)%	(1,872		)	(11.0	)%
Net commissions incurred	1,450			4.6	%	(4,732		)	(27.8	)%
Other underwriting expenses	5,031			15.8	%	4,763			28.0	%
Underwriting, acquisition, and insurance expenses	$	6,481		20.4	%	$	31		0.2	%

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The 20.2 basis point increase in the expense ratio in the second quarter of 2016 was due primarily to the decrease in the ceding percentage and related ceding commission on the MLQS for the three months ended June 30, 2016 compared to the three months ended June 30, 2015 . Other underwriting expenses were $5.0 million for the three months ended June 30, 2016 compared to $4.8 million for the three months ended June 30, 2015 , an increase of $0.3 million , or 5.6% . This increase was primarily due to higher compensation costs associated with an increase in the number of employees in the second quarter of 2016. Direct commissions paid as a percent of gross written premiums was 14.9% for the three months ended June 30, 2016 and 14.8% for the three months ended June 30, 2015 .

Excluding the effect of the MLQS, the adjusted expense ratio was 25.5% for the three months ended June 30, 2016 compared to 26.2% for the three months ended June 30, 2015 .

Combined ratio

Our combined ratio was 75.3% for the three months ended June 30, 2016 compared to 47.6% for the three months ended June 30, 2015 . Excluding the effects of the MLQS, the adjusted combined ratio was 78.4% for the three months ended June 30, 2016 compared to 72.0% for the three months ended June 30, 2015 .

Investing results

Our net investment income increased by 32.1% to $1.8 million for the three months ended June 30, 2016 from $1.4 million for the three months ended June 30, 2015 , primarily due to the increase in our investment portfolio from additional premiums collected since the second quarter of 2015. We achieved this increase despite the continuing low interest rate environment.

The following table summarizes net investment income and net capital gains for the three months ended June 30, 2016 and 2015 :



	Three Months Ended June 30,
($ in thousands)	2016			2015		Change

Net investment income	$	1,819		1,377		$	442
Net realized investment (losses) gains	(4		)	8		(12		)
Total	$	1,815		$	1,385	$	430

Our fixed income portfolio had a gross investment return of 2.15% for the three months ended June 30, 2016, compared to 2.12% for the three months ended June 30, 2015.

We perform quarterly reviews of all securities within our investment portfolio to determine whether any other-than-temporary impairment has occurred. Management concluded that there were no other-than-temporary impairments from fixed maturity or equity securities with unrealized losses for the three months ended June 30, 2016 and 2015 .

Other expenses, net

Other expenses were relatively flat for the three months ended June 30, 2016 compared to the three months ended June 30, 2015 and were comprised principally of interest expense related to our credit facility of $0.3 million for the second quarter of 2016 and 2015, and operating expenses related to Aspera.

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Income tax expense

Our income tax expense was $3.2 million for the three months ended June 30, 2016 compared to $3.4 million for the three months ended June 30, 2015 . Our effective tax rate for the three months ended June 30, 2016 was approximately 34.5% compared to 33.8% for the three months ended June 30, 2015 . Our effective tax rate differs from the statutory tax rate primarily as a result of favorable tax treatment on certain municipal bond interest income and dividends received from our equity investments.

Return on equity

Our annualized return on equity for the three months ended June 30, 2016 was 19.3% compared to 26.2% for the three months ended June 30, 2015 and reflects lower favorable loss development in the second quarter of 2016 compared to 2015.

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Six months ended June 30, 2016 compared to six months ended June 30, 2015

The following table summarizes our results of operations for the six months ended June 30, 2016 and 2015:



	Six Months Ended June 30,
($ in thousands)	2016			2015			Change

Gross written premiums	$	93,189		$	86,042		$	7,147
Ceded written premiums	(9,733		)	(50,218		)	40,485
Net written premiums	$	83,456		$	35,824		$	47,632

Net earned premiums	$	62,380		$	33,457		$	28,923
Losses and loss adjustment expenses	35,577			17,279			18,298
Underwriting, acquisition and insurance expenses	12,729			362			12,367
Underwriting income ⁽¹⁾	14,074			15,816			(1,742		)
Other expenses, net	(810		)	(698		)	(112		)
Net investment income	3,495			2,591			904
Net investment gains	383			16			367
Income before taxes	17,142			17,725			(583		)
Income tax expense	5,828			6,000			(172		)
Net income	$	11,314		$	11,725		$	(411	)

Return on equity	18.6		%	24.0		%

Loss ratio	57.0		%	51.6		%
Expense ratio	20.4		%	1.1		%
Combined ratio	77.4		%	52.7		%

⁽¹⁾ Underwriting income is a non-GAAP financial measure. See "—Reconciliation of non-GAAP financial measures" for a reconciliation of underwriting income to net income in accordance with GAAP.

Our net income was $11.3 million for the six months ended June 30, 2016 compared to $11.7 million for the six months ended June 30, 2015 , an decrease of 3.5% . Our underwriting income decreased by $1.7 million , or 11.0% , to $14.1 million for the six months ended June 30, 2016 compared to $15.8 million for the six months ended June 30, 2015 . The decrease in our underwriting income in the period was primarily due to lower favorable loss development from prior accident years, during the first half of 2016 compared to the same period in 2015.

On January 1, 2015, we renewed the MLQS and maintained the ceding percentage at 50%, which resulted in a net retention ratio of 41.6% for the six months ended June 30, 2015 . The provisional ceding commission rate for the MLQS was increased to 41%.The ceding percentage remained at 50% until October 1, 2015, at which time we decreased the percentage to 40%. Upon renewal of the MLQS on January 1, 2016, we further reduced the ceding percentage from 40% to 15%, which resulted in a net retention ratio of 89.6% for the six months ended June 30, 2016 , while maintaining the provisional ceding commission rate at 41%. Excluding the effect of the MLQS, our

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net retention ratio was 83.9% for the six months ended June 30, 2016 compared to 83.4% for the six months ended June 30, 2015 .

In addition, excluding the effect of the MLQS, our underwriting income was $14.5 million for the six months ended June 30, 2016 compared to $17.2 million for the six months ended June 30, 2015 , a decrease of $2.7 million , or 15.5% . The corresponding adjusted combined ratio was 80.2% for the six months ended June 30, 2016 compared to 74.6% for the six months ended June 30, 2015 . The adjusted combined ratio reflected a 5.5 basis point increase in the adjusted loss ratio for the first six months of 2016 and an increase in the adjusted expense ratio of 0.1 basis points.

Premiums

Our gross written premiums were $93.2 million for the six months ended June 30, 2016 compared to $86.0 million for the six months ended June 30, 2015 , an increase of $7.1 million , or 8.3% . Premium growth in the first six months of 2016 was principally due to a greater number of policies written, offset in part by a decrease in the average premium per policy. The average premium on a policy written by us in the first half of 2016 was $8,787 compared to $10,185 in the first half of 2015. The increase in gross written premiums was most notable in the small business, construction and personal insurance lines of business, offset in part by lower premiums written in the general casualty and energy lines of business.

Net written premiums increased by $47.6 million , or 133.0% , to $83.5 million for the six months ended June 30, 2016 from $35.8 million for the six months ended June 30, 2015 . This increase in net written premiums was primarily due to the decrease in the ceding percentage on the MLQS and higher gross written premiums in the first six months of 2016. Effective January 1, 2016, we decreased the ceding percentage on the MLQS from 40% to 15%.

Net earned premiums increased by $28.9 million , or 86.4% , to $62.4 million for the six months ended June 30, 2016 from $33.5 million for the six months ended June 30, 2015 due to higher written premiums in the first half of 2016 compared to the first half of 2015. Excluding the effect of the MLQS, net earned premiums increased by $6.1 million , or 9.0% , to $73.5 million for the six months ended June 30, 2016 from $67.5 million for the six months ended June 30, 2015 .

Loss ratio

Our loss ratio was 57.0% for the six months ended June 30, 2016 compared to 51.6% for the six months ended June 30, 2015 , or an increase of 5.4 basis points. This increase in the loss ratio was due primarily to lower favorable loss development from prior accident years during the first half of 2016 compared to the same period in 2015.

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The following tables summarize the effect of the factors indicated above on the loss ratio for the six months ended June 30, 2016 and 2015 :



	Six Months Ended June 30,
	2016					2015
($ in thousands)	Losses and loss adjustment expenses			% of Earned Premiums		Losses and loss adjustment expenses			% of Earned Premiums
Loss ratio:
Current accident year	$	40,984		65.7	%	$	24,094		72.0	%
Effect of prior year development	(5,407		)	(8.7	)	(6,815		)	(20.4	)
	$	35,577		57.0	%	$	17,279		51.6	%



	Six Months Ended June 30,
	2016					2015
($ in thousands)	Losses and loss adjustment expenses			% of Earned Premiums		Losses and loss adjustment expenses			% of Earned Premiums
Adjusted loss ratio:
Current accident year	$	47,347		64.4	%	$	43,172		64.0	%
Effect of prior year development	(7,575		)	(10.3	)	(10,418		)	(15.4	)
	$	39,772		54.1	%	$	32,754		48.6	%

Expense ratio

Our expense ratio was 20.4% for the six months ended June 30, 2016 compared to 1.1% for the six months ended June 30, 2015 . As a result of the MLQS, our expense ratio in the first half of 2015 was low due to ceding commissions we received under the MLQS and certain other reinsurance contracts.

The following table summarizes the effect of the factors indicated above on the expense ratio for the six months ended June 30, 2016 and 2015 :



	Six Months Ended June 30,
	2016					2015
($ in thousands)	Underwriting Expenses			% of Earned Premiums		Underwriting Expenses			% of Earned Premiums
Commissions incurred:
Direct	$	13,074		20.9	%	$	12,048		36.0	%
Ceding - MLQS	(6,485		)	(10.4	)%	(17,159		)	(51.3	)%
Ceding - other	(4,141		)	(6.6	)%	(3,738		)	(11.1	)%
Net commissions incurred	2,448			3.9	%	(8,849		)	(26.4	)%
Other underwriting expenses	10,281			16.5	%	9,211			27.5	%
Underwriting, acquisition, and insurance expenses	$	12,729		20.4	%	$	362		1.1	%

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The 19.3 basis point increase in the expense ratio in the first half of 2016 was due primarily to the decrease in the ceding percentage and related ceding commission on the MLQS for the six months ended June 30, 2016 compared to the six months ended June 30, 2015 . Other underwriting expenses were $10.3 million for the six months ended June 30, 2016 compared to $9.2 million for the six months ended June 30, 2015 , an increase of $1.1 million , or 11.6% . This increase was primarily due to higher compensation costs associated with an increase in our overall number of employees in the first half of 2016. Direct commissions paid as a percent of gross written premiums was 14.9% for the six months ended June 30, 2016 and 14.8% for the six months ended June 30, 2015 .

Excluding the effect of the MLQS, the adjusted expense ratio was 26.1% for the six months ended June 30, 2016 compared to 26.0% for the six months ended June 30, 2015 .

Combined ratio

Our combined ratio was 77.4% for the six months ended June 30, 2016 compared to 52.7% for the six months ended June 30, 2015 . Excluding the effects of the MLQS, the adjusted combined ratio was 80.2% for the six months ended June 30, 2016 compared to 74.6% for the six months ended June 30, 2015 .

Investing results

Our net investment income increased by 34.9% to $3.5 million for the six months ended June 30, 2016 from $2.6 million for the six months ended June 30, 2015 , primarily due to the increase in our investment portfolio from additional premiums collected since the first half of 2015. We achieved this increase despite the ongoing low interest rate environment.

The following table summarizes net investment income and net capital gains for the six months ended June 30, 2016 and 2015 :



	Six Months Ended June 30,
($ in thousands)	2016		2015		Change

Net investment income	$	3,495	2,591		$	904
Net realized investment gains	383		16		367
Total	$	3,878	$	2,607	$	1,271

Our fixed income portfolio had a gross investment return of 2.14% for the six months ended June 30, 2016 , compared to 2.08% for the six months ended June 30, 2015 .

We perform quarterly reviews of all securities within our investment portfolio to determine whether any other-than-temporary impairment has occurred. Management concluded that there were no significant other-than-temporary impairments from fixed maturity or equity securities with unrealized losses for the six months ended June 30, 2016 and 2015 .

Other expenses, net

Other expenses increased slightly for the six months ended June 30, 2016 compared to the six months ended June 30, 2015 and were comprised principally of interest expense related to our credit facility of $0.6 million for the first half of 2016 and 2015, and operating expenses related to Aspera.

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Income tax expense

Our income tax expense was $5.8 million for the six months ended June 30, 2016 compared to $6.0 million for the six months ended June 30, 2015. Our effective tax rate for the six months ended June 30, 2016 was approximately 34.0% compared to 33.9% for the six months ended June 30, 2015 . Our effective tax rate differs from the statutory tax rate primarily as a result of favorable tax treatment on certain municipal bond interest income and dividends received from our equity investments.

Return on equity

Our annualized return on equity for the six months ended June 30, 2016 was 18.6% compared to 24.0% for the six months ended June 30, 2015 and reflects the increase in our combined ratio in the first half of 2016 from lower favorable loss development from prior accident years.

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Liquidity and capital resources

Sources and uses of funds

We are organized as a Delaware holding company with our operations primarily conducted by our wholly-owned insurance subsidiary, Kinsale Insurance, which is domiciled in Arkansas. Accordingly, Kinsale may receive cash through (1) loans from banks, (2) issuance of equity and debt securities, (3) corporate service fees from our insurance subsidiary, (4) payments from our subsidiaries pursuant to our consolidated tax allocation agreement and other transactions, and (5) dividends from our insurance subsidiary. We may use the proceeds from these sources to contribute funds to Kinsale Insurance in order to support premium growth, reduce our reliance on reinsurance, retire our outstanding indebtedness and pay interest, dividends and taxes and for other business purposes.

Management believes that the Company has sufficient liquidity available both in Kinsale and in its insurance subsidiary, Kinsale Insurance, as well as in its other operating subsidiaries, to meet its operating cash needs and obligations and committed capital expenditures for the next 12 months.

Cash flows

Our most significant source of cash is from premiums received from our insureds, which, for most policies, we receive at the beginning of the coverage period. Our most significant cash outflow is for claims that arise when a policyholder incurs an insured loss. Because the payment of claims occurs after the receipt of the premium, often years later, we invest the cash in various investment securities that earn interest and dividends. We also use cash to pay commissions to brokers, as well as to pay for ongoing operating expenses such as salaries, rent, taxes and interest expense. We use reinsurance to manage the risk that we take on our policies. We cede, or pay out, part of the premiums we receive to our reinsurers and collect cash back when losses subject to our reinsurance coverage are paid.

The timing of our cash flows from operating activities can vary among periods due to the timing by which payments are made or received. Some of our payments and receipts, including loss settlements and subsequent reinsurance receipts, can be significant, so their timing can influence cash flows from operating activities in any given period. Management believes that cash receipts from premiums, proceeds from investment sales and redemptions and investment income are sufficient to cover cash outflows in the foreseeable future.

Our cash flows for the six months ended June 30, 2016 and 2015 were:



	Six Months Ended June 30,
	2016			2015
	(in thousands)
Cash and cash equivalents provided by (used in):
Operating activities	$	36,480		$	34,524
Investing activities	(38,721		)	(39,338		)
Financing activities	(67		)	(53		)
Change in cash and cash equivalents	$	(2,308	)	$	(4,867	)

Net cash provided by operating activities was approximately $36.5 million for the six months ended June 30, 2016 , compared with $34.5 million provided by operating activities for the same period in

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2015 . This increase was largely driven by the timing of claim payments and reinsurance balances and operating assets and liabilities.

Net cash used in investing activities was $38.7 million for the six months ended June 30, 2016 , compared with net cash used in investing activities of $39.3 million for the six months ended June 30, 2015 . The decrease in cash used in investing activities was primarily attributable to higher net disposals of fixed maturity securities of $9.2 million, largely offset by higher net purchases of short-term and equity securities of $8.4 million.

There were no significant cash flows related to financing activities for the six months ended June 30, 2016 and 2015 .

Credit facility

The Company has a loan and security agreement (the "Credit Agreement") with The PrivateBank and Trust Company ("PrivateBank") with a five-year secured term loan in the amount of $30.0 million. Pursuant to the terms of the Credit Agreement, the applicable interest rate on the term loan accrues daily at a rate equal to the 3 month LIBOR plus a margin, and is payable on the last day of each calendar quarter. The term loan has a maturity of December 4, 2020. Our wholly-owned subsidiaries, Kinsale Management, Inc. ("Kinsale Management") and Aspera, are guarantors of the term loan. The assets of Kinsale Management, Inc. and the stock of Kinsale Insurance have been pledged as collateral to PrivateBank.

On June 28, 2016, the Credit Agreement was amended and restated, among other things, to (i) increase the materiality thresholds and grace periods for events of default thereunder, (ii) add additional permitted categories to the debt, lien, restricted payments, mergers, disposals, transactions with affiliates and investment covenants, as well as to increase the general permitted baskets under the debt, lien, restricted payments and investment covenants, (iii) remove certain representations and warranties and affirmative covenants, (iv) add materiality qualifiers to certain representations and warranties, (v) add reinvestment rights and a minimum threshold with respect to net cash proceeds of certain asset disposals (other than disposals of the stock of Kinsale Insurance, which has been pledged as collateral to PrivateBank) which must be used to prepay the outstanding term loans and (vi) make the creation and perfection requirements with respect to collateral less onerous.

Reinsurance

We enter into reinsurance contracts to limit our exposure to potential large losses as well as to provide additional capacity for growth. Our reinsurance is primarily contracted under quota-share reinsurance contracts and excess of loss contracts. In quota share reinsurance, the reinsurer agrees to assume a specified percentage of the ceding company's losses arising out of a defined class of business in exchange for a corresponding percentage of premiums, net of a ceding commission. In excess of loss reinsurance, the reinsurer agrees to assume all or a portion of the ceding company's losses, in excess of a specified amount. In excess of loss reinsurance, the premium payable to the reinsurer is negotiated by the parties based on their assessment of the amount of risk being ceded to the reinsurer because the reinsurer does not share proportionately in the ceding company's losses.

We cede risks through our MLQS. The MLQS transfers a portion of the risk related to certain lines of business written by us to reinsurers in exchange for a proportion of the gross written premiums on that business. Transferring risk to the reinsurers also reduces the amount of capital required to

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support our insurance operations. The MLQS is subject to annual renewal, effective each January 1. Under the terms of the 2016 MLQS contract, we receive a provisional ceding commission equal to 41% of ceded written premiums and pay a reinsurance margin equal to 4% of ceded written premium. The reinsurers do not receive a margin when they are in the loss position on the contract. The MLQS includes a sliding scale commission provision that can reduce the ceding commission to 25% or increase the ceding commission to 41% based on the loss experience of the business ceded. Additionally, we are entitled to an additional contingent profit commission up to an amount equal to all of the reinsurers’ profits above the margin based on the underwriting results of the business ceded, upon commutation of the contract. The contract has a loss ratio cap of 110%, which means that we cannot cede any losses in excess of a 110% loss ratio to the reinsurers. For a discussion regarding the effect of the MLQS contract on our results, see "Management's Discussion and Analysis of Financial Condition and Results of Operations — Factors affecting our results of operations — The MLQS."

In addition to the MLQS described above, the following is a summary of our other significant reinsurance programs as of June 30, 2016:



Line of Business Covered	Company Policy Limit	Reinsurance Coverage	Company Retention
Property	Up to $5.0 million per risk	$4.0 million excess of $1.0 million	$1.0 million per risk
Property - catastrophe (1)	Up to $5.0 million per occurrence	$40.0 million excess of $5.0 million	$5.0 million per occurrence
Excess casualty (2)	Up to $5.0 million per occurrence	Variable quota share	$750,000 per occurrence except as described in note (2) below

(1)

Our property catastrophe reinsurance reduces the financial impact of a catastrophe event involving multiple claims and policyholders. Our property catastrophe reinsurance includes a reinstatement provision which requires us to pay reinstatement premiums after a loss has occurred in order to preserve coverage. Including the reinstatement provision, the maximum aggregate loss recovery limit is $80 million and is in addition to the per-occurrence coverage provided by our facultative and other treaty coverages.

(2)

Reinsurance is not applicable to any individual policy with a per occurrence limit of less than $1.0 million. For policies with a per occurrence limit of $1.0 million or higher, the quota share ceding percentage varies such that the retention is always $750,000. For example, for a $1.0 million limit excess policy, our retention would be 75%, whereas for a $5.0 million limit excess policy, our retention would be 15%. For policies for which we also write an underlying primary limit, the retention on the excess policy will never exceed $1,175,000.

At each renewal, we consider any plans to change the underlying insurance coverage we offer, as well as updated loss activity, the level of our capital and surplus, changes in our risk appetite and the cost and availability of reinsurance treaties. In the last renewal cycle, we maintained similar retentions on most lines of business.

Reinsurance contracts do not relieve us from our obligations to policyholders. Failure of the reinsurer to honor its obligations could result in losses to us, and therefore, we establish allowances for amounts considered uncollectible. At June 30, 2016, there was no allowance for uncollectible

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reinsurance. As of June 30, 2016, Kinsale Insurance has only contracted with reinsurers with A.M. Best Company ("A.M. Best") financial strength ratings of "A" (Excellent) or better.

Ratings

Kinsale Insurance has a financial strength rating of "A-" (Excellent) from A.M. Best. A.M. Best assigns 16 ratings to insurance companies, which currently range from "A++" (Superior) to "F" (In Liquidation). "A-" (Excellent) is the fourth highest rating issued by A.M. Best. The "A-" (Excellent) rating is assigned to insurers that have, in A.M. Best's opinion, an excellent ability to meet their ongoing obligations to policyholders. This rating is intended to provide an independent opinion of an insurer's ability to meet its obligation to policyholders and is not an evaluation directed at investors. See also " Risk Factors — Risks related to our business and our industry — A decline in our financial strength rating may adversely affect the amount of business we write."

The financial strength ratings assigned by A.M. Best have an impact on the ability of the insurance companies to attract and retain agents and brokers and on the risk profiles of the submissions for insurance that the insurance companies receive. The "A-" (Excellent) rating obtained by Kinsale Insurance is consistent with our business plan and allows us to actively pursue relationships with the agents and brokers identified in our marketing plan.

Financial condition

Stockholders' equity

As of June 30, 2016 , total stockholders' equity was $129.8 million and tangible stockholders' equity was $127.5 million , compared to $113.5 million total stockholders' equity and $111.2 million tangible stockholders' equity as of December 31, 2015 . The increases in both total and tangible stockholders' equity over the prior year end balances were primarily due to net income and an increase in unrealized gains on investments, net of taxes.

Tangible stockholders’ equity is a non-GAAP financial measure. We define tangible stockholders’ equity as stockholders’ equity less intangible assets, net of deferred taxes. Our definition of tangible stockholders’ equity may not be comparable to that of other companies, and it should not be viewed as a substitute for stockholders’ equity calculated in accordance with GAAP. We use tangible stockholders' equity internally to evaluate the strength of our balance sheet and to compare returns relative to this measure.

Tangible stockholders' equity at June 30, 2016 and December 31, 2015 , reconciles to stockholders' equity as follows:



	June 30, 2016		December 31, 2015
	(in thousands)
Tangible stockholders' equity	$	127,525	$	111,151
Intangible assets, net of deferred taxes	2,300		2,300
Stockholders' equity	$	129,825	$	113,451

Amendment of Certificate of Incorporation and Reclassification of Common Stock

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Common Non-Voting Shares ("Class B Common Stock"). On July 28, 2016, in connection with the initial public offering (the "IPO"), the Company amended and restated its certificate of incorporation to recapitalize the Company's authorized capital stock to consist of 400,000,000 shares of common stock, par value $0.01 per share, and 100,000,000 shares of preferred stock, par value $0.01 per share.


•	the number of shares of common stock equal to the amount of accrued and unpaid dividends based on a reclassification date of July 28, 2016, or $90.3 million, divided by the initial public offering price of $16.00 per share, plus


•	the number of shares of common stock equal to a conversion ratio of 0.65485975, calculated on the IPO price of $16.00 per share.

On July 28, 2016, the Company had outstanding grants of 1,783,858 restricted shares of Class B Common Stock. At that date, all restricted shares of Class B Common Stock were reclassified into 1,286,036 shares of common stock equal to a conversion ratio of 0.72095061. The conversion ratio was calculated on the IPO price of $16.00 per share.

All fractional shares resulting from the reclassification of Class A Common Stock and Class B Common Stock into a single class of common stock were settled in cash.

Initial Public Offering

On August 2, 2016, the Company completed its IPO of 7,590,000 shares of common stock at a price to the public of $16.00 per share. The Company issued 5,000,000 shares of common stock and the selling stockholders sold 2,590,000 shares of common stock, which included 990,000 shares sold to the underwriters pursuant to the underwriters' option to purchase additional shares. After underwriter discounts and commissions and estimated offering expenses, the Company received net proceeds from the offering of approximately $72.4 million. The Company did not receive any net proceeds from the sale of shares of common stock by the selling stockholders. The issuance of common stock by the Company and the related net proceeds will be recorded in the consolidated financial statements on August 2, 2016, the closing date of the IPO.

Equity-based Compensation

On July 27, 2016, the Kinsale Capital Group, Inc. 2016 Omnibus Incentive Plan (the "2016 Incentive Plan") became effective. The 2016 Incentive Plan provides for grants of stock options, stock appreciation rights, restricted stock, other stock-based awards and other cash-based awards to directors, officers and other employees, as well as independent contractors or consultants providing consulting or advisory services to the Company. The number of shares of common stock available for issuance under the 2016 Incentive Plan may not exceed 2,073,832. On July 27 2016, the Board of Directors approved and the Company granted 1,036,916 stock options with an exercise price equal to the IPO price per share of $16.00, a maximum contractual term of 10 years, and a vesting period in which the options vest in 4 equal annual installments following the date of the grant.

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Dividend Declaration

The Company's Board of Directors declared a cash dividend of $0.05 per share of common stock. This dividend is payable on September 30, 2016 to all stockholders of record on September 15, 2016.

Investment portfolio

Our cash and invested assets consisted of fixed maturity securities, cash and cash equivalents, equity securities and short-term investments. The majority of the investment portfolio was comprised of fixed maturity securities of $378.4 million at June 30, 2016, that were classified as available-for-sale. Available-for-sale investments are carried at fair value with unrealized gains and losses on these securities, net of applicable taxes, reported as a separate component of accumulated other comprehensive income. Also included in our investments were $17.1 million of equity securities classified as available-for-sale and $6.7 million of short-term investments. At June 30, 2016 , $22.2 million represented the cash and cash equivalents portion of our total cash and invested assets of $424.5 million . Our fixed maturity securities had a weighted average duration of 3.1 years at June 30, 2016 compared to 3.2 years at December 31, 2015. Our investment portfolio had an average rating of "AA-"at June 30, 2016 and December 31, 2015 . Our fixed income portfolio had a gross investment return of 2.14% as of June 30, 2016 , compared to 2.08% as of June 30, 2015 .

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At June 30, 2016 and December 31, 2015 , the amortized cost and fair value on available-for-sale securities were as follows:



	June 30, 2016						December 31, 2015
	Amortized Cost		Estimated Fair Value		% of Total Fair Value		Amortized Cost		Estimated Fair Value		% of Total Fair Value
	(in thousands)
Fixed maturities:
U.S. Treasury securities and obligations of U.S. government agencies	$	12,410	$	12,475	3.2	%	$	3,422	$	3,433	1.0	%
Obligations of states, municipalities and political subdivisions	62,488		66,966		16.9	%	69,997		72,513		21.2	%
Corporate and other securities	131,482		132,519		33.5	%	130,758		129,521		37.9	%
Asset-backed securities	72,148		72,813		18.4	%	58,680		58,307		17.0	%
Residential mortgage-backed securities	92,230		93,650		23.7	%	64,096		63,828		18.7	%
Total fixed maturities	370,758		378,423		95.7	%	326,953		327,602		95.8	%

Equity securities:
Exchange traded funds	14,386		17,143		4.3	%	12,184		14,240		4.2	%
Total investments available for sale	$	385,144	$	395,566	100.0	%	$	339,137	$	341,842	100.0	%

The table below summarizes the credit quality of our fixed-maturity securities at June 30, 2016 and December 31, 2015 , as rated by Standard & Poor’s Financial Services, LLC ("Standard & Poor's"):



	June 30, 2016				December 31, 2015
Standard & Poor’s or Equivalent Designation	Fair Value		% of Total		Estimated Fair Value		% of Total
	(in thousands)
AAA	$	61,742	16.3	%	$	59,263	18.1	%
AA	163,693		43.3	%	122,154		37.3	%
A	114,298		30.2	%	107,218		32.7	%
BBB	32,777		8.7	%	35,164		10.7	%
BB	3,050		0.8	%	1,006		0.3	%
Below BB and unrated	2,863		0.7	%	2,797		0.9	%
Total	$	378,423	100.0	%	$	327,602	100.0	%

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The amortized cost and fair value of our available-for-sale investments in fixed maturity securities summarized by contractual maturity as of June 30, 2016 and December 31, 2015 , were as follows:



	June 30, 2016						December 31, 2015
	Amortized Cost		Estimated Fair Value		% of Fair Value		Amortized Cost		Estimated Fair Value		% of Fair Value
	(in thousands)
Due in one year or less	$	36,817	$	36,855	9.7	%	$	19,723	$	19,709	6.0	%
Due after one year through five years	104,397		105,535		27.9	%	111,059		110,733		33.8	%
Due after five years through ten years	24,932		26,280		6.9	%	27,383		27,335		8.3	%
Due after ten years	40,234		43,290		11.4	%	46,012		47,690		14.6	%
Asset-backed securities	72,148		72,813		19.2	%	58,680		58,307		17.8	%
Residential mortgage-backed securities	92,230		93,650		24.7	%	64,096		63,828		19.5	%
Total fixed maturities	$	370,758	$	378,423	100.0	%	$	326,953	$	327,602	100.0	%

Actual maturities may differ from contractual maturities because some borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Restricted investments

In order to conduct business in certain states, we are required to maintain letters of credit or assets on deposit to support state-mandated insurance regulatory requirements and to comply with certain third-party agreements. Assets held on deposit or in trust accounts are primarily in the form of high-grade securities. The fair value of our restricted assets was $7.5 million at June 30, 2016 compared to $7.2 million at December 31, 2015 .

Off-balance sheet arrangements

We do not have any off-balance sheet arrangements.

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Reconciliation of non-GAAP financial measures

Reconciliation of underwriting income

Underwriting income is a non-GAAP financial measure that is useful in evaluating our underwriting performance without regard to investment income. Underwriting income represents the pre-tax profitability of our insurance operations and is derived by subtracting losses and loss adjustment expenses and other operating expenses from net earned premiums. We use underwriting income as an internal performance measure in the management of our operations because we believe it gives us and users of our financial information useful insight into our results of operations and our underlying business performance. Underwriting income should not be viewed as a substitute for net income calculated in accordance with GAAP, and other companies may define underwriting income differently.

Underwriting income for the three and six months ended June 30, 2016 and 2015 , reconciles to net income as follows:



	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2016			2015			2016			2015

Underwriting income	$	7,846		$	8,924		$	14,074		$	15,816
Net investment income	1,819			1,377			3,495			2,591
Net investment gains	(4		)	8			383			16
Other income	78			191			136			315
Other expenses	(486		)	(517		)	(946		)	(1,013		)
Income before income taxes	9,253			9,983			17,142			17,725
Income tax expense	3,196			3,374			5,828			6,000
Net income	$	6,057		$	6,609		$	11,314		$	11,725

Critical accounting estimates

We identified the accounting estimates which are critical to the understanding of our financial position and results of operations. Critical accounting estimates are defined as those estimates that are both important to the portrayal of our financial condition and results of operations and require us to exercise significant judgment. We use significant judgment concerning future results and developments in applying these critical accounting estimates and in preparing our consolidated financial statements. These judgments and estimates affect our reported amounts of assets, liabilities, revenues and expenses and the disclosure of our material contingent assets and liabilities. Actual results may differ materially from the estimates and assumptions used in preparing the consolidated financial statements. We evaluate our estimates regularly using information that we believe to be relevant. Our critical accounting policies and estimates are described in our annual consolidated financial statements and the related notes in our final prospectus filed with the SEC on July 29, 2016.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk is the risk of economic losses due to adverse changes in the estimated fair value of a financial instrument as the result of changes in interest rates, equity prices, foreign currency exchange rates and commodity prices. Our primary market risks have been equity price risk associated with investments in equity securities and interest rate risk associated with investments in fixed maturities. We do not have exposure to foreign currency exchange rate risk or commodity risk.

There have been no material changes in market risk from the information provided in our final prospectus filed with the SEC on July 29, 2016.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports we file under the Securities Exchange Act of 1934 (the "Exchange Act") is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), as appropriate, to allow timely decisions regarding required financial disclosure.

As of the end of the period covered by this Quarterly Report on Form 10-Q, we carried out an evaluation, under the supervision and with the participation of our management, including our CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures defined under Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based upon this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective.

Changes in Internal Controls over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended June 30, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

The effectiveness of any system of controls and procedures is subject to certain limitations, and, as a result, there can be no assurance that our controls and procedures will detect all errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system will be attained.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are party to legal proceedings which arise in the ordinary course of business. We believe that the outcome of such matters, individually and in the aggregate, will not have a material adverse effect on our consolidated financial position.

Item 1A. Risk Factors

Risks related to our business and our industry

Our loss reserves may be inadequate to cover our actual losses, which could have a material adverse effect on our financial condition and results of operations.

Our success depends on our ability to accurately assess the risks related to the businesses and people that we insure. We establish loss and loss adjustment expense reserves for the ultimate payment of all claims that have been incurred, and the related costs of adjusting those claims, as of the date of our financial statements. Reserves do not represent an exact calculation of liability. Rather, reserves represent an estimate of what we expect the ultimate settlement and administration of claims will cost us, and our ultimate liability may be greater or less than our estimate.

As part of the reserving process, we review historical data and consider the impact of such factors as:


•	claims inflation, which is the sustained increase in cost of raw materials, labor, medical services and other components of claims cost;


•	claims development patterns by line of business and by "claims made" versus "occurrence" policies;


•	legislative activity;


•	social and economic patterns; and


•	litigation and regulatory trends.

These variables are affected by both internal and external events that could increase our exposure to losses, and we continually monitor our reserves using new information on reported claims and a variety of statistical techniques. This process assumes that past experience, adjusted for the effects of current developments and anticipated trends, is an appropriate basis for predicting future events. There is, however, no precise method for evaluating the impact of any specific factor on the adequacy of reserves, and actual results may deviate, perhaps substantially, from our reserve estimates. For instance, the following uncertainties may have an impact on the adequacy of our resources:


•	When we write "occurrence" policies, we are obligated to pay covered claims, up to the contractually agreed amount, for any covered loss that occurs while the policy is in force. Accordingly, claims may arise many years after a policy has lapsed. Approximately 77.6% of our net casualty loss reserves were associated with "occurrence" policies as of June 30, 2016.

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•	Even when a claim is received (irrespective of whether the policy is a "claims made" or "occurrence" basis form), it may take considerable time to fully appreciate the extent of the covered loss suffered by the insured and, consequently, estimates of loss associated with specific claims can increase over time.


•	New theories of liability are enforced retroactively from time to time by courts. See also "—The failure of any of the loss limitations or exclusions we employ, or changes in other claims or coverage issues, could have a material adverse effect on our financial condition or results of operations."

•

Volatility in the financial markets, economic events and other external factors may result in an increase in the number of claims and severity of the claims reported. In addition, elevated inflationary conditions would, among other things, cause loss costs to increase. See also "—Adverse economic factors, including recession, inflation, periods of high unemployment or lower economic activity could result in the sale of fewer policies than expected or an increase in frequency or severity of claims and premium defaults or both, which, in turn, could affect our growth and profitability."


•	If claims were to become more frequent, even if we had no liability for those claims, the cost of evaluating such potential claims could escalate beyond the amount of the reserves we have established. As we enter new lines of business, or as a result of new theories of claims, we may encounter an increase in claims frequency and greater claims handling costs than we had anticipated.

In addition, there may be significant reporting lags between the occurrence of the insured event and the time it is actually reported to us and additional lags between the time of reporting and final settlement of any claims. Consequently, estimates of loss associated with specified claims can increase as new information emerges, which could cause the reserves for the claim to become inadequate.

If any of our reserves should prove to be inadequate, we will be required to increase our reserves resulting in a reduction in our net income and stockholders’ equity in the period in which the deficiency is identified. Future loss experience substantially in excess of established reserves could also have a material adverse effect on our future earnings and liquidity and our financial rating.

Given the inherent uncertainty of models, the usefulness of such models as a tool to evaluate risk is subject to a high degree of uncertainty that could result in actual losses that are materially different than our estimates, including probable maximum losses ("PMLs"). A deviation from our loss estimates may adversely impact, perhaps significantly, our financial results.

Our approach to risk management relies on subjective variables that entail significant uncertainties. For example, we rely heavily on estimates of PMLs for certain events that are generated by computer-run models. In addition, we rely on historical data and scenarios in managing credit and interest rate risks in our investment portfolio. These estimates, models, data and scenarios may not produce accurate predictions and consequently, we could incur losses both in the risks we underwrite and to the value of our investment portfolio.

We use third-party vendor analytic and modeling capabilities to provide us with objective risk assessment relating to other risks in our reinsurance portfolio. We use these models to help us control risk accumulation, inform management and other stakeholders of capital requirements and to improve the risk/return profile or minimize the amount of capital required to cover the risks in

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each of our reinsurance contracts. However, given the inherent uncertainty of modeling techniques and the application of such techniques, these models and databases may not accurately address a variety of matters which might impact certain of our coverages.

Small changes in assumptions, which depend heavily on our judgment and foresight, can have a significant impact on the modeled outputs. For example, catastrophe models that simulate loss estimates based on a set of assumptions are important tools used by us to estimate our PMLs. These assumptions address a number of factors that impact loss potential including, but not limited to, the characteristics of a given natural catastrophe event; the increase in claim costs resulting from limited supply of labor and materials needed for repairs following a catastrophe event (demand surge); the types, function, location and characteristics of exposed risks; susceptibility of exposed risks to damage from an event with specific characteristics; and the financial and contractual provisions of the (re)insurance contracts that cover losses arising from an event. We run many model simulations in order to understand the impact of these assumptions on a catastrophe’s loss potential. Furthermore, there are risks associated with catastrophe events, which are either poorly represented or not represented at all by catastrophe models. Each modeling assumption or un-modeled risk introduces uncertainty into PML estimates that management must consider. These uncertainties can include, but are not limited to, the following:


•	The models do not address all the possible hazard characteristics of a catastrophe peril (e.g., the precise path and wind speed of a hurricane);


•	The models may not accurately reflect the true frequency of events;


•	The models may not accurately reflect a risk’s vulnerability or susceptibility to damage for a given event characteristic;


•	The models may not accurately represent loss potential to insurance or reinsurance contract coverage limits, terms and conditions; and


•	The models may not accurately reflect the impact on the economy of the area affected or the financial, judicial, political, or regulatory impact on insurance claim payments during or following a catastrophe event.

Our PMLs are reviewed by management after the assessment of outputs from multiple third-party vendor models and other qualitative and quantitative assessments, including exposures not typically modeled in vendor models. Our methodology for estimating PMLs may differ from methods used by other companies and external parties given the various assumptions and judgments required to estimate a PML.

As a result of these factors and contingencies, our reliance on assumptions and data used to evaluate our entire reinsurance portfolio and specifically to estimate a PML is subject to a high degree of uncertainty that could result in actual losses that are materially different from our PML estimates and our financial results could be adversely affected.

Adverse economic factors, including recession, inflation, periods of high unemployment or lower economic activity could result in the sale of fewer policies than expected or an increase in frequency or severity of claims and premium defaults or both, which, in turn, could affect our growth and profitability.

Factors, such as business revenue, economic conditions, the volatility and strength of the capital markets and inflation can affect the business and economic environment. These same factors affect

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our ability to generate revenue and profits. In an economic downturn that is characterized by higher unemployment, declining spending and reduced corporate revenues, the demand for insurance products is generally adversely affected, which directly affects our premium levels and profitability. Negative economic factors may also affect our ability to receive the appropriate rate for the risk we insure with our policyholders and may adversely affect the number of policies we can write, including with respect to our opportunities to underwrite profitable business. In an economic downturn, our customers may have less need for insurance coverage, cancel existing insurance policies, modify their coverage or not renew the policies they hold with us. Existing policyholders may exaggerate or even falsify claims to obtain higher claims payments. These outcomes would reduce our underwriting profit to the extent these factors are not reflected in the rates we charge.

We underwrite a significant portion of our insurance in California, Texas and Florida. Any economic downturn in any such state could have an adverse effect on our financial condition and results of operations.

A decline in our financial strength rating may adversely affect the amount of business we write.

Participants in the insurance industry use ratings from independent ratings agencies, such as A.M. Best, as an important means of assessing the financial strength and quality of insurers. In setting its ratings, A.M. Best uses a quantitative and qualitative analysis of a company’s balance sheet strength, operating performance and business profile. This analysis includes comparisons to peers and industry standards as well as assessments of operating plans, philosophy and management. A.M. Best financial strength ratings range from "A++" (Superior) to "F" for insurance companies that have been publicly placed in liquidation. A.M. Best has assigned a financial strength rating of "A-" (Excellent) to our operating subsidiary, Kinsale Insurance. A.M. Best assigns ratings that are intended to provide an independent opinion of an insurance company’s ability to meet its obligations to policyholders and such ratings are not evaluations directed to investors and are not a recommendation to buy, sell or hold our common stock or any other securities we may issue. A.M. Best periodically reviews our financial strength rating and may revise it downward or revoke it at its sole discretion based primarily on its analysis of our balance sheet strength (including capital adequacy and loss adjustment expense reserve adequacy), operating performance and business profile. Factors that could affect such analysis include, but are not limited to:


•	if we change our business practices from our organizational business plan in a manner that no longer supports A.M. Best’s rating;


•	if unfavorable financial, regulatory or market trends affect us, including excess market capacity;


•	if our losses exceed our loss reserves;


•	if we have unresolved issues with government regulators;


•	if we are unable to retain our senior management or other key personnel;


•	if our investment portfolio incurs significant losses; or


•	if A.M. Best alters its capital adequacy assessment methodology in a manner that would adversely affect our rating.

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These and other factors could result in a downgrade of our financial strength rating. A downgrade or withdrawal of our rating could result in any of the following consequences, among others:


•	causing our current and future brokers and insureds to choose other, more highly-rated competitors;


•	increasing the cost or reducing the availability of reinsurance to us;


•	severely limiting or preventing us from writing new and renewal insurance contracts; or


•	giving our lenders under our credit agreement the right to accelerate our debt.

In addition, in view of the earnings and capital pressures recently experienced by many financial institutions, including insurance companies, it is possible that rating organizations will heighten the level of scrutiny that they apply to such institutions, will increase the frequency and scope of their credit reviews, will request additional information from the companies that they rate or will increase the capital and other requirements employed in the rating organizations’ models for maintenance of certain ratings levels. We can offer no assurance that our rating will remain at its current level. It is possible that such reviews of us may result in adverse ratings consequences, which could have a material adverse effect on our financial condition and results of operations.

We could be adversely affected by the loss of one or more key executives or by an inability to attract and retain qualified personnel.

We depend on our ability to attract and retain experienced personnel and seasoned key executives who are knowledgeable about our business. The pool of talent from which we actively recruit is limited and may fluctuate based on market dynamics specific to our industry and independent of overall economic conditions. As such, higher demand for employees having the desired skills and expertise could lead to increased compensation expectations for existing and prospective personnel, making it difficult for us to retain and recruit key personnel and maintain labor costs at desired levels. Only our Chief Executive Officer has an employment agreement with us and is subject to a non-compete agreement. Should any of our key executives terminate their employment with us, or if we are unable to retain and attract talented personnel, we may be unable to maintain our current competitive position in the specialized markets in which we operate, which could adversely affect our results of operations.

We rely on a select group of brokers, and such relationships may not continue.

We distribute the majority of our products through a select group of brokers. 46.3%, or $81.9 million, of our 2015 gross written premiums were distributed through five of our approximately 149 brokers, two of which accounting for 22.8%, or $40.3 million, of our 2015 gross written premiums.

Our relationship with any of these brokers may be discontinued at any time. Even if the relationships do continue, they may not be on terms that are profitable for us. The termination of a relationship with one or more significant brokers could result in lower gross written premiums and could have a material adverse effect on our results of operations or business prospects.

Because our business depends on insurance brokers, we are exposed to certain risks arising out of our reliance on these distribution channels that could adversely affect our results.

Certain premiums from policyholders, where the business is produced by brokers, are collected directly by the brokers and forwarded to our insurance subsidiary. In certain jurisdictions, when the insured pays its policy premium to its broker for payment on behalf of our insurance subsidiary, the

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premium might be considered to have been paid under applicable insurance laws and regulations. Accordingly, the insured would no longer be liable to us for those amounts, whether or not we have actually received the premium from that broker. Consequently, we assume a degree of credit risk associated with the brokers with whom we work. Where necessary, we review the financial condition of potential new brokers before we agree to transact business with them. Although the failure by any of our brokers to remit premiums to us has not been material to date, there may be instances where our brokers collect premiums but do not remit them to us and we may be required under applicable law to provide the coverage set forth in the policy despite the absence of related premiums being paid to us.

Because the possibility of these events occurring depends in large part upon the financial condition and internal operations of our brokers, we monitor broker behavior and review financial information on an as-needed basis. If we are unable to collect premiums from our brokers in the future, our underwriting profits may decline and our financial condition and results of operations could be materially and adversely affected.

The failure of any of the loss limitations or exclusions we employ, or changes in other claims or coverage issues, could have a material adverse effect on our financial condition or results of operations.

Although we seek to mitigate our loss exposure through a variety of methods, the future is inherently unpredictable. It is difficult to predict the timing, frequency and severity of losses with statistical certainty. It is not possible to completely eliminate our exposure to unforecasted or unpredictable events and, to the extent that losses from such risks occur, our financial condition and results of operations could be materially adversely affected.

For instance, various provisions of our policies, such as limitations or exclusions from coverage or choice of forum, 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. As industry practices and legal, judicial, social and other conditions change, unexpected and unintended issues related to claims and coverage may emerge.

In addition, we design our policy terms to manage our exposure to expanding theories of legal liability like those which have given rise to claims for lead paint, asbestos, mold, construction defects and environmental matters. Many of the policies we issue also include conditions requiring the prompt reporting of claims to us and entitle us to decline coverage in the event of a violation of those conditions. Also, many of our policies limit the period during which a policyholder may bring a claim under the policy, which in many cases is shorter than the statutory period under which such claims can be brought against our policyholders. While these exclusions and limitations help us assess and reduce our loss exposure 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. These types of governmental actions could result in higher than anticipated losses and loss adjustment expenses, which could have a material adverse effect on our financial condition or results of operations.

As industry practices and legal, judicial, social and other environmental conditions change, unexpected and unintended issues related to claims and coverage may emerge. Three examples of unanticipated risks that have affected the insurance industry are:


•	Asbestos liability applied to manufacturers of products and contractors who installed those products.

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•	Apportionment of liability arising from subsidence claims assigned to subcontractors who may have been involved in mundane tasks (such as installing sheetrock in a home).


•	Court decisions, such as the 1995 Montrose decision in California, that read policy exclusions narrowly so as to expand coverage, thereby requiring insurers to create and write new exclusions.

These issues may adversely affect our business by either broadening 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.

Performance of our investment portfolio is subject to a variety of investment risks that may adversely affect our financial results.

Our results of operations depend, in part, on the performance of our investment portfolio. We seek to hold a diversified portfolio of investments that is managed by professional investment advisory management firms in accordance with our investment policy and routinely reviewed by our Investment Committee. However, our investments are subject to general economic conditions and market risks as well as risks inherent to particular securities.

Our primary market risk exposures are to changes in interest rates and equity prices. In recent years, interest rates have been at or near historic lows. A protracted low interest rate environment would continue to place pressure on our net investment income, particularly as it relates to fixed income securities and short-term investments, which, in turn, may adversely affect our operating results. Future increases in interest rates could cause the values of our fixed income securities portfolios to decline, with the magnitude of the decline depending on the duration of securities included in our portfolio and the amount by which interest rates increase. Some fixed income securities have call or prepayment options, which create possible reinvestment risk in declining rate environments. Other fixed income securities, such as mortgage-backed and asset-backed securities, carry prepayment risk or, in a rising interest rate environment, may not prepay as quickly as expected.

The value of our investment portfolio is subject to the risk that certain investments may default or become impaired due to deterioration in the financial condition of one or more issuers of the securities we hold, or due to deterioration in the financial condition of an insurer that guarantees an issuer’s payments on such investments. Downgrades in the credit ratings of fixed maturities also have a significant negative effect on the market valuation of such securities.

Such factors could reduce our net investment income and result in realized investment losses. Our investment portfolio is subject to increased valuation uncertainties when investment markets are illiquid. The valuation of investments is more subjective when markets are illiquid, thereby increasing the risk that the estimated fair value (i.e., the carrying amount) of the securities we hold in our portfolio does not reflect prices at which actual transactions would occur.

We also invest in marketable equity securities. These securities are carried on the balance sheet at fair market value and are subject to potential losses and declines in market value. Our equity invested assets totaled $17.1 million as of June 30, 2016.

Risks for all types of securities are managed through the application of our investment policy, which establishes investment parameters that include but are not limited to, maximum percentages of investment in certain types of securities and minimum levels of credit quality, which we believe are

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within applicable guidelines established by the National Association of Insurance Commissioners ("NAIC") and the Arkansas State Insurance Department.

Although we seek to preserve our capital, we cannot be certain that our investment objectives will be achieved, and results may vary substantially over time. In addition, although we seek to employ investment strategies that are not correlated with our insurance and reinsurance exposures, losses in our investment portfolio may occur at the same time as underwriting losses and, therefore, exacerbate the adverse effect of the losses on us.

Our E&S insurance operations are subject to increased risk from changing market conditions and our business is cyclical in nature, which may affect our financial performance.

E&S insurance covers risks that are typically more complex and unusual than standard risks and require a high degree of specialized underwriting. As a result, E&S risks do not often fit the underwriting criteria of standard insurance carriers, and are generally considered higher risk than those covered in the standard market. If our underwriting staff inadequately judges and prices the risks associated with the business underwritten in the E&S market, our financial results could be adversely impacted.

Historically, the financial performance of the P&C insurance industry has tended to fluctuate in cyclical periods of price competition and excess capacity (known as a soft market) followed by periods of high premium rates and shortages of underwriting capacity (known as a hard market). Soft markets occur when the supply of insurance capital in a given market or territory is greater than the amount of insurance coverage demanded by all potential insureds in that market. When this occurs, insurance prices tend to decline and policy terms and conditions become more favorable to the insureds. Conversely, hard markets occur when there is not enough insurance capital capacity in the market to meet the needs of potential insureds, causing insurance prices to generally rise and policy terms and conditions to become more favorable to the insurers.

Although an individual insurance company’s financial performance depends on its own specific business characteristics, the profitability of most P&C insurance companies tends to follow this cyclical market pattern. Further, this cyclical market pattern can be more pronounced in the E&S market than in the standard insurance market. When the standard insurance market hardens, the E&S market hardens, and growth in the E&S market can be significantly more rapid than growth in the standard insurance market. Similarly, when conditions begin to soften, many customers that were previously driven into the E&S market may return to the admitted market, exacerbating the effects of rate decreases. We cannot predict the timing or duration of changes in the market cycle because the cyclicality is due in large part to the actions of our competitors and general economic factors. These cyclical patterns cause our revenues and net income to fluctuate, which may cause the price of our common stock to be volatile.

We are subject to extensive regulation, which may adversely affect our ability to achieve our business objectives. In addition, 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.

Our insurance subsidiary, Kinsale Insurance, is subject to extensive regulation in Arkansas, its state of domicile, and to a lesser degree, the other states in which it operates. Most insurance regulations are designed to protect the interests of insurance policyholders, as opposed to the interests of investors or stockholders. These regulations generally are administered by a department of insurance in each state and relate to, among other things, authorizations to write E&S lines of

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business, capital and surplus requirements, investment and underwriting limitations, affiliate transactions, dividend limitations, changes in control, solvency and a variety of other financial and non-financial aspects of our business. Significant changes in these laws and regulations could further limit our discretion or make it more expensive to conduct our business. State insurance regulators also 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 impose timing and expense constraints that could adversely affect our ability to achieve some or all of our business objectives.

In addition, state insurance regulators have broad discretion to deny or revoke licenses for various reasons, including the violation of regulations. In some instances, where there is uncertainty as to applicability, we follow practices based on our interpretations of regulations or practices that we believe generally to be 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, state insurance regulators could preclude or temporarily suspend us from carrying on some or all of our activities or could otherwise penalize us. This could adversely affect our ability to operate our business. Further, changes in the level of regulation of the insurance industry or changes in laws or regulations themselves or interpretations by regulatory authorities could interfere with our operations and require us to bear additional costs of compliance, which could adversely affect our ability to operate our business.

The NAIC has adopted a system to test the adequacy of statutory capital of insurance companies, known as "risk-based capital." This system establishes the minimum amount of risk-based capital necessary for a company to support its overall business operations. It identifies P&C insurers that may be inadequately capitalized by looking at certain inherent risks of each insurer’s assets and liabilities and its mix of net written premiums. Insurers falling below a calculated threshold may be subject to varying degrees of regulatory action, including supervision, rehabilitation or liquidation. Failure to maintain our risk-based capital at the required levels could adversely affect the ability of our insurance subsidiary to maintain regulatory authority to conduct our business.

We may become subject to additional government or market regulation which may have a material adverse impact on our business.

Our business could be adversely affected by changes in state laws, including those relating to asset and reserve valuation requirements, surplus requirements, limitations on investments and dividends, enterprise risk and risk-based capital requirements and, at the federal level, by laws and regulations that may affect certain aspects of the insurance industry, including proposals for preemptive federal regulation. The U.S. federal government generally has not directly regulated the insurance industry except for certain areas of the market, such as insurance for flood, nuclear and terrorism risks. However, the federal government has undertaken initiatives or considered legislation in several areas that may affect the insurance industry, including tort reform, corporate governance and the taxation of reinsurance companies.

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") also established the Federal Insurance Office (the "FIO") and vested the FIO with the authority to monitor all aspects of the insurance sector, including to monitor the extent to which traditionally underserved communities and consumers have access to affordable non-health insurance products. In addition, the FIO has the ability to recommend to the Financial Stability Oversight Council the designation of an insurer as "systemically significant" and therefore subject to regulation by the Federal Reserve as a bank holding company. In December 2013, the FIO issued a report on

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alternatives to modernize and improve the system of insurance regulation in the United States (the "Modernization Report"), including increasing national uniformity through either a federal charter or effective action by the states. Any additional regulations established as a result of the Dodd-Frank Act or actions in response to the Modernization Report could increase our costs of compliance or lead to disciplinary action. In addition, legislation has been introduced from time to time that, if enacted, could result in the federal government assuming a more direct role in the regulation of the insurance industry, including federal licensing in addition to or in lieu of state licensing and requiring reinsurance for natural catastrophes. We are unable to predict whether any legislation will be enacted or any regulations will be adopted, or the effect any such developments could have on our business, financial condition or results of operations.

Because we are a holding company and substantially all of our operations are conducted by our insurance subsidiary, our ability to pay dividends and service our debt obligations depends on our ability to obtain cash dividends or other permitted payments from our insurance subsidiary.

We intend to declare and pay dividends on shares of our common stock, in an amount and on such dates as may be determined by our Board of Directors and depending on a variety of factors. Because we are a holding company with no business operations of our own, our ability to pay dividends to stockholders and meet our debt payment obligations largely depends on dividends and other distributions from our insurance subsidiary, Kinsale Insurance. State insurance laws, including the laws of Arkansas, restrict the ability of Kinsale Insurance to declare stockholder dividends. State insurance regulators require insurance companies to maintain specified levels of statutory capital and surplus. Consequently, the maximum dividend distribution is limited by Arkansas law to the greater of 10% of policyholder surplus as of December 31 of the previous year or net income, not including realized capital gains, for the previous calendar year. Dividend payments are further limited to that part of available policyholder surplus which is derived from net profits on our business. The maximum amount of dividends Kinsale Insurance could pay us during 2016 without regulatory approval is $21.9 million. State insurance regulators have broad powers to prevent the reduction of statutory surplus to inadequate levels, and there is no assurance that dividends up to the maximum amounts calculated under any applicable formula would be permitted. Moreover, state insurance regulators that have jurisdiction over the payment of dividends by our insurance subsidiary may in the future adopt statutory provisions more restrictive than those currently in effect.

Our operating results have in the past varied from quarter to quarter and may not be indicative of our long-term prospects.

Our operating results are subject to fluctuation and have historically varied from quarter to quarter. We expect our quarterly results to continue to fluctuate in the future due to a number of factors, including the general economic conditions in the markets where we operate, the frequency of occurrence or severity of catastrophic or other insured events, fluctuating interest rates, claims exceeding our loss reserves, competition in our industry, deviations from expected renewal rates of our existing policies and contracts, adverse investment performance and the cost of reinsurance coverage.

In particular, we seek to underwrite products and make investments to achieve favorable returns on tangible stockholders’ equity over the long term. In addition, our opportunistic nature and focus on long-term growth in tangible equity may result in fluctuations in gross written premiums from period to period as we concentrate on underwriting contracts that we believe will generate better

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long-term, rather than short-term, results. Accordingly, our short-term results of operations may not be indicative of our long-term prospects.

We could be forced to sell investments to meet our liquidity requirements.

We invest the premiums we receive from our insureds until they are needed to pay policyholder claims. Consequently, we seek to manage the duration of our investment portfolio based on the duration of our loss and loss adjustment expense reserves to ensure sufficient liquidity and avoid having to liquidate investments to fund claims. Risks such as inadequate loss and loss adjustment reserves or unfavorable trends in litigation could potentially result in the need to sell investments to fund these liabilities. We may not be able to sell our investments at favorable prices or at all. Sales could result in significant realized losses depending on the conditions of the general market, interest rates and credit issues with individual securities.

We may be unable to obtain reinsurance coverage at reasonable prices or on terms that adequately protect us.

We use reinsurance to help manage our exposure to insurance risks. Reinsurance is a practice whereby one insurer, called the reinsurer, agrees to indemnify another insurer, called the ceding insurer, for all or part of the potential liability arising from one or more insurance policies issued by the ceding insurer. The availability and cost of reinsurance are subject to prevailing market conditions, both in terms of price and available capacity, which can affect our business volume and profitability. In addition, reinsurance programs are generally subject to renewal on an annual basis. We may not be able to obtain reinsurance on acceptable terms or from entities with satisfactory creditworthiness. If we are unable to obtain new reinsurance facilities or to renew expiring facilities, our net exposures would increase. In such event, if we are unwilling to bear an increase in our net exposure, we would have to reduce the level of our underwriting commitments, which would reduce our revenues.

Many reinsurance companies have begun to exclude certain coverages from, or alter terms in, the reinsurance contracts we enter into with them. Some exclusions are with respect to risks that we cannot exclude in policies we write due to business or regulatory constraints. In addition, reinsurers are imposing terms, such as lower per occurrence and aggregate limits, on direct insurers that do not wholly cover the risks written by these direct insurers. As a result, we, like other direct insurance companies, write insurance policies which to some extent do not have the benefit of reinsurance protection. These gaps in reinsurance protection expose us to greater risk and greater potential losses. For example, certain reinsurers have excluded coverage for terrorist acts or priced such coverage at unreasonably high rates. Many direct insurers, including us, have written policies without terrorist act exclusions and in many cases we cannot exclude terrorist acts because of regulatory constraints. We may, therefore, be exposed to potential losses as a result of terrorist acts.

We are subject to reinsurance counterparty credit risk.

Although reinsurance makes the reinsurer liable to us to the extent the risk is transferred or ceded to the reinsurer, it does not relieve us (the ceding insurer) of our primary liability to our policyholders. Our reinsurers may not pay claims made by us on a timely basis, or they may not pay some or all of these claims. For example, reinsurers may default in their financial obligations to us as the result of insolvency, lack of liquidity, operational failure, fraud, asserted defenses based on agreement wordings or the principle of utmost good faith, asserted deficiencies in the documentation of agreements or other reasons. Any disputes with reinsurers regarding coverage under reinsurance contracts could be time consuming, costly and uncertain of success. We evaluate

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each reinsurance claim based on the facts of the case, historical experience with the reinsurer on similar claims and existing case law and include any amounts deemed uncollectible from the reinsurer in our reserve for uncollectible reinsurance. As of June 30, 2016, we had $104.2 million of aggregate reinsurance balances on paid and unpaid losses, ceded unearned premiums and other reinsurance receivables. These risks could cause us to incur increased net losses, and, therefore, adversely affect our financial condition.

We may act based on inaccurate or incomplete information regarding the accounts we underwrite.

We rely on information provided by insureds or their representatives when underwriting insurance policies. While we may make inquiries to validate or supplement the information provided, we may make underwriting decisions based on incorrect or incomplete information. It is possible that we will misunderstand the nature or extent of the activities or facilities and the corresponding extent of the risks that we insure because of our reliance on inadequate or inaccurate information.

Our employees could take excessive risks, which could negatively affect our financial condition and business.

As an insurance enterprise, we are in the business of binding certain risks. The employees who conduct our business, including executive officers and other members of management, underwriters, product managers and other employees, do so in part by making decisions and choices that involve exposing us to risk. These include decisions such as setting underwriting guidelines and standards, product design and pricing, determining which business opportunities to pursue and other decisions. We endeavor, in the design and implementation of our compensation programs and practices, to avoid giving our employees incentives to take excessive risks. Employees may, however, take such risks regardless of the structure of our compensation programs and practices. Similarly, although we employ controls and procedures designed to monitor employees’ business decisions and prevent them from taking excessive risks, these controls and procedures may not be effective. If our employees take excessive risks, the impact of those risks could have a material adverse effect on our financial condition and business operations.

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 the funds generated by this offering are insufficient to fund future operating requirements and cover claim losses, we may need to raise additional funds through financings or curtail our growth. Many factors will affect the amount and timing of our capital needs, including our growth rate and profitability, our claims experience, and the availability of reinsurance, market disruptions and other unforeseeable developments. If we need 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. In the case of debt financings, we may be subject to covenants that restrict our ability to freely operate our business. In any case, such securities may have rights, preferences and privileges that are senior to those of the shares of common stock offered hereby. If we cannot obtain adequate capital on favorable terms or at all, we may not have sufficient funds to implement our operating plans and our business, financial condition or results of operations could be materially adversely affected.

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The failure of our information technology and telecommunications systems could adversely affect our business.

Our business is highly dependent upon our information technology and telecommunications systems, including our browser-based underwriting system. Among other things, we rely on these systems to interact with brokers and insureds, to underwrite business, to prepare policies and process premiums, to perform actuarial and other modeling functions, to process claims and make claims payments and to prepare internal and external financial statements and information. In addition, some of these systems may include or rely on third-party systems not located on our premises or under our control. Events such as natural catastrophes, terrorist attacks, industrial accidents or computer viruses may cause our systems to fail or be inaccessible for extended periods of time. While we have implemented business contingency plans and other reasonable plans to protect our systems, sustained or repeated system failures or service denials could severely limit our ability to write and process new and renewal business, provide customer service, pay claims in a timely manner or otherwise operate in the ordinary course of business.

Our operations depend on the reliable and secure processing, storage and transmission of confidential and other data and information in our computer systems and networks. Computer viruses, hackers, employee misconduct and other external hazards could expose our systems to security breaches, cyber-attacks or other disruptions. In addition, we routinely transmit and receive personal, confidential and proprietary data and information by electronic means and are subject to numerous data privacy laws and regulations enacted in the jurisdictions in which we do business.

While we have implemented security measures designed to protect against breaches of security and other interference with our systems and networks, our systems and networks may be subject to breaches or interference. Any such event may result in operational disruptions as well as unauthorized access to or the disclosure or loss of our proprietary information or our customers’ data and information, which in turn may result in legal claims, regulatory scrutiny and liability, reputational damage, the incurrence of costs to eliminate or mitigate further exposure, the loss of customers or affiliated advisors, reputational harm or other damage to our business. In addition, the trend toward general public notification of such incidents could exacerbate the harm to our business, financial condition and results of operations. Even if we successfully protect our technology infrastructure and the confidentiality of sensitive data, we could suffer harm to our business and reputation if attempted security breaches are publicized. We cannot be certain that advances in criminal capabilities, discovery of new vulnerabilities, attempts to exploit vulnerabilities in our systems, data thefts, physical system or network break-ins or inappropriate access, or other developments will not compromise or breach the technology or other security measures protecting the networks and systems used in connection with our business.

Any failure to protect our intellectual property rights could impair our ability to protect our intellectual property, proprietary technology platform and brand, or we may be sued by third parties for alleged infringement of their proprietary rights.

Our success and ability to compete depend in part on our intellectual property, which includes our rights in our proprietary technology platform and our brand. We primarily rely on copyright, trade secret and trademark laws, and confidentiality or license agreements with our employees, customers, service providers, partners and others to protect our intellectual property rights. However, the steps we take to protect our intellectual property may be inadequate. Litigation brought to protect and enforce our intellectual property rights could be costly, time-consuming and distracting to management and could result in the impairment or loss of portions of our intellectual

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property. Additionally, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims and countersuits attacking the validity and enforceability and scope of our intellectual property rights. Our failure to secure, protect and enforce our intellectual property rights could adversely affect our brand and adversely impact our business.

Our success depends also in part on our not infringing on the intellectual property rights of others. Our competitors, as well as a number of other entities and individuals, may own or claim to own intellectual property relating to our industry. In the future, third parties may claim that we are infringing on their intellectual property rights, and we may be found to be infringing on such rights. Any claims or litigation could cause us to incur significant expenses and, if successfully asserted against us, could require that we pay substantial damages or ongoing royalty payments, prevent us from offering our services, or require that we comply with other unfavorable terms. Even if we were to prevail in such a dispute, any litigation could be costly and time-consuming and divert the attention of our management and key personnel from our business operations.

We employ third-party and open source licensed software for use in our business, and the inability to maintain these licenses, errors in the software we license or the terms of open source licenses could result in increased costs, or reduced service levels, which would adversely affect our business.

Our business relies on certain third-party software obtained under licenses from other companies. We anticipate that we will continue to rely on such third-party software in the future. Although we believe that there are commercially reasonable alternatives to the third-party software we currently license, this may not always be the case, or it may be difficult or costly to replace. In addition, integration of new third-party software may require significant work and require substantial investment of our time and resources. Our use of additional or alternative third-party software would require us to enter into license agreements with third parties, which may not be available on commercially reasonable terms or at all. Many of the risks associated with the use of third-party software cannot be eliminated, and these risks could negatively affect our business.

Additionally, the software powering our technology systems incorporates software covered by open source licenses. The terms of many open source licenses have not been interpreted by U.S. courts and there is a risk that the licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to operate our systems. In the event that portions of our proprietary software are determined to be subject to an open source license, we could be required to publicly release the affected portions of our source code or re-engineer all or a portion of our technology systems, each of which could reduce or eliminate the value of our technology systems. Such risk could be difficult or impossible to eliminate and could adversely affect our business, financial condition and results of operations.

Severe weather conditions and other catastrophes may result in an increase in the number and amount of claims filed against us.

Our business is exposed to the risk of severe weather conditions and other catastrophes. Catastrophes can be caused by various events, including natural events such as severe winter weather, tornadoes, windstorms, earthquakes, hailstorms, severe thunderstorms and fires, and other events such as explosions, terrorist attacks and riots. The incidence and severity of catastrophes and severe weather conditions are inherently unpredictable. The extent of losses from catastrophes is a function of the total amount of losses incurred, the number of insureds affected, the frequency and severity of the events, the effectiveness of our catastrophe risk management

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program and the adequacy of our reinsurance coverage. Insurance companies are not permitted to reserve for a catastrophe until it has occurred. Severe weather conditions and catastrophes can cause losses in our property lines and generally result in both an increase in the number of claims incurred and an increase in the dollar amount of each claim asserted, which might require us to increase our reserves, causing our liquidity and financial condition to deteriorate. In addition, our inability to obtain reinsurance coverage at reasonable rates and in amounts adequate to mitigate the risks associated with severe weather conditions and other catastrophes could have a material adverse effect on our business and results of operation.

We may not be able to manage our growth effectively.

We intend to grow our business in the future, which could require additional capital, systems development and skilled personnel. However, we must be able to meet our capital needs, expand our systems and our internal controls effectively, allocate our human resources optimally, identify and hire qualified employees or effectively incorporate the components of any businesses we may acquire in our effort to achieve growth. The failure to manage our growth effectively could have a material adverse effect on our business, financial condition and results of operations.

Competition for business in our industry is intense.

We face competition from other specialty insurance companies, standard insurance companies and underwriting agencies, as well as from diversified financial services companies that are larger than we are and that have greater financial, marketing and other resources than we do. Some of these competitors also have longer experience and more market recognition than we do in certain lines of business. In addition, it may be difficult or prohibitively expensive for us to implement technology systems and processes that are competitive with the systems and processes of these larger companies.

In particular, competition in the insurance industry is based on many factors, including price of coverage, the general reputation and perceived financial strength of the company, relationships with brokers, terms and conditions of products offered, ratings assigned by independent rating agencies, speed of claims payment and reputation, and the experience and reputation of the members of our underwriting team in the particular lines of insurance and reinsurance we seek to underwrite. In recent years, the insurance industry has undergone increasing consolidation, which may further increase competition.

A number of new, proposed or potential legislative or industry developments could further increase competition in our industry. These developments include:


•	An increase in capital-raising by companies in our lines of business, which could result in new entrants to our markets and an excess of capital in the industry;


•	The deregulation of commercial insurance lines in certain states and the possibility of federal regulatory reform of the insurance industry, which could increase competition from standard carriers; and

•

Changing practices caused by the internet, including shifts in the way in which E&S insurance is purchased. We currently depend largely on the wholesale distribution model. If the wholesale distribution model were to be significantly altered by changes in the way E&S insurance were marketed, including, but not limited to, through use of the internet, it could have a material adverse effect on our premiums, underwriting results and profits.

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We may not be able to continue to compete successfully in the insurance markets. Increased competition in these markets could result in a change in the supply and demand for insurance, affect our ability to price our products at risk-adequate rates and retain existing business, or underwrite new business on favorable terms. If this increased competition so limits our ability to transact business, our operating results could be adversely affected.

If we are unable to underwrite risks accurately and charge competitive yet profitable rates to our policyholders, our business, financial condition and results of operations will be adversely affected.

In general, the premiums for our insurance policies are established at the time a policy is issued and, therefore, before all of our underlying costs are known. Like other insurance companies, we rely on estimates and assumptions in setting our premium rates. Establishing adequate premium rates is necessary, together with investment income, to generate sufficient revenue to offset losses, loss adjustment expenses and other underwriting costs and to earn a profit. If we do not accurately assess the risks that we assume, we may not charge adequate premiums to cover our losses and expenses, which would adversely affect our results of operations and our profitability. Alternatively, we could set our premiums too high, which could reduce our competitiveness and lead to lower revenues.

Pricing involves the acquisition and analysis of historical loss data and the projection of future trends, loss costs and expenses, and inflation trends, among other factors, for each of our products in multiple risk tiers and many different markets. In order to accurately price our policies, we must:


•	collect and properly analyze a substantial volume of data from our insureds;


•	develop, test and apply appropriate actuarial projections and ratings formulas;


•	closely monitor and timely recognize changes in trends; and


•	project both frequency and severity of our insureds’ losses with reasonable accuracy.

We seek to implement our pricing accurately in accordance with our assumptions. Our ability to undertake these efforts successfully and, as a result, accurately price our policies, is subject to a number of risks and uncertainties, including:


•	insufficient or unreliable data;


•	incorrect or incomplete analysis of available data;


•	uncertainties generally inherent in estimates and assumptions;


•	our failure to implement appropriate actuarial projections and ratings formulas or other pricing methodologies;


•	regulatory constraints on rate increases;


•	our failure to accurately estimate investment yields and the duration of our liability for loss and loss adjustment expenses; and


•	unanticipated court decisions, legislation or regulatory action.

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If actual renewals of our existing contracts do not meet expectations, our written premiums in future years and our future results of operations could be materially adversely affected.

Many of our contracts are written for a one-year term. In our financial forecasting process, we make assumptions about the rates of renewal of our prior year’s contracts. The insurance and reinsurance industries have historically been cyclical businesses with intense competition, often based on price. If actual renewals do not meet expectations or if we choose not to write a renewal because of pricing conditions, our written premiums in future years and our future operations would be materially adversely affected.

We may change our underwriting guidelines or our strategy without stockholder approval.

Our management has the authority to change our underwriting guidelines or our strategy without notice to our stockholders and without stockholder approval. As a result, we may make fundamental changes to our operations without stockholder approval, which could result in our pursuing a strategy or implementing underwriting guidelines that may be materially different from the strategy or underwriting guidelines described in the section titled "Business" in the final prospectus filed with the SEC on July 29, 2016.

The effects of litigation on our business are uncertain and could have an adverse effect on our business.

As is typical in our industry, we continually face risks associated with litigation of various types, including disputes relating to insurance claims under our policies as well as other general commercial and corporate litigation. Although we are not currently involved in any material litigation with our customers, other members of the insurance industry are the target of class action lawsuits and other types of litigation, some of which involve claims for substantial or indeterminate amounts, and the outcomes of which are unpredictable. This litigation is based on a variety of issues, including insurance and claim settlement practices. We cannot predict with any certainty whether we will be involved in such litigation in the future or what impact such litigation would have on our business.

Changes in accounting practices and future pronouncements may materially affect our reported financial results.

Developments in accounting practices may require us to incur considerable additional expenses to comply, particularly if we are required to prepare information relating to prior periods for comparative purposes or to apply the new requirements retroactively. The impact of changes in current accounting practices and future pronouncements cannot be predicted but may affect the calculation of net income, stockholders’ equity and other relevant financial statement line items.

Our insurance subsidiary, Kinsale Insurance, is required to comply with statutory accounting principles ("SAP"). SAP and various components of SAP are subject to constant review by the NAIC and its task forces and committees, as well as state insurance departments, in an effort to address emerging issues and otherwise improve financial reporting. Various proposals are pending before committees and task forces of the NAIC, some of which, if enacted, could have negative effects on insurance industry participants. The NAIC continuously examines existing laws and regulations. We cannot predict whether or in what form such reforms will be enacted and, if so, whether the enacted reforms will positively or negatively affect us.

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Our failure to accurately and timely pay claims could materially and adversely affect our business, financial condition, results of operations and prospects.

We must accurately and timely evaluate and pay claims that are made under our policies. Many factors affect our ability to pay claims accurately and timely, including the training and experience of our claims representatives, our claims organization’s culture and the effectiveness of our management, our ability to develop or select and implement appropriate procedures and systems to support our claims functions and other factors. Our failure to pay claims accurately and timely could lead to regulatory and administrative actions or material litigation, undermine our reputation in the marketplace and materially and adversely affect our business, financial condition, results of operations and prospects.

In addition, if we do not train new claims employees effectively or if we lose a significant number of experienced claims employees, our claims department’s ability to handle an increasing workload could be adversely affected. In addition to potentially requiring that growth be slowed in the affected markets, our business could suffer from decreased quality of claims work which, in turn, could adversely affect our operating margins.

We rely on the use of credit scoring in pricing and underwriting certain of our insurance policies and any legal or regulatory requirements that restrict our ability to access credit score information could decrease the accuracy of our pricing and underwriting process and thus decrease our ability to be profitable.

We use credit scoring as a factor in pricing and underwriting decisions where allowed by state law. Consumer groups and regulators have questioned whether the use of credit scoring unfairly discriminates against some groups of people and are calling for laws and regulations to prohibit or restrict the use of credit scoring in underwriting and pricing. Laws or regulations that significantly curtail or regulate the use of credit scoring, if enacted in a large number of states in which we operate, could impact the integrity of our pricing and underwriting processes, which could, in turn, materially and adversely affect our business, financial condition, results of operations and prospects, and make it harder for us to be profitable over time.

Global climate change may have an adverse effect on our financial results.

Although uncertainty remains as to the nature and effect of future efforts to curb greenhouse gas emissions and thereby mitigate their potential long-term effects on the climate, a broad spectrum of scientific evidence suggests that manmade production of greenhouse gas has had an adverse effect on the global climate. Our insurance policies are generally written for one year and repriced annually to reflect changing exposures. However, assessing the risk of loss and damage associated with the adverse effects of climate change and the range of approaches to address loss and damage associated with the adverse effects of climate change, including impacts related to extreme weather events and slow onset events, remains a challenge and might adversely impact our business, results of operations and financial condition.

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

None.

Item 6. Exhibits

See Exhibit Index for a list of exhibits filed as part of this report.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



		KINSALE CAPITAL GROUP, INC.
Date: September 7, 2016	By:	/s/ Michael P. Kehoe
		Michael P. Kehoe President and Chief Executive Officer

Date: September 7, 2016	By:	/s/ Bryan P. Petrucelli
		Bryan P. Petrucelli Senior Vice President and Chief Financial Officer

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Exhibit Index



Exhibit Number		Description
3.1		Amended and Restated Certificate of Incorporation of Kinsale Capital Group, Inc.
3.2		Amended and Restated By-Laws of Kinsale Capital Group, Inc.
4.1		Specimen common stock certificate
10.1		Amended and Restated Loan and Security Agreement, dated as of June 28, 2016, among Kinsale Capital Group, Inc., as borrower, Kinsale Management, Inc. and Aspera Insurance Services, Inc., as loan guarantors, and The PrivateBank and Trust Company, as lender
10.2		Amended and Restated Registration Rights Agreement, dated as of August 2, 2016, among Kinsale Capital Group, Inc., Moelis Capital Partners Opportunity Fund I, LP, Moelis Capital Partners Opportunity Fund I-A, LP, Virginia Capital Private Equity, LP, M.P. Kehoe, LLC and the other stockholders party thereto
10.3		Director Nomination Agreement, dated as of July 28, 2012, between Moelis Capital Partners Opportunity Fund I, LP and Moelis Capital Partners Opportunity Fund I-A, LP and Kinsale Capital Group, Inc.
10.4+		Kinsale Capital Group, Inc. 2016 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.4 to Amendment No. 1 to the Registration Statement on Form S-1, filed with the SEC on July 18, 2016)
10.5a+		Form of Stock Option Grant Notice and Award Agreement (Employee) (incorporated by reference to Exhibit 10.5a to Amendment No. 1 to the Registration Statement on Form S-1, filed with the SEC on July 18, 2016)
10.5b+		Form of Stock Option Grant Notice and Award Agreement (Director) (incorporated by reference to Exhibit 10.5b to Amendment No. 1 to the Registration Statement on Form S-1, filed with the SEC on July 18, 2016)
10.6+		Kinsale Capital Group, Inc. (as successor to Kinsale Capital Group, Ltd.) 2010 Stock Incentive Plan (incorporated by reference to Exhibit 10.7 to the Registration Statement on Form S-1, filed with the SEC on July 1, 2016)
10.7		Employment and Arbitration Agreement, dated as of June 4, 2009 among Kinsale Management, Inc. and Michael P. Kehoe (incorporated by reference to Exhibit 10.7 to the Registration Statement on Form S-1, filed with the SEC on July 1, 2016)
10.8		Form of Indemnification Agreement between Kinsale Capital Group, Inc. and each of its directors and executive officers (incorporated by reference to Exhibit 10.8 to Amendment No. 1 to the Registration Statement on Form S-1, filed with the SEC on July 18, 2016)
31.1		Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*		Certification of Chief Financial Officer 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

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* This certification is deemed not filed for purposes of section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.

** Furnished with this Quarterly Report. Pursuant to Rule 406T of Regulation S-T, these interactive data files 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 and are deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934.

+ Compensatory plan or arrangement

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

KINSALE CAPITAL GROUP, INC.

The undersigned, Michael P. Kehoe, certifies that he is the Chief Executive Officer, President and Director of Kinsale Capital Group, Inc., a corporation organized and existing under the laws of the State of Delaware (the “ Corporation ”), and does hereby further certify as follows:


(1)	The name of the Corporation is Kinsale Capital Group, Inc.

(2)

The name under which the Corporation was originally incorporated in the State of Delaware following its domestication from the Islands of Bermuda was Kinsale Capital Group Bermuda, Ltd. with the Certificate of Domestication of Non-United States Corporation and the original Certificate of Incorporation filed with the Secretary of State of the State of Delaware on September 5, 2014. The original Certificate of Incorporation was amended on September 5, 2014 by filing a certificate of ownership and merger with the Secretary of State of the State of Delaware, pursuant to which the Corporation changed its name to Kinsale Capital Group, Inc.

(3)

In lieu of a meeting of the Board of Directors of the Corporation (the “ Board of Directors ”), the Board of Directors has, by unanimous written consent dated July 15, 2016, authorized the amendment and restatement of the Corporation’s original Certificate of Incorporation as set forth herein in accordance with the provisions of Sections 141(f), 242 and 245 of the General Corporation Law of the State of Delaware (the “ DGCL ”). In lieu of a meeting of such stockholders of the Corporation, the holders of the Corporation’s Class A Common Stock and holders of the Corporation’s Class B Common Stock have, by written consent dated July 18, 2016, approved the amendment and restatement of the Corporation’s original Certificate of Incorporation as set forth herein in accordance with the provisions of Section 228 of the DGCL, and such consents have been filed with the minutes of the proceedings of stockholders of the Corporation.


(4)	This Amended and Restated Certificate of Incorporation restates and integrates and further amends the original Certificate of Incorporation, as heretofore amended and supplemented.


(5)	The effective time of this Amended and Restated Certificate of Incorporation is 6:00 a.m. ET on July 28, 2016.

The text of the original Certificate of Incorporation of the Corporation is hereby amended and restated to read in its entirety as follows:

FIRST: The name of the Corporation is Kinsale Capital Group, Inc. (the “ Corporation ”).

SECOND: The address of the Corporation’s registered office in the State of Delaware is The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware, County of New Castle, 19801. The name of the Corporation’s registered agent at such address is The Corporation Trust Company.

THIRD: The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the Delaware General Corporation Law (the “ DGCL ”).

FOURTH:

(a)

Authorized Capital Stock . The total number of shares of stock which the Corporation shall have authority to issue is 500,000,000 of which the Corporation shall have authority to issue 400,000,000 shares of common stock, each having a par value of one cent ($0.01) per share (the “ Common Stock ”), and 100,000,000 shares of preferred stock, each having a par value of one cent ($0.01) per share (the “ Preferred Stock ”).


(b)	Common Stock . The powers, preferences and rights, and the qualifications, limitations and restrictions, of the Common Stock are as follows:


(1)	Each holder of record of shares of Common Stock shall be entitled to one vote for each share of Common Stock held on all matters submitted to a vote of stockholders of the Corporation on which holders of Common Stock are entitled to vote.


(2)	The holders of shares of Common Stock shall not have cumulative voting rights (as defined in Section 214 of the DGCL).

(3)

Subject to the rights of the holders of Preferred Stock, and subject to any other provisions of this Amended and Restated Certificate of Incorporation, as it may be amended from time to time, holders of shares of Common Stock shall be entitled to receive such dividends and other distributions in cash, stock or property of the Corporation if, as and when declared thereon by the Board of Directors from time

to time out of assets or funds of the Corporation legally available therefor.

(4)

In the event of any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary, after payment or provision for the payment of the debt and liabilities of the Corporation and subject to the prior payment in full of the preferential amounts, if any, to which any series of Preferred Stock may be entitled, the holders of shares of Common Stock shall be entitled to receive the assets and funds of the Corporation remaining for distribution in proportion to the number of shares held by them, respectively.


(5)	No holder of shares of Common Stock shall be entitled to preemptive or subscription rights.

(c)

Preferred Stock . The Board of Directors is expressly authorized to provide for the issuance of all or any shares of the Preferred Stock in one or more classes or series, and to fix for each such class or series such voting powers, full or limited, or no voting powers, and such distinctive designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issuance of such class or series and as may be permitted by the DGCL, including, without limitation, the authority to provide that any such class or series may be (i) subject to redemption at such time or times and at such price or prices; (ii) entitled to receive dividends (which may be cumulative or non-cumulative) at such rates, on such conditions, and at such times, and payable in preference to, or in such relation to, the dividends payable on any other class or classes of stock or any other series of stock; (iii) entitled to such rights upon any liquidation, dissolution or winding-up, whether voluntary or involuntary, of the Corporation; or (iv) convertible into, or exchangeable for, shares of any other class or classes of stock, or shares of any other series of the same class of stock, of the Corporation at such price or prices or at such rates of exchange and with such adjustments; all as may be stated in such resolution or resolutions.


(d)	Reclassification of Class A Common Stock . Immediately upon the effective time of this Amended and Restated Certificate of Incorporation, each one (1) share of the Corporation’s Class A Common Voting Shares, par value $0.0001 per share (the “ Class A Common Stock ”), issued and outstanding

immediately prior to the effective time of this Amended and Restated Certificate of Incorporation shall automatically be reclassified as and converted into 0.65485975 validly issued, fully paid and nonassessable shares of Common Stock, without any action by the holder thereof or by the Corporation (the “ Class A Reclassification ”). No fractional shares shall be issued in connection with the Class A Reclassification and, in lieu thereof, any holder who would hold a fractional share of Common Stock shall be entitled to receive cash for such holder’s fractional share based upon the initial public offering price of the Corporation’s Common Stock.

(e)

Reclassification of Class B Common Stock . Immediately upon the effective time of this Amended and Restated Certificate of Incorporation, each one (1) share of the Corporation’s Class B Common Non-Voting Shares, par value $0.0001 per share (the “ Class B Common Stock ”), issued and outstanding immediately prior to the effective time of this Amended and Restated Certificate of Incorporation shall automatically be reclassified as and converted into 0.72095061 validly issued, fully paid and nonassessable shares of Common Stock, without any action by the holder thereof or by the Corporation (the “ Class B Reclassification ”). No fractional shares shall be issued in connection with the Class B Reclassification and, in lieu thereof, any holder who would hold a fractional share of Common Stock shall be entitled to receive cash for such holder’s fractional share based upon the initial public offering price of the Corporation’s Common Stock.

(f)

Surrender and Issuance of New Certificates . After the Class A Reclassification and the Class B Reclassification, each certificate that prior to (i) the Class A Reclassification represented shares of Class A Common Stock (“ Old Class A Certificates ”) and (ii) the Class B Reclassification represented shares of Class B Common Stock (“ Old Class B Certificates ”) shall thereafter represent that number of shares of Common Stock into which the shares of Class A Common Stock represented by the Old Class A Certificates or the shares of Class B Common Stock represented by the Old Class B Certificates shall have been reclassified as a result of the Class A Reclassification or the Class B Reclassification, respectively. Upon surrender at the office of the Corporation or its transfer agent of Old Class A Certificates or Old Class B Certificates in such holder’s name, or upon notifying the Corporation or its transfer agent that such certificates have been lost, stolen or destroyed and executing an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificates, such holder will be entitled to receive,

as soon as practicable after the Class A Reclassification or the Class B Reclassification and such surrender or such agreement and indemnification in the case of a lost certificate, a book-entry interest or interests representing, or, at the election of such holder, a certificate or certificates evidencing, the number of shares of Common Stock into which the shares represented by the Old Class A Certificates or the Old Class B Certificates were reclassified pursuant to the Class A Reclassification or the Class B Reclassification, respectively, in such name or names and such denomination or denominations as such holder has specified.

(g)

No Charge to Holders . The issuance of book-entry interests or certificates for shares of Common Stock upon the Class A Reclassification or the Class B Reclassification shall be made without charge to the holders of such shares for any issuance tax in respect thereof or other cost incurred by the Corporation in connection with such Class A Reclassification or Class B Reclassification and the related issuance of shares of Common Stock. Upon the Class A Reclassification or Class B Reclassification, the Corporation shall take all such actions as are necessary in order to ensure that the shares of Common Stock issued in the Class A Reclassification or Class B Reclassification shall be validly issued, fully paid and nonassessable, free and clear of all taxes, liens, charges and encumbrances with respect to the issuance thereof.

(h)

Power to Sell and Purchase Shares . Subject to the requirements of applicable law, the Corporation shall have the power to issue and sell all or any part of any shares of any class of stock herein or hereafter authorized to such persons, and for such consideration, as the Board of Directors shall from time to time, in its discretion, determine, whether or not greater consideration could be received upon the issue or sale of the same number of shares of another class or of shares of another series of such class, and as otherwise permitted by law. Subject to the requirements of applicable law, the Corporation shall have the power to purchase any shares of any class of stock herein or hereafter authorized from such persons, and for such consideration, as the Board of Directors shall from time to time, in its discretion, determine, whether or not less consideration could be paid upon the purchase of the same number of shares of another class or of shares of another series of such class, and as otherwise permitted by law.

FIFTH: The following provisions are inserted for the management of the business and the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders:

(a)

The business and affairs of the Corporation shall be managed by, or under the direction of, the Board of Directors. In addition to the powers and authority expressly conferred upon the Board of Directors by applicable law, this Amended and Restated Certificate of Incorporation or the Amended and Restated By-Laws of the Corporation (as amended from time to time, the “ By-Laws ”), the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject to the provisions of the DGCL and this Amended and Restated Certificate of Incorporation.


(b)	The number of directors of the Corporation shall be fixed from time to time exclusively by resolution of the Board of Directors.

(c)

The directors shall be divided into three classes, designated Class I, Class II and Class III. Each class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire Board of Directors. The initial division of the Board of Directors into classes shall be made by the decision of the affirmative vote of a majority of the entire Board of Directors. The term of the initial Class I directors shall terminate on the date of the 2017 annual meeting of stockholders; the term of the initial Class II directors shall terminate on the date of the 2018 annual meeting of stockholders; and the term of the initial Class III directors shall terminate on the date of the 2019 annual meeting of stockholders. Each director in each class shall hold office until his or her successor is duly elected and qualified or until his or her earlier death, resignation or removal. At each succeeding annual meeting of stockholders beginning in 2017, successors to the class of directors whose term expires at that annual meeting shall be elected to hold office for a term expiring at the annual meeting of stockholders to be held in the third year following the year of their election, with each director in each such class to hold office until his or her successor is duly elected and qualified or until his or her earlier death, resignation or removal. If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, but in no case will a decrease in the number of directors shorten the term of any incumbent director.

(d)

Subject to the terms of any one or more classes or series of Preferred Stock then outstanding, any vacancy on the Board of Directors that results from (i) removal of a director, (ii) an increase in the number of directors or (iii) death, resignation, disqualification or any other cause, will be filled solely by the affirmative vote of a majority of the remaining directors then in office, even if less than a quorum remains, including by a sole remaining director. Any director of any class elected to fill a vacancy resulting from an increase in the number of directors of such class shall hold office for a term that shall coincide with the remaining term of that class. Any director elected to fill a vacancy not resulting from an increase in the number of directors shall have the same remaining term as that of his or her predecessor. The right of stockholders to fill vacancies on the Board of Directors is hereby specifically denied.

(e)

Notwithstanding the foregoing, the election, term, removal and filling of vacancies with respect to directors, if any, elected separately by the holders of one or more classes or series of Preferred Stock shall not be governed by this Article FIFTH, but rather shall be as provided for in the resolutions adopted by the Board of Directors creating and establishing such class or series of Preferred Stock.

SIXTH: No director shall be personally liable to the Corporation or any of its stockholders for monetary damages for breach of any fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL. If the DGCL is amended hereafter to authorize the further elimination or limitation of the liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent authorized by the DGCL, as so amended. Any repeal or modification of this Article SIXTH shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification with respect to acts or omissions occurring prior to such repeal or modification.

SEVENTH: The Corporation shall indemnify any person that is or was a director or officer (and any person that is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise) to the fullest extent authorized or permitted by law, as now or hereafter in effect, and such right to indemnification shall continue as to a person who has ceased to be a director or officer of the Corporation (or such other corporation, partnership, joint venture, trust or other enterprise) and shall inure to the benefit of his or her heirs, executors and personal and legal representatives; provided , however , that, except for proceedings to enforce rights to indemnification, the Corporation shall not be obligated to indemnify any director or officer (or his or her heirs, executors or personal or

legal representatives) in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the Board of Directors. The right to indemnification conferred by this Article SEVENTH shall include the right to be paid by the Corporation the expenses incurred in defending or otherwise participating in any proceeding in advance of its final disposition.

The Corporation may, to the extent authorized from time to time by the Board of Directors, provide rights to indemnification and to the advancement of expenses to employees and agents of the Corporation similar to those conferred in this Article SEVENTH.

The rights to indemnification and to the advance of expenses conferred in this Article SEVENTH shall not be exclusive of any other right which any person may have or hereafter acquire under this Amended and Restated Certificate of Incorporation, the By-Laws, any statute or other law, by agreement, vote of stockholders or approval of the directors of the Corporation or otherwise.

Any repeal or modification of this Article SEVENTH shall not adversely affect any rights to indemnification and to the advancement of expenses of a director or officer of the Corporation existing at the time of such repeal or modification with respect to any acts or omissions occurring prior to such repeal or modification.

EIGHTH: Prior to the first date on which funds managed by, or entities affiliated with, Moelis Capital Partners LLC, a Delaware limited liability company (collectively, the “ Sponsor Holder ”), cease collectively to beneficially own (directly or indirectly) at least forty percent (40%) of the votes entitled to be cast by the shares of the then outstanding capital stock of the Corporation entitled to vote generally in the election of directors (the “ Voting Stock ”), any action that, under the DGCL, may be taken at a duly called meeting of the stockholders of the Corporation may instead be taken without holding such a meeting by one or more consents in writing or by electronic submission, setting forth the action so taken or to be taken, signed by holders of Voting Stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. From and after the date the Sponsor Holder ceases to beneficially own (directly or indirectly) at least forty percent (40%) of the Voting Stock, any action required or permitted to be taken by the stockholders of the Corporation may be effected only at a duly called annual or special meeting of the stockholders of the Corporation and may not be effected by any consent in writing by such stockholders.

NINTH: Meetings of stockholders may be held within or without the State of Delaware, as the By-Laws may provide. The books of the Corporation may be kept (subject to any provision contained in the DGCL) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the By-Laws.

TENTH: Except as otherwise required by law, special meetings of the stockholders of the Corporation, for any purpose or purposes, may be called at any time only (i) by the Chairman of the Board of Directors, (ii) by the Chief Executive Officer (or, in the absence of a Chief Executive Officer, the President) of the Corporation, (iii) pursuant to a resolution duly adopted by a majority of the Board of Directors or (iv) prior to the date that the Sponsor Holder ceases to beneficially own (directly or indirectly) forty percent (40%) or more of the Voting Stock, by the Secretary of the Corporation at the request of the holders of shares representing at least forty percent (40%) of the Voting Stock. Other than as set forth in clause (iv) of the preceding sentence, any power of the stockholders to call a special meeting of stockholders is hereby specifically denied.

Advance notice of stockholder nominations for the election of directors of the Corporation and of business to be brought by stockholders before any meeting of stockholders of the Corporation shall be given in the manner provided in the By-Laws. No business other than that stated in the notice of such meeting (or any amendment or supplement thereto), which notice, in the case of a special meeting called by a stockholder or stockholders, shall include all business requested by such stockholder or stockholders to be transacted at such meeting, shall be transacted at any special meeting.

ELEVENTH: In furtherance and not in limitation of the powers conferred upon it by the laws of the State of Delaware, the Board of Directors shall have the power without the assent or vote of the stockholders to adopt, amend, alter or repeal the By-Laws. The affirmative vote of at least a majority of the Board of Directors shall be required to adopt, amend, alter or repeal the By-Laws. The By-Laws also may be adopted, amended, altered or repealed by the affirmative vote of the holders of a majority of the Voting Stock.

TWELFTH: The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Amended and Restated Certificate of Incorporation, in the manner now or hereafter prescribed in the DGCL, and all rights conferred upon stockholders herein are granted subject to such reservation.

THIRTEENTH:

(a)

To the fullest extent permitted by applicable law (including, without limitation, Section 122(17) of the DGCL (or any successor provision)), the Corporation, on behalf of itself and its subsidiaries, renounces any interest or expectancy of the Corporation and its subsidiaries in, or in being offered an opportunity to participate in, business opportunities that are from time to time presented to the Sponsor Holder or any of its officers, directors, employees, agents, shareholders, members, partners, principals, affiliates (other than the Corporation and its subsidiaries) and

managers (each, a “ Specified Party ”), even if the opportunity is one that the Corporation or any of its subsidiaries might reasonably be deemed to have pursued or had the ability or desire to pursue if presented the opportunity to do so. Each such Specified Party shall have no duty to communicate or offer such business opportunity to the Corporation or any of its subsidiaries and, to the fullest extent permitted by applicable law, shall not be liable to the Corporation or any of its subsidiaries for breach of any fiduciary or other duty, as a director or officer or controlling stockholder or otherwise, by reason of the fact that such Specified Party pursues or acquires such business opportunity, directs such business opportunity to another person or fails to present such business opportunity, or information regarding such business opportunity, to the Corporation or any of its subsidiaries. Notwithstanding the foregoing, a Specified Party who is a director or officer of the Corporation and who is expressly offered a business opportunity solely in his or her capacity as a director or officer of the Corporation (a “ Directed Opportunity ”) shall be obligated to communicate such Directed Opportunity to the Corporation; provided , however , that all of the protections of this Article THIRTEENTH shall otherwise apply to the Specified Parties with respect to such Directed Opportunity, including, without limitation, the ability of the Specified Parties to pursue or acquire such Directed Opportunity or to direct such Directed Opportunity to another person.


(b)	The Specified Parties shall have no duty to refrain from (i) engaging directly or indirectly in the same or similar business activities or lines of business as the Corporation or any of its subsidiaries or (ii) otherwise competing with the Corporation or any of its subsidiaries.

(c)

In addition to and notwithstanding the foregoing provisions of this Article THIRTEENTH, a corporate opportunity shall not be deemed to belong to the Corporation if it is a business opportunity that the Corporation is not financially able or contractually permitted or legally able to undertake, or that is, from its nature, not in the line of the Corporation’s business or is of no practical advantage to it or that is one in which the Corporation has no interest or reasonable expectancy.


(d)	No alteration, amendment or repeal of this Article THIRTEENTH (including the adoption of any provision of this Amended and Restated Certificate of Incorporation inconsistent with this Article THIRTEENTH)

shall eliminate or reduce the effect of this Article THIRTEENTH in respect of any matter occurring, or any cause of action, suit or claim that, but for this Article THIRTEENTH, would accrue or arise, prior to such alteration, amendment or repeal. This Article THIRTEENTH shall not limit any protections or defenses available to, or indemnification or advancement rights of, any director or officer of the Corporation under this Amended and Restated Certificate of Incorporation, the By-Laws or applicable law.


(e)	Any person or entity purchasing or otherwise acquiring any interest in the shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article THIRTEENTH.

FOUREENTH: The Court of Chancery of the State of Delaware shall, to the fullest extent permitted by applicable law, be the sole and exclusive forum for (a) any actual or purported derivative action or proceeding brought on behalf of the Corporation, (b) any action asserting a claim of breach of a fiduciary duty owed by any director or officer of the Corporation to the Corporation or the Corporation’s stockholders or creditors, (c) any action asserting a claim against the Corporation or any director or officer of the Corporation arising pursuant to any provision of the DGCL, this Amended and Restated Certificate of Incorporation or the By-Laws, or (d) any action asserting a claim against the Corporation or any director or officer of the Corporation governed by the internal affairs doctrine; provided , however , that, if and only if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, such action may be brought in another state court sitting in the State of Delaware. Any person or entity purchasing or otherwise acquiring any interest in the shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article FOURTEENTH.

FIFTEENTH: If any provision or provisions of this Amended and Restated Certificate of Incorporation shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever: (i) the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Amended and Restated Certificate of Incorporation (including, without limitation, each portion of any paragraph of this Amended and Restated Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and (ii) to the fullest extent possible, the provisions of this Amended and Restated Certificate of Incorporation (including, without limitation, each such portion of any paragraph of this Amended and Restated Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to permit the Corporation to protect its directors, officers, employees and agents from personal liability in respect of their good faith service to or for the benefit of the Corporation to the fullest extent authorized or permitted by law.

( Next Page Is Signature Page )

IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated Certificate of Incorporation to be executed on its behalf this 28th day of July, 2016.

KINSALE CAPITAL GROUP, INC.

By: /s/ Michael P. Kehoe

Michael P. Kehoe

Chief Executive Officer, President and Director

[Signature page to Amended and Restated Certificate of Incorporation]

Exhibit 3.2

AMENDED AND RESTATED

BY-LAWS

KINSALE CAPITAL GROUP, INC.

A Delaware Corporation

Effective July 28, 2016

TABLE OF CONTENTS



		Page
Article I Offices		1
Section 1.	Registered Office	1
Section 2.	Other Offices	1
Article II Meetings Of Stockholders		1
Section 1.	Place of Meetings	1
Section 2.	Annual Meetings	1
Section 3.	Special Meetings	2
Section 4.	Nature of Business at Meetings of Stockholders	2
Section 5.	Nomination of Directors	6
Section 6.	Notice	11
Section 7.	Adjournments	11
Section 8.	Quorum	12
Section 9.	Voting	12
Section 10.	Proxies	13
Section 11.	List of Stockholders Entitled to Vote	14
Section 12.	Record Date	15
Section 13.	Stock Ledger	16
Section 14.	Conduct of Meetings	16
Section 15.	Inspectors of Election	17
Section 16.	No Consent of Stockholders in Lieu of Meeting	18
Article III Directors		18
Section 1.	Number, Classification, Election and Term of Office	18
Section 2.	Vacancies	18
Section 3.	Duties and Powers	18
Section 4.	Meetings	18
Section 5.	Organization	19
Section 6.	Resignations and Removals of Directors	20
Section 7.	Quorum	20
Section 8.	Actions of the Board of Directors by Written Consent	21
Section 9.	Meetings by Means of Conference Telephone	21
Section 10.	Committees	21
Section 11.	Compensation	22
Section 12.	Interested Directors	22
Article IV Officers		23
Section 1.	General	23
Section 2.	Election	24
Section 3.	Voting Securities Owned by the Corporation	24
Section 4.	Chairman of the Board of Directors	24
Section 5.	President	25
Section 6.	Vice Presidents	25
Section 7.	Secretary	26
Section 8.	Treasurer	27
Section 9.	Assistant Secretaries	27



Section 10.	Assistant Treasurers	28
Section 11.	Other Officers	28
Article V Stock		28
Section 1.	Form Shares of Stock	28
Section 2.	Signatures	29
Section 3.	Lost Certificates	29
Section 4.	Transfers	30
Section 5.	Dividend Record Date	30
Section 6.	Record Owners	31
Section 7.	Transfer and Registry Agents	31
Article VI Notices		31
Section 1.	Notices	31
Section 2.	Waivers of Notice	32
Article VII General Provisions		33
Section 1.	Dividends	33
Section 2.	Disbursements	33
Section 3.	Fiscal Year	33
Section 4.	Corporate Seal	34
Article VIII Indemnification		34
Section 1.	Power to Indemnify in Actions, Suits or Proceedings Other than Those by or in the Right of the Corporation	34
Section 2.	Power to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation	35
Section 3.	Authorization of Indemnification	35
Section 4.	Good Faith Defined	36
Section 5.	Indemnification by a Court	37
Section 6.	Expenses Payable in Advance	37
Section 7.	Nonexclusivity of Indemnification and Advancement of Expenses	38
Section 8.	Insurance	38
Section 9.	Certain Definitions.	39
Section 10.	Survival of Indemnification and Advancement of Expenses	40
Section 11.	Limitation on Indemnification	40
Section 12.	Indemnification of Employees and Agents	40
Section 13.	Indemnification Priority	40
Article IX Amendments		43
Section 1.	Amendments	43
Section 2.	Entire Board of Directors	43

AMENDED AND RESTATED

BY-LAWS

KINSALE CAPITAL GROUP, INC.

(hereinafter called the “Corporation”)

ARTICLE I

OFFICES

Section 1. Registered Office . The registered office of the Corporation shall be in the City of Wilmington, County of New Castle, State of Delaware.

Section 2. Other Offices . The Corporation may also have offices at such other places, both within and without the State of Delaware, as the Board of Directors of the Corporation (the “Board of Directors”) may from time to time determine.

ARTICLE II

MEETINGS OF STOCKHOLDERS

Section 1. Place of Meetings . Meetings of the stockholders for the election of directors or for any other purpose shall be held at such time and place, either within or without the State of Delaware, as shall be designated from time to time by the Board of Directors. The Board of Directors may, in its sole discretion, determine that a meeting of the stockholders shall not be held at any place, but may instead be held solely by means of remote communication in the manner authorized by the General Corporation Law of the State of Delaware (the “DGCL”).

Section 2. Annual Meetings . The annual meeting of stockholders (the “Annual Meeting”) for the election of directors shall be held on such date and at such time as shall be designated from time to time by the Board of Directors. Any other proper business may be transacted at the Annual Meeting.

Section 3. Special Meetings . Unless otherwise required by law or by the certificate of incorporation of the Corporation, as amended and restated from time to time (the “Certificate of Incorporation”), special meetings of the stockholders (a “Special Meeting”), for any purpose or purposes, shall be called in the manner provided by the Certificate of Incorporation. A request to call a Special Meeting shall state the purpose or purposes of the proposed meeting.

Section 4. Nature of Business at Meetings of Stockholders. Only such business (other than nominations for election to the Board of Directors, which must comply with the provisions of Section 5 of this Article II) may be transacted at an Annual Meeting or Special Meeting as is (a) specified in the notice of meeting (or any amendment or supplement thereto) given by or at the direction of the Board of Directors (or any duly authorized committee thereof), (b) otherwise properly brought before the Annual Meeting or Special Meeting by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (c) otherwise properly brought before the Annual Meeting or Special Meeting by any stockholder of the Corporation (i) who is a stockholder of record on the date of the giving of the notice provided for in this Section 4 of this Article II and on the record date for the determination of stockholders entitled to notice of and to vote at such Annual Meeting or Special Meeting and (ii) who complies with the notice procedures set forth in this Section 4 of this Article II. Notwithstanding the foregoing, at a Special Meeting, only such business shall be conducted as specified in the notice of meeting (or any amendment or supplement thereto).

In addition to any other applicable requirements, for business to be properly brought before an Annual Meeting or a Special Meeting by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary of the Corporation (the “Secretary”).

To be timely, a stockholder’s notice to the Secretary must be delivered to, or be mailed and received at, the principal executive offices of the Corporation (a) in the case of an Annual Meeting, not less than ninety (90) days nor more than one hundred twenty (120) days prior to the anniversary date of the immediately preceding Annual Meeting; provided , however , that in the event that the Annual Meeting is called for a date that is not within twenty-five (25) days before or after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the Annual Meeting was mailed or such public disclosure of the date of the Annual Meeting was made, whichever first occurs; and (b) in the case of a Special Meeting, no later than the close of business on the tenth (10th) day following the day on which notice of the date of the Special Meeting was mailed or public disclosure of the date of the Special Meeting was made, whichever first occurs. In no event shall the adjournment or postponement of an Annual Meeting or Special Meeting, or the public announcement of such an adjournment or postponement, commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.

To be in proper written form, a stockholder’s notice to the Secretary must set forth the following information: (a) as to each matter such stockholder proposes to bring before the Annual Meeting or Special Meeting, a brief description of the business desired to be brought before the Annual Meeting or Special Meeting (including the specific text of any resolutions or actions proposed for consideration and if such business includes a proposal to amend the Certificate of Incorporation or these By-Laws, the specific language of the proposed amendment) and the reasons for conducting such business at the Annual Meeting or Special Meeting, and (b) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the proposal is being made, (i) the name and record address of such person as they appear on the Corporation’s books, (ii) (A) the class or series and number of all shares of stock of the Corporation which are owned beneficially or of record by such person and any affiliates or associates of such person, (B) the name and address of each nominee holder of shares of all stock of the Corporation owned beneficially, but not of record, by such person or any affiliates or associates of such person, and the number of such shares of stock of the Corporation held by each such nominee holder, (C) whether and the extent to which any derivative instrument, swap, option, warrant, short interest, hedge or profit interest or other transaction has been entered into by or on behalf of such person, or any affiliates or associates of such person, with respect to stock of the Corporation and (D) whether and the extent to which any other transaction, agreement, arrangement or understanding (including any short position or any borrowing or lending of shares of stock of the Corporation) has been made by or on behalf of such person, or any affiliates or associates of such person, the effect or intent of any of the foregoing being to mitigate loss to, or to manage risk or benefit of stock price changes for such person, or any affiliates or associates of such person, or to increase or decrease the voting power or pecuniary or economic interest of such person, or any affiliates or associates of such person, with respect to stock of the Corporation, (iii) a description of all agreements, arrangements, or understandings (whether written or oral) between or among such person, or any affiliates or associates of such person, and any other person or persons (including their names) in connection with the proposal of such business and any material interest of such person or any affiliates or associates of such person, in such business, including any anticipated benefit therefrom to such person, or any affiliates or associates of such person, (iv) a representation that the stockholder giving notice intends to appear in person or by proxy at the Annual Meeting or Special Meeting to bring such business before the meeting, and (v) any other information relating to such person that would be required to be disclosed in a proxy statement or other filing required to be made in connection with the solicitation of proxies by such person with respect to the proposed business to be brought by such person before the Annual Meeting or a Special Meeting pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder.

A stockholder providing notice of business proposed to be brought before an Annual Meeting or Special Meeting shall further update and supplement such notice, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 4 of this Article II shall be true and correct as of the record date for determining the stockholders entitled to receive notice of the Annual Meeting or a Special Meeting and such update and supplement shall be delivered to or be mailed and received by the Secretary at the principal executive offices of the Corporation not later than five (5) business days after the record date for determining the stockholders entitled to receive notice of the Annual Meeting or a Special Meeting.

No business shall be conducted at the Annual Meeting or a Special Meeting except business brought before the Annual Meeting or Special Meeting in accordance with the procedures set forth in this Section 4 of this Article II; provided , however , that, once business has been properly brought before the Annual Meeting or Special Meeting in accordance with such procedures, nothing in this Section 4 of this Article II shall be deemed to preclude discussion by any stockholder of any such business. If the chairman of an Annual Meeting or a Special Meeting determines that business was not properly brought before the Annual Meeting or Special Meeting in accordance with the foregoing procedures, the chairman shall declare to the meeting that the business was not properly brought before the meeting and such business shall not be transacted.

Nothing contained in this Section 4 of this Article II shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act (or any successor provision of law).

Section 5. Nomination of Directors. Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation, except as may be otherwise provided in the Certificate of Incorporation. Nominations of persons for election to the Board of Directors may be made at any Annual Meeting, or at any Special Meeting called for the purpose of electing directors, in either case, (a) by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (b) by any stockholder of the Corporation (i) who is a stockholder of record on the date of the giving of the notice provided for in this Section 5 of this Article II and on the record date for the determination of stockholders entitled to notice of and to vote at such Annual Meeting or Special Meeting and (ii) who complies with the notice procedures set forth in this Section 5 of this Article II.

In addition to any other applicable requirements, for a nomination to be made by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary.

of the immediately preceding Annual Meeting; provided , however , that in the event that the Annual Meeting is called for a date that is not within twenty-five (25) days before or after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the Annual Meeting was mailed or such public disclosure of the date of the Annual Meeting was made, whichever first occurs; and (b) in the case of a Special Meeting called for the purpose of electing directors, not later than the close of business on the tenth (10th) day following the day on which notice of the date of the Special Meeting was mailed or public disclosure of the date of the Special Meeting was made, whichever first occurs. In no event shall the adjournment or postponement of an Annual Meeting or a Special Meeting called for the purpose of electing directors, or the public announcement of such an adjournment or postponement, commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.

To be in proper written form, a stockholder’s notice to the Secretary must set forth the following information: (a) as to each person whom the stockholder proposes to nominate for election as a director (i) the name, age, business address and residence address of such person, (ii) the principal occupation or employment of such person, (iii) (A) the class or series and number of all shares of stock of the Corporation which are owned beneficially or of record by such person and any affiliates or associates of such person, (B) the name of each nominee holder of shares of all stock of the Corporation owned beneficially, but not of record, by such person or any affiliates or associates of such person, and the number of such shares of stock of the Corporation held by each such nominee holder, (C) whether and the extent to which any derivative instrument, swap, option, warrant, short interest, hedge or profit interest or other transaction has been entered into by or on behalf of such person, or any affiliates or associates of such person, with respect to stock of the Corporation and (D) whether and the extent to which any other transaction, agreement, arrangement or understanding (including any short position or any borrowing or lending of shares of stock of the Corporation) has been made by or on behalf of such person, or any affiliates or associates of such person, the effect or intent of any of the foregoing being to mitigate loss to, or to manage risk or benefit of stock price changes for, such person, or any affiliates or associates of such person, or to increase or decrease the voting power or pecuniary or economic interest of such person, or any affiliates or associates of such person, with respect to stock of the Corporation, and (iv) any other information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act, and the rules and regulations promulgated thereunder; and (b) as to the stockholder giving the notice, and the beneficial owner, if any, on whose behalf the nomination is being made, (i) the name and record address of such person as they appear on the Corporation’s books, (ii) (A) the class or series and number of all shares of stock of the Corporation which are owned beneficially or of record by such person and any affiliates or associates of such person, (B) the name and address of each nominee holder of shares of all stock of the Corporation owned

beneficially but not of record by such person or any affiliates or associates of such person, and the number of such shares of stock of the Corporation held by each such nominee holder, (C) whether and the extent to which any derivative instrument, swap, option, warrant, short interest, hedge or profit interest or other transaction has been entered into by or on behalf of such person, or any affiliates or associates of such person, with respect to stock of the Corporation and (D) whether and the extent to which any other transaction, agreement, arrangement or understanding (including any short position or any borrowing or lending of shares of stock of the Corporation) has been made by or on behalf of such person, or any affiliates or associates of such person, the effect or intent of any of the foregoing being to mitigate loss to, or to manage risk or benefit of stock price changes for, such person, or any affiliates or associates of such person, or to increase or decrease the voting power or pecuniary or economic interest of such person, or any affiliates or associates of such person, with respect to stock of the Corporation, (iii) a description of all agreements, arrangements, or understandings (whether written or oral) between or among such person, or any affiliates or associates of such person, and any proposed nominee or any other person or persons (including their names) pursuant to which the nomination(s) are being made by such person, and any material interest of such person, or any affiliates or associates of such person, in such nomination, including any anticipated benefit therefrom to such person, or any affiliates or associates of such person, (iv) a representation that the stockholder giving notice intends to appear in person or by proxy at the Annual Meeting or Special Meeting to nominate the persons named in its notice, and (v) any other information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with the solicitation of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected.

A stockholder providing notice of any nomination proposed to be made at an Annual Meeting or Special Meeting shall further update and supplement such notice, if necessary, so that the information provided or required to be provided in such notice pursuant to this Section 5 of this Article II shall be true and correct as of the record date for determining the stockholders entitled to receive notice of the Annual Meeting or a Special Meeting, and such update and supplement shall be delivered to or be mailed and received by the Secretary at the principal executive offices of the Corporation not later than five (5) business days after the record date for determining the stockholders entitled to receive notice of such Annual Meeting or Special Meeting.

No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 5 of this Article II. If the chairman of an Annual Meeting or a Special Meeting for the election of directors determines that a nomination was not made in accordance with the foregoing procedures, the chairman shall declare to the meeting that the nomination was defective and such defective nomination shall be disregarded.

Notwithstanding any provision of this Section 5 of this Article II to the contrary, a nomination of persons for election to the Board of Directors may be submitted for inclusion in the Corporation’s proxy materials pursuant to the final rules adopted by the Securities and Exchange Commission (the “SEC”) providing for such nominations and inclusion (“final proxy access rules”), and, if such nomination is submitted under the final proxy access rules, such submission (a) in order to be timely, must be delivered to, or be mailed and received by, the Secretary at the principal executive offices of the Corporation no later than 120 calendar days before the date that the Corporation mailed (or otherwise disseminated) its proxy materials for the prior year’s Annual Meeting (or such other date as may be set forth in the final proxy access rules for companies without advance notice bylaws); (b) in all other respects, must be made pursuant to, and in accordance with, the terms of the final proxy access rules, as in effect at the time of the nomination, or any successor rules or regulations of the SEC then in effect; and (c) must provide the Corporation with any other information required by this Section 5 of this Article II for nominations not made under the final proxy access rules except to the extent that requiring such information to be furnished is prohibited by the final proxy access rules. The provisions of this paragraph of this Section 5 of this Article II do not provide stockholders of the Corporation with any rights, nor impose upon the Corporation any obligations, other than the rights and obligations set forth in the final proxy access rules.

Notwithstanding anything to the contrary contained in these By-Laws, nothing contained in this Section 5 of this Article II or in any other provision of these By-Laws shall affect or impair any rights of any persons party to the Director Nomination Agreement to have any person designated by such person to be a nominee for election to the board of directors to have such nominee included in the Corporation’s proxy statement.

Section 6. Notice . Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, if any, date and hour of the meeting, the means of remote communication, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting, and, in the case of a Special Meeting, the purpose or purposes for which the meeting is called. Unless otherwise required by law, written notice of any meeting shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to notice of and to vote at such meeting.

Section 7. Adjournments . Any meeting of the stockholders may be adjourned from time to time to reconvene at the same or some other place, and notice need not be given of any such adjourned meeting if the time and place, if any, thereof and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting in accordance with the requirements of Section 6 of this Article II shall be given to each stockholder of record entitled to notice of and to vote at the meeting.

Section 8. Quorum . Unless otherwise required by applicable law, the Certificate of Incorporation or these By-Laws, the holders of a majority of the Corporation’s capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business. A quorum, once established, shall not be broken by the withdrawal of enough votes to leave less than a quorum. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, in the manner provided in Section 7 of this Article II, until a quorum shall be present or represented.

Section 9. Voting . Unless otherwise required by law, the Certificate of Incorporation, these Bylaws, or any rule of any stock exchange on which the Corporation’s shares are listed and traded, any question brought before any meeting of the stockholders, other than the election of directors, shall be decided by the affirmative vote of the holders of a majority of the total number of votes of the Corporation’s capital stock represented at the meeting and entitled to vote on such question, voting as a single class. Unless otherwise provided in the Certificate of Incorporation, and subject to Section 12(a) of this Article II, each stockholder represented at a meeting of the stockholders shall be entitled to cast one (1) vote for each share of the capital stock entitled to vote thereat held by such stockholder. Such votes may be cast in person or by proxy as provided in Section 10 of this Article II. The Board of Directors, in its discretion, or the officer of the Corporation

presiding at a meeting of the stockholders, in such officer’s discretion, may require that any votes cast at such meeting shall be cast by written ballot.

Section 10. Proxies . Each stockholder entitled to vote at a meeting of the stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder as proxy, but no such proxy shall be voted upon after three years from its date, unless such proxy provides for a longer period. Without limiting the manner in which a stockholder may authorize another person or persons to act for such stockholder as proxy, the following shall constitute a valid means by which a stockholder may grant such authority:

(i) A stockholder may execute a writing authorizing another person or persons to act for such stockholder as proxy. Execution may be accomplished by the stockholder or such stockholder’s authorized officer, director, employee or agent signing such writing or causing such person’s signature to be affixed to such writing by any reasonable means, including, but not limited to, by facsimile signature.

(ii) A stockholder may authorize another person or persons to act for such stockholder as proxy by transmitting or authorizing the transmission of a telegram, cablegram or other electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive such transmission, provided that any such telegram, cablegram or other electronic transmission must either set forth or be submitted with information from which it can be determined that the telegram, cablegram or other electronic transmission was authorized by the stockholder. If it is determined that such telegrams, cablegrams or other electronic transmissions are valid, the inspectors or, if there are no inspectors, such other persons making that determination shall specify the information on which they relied.

Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission authorizing another person or persons to act as proxy for a stockholder may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used; provided, however, that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.

Section 11. List of Stockholders Entitled to Vote . The officer of the Corporation who has charge of the stock ledger of the Corporation (the “Stock Ledger”) shall prepare and make, at least ten (10) days before every meeting of the stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business

hours, for a period of at least ten (10) days prior to the meeting (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the principal place of business of the Corporation. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting.

Section 12. Record Date .

(a) In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of the stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of the stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of the stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

(b) In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date has been fixed by the Board of Directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applicable law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of the stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has

been fixed by the Board of Directors and prior action by the Board of Directors is required by applicable law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.

Section 13. Stock Ledger . The Stock Ledger shall be the only evidence as to who are the stockholders entitled to examine the Stock Ledger, the list required by Section 11 of this Article II or the books of the Corporation, or to vote in person or by proxy at any meeting of the stockholders.

Section 14. Conduct of Meetings . The Board of Directors may adopt by resolution such rules and regulations for the conduct of any meeting of the stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board of Directors, the chairman of any meeting of the stockholders shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the chairman of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) the determination of when the polls shall open and close for any given matter to be voted on at the meeting; (iii) rules and procedures for maintaining order at the meeting and the safety of those present; (iv) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the chairman of the meeting shall determine; (v) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (vi) limitations on the time allotted to questions or comments by participants.

Section 15. Inspectors of Election . In advance of any meeting of the stockholders, the Board of Directors, by resolution, the Chairman or the President shall appoint one or more inspectors to act at the meeting and make a written report thereof. One or more other persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of the stockholders, the chairman of the meeting shall appoint one or more inspectors to act at the meeting. Unless otherwise required by applicable law, inspectors may be officers, employees or agents of the Corporation. Each inspector, before entering upon the discharge of the duties of inspector, shall take and sign an oath to faithfully execute the duties of inspector with strict impartiality and according to the best of such inspector’s ability. The inspector shall have the duties prescribed by law and shall take charge of the polls and, when the vote is completed, shall make a certificate of the result of the vote taken and of such other facts as may be required by applicable law.

Section 16. No Consent of Stockholders in Lieu of Meeting . The right of the stockholders to act by written consent in lieu of a meeting shall be as set forth in Article EIGHTH of the Certificate of Incorporation.

ARTICLE III

DIRECTORS

Section 1. Number, Classification, Election and Term of Office . The number of directors shall be fixed from time to time exclusively by the Board of Directors pursuant to a resolution adopted by the Board of Directors and shall be divided in accordance with Article FIFTH of the Certificate of Incorporation. Except as provided in the Certificate of Incorporation and in Section 2 of this Article III, directors shall be elected by a plurality of the votes cast at each Annual Meeting at which a quorum is present. Directors need not be stockholders.

Section 2. Vacancies . Any vacancy in the Board of Directors, however resulting, may be filled only in the manner provided in, and only to the extent permitted under, the Certificate of Incorporation.

Section 3. Duties and Powers . The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-Laws required to be exercised or done by the stockholders.

Section 4. Meetings . The Board of Directors and any committee thereof may hold meetings, both regular and special, either within or without the State of Delaware. Regular meetings of the Board of Directors or any committee thereof may be held without notice (provided that a schedule of meetings referencing the time and place of such meeting shall have been delivered to the Board of Directors not less than three (3) business days prior to such regular meeting) at such time and at such place as may from time to time be determined by the Board of Directors or such committee, respectively. Special meetings of the Board of Directors may be called only in the manner provided in, and only to the extent permitted under, the Certificate of Incorporation. Special meetings of any committee of the Board of Directors may be called by the chairman of such committee, if there be one, by the President, or by any director serving on such committee. Notice thereof stating the place, date and hour of the meeting shall be given to each director (or, in the case of a committee, to each member of such committee) either by mail not less than forty-eight (48) hours before the date of the meeting, by telephone, electronic transmission or telegram on twenty-four (24) hours’ notice, or on such shorter notice as the person or persons calling such meeting may deem necessary or appropriate in the circumstances.

Section 5. Organization . At each meeting of the Board of Directors or any committee thereof, the Chairman or the chairman of such committee, as the case may be, or, in his or her absence or if is no such chairman, a director chosen by a majority of the directors present, shall act as chairman. Except as provided below, the Secretary shall act as secretary at each meeting of the Board of Directors and of each committee thereof. In case the Secretary shall be absent from any meeting of the Board of Directors or any committee thereof, an Assistant Secretary shall perform the duties of secretary at such meeting; and in the absence from any such meeting of the Secretary and all the Assistant Secretaries, the chairman of the meeting may appoint any person to act as secretary of the meeting. Notwithstanding the foregoing, the members of each committee of the Board of Directors may appoint any person to act as secretary of any meeting of such committee and the Secretary or any Assistant Secretary of the Corporation may, but need not if such committee so elects, serve in such capacity.

Section 6. Resignations and Removals of Directors . Any director of the Corporation may resign from the Board of Directors or any committee thereof at any time, by giving notice in writing or by electronic transmission to the Chairman, if there be one, the President or the Secretary and, in the case of a committee, to the chairman of such committee, if there be one. Such resignation shall take effect at the time therein specified or, if no time is specified, immediately; and, unless otherwise specified in such notice, the acceptance of such resignation shall not be necessary to make it effective. Any director may be removed only in the manner provided in, and only to the extent permitted under, the Certificate of Incorporation. Any director serving on a committee of the Board of Directors may be removed from such committee at any time by the Board of Directors.

Section 7. Quorum . Except as otherwise required by law, the Certificate of Incorporation or the rules and regulations of any securities exchange or quotation system on which the Corporation’s securities are listed or quoted for trading, at all meetings of the Board of Directors or any committee thereof, a majority of the entire Board of Directors or a majority of the directors constituting such committee, as the case may be, shall constitute a quorum for the transaction of business and the act of a majority of the directors or committee members present at any meeting at which there is a quorum shall be the act of the Board of Directors or such committee, as applicable. If a quorum shall not be present at any meeting of the Board of Directors or any committee thereof, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting of the time and place of the adjourned meeting, until a quorum shall be present.

Section 8. Actions of the Board of Directors by Written Consent . Unless otherwise provided in the Certificate of Incorporation or these By-Laws, any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be taken without a meeting, if all the members of the Board of Directors or such committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic

transmission or transmissions are filed with the minutes of proceedings of the Board of Directors or such committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

Section 9. Meetings by Means of Conference Telephone . Unless otherwise provided in the Certificate of Incorporation or these By-Laws, members of the Board of Directors, or any committee thereof, may participate in a meeting of the Board of Directors or such committee by means of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section 9 of this Article III shall constitute presence in person at such meeting.

Section 10. Committees . The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. Each member of a committee must meet the requirements for membership, if any, imposed by applicable law and the rules and regulations of any securities exchange or quotation system on which the securities of the Corporation are listed or quoted for trading. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of any such committee. Subject to the rules and regulations of any securities exchange or quotation system on which the securities of the Corporation are listed or quoted for trading, in the absence or disqualification of a member of a committee, and in the absence of a designation by the Board of Directors of an alternate member to replace the absent or disqualified member, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another qualified member of the Board of Directors to act at the meeting in the place of any absent or disqualified member. Any committee, to the extent permitted by law and provided in the resolution establishing such committee, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it. Each committee shall keep regular minutes and report to the Board of Directors when required.

Section 11. Compensation . The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary for service as director, payable in cash or securities. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for service as committee members.

Section 12. Interested Directors . No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association or other organization in which one or more of its directors or officers are

directors or officers or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because any such director’s or officer’s vote is counted for such purpose if: (i) the material facts as to the director’s or officer’s relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board of Directors or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; (ii) the material facts as to the director’s or officer’s relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (iii) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified by the Board of Directors, a committee thereof or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.

ARTICLE IV

OFFICERS

Section 1. General . The officers of the Corporation shall be chosen by the Board of Directors and shall include a President and a Secretary. The Board of Directors, in its discretion, also may choose a Chairman (who must be a director) and one or more Vice Presidents, Assistant Secretaries, Treasurers, Assistant Treasurers and other officers. Any number of offices may be held by the same person, unless otherwise prohibited by law, the Certificate of Incorporation or these By-Laws. The officers of the Corporation need not be stockholders of the Corporation nor, except in the case of the Chairman, need such officers be directors of the Corporation.

Section 2. Election . The Board of Directors, at its first meeting held after each Annual Meeting (or action by written consent of stockholders in lieu of the Annual Meeting if permitted by the Certificate of Incorporation and these By-Laws), shall elect the officers of the Corporation who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors; and each officer of the Corporation shall hold office until such officer’s successor is elected and qualified, or until such officer’s earlier death, resignation or removal. Any officer of the Corporation may be removed at any time by the Board of Directors. Any vacancy occurring in any office of the Corporation shall be filled by the Board of Directors. The salaries of all officers of the Corporation shall be fixed by the Board of Directors.

Section 3. Voting Securities Owned by the Corporation . Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by the President or any Vice President or any other officer authorized to do so by the Board of Directors and any such officer may, in the name of and on behalf of the Corporation, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities and at any such meeting shall possess and may exercise any and all rights and power incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present. The Board of Directors may, by resolution, from time to time confer like powers upon any other person or persons.

Section 4. Chairman of the Board of Directors . The Chairman, if there be one, shall preside at all meetings of the stockholders and of the Board of Directors. The Chairman shall be the President of the Corporation, unless the Board of Directors designates another director to serve as Chairman, and, except where by law the signature of the President is required, the Chairman shall possess the same power as the President to sign all contracts, certificates and other instruments of the Corporation which may be authorized by the Board of Directors. During the absence or disability of the President, the Chairman shall exercise all the powers and discharge all the duties of the President. The Chairman shall also perform such other duties and may exercise such other powers as may from time to time be assigned by these By-Laws or by the Board of Directors.

Section 5. President . The President shall, subject to the control of the Board of Directors and, if there be one, the Chairman, have general supervision of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. The President shall execute all bonds, mortgages, contracts and other instruments of the Corporation requiring a seal, under the seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except that the other officers of the Corporation may sign and execute documents when so authorized by these By-Laws, the Board of Directors or the President. In the absence or disability of the Chairman, or if there be none, the President shall preside at all meetings of the stockholders and, provided the President is also a director, the Board of Directors. If there be no Chairman, or if the Board of Directors shall otherwise designate, the President shall be the Chief Executive Officer. The President shall also perform such other duties and may exercise such other powers as may from time to time be assigned to such officer by these By-Laws or by the Board of Directors.

Section 6. Vice Presidents . At the request of the President or in the President’s absence or in the event of the President’s inability or refusal to act (and if there be no Chairman), the Vice President, or the Vice Presidents if there are more than one (in the order designated by the Board of Directors), shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Each Vice President shall perform such

other duties and have such other powers as the Board of Directors from time to time may prescribe. If there be no Chairman and no Vice President, the Board of Directors shall designate the officer of the Corporation who, in the absence of the President or in the event of the inability or refusal of the President to act, shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President.

Section 7. Secretary . The Secretary shall attend all meetings of the Board of Directors and all meetings of the stockholders and record all the proceedings thereat in a book or books to be kept for that purpose; the Secretary shall also perform like duties for committees of the Board of Directors when required. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors, the Chairman or the President, under whose supervision the Secretary shall be. If the Secretary shall be unable or shall refuse to cause to be given notice of all meetings of the stockholders and special meetings of the Board of Directors, and if there be no Assistant Secretary, then either the Board of Directors or the President may choose another officer to cause such notice to be given. The Secretary shall have custody of the seal of the Corporation and the Secretary or any Assistant Secretary, if there be one, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by the signature of the Secretary or by the signature of any such Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest to the affixing by such officer’s signature. The Secretary shall see that all books, reports, statements, certificates and other documents and records required by law to be kept or filed are properly kept or filed, as the case may be.

Section 8. Treasurer . The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all transactions as Treasurer and of the financial condition of the Corporation. If required by the Board of Directors, the Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of the office of the Treasurer and for the restoration to the Corporation, in case of the Treasurer’s death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in the Treasurer’s possession or under the Treasurer’s control belonging to the Corporation.

Section 9. Assistant Secretaries . Assistant Secretaries, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the President, any Vice President, if there be one, or the Secretary, and in the absence of the Secretary or in the event of the Secretary’s inability or refusal to act, shall perform the duties of the Secretary, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Secretary.

Section 10. Assistant Treasurers . Assistant Treasurers, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the President, any Vice President, if there be one, or the Treasurer, and in the absence of the Treasurer or in the event of the Treasurer’s inability or refusal to act, shall perform the duties of the Treasurer, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Treasurer. If required by the Board of Directors, an Assistant Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of the office of Assistant Treasurer and for the restoration to the Corporation, in case of the Assistant Treasurer’s death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in the Assistant Treasurer’s possession or under the Assistant Treasurer’s control belonging to the Corporation.

Section 11. Other Officers . Such other officers as the Board of Directors may choose shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors. The Board of Directors may delegate to any other officer of the Corporation the power to choose such other officers and to prescribe their respective duties and powers.

ARTICLE V

STOCK

Section 1. Form Shares of Stock . The shares of capital stock of the Corporation shall be represented by a certificate, unless and until the Board of Directors adopts a resolution permitting shares to be uncertificated. Notwithstanding the adoption of any such resolution providing for uncertificated shares, every holder of capital stock of the Corporation theretofore represented by certificates and, upon request, every holder of uncertificated shares, shall be entitled to have a certificate for shares of capital stock of the Corporation signed by, or in the name of the Corporation by, the Chairman, or the President or any Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary representing the number of shares registered in certificate form.

Section 2. Signatures . To the extent any shares are represented by certificates, any or all of the signatures on a certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.

Section 3. Lost Certificates . The Board of Directors may direct a new certificate or uncertificated shares be issued in place of any certificate theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issuance of a new certificate or uncertificated shares, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate, or such owner’s legal representative, to advertise the same in such manner as the Board of Directors shall require and/or to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate or the issuance of such new certificate or uncertificated shares.

Section 4. Transfers . Stock of the Corporation shall be transferable in the manner prescribed by applicable law and in these By-Laws. Transfers of stock shall be made on the books of the Corporation, and (a) in the case of certificated shares of stock, only by the person named in the certificate or by such person’s attorney lawfully constituted in writing and upon the surrender of the certificate therefor, properly endorsed for transfer and payment of all necessary transfer taxes, or, (b) in the case of uncertificated shares of stock, upon receipt of proper transfer instructions from the registered holder of the shares or by such person’s attorney lawfully constituted in writing, and upon payment of all necessary transfer taxes and compliance with appropriate procedures for transferring shares in uncertificated form; provided , however , that such surrender and endorsement (to the extent any shares are represented by certificates), compliance or payment of taxes shall not be required in any case in which the officers of the Corporation shall determine to waive such requirement. With respect to certificated shares of stock, every certificate exchanged, returned or surrendered to the Corporation shall be marked “Cancelled,” with the date of cancellation, by the Secretary or Assistant Secretary of the Corporation or the transfer agent thereof. No transfer of stock shall be valid as against the Corporation for any purpose until it shall have been entered in the stock records of the Corporation by an entry showing from and to whom transferred.

Section 5. Dividend Record Date . In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a

record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

Section 6. Record Owners . The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise required by law.

Section 7. Transfer and Registry Agents . The Corporation may from time to time maintain one or more transfer offices or agencies and registry offices or agencies at such place or places as may be determined from time to time by the Board of Directors.

ARTICLE VI

NOTICES

Section 1. Notices . Whenever written notice is required by law, the Certificate of Incorporation or these By-Laws, to be given to any director, member of a committee or stockholder, such notice may be given by mail, addressed to such director, member of a committee or stockholder, at such person’s address as it appears on the records of the Corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Without limiting the manner by which notice otherwise may be given effectively to stockholders, any notice to stockholders given by the Corporation under applicable law, the Certificate of Incorporation or these By-Laws shall be effective if given by a form of electronic transmission if consented to by the stockholder to whom the notice is given. Any such consent shall be revocable by the stockholder by written notice to the Corporation. Any such consent shall be deemed to be revoked if (i) the Corporation is unable to deliver by electronic transmission two (2) consecutive notices by the Corporation in accordance with such consent and (ii) such inability becomes known to the Secretary or Assistant Secretary or to the transfer agent, or other person responsible for the giving of notice; provided, however, that the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action. Notice given by electronic transmission, as described above, shall be deemed given: (i) if by facsimile telecommunication, when directed to a number at which the stockholder has consented to receive notice; (ii) if by electronic mail, when directed to an electronic mail address at which the person has consented to

receive notice; (iii) in the case of notices to stockholders, if by a posting on an electronic network, together with separate notice to the stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and (iv) if by any other form of electronic transmission consented to by such person in advance, when directed to such person. Notice to directors or committee members may be given personally or by telegram, telex, cable or by means of electronic transmission.

Section 2. Waivers of Notice . Whenever any notice is required by applicable law, the Certificate of Incorporation or these By-Laws, to be given to any director, member of a committee or stockholder, a waiver thereof in writing, signed by the person or persons entitled to notice, or a waiver by electronic transmission by the person or persons entitled to notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Attendance of a person at a meeting, present in person or represented by proxy, shall constitute a waiver of notice of such meeting, except where the person attends the meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any Annual Meeting or Special Meeting or any regular or special meeting of the directors or members of a committee of directors need be specified in any written waiver of notice unless so required by law, the Certificate of Incorporation or these By-Laws.

ARTICLE VII

GENERAL PROVISIONS

Section 1. Dividends . Dividends upon the capital stock of the Corporation, subject to the requirements of the DGCL and the provisions of the Certificate of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting of the Board of Directors (or any action by written consent in lieu thereof in accordance with Section 10 of Article III hereof), and may be paid in cash, in property, or in shares of the Corporation’s capital stock. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in its absolute discretion, deems proper as a reserve or reserves to meet contingencies, or for purchasing any of the shares of capital stock, warrants, rights, options, bonds, debentures, notes, scrip or other securities or evidences of indebtedness of the Corporation, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for any proper purpose, and the Board of Directors may modify or abolish any such reserve.

Section 2. Disbursements . All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.

Section 3. Fiscal Year . The fiscal year of the Corporation shall be January 1 to December 31 or as otherwise fixed by resolution of the Board of Directors.

Section 4. Corporate Seal . The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words “Corporate Seal, Delaware”. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

ARTICLE VIII

INDEMNIFICATION

Section 1. Power to Indemnify in Actions, Suits or Proceedings Other than Those by or in the Right of the Corporation . Subject to Section 3 of this Article VIII, the Corporation shall indemnify, to the fullest extent permitted by applicable law, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that such person is or was a director or officer of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such person’s conduct was unlawful.

Section 2. Power to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation . Subject to Section 3 of this Article VIII, the Corporation shall indemnify, to the

fullest extent permitted by applicable law, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is or was a director or officer of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

Section 3. Authorization of Indemnification . Any indemnification under this Article VIII (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the present or former director or officer is proper in the circumstances because such person has met the applicable standard of conduct set forth in Section 1 or Section 2 of this Article VIII, as the case may be. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination, (i) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, (ii) by a committee of such directors designated by a majority vote of such directors, even though less than a quorum, (iii) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion or (iv) by the stockholders. Such determination shall be made, with respect to former directors and officers, by any person or persons having the authority to act on the matter on behalf of the Corporation. To the extent, however, that a present or former director or officer of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding described above, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith, without the necessity of authorization in the specific case.

Section 4. Good Faith Defined . For purposes of any determination under Section 3 of this Article VIII, a person shall be deemed to have acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe such person’s

conduct was unlawful, if such person’s action is based on the records or books of account of the Corporation or another enterprise, or on information supplied to such person by the officers of the Corporation or another enterprise in the course of their duties, or on the advice of legal counsel for the Corporation or another enterprise or on information or records given or reports made to the Corporation or another enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Corporation or another enterprise. The provisions of this Section 4 shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standard of conduct set forth in Section 1 or Section 2 of this Article VIII, as the case may be.

Section 5. Indemnification by a Court . Notwithstanding any contrary determination in the specific case under Section 3 of this Article VIII, and notwithstanding the absence of any determination thereunder, any director or officer may apply to the Court of Chancery of the State of Delaware or any other court of competent jurisdiction in the State of Delaware for indemnification to the extent otherwise permissible under Section 1 or Section 2 of this Article VIII. The basis of such indemnification by a court shall be a determination by such court that indemnification of the director or officer is proper in the circumstances because such person has met the applicable standard of conduct set forth in Section 1 or Section 2 of this Article VIII, as the case may be. Neither a contrary determination in the specific case under Section 3 of this Article VIII nor the absence of any determination thereunder shall be a defense to such application or create a presumption that the director or officer seeking indemnification has not met any applicable standard of conduct. Notice of any application for indemnification pursuant to this Section 5 shall be given to the Corporation promptly upon the filing of such application. If successful, in whole or in part, the director or officer seeking indemnification shall also be entitled to be paid the expense of prosecuting such application.

Section 6. Expenses Payable in Advance . Expenses (including attorneys’ fees) incurred by a director or officer in defending any civil, criminal, administrative or investigative action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized in this Article VIII. Such expenses (including attorneys’ fees) incurred by former directors and officers or other employees and agents may be so paid upon such terms and conditions, if any, as the Corporation deems appropriate.

Section 7. Nonexclusivity of Indemnification and Advancement of Expenses . The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VIII shall not be deemed exclusive of any other rights to which those seeking indemnification or

advancement of expenses may be entitled under the Certificate of Incorporation, these By-Laws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding such office, it being the policy of the Corporation that indemnification of the persons specified in Section 1 and Section 2 of this Article VIII shall be made to the fullest extent permitted by law. The provisions of this Article VIII shall not be deemed to preclude the indemnification of any person who is not specified in Section 1 or Section 2 of this Article VIII but whom the Corporation has the power or obligation to indemnify under the provisions of the DGCL, or otherwise.

Section 8. Insurance . The Corporation may purchase and maintain insurance on behalf of any person who is or was a director or officer of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the Corporation would have the power or the obligation to indemnify such person against such liability under the provisions of this Article VIII.

Section 9. Certain Definitions . For purposes of this Article VIII, references to “the Corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors or officers, so that any person who is or was a director or officer of such constituent corporation, or is or was a director or officer of such constituent corporation serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article VIII with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. The term “another enterprise” as used in this Article VIII shall mean any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise of which such person is or was serving at the request of the Corporation as a director, officer, employee or agent. For purposes of this Article VIII, references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the Corporation” shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director or officer with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Article VIII.

Section 10. Survival of Indemnification and Advancement of Expenses . The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VIII shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person.

Section 11. Limitation on Indemnification . Notwithstanding anything contained in this Article VIII to the contrary, except for proceedings to enforce rights to indemnification (which shall be governed by Section 5 of this Article VIII), the Corporation shall not be obligated to indemnify any director or officer (or his or her heirs, executors or personal or legal representatives) or advance expenses in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the Board of Directors.

Section 12. Indemnification of Employees and Agents . The Corporation may, to the extent authorized from time to time by the Board of Directors, provide rights to indemnification and to the advancement of expenses to employees and agents of the Corporation similar to those conferred in this Article VIII to directors and officers of the Corporation.

Section 13. Indemnification Priority . As between the Corporation and any other person (other than an entity directly or indirectly controlled by the Corporation) who provides indemnification to any person entitled to indemnification hereunder (each an "Indemnitee") for their service to, or on behalf of, the Corporation (collectively, the “Secondary Indemnitors”) (i) the Corporation shall be the full indemnitor of first resort in respect of indemnification or advancement of expenses in connection with any Jointly Indemnifiable Claims (as defined below), pursuant to and in accordance with the terms of this Article VIII, irrespective of any right of indemnification, advancement of expenses or other right of recovery any Indemnitee may have from any Secondary Indemnitor or any right to insurance coverage that Indemnitee may have under any insurance policy issued to any Secondary Indemnitor (i.e., the Corporation’s obligations to such Indemnitees are primary and any obligation of any Secondary Indemnitor, or any insurer of any Secondary Indemnitor, to advance expenses or to provide indemnification or insurance coverage for the same loss or liability incurred by such Indemnitees is secondary to the Corporation’s obligations), (ii) the Corporation shall be required to advance the full amount of expenses incurred by any such Indemnitee and shall be liable for the full amount of all liability and loss suffered by such Indemnitee (including, but not limited to, expenses (including, but not limited to, attorneys’ fees and expenses), judgments, fines and amounts paid in settlement actually and reasonably incurred by such Indemnitee in connection with such Proceeding), without regard to any rights any such Indemnitee may have against any Secondary Indemnitor or against any insurance carrier providing insurance coverage to Indemnitee under any insurance policy issued to a Secondary Indemnitor, and (iii) the

Corporation irrevocably waives, relinquishes and releases each Secondary Indemnitor from any and all claims against such Secondary Indemnitor for contribution, subrogation or any other recovery of any kind in respect thereof. The Corporation shall indemnify each Secondary Indemnitor directly for any amounts that such Secondary Indemnitor pays as indemnification or advancement on behalf of any such Indemnitee and for which such Indemnitee may be entitled to indemnification from the Corporation in connection with Jointly Indemnifiable Claims. No right of indemnification, advancement of expenses or other right of recovery that an Indemnitee may have from any Secondary Indemnitor shall reduce or otherwise alter the rights of the Indemnitee or the obligations of the Corporation hereunder. No advancement or payment by any Secondary Indemnitor on behalf of any such Indemnitee with respect to any claim for which such Indemnitee has sought indemnification from the Corporation shall affect the foregoing and the Secondary Indemnitors shall be subrogated to the extent of such advancement or payment to all of the rights of recovery of such Indemnitee against the Corporation. Each Indemnitee shall execute all papers reasonably required and shall do all things that may be reasonably necessary to secure the rights of such Indemnitee’s Secondary Indemnitors under this Section 13 of this Article VIII, including the execution of such documents as may be necessary to enable the Secondary Indemnitors effectively to bring suit to enforce such rights, including in the right of the Corporation. Each of the Secondary Indemnitors shall be third-party beneficiaries with respect to this Section 13 of this Article VIII, entitled to enforce this Section 13 of this Article VIII. As used in this Section 13 of this Article VIII, the term “Jointly Indemnifiable Claims” shall be broadly construed and shall include, without limitation, any action, suit, proceeding or other matter for which an Indemnitee shall be entitled to indemnification, reimbursement, advancement of expenses or insurance coverage from both a Secondary Indemnitor (or an insurance carrier providing insurance coverage to any Secondary Indemnitor) and the Corporation, whether pursuant to Delaware law (or other applicable law in the case of any Secondary Indemnitor), any agreement or certificate of incorporation, bylaws, partnership agreement, operating agreement, certificate of formation, certificate of limited partnership or other organizational or governing documents of the Corporation or the Secondary Indemnitors or any insurance policy providing insurance coverage to any Secondary Indemnitor, as applicable.

ARTICLE IX

AMENDMENTS

Section 1. Amendments . Amendments. These By-Laws may be altered, amended or repealed, in whole or in part, or new By-Laws may be adopted by the stockholders or by the Board of Directors; provided, however, that notice of such alteration, amendment, repeal or adoption of new By-Laws be contained in the notice of such meeting of the stockholders or Board of Directors, as the case may be. Except where otherwise required by these By-Laws or the Certificate of

Incorporation, the affirmative vote of at least a majority of the Board of Directors shall be required to adopt, amend, alter or repeal these By-Laws. These By-Laws also may be adopted, amended, altered or repealed by the affirmative vote of the holders of at least a majority of the issued and outstanding capital stock of the Corporation entitled to vote thereon.

Section 2. Entire Board of Directors . As used in this Article IX and in these By-Laws generally, the term “entire Board of Directors” means the total number of directors which the Corporation would have if there were no vacancies.

* * *

Adopted as of July 28, 2016.

Exhibit 4.1

Exhibit 10.1

EXECUTION VERSION

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

dated as of June 28, 2016

by and between

KINSALE CAPITAL GROUP, INC.

as Borrower,

KINSALE MANAGEMENT, INC. and ASPERA INSURANCE SERVICES, INC.,

as Loan Guarantors,

and

THE PRIVATEBANK AND TRUST COMPANY

as Lender

TABLE OF CONTENTS




ARTICLE 1		DEFINITIONS
	1.1	Definitions	1
	1.2	Other Interpretive Provisions	14
ARTICLE 2		COMMITMENTS OF LENDER; EVIDENCING OF LOANS	14
	2.1	Commitments	14
	2.2	Notes	14
	2.3	Recordkeeping	15
ARTICLE 3		INTEREST	15
	3.1	Interest Rates	15
	3.2	Interest Payment Dates	15
	3.3	Setting and Notice of LIBOR Rates	15
	3.4	Computation of Interest	15
ARTICLE 4		PREPAYMENTS	15
	4.1	Prepayments	15
	4.2	Manner of Prepayments	16
	4.3	Repayments	16
ARTICLE 5		MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES	17
	5.1	Making of Payments	17
	5.2	Application of Certain Payments	17
	5.3	Due Date	17
	5.4	Setoff	17
	5.5	Taxes	17
ARTICLE 6		INCREASED COSTS; SPECIAL PROVISIONS FOR TERM LOAN	19
	6.1	Increased Costs	19
	6.2	Basis for Determining Interest Rate Inadequate or Unfair	20
	6.3	Changes in Law Rendering the Term Loan Unlawful	20
	6.4	Funding Losses	21
	6.5	Right of Lender to Fund through Other Offices	21
	6.6	Discretion of Lender as to Manner of Funding	21
	6.7	Mitigation of Circumstances	21
	6.8	Conclusiveness of Statements; Survival of Provisions	21
ARTICLE 7		COLLATERAL AND COLLATERAL ADMINISTRATION	22
	7.1	Grant	22
	7.2	Certain Matters Relating to Receivables	22
	7.3	Communications with Obligors; Loan Parties Remain Liable	23
	7.4	Investment Property	23
	7.5	Proceeds to be Turned Over to Lender	24
	7.6	Application of Proceeds	24
	7.7	Code and Other Remedies	25
	7.8	Pledged Equity	26



	7.9	Waiver; Deficiency	27
	7.10	Lender’s Appointment as Attorney-in-Fact, etc	27
	7.11	Duty of Lender	28
	7.12	Acknowledgements	29
	7.13	Additional Parties	29
	7.14	Releases	29
	7.15	Obligations and Liens Absolute and Unconditional	29
	7.16	Reinstatement	30
ARTICLE 8		REPRESENTATIONS AND WARRANTIES	30
	8.1	Organization	30
	8.2	Authorization; No Conflict	30
	8.3	Validity and Binding Nature	31
	8.4	Financial Condition	31
	8.5	No Material Adverse Change	31
	8.6	Litigation and Contingent Liabilities	31
	8.7	Ownership of Properties; Liens	31
	8.8	Equity Ownership; Subsidiaries	31
	8.9	Pension Plans	31
	8.10	Investment Company Act	32
	8.11	Compliance with Laws	32
	8.12	Regulation U	32
	8.13	Licensed Insurance Company	32
	8.14	Taxes	32
	8.15	Solvency, etc	33
	8.16	Insurance	33
	8.17	Information	33
	8.18	Labor Matters	33
	8.19	Anti-Terrorism Laws	34
	8.20	No Default	34
	8.21	Subordinated Debt	34
	8.22	Perfected First Priority Liens	34
	8.23	Loan Party Information	34
	8.24	Certain Property	35
	8.25	Investment Property	35
	8.26	Intellectual Property	35
	8.27	Right to Use Intellectual Property	35
ARTICLE 9		AFFIRMATIVE COVENANTS	35
	9.1	Reports, Certificates and Other Information	35
	9.2	Books, Records and Inspections	38
	9.3	Maintenance of Property; Insurance	38
	9.4	Compliance with Laws; Payment of Taxes and Liabilities	39
	9.5	Licensed Insurance Provider	39
	9.6	Maintenance of Existence, etc	39



	9.7	Employee Benefit Plans	39
	9.8	Further Assurances	40
	9.9	Deposit Accounts	41
	9.10	Delivery of Instruments, Certificated Securities and Chattel Paper	41
	9.11	Maintenance of Perfected Security Interest; Further Documentation	41
	9.12	Investment Property	42
	9.13	Intellectual Property	43
	9.14	Other Matters	44
	9.15	A.M. Best Co. Rating	45
ARTICLE 10		NEGATIVE COVENANTS	45
	10.1	Debt	45
	10.2	Liens	46
	10.3	Operating Leases	48
	10.4	Restricted Payments	48
	10.5	Mergers, Consolidations, Sales	48
	10.6	Modification of Organizational Documents	49
	10.7	Transactions with Affiliates	49
	10.8	Inconsistent Agreements	49
	10.9	Business Activities; Issuance of Equity	49
	10.10	Investments	50
	10.11	Restriction of Amendments to Certain Documents	51
	10.12	Fiscal Year	51
	10.13	Financial Covenants	51
ARTICLE 11		EFFECTIVENESS; CONDITIONS OF CLOSING, ETC	51
	11.1	Agreement and Note	51
	11.2	Authorization Documents	51
	11.3	Consents and Approvals	52
	11.4	Delivery of Pledged Collateral	52
	11.5	Subordination Agreements	52
	11.6	Insurance	52
	11.7	Payment of Fees	52
	11.8	Financial Statements	52
	11.9	Reserves	52
	11.10	Search Results	52
	11.11	Filings, Registrations and Recordings	52
	11.12	Representations and Warranties	53
	11.13	Other	53
ARTICLE 12		EVENTS OF DEFAULT AND THEIR EFFECT	53
	12.1	Events of Default	53
	12.2	Effect of Event of Default. If:	55
ARTICLE 13		GENERAL	55
	13.1	Marshalling; Waiver; Amendments	55
	13.2	Confirmations	55

iii



	13.3	Notices	55
	13.4	Computations	56
	13.5	Costs, Expenses and Taxes	56
	13.6	GOVERNING LAW	57
	13.7	Confidentiality	57
	13.8	Severability	57
	13.9	Nature of Remedies	57
	13.10	Entire Agreement	57
	13.11	Counterparts	58
	13.12	Successors and Assigns	58
	13.13	Assignments; Participations	58
	13.14	Captions	59
	13.15	Customer Identification - USA Patriot Act Notice	59
	13.16	INDEMNIFICATION BY LOAN PARTIES	59
	13.17	Nonliability of Lender	60
	13.18	FORUM SELECTION AND CONSENT TO JURISDICTION	61
	13.19	WAIVER OF JURY TRIAL	61
ARTICLE 14		LOAN GUARANTY	61
	14.1	Guaranty	61
	14.2	Right of Contribution	62
	14.3	No Subrogation	62
	14.4	Amendments, etc. with respect to the Secured Obligations	63
	14.5	Discharge	63
	14.6	Notice	63
	14.7	Waivers	64
	14.8	Payments	66
	14.9	Representations and Warranties	66
ANNEXES

ANNEX A		Addresses for Notices

SCHEDULES
SCHEDULE 8.8		Equity Ownership; Subsidiaries
SCHEDULE 10.2		Existing Liens
SCHEDULE 10.10		Investments


EXHIBITS

EXHIBIT A		Form of Compliance Certificate

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT, dated as of June 28, 2016 (as amended, restated, supplemented or modified from time to time, this “ Agreement ”), is entered into by KINSALE CAPITAL GROUP, INC., a Delaware corporation formerly incorporated in the Islands of Bermuda under the name Kinsale Capital Group, Ltd, as successor by merger with Kinsale Capital Group, Inc., a Delaware corporation (the “ Borrower ”), KINSALE MANAGEMENT, INC., a Delaware corporation (“ Kinsale Management ”), ASPERA INSURANCE SERVICES, INC., a Virginia corporation (“ Aspera ”), the other Loan Parties from time to time party hereto, and THE PRIVATEBANK AND TRUST COMPANY (the “ Lender ”) .

R E C I T A L S :

A. Borrower, Kinsale Management, Aspera and Lender are parties to that certain Loan and Security Agreement dated as of June 21, 2013, as amended pursuant to: (i) that certain First Amendment to Loan and Security Agreement dated as of March 10, 2014; (ii) that certain Consent and Second Amendment to Loan and Security Agreement dated as of September 2, 2014; (iii) that certain Third Amendment to Loan and Security Agreement dated as of September 29, 2014; and (iv) that certain Fourth Amendment to Loan and Security Agreement dated as of December 4, 2015 (collectively, the “ Original Loan Agreement ”), which governs the terms of the “Term Loan” (as such term is used and defined in the Original Loan Agreement).

B. Borrower has requested that Lender, and Lender has agreed to, amend and restate the Original Loan Agreement pursuant to this Agreement.

NOW THEREFORE, in consideration of the mutual agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrowers and Lender hereby agree as follows:

ARTICLE 1 DEFINITIONS.

1.1 Definitions . When used herein (a) the following terms are used herein as defined in the UCC: Accounts, Certificated Security, Commercial Tort Claims, Deposit Accounts, Documents, Electronic Chattel Paper, Equipment, Farm Products, Fixtures, Goods, Health Care Insurance Receivables, Instruments (as defined in Article 9 of the UCC), Inventory, Leases, Letter-of-Credit Rights, Money, Payment Intangibles, Securities, Software, Supporting Obligations, Tangible Chattel Paper and (b) the following terms shall have the following meanings: Account Debtor means any Person who is obligated with respect to any Account or other Receivable.

Agreement is defined in the preamble of this Agreement.

Ancillary Schedules means, individually and collectively as the case may be, the following ancillary schedules to be delivered to Lender in connection herewith and as a condition hereof:

(a) one or more schedules identifying all Investment Property owned by each Loan Party (such schedules, individually and collectively, the “ Investment Schedules ”);

(b) one or more schedules summarizing all property, casualty, worker’s compensation, errors and omissions, and/or fidelity bonds/crime insurance program of each Loan Party (such schedules, individually and collectively, the “ Insurance Schedules ”); and

(c) one or more schedules identifying, with respect to each Loan Party: (i) its respective jurisdiction of organization, (ii) the location of its chief executive office, (iii) its exact legal name as it appears on its organizational documents, and (iv) its issued organizational identification number, if any (such schedules, individually and collectively, the “ Loan Party Schedules ”).

Asset Disposition means the sale, lease, assignment or other transfer for value (each, a “ Disposition ”) by any Loan Party to any Person (other than a Loan Party) of any asset of such Loan Party (including, the loss, destruction or damage of any thereof or any actual or threatened (in writing to any Loan Party) condemnation, confiscation, requisition, seizure or taking thereof) other than (a) the Disposition of any asset which is to be replaced, and is in fact replaced, within 30 days with another asset performing the same or a similar function, (b) the sale or lease of inventory in the ordinary course of business; (c) an issuance of Capital Stock by a Subsidiary of Borrower to Borrower or another Subsidiary (so long as such issuance would be permitted under Section 10.10) or the issuance of directors' qualifying shares or of other nominal amounts of other Capital Stock that are required to be held by specified Persons under applicable law, (d) the sale or other disposition of cash or Cash Equivalent Investments and (e) leases of subleases entered into in the ordinary course of business to the extent that they do not materially interfere with the business of Borrower and its Subsidiaries.

Assignee is defined in Section 13.13.1(a) .

Attorney Costs means, individually and collectively, all costs, expenses, charges, fees, and the like incurred by (or on behalf) of Lender in connection with the making, administration, negotiation, documentation, enforcement or any other aspect of the Term Loan, including, without limitation, Lender’s reasonable attorneys’ fees and court costs, whether or not there is a lawsuit, incurred by (or on behalf) of Lender in connection with the enforcement of this Agreement and/or any of the other Loan Documents.

Bank Product Agreements means those certain cash management service agreements entered into from time to time between any Loan Party and Lender or its Affiliates in connection with any of the Bank Products.

Bank Product Obligations means all obligations, liabilities, contingent reimbursement obligations, fees, and expenses owing by the Loan Parties to Lender or its Affiliates pursuant to or evidenced by the Bank Product Agreements and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including all such amounts that a Loan Party is obligated to reimburse to Lender as a result of Lender purchasing participations or executing indemnities or reimbursement obligations with respect to the Bank Products provided to the Loan Parties pursuant to the Bank Product Agreements.

Bank Products means any service or facility extended to any Loan Party by Lender or its Affiliates, including, without limitation, (a) deposit accounts, (b) cash management services, including, without limitation, controlled disbursement, lockbox, electronic funds transfers (including, without limitation, book transfers, fedwire transfers, ACH transfers), online reporting and other services relating to accounts maintained with Lender or its Affiliates, and (c) debit cards.

Bankruptcy Code is defined in Section 14.5 .

Base Rate means at any time, the Prime Rate plus 0.50%.

BCAR means A.M. Best Co.’s capital adequacy ratio.

Borrower is defined in the preamble of this Agreement.

Borrower Obligations means all Obligations of Borrower.

Business Day means any day on which Lender is open for commercial banking business in Chicago, Illinois and, in the case of a Business Day which relates to a Term Loan that bears interest at the LIBOR Rate, on which dealings are carried on in the London interbank eurodollar market.

Capital Lease means, with respect to any Person, any lease of (or other agreement conveying the right to use) any real or personal property by such Person that, in conformity with GAAP, is accounted for as a capital lease on the balance sheet of such Person.

Capital Securities means, with respect to any Person, all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) of such Person’s capital, whether now outstanding or issued or acquired after the Closing Date, including common shares, preferred shares, membership interests in a limited liability company, limited or general partnership interests in a partnership, interests in a trust, interests in other unincorporated organizations or any other equivalent of such ownership interest.

Cash Equivalent Investment means, at any time, (a) any evidence of Debt, maturing not more than one year after such time, issued or guaranteed by the United States Government or any agency thereof, (b) commercial paper, maturing not more than one year from the date of issue, or corporate demand notes, in each case (unless issued by Lender or its holding company) rated at least A-l by Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business or P-l by Moody’s Investors Service, Inc., (c) any certificate of deposit, time deposit or banker’s acceptance, maturing not more than one year after such time, or any overnight Federal Funds transaction that is issued or sold by Lender or its holding company (or by a commercial banking institution that is a member of the Federal Reserve System and has a combined capital and surplus and undivided profits of not less than $500,000,000), (d) any repurchase agreement entered into with Lender (or commercial banking institution of the nature referred to in clause (c) ) which (i) is secured by a fully perfected security interest in any obligation of the type described in any of clauses (a) through (c) above and (ii) has a market value at the time such repurchase agreement is entered into of not less than 100% of the repurchase obligation of Lender (or other commercial banking institution) thereunder, (e) money market accounts or mutual funds which invest exclusively in assets satisfying the foregoing requirements, and (f) other short term liquid investments approved in writing by Lender.

Change of Control means the occurrence of any of the following events: (a) any "Person" or "group" (within the meaning of Rule 13d-5 under the Securities Exchange Act of 1934) other than Moelis Capital shall, directly or indirectly, beneficially or of record, own or control 51% or more of the outstanding Capital Securities of Borrower entitled to vote for members of the board of directors or equivalent governing body of the Borrower; or (b) Borrower shall cease to, directly or indirectly, own and control 100% of each class of the outstanding Capital Securities of Kinsale Insurance and Kinsale Management.

Chattel Paper means all “chattel paper” as such term is defined in Section 9-102(a)(11) of the UCC and, in any event, including with respect to any Loan Party, all Electronic Chattel Paper and Tangible Chattel Paper.

Closing Date shall mean the date of this Agreement.

Code means the Internal Revenue Code of 1986.

Collateral is defined in Section 7.1 .

Collateral Documents means, collectively, the Securities Account Control Agreement, each control agreement and any other agreement or instrument pursuant to which Borrower, any Subsidiary or any other Person grants or purports to grant collateral to Lender or otherwise relates to such collateral.

Compliance Certificate means a certificate in substantially the form of Exhibit B .

Contingent Liability means, with respect to any Person, each obligation and liability of such Person and all such obligations and liabilities of such Person incurred pursuant to any agreement, undertaking or arrangement by which such Person: (a) guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise to invest in, a debtor, or otherwise to assure a creditor against loss) the indebtedness, dividend, obligation or other liability of any other Person in any manner (other than by endorsement of instruments in the course of collection), including any indebtedness, dividend or other obligation which may be issued or incurred at some future time; (b) guarantees the payment of dividends or other distributions upon the Capital Securities of any other Person; (c) undertakes or agrees (whether contingently or otherwise): (i) to purchase, repurchase, or otherwise acquire any indebtedness, obligation or liability of any other Person or any property or assets constituting security therefor, (ii) to advance or provide funds for the payment or discharge of any indebtedness, obligation or liability of any other Person (whether in the form of loans, advances, stock purchases, capital contributions or otherwise), or to maintain solvency, assets, level of income, working capital or other financial condition of any other Person, or (iii) to make payment to any other Person other than for value received; (d) agrees to lease property or to purchase securities, property or services from such other Person with the purpose or intent of assuring the owner of such indebtedness or obligation of the ability of such other Person to make payment of the indebtedness or obligation; (e) induces the issuance of any letter of credit for the benefit of such other Person; or (f) undertakes or agrees otherwise to assure a creditor against loss. The amount of any Contingent Liability shall (subject to any limitation set forth herein) be deemed to be the outstanding principal amount (or maximum permitted principal amount, if larger) of the indebtedness, obligation or other liability guaranteed or supported thereby.

Controlled Group means all members of a controlled group of corporations, all members of a controlled group of trades or businesses (whether or not incorporated) under common control and all members of an affiliated service group which, together with Borrower or any of its Subsidiaries, are treated as a single employer under Section 414 of the Code or Section 4001 of ERISA.

Copyrights means all copyrights arising under the laws of the United States, any other country or any political subdivision thereof, whether registered or unregistered and whether published or unpublished, all registrations and recordings thereof, and all applications in connection therewith, including all registrations, recordings and applications in the United States Copyright Office, and the right to obtain all renewals of any of the foregoing.

Copyright Licenses means all written agreements naming any Loan Party as licensor or licensee granting any right under any Copyright, including the grant of rights to manufacture, distribute, exploit and sell materials derived from any Copyright.

Debt of any Person means, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all indebtedness of such Person evidenced by bonds, debentures, notes or similar instruments, (c) the capitalized amount of all obligations of such Person as lessee under Capital Leases which have been or should be recorded as liabilities on a balance sheet of such Person in accordance with GAAP, (d) all obligations of such Person to pay the deferred purchase price of property or services (excluding trade accounts

payable in the ordinary course of business) which purchase price is due more than 90 days from the date of incurrence of the obligation thereof or is evidenced by a note or similar written instrument which have been or should be recorded as liabilities on a balance sheet of such Person in accordance with GAAP, (e) all indebtedness secured by a Lien on the property of such Person, whether or not such indebtedness shall have been assumed by such Person; provided that if such Person has not assumed or otherwise become liable for such indebtedness, such indebtedness shall be measured at the fair market value of such property securing such indebtedness at the time of determination, (f) all obligations for reimbursement in respect of letters of credit, bankers’ acceptances and similar obligations issued for the account of such Person, (g) all Bank Product Obligations and Hedging Obligations (on a net basis) of such Person, (h) all Contingent Liabilities of such Person, (i) all Debt of any partnership of which such Person is a general partner (unless such Debt is expressly made non-recourse to such Person), (j) all non-compete payment obligations, earn-outs and similar obligations of such Person to the extent not contingent but fixed and (k) any Capital Securities or other equity instrument of such Person, whether or not mandatorily redeemable, that under GAAP is characterized as debt, whether pursuant to financial accounting standards board issuance No. 150 or otherwise; provided that Debt shall not include Excluded Kinsale Insurance Debt.

Default means any event that, if it continues uncured, will, with lapse of time or notice or both, constitute an Event of Default.

Dollar and the sign “ $ ” mean lawful money of the United States of America.

Environmental Laws means all present or future federal, state or local laws, statutes, common law duties, rules, regulations, ordinances and codes, together with all administrative or judicial orders, consent agreements, directed duties, requests, licenses, authorizations and permits of, and agreements with, any governmental authority, in each case relating to any matter arising out of or relating to public health and safety, or pollution or protection of the environment or workplace, including any of the foregoing relating to the presence, use, production, generation, handling, transport, treatment, storage, disposal, distribution, discharge, emission, release, threatened release, control or cleanup of any Hazardous Substance.

ERISA means the Employee Retirement Income Security Act of 1974.

Event of Default means any of the events described in Section 12.1 .

Excluded Kinsale Insurance Debt means Debt incurred by Kinsale Insurance in the ordinary course of its insurance business, including, without limitation, policyholder claims (and Debt relating to or arising in connection with the defense or settlement of such claims), direct third party claims (and Debt relating to or arising in connection with the defense or settlement of such claims), Debt relating to or arising in connection with Investments authorized by the Arkansas Insurance Code, and Debt relating to or arising in connection with reinsurance assumed and ceding agreements.

Excluded Taxes means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient: (a) Taxes imposed on or measured by net income (however denominated), net receipts or net profits, franchise Taxes, and branch profits Taxes, in each case (i) imposed as a result of such Recipient being organized under the laws of, or having is principal office or, in the case of Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under or received or perfected a security interest under any Term Loan or any Loan Document), (b) any withholding Taxes imposed on amounts payable to or for the account of such Recipient pursuant to a law in

effect on the date on which such Recipient becomes a party to this Agreement or first becomes entitled to payments under any Loan Document, (c) Taxes attributable to such Recipient’s failure to comply with Section 5.5(d) , and (d) any U.S. federal withholding Taxes imposed pursuant to FATCA.

FATCA means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471 (b) (1) of the Code.

Fiscal Quarter means a fiscal quarter of a Fiscal Year.

Fiscal Year means the fiscal year of Borrower and its Subsidiaries, which period shall be the 12-month period ending on December 31 of each year.

FRB means the Board of Governors of the Federal Reserve System or any successor thereto.

GAAP means generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession) and the Securities and Exchange Commission, which are applicable to the circumstances as of the date of determination.

General Intangibles means all “general intangibles” as such term is defined in Section 9-102(a)(42) of the UCC and, in any event, including with respect to any Loan Party, all Payment Intangibles, Software, all contracts, agreements, instruments and indentures in any form, and portions thereof, to which such Loan Party is a party or under which such Loan Party has any right, title or interest or to which such Loan Party or any property of such Loan Party is subject, as the same from time to time may be amended, supplemented or otherwise modified, including, without limitation, (a) all rights of such Loan Party to receive moneys due and to become due to it thereunder or in connection therewith, (b) all rights of such Loan Party to damages arising thereunder and (c) all rights of such Loan Party to perform and to exercise all remedies thereunder; provided, that the foregoing limitation shall not affect, limit, restrict or impair the grant by such Loan Party of a security interest pursuant to this Agreement in any Receivable or any money or other amounts due or to become due under any such Payment Intangible, contract, agreement, instrument or indenture.

Hazardous Substances means hazardous waste, hazardous substance, pollutant, contaminant, toxic substance, oil, hazardous material, chemical or other substance regulated by any Environmental Law.

Hedging Agreement means any agreement with respect to any swap, collar, cap, future, forward or derivative transaction, whether exchange-traded, over-the-counter or otherwise, including any involving, or settled by reference to, one or more interest rates, currencies, commodities, equity or debt instruments, any economic, financial or pricing index or basis, or any similar transaction, including any option with respect to any of these transactions and any combination of these transactions.

Hedging Obligation means, with respect to any Person, any liability of such Person under any Hedging Agreement, including any and all cancellations, buy backs, reversals, terminations or assignments under any Hedging Agreement.

Indemnified Liabilities is defined in Section 13.16 .

Indemnified Taxes means all Taxes other than Excluded Taxes.

Intellectual Property means the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including all Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks and Trademark Licenses (if any), and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom.

Intercompany Note means any promissory note evidencing loans made by any Loan Party to any other Loan Party.

Interest Maintenance Account means that certain business checking account of Borrower held at Lender with account number #2344727.

Interest Period means, with respect to any Term Loan, (i) the period commencing on the date such Term Loan is borrowed and ending on the last day of the calendar quarter during which such Term Loan is borrowed and (ii) thereafter, each period beginning on the first day of a calendar quarter and ending on the last day of such calendar quarter; provided that, if such Term Loan is borrowed within seven (7) Business Days prior to the end of a calendar quarter, the initial Interest Period with respect to such Term Loan shall end on the last day of the next succeeding calendar quarter.

Investment means, with respect to any Person, any investment in another Person, whether by acquisition of any debt or Capital Security, by making any loan or advance, by becoming obligated with respect to a Contingent Liability in respect of obligations of such other Person (other than travel and similar advances to employees in the ordinary course of business) or by making an Acquisition.

Investment Property means the collective reference to (a) all “investment property” as such term is defined in Section 9-102(a)(49) of the UCC (other than the equity interest of any foreign Subsidiary excluded from the definition of Pledged Equity), (b) all “financial assets” as such term is defined in Section 8-102(a)(9) of the UCC, and (b) whether or not constituting “investment property” as so defined, all Pledged Notes and all Pledged Equity.

Issuers means the collective reference to each issuer of any Investment Property.

Kinsale Insurance means Kinsale Insurance Company, an Arkansas domiciled stock insurance company.

Kinsale Management is defined in the preamble of this Agreement.

Lender is defined in the preamble of this Agreement. In addition to the foregoing, for the purpose of identifying the Persons entitled to share in the Collateral and the proceeds thereof under, and in accordance with the provisions of, this Agreement and the Collateral Documents, the term “Lender” shall include Affiliates of Lender providing a Bank Product.

Lender Party is defined in Section 13.16 .

LIBOR Office means the office or offices of Lender which shall be making or maintaining the Term Loans hereunder. A LIBOR Office of Lender may be, at the option of Lender, either a domestic or foreign office.

LIBOR Rate means, with respect to any Interest Period, a rate of interest equal to the result of:

(a) (i) the rate per annum (rounded upward to the nearest whole multiple of 1/100 of 1% per annum) as displayed in the Bloomberg Financial Markets system as the London interbank offered rate for deposits in Dollars at approximately 11:00 A.M. (London time) two (2) Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period (“ ICE LIBOR ”); or (ii) if the ICE LIBOR rate is not available at such time for any reason, then the rate per annum determined by the Lender to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the subject Term Loan(s) and with a term equivalent to such Interest Period would be offered in the London interbank Eurodollar market at approximately 11:00 a.m. (London time) two (2) Business Days prior to the commencement of such Interest Period; provided however that, notwithstanding the forgoing or anything contained herein to the contrary, at no time will the rate of interest resulting from either the forgoing method (i) or (ii) for any Interest Period be less than zero; plus

(b) the applicable “Percentage Over Libor” corresponding to the Total Debt to Capital Ratio as of the last day of the Fiscal Quarter immediately preceding such Interest Period, as follows:



Total Debt to Capital Ratio Less than 15% 15% up to 22.5% 22.5% up to 27.5% Greater than 27%	Percentage Over Libor 2.5% 2.75% 3% 3.5%

Lender’s determination of the LIBOR Rate shall be conclusive, absent manifest error and shall remain fixed during such Interest Period, provided the applicable Percentage Over Libor for any Interest Period is subject to confirmation and retroactive adjustment upon Lender’s receipt and review of the applicable Compliance Certificate to account for any difference in the Total Debt to Capital Ratio.

Lien means, with respect to any Person, any interest granted by such Person in any real or personal property, asset or other right owned or being purchased or acquired by such Person (including an interest in respect of a Capital Lease) which secures payment or performance of any obligation and shall include any mortgage, lien, encumbrance, title retention lien, charge or other security interest of any kind, whether arising by contract, as a matter of law, by judicial process or otherwise.

Loan Documents means this Agreement, the Note, the Collateral Documents, the Subordination Agreements, all Hedging Agreements in favor of Lender or any of its Affiliates, and all documents, instruments and agreements delivered in connection with the foregoing, all as may be amended, restated, supplemented or modified from time to time.

Loan Guarantor means, each of: (a) Kinsale Management; (b) Aspera; and (c) any other Person who becomes a party to this Agreement as a guarantor/surety with respect to the Obligations (or any portion thereof) as required under Section 9.8 , pursuant to a joinder agreement or otherwise; it being expressly understood that Kinsale Insurance is not, and will not be, a Loan Guarantor hereunder.

Loan Guarantor Obligations means, collectively, with respect to each Loan Guarantor, all Obligations of such Loan Guarantor under each Loan Guaranty.

Loan Guaranty means ARTICLE 14 of this Agreement and each separate guaranty delivered by a Loan Guarantor, as such separate guaranty may be amended, restated, supplemented or modified from time to time.

Loan Party or Loan Parties means Borrower, the Loan Guarantors and any other Person who becomes a party to this Agreement pursuant to a joinder agreement or otherwise, and their respective successors and assigns, it being expressly understood that Kinsale Insurance is not, and will not be, a Loan Party hereunder.

Margin Stock means any “margin stock” as defined in Regulation U.

Material Adverse Effect means (a) a material adverse change in the financial condition, operations, assets, business, or properties of Borrower and its Subsidiaries taken as a whole, (b) a material adverse effect on the ability of any Loan Party to perform any of the Obligations under any Loan Document or (c) a material adverse effect upon any substantial portion of the Pledged Equity (or any portion thereof) and/or the Pledged Notes (or any portion thereof) or upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document.

Moelis Capital means Moelis Capital Partners LLC, a Delaware limited liability company, and its Affiliates.

Multiemployer Pension Plan means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to which Borrower or any other member of the Controlled Group may have any liability.

Net Cash Proceeds means:

(a) with respect to any Asset Disposition, the aggregate cash proceeds (including cash proceeds received pursuant to policies of insurance or by way of deferred payment of principal pursuant to a note, installment receivable or otherwise, but only as and when received) received by any Loan Party pursuant to such Asset Disposition net of (i) the direct costs relating to such sale, transfer or other disposition (including sales commissions and legal, accounting and investment banking fees), (ii) taxes paid or reasonably estimated by Borrower to be payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements) and (iii) amounts required to be applied to the repayment of any Debt secured by a Lien on the asset subject to such Asset Disposition (other than the Term Loans); and

(b) with respect to any issuance of Debt, the aggregate cash proceeds received by any Loan Party pursuant to such issuance, net of the direct costs of such issuance (including up-front, underwriters’ and placement fees, and reasonable legal fees and expenses).

Net Earnings means, for any period, the consolidated net income (or loss) of Borrower and its consolidated Subsidiaries for such period calculated in conformity with GAAP, excluding any gains from Asset Dispositions, any extraordinary gains and any gains from discontinued operations.

Net Worth means, as of any date, the sum of the capital stock and additional paid-in capital plus retained earnings (or minus accumulated deficit) plus other comprehensive income (or minus other comprehensive loss) of Borrower and its consolidated Subsidiaries as of such date calculated on a consolidated basis in conformity with GAAP.

Non-U.S. Lender is defined in Section 5.5(c)(i) .

Note means that certain Fifth Amended and Restated Term Note dated as of even date herewith, made by Borrower payable to the order of Lender in the maximum principal amount of THIRTY MILLION and No/100 Dollars ($30,000,000), as the same may be amended, modified, restated, or replaced from time to time.

Obligations means all obligations (monetary (including post-petition interest, allowed or not) or otherwise) of any Loan Party under this Agreement and any other Loan Document including Attorney Costs and surety bonds, all Hedging Obligations permitted hereunder which are owed to Lender or its Affiliates, and all other Bank Products Obligations, all in each case howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing or arising, or due or to become due.

OFAC is defined in Section 9.4 .

Operating Lease means any lease of (or other agreement conveying the right to use) any real or personal property by any Loan Party or any Subsidiary of any Loan Party, as lessee, other than any Capital Lease.

Original Loan Agreement is defined in the recitals to this Agreement.

Paid in Full means (a) the payment in full in cash and performance of all Secured Obligations, and (b) the termination of the Term Loan Commitment.

Participant is defined in Section 13.13.2 .

Participant Register is defined in Section 13.13.2 .

Patents means (a) all letters patent of the United States, any other country or any political subdivision thereof, all reissues and extensions thereof and all goodwill associated therewith; (b) all applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof; and (c) all rights to obtain any reissues or extensions of the foregoing.

Patent Licenses means all agreements, whether written or oral, providing for the grant by or to any Loan Party of any right to manufacture, use or sell any invention covered in whole or in part by a Patent.

Patriot Act is defined in Section 13.15.

PBGC means the Pension Benefit Guaranty Corporation and any entity succeeding to any or all of its functions under ERISA.

Pension Plan means a “pension plan”, as such term is defined in Section 3(2) of ERISA, which is subject to Title IV of ERISA or the minimum funding standards of ERISA (other than a Multiemployer Pension Plan), and as to which Borrower or any member of the Controlled Group may have any liability, including any liability by reason of having been a substantial employer within the meaning of Section 4063 of ERISA at any time during the preceding five years, or by reason of being deemed to be a contributing sponsor under Section 4069 of ERISA.

Permitted Kinsale Insurance Activities means activities engaged in by Kinsale Insurance in the ordinary course of its insurance business, including, without limitation, defending and settling policyholder claims, defending and settling direct third party claims, making Investments authorized by the Arkansas Insurance Code, entering into and performing its obligations under reinsurance assumed and ceding agreements and other activities necessary to fulfill its responsibilities to policyholders or insurance regulators.

Permitted Lien means a Lien expressly permitted hereunder pursuant to Section 10.2 .

Person means any natural person, corporation, partnership, trust, limited liability company, association, governmental authority or unit, or any other entity, whether acting in an individual, fiduciary or other capacity.

Pledged Equity means all Capital Securities listed on the Investment Schedules, together with any other equity interests, certificates, options or rights of any nature whatsoever in respect of the Capital Securities of any Person that may be issued or granted to, or held by, any Loan Party while this Agreement is in effect; provided that in no event shall more than 65% of the total outstanding Capital Securities of any foreign Subsidiary be required to be pledged hereunder.

Pledged Notes means all promissory notes listed on the Investment Schedules, all Intercompany Notes at any time issued to any Loan Party and all other promissory notes issued to or held by any Loan Party (other than promissory notes issued in connection with extensions of trade credit by any Loan Party in the ordinary course of business).

Prime Rate means, for any day, the rate of interest in effect for such day as announced from time to time by Lender as its prime rate (whether or not such rate is actually charged by Lender), which is not intended to be Lender’s lowest or most favorable rate of interest at any one time. Any change in the Prime Rate announced by Lender shall take effect at the opening of business on the day specified in the public announcement of such change; provided that Lender shall not be obligated to give notice of any change in the Prime Rate.

Proceeds means all “proceeds” as such term is defined in Section 9-102(a)(64) of the UCC and, in any event, shall include all dividends or other income from the Investment Property, collections thereon or distributions or payments with respect thereto.

Receivable means any right to payment for goods sold or leased or for services rendered, including without limitation, any Accounts, whether or not such right is evidenced by an Instrument or Chattel Paper and whether or not it has been earned by performance.

Recipient means Lender and any other recipient of any payment to be made by or on account of any obligation of any Loan Party under any Loan Document.

Regulation D means Regulation D of the FRB.

Regulation U means Regulation U of the FRB.

Reportable Event means a reportable event as defined in Section 4043 of ERISA and the regulations issued thereunder as to which the PBGC has not waived the notification requirement of Section 4043(a), or the failure of a Pension Plan to meet the minimum funding standards of Section 412 of the Code (without regard to whether the Pension Plan is a plan described in Section 4021(a)(2) of ERISA) or under Section 302 of ERISA.

Risk Based Capital Ratio means, with respect to Kinsale Insurance for any Fiscal Year, the ratio of its Total Adjusted Capital for such Fiscal Year to its Authorized Control Level for such Fiscal Year, as each such term is defined in the instructions for the statutory statements of Kinsale Insurance as prescribed by the Arkansas Department of Insurance.

SAP means the Statutory Accounting Principles as prescribed or permitted by the Arkansas Department of Insurance.

SEC means the Securities and Exchange Commission or any other governmental authority succeeding to any of the principal functions thereof.

Secured Obligations means, collectively, the Borrower Obligations and the Loan Guarantor Obligations.

Securities Act means the Securities Act of 1933, as amended.

Securities Account means that certain securities account of Kinsale Management held at Wells Fargo Advisors, LLC named “Kinsale Management Inc.” with account number 2047-6791.

Securities Account Control Agreement means that certain account control agreement with respect to the Securities Account, dated as of June 21, 2013, by and among, Lender, Kinsale Management, and Wells Fargo Advisors, LLC, as the same may be amended, restated, supplemented or modified from time to time.

Senior Debt means all Debt of Borrower and its Subsidiaries other than Subordinated Debt.

Senior Officer means, with respect to any Loan Party, any of the chief executive officer, the chief financial officer, the vice president-finance or the treasurer of such Loan Party.

Statutory Surplus is defined in the instructions for the statutory statements of Kinsale Insurance as prescribed by the Arkansas Department of Insurance.

Statutory Net Income is defined in the instructions for the statutory statements of Kinsale Insurance as prescribed the Arkansas Department of Insurance .

Subordinated Debt means any Debt incurred by Borrower which is subordinated to the Obligations in a manner reasonably satisfactory to the Lender, including, without limitation, with respect to the right and time of payment of principal and interest in connection with such Debt.

Subordination Agreements means all subordination agreements executed by a holder of Subordinated Debt in favor of Lender from time to time after the Closing Date in form and substance and on terms and conditions reasonably satisfactory to Lender.

Subsidiary means, with respect to any Person, a corporation, partnership, limited liability company or other entity of which such Person owns, directly or indirectly, such number of outstanding Capital Securities as have more than 50% of the ordinary voting power for the election of directors or other managers of such corporation, partnership, limited liability company or other entity. Unless the context otherwise requires, each reference to Subsidiaries herein shall be a reference to Subsidiaries of Borrower.

Taxes means any and all present and future taxes, duties, levies, imposts, deductions, assessments, charges or withholdings, and any and all liabilities (including interest and penalties and other additions to taxes) with respect to the foregoing.

Term Loan has the meaning given such term in Section 2.1 below.

Term Loan Commitment has the meaning given such term in Section 2.1 below.

Termination Date means the earlier to occur of (a) December 4, 2020 and (b) the date on which the Term Loan becomes immediately due and payable in whole pursuant to ARTICLE 12 .

Termination Event means, with respect to a Pension Plan that is subject to Title IV of ERISA, (a) a Reportable Event, (b) the withdrawal of Borrower or any other member of the Controlled Group from such Pension Plan during a plan year in which Borrower or any other member of the Controlled Group was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or was deemed such under Section 4068(f) of ERISA, (c) the termination of such Pension Plan, the filing of a notice of intent to terminate the Pension Plan or the treatment of an amendment of such Pension Plan as a termination under Section 4041(c) of ERISA, (d) the institution by the PBGC of proceedings to terminate such Pension Plan or (e) any event or condition that might constitute grounds under Section 4042 of ERISA for the termination of, or appointment of a trustee to administer, such Pension Plan.

Total Debt means, as of any date, all Debt of Borrower and its consolidated Subsidiaries as of such date determined on a consolidated basis in conformity with GAAP, excluding (a) Hedging Obligations and (b) Debt of Borrower to its Subsidiaries and Debt of Subsidiaries of Borrower to Borrower or to other Subsidiaries of Borrower.

Total Debt to Capital Ratio means, as of the last day of any Fiscal Quarter, the ratio of (a) Total Debt as of such day to (b) the sum of Total Debt plus Net Worth, in each case, as of such day.

Total Plan Liability means, at any time, the present value of all vested and unvested accrued benefits under all Pension Plans, determined as of the then most recent valuation date for each Pension Plan, using PBGC actuarial assumptions for single employer plan terminations.

Trademarks means (a) all trademarks, trade names, corporate names, names of Loan Parties, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers, and all goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, or otherwise, and all common-law rights related thereto; and (b) the right to obtain all renewals thereof.

Trademark Licenses means, collectively, each agreement, whether written or oral, providing for the grant by or to any Loan Party of any right to use any Trademark.

UCC means the Uniform Commercial Code as in effect on the date hereof and from time to time in the State of Illinois, provided that if by reason of mandatory provisions of law, the perfection or the effect of perfection or non-perfection of the security interests in any Collateral or the availability of any remedy hereunder is governed by the Uniform Commercial Code as in effect on or after the date hereof in any other jurisdiction, “UCC” means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection or availability of such remedy.

Unfunded Liability means the amount (if any) by which the present value of all vested and unvested accrued benefits under all Pension Plans exceeds the fair market value of all assets allocable to those benefits, all determined as of the then most recent valuation date for each Pension Plan, using PBGC actuarial assumptions for single employer plan terminations.

Wholly-Owned Subsidiary means, as to any Person, a Subsidiary all of the Capital Securities of which (except directors’ qualifying Capital Securities and foreign national qualifying shares to the extent required by applicable law) are at the time directly or indirectly owned by such Person and/or another Wholly-Owned Subsidiary of such Person.

Withholding Certificate is defined in Section 5.5(c)(i) .

1.2 Other Interpretive Provisions .

(a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

(b) Section, Annex, Schedule and Exhibit references are to this Agreement unless otherwise specified.

(d) In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”; the words “to” and “until” each mean “to but excluding”, and the word “through” means “to and including.”

(e) Unless otherwise expressly provided herein, (i) references to agreements (including this Agreement and the other Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, supplements and other modifications thereto, but only to the extent such amendments, restatements, supplements and other modifications are not prohibited by the terms of any Loan Document, and (ii) references to any statute or regulation shall be construed as including all statutory and regulatory provisions amending, replacing, supplementing or interpreting such statute or regulation.

(f) This Agreement and the other Loan Documents may use several different limitations, tests or measurements to regulate the same or similar matters. All such limitations, tests and measurements are cumulative and each shall be performed in accordance with its terms.

(g) This Agreement and the other Loan Documents are the result of negotiations among and have been reviewed by counsel to Lender, Borrower and the other parties thereto and are the products of all parties. Accordingly, they shall not be construed against Lender merely because of Lender’s involvement in their preparation.


ARTICLE 2	COMMITMENTS OF LENDER; EVIDENCING OF LOANS.

2.1 Commitments . Subject to the terms and conditions of this Agreement and the other Loan Documents, and in reliance upon the representations and warranties of the Loan Parties set forth herein and in the other Loan Documents, the Lender agrees to make one or more loans to Borrower (individually and collectively, the “ Term Loan ”) in the maximum aggregate principal amount at any one time outstanding up to, but not exceeding, $30,000,000 (the “ Term Loan Commitment ”). The Term Loan is a non-revolving credit facility and, accordingly, any portion of the principal balance that is repaid or prepaid may not be re-borrowed. Notwithstanding anything contained herein or in any of the other Loan Documents to the contrary, each of the Loan Parties hereby acknowledges and agrees that, as of the date hereof: (a) Lender has previously made certain advances of the Term Loan to Borrower; (b) the aggregate outstating principal balance of the Term Loan equals the Term Loan Commitment; and (c) Lender shall have no further obligation hereunder

or under any of the other Loan Documents to make any further advance of the Term Loan (or any other loan or advance) to Borrower or any other Person.

2.2 Notes . The Term Loan shall be evidenced by a Note, with appropriate insertions, payable to the order of Lender in a face principal amount equal to the Term Loan.

2.3 Recordkeeping . Lender shall record in its records, the date and amount of each Term Loan made by Lender and the repayments of the Term Loan thereof. The aggregate principal amount outstanding under the Term Loan so recorded shall be rebuttably presumptive evidence of the principal amount of the Term Loan owing and unpaid. The failure to so record any such amount or any error in so recording any such amount shall not, however, limit or otherwise affect the Obligations of Borrower hereunder or under the Note to repay the principal amount of the Term Loan hereunder, together with all interest accruing thereon.


ARTICLE 3	INTEREST.

3.1 Interest Rates . Borrower promises to pay interest on the aggregate principal amount outstanding under the Term Loan for the period commencing on the first advance of the Term Loan until the Term Loan is paid in full at a rate per annum equal to, for each Interest Period, the LIBOR Rate applicable to such Interest Period; provided that at any time an Event of Default exists, at Lender’s election, the interest rate applicable to the Term Loan shall be increased by 2% (and, in the case of Obligations not bearing interest, such Obligations shall bear interest at the LIBOR Rate plus 2%). Notwithstanding the foregoing, upon the occurrence of an Event of Default under Section 12.1.1 or Section 12.1.4 , such increase shall occur automatically. In no event shall interest payable by Borrower to Lender hereunder exceed the maximum rate permitted under applicable law, and if any such provision of this Agreement is in contravention of any such law, such provision shall be deemed modified to limit such interest to the maximum rate permitted under such law.

3.2 Interest Payment Dates . Accrued interest on the Term Loan shall be payable on the last day of each Interest Period, upon a prepayment of the Term Loan, and at maturity. After maturity, and at any time an Event of Default exists, accrued interest on the Term Loan shall be payable on demand.

3.3 Setting and Notice of LIBOR Rates . The applicable LIBOR Rate for each Interest Period shall be determined by Lender, and notice thereof shall be given by Lender promptly to Borrower. Each determination of the applicable LIBOR Rate by Lender shall be conclusive and binding upon the parties hereto, in the absence of demonstrable error. Lender shall, upon written request of Borrower, deliver to Borrower a statement showing the computations used by Lender in determining any applicable LIBOR Rate hereunder.

3.4 Computation of Interest . Interest shall be computed for the actual number of days elapsed on the basis of a year of (a) 360 days for interest calculated at the LIBOR Rate and (b) 365/366 days for interest calculated at the Base Rate. The applicable interest rate for each Term Loan that bears interest at the Base Rate shall change simultaneously with each change in the Base Rate.


ARTICLE 4	PREPAYMENTS.

4.1 Prepayments .

4.1.1 Voluntary Prepayments . Borrower may from time to time prepay the Term Loan in whole or in part; provided that Borrower shall give Lender notice thereof not later than 11:00 A.M., Chicago time, on the day of such prepayment (which shall be a Business Day), specifying the date

and amount of prepayment. Any such partial prepayment shall be in an amount equal to $250,000 or a higher integral multiple of $250,000.

4.1.2 Mandatory Prepayments .

(a) Borrower shall make a prepayment of the Term Loan until paid in full upon the occurrence of any of the following at the following times and in the following amounts:

(i) concurrently with the receipt by any Loan Party of any Net Cash Proceeds from any Asset Disposition with respect to any of the Pledged Equity and/or Pledged Notes, in an amount equal to 100% of such Net Cash Proceeds;

(ii) within five (5) Business Days from the receipt by any Loan Party of any Net Cash Proceeds from any Asset Disposition (other than as provided in subsection (i) above and/or the sale (or other transfer) of the Capital Securities of Borrower (or any Affiliate of Borrower) and the sale (or other transfer) of cash or Investment Property deposited in or credited to the Securities Account in the ordinary course of business), in an amount equal to 100% of such Net Cash Proceeds; provided that, such prepayment shall only be required if Net Cash Proceeds from Asset Dispositions exceed $10,000,000, in the aggregate, in any given Fiscal Year; provided further , that so long as no Event of Default shall have occurred and be continuing, the Borrower and its Subsidiaries may invest an amount equal to all or any portion of such Net Cash Proceeds within 365 days of receipt thereof in assets useful in the business of the Borrower and its Subsidiaries (or any similar or related or ancillary business), in which case the amount of such Net Cash Proceeds so invested shall not be required to be applied to prepay the Term Loans pursuant to this Section 4.1.2(a)(ii) ; and

(ii) promptly upon the receipt by any Loan Party of any Net Cash Proceeds from any issuance of any Debt of such Loan Party (excluding (1) Debt permitted by Section 10.1 and (2) Debt issued by shareholders of Borrower to Borrower), in an amount equal to 100% of such Net Cash Proceeds.

4.2 Manner of Prepayments . Each voluntary partial prepayment shall be in a principal amount of $250,000 or a higher integral multiple of $250,000. Any prepayment of the Term Loan on a day other than the last day of an Interest Period shall include interest on the principal amount being repaid and shall be subject to Section 6.4 . All prepayments of the Term Loan shall immediately reduce the outstanding principal balance of the Term Loan and shall be applied to reduce the principal amount due on the principal payment dates set forth below in chronological order until the amount of such prepayments are applied in full.

4.3 Repayments .

4.3.1 Loan . The outstanding principal balance of the Term Loan shall be paid on a quarterly basis, beginning on September 30, 2016 and ending on September 30, 2020, in equal amounts of $750,000, with a final payment of $17,250,000 to be paid on December 4, 2020, provided that (a) the principal amount payable on any payment date other than December 4, 2020 (before giving effect to any principal prepayment applied in accordance with Section 4.2) shall not exceed 5% of the aggregate outstanding principal balance of the Term Loan, (b) the principal amount payable on any payment date shall be reduced by any prepayment of principal applied in accordance with Section 4.2 and (c) the principal amount payable on any payment date shall not exceed the aggregate outstanding principal balance of the Term Loan as of such date. Unless sooner paid in full, the

outstanding principal balance of the Term Loan, together with any unpaid interest accrued thereon, shall be paid in full on the Termination Date.


ARTICLE 5	MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.

5.1 Making of Payments . All payments of principal or interest on the Note, and of all fees, shall be made by Borrower to Lender in immediately available funds at the office specified by Lender not later than noon, Chicago time, on the date due; and funds received after that hour shall be deemed to have been received by Lender on the following Business Day. All payments under Section 6.1 shall be made by Borrower directly to Lender without setoff, counterclaim or other defense.

5.2 Application of Certain Payments . So long as no Default or Event of Default has occurred and is continuing, (a) payments matching specific scheduled payments then due shall be applied to those scheduled payments and (b) voluntary and mandatory prepayments shall be applied as set forth in Section 4.2 . After the occurrence and during the continuance of an Event of Default, all amounts collected or received by Lender as proceeds from the sale of, or other realization upon, all or any part of the Collateral shall be applied as Lender shall determine in its discretion.

5.3 Due Date . If any payment of principal or interest with respect to the Term Loan, or of any fees, falls due on a day which is not a Business Day, then such due date shall be the immediately preceding Business Day.

5.4 Setoff . Borrower, for itself and each other Loan Party, agrees that Lender has all rights of set-off and bankers’ lien provided by applicable law, and in addition thereto, Borrower, for itself and each other Loan Party, agrees that at any time any Event of Default exists, Lender may apply to the payment of any Obligations of Borrower and each other Loan Party hereunder, whether or not then due, any and all balances, credits, deposits, accounts or moneys of Borrower and each other Loan Party then or thereafter with Lender.

5.5 Taxes .

(a) All payments made by Borrower under any Loan Document shall be made without setoff, counterclaim, or other defense. To the extent permitted by applicable law, all payments under the Loan Documents (including any payment of principal, interest, or fees) to, or for the benefit, of any Recipient shall be made by Borrower free and clear of and without deduction or withholding for, or account of, any Taxes now or hereinafter imposed by any taxing authority.

(b) If Borrower makes any payment under any Loan Document in respect of which it is required by applicable law to deduct or withhold any Indemnified Taxes, Borrower shall increase the payment under such Loan Document such that after the reduction for the amount of Indemnified Taxes withheld (and any Indemnified Taxes withheld or imposed with respect to the additional payments required under this Section 5.5(b) ), the amount paid to a Lender equals the amount that was payable under such Loan Document without regard to this Section 5.5(b) (but for the avoidance of doubt, taking into account any amounts that are otherwise permitted to be withheld for Excluded Taxes under this Section 5.5 ). To the extent Borrower withholds any Taxes on payments under any Loan Document, Borrower shall pay the full amount deducted to the relevant taxing authority within the time allowed for payment under applicable law and shall deliver to such Lender within 30 days after it has made payment to such authority a receipt issued by such authority (or other evidence satisfactory to such Lender) evidencing the payment of all amounts so required to be deducted or withheld from such payment.

(c) If a Lender is required by law to make any payments of any Indemnified Taxes on or in relation to any amounts received or receivable under any Loan Document, or any Indemnified Tax is assessed against a Lender with respect to amounts received or receivable under any Loan Document, Borrower will indemnify such person against (i) such Indemnified Tax and (ii) any Indemnified Taxes imposed as a result of the receipt of the payment under this Section 5.5(c) . A certificate prepared in good faith as to the amount of such payment by a Lender shall, absent manifest error, be final, conclusive, and binding on all parties; provided that Borrower shall not be required to compensate a Lender pursuant to this Section 5.5(c) for any amounts incurred more than six months prior to the date such Lender notifies Borrower of such Lender’s intention to claim compensation therefor.

(i) To the extent permitted by applicable law, each Lender that is not a United States person within the meaning of Code Section 7701(a)(30) (a “ Non-U.S. Lender ”) shall deliver to Borrower on or prior to the Closing Date (or in the case of a Lender that is an Assignee, on the date of such assignment to such Lender) two accurate and complete original signed copies of IRS Form W-8BEN, W-8ECI, or W-8IMY (or any successor or other applicable form prescribed by the IRS) certifying to such Lender’s entitlement to a complete exemption from, or a reduced rate in, United States withholding tax on interest payments to be made hereunder or any Term Loan. If a Lender that is a Non-U.S. Lender is claiming a complete exemption from withholding on interest pursuant to Code Sections 871(h) or 881(c), such Lender shall deliver (along with two accurate and complete original signed copies of IRS Form W-8BEN) a certificate in form and substance reasonably acceptable to Borrower representing that such Lender is not a bank for purposes of Section 881(c)(3)(A) of the Code, is not a 10 percent shareholder (within the meaning of Section 871(c)(3)(B) of the Code) of Borrower and is not a controlled foreign corporation related to Borrower (within the meaning of Section 881(c)(3)(C) of the Code) (any such certificate, a “ Withholding Certificate ”). In addition, each Lender that is a Non-U.S. Lender agrees that from time to time after the Closing Date (or, in the case of a Lender that is an Assignee, after the date of the assignment to such Lender), when a lapse in time (or change in circumstances occurs) renders the prior certificates hereunder obsolete or inaccurate in any material respect, such Lender shall, to the extent permitted under applicable law, deliver to Borrower two new and accurate and complete original signed copies of an IRS Form W-8BEN, W-8ECI, or W-8IMY (or any successor or other applicable forms prescribed by the IRS), and if applicable, a new Withholding Certificate, to confirm or establish the entitlement of such Lender to an exemption from, or reduction in, United States withholding tax on interest payments to be made hereunder or any Term Loan.

(ii) Each Lender that is not a Non-U.S. Lender shall provide two properly completed and duly executed copies of IRS Form W-9 (or any successor or other applicable form) to Borrower certifying that such Lender is exempt from United States backup withholding Tax. To the extent that a form provided pursuant to this Section 5.5(c)(ii) is rendered obsolete or inaccurate in any material respect as result of change in circumstances with respect to the status of a Lender, such Lender shall, to the extent permitted by applicable law, deliver to Borrower revised forms necessary to confirm or establish the entitlement to such Lender’s exemption from United States backup withholding Tax.

(iii) Notwithstanding anything to the contrary herein, Borrower shall not be required to pay additional amounts to any Lender, or indemnify any Lender, under this Section 5.5 to the extent that such obligations would not have arisen but for the failure of such Lender to comply with this Section 5.5(c) .

(d) If a Lender determines, in its sole discretion, that it has received a refund of any Indemnified Taxes as to which it has been indemnified by Borrower or with respect to which Borrower has paid additional amounts pursuant to this Section 5.5 , it shall pay over such refund to Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by Borrower under this Section 5.5 with respect to the Indemnified Taxes giving rise to such refund), net of any Taxes imposed by reason of receipt of such refund and all out-of-pocket expenses of such Lender and without interest (other than any interest paid by the relevant governmental authority with respect to such refund, which interest shall be paid to Borrowers); provided , that Borrower, upon the request of such Lender, agrees to repay any amount paid to Borrower ( plus any penalties, interest or other charges imposed by the relevant governmental authority) to such Lender in the event such Lender is required to repay such refund to such governmental authority. Nothing in this Section 5.5(d) shall be construed to require any Lender to make available its tax returns (or any other information which it deems confidential) to Borrower or any other Person.

(e) If a payment made to a Lender under any Loan Document would be subject to any U.S. federal income withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to Borrower (or, in the case of a Participant, to the Lender granting the participation only) at the time or times prescribed by law and at such time or times reasonably requested by Borrower (or, in the case of a Participant, the Lender granting the participation) such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Borrower (or, in the case of a Participant, the Lender granting the participation) as may be necessary for Borrower to comply with its obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 5.5(e) , “FATCA” is deemed to include any amendments made to FATCA after the date of this Agreement.


ARTICLE 6	INCREASED COSTS; SPECIAL PROVISIONS FOR TERM LOAN.

6.1 Increased Costs .

(a) If, after the date hereof, the adoption of, or any change in, any applicable law, rule or regulation, or any change in the interpretation or administration of any applicable law, rule or regulation by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by Lender with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency: (i) shall impose, modify or deem applicable any reserve (including any reserve imposed by the FRB, but excluding any reserve included in the determination of the LIBOR Rate pursuant to ARTICLE 3 ), special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by Lender; or (ii) shall impose on Lender any other condition affecting the Term Loan, the Note or its obligation to make the Term Loan; and the result of anything described in clauses (i) and (ii) above is to increase the cost to (or to impose a cost on) Lender (or any LIBOR Office of Lender) of making or maintaining the Term Loan, or to reduce the amount of any sum received or receivable by Lender (or its LIBOR Office) under this Agreement or under its Note with respect thereto, then upon demand by Lender (which demand shall be accompanied by a statement setting forth the basis for such demand and a calculation of the amount thereof in reasonable detail), Borrower shall pay directly to Lender such additional amount as will compensate Lender for such increased cost or such reduction.

(b) If Lender shall reasonably determine that, after the date hereof, any change in, or the adoption or phase-in of, any applicable law, rule or regulation regarding capital adequacy, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or the compliance by Lender or any Person controlling Lender with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on Lender’s or such controlling Person’s capital as a consequence of Lender’s obligations hereunder to a level below that which Lender or such controlling Person could have achieved but for such change, adoption, phase-in or compliance (taking into consideration Lender’s or such controlling Person’s policies with respect to capital adequacy) by an amount deemed by Lender or such controlling Person to be material, then from time to time, upon demand by Lender (which demand shall be accompanied by a statement setting forth the basis for such demand and a calculation of the amount thereof in reasonable detail), Borrower shall pay to Lender such additional amount as will compensate Lender or such controlling Person for such reduction.

(c) Notwithstanding anything in this Section 6.1 to the contrary, Borrower shall only be required to compensate Lender pursuant to this Section 6.1 to the extent that Lender is imposing applicable increased costs or costs in connection with capital adequacy requirements similar to those described in clauses (a) and (b) above generally on other borrowers of loans under similar credit facilities.

6.2 Basis for Determining Interest Rate Inadequate or Unfair . If:

(a) Lender reasonably determines (which determination shall be binding and conclusive on Borrower absent manifest error) that by reason of circumstances affecting the interbank LIBOR market adequate and reasonable means do not exist for ascertaining the applicable LIBOR Rate; or

(b) the LIBOR Rate as determined by Lender will not adequately and fairly reflect the cost to Lender of maintaining or funding the Term Loan for such Interest Period;

then Lender shall promptly notify Borrower and, so long as such circumstances shall continue, on the last day of the current Interest Period, the interest rate on the Term Loan shall, unless then repaid in full, automatically convert to the Base Rate.

6.3 Changes in Law Rendering the Term Loan Unlawful . If, after the date hereof, any change in, or the adoption of any law or regulation, or any change in the interpretation of any applicable law or regulation by any governmental or other regulatory body charged with the administration thereof, should make it unlawful for Lender to make, maintain or fund the Term Loan at the LIBOR Rate, then Lender shall promptly notify each of the other parties hereto and, so long as such circumstances shall continue, on the last day of the current Interest Period (or, in any event, on such earlier date as may be required by the relevant law, regulation or interpretation), the interest rate on the Term Loan shall, unless then repaid in full, automatically convert to the Base Rate. Each Term Loan which, but for the circumstances described in the foregoing sentence, would bear interest at the LIBOR Rate shall remain outstanding for the period corresponding to such Term Loan absent such circumstances.

6.4 Funding Losses . Borrower hereby agrees that upon demand by Lender (which demand shall be accompanied by a statement setting forth in reasonable detail the basis for the amount being claimed), Borrower will indemnify Lender against any net loss or expense which Lender may sustain or incur (including any net loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds

acquired by Lender to fund or maintain the Term Loan), as reasonably determined by Lender, as a result of (a) any payment, prepayment or conversion of the Term Loan of Lender on a date other than the last day of an Interest Period for the Term Loan (including any conversion pursuant to Section 6.3 ) or (b) any failure of Borrower to borrow or prepay the Term Loan on a date specified therefor in a notice of borrowing or prepayment pursuant to this Agreement. For this purpose, all notices to Lender pursuant to this Agreement shall be deemed to be irrevocable.

6.5 Right of Lender to Fund through Other Offices . Lender may, if it so elects, fulfill its commitment as to the Term Loan by causing a foreign branch or Affiliate of Lender to make the Term Loan; provided that in such event for the purposes of this Agreement the Term Loan shall be deemed to have been made by Lender and the obligation of Borrower to repay the Term Loan shall nevertheless be to Lender and shall be deemed held by it, to the extent of the Term Loan, for the account of such branch or Affiliate.

6.6 Discretion of Lender as to Manner of Funding . Notwithstanding any provision of this Agreement to the contrary, Lender shall be entitled to fund and maintain its funding of all or any part of the Term Loan in any manner it sees fit, it being understood, however, that for the purposes of this Agreement all determinations hereunder shall be made as if Lender had actually funded and maintained the Term Loan during each Interest Period for the Term Loan through the purchase of deposits having a maturity corresponding to such Interest Period and bearing an interest rate equal to the LIBOR Rate for such Interest Period.

6.7 Mitigation of Circumstances .

(a) Lender shall promptly notify Borrower of any event of which it has knowledge which will result in, and will use reasonable commercial efforts available to it (and not, in Lender’s sole judgment, otherwise disadvantageous to Lender) to mitigate or avoid, (i) any obligation by Borrower to pay any amount pursuant to Sections 5.5 or 6.1 or (ii) the occurrence of any circumstances described in Sections 6.2 or 6.3 (and, if Lender has given notice of any such event described in clause (i) or (ii) above and thereafter such event ceases to exist, Lender shall promptly so notify Borrower). Without limiting the foregoing, Lender will designate a different funding office if such designation will avoid (or reduce the cost to Borrower of) any event described in clause (i) or (ii) above and such designation will not, in Lender’s sole judgment, be otherwise disadvantageous to Lender.

(b) If Lender demands that Borrower pay any amount pursuant to Sections 5.5 or 6.1 , then Borrower may, at its sole expense, upon notice to Lender, require Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 13.13), all of its interests, rights and obligations under this Agreement to an assignee selected by Borrower that shall assume such obligations; provided that Lender shall have received from the assignee payment of an amount equal to the outstanding principal amount of the Term Loan, accrued interest thereon, accrued fees and all other amounts payable to it hereunder. Lender shall not be required to make any such assignment if, prior thereto, as a result of a waiver by Lender or otherwise, the circumstances entitling Borrower to require such assignment cease to apply.

6.8 Conclusiveness of Statements; Survival of Provisions . Determinations and statements of Lender pursuant to Sections 6.1 , 6.2, 6.3 or 6.4 shall be conclusive absent demonstrable error. Lender may use reasonable averaging and attribution methods in determining compensation under Sections 6.1 and 6.4 , and the provisions of such Sections shall survive repayment of the Obligations, cancellation of any Note(s) and termination of this Agreement.


ARTICLE 7	COLLATERAL AND COLLATERAL ADMINISTRATION.

7.1 Grant . Each Loan Party hereby grants, assigns and transfers to Lender and (to the extent provided herein) Lender’s Affiliates, as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Secured Obligations, a continuing security interest in all right, title and interest of such Loan Party in, to and under the following (collectively with respect to all Loan Parties, the “ Collateral ”): (a) all property, wherever located, whether real or personal, now owned or existing or at any time hereafter arising or acquired by such Loan Party or in which such Loan Party now has or at any time in the future may acquire any right, title or interest, including all of such Loan Party’s Pledged Equity, Accounts, Chattel Paper, Commercial Tort Claims, Deposit Accounts, Documents, Equipment, Fixtures, General Intangibles, Health Care Insurance Receivables, Farm Products, Goods, Instruments, Intellectual Property, Inventory, Investment Property, Leases, Letter-of-Credit Rights, Money, Records, securities accounts (including, without limitation, the Securities Account), Securities and Supporting Obligations, (b) all books and records pertaining to any of the foregoing, (c) all Proceeds and products of any of the foregoing, and (d) all collateral security and guaranties given by any Person with respect to any of the foregoing. Where the context requires, terms relating to the Collateral or any part thereof, when used in relation to a Loan Party, shall refer to such Loan Party’s Collateral or the relevant part thereof.

7.2 Certain Matters Relating to Receivables .

(a) At any time and from time to time after the occurrence and during the continuance of an Event of Default, Lender shall have the right to make test verifications of the Receivables of any Loan Party in any manner and through any medium that it reasonably considers advisable, and each Loan Party shall furnish all such assistance and information as Lender may require in connection with such test verifications. At any time and from time to time after the occurrence and during the continuance of an Event of Default, upon Lender’s request and at the expense of the relevant Loan Party, such Loan Party shall cause independent public accountants or others reasonably satisfactory to Lender to furnish to Lender reports showing reconciliations, agings and test verifications of, and trial balances for, such Receivables. Anything herein to the contrary notwithstanding, the provisions of this Section 7.2 shall only apply if the aggregate amount of the then outstanding Receivables of any Loan Party exceeds $5,000,000.

(b) Lender hereby authorizes each Loan Party to collect any Receivables of such Loan Party, and Lender may curtail or terminate such authority at any time after the occurrence and during the continuance of an Event of Default. If required by Lender at any time after the occurrence and during the continuance of an Event of Default, any payments of such Receivables, when collected by any Loan Party, (i) shall be forthwith (and, in any event, within two (2) Business Days) deposited by such Loan Party in the exact form received, duly indorsed by such Loan Party to Lender if required, in a collateral account maintained under the sole dominion and control of Lender, subject to withdrawal by Lender for its own account only as provided in Section 7.6 , and (ii) until so turned over, shall be held by such Loan Party in trust for Lender, segregated from other funds of such Loan Party. Each such deposit of payments of such Receivables shall be accompanied by a report identifying in reasonable detail the nature and source of the payments included in the deposit.

(c) At any time and from time to time after the occurrence and during the continuance of an Event of Default, at Lender’s request, each Loan Party shall deliver to Lender all original and other documents evidencing, and relating to, the agreements and transactions which gave rise to any Receivables of such Loan Party, including all original orders, invoices and shipping receipts.

7.3 Communications with Obligors; Loan Parties Remain Liable .

(f) Lender in its own name or in the name of others may at any time after the occurrence and during the continuance of an Event of Default communicate with the Account Debtors under the Receivables of any Loan Party to verify with them to Lender’s satisfaction the existence, amount and terms of such Receivables.

(g) Upon the request of Lender at any time after the occurrence and during the continuance of an Event of Default, each Loan Party shall notify the Account Debtors under the Receivables of such Loan Party that such Receivables have been assigned to Lender and that payments in respect thereof shall be made directly to Lender. Lender shall have the right to notify such Account Debtors of the same should such Loan Party fail to do so within two (2) Business Days of Lender’s request.

(h) Anything herein to the contrary notwithstanding, each Loan Party shall remain liable in respect of each of the Receivables of such Loan Party to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise thereto. Lender shall have no obligation or liability under any such Receivable (or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by Lender of any payment relating thereto, nor shall Lender be obligated in any manner to perform any of the obligations of any Loan Party under or pursuant to any such Receivable (or any agreement giving rise thereto), to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party thereunder, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to it or to which it may be entitled at any time or times.

(i) For the purpose of enabling Lender to exercise rights and remedies under this Agreement, each Loan Party hereby grants to Lender an irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation to such Loan Party) to use, license or sublicense any Intellectual Property now owned or hereafter acquired by such Loan Party, and wherever the same may be located, and including in such license access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof.

7.4 Investment Property .

(a) Unless an Event of Default shall have occurred and be continuing, each Loan Party shall be permitted to receive cash dividends and distributions in accordance with Section 10.4 , and to exercise all voting and other rights with respect to the Investment Property of such Loan Party; provided , that no vote shall be cast or other right exercised or action taken which could reasonably be expected to impair the Collateral or which would result in any violation of any provision of this Agreement or any other Loan Document.

(b) If an Event of Default shall occur and be continuing, Lender shall have the right, in each case upon notice to Borrower, (i) to receive any and all cash dividends and distributions, payments or other Proceeds paid in respect of any Investment Property of any Loan Party and make application thereof to the Secured Obligations in such order as Lender may determine, and (ii) to require that any or all of such Investment Property be registered in the name of Lender or its nominee, subject to compliance with the applicable provisions of the Arkansas Insurance Holding Company Regulatory Act, and upon such registration Lender or its nominee may thereafter exercise (x) all voting and other rights pertaining to such Investment Property and (y) any and all rights of conversion,

exchange and subscription and any other rights, privileges or options pertaining to such Investment Property as if it were the absolute owner thereof (including the right to exchange at its discretion any and all of such Investment Property upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate or other structure of any Issuer, or upon the exercise by any Loan Party or Lender of any right, privilege or option pertaining to such Investment Property, and in connection therewith, the right to deposit and deliver any and all of such Investment Property with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as Lender may determine), all without liability except to account for property actually received by it, but Lender shall have no duty to any Loan Party to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing. To the extent necessary, Borrower shall cause Kinsale Insurance to promptly file a Form B amendment pursuant to the Arkansas Insurance Holding Company Regulatory Act disclosing the transactions contemplated by this Agreement. If an Event of Default shall occur and be continuing, Borrower shall, at the request of Lender, take such actions, or cause Kinsale Insurance to take such actions, as may be required under the Arkansas Insurance Holding Company Regulatory Act to enable Lender to exercise the rights and remedies provided for in this Agreement. Additionally, each Loan Party shall do all things and take all such actions as are necessary to cause Lender to be admitted as a member of any of its Subsidiaries that is organized as a limited liability company.

(c) Each Loan Party hereby authorizes and instructs each Issuer of any Investment Property of such Loan Party to (i) comply with any instruction received by it from Lender in writing that (x) states that an Event of Default has occurred and is continuing and (y) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from such Loan Party, and each Loan Party agrees that each such Issuer shall be fully protected in so complying, (ii) unless otherwise expressly permitted hereby, pay any dividends, distributions or other payments with respect to such Investment Property directly to Lender and (iii) mark in its books and records to indicate Lender’s security interest in such Investment Property.

7.5 Proceeds to be Turned Over to Lender . In addition to the rights of Lender specified in Section 7.3 with respect to payments of Receivables, if an Event of Default shall occur and be continuing, all Proceeds from the sale of, or other realization upon, all or any part of the Collateral received by any Loan Party consisting of cash, checks and other cash equivalent items shall be held by such Loan Party in trust for Lender, segregated from other funds of such Loan Party, and shall, forthwith upon receipt by such Loan Party, be turned over to Lender in the exact form received by such Loan Party (duly indorsed by such Loan Party to Lender, if required). All such Proceeds received by Lender hereunder shall be held by Lender in a collateral account maintained under its sole dominion and control. All such Proceeds, while held by Lender in any collateral account (or by such Loan Party in trust for Lender) established pursuant hereto, shall continue to be held as collateral security for the Secured Obligations and shall not constitute payment thereof until applied as provided in Section 7.6 .

7.6 Application of Proceeds . At such intervals as may be agreed upon by Borrower and Lender, or, if an Event of Default shall have occurred and be continuing, at any time at Lender’s election, Lender may apply all or any part of Proceeds from the sale of, or other realization upon, all or any part of the Collateral in payment of the Secured Obligations in such order as Lender shall determine in its discretion. Any part of such funds which Lender elects not so to apply and deems not required as collateral security for the Secured Obligations shall be paid over from time to time by Lender to the applicable Loan Party or to whomsoever may be lawfully entitled to receive the same. Any balance of such Proceeds remaining after the Secured Obligations shall have been Paid in Full shall be paid over by Lender to the applicable Loan Party or to whomsoever may be lawfully entitled to receive the same. In the absence of a specific

determination by Lender, the Proceeds from the sale of, or other realization upon, all or any part of the Collateral in payment of the Secured Obligations shall be applied in the following order:

FIRST, to the payment of all fees, costs, expenses and indemnities of Lender (in its capacity as such), including Attorney Costs, and any other Secured Obligations owing to Lender in respect of sums advanced by Lender to preserve the Collateral or to preserve its security interest in the Collateral, until paid in full;

SECOND, to the payment of all of the Secured Obligations (other than Hedging Obligations and other Bank Product Obligations) consisting of accrued and unpaid interest owing to Lender, until paid in full;

THIRD, to the payment of all Secured Obligations consisting of principal or Hedging Obligations owing to Lender, until paid in full;

FOURTH, to the payment of all Bank Products Obligations (other than Hedging Obligations) owing to Lender or its Affiliates, until paid in full;

FIFTH, to the payment of all other Secured Obligations owing to Lender, until paid in full; and

SIXTH, to the payment of any remaining Proceeds, if any, to whomever may be lawfully entitled to receive such amounts.

7.7 Code and Other Remedies .

(a) If an Event of Default shall occur and be continuing, Lender may exercise, in addition to all other rights and remedies granted to it in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Secured Obligations, all rights and remedies of a secured party under the UCC or any other applicable law. Without limiting the generality of the foregoing, Lender, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any Loan Party or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker’s board or office of Lender or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery with assumption of any credit risk. Lender shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in any Loan Party, which right or equity is hereby waived and released. Each Loan Party further agrees, at Lender’s request, to assemble the Collateral and make it available to Lender at places which Lender shall reasonably select, whether at such Loan Party’s premises or elsewhere. Lender shall apply the net proceeds of any action taken by it pursuant to this Section 7.7 , after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of Lender hereunder, including Attorney Costs, to the payment in whole or in part of the Secured Obligations, in such order as Lender may elect (or, in the absence of a specific determination by Lender, as set forth in Section 7.6 ), and only after such

application and after the payment by Lender of any other amount required by any provision of law, need Lender account for the surplus, if any, to any Loan Party. To the extent permitted by applicable law, each Loan Party waives all claims, damages and demands it may acquire against Lender arising out of the exercise by Lender of any rights hereunder. If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 10 days before such sale or other disposition.

(b) To the extent that applicable law imposes duties on Lender to exercise remedies in a commercially reasonable manner, the Loan Parties acknowledge and agree that it is not commercially unreasonable for Lender: (i) to fail to incur expenses reasonably deemed significant by Lender to prepare Collateral for disposition or otherwise to complete raw material or work in process into finished goods or other finished products for disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents for the collection or disposition of Collateral to be collected or disposed of (it being understood that any disposition of the Capital Securities of Kinsale Insurance must be made in compliance with the Arkansas Insurance Holding Company Regulatory Act), (iii) to fail to exercise collection remedies against any Account Debtor or other Persons obligated on Collateral or to remove liens or encumbrances on or any adverse claims against Collateral, (iv) to exercise collection remedies against any Account Debtor and other Persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (v) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (vi) to contact other Persons, whether or not in the same business as the Loan Parties, for expressions of interest in acquiring all or any portion of the Collateral, (vii) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the collateral is of a specialized nature, (viii) to dispose of Collateral by utilizing Internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capability of doing so, or that match buyers and sellers of assets, (ix) to dispose of assets in wholesale rather than retail markets, (x) to disclaim disposition warranties, or (xi) to the extent deemed appropriate by Lender in good faith, to obtain the services of other brokers, investment bankers, consultants and other professionals to assist Lender in the collection or disposition of any of the Collateral. The Loan Parties acknowledge that the purpose of this paragraph is to provide non-exhaustive indications of what actions or omissions by Lender would not be commercially unreasonable in Lender’s exercise of remedies against the Collateral and that other actions or omissions by Lender shall not be deemed commercially unreasonable solely on account of not being indicated in this paragraph. Without limitation upon the foregoing, nothing contained in this paragraph shall be construed to grant any rights to the Loan Parties or to impose any duties on Lender that would not have been granted or imposed by this Agreement or by applicable law in the absence of this paragraph.

7.8 Pledged Equity .

(a) Each Loan Party recognizes that Lender may be unable to effect a public sale of any or all the Pledged Equity, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Each Loan Party acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. Lender shall be under no obligation to delay a sale of any of the

Pledged Equity for the period of time necessary to permit the Issuer thereof to register such securities or other interests for public sale under the Securities Act, or under applicable state securities laws, even if such Issuer would agree to do so.

(b) Each Loan Party agrees to use its best efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of the Pledged Equity pursuant to this Section 7.8 valid and binding and in compliance with applicable law. Each Loan Party further agrees that a breach of any of the covenants contained in this Section 7.8 will cause irreparable injury to Lender, that Lender has no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section 7.8 shall be specifically enforceable against such Loan Party, and such Loan Party hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred and is continuing under this Agreement.

7.9 Waiver; Deficiency . Each Loan Party shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay the Secured Obligations in full and the fees and disbursements of any attorneys employed by Lender to collect such deficiency.

7.10 Lender’s Appointment as Attorney-in-Fact, etc .

(a) Each Loan Party hereby irrevocably constitutes and appoints Lender and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Loan Party and in the name of such Loan Party or in its own name, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement, and, without limiting the generality of the foregoing, each Loan Party hereby gives Lender the power and right, on behalf of and at the expense of such Loan Party, without notice to or assent by such Loan Party, to do any or all of the following:

(i) in the name of such Loan Party or its own name, or otherwise, take possession of and indorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under any Receivable of any Loan Party or with respect to any other Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by Lender for the purpose of collecting any and all such moneys due under any such Receivable or with respect to any other Collateral whenever payable;

(ii) in the case of any Intellectual Property of any Loan Party, execute and deliver, and have recorded, any and all agreements, instruments, documents and papers as Lender may request to evidence Lender’s security interest in such Intellectual Property and the goodwill and General Intangibles of such Loan Party relating thereto or represented thereby;

(iii) discharge Liens levied or placed on or threatened against the Collateral (other than Permitted Liens), and effect any repairs or insurance called for by the terms of this Agreement and pay all or any part of the premiums therefor and the costs thereof;

(iv) execute, in connection with any sale provided for in Section 7.7 or 7.8 , any indorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral; and

(v) (1) direct any party liable for any payment under any of the Collateral to make payment of any and all moneys due or to become due thereunder directly to Lender or as Lender shall direct; (2) ask or demand for, collect, and receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral; (3) sign and indorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications, notices and other documents in connection with any of the Collateral; (4) commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral or any portion thereof and to enforce any other right in respect of any Collateral; (5) defend any suit, action or proceeding brought against such Loan Party with respect to any Collateral; (6) settle, compromise or adjust any such suit, action or proceeding and, in connection therewith, give such discharges or releases as Lender may deem appropriate; (7) assign any Copyright, Patent or Trademark of any Loan Party throughout the world for such term or terms, on such conditions, and in such manner, as Lender shall in its sole discretion determine; (8) vote any right or interest with respect to any Investment Property of any Loan Party; (9) order good standing certificates and conduct lien searches with respect to any Loan Party or the Collateral in respect of such jurisdictions or offices as Lender may deem appropriate; and (10) generally sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though Lender were the absolute owner thereof for all purposes, and do, at Lender’s option and such Loan Party’s expense, at any time, or from time to time, all acts and things which Lender deems necessary to protect, preserve or realize upon the Collateral and Lender’s security interests therein and to effect the intent of this Agreement, all as fully and effectively as such Loan Party might do.

Anything in this Section 7.10(a) to the contrary notwithstanding, Lender agrees that it will not exercise any rights under the power of attorney provided for in this Section 7.10(a) unless an Event of Default shall have occurred and be continuing.

(b) If any Loan Party fails to perform or comply with any of its agreements contained herein, Lender, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement.

(c) Each Loan Party hereby ratifies all that such attorneys shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the security interests created hereby are released.

7.11 Duty of Lender . Lender’s sole duty with respect to the custody, safekeeping, and economic and physical preservation of the Collateral in its possession shall be to deal with it in a commercially reasonable manner and in the same manner as Lender deals with similar property for its own account. Neither Lender nor any of its officers, directors, employees or agents shall be liable for any failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Loan Party or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The powers conferred on Lender hereunder are solely to protect Lender’s interests in the Collateral and shall not impose any duty upon Lender to exercise any such powers. Lender shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither Lender nor any of its officers, directors, employees or agents shall be responsible to any Loan Party for any act or failure to act hereunder.

7.12 Acknowledgements . Each Loan Party hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents to which it is a party;

(b) Lender has no fiduciary relationship with or duty to any Loan Party arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Loan Parties, on the one hand, and Lender, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

(c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby by the Loan Parties and Lender.

7.13 Additional Parties . Each Loan Party that is required to become a party to this Agreement pursuant to Section 9.8 of this Agreement shall become a Loan Party for all purposes of this Agreement upon execution and delivery by such Loan Party of a joinder agreement in form and substance reasonably acceptable to Lender.

7.14 Releases .

(a) At such time as the Secured Obligations have been Paid in Full, the Collateral shall be released from the Liens created hereby, and this Agreement and all obligations (other than those expressly stated to survive such termination) of Lender and each Loan Party hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Loan Party. At the request and sole expense of any Loan Party following any such termination, Lender shall deliver to the Loan Parties any Collateral held by Lender hereunder and shall execute and deliver to the Loan Parties such documents as the Loan Parties shall reasonably request to evidence such termination.

(b) If any of the Collateral shall be sold, transferred or otherwise disposed of by any Loan Party in a transaction permitted by this Agreement, then Lender, at the request and sole expense of such Loan Party, shall execute and deliver to such Loan Party all releases or other documents reasonably necessary or desirable for the release of the Liens created hereby on such Collateral. At the request and sole expense of Borrower, a Loan Guarantor shall be released from its obligations hereunder in the event that all the equity interests of such Loan Guarantor shall be sold, transferred or otherwise disposed of in a transaction permitted by this Agreement; provided that Borrower shall have delivered to Lender, with reasonable notice prior to the date of the proposed release, a written request for release identifying the relevant Loan Guarantor and the terms of the sale or other disposition in reasonable detail, including the price thereof and any expenses in connection therewith, together with a certification by Borrower stating that such transaction is in compliance with this Agreement and the other Loan Documents.

7.15 Obligations and Liens Absolute and Unconditional . Each Loan Party understands and agrees that the obligations of each Loan Party under this Agreement shall be construed as continuing, absolute and unconditional without regard to (a) the validity or enforceability of any Loan Document, any of the Secured Obligations or any other collateral security therefor or guaranty or right of offset with respect thereto at any time or from time to time held by Lender, (b) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by any Loan Party or any other Person against Lender, or (c) any other circumstance whatsoever (with or without notice to or knowledge of any Loan Party) which constitutes, or might be construed to constitute, an equitable or legal discharge of

any Loan Party for the Secured Obligations, in bankruptcy or in any other instance. When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Loan Party, Lender may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against any other Loan Party or any other Person or against any collateral security or guaranty for the Secured Obligations or any right of offset with respect thereto, and any failure by Lender to make any such demand, to pursue such other rights or remedies or to collect any payments from any other Loan Party or any other Person or to realize upon any such collateral security or guaranty or to exercise any such right of offset, or any release of any other Loan Party or any other Person or any such collateral security, guaranty or right of offset, shall not relieve any Loan Party of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of Lender against any Loan Party. For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.

7.16 Reinstatement . This Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against any Loan Party or any Issuer of any Investment Property of any Loan Party for liquidation or reorganization, should any Loan Party or any such Issuer become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of any Loan Party’s or any such Issuer’s assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Secured Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Secured Obligations, whether as a “voidable preference”, “fraudulent conveyance”, or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Secured Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.


ARTICLE 8	REPRESENTATIONS AND WARRANTIES.

To induce Lender to enter into this Agreement and to induce Lender to make the Term Loan, each Loan Party represents and warrants to Lender that, as of the date hereof:

8.1 Organization . Each Loan Party and each Subsidiary of any Loan Party is validly existing and, to the extent such concept is applicable in the relevant jurisdiction, in good standing under the laws of its jurisdiction of organization; and each Loan Party and each Subsidiary of any Loan Party is in good standing and is duly qualified to do business in each jurisdiction where, because of the nature of its activities or properties, such qualification is required, except for such jurisdictions where the failure to so qualify could not reasonably be expected to have a Material Adverse Effect.

8.2 Authorization; No Conflict . All necessary and appropriate action has been taken by each Loan Party in order to, and each Loan Party has full power, right and authority, and is duly authorized, to execute and deliver each Loan Document to which it is a party and perform its Obligations under each Loan Document to which it is a party, and Borrower is duly authorized to borrow monies hereunder. The execution, delivery and performance by each Loan Party of each Loan Document to which it is a party, and the borrowings by Borrower hereunder, do not and will not (a) require any consent or approval of any governmental agency or authority (other than the filing of a Form B amendment pursuant to the Arkansas Insurance Holding Company Regulatory Act which has been previously completed, and any consent or approval which has been previously obtained, each of which is in full force and effect), (b) conflict with (i) any provision of law, (ii) the charter, by-laws, operating agreement or other organizational documents of any Loan Party or any Subsidiary of any Loan Party or (iii) any material agreement, indenture, instrument or other document, or any judgment, order or decree, which is binding upon any Loan Party or any Subsidiary of any Loan Party

or any of their respective properties, except with respect to (i) and (iii) to the extent such conflict could not reasonably be expected to have a Material Adverse Effect, or (c) require, or result in, the creation or imposition of any Lien on any asset of any Loan Party or any Subsidiary of any Loan Party (other than Liens in favor of Lender created pursuant to the Collateral Documents).

8.3 Validity and Binding Nature . Each of this Agreement and each other Loan Document to which any Loan Party is a party is the legal, valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its terms, subject to bankruptcy, insolvency and similar laws affecting the enforceability of creditors’ rights generally and to general principles of equity.

8.4 Financial Condition . The audited financial statements of Borrower and its consolidated Subsidiaries as at December 31, 2015 and the unaudited financial statements of Borrower and its consolidated Subsidiaries as at March 31, 2016, copies of each of which have been delivered to Lender, were prepared in accordance with GAAP and present fairly (or in the case of the unaudited financial statement, present fairly in all material respects) the financial condition of such entities as at such dates and the results of their operations for the periods then ended.

8.5 No Material Adverse Change . Since March 31, 2016, there has been no material adverse change in the financial condition, operations, assets, business or properties of Borrower and its Subsidiaries taken as a whole.

8.6 Litigation and Contingent Liabilities . No litigation (including derivative actions), arbitration proceeding or governmental investigation or proceeding is pending or, to the knowledge of any Loan Party or any Subsidiary of any Loan Party, threatened against any Loan Party or any Subsidiary of any Loan Party which could reasonably be expected to have a Material Adverse Effect. Neither any Loan Party nor any Subsidiary of any Loan Party has any material contingent liabilities, other than such liabilities: (a) incident to such actions/proceedings (as applicable) previously disclosed, in writing, to Lender as of the Closing Date, if any; (b) permitted by Section 10.1 and/or (c) with respect to Kinsale Insurance, which are part of the Excluded Kinsale Insurance Debt.

8.7 Ownership of Properties; Liens . Each Loan Party has good and valid rights in or the power to transfer its Collateral, owns good and, in the case of real property, marketable title to all of its properties and assets, including its Collateral, real and personal, tangible and intangible, of any nature whatsoever (including Intellectual Property), free and clear of all Liens, charges and claims (including infringement claims with respect to Intellectual Property) except Permitted Liens. No financing statement or other public notice with respect to all or any part of the Collateral is on file or of record in any public office, except filings evidencing Permitted Liens and filings for which termination statements have been delivered to Lender. Each Loan Party is duly authorized to sell, transfer, pledge and grant a Lien in its Collateral.

8.8 Equity Ownership; Subsidiaries . All issued and outstanding Capital Securities of each Loan Party and each Subsidiary of the Loan Parties are duly authorized and validly issued, fully paid, non-assessable, and free and clear of all Liens other than those in favor of Lender, and such securities were issued in compliance with all applicable state and federal laws concerning the issuance of securities. Schedule 8.8 sets forth the authorized Capital Securities of each Loan Party and each Subsidiary of the Loan Parties as of the Closing Date. All of the issued and outstanding Capital Securities of each Wholly-Owned Subsidiary are, directly or indirectly, owned by Borrower.

8.9 Pension Plans .

(d) Except as would not reasonably be expected to have a Material Adverse Effect, (i) each Pension Plan complies with all applicable requirements of law and regulations, (ii) no contribution failure under Section 412 of the Code, Section 302 of ERISA or the terms of any Pension Plan has occurred with respect to any Pension Plan, sufficient to give rise to a Lien under Section 303(k) of ERISA, (iii) there are no pending or, to the knowledge of any Loan Party or any Subsidiary of any Loan Party, threatened, claims, actions, investigations or lawsuits against any Pension Plan, any fiduciary of any Pension Plan, any Loan Party, any Subsidiary of any Loan Party or any other member of the Controlled Group with respect to a Pension Plan or a Multiemployer Pension Plan, (iv) none of any Loan Party, any Subsidiary of any Loan Party or any other member of the Controlled Group has engaged in any prohibited transaction (as defined in Section 4975 of the Code or Section 406 of ERISA) in connection with any Pension Plan or Multiemployer Pension Plan, (v) within the past five years, none of any Loan Party, any Subsidiary of any Loan Party or any other member of the Controlled Group has engaged in a transaction which resulted in a Pension Plan with an Unfunded Liability being transferred out of the Controlled Group and (vi) no Termination Event has occurred or is reasonably expected to occur with respect to any Pension Plan.

(e) Except as would not reasonably be expected to have a Material Adverse Effect, (i) all contributions (if any) have been made to any Multiemployer Pension Plan that are required to be made by any Loan Party, any Subsidiary of any Loan Party or any other member of the Controlled Group under the terms of the plan or of any collective bargaining agreement or by applicable law, (ii) none of any Loan Party, any Subsidiary of any Loan Party or any other member of the Controlled Group has withdrawn or partially withdrawn from any Multiemployer Pension Plan, incurred any withdrawal liability with respect to any such plan or received notice of any claim or demand for withdrawal liability or partial withdrawal liability from any such plan, and no condition has occurred which, if continued, could result in a withdrawal or partial withdrawal from any such plan, and (iii) none of any Loan Party, any Subsidiary of any Loan Party or any other member of the Controlled Group has received any notice that any Multiemployer Pension Plan is in reorganization, that increased contributions may be required to avoid a reduction in plan benefits or the imposition of any excise tax, that any such plan is or has been funded at a rate less than that required under Section 412 of the Code, that any such plan is or may be terminated, or that any such plan is or may become insolvent.

8.10 Investment Company Act . Neither any Loan Party nor any Subsidiary of any Loan Party is an “investment company” or a company “controlled” by an “investment company” or a “subsidiary” of an “investment company,” within the meaning of the Investment Company Act of 1940.

8.11 Compliance with Laws . Each Loan Party and each Subsidiary of the Loan Parties is in compliance in all material respects with the requirements of all laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

8.12 Regulation U . Borrower is not engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying Margin Stock.

8.13 Licensed Insurance Company . Kinsale Insurance is licensed as an insurance company in every jurisdiction in which it is required to be licensed and is approved or permitted to write insurance on a surplus lines basis in every jurisdiction in which it writes insurance and where it is not so licensed.

8.14 Taxes . Except where failure to file or pay could not reasonably be expected to have a Material Adverse Effect, each Loan Party has timely filed all material tax returns and reports required by law to have been filed by it and has paid all Taxes and governmental charges due and payable with respect to such returns, except any such Taxes or charges which are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books. The Loan Parties have made adequate reserves on their respective books and records in accordance with GAAP or SAP, as applicable, for all Taxes that have accrued but which are not yet due and payable. None of the Loan Parties has participated in any transaction that relates to a year of the taxpayer (which is still open under the applicable statute of limitations) which is a “listed transaction” within the meaning of Treasury Regulation Section 1.6011-4(b)(2) (irrespective of the date when the transaction was entered into) that has not been properly disclosed or otherwise duly reported to the relevant taxing authority.

8.15 Solvency, etc . On the Closing Date, with respect to each Loan Party and each Subsidiary of the Loan Parties, individually: (a) the fair value of its assets is greater than the amount of its liabilities (including disputed, contingent and unliquidated liabilities) as such value is established and liabilities evaluated in accordance with GAAP, (b) the present fair saleable value of its assets is not less than the amount that will be required to pay the probable liability on its debts as they become absolute and matured, (c) it is able to realize upon its assets and pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business, (d) it does not intend to, and does not believe that it will, incur debts or liabilities beyond its ability to pay as such debts and liabilities mature and (e) it is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which its property would constitute unreasonably small capital.

8.16 Insurance . Set forth in the Insurance Schedules is a complete and accurate summary of the property, casualty, worker’s compensation, errors and omissions, fidelity bonds/crime insurance program of the Loan Parties and the Subsidiaries of the Loan Parties as of the Closing Date (including the names of all insurers, policy numbers, expiration dates, amounts and types of coverage, annual premiums, exclusions, deductibles, self-insured retention, and a description in reasonable detail of any self-insurance program, retrospective rating plan, fronting arrangement or other risk assumption arrangement involving any Loan Party or any Subsidiary of any Loan Party). Each Loan Party and each Subsidiary of the Loan Parties, and their respective properties, are insured with financially sound and reputable insurance companies which are not Affiliates of the Loan Parties or the Subsidiaries of the Loan Parties, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where such Loan Parties or such Subsidiaries operate.

8.17 Information . All information heretofore or contemporaneously herewith furnished in writing by any Loan Party or any Subsidiary of any Loan Party to Lender for purposes of or in connection with this Agreement and the transactions contemplated hereby is (in each case, as modified or supplemented by other written information so furnished), true and accurate in every material respect on the date as of which such information is dated or certified, and none of such information omits to state any material fact necessary to make such information not misleading in light of the circumstances under which made (it being recognized by Lender that any projections and forecasts provided by any Loan Party or any Subsidiary of any Loan Party are based on good faith estimates and assumptions believed by such Loan Party or such Subsidiary to be reasonable as of the date of the applicable projections or assumptions and that actual results during the period or periods covered by any such projections and forecasts may differ from projected or forecasted results).

8.18 Labor Matters . Neither any Loan Party nor any Subsidiary of any Loan Party is subject to any labor or collective bargaining agreement. There are no existing or threatened strikes, lockouts or other labor disputes involving any Loan Party or any Subsidiary of any Loan Party that singly or in the aggregate

could reasonably be expected to have a Material Adverse Effect. Hours worked by and payment made to employees of the Loan Parties and the Subsidiaries of the Loan Parties are not in violation of the Fair Labor Standards Act or any other applicable law, rule or regulation dealing with such matters.

8.19 Anti-Terrorism Laws . Neither any Loan Party nor any Subsidiary of any Loan Party (and, to the knowledge of any Loan Party or any Subsidiary of any Loan Party, no joint venture or Subsidiary thereof):

(a) is in violation in any material respects of any United States Requirements of Law relating to terrorism, sanctions or money laundering (the “Anti-Terrorism Laws”), including the United States Executive Order No. 13224 on Terrorist Financing (the “Anti-Terrorism Order”) and the Patriot Act.

(b) (i) is listed in the annex to, or is otherwise subject to the provisions of, the Anti-Terrorism Order, (ii) is owned or controlled by, or acting for or on behalf of, any person listed in the annex to, or is otherwise subject to the provisions of, the Anti-Terrorism Order, (iii) commits, threatens or conspires to commit or supports “terrorism” as defined in the Anti-Terrorism Order or (iv) is named as a “specially designated national and blocked person” in the most current list published by OFAC.

(c) (i) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any person described in clauses (b)(i) through (b)(iv) above, (ii) deals in, or otherwise engages in any transactions relating to, any property or interests in property blocked pursuant to the Anti-Terrorism Order or (iii) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.

8.20 No Default . No Default or Event of Default exists.

8.21 Subordinated Debt . The subordination provisions of the Subordinated Debt are enforceable against the holders of the Subordinated Debt by Lender. All Obligations constituting Senior Debt are entitled to the benefits of the subordination provisions contained in the Subordinated Debt. Each Loan Party acknowledges that Lender is entering into this Agreement and making the Term Loan in reliance upon the subordination provisions of the Subordinated Debt and this Section 8.21 .

8.22 Perfected First Priority Liens . None of this Agreement, nor any other documents or instruments delivered in connection herewith, constitutes the creation of a new Debt or the extinguishment of the Debt evidenced by the Original Loan Agreement (and/or any other Loan Document executed in connection therewith) and the Original Loan Agreement and the other Loan Documents as in effect prior to the Closing Date and such Obligations (under and as defined in the Original Credit Agreement) are in all respects continuing with only the terms being modified as provided in this Agreement, nor will they in any way affect or impair the Liens granted in favor of Lender pursuant to the Original Loan Agreement, the Collateral Documents and/or any of the other Loan Documents (and/or Lender’s interest in and to the Collateral), which each Loan Party hereby acknowledges to be a valid and existing first priority Lien on the Collateral described therein (subject only to Permitted Liens). Each Loan Party further agrees that the Liens granted pursuant to the Original Loan Agreement, the Collateral Documents and the other Loan Documents each continue to be in full force and effect, unaffected and unimpaired by this Agreement, and that said Lien shall so continue as a first priority lien (subject only to Permitted Liens) until the Debt secured by the Original Loan Agreement, the Collateral Documents and the other Loan Documents (including without limitation, the Term Loan) is irrevocably Paid in Full.

8.23 Loan Party Information . As of the Closing Date, the Loan Party Schedules completely and accurately identify: (a) each Loan Party’s jurisdiction of organization, (b) the location of each Loan Party’s chief executive office, (c) each Loan Party’s exact legal name as it appears on its organizational documents and (d) each Loan Party’s organizational identification number (to the extent a Loan Party is organized in a jurisdiction which assigns such numbers). In the past five years, no Loan Party had its chief executive offices at any location, or has had any other name, other than as set forth in the Loan Party Schedules.

8.24 Certain Property . None of the Collateral constitutes, or is the Proceeds of, (a) Farm Products, (b) Health Care Insurance Receivables or (c) vessels, aircraft or any other property (other than motor vehicles) subject to any certificate of title or other registration statute of the United States, any State or other jurisdiction.

8.25 Investment Property .

(a) The Pledged Equity of each Loan Party constitutes all the issued and outstanding equity interests of each Issuer owned by such Loan Party or, in the case of any foreign Subsidiary, 65% of all issued and outstanding equity interests of such foreign Subsidiary.

(b) All of the Pledged Equity has been duly and validly issued and is fully paid and nonassessable.

(c) The Investment Schedules list all Investment Property owned by each Loan Party as of the Closing Date. Each Loan Party is the record and beneficial owner of, and has good and marketable title to, its Investment Property, free of any and all Liens or options in favor of, or claims of, any other Person, except Permitted Liens.

(d) No person other than Lender has possession or control of any of the Pledged Equity of such nature that perfection of a security interest is accomplished by control (except that a depository institution other than Lender may have possession (but not control) of the Securities Account).

(e) Upon delivery to Lender of any certificated Pledged Equity, Lender shall have a fully perfected first priority security interest in such Pledged Equity so long as Lender maintains possession of such Pledged Equity.

(f) No membership interests or partnership interests constituting Pledged Equity are certificated or are comprised of Securities.

8.26 Intellectual Property . On the date hereof: (a) all Intellectual Property owned by any Loan Party and material to its business is valid, subsisting, unexpired and enforceable and has not been abandoned; and (b) none of the Intellectual Property owned by any Loan Party and material to its business is the subject of any licensing or franchise agreement pursuant to which such Loan Party is the licensor or franchisor.

8.27 Right to Use Intellectual Property . Each Loan Party has a license or other right to use Intellectual Property as is necessary for the conduct of the businesses of such Loan Party, without any infringement upon rights of others which could reasonably be expected to have a Material Adverse Effect.


ARTICLE 9	AFFIRMATIVE COVENANTS.

Until the expiration or termination of the Term Loan Commitment and thereafter until all Obligations hereunder and under the other Loan Documents are paid and performed in full, each Loan Party agrees (or, in the case of Section 9.1 , Borrower agrees) that, unless at any time Lender shall otherwise expressly consent in writing, it will:

9.1 Reports, Certificates and Other Information . Furnish to Lender:

9.1.2 Annual Report . Promptly when available and in any event within 120 days after the close of each Fiscal Year, (a) a copy of the annual audit report of Borrower and its consolidated Subsidiaries for such Fiscal Year, including therein a consolidated balance sheet of Borrower and its consolidated Subsidiaries as of the end of such Fiscal Year and an income statement and statement of stockholders’ equity of Borrower and its consolidated Subsidiaries for such Fiscal Year, certified without adverse reference to going concern value and without qualification by independent auditors of recognized standing (other than a qualification related to the maturity of Term Loans or any other Debt or potential non-compliance with any financial covenant hereunder), and (b) a consolidating balance sheet of Borrower and its consolidated Subsidiaries as of the end of such Fiscal Year and a consolidating income statement and statement of stockholders’ equity of Borrower and its consolidated Subsidiaries for such Fiscal Year, certified by a Senior Officer of Borrower.

9.1.3 Interim Reports . Promptly when available and in any event within 45 days after the end of each Fiscal Quarter (other than the fourth Fiscal Quarter of any Fiscal Year), consolidated and consolidating balance sheets of Borrower and its consolidated Subsidiaries as of the end of such Fiscal Quarter, together with consolidated and consolidating income statements and statements of stockholders’ equity of Borrower and its consolidated Subsidiaries for such Fiscal Quarter and for the period beginning with the first day of the related Fiscal Year and ending on the last day of such Fiscal Quarter, together with a comparison with the corresponding period of the previous Fiscal Year, certified by a Senior Officer of Borrower.

9.1.4 Compliance Certificates . Contemporaneously with the furnishing of a copy of each annual audit report pursuant to Section 9.1.1 and each set of quarterly statements pursuant to Section 9.1.2 , a duly completed Compliance Certificate, with appropriate insertions, dated the date of such annual report or such quarterly statements and signed by a Senior Officer of Borrower, containing a computation of each of the financial ratios and restrictions set forth in Section 10.13 and to the effect that such officer has not become aware of any Default or Event of Default that has occurred and is continuing or, if there is any such event, describing it and the steps, if any, being taken to cure it.

9.1.5 Reports to the SEC and to Shareholders . Promptly upon the filing, sending or posting (as applicable)( thereof, copies of (or, alternatively, notice of such filing/sending/posting and electronic access to) all: (a) regular, periodic or special reports of any Loan Party or any Subsidiary of any Loan Party filed with the SEC; (b) registration statements of any Loan Party or any Subsidiary of any Loan Party filed with the SEC (other than on Form S-8); and (c) proxy statements or other communications made to security holders generally.

9.1.6 Notice of Default, Litigation and ERISA Matters . Promptly upon becoming aware of any of the following, written notice describing the same and the steps being taken by any Loan Party or any Subsidiary of any Loan Party affected thereby with respect thereto:

(d) any litigation, arbitration or governmental investigation or proceeding not previously disclosed by any Loan Party or any Subsidiary of any Loan Party to Lender which has been instituted or, to the knowledge of such Loan Party or such Subsidiary, is threatened against any Loan Party or any Subsidiary of any Loan Party or to which any of the properties

of any thereof is subject which could reasonably be expected to have a Material Adverse Effect;

(e) (i) Borrower or any Subsidiary of Borrower taking any action that results in a Reportable Event, (ii) the failure of Borrower or any Subsidiary of Borrower to make a required contribution to any Pension Plan (if such failure is sufficient to give rise to a Lien under Section 303(k) of ERISA) or to any Multiemployer Pension Plan, (iii) Borrower or any Subsidiary of Borrower taking any action with respect to a Pension Plan which could result in the requirement that any Loan Party or any Subsidiary of any Loan Party furnish a bond or other security to the PBGC or such Pension Plan, or (iv) the withdrawal by Borrower or any Subsidiary of Borrower from any Multiemployer Pension Plan or the receipt by Borrower or any Subsidiary of Borrower of notice that any Multiemployer Pension Plan is in reorganization, may be terminated or is or may become insolvent;

(f) any Lien (other than Permitted Liens) on any of the Pledged Equity (or any portion thereof) and/or any of the Pledged Notes (or any portion thereof) which could reasonably be expected to adversely affect the ability of Lender to exercise any of its remedies hereunder; and/or

(g) any other event which could reasonably be expected to have a Material Adverse Effect.

9.1.7 Management Reports . Promptly upon receipt thereof, copies of all detailed financial and management reports submitted to Borrower by independent auditors in connection with each annual or interim audit made by such auditors of the books of Borrower and its Subsidiaries.

9.1.8 Projections . As soon as practicable, and in any event not later than 30 days prior to the commencement of each Fiscal Year, financial projections for Borrower and its Subsidiaries for such Fiscal Year (including quarterly operating and cash flow budgets) prepared in a manner consistent with the projections delivered by Borrower to Lender prior to the Closing Date or otherwise in a manner reasonably satisfactory to Lender accompanied by a certificate of a Senior Officer of Borrower to the effect that (a) such projections were prepared by Borrower in good faith, (b) Borrower has a reasonable basis for the assumptions contained in such projections and (c) such projections have been prepared in accordance with such assumptions.

9.1.9 Subordinated Debt Notices . Promptly following receipt thereof, copies of all material notices (including notices of default or acceleration) received from any holder or trustee of, under or with respect to any Subordinated Debt.

9.1.10 Incurred Debt Related to Ratings . Promptly provide written notice of (i) the incurrence by Borrower of any Subordinated Debt to which Kinsale Insurance is a party; and (ii) any amendments, modifications or waivers to any provisions related thereto which are materially adverse to the Lender.

9.1.11 Reinsurance Agreements . No later than June 30 of every Fiscal Year, a copy or summary of all reinsurance agreements to which Kinsale Insurance is a party.

9.1.12 Updated Schedules . Contemporaneously with the furnishing of each annual audit report pursuant to Section 9.1.1 , updated versions (solely to the extent necessary to update the information previously provided to Lender with respect thereto) of Schedule 8.8 , Schedule 9.28 , the

Insurance Schedules, and the Loan Party Schedules, showing information as of the date of such audit report (it being agreed and understood that this requirement shall be in addition to the other notice and delivery requirements set forth herein). Lender may also from time to time, in its sole discretion (but not more than once in any Fiscal Year unless an Event of Default shall have occurred and be continuing), request that the Loan Parties provide updated schedules.

9.1.13 Other Information . Promptly from time to time, such other information (including, without limitation, business or financial data, reports, appraisals and projections) concerning the Loan Parties and the Subsidiaries of the Loan Parties, or their respective properties or business, as Lender may reasonably request.

9.1.14 General . Notwithstanding the forgoing, Lender acknowledges that any financial statement, report, notice, proxy statement, registration statement, prospectus or other document required to be delivered pursuant to this Section 9.1 shall (to the extent the same is required to be delivered to the SEC by Borrower or any of the other Loan Parties, as applicable) be deemed to have been delivered to Lender on the later of the date on which such financial statement, report, notice, proxy statement, registration statement, prospectus or other document is posted on the SEC’s website on the Internet at www.sec.gov or the date the same is readily accessible to the Lender; provided that Borrower shall promptly give notice of any such posting to Lender. Furthermore, if any financial statement, certificate or other information required to be delivered pursuant to this Section 9.1 shall be required to be delivered on any date that is not a Business Day, such financial statement, certificate or other information may be delivered to the Lender on the next succeeding Business Day after such date.

9.2 Books, Records and Inspections . Keep, and cause each other Loan Party and each Subsidiary of the Loan Parties to keep, its books and records in accordance with sound business practices sufficient to allow the preparation of financial statements in accordance with GAAP; and permit Lender or any representative thereof, in each case at the expense of Borrower during normal business hours and upon reasonable advance notice to Borrower, to: (a) inspect the properties and operations of such Loan Party or such Subsidiary; (b) visit any or all of its offices, to discuss its financial matters with its officers and its independent auditors (and each such Loan Party hereby authorizes such independent auditors to discuss such financial matters with Lender or any representative thereof); and (c) examine (and photocopy extracts from) any of its books or other records. Notwithstanding anything to the contrary herein, Lender is entitled to conduct as many inspections and audits as it deems appropriate; provided , that only one such inspection or audit shall be at the expense of Borrower during any period of twelve (12) consecutive months so long as no Event of Default has occurred and is continuing. Notwithstanding anything to the contrary in this Section 9.2 or any other Loan Document, none of Borrower or any of its Subsidiaries shall be required to disclose, permit the inspection, examination or making of copies or taking of extracts of, or discussion of, any document, information or other matter (a) that constitutes non-financial trade secrets or non-financial proprietary information, (b) in respect of which disclosure to Lender (or any of their respective representatives) is prohibited by any applicable law or any binding contractual agreement or (c) is subject to attorney-client or similar privilege or constitutes attorney work product.

9.3 Maintenance of Property; Insurance .

(a) Keep, and cause each other Loan Party and each Subsidiary of the Loan Parties to keep, all property useful and necessary in the business of the Loan Parties and the Subsidiaries of the Loan Parties in good working order and condition, ordinary wear and tear excepted.

(b) Maintain, and cause each other Loan Party and each Subsidiary of the Loan Parties to maintain, with responsible insurance companies, such insurance coverage as may be required by any law or governmental regulation or court decree or order applicable to it and such other insurance, to such extent and against such hazards and liabilities, as is customarily maintained by companies similarly situated, with such deductibles, covering such risks and otherwise on such terms and conditions as shall be customary for such persons; and, upon the reasonable request of Lender, furnish to Lender original or electronic copies of policies evidencing such insurance, and a certificate setting forth in reasonable detail the nature and extent of all insurance maintained by the Loan Parties and the Subsidiaries of the Loan Parties. Such Loan Party shall cause, and shall cause each other Loan Party to cause, (i) each issuer of a property insurance policy maintained by such Loan Party to provide Lender with an endorsement showing Lender as loss payee with respect to such policy, and (ii) each issuer of a general liability or umbrella liability policy maintained by such Loan Party to include Lender as an additional insured with respect to such policy.

9.4 Compliance with Laws; Payment of Taxes and Liabilities . (a) Comply, and cause each other Loan Party and each Subsidiary of the Loan Parties to comply, in all material respects with all applicable laws, rules, regulations, decrees, orders, judgments, licenses and permits, except where failure to comply could not reasonably be expected to have a Material Adverse Effect; (b) without limiting clause (a) above, ensure, and cause each other Loan Party and each Subsidiary of the Loan Parties to ensure, that no person who owns a controlling interest in or otherwise controls such Loan Party or such Subsidiary is or shall be (i) listed on the Specially Designated Nationals and Blocked Person List maintained by the Office of Foreign Assets Control (“ OFAC ”), Department of the Treasury, and/or any other similar lists maintained by OFAC pursuant to any authorizing statute, Executive Order or regulation or (ii) a person designated under Section 1(b), (c) or (d) of Executive Order No. 13224 (September 23, 2001), any related enabling legislation or any other similar Executive Orders, (c) without limiting clause (a) above, comply, and cause each other Loan Party and each Subsidiary of the Loan Parties to comply, with all applicable Bank Secrecy Act and anti-money laundering laws and regulations and (d) except where failure to comply could not reasonably be expected to have a Material Adverse Effect, pay, and cause each other Loan Party and each Subsidiary of the Loan Parties to pay, prior to delinquency, all material taxes and other governmental charges against it or any of its property, including the Collateral, as well as claims of any kind which, if unpaid, could become a Lien on any of its property; provided that the foregoing shall not require any Loan Party or any Subsidiary of any Loan Party to pay any such tax or charge so long as it shall contest the validity thereof in good faith by appropriate proceedings and shall set aside on its books adequate reserves with respect thereto in accordance with GAAP and, in the case of a claim which could become a Lien on any Collateral, such contest proceedings shall stay the foreclosure of such Lien or the sale of any portion of the Collateral to satisfy such claim.

9.5 Licensed Insurance Provider . Cause Kinsale Insurance to maintain: (a) its license as an insurance company in every jurisdiction in which Kinsale Insurance is required to maintain a license as an insurance provider and (b) its approval or permission to write insurance on a surplus line basis in every jurisdiction in which it writes insurance and where it is not so licensed.

9.6 Maintenance of Existence, etc . Subject to Section 10.5 , maintain and preserve, and cause each other Loan Party and each Subsidiary of the Loan Parties to maintain and preserve: (a) its existence and good standing, to the extent applicable in such jurisdiction, in the jurisdiction of its organization and (b) its qualification to do business and good standing in each jurisdiction where the nature of its business makes such qualification necessary (other than such jurisdictions in which the failure to be qualified or in good standing could not reasonably be expected to have a Material Adverse Effect).

9.7 Employee Benefit Plans .

(a) Maintain, and cause each of its Subsidiaries to maintain, each Pension Plan in compliance with all applicable requirements of law and regulations, except as such failure would not reasonably be expected to have a Material Adverse Effect.

(b) Make, and cause each of its Subsidiaries to make, on a timely basis, all required contributions to any Multiemployer Pension Plan, except as such failure would not reasonably be expected to have a Material Adverse Effect.

(c) Not, and not permit any of its Subsidiaries to, (i) seek a waiver of the minimum funding standards of ERISA, (ii) terminate or withdraw from any Pension Plan or Multiemployer Pension Plan or (iii) take any other action with respect to any Pension Plan that would reasonably be expected to entitle the PBGC to terminate, impose liability in respect of, or cause a trustee to be appointed to administer, any Pension Plan, unless the actions or events described in clauses (i), (ii) and (iii) individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect.

9.8 Further Assurances .

(a) Take, and cause each other Loan Party to take, such actions as are necessary or as Lender may reasonably request from time to time to ensure that the Obligations of each Loan Party under the Loan Documents are secured by a first priority perfected Lien in favor of Lender (subject only to Permitted Liens) on substantially all of the assets of Borrower and each Loan Party (as well as all Capital Securities of each domestic Subsidiary and 65% of all Capital Securities of each direct foreign Subsidiary) and guaranteed by each Loan Guarantor (including, upon the acquisition or creation thereof, any domestic Subsidiary acquired or created after the Closing Date other than any non-Wholly-Owned Subsidiary or any Subsidiary that is prohibited by applicable law, rule or regulation or by any contractual obligation existing on the date any such Subsidiary is acquired (so long as such prohibition is not incurred in contemplation of such acquisition) or created from guaranteeing the Obligations or which would require governmental (including regulatory) consent, approval, license or authorization to guarantee the Obligations), in each case as Lender may determine, including: (i) the execution and delivery of guaranties, security agreements, pledge agreements, mortgages, deeds of trust, financing statements and other documents, and the filing or recording of any of the foregoing; and (ii) the delivery of certificated securities and other Collateral with respect to which perfection is obtained by possession, provided, that the provisions of this Section 9.8(a) relating to perfection shall only apply to (A) the Pledged Equity, (B) the Securities Account, (C) Collateral a security interest in which may be perfected through the filing of a financing statement under the UCC and (D) any other Collateral a security interest in which is required to be perfected pursuant to the terms of this Agreement.

(b) Promptly upon the creation or acquisition of a Subsidiary by such Loan Party, provide written notice of the same to Lender and, if required by Section 9.8(a), within sixty (60) days of such creation or acquisition, deliver to Lender a joinder agreement executed by such Subsidiary (in form and substance reasonably acceptable to Lender), all related certificated securities, duly indorsed in a manner satisfactory to Lender evidencing the Capital Securities of such Subsidiary, a UCC financing statement naming such Subsidiary as debtor and Lender as secured party, and any other documentation reasonably requested by Lender.

(c) At any time and from time to time, upon the written request of Lender, and at the sole expense of such Loan Party, promptly and duly execute and deliver, and have recorded, and cause each other Loan Party to promptly and duly execute and deliver, and have recorded, such

further instruments and documents and take, and cause each other Loan Party to take, such further actions as Lender may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted, including (i) filing any financing or continuation statements under the UCC (or other similar laws) in effect in any jurisdiction with respect to the security interests created hereby, and (ii) in the case of any other relevant Collateral, taking any actions necessary to enable Lender to obtain “control” (within the meaning of the applicable UCC) with respect thereto, including without limitation, if requested by Lender, entering into account control agreements granting Lender control of any deposit or other account held at a financial institution other than Lender; provided, that, except in the case of the Pledged Equity and the Securities Account, clause (ii) above shall only apply if an Event of Default shall have occurred and be continuing or the fair market value of such relevant Collateral exceeds $2,500,000 (in the aggregate).

(d) Assign, and cause each other Loan Party to assign to Lender, its right to payment of any Account of such Loan Party for which the Account Debtor is the United States or any department, agency or instrumentality thereof, pursuant to the Assignment of Claims Act of 1940, and promptly deliver evidence of such assignment to Lender (in form satisfactory to Lender) once received.

9.9 Deposit Accounts . Unless Lender otherwise consents in writing, maintain, and cause each other Loan Party to maintain, all of its treasury management accounts and principal deposit accounts with Lender; provided , that this Section 9.9 shall not apply to the Securities Account.

9.10 Delivery of Instruments, Certificated Securities and Chattel Paper . If any amount payable under or in connection with any of the Collateral shall be or become evidenced by any Instrument, Certificated Security or Chattel Paper, immediately deliver, or cause any other applicable Loan Party to immediately deliver, such Instrument, Certificated Security or Chattel Paper to Lender, duly indorsed in a manner satisfactory to Lender, to be held as Collateral pursuant to this Agreement and, in the case of Electronic Chattel Paper, cause Lender to have control thereof within the meaning set forth in Section 9-105 of the UCC, provided, that, except in the case of the Pledged Equity and subject to the applicable provisions of Section 9.12 , this sentence shall only apply if the fair market value of such Instruments, Certificated Securities and/or Chattel Paper exceeds $2,500,000 (in the aggregate). If an Event of Default shall have occurred and be continuing, upon the request of Lender, any Instrument, Certificated Security or Chattel Paper of any Loan Party not theretofore delivered to Lender and at such time being held by any Loan Party shall be immediately delivered to Lender, duly indorsed in a manner satisfactory to Lender, to be held as Collateral pursuant to this Agreement and, in the case of Electronic Chattel Paper, the applicable Loan Party shall cause Lender to have control thereof within the meaning set forth in Section 9-105 of the UCC.

9.11 Maintenance of Perfected Security Interest; Further Documentation .

(a) Such Loan Party shall maintain the security interest created by this Agreement as a perfected security interest (to the extent that such security interest is required to be perfected pursuant to this Agreement), having at least the priority described in Section 8.22 and shall defend such security interest against the claims and demands of all Persons whomsoever.

(b) Such Loan Party shall not pledge, assign, transfer, create or permit to exist any tax liens and other Liens, encumbrances and security interests on any part of the Collateral other than Permitted Liens, and such Loan Party shall not enter into any agreement doing the same (other than with respect to Permitted Liens).

(c) Such Loan Party shall not permit the filing of any financing statements or other documents perfecting a Lien upon or security interest in any of the Collateral except as permitted under Section 10.11 .

(d) Such Loan Party will furnish to Lender from time to time statements and schedules further identifying and describing the assets and property of such Loan Party and such other reports in connection therewith as Lender may reasonably request, all in reasonable detail.

(e) Such Loan Party shall promptly notify Lender of any material change with respect to the Pledged Equity (or any portion thereof) and/or the Pledged Notes (or any portion thereof) which is adverse to the interests of the Lender.

(f) Changes in Locations, Name, etc . Such Loan Party shall provide written notice to Lender within 60 days of (and shall deliver to Lender, if applicable, all additional financing statements and other documents reasonably requested by Lender as to the validity, perfection and priority of the security interests provided for herein): (i) a change in its jurisdiction of organization or the location of its chief executive office from that specified in the Loan Party Schedules or in any subsequent notice delivered pursuant to this Section 9.11 ; or (ii) a change in its name, identity or corporate structure.

9.12 Investment Property .

(a) If such Loan Party shall become entitled to receive or shall receive any certificate, option or rights in respect of the equity interests of any Issuer of any Investment Property of such Loan Party, whether in addition to, in substitution of, as a conversion of, or in exchange for, any of the Pledged Equity, or otherwise in respect thereof, such Loan Party shall accept the same as the agent of Lender, hold the same in trust for Lender and deliver the same forthwith to Lender in the exact form received, duly indorsed by such Loan Party to Lender, if required, together with an undated instrument of transfer covering such certificate duly executed in blank by such Loan Party and with, if Lender so requests, signature guarantied, to be held by Lender, subject to the terms hereof, as additional Collateral for the Secured Obligations. Upon the occurrence and during the continuance of an Event of Default, (i) any sums paid upon or in respect of any Investment Property of any Loan Party upon the liquidation or dissolution of any Issuer shall be paid over to Lender to be held by it hereunder as additional Collateral for the Secured Obligations, and (ii) in case any distribution of capital shall be made on or in respect of such Investment Property or any property shall be distributed upon or with respect to such Investment Property pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject to a perfected Lien in favor of Lender, be delivered to Lender to be held by it hereunder as additional Collateral for the Secured Obligations. Upon the occurrence and during the continuance of an Event of Default, if any sums of money or property so paid or distributed in respect of the Investment Property of any Loan Party shall be received by such Loan Party, such Loan Party shall, until such money or property is paid or delivered to Lender, hold such money or property in trust for Lender, segregated from other funds of such Loan Party, as additional Collateral for the Secured Obligations.

(b) Without the prior written consent of Lender, such Loan Party will not (i) sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, the Investment Property of such Loan Party or Proceeds thereof (except pursuant to a transaction expressly permitted by this Agreement and except that Kinsale Management may sell, assign, transfer, exchange, or otherwise dispose of Investment Property deposited in or credited to the Securities Account in the

ordinary course of business), (ii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, any of the Investment Property of such Loan Party or Proceeds thereof, or any interest therein, except for Permitted Liens, (iii) enter into any agreement or undertaking restricting the right or ability of such Loan Party, or Lender to sell, assign or transfer any of the Investment Property of such Loan Party or Proceeds thereof, except, with respect to such Investment Property, shareholders’ agreements entered into by such Loan Party with respect to Persons in which such Loan Party maintains an ownership interest of 50% or less, (iv) do or take any other action which will impair Lender’s interests or rights in the Investment Property of such Loan Party in any material respect or (v) allow any membership interests or partnership interests comprising its Pledged Equity to be comprised of Securities.

(c) In the case of each Loan Party or any Subsidiary of any Loan Party which is an Issuer, such Loan Party agrees, or such Loan Party shall cause such Subsidiary to agree, that (i) it will be bound by the terms of this Agreement relating to the Investment Property issued by it and will comply with such terms insofar as such terms are applicable to it, (ii) it will notify Lender promptly in writing of the occurrence of any of the events described in Section 9.12(a) with respect to the Investment Property issued by it, (iii) the terms of Sections 7.4 and 7.7 shall apply to such Issuer with respect to all actions that may be required of it pursuant to Section 7.4 or 7.7 regarding the Investment Property issued by it and (iv) it shall mark in books and records to indicate Lender’s security interest in the Investment Property issued by it.

9.13 Intellectual Property .

(a) Such Loan Party (either itself or through licensees) will (i) continue to use each Trademark material to its business in order to maintain such Trademark in full force free from any claim of abandonment for non-use, (ii) maintain as in the past the quality of products and services offered under such Trademark, (iii) use such Trademark with the appropriate notice of registration and all other notices and legends required by applicable law, (iv) not adopt or use any mark which is confusingly similar or a colorable imitation of such Trademark unless Lender shall obtain a perfected security interest in such mark pursuant to this Agreement, and (v) not (and not permit any licensee or sublicensee thereof to) do any act or knowingly omit to do any act whereby such Trademark would reasonably be expected to become invalidated or impaired in any way.

(b) Such Loan Party (either itself or through licensees) will not do any act, or knowingly omit to do any act, whereby any Patent material to its business would reasonably be expected to become forfeited, abandoned or dedicated to the public.

(c) Such Loan Party (either itself or through licensees) (i) will employ each Copyright material to its business and (ii) will not (and will not permit any licensee or sublicensee thereof to) do any act or knowingly omit to do any act whereby any material portion of such Copyrights would reasonably be expected to become invalidated or otherwise impaired. Such Loan Party will not (either itself or through licensees) do any act whereby any material portion of such Copyrights would reasonably be expected to fall into the public domain.

(d) Such Loan Party (either itself or through licensees) will not do any act that knowingly uses any Intellectual Property material to its business to infringe the intellectual property rights of any other Person.

(e) Such Loan Party will notify Lender promptly if it knows, or has reason to know, that any application or registration relating to any Intellectual Property material to its business may

become forfeited, abandoned or dedicated to the public, or of any adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, the United States Copyright Office or any court or tribunal in any country) regarding, such Loan Party’s ownership of, or the validity of, any Intellectual Property material to its business or such Loan Party’s right to register the same or to own and maintain the same.

(f) Whenever such Loan Party, either by itself or through any agent, employee, licensee or designee, (i) shall file an application for the registration of any Intellectual Property with the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency in any other country or any political subdivision thereof or (ii) obtain rights in any Intellectual Property on or after the Closing Date, such Loan Party shall report such filing to Lender concurrently with the next delivery of financial statements of Borrower pursuant to Section 9.1 of this Agreement. Upon the request of Lender, such Loan Party shall execute and deliver, and have recorded, any and all agreements, instruments, documents, and papers as Lender may request to evidence Lender’s security interest in any Copyright, Patent or Trademark of any Loan Party and the goodwill and General Intangibles of such Loan Party relating thereto or represented thereby.

(g) Such Loan Party will take all reasonable and necessary steps to maintain and pursue each application (and to obtain the relevant registration) and to maintain each registration of all Intellectual Property material to its business.

(h) In the event that any Intellectual Property owned by such Loan Party and material to its business is infringed upon or misappropriated or diluted by a third party, such Loan Party shall (i) take such actions as such Loan Party shall reasonably deem appropriate under the circumstances to protect such Intellectual Property and (ii) if such Intellectual Property is of material economic value, promptly notify Lender after it learns thereof and, to the extent, in its reasonable judgment, such Loan Party determines it appropriate under the circumstances, sue for infringement, misappropriation or dilution, to seek injunctive relief where appropriate and to recover any and all damages for such infringement, misappropriation or dilution.

9.14 Other Matters .

(a) Each Loan Party authorizes Lender to, at any time and from time to time, file financing statements, continuation statements, and amendments thereto that describe the Collateral as “all assets” of such Loan Party, or words of similar effect, and which contain any other information required pursuant to the UCC for the sufficiency of filing office acceptance of any financing statement, continuation statement, or amendment, and each Loan Party agrees to furnish any such information to Lender promptly upon request. Any such financing statement, continuation statement, or amendment may be filed at any time in any jurisdiction where such filing is required or permitted to perfect the security interest of Lender in any Collateral.

(b) Each Loan Party shall, at any time and from time and to time, take such steps as Lender may reasonably request for Lender (i) to obtain an acknowledgment, in form and substance reasonably satisfactory to Lender, of any bailee having possession of any of the Collateral, stating that bailee holds such Collateral for Lender (but only if the fair market value of such Collateral exceeds $2,500,000, in the aggregate), (ii) to obtain “control” of any Letter-of-Credit Rights or Electronic Chattel Paper, with any agreements establishing control to be in form and substance reasonably satisfactory to Lender (but only if the fair market value of such Letter-of-Credit Rights or Electronic Chattel Paper exceeds $2,500,000, in the aggregate), and (iii) otherwise to insure the

continued perfection and priority of Lender’s security interest in any of the Collateral and of the preservation of its rights therein (but only to the extent that such Collateral is (A) the Pledged Equity, (B) the Securities Account, (C) Collateral a security interest in which may be perfected through the filing of a financing statement under the UCC and (D) any other Collateral a security interest in which is required to be perfected pursuant to the terms of this Agreement. If any Loan Party shall at any time acquire a Commercial Tort Claim exceeding $2,500,000, such Loan Party shall promptly notify Lender thereof in writing, therein providing a reasonable description and summary thereof, and upon delivery thereof to Lender, such Loan Party shall be deemed to thereby grant to Lender (and such Loan Party hereby grants to Lender) a security interest and lien in and to such Commercial Tort Claim and all proceeds thereof, all upon the terms of and governed by this Agreement.

(c) Without limiting the generality of the foregoing, if any Loan Party at any time holds or acquires an interest in any Electronic Chattel Paper or any “transferable record”, as that term is defined in Section 201 of the federal Electronic Signatures in Global and National Commerce Act, or in §16 of the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction, such Loan Party shall promptly notify Lender thereof and, at the request of Lender, shall take such action as Lender may reasonably request to vest in Lender “control” under Section 9-105 of the UCC of such Electronic Chattel Paper or control under Section 201 of the federal Electronic Signatures in Global and National Commerce Act or, as the case may be, §16 of the Uniform Electronic Transactions Act, as so in effect in such jurisdiction, of such transferable record (but only if the fair market value of such Electronic Chattel Paper or transferable record exceeds $2,500,000, in the aggregate). Lender agrees with the Loan Parties that Lender will arrange, pursuant to procedures satisfactory to Lender and so long as such procedures will not result in Lender’s loss of control, for the Loan Parties to make alterations to any such Electronic Chattel Paper or transferable record permitted under Section 9-105 of the UCC or, as the case may be, Section 201 of the federal Electronic Signatures in Global and National Commerce Act or §16 of the Uniform Electronic Transactions Act for a party in control to make without loss of control, unless an Event of Default has occurred and is continuing or would occur after taking into account any action by any Loan Party with respect to such Electronic Chattel Paper or transferable record.

9.15 A.M. Best Co. Rating . Kinsale Insurance shall maintain a rating of at least “A-” by A.M. Best Co.


ARTICLE 10	NEGATIVE COVENANTS

Until the expiration or termination of the Term Loan Commitment and thereafter until all Obligations hereunder and under the other Loan Documents are paid and performed in full, each Loan Party agrees that, unless at any time Lender shall otherwise expressly consent in writing, it will:

10.1 Debt .

(a) Not, and not permit any other Loan Party or any Subsidiary of any Loan Party to, create, incur, assume or suffer to exist any Debt, except:

(i) Obligations under this Agreement and the other Loan Documents;

(ii) Debt secured by Liens permitted by Section 10.2(d), and extensions, renewals and refinancings thereof;

(iii) Debt of Borrower to any domestic Wholly-Owned Subsidiary or Debt of any domestic Wholly-Owned Subsidiary to Borrower or another domestic Wholly-Owned Subsidiary;

(iv) Subordinated Debt;

(v) Bank Product Obligations in an aggregate outstanding amount not at any time exceeding $5,000,000;

(vi) the Excluded Kinsale Insurance Debt;

(vii) Contingent Liabilities arising with respect to customary indemnification obligations, adjustment of purchase price, deferred purchase price, escrow arrangements, earn-outs or similar obligations, or from guaranties, surety bonds or performance bonds securing the performance of the Borrower or any of its Subsidiaries in favor of purchasers in connection with dispositions permitted under Section 10.5 ;

(viii) Debt in respect of Capital Leases and purchase money obligations for fixed or capital assets within the limitations set forth in Section 10.2(d) , in an aggregate outstanding amount not at any time exceeding $5,000,000;

(ix) Debt owed to any Person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance, pursuant to reimbursement or indemnification obligations to such Person, in each case incurred in the ordinary course of business;

(x) Debt under bid bonds, performance bonds, surety bonds, bonds to secure statutory obligations (including obligations under workers compensation, unemployment insurance and other social security legislation) and similar obligations, in each case, incurred by the Borrower or its Subsidiaries in the ordinary course of business, including guarantees or obligations with respect to letters of credit supporting such bid bonds, performance bonds, surety bonds and similar obligations;

(xi) endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business;

(xii) in addition to the Debt listed above, Debt in an aggregate outstanding principal amount not, at any time, exceeding $5,000,000 provided that, at the time of the creation or incurrence of any such Debt, no Default or Event of Default shall exist or would otherwise result from such creation or incurrence; and/or

(xiii) Hedging Obligations incurred in the ordinary course of business and for bona fide hedging purposes not for speculation.

(b) Notwithstanding the forgoing or anything contained herein to the contrary, with respect to any Debt of the type permitted pursuant to Section 10.1(a)(iv) and 10.1(a)(xii) (to the extent such Debt is debt for borrowed money), above, Borrower agrees that it shall provide the Lender with the first right to finance such Debt during the term of the Loan. In the event that either: (i) Lender has not agreed to finance such Debt; or (ii) Lender has agreed to finance such Debt but Borrower shall have received a bona fide offer from an unrelated, third-party, lender agreeing to extend such Debt on substantially more favorable material terms and Lender has not agreed to match

such terms (subject to the Lender’s normal and customary terms); Lender shall be deemed to have waived its option to finance such Debt pursuant to this Section 10.1(b) .

10.2 Liens . Not, and not permit any other Loan Party or any Subsidiary of any Loan Party to, create or permit to exist any Lien on any of its real or personal properties, assets or rights of whatsoever nature (whether now owned or hereafter acquired), except:

(a) inchoate Liens for taxes or other governmental charges not at the time delinquent or thereafter payable without penalty or being diligently contested in good faith by appropriate proceedings and, in each case, for which it maintains adequate reserves in accordance with GAAP;

(b) Liens arising in the ordinary course of business (such as (i) Liens of carriers, warehousemen, mechanics and materialmen and other similar Liens imposed by law and (ii) Liens in the form of deposits or pledges incurred in connection with worker’s compensation, unemployment compensation and other types of social security (excluding Liens arising under ERISA) or in connection with surety and appeal bonds, statutory obligations, bids, performance bonds, trade contracts and similar obligations);

(d) subject to the limitations set forth in Section 10.1(a)(ii) and 10.1(a)(viii) , Liens: (i) arising in connection with Capital Leases (and attaching only to the property being leased, provided that if any Capital Leases are provided by the same lender, the Liens attaching to such property can be cross-collateralized with other property the subject of a Capital Lease provided by such lender); (ii) existing on property at the time of the acquisition thereof or at the time of the acquisition or merger of a Person owning such property by or with any Loan Party (and not created in contemplation of such acquisition or merger); (iii) Liens that constitute purchase money security interests on any property securing debt incurred for the purpose of financing all or any part of the cost of acquiring, constructing or improving such property, provided that any such Lien attaches to such property within 90 days of the acquisition, construction or improvement thereof and attaches solely to the property so acquired, constructed or improved; and (iv) on real property securing Debt; provided that the principal amount of such Debt shall not exceed 80% of the appraised value of such real property as of the date on which such Liens are granted;

(e) attachments, appeal bonds, judgments and other similar Liens arising in connection with court proceedings, provided the execution or other enforcement of such Liens is effectively stayed and the claims secured thereby are being actively contested in good faith and by appropriate proceedings;

(f) easements, rights of way, restrictions, minor defects or irregularities in title and other similar Liens not interfering in any material respect with the ordinary conduct of the business of any Loan Party or any Subsidiary of any Loan Party;

(g) Liens arising under this Agreement and the other Loan Documents;

(h) deposits to secure the performance of bids, tenders, trade contracts and leases (other than Debt), statutory obligations, surety and appeal bonds, performance bonds and other similar obligations incurred in the ordinary course of business;

(i) Liens arising solely as a result of statutory or common law rights of setoff or similar rights and remedies as to deposit accounts or other funds maintained with depository institutions;

(j) Liens securing or arising in connection with Excluded Kinsale Insurance Debt;

(k) the replacement, extension or renewal of any Lien permitted by clause (c) or (d) above upon or in the same property subject thereto arising out of the extension, renewal or replacement of the Debt secured thereby (without increase in the amount thereof (other than with respect to unpaid accrued interest and premiums (including tender premiums) thereon, any committed or undrawn amounts, defeasance costs, underwriting discounts, fees, commissions and expenses associated with such Debt);

(l) Liens granted in connection with the Debt permitted pursuant to Section 10.1(a)(iii), and 10.1(a)(xii) ; provided that, at the time of the creation or incurrence of any such Lien, no Default or Event of Default shall exist or would otherwise result from such creation or incurrence; and/or

(m) precautionary UCC financing statements filed in connection with any Operating Lease or consignment of goods.

10.3 Operating Leases . Not permit the aggregate amount of all rental payments under Operating Leases made (or scheduled to be made) by any Loan Party or any Subsidiary of any Loan Party (on a consolidated basis) to exceed $5,000,000 in any Fiscal Year.

10.4 Restricted Payments . Not, and not permit any other Loan Party or any Subsidiary of any Loan Party to: (a) make any distribution to any holders of its Capital Securities (other than dividend payments from Kinsale Insurance to Borrower or from any Loan Party to any other Loan Party), (b) purchase or redeem any of its Capital Securities, (c) pay any management fees or similar fees to any of its equityholders or to any Affiliate of any of its equityholders (it being understood that this clause (c) shall not include intercompany or director fees paid in the ordinary course of business for customary management or director services), (d) make any redemption, prepayment (whether mandatory or optional), defeasance, repurchase or any other payment in respect of any Subordinated Debt (other than as permitted by the terms of such Subordinated Debt) or (e) set aside funds for any of the foregoing; provided that this Section 10.4 shall not prohibit distributions, purchases, redemptions or payments described in clauses (a) though (e) above to the extent that no Default or Event of Default shall then exist or would otherwise result from the same.

10.5 Mergers, Consolidations, Sales .

(a) Not, and not permit any other Loan Party or any Subsidiary of any Loan Party to, be a party to any merger, consolidation or amalgamation, except for any of the same where: (i) with respect to Borrower, Borrower is the surviving entity; (ii) with respect to any other Loan Party, such Loan Party is the surviving entity or the surviving entity (if not a Loan Party, shall become a Loan Party on or prior to consummation of such merger, consolidation or amalgamation) and (iii) with respect to any Subsidiary of any Loan Party, such Person is the surviving entity or the surviving entity shall become a Subsidiary of such Loan Party.

(b) Not, and not permit any other Loan Party or any Subsidiary of any Loan Party to, sell, transfer, dispose of, convey or lease any of its assets or Capital Securities (including the sale of Capital Securities of any Subsidiary) except for: (i) sales or other dispositions of Cash Equivalent Investments in the ordinary course of business; (ii) sales or other dispositions constituting leases,

subleases, licenses and sublicenses in the ordinary course of business; (iii) sales or other dispositions of obsolete or worn out property and/or non-core assets acquired in connection with an Acquisition; (iv) sales or other dispositions of property by (A) any Subsidiary that is not a Loan Party to another Subsidiary that is not a Loan Party, (B) by any Loan Party to any other Loan Party and (C) between a Loan Party and a Subsidiary that is not a Loan Party, provided the same is conducted at arm’s length and on commercially reasonable terms; (v) sales or other dispositions by Borrower of its Capital Securities in connection with an initial public offering (IPO) by Borrower; (vi) sales or other dispositions of Inventory in the ordinary course of business; (vii) sales of other dispositions of equipment or real property to the extent that such property is exchanged for credit against the purchase price of similar replacement property or the proceeds of such sale or other disposition are reasonably promptly applied to the purchase price of such replacement property; (viii) sales or other dispositions in the ordinary course of business of investments made by Kinsale Insurance, (ix) sales or other dispositions in the ordinary course of business of cash or Investment Property deposited in or credited to the Securities Account and/or (x) other sales, transfers, dispositions, conveyances, or leases, in addition to the forgoing, provided that the aggregate fair market value of all property sold, transferred, disposed of, conveyed or leased in reliance on this clause (x) during any Fiscal Year shall not exceed five percent (5%) of the total assets of the Borrower and its Subsidiaries, determined on a consolidated basis in accordance with GAAP.

10.6 Modification of Organizational Documents . Not permit the charters, by-laws, operating agreements or other organizational documents of any Loan Party or any Subsidiary of any Loan Party to be amended or modified in any way which could reasonably be expected to have a Material Adverse Effect, except to the extent the same is amended or modified to facilitate, or otherwise in connection with, an initial public offering (IPO) by such Loan Party or Subsidiary.

10.7 Transactions with Affiliates . Not, and not permit any other Loan Party or any Subsidiary of any Loan Party to, enter into, or cause, suffer or permit to exist any material transaction, arrangement or contract with any of its other Affiliates (other than the Loan Parties and the Subsidiaries of the Loan Parties) which is not entered into in good faith, at arm’s length and/or on commercially reasonable terms; provided that this provision shall not prohibit (1) any transaction with a Person that would constitute a transaction with an Affiliate solely because a Loan Party or Subsidiary owns Capital Securities in or otherwise controls such person and (2) any transaction that has otherwise been approved, in good faith, by a majority of disinterested directors of the Borrower or relevant Subsidiary (or the applicable committee thereof).

10.8 Inconsistent Agreements . Not, and not permit any other Loan Party or any Subsidiary of any Loan Party to, enter into any agreement containing any provision which would: (a) be violated or breached by any borrowing by Borrower hereunder or by the performance by any Loan Party of any of its Obligations hereunder or under any other Loan Document; (b) prohibit any Loan Party from granting to Lender, a Lien on any of its assets; or (c) create or permit to exist or become effective any encumbrance or restriction on the ability of any Loan Party or any Subsidiary of any Loan Party to: (i) pay dividends or make other distributions to Borrower, any Loan Party or any Subsidiary of any Loan Party, or pay any Debt owed to any Loan Party or any Subsidiary of any Loan Party; (ii) make loans or advances to any Loan Party or any Subsidiary of any Loan Party; and/or or (iii) transfer any of its assets or properties to any Loan Party or any Subsidiary of any Loan Party; except : (A) customary restrictions and conditions contained in agreements relating to the sale of all or a substantial part of the assets of any Subsidiary pending such sale, provided that such restrictions and conditions apply only to the Subsidiary to be sold and such sale is permitted hereunder; (B) restrictions or conditions imposed by any agreement relating to purchase money Debt, Capital Leases and other secured Debt permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Debt; (C) customary provisions in leases and other contracts restricting the assignment thereof; (D) restrictions and conditions imposed hereunder, under any other Loan Documents

and/or under any applicable law; and (E) restrictions and conditions contained in the organizational documents and/or other agreements of any Person acquired by, and becoming a Subsidiary of, a Loan Party after the Closing Date which were in effect at the time of such acquisition, so long as the subject organizational document/agreement was not entered into in contemplation of such acquisition (and any amendments, modifications, extensions or renewals thereof which are no more onerous than the existing agreement).

10.9 Business Activities; Issuance of Equity . Not, and not permit any other Loan Party or any Subsidiary of any Loan Party to, engage in any line of business other than the businesses engaged in on the date hereof and businesses reasonably related thereto (such line of business including, but not limited to the in-house underwriting of risk). Not, and not permit any other Loan Party or any Subsidiary of any Loan Party to, issue any Capital Securities (other than any issuance in accordance with Section 10.5 and further issuances of Capital Securities by direct Subsidiaries of Borrower made to the Borrower), provided that this sentence shall not apply to Borrower.

10.10 Investments . Not, and not permit any other Loan Party or any Subsidiary of any Loan Party to, make or permit to exist any Investment in any other Person, except the following:

(a) (i) Investments in any Person that is a Loan Party prior to giving effect to such Investment, (ii) Investments by Borrower and its Subsidiaries in their respective Subsidiaries outstanding on the date hereof, (iii) Investments by Subsidiaries that are not Loan Parties in other Subsidiaries that are not Loan Parties and (iv) Investments by any Loan Party in Subsidiaries that are not Loan Parties in the aggregate, up to $10,000,000 in any given Fiscal Year;

(b) Investments constituting Debt permitted by Section 10.1 ;

(d) Cash Equivalent Investments;

(e) bank deposits in the ordinary course of business;

(f) Investments in securities of Account Debtors received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such Account Debtors and Investments received in satisfaction or partial satisfaction of Debt from financially troubled Account Debtors to the extent reasonably necessary to prevent or limit loss;

(g) Investments listed on Schedule 10.10 as of the Closing Date and modifications, replacements, renewals or extensions thereof to the extent not involving any new cash Investment.

(h) Investments made by Kinsale Insurance and authorized by the Arkansas Insurance Code;

(i) Investments made by Kinsale Management in publicly-traded securities that can be readily converted to cash;

(j) with respect to any Person acquired by, and becoming a Subsidiary of, a Loan Party after the Closing Date, such Investments held by such Subsidiary as of the date of acquisition;

(k) other Investments, in addition to the Investments listed above, provided that , the aggregate amount of such Investments does not, at any time, exceed five percent (5%) of the total

assets of the Borrower and its Subsidiaries, determined on a consolidated basis in accordance with GAAP;

(l) Investments in Hedging Agreements specifically permitted under this Agreement;

(m) Investments received in connection with the disposition of assets permitted under this Agreement; and/or

(n) modifications, replacements, and/or renewals of scheduled Investments, to the extent the original Investment is permitted pursuant to the terms of this Agreement and the other Loan Documents; provided that (x) any Investment which when made complies with the requirements of the definition of the term “ Cash Equivalent Investment ” may continue to be held notwithstanding that such Investment if made thereafter would not comply with such requirements; and (y) no Investment otherwise permitted by clause (k) above shall be permitted to be made if, immediately before or after giving effect thereto, any Default or Event of Default exists.

10.11 Restriction of Amendments to Certain Documents . Not amend or otherwise modify, or waive, and not permit any other Loan Party or any Subsidiary of any Loan Party to amend, otherwise modify or waive, any rights under any provisions of any Subordinated Debt to the extent the same would: (a) result in a Material Adverse Effect with respect to any Loan Party; or (b) after giving effect thereto, result in a Default or Event of Default hereunder.

10.12 Fiscal Year . Not change its Fiscal Year.

10.13 Financial Covenants .

10.13.2 Minimum Risk Based Capital . Not permit the Risk Based Capital Ratio for Kinsale Insurance to be less than 350% for any Fiscal Year .

10.13.3 Statutory Surplus . Not permit the Statutory Surplus for Kinsale Insurance as of the last day of any Fiscal Quarter, commencing with the Fiscal Quarter ending June 30, 2016, to be less than (a) 90% of the Statutory Surplus for Kinsale Insurance as of March 31, 2016 plus (b) 50% of the Statutory Net Income of Kinsale Insurance for each Fiscal Quarter ending after March 31, 2016.

10.13.4 Total Debt to Capital Ratio . Not permit the Total Debt to Capital Ratio as of the last day of any Fiscal Quarter to exceed 1.00 to 2.50.

10.13.5 Net Worth . Not permit Net Worth as of the last day of any Fiscal Quarter, commencing with the Fiscal Quarter ending June 30, 2016, to be less than the sum of (a) 85% of Net Worth as of March 31, 2016 plus (b) 50% of Net Earnings for each Fiscal Quarter ending after March 31, 2016.

Notwithstanding any provision of this Agreement to the contrary, Lender acknowledges that Kinsale Insurance may engage in Permitted Kinsale Insurance Activities without violating the provisions of Section 10.1 through Section 10.8 and Section 10.10 through Section 10.12 .


ARTICLE 11	EFFECTIVENESS; CONDITIONS OF CLOSING, ETC.

As a condition precedent to the effectiveness of this Agreement, and the obligation of the Lender to be bound by the terms hereof, the Loan Parties shall execute and/or deliver to Lender (to the extent not

previously provided), the following documents and other items, each of which shall be in form and substance to reasonably satisfactory to Lender:

11.1 Agreement and Note . Duly executed copies of this Agreement and the Note.

11.2 Authorization and Ancillary Documents . For each Loan Party, as applicable: (a) such Person’s charter (or similar formation document), certified by the appropriate governmental authority; (b) good standing certificates for such Person in its state of incorporation (or formation), to the extent such concept is applicable in the relevant jurisdiction; (c) such Person’s bylaws (or similar governing document); (d) resolutions of such Person’s board of directors (or similar governing body) approving and authorizing such Person’s execution, delivery and performance of the Loan Documents to which it is party and the transactions contemplated thereby; (e) signature and incumbency certificates of the officers of such Person executing any of the Loan Documents (it being understood that Lender may conclusively rely on each such certificate until formally advised by a like certificate of any changes therein); and (f) all such Ancillary Schedules applicable to such Loan Party; each and all of the forgoing being certified by the secretary or an assistant secretary (or similar Senior Officer) of such Lon Party as being true and correct as of the Closing Date, and in full force and effect without modification (where applicable).

11.3 Consents and Approvals . Evidence that all consents and all governmental, regulatory and other third party approvals required in connection with the execution, delivery and performance by Borrower of the Loan Documents to which it is a party have been granted (including without limitation, copies of any Form B amendment to filed by Borrower pursuant to the Arkansas Insurance Holding Company Regulatory Act disclosing the transactions contemplated by this Agreement).

11.4 Delivery of Pledged Collateral . To the extent required by this Agreement and/or any of the other Loan Documents and not previously delivered to Lender, the certificates evidencing the Certificated Securities of any Loan Party, duly indorsed in a manner satisfactory to Lender.

11.5 Subordination Agreements . To the extent required by this Agreement and/or any of the other Loan Documents and not previously delivered to Lender, Subordination Agreements with respect to all Subordinated Debt.

11.6 Insurance . To the extent required by this Agreement and/or any of the other Loan Documents and not previously delivered to Lender, evidence of the existence of insurance required to be maintained pursuant to Section 9.3(b) , together with evidence(acceptable to Lender in its reasonable discretion) that Lender has been named as a loss payee and an additional insured on all related insurance policies (to the extent required by Section 9.3(b) .

11.7 Payment of Fees . Evidence of payment by Borrower of all accrued and unpaid fees, costs and expenses to the extent due and payable on the Closing Date, together with all Attorney Costs of Lender incurred in connection with the negotiation and documentation of this Agreement and the transactions contemplated hereby. Without limiting the generality of the forgoing, Borrowers shall have paid to Lender, and Lender shall have received, an amount equal to any and all Attorney Costs and other fees and expenses incurred by (or on behalf of Lender) up through, and including, the Closing Date in connection with the transactions contemplated by this Agreement.

11.8 Financial Statements . Audited financial statements of Borrower and its consolidated Subsidiaries for the Fiscal Year ended December 31, 2015 and unaudited financial statements of Borrower and its consolidated Subsidiaries for the Fiscal Quarter ending March 31, 2016.

11.9 Reserves . A satisfactory independent report of Milliman Inc. dated December 31, 2015 with respect to any reserves of Kinsale Insurance.

11.10 Search Results . Current UCC, federal and state tax Lien and judgment searches, pending suit and litigation searches and bankruptcy court filings searches covering each Loan Party (if any).

11.11 Filings, Registrations and Recordings . To the extent required by this Agreement and/or any of the other Loan Documents and not previously delivered to Lender, each document (including UCC financing statements) required by the Collateral Documents or under law or reasonably requested by Lender to be filed, registered or recorded in order to create in favor of Lender, in each case to the extent required pursuant to this Agreement, a perfected Lien on the Collateral described therein, prior to any other Liens (subject only to Liens permitted pursuant to Section 10.2 ), in proper form for filing, registration or recording.

11.12 Representations and Warranties . The representations and warranties of Borrower and each other Loan Party set forth in this Agreement and the other Loan Documents (as applicable) shall be true and correct, in all material respects, with the same effect as if made on the Closing Date (except to the extent stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct as of such earlier date).

11.13 Other . Such other documents as Lender may reasonably request (including without limitation, such amendments or other documents as may be required, in Lender’s sole discretion, in connection with the Collateral Documents, or any of them).

ARTICLE 12 EVENTS OF DEFAULT AND THEIR EFFECT.

12.1 Events of Default . Each of the following shall constitute an Event of Default under this Agreement:

12.1.2 Non-Payment of the Term Loan, etc. Failure by Borrower or any other Loan Party to make: (a) any payment of principal or interest hereunder or under the Note immediately upon maturity or acceleration (as applicable); (b) any payment of principal or interest hereunder or under the Note when due (other than upon maturity or acceleration) within five (5) Business Days of the date when due; or (c) any other payment under the Loan Documents within five (5) Business Days of the date when due or, if no date is stated, within five (5) Business Days after demand (or such shorter period as may be expressly provided for herein or therein).

12.1.3 Non-Payment of Other Debt . Any default or event of default shall occur under the terms, documents, agreements or instruments applicable to or evidencing any Debt of any Loan Party or any Subsidiary of any Loan Party where the aggregate amount for all such Debt so affected (and including undrawn committed or available amounts and amounts owing to all creditors under any combined or syndicated credit arrangement) exceeds $2,500,000 and such default shall permit any Person, or any trustee or agent for such Person, to cause such Debt to become due and payable (or require any Loan Party to purchase or redeem such Debt or post cash collateral in respect thereof) prior to its expressed maturity.

12.1.4 Bankruptcy, Insolvency, etc. Any Loan Party or any Subsidiary of any Loan Party becomes insolvent or generally fails to pay, or admits in writing its inability or refusal to pay, debts as they become due; or any Loan Party or any Subsidiary of any Loan Party applies for, consents to, or acquiesces in the appointment of a trustee, receiver or other custodian for such Loan Party or such Subsidiary, as applicable, or any property thereof, or makes a general assignment for the benefit of

creditors; or, in the absence of such application, consent or acquiescence, a trustee, receiver or other custodian is appointed for any Loan Party or any Subsidiary of any Loan Party or for a substantial part of the property of any thereof and is not discharged within 60 days; or any bankruptcy, reorganization, debt arrangement, or other case or proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding, is commenced in respect of any Loan Party or any Subsidiary of any Loan Party, and if such case or proceeding is not commenced by such Loan Party or such Subsidiary, it is consented to or acquiesced in by such Loan Party or such Subsidiary, or remains for 60 days undismissed; or any Loan Party or any Subsidiary of any Loan Party takes any action to authorize, or in furtherance of, any of the foregoing.

12.1.5 Non-Compliance with Loan Documents . (a) Failure by any Loan Party to comply with or to perform, or the failure by any Loan Party to cause any of its Subsidiaries to comply with or to perform, any covenant set forth in Sections 9.1.5(a) , and 9.6 , or ARTICLE 10 ; or (b) failure by any Loan Party to comply with or to perform, or the failure by any Loan Party to cause its Subsidiaries to comply with or to perform, any other provision of this Agreement or any other Loan Document (and not constituting an Event of Default under any other provision of this ARTICLE 12 ) and continuance of such failure described in this clause (b) for 30 days.

12.1.6 Representations; Warranties . Any representation, warranty, certification or statement of any Loan Party in this Agreement, the other Loan Documents or any other agreement with the Lender shall be false in any material respect when made or deemed made.

12.1.7 Pension Plans . (a) Any Person institutes steps to terminate a Pension Plan if as a result of such termination Borrower or any Subsidiary of Borrower could be required to make a contribution to such Pension Plan, or could incur a liability or obligation to such Pension Plan, in excess of $5,000,000; (b) a contribution failure occurs with respect to any Pension Plan sufficient to give rise to a Lien under Section 303(k) of ERISA; (c) the Unfunded Liability exceeds twenty percent of the Total Plan Liability, or (d) there shall occur any withdrawal or partial withdrawal from a Multiemployer Pension Plan and the withdrawal liability of the Borrower or any Subsidiary of the Borrower (without unaccrued interest) to Multiemployer Pension Plans as a result of such withdrawal (including any outstanding withdrawal liability that Borrower or any Subsidiary of the Borrower has incurred on the date of such withdrawal) exceeds $5,000,000 (in the aggregate).

12.1.8 Judgments . Any judgment or judgments, writ or writs, or warrant or warrants of attachment, or any similar process or processes in an aggregate amount (to the extent not covered by independent third party insurance or one or more third-party reinsurance contracts, in each case as to which the insurer does not dispute coverage) in excess of (a) in the case of any Loan Party or any Subsidiary of any Loan Party other than Kinsale Insurance, $2,500,000 (in the aggregate), and (b) in the case of Kinsale Insurance, 5% of the Statutory Surplus for Kinsale Insurance as of the last day of the preceding Fiscal Quarter, shall be rendered against any Loan Party or Kinsale Insurance and shall not have been paid, discharged or vacated or had execution thereof stayed pending appeal within 60 days (in the case of clause (a)) or 90 days (in the case of clause (b)) after entry or filing of such judgments.

12.1.9 Attachment . A notice of lien, levy, or assignment is filed or recorded with respect to the Pledged Equity (or any portion thereof) by the United States government or any department, agency or instrumentality thereof or by any state, county, municipal or other governmental agency, or if any taxes or debts owing at any time to any one of them becomes a lien or encumbrance upon the Pledged Equity (or any portion thereof), and any of the foregoing is not released, bonded or

otherwise secured to Lender's reasonable satisfaction within sixty (60) days after the same becomes a lien or encumbrance on such assets.

12.1.10 Loan Documents . Any of the Loan Documents shall for any reason not be or shall cease to be in full force and effect, or any of the Loan Documents is declared to be null and void.

12.1.11 Invalidity of Collateral Documents, Perfection, etc. Any Loan Party (or any Person by, through or on behalf of any Loan Party) shall contest in any manner the validity, binding nature or enforceability of any Collateral Document; and/or Lender shall, at any time and for any reason (other than as a result of the gross negligence or willful misconduct of Lender), fail to have a perfected, first priority, security interest in, and Lien on, the Pledged Equity (or any portion thereof) and/or the Pledged Notes (or any portion thereof).

12.1.12 Invalidity of Subordination Provisions, etc. Any subordination provision in any document or instrument governing Subordinated Debt, or any subordination provision in any subordination agreement that relates to any Subordinated Debt, or any subordination provision in any guaranty by any Loan Party of any Subordinated Debt, shall cease to be in full force and effect, or any Loan Party or any other Person (including the holder of any applicable Subordinated Debt) shall contest in any manner the validity, binding nature or enforceability of any such provision.

12.1.13 Change of Control . A Change of Control shall occur.

12.2 Effect of Event of Default . If:

(a) any Event of Default described in Section 12.1.3 shall occur, the Term Loan Commitment shall immediately terminate and the Term Loan and all other Obligations hereunder shall become immediately due and payable, all without presentment, demand, protest or notice of any kind;

(b) any other Event of Default shall occur and be continuing, Lender may declare the Term Loan Commitment to be terminated or reduced in whole or in part and/or declare all or any part of the Term Loan and all other Obligations hereunder to be due and payable, whereupon the Term Loan Commitment shall immediately terminate (or be reduced, as applicable) and/or the Term Loan and other Obligations hereunder shall become immediately due and payable (in whole or in part, as applicable), all without presentment, demand, protest or notice of any kind, and

(c) any Event of Default shall occur and be continuing, Lender shall have (i) all rights and remedies provided for in this Agreement and the other Loan Documents, (ii) all rights and remedies provided by the UCC (in each applicable jurisdiction) and (iii) all rights and remedies provided by any other applicable law (including, without limitation, all other legal and equitable remedies available to Lender). Lender shall promptly advise Borrower of any such declaration, but failure to do so shall not impair the effect of such declaration.


ARTICLE 13	GENERAL.

13.1 Marshalling; Waiver; Amendments . To the extent that it lawfully may, each Loan Party hereby agrees that it will not invoke any law relating to the marshalling of Collateral which might cause delay in or impede the enforcement of Lender’s rights under this Agreement or under any other instrument creating or evidencing any of the Obligations or under which any of the Obligations is outstanding or by which any of the Obligations is secured or payment thereof is otherwise assured, and, to the extent that it

lawfully may, each Loan Party hereby irrevocably waives the benefits of all such laws. No amendment, modification or waiver of, or consent with respect to, any provision of this Agreement or the other Loan Documents shall in any event be effective unless the same shall be in writing and acknowledged by Lender and Borrower, and then any such amendment, modification, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

13.2 Confirmations . Borrower and each holder of a Note agree from time to time, upon written request received by it from the other, to confirm to the other in writing the aggregate unpaid principal balance of the Term Loan then outstanding under such Note.

13.3 Notices . All notices hereunder shall be in writing (including facsimile or electronic transmission) and shall be sent to the applicable party at its address shown on Annex A or at such other address as such party may, by written notice received by the other parties, have designated as its address for such purpose. Notices sent by facsimile or electronic transmission shall be deemed to have been given when sent; notices sent by mail shall be deemed to have been given three Business Days after the date when sent by registered or certified mail, postage prepaid; and notices sent by hand delivery or overnight courier service shall be deemed to have been given when received.

13.4 Computations . Where the character or amount of any asset or liability or item of income or expense is required to be determined, or any consolidation or other accounting computation is required to be made, for the purpose of this Agreement, such determination or calculation shall, to the extent applicable and except as otherwise specified in this Agreement, be made in accordance with GAAP, SAP or the instructions for the statutory statements of Kinsale Insurance as prescribed by the Arkansas Department of Insurance, as applicable, consistently applied; provided that if any Loan Party notifies Lender that the Loan Parties wish to amend any covenant in ARTICLE 9 or 10.13 (or any related definition) to eliminate or to take into account the effect of any change in GAAP on the operation of such covenant (or if Lender notifies the Loan Parties that Lender wishes to amend ARTICLE 9 or 10.13 (or any related definition) for such purpose), then Loan Parties’ compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant (or related definition) is amended in a manner satisfactory to the Loan Parties and Lender. If at any time any change in GAAP would affect the classification of leases, leases shall continue to be classified and accounted for on a basis consistent with that reflected in the audited financial statements of Borrower and its consolidated Subsidiaries delivered pursuant to Section 11.8 for all purposes of this Agreement unless the Loan Parties and Lender shall enter into a mutually acceptable amendment addressing such change as provided for above.

13.5 Costs, Expenses and Taxes .

(a) Each Loan Party, jointly and severally, agrees to pay on demand all reasonable out-of-pocket costs and expenses of Lender (including Attorney Costs and any Indemnified Taxes) in connection with the preparation, execution, syndication, delivery and administration (including perfection and protection of any Collateral (to the extent required by this Agreement) and the costs of Intralinks (or other similar service), if applicable) of this Agreement, the other Loan Documents and all other documents provided for herein or delivered or to be delivered hereunder or in connection herewith (including any amendment, supplement or waiver to any Loan Document), whether or not the transactions contemplated hereby or thereby shall be consummated, and all reasonable out-of-pocket costs and expenses (including Attorney Costs and any Indemnified Taxes) incurred by Lender after an Event of Default in connection with the collection of the Obligations or the enforcement of this Agreement the other Loan Documents or any such other documents or during any workout, restructuring or negotiations in respect thereof. In addition, each Loan Party agrees to pay, and to

save Lender harmless from all liability for, any fees of the Loan Parties’ auditors in connection with any reasonable exercise by Lender of their rights pursuant to Section 9.2 . All Obligations provided for in this Section 13.5 shall survive repayment of the Term Loan, cancellation of the Note and termination of this Agreement.

(b) Each Loan Party agrees to pay, and to save Lender harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement.

(c) The agreements in this Section 13.5 shall survive repayment of all (and shall be) Secured Obligations (and termination of all commitments under this Agreement), any foreclosure under, or any modification, release or discharge of, any or all of the Collateral Documents and termination of this Agreement.

13.6 GOVERNING LAW . THIS AGREEMENT AND THE NOTE SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

13.7 Confidentiality . As required by federal law and Lender’s policies and practices, Lender may need to obtain, verify, and record certain customer identification information and documentation in connection with opening or maintaining accounts, or establishing or continuing to provide services. Lender agrees to use commercially reasonable efforts (equivalent to the efforts Lender applies to maintain the confidentiality of its own confidential information) to maintain as confidential all information provided to it by any Loan Party or any Subsidiary of any Loan Party and designated as confidential, except that Lender may disclose such information (a) to Persons employed or engaged by Lender in evaluating, approving, structuring or administering the Term Loan and the Term Loan Commitment; (b) to any assignee or participant or potential assignee or participant that has agreed to comply with the covenant contained in this Section 13.7 (and any such assignee or participant or potential assignee or participant may disclose such information to Persons employed or engaged by them as described in clause (a) above); (c) as required or requested by any federal or state regulatory authority or examiner, or any insurance industry association, or as reasonably believed by Lender to be compelled by any court decree, subpoena or legal or administrative order or process; (d) as, on the advice of Lender’s counsel, is required by law; (e) in connection with the exercise of any right or remedy under the Loan Documents or in connection with any litigation to which Lender is a party; (f) to any nationally recognized rating agency that requires access to information about Lender’s investment portfolio in connection with ratings issued with respect to Lender; (g) to any Affiliate of Lender, or any other Person who may provide Bank Products to the Loan Parties; (h) to Lender’s independent auditors and other professional advisors as to which such information has been identified as confidential; or (i) that ceases to be confidential through no fault of Lender. Notwithstanding the foregoing, Borrower consents to the publication by Lender of a tombstone or similar advertising material relating to the financing transactions contemplated by this Agreement, and Lender reserves the right to provide to industry trade organizations information necessary and customary for inclusion in league table measurements. If any provision of any confidentiality agreement, non-disclosure agreement or other similar agreement between Borrower and Lender conflicts with or contradicts this Section 13.7 with respect to the treatment of confidential information, this section shall supersede all such prior or contemporaneous agreements and understandings between the parties.

13.8 Severability . Whenever possible each provision of this Agreement shall be interpreted in such manner as to be effective and valid pursuant to Section 13.13.1 under applicable law, but if any provision

of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. All obligations of the Loan Parties and rights of Lender expressed herein or in any other Loan Document shall be in addition to and not in limitation of those provided by applicable law.

13.9 Nature of Remedies . All Obligations of the Loan Parties and rights of Lender expressed herein or in any other Loan Document shall be in addition to and not in limitation of those provided by applicable law. No failure to exercise and no delay in exercising, on the part of Lender, any right, remedy, power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

13.10 Entire Agreement . This Agreement, together with the other Loan Documents, embodies the entire agreement and understanding among the parties hereto and supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof and thereof and any prior arrangements made with respect to the payment by the Loan Parties of (or any indemnification for) any fees, costs or expenses payable to or incurred (or to be incurred) by or on behalf of Lender.

13.11 Counterparts . This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Agreement. Receipt of an executed signature page to this Agreement by facsimile or other electronic transmission shall constitute effective delivery thereof. Electronic records of executed Loan Documents maintained by Lender shall be deemed to be originals.

13.12 Successors and Assigns . This Agreement shall be binding upon the Loan Parties, Lender and their respective successors and assigns, and shall inure to the benefit of the Loan Parties, Lender and the successors and assigns of Lender. No other Person shall be a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Agreement or any of the other Loan Documents. No Loan Party may assign or transfer any of its rights or Obligations under this Agreement without the prior written consent of Lender.

13.13 Assignments; Participations .

13.13.1 Assignments .

(1) Lender may at any time assign to one or more Persons (any such Person, an “ Assignee ”) all or any portion of the Term Loan and the Term Loan Commitment, with the prior written consent of Borrower, so long as no Event of Default exists (which consent shall not be unreasonably withheld or delayed and shall not be required for an assignment by Lender to an Affiliate of Lender). Borrower shall be deemed to have granted its consent to any assignment requiring its consent hereunder unless Borrower has expressly objected to such assignment within ten (10) Business Days after notice thereof.

(a) From and after the date on which the conditions described above have been met, (i) such Assignee shall be deemed automatically to have become a party hereto and, to the extent that rights and obligations hereunder have been assigned to such Assignee pursuant to an assignment agreement between Lender and the Assignee, shall have the rights and

obligations of Lender hereunder and (ii) Lender, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment Agreement, shall be released from its rights (other than its indemnification rights) and obligations hereunder. Upon the request of the Assignee (and, as applicable, Lender) pursuant to an effective assignment agreement, Borrower shall execute and deliver to the Assignee (and, as applicable, Lender) a Note in the principal amount of the Assignee’s pro rata share of the Term Loan Commitment plus the principal amount of the Assignee’s Term Loan (and, as applicable, a Note in the principal amount of the Term Loan retained by Lender). Each such Note shall be dated the effective date of such assignment. Upon receipt by Lender of such Note, Lender shall return to Borrower any prior Note held by it.

(b) Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section 13.13.1 shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release Lender from any of its obligations hereunder or substitute any such pledgee or assignee for Lender as a party hereto.

13.13.2 Participations . Lender may at any time sell to one or more Persons participating interests in the Term Loan, the Term Loan Commitment or its other interests hereunder (any such Person, a “ Participant ”). In the event of a sale by Lender of a participating interest to a Participant, (a) Lender’s obligations hereunder shall remain unchanged for all purposes, (b) Borrower shall continue to deal solely and directly with Lender in connection with Lender’s rights and obligations hereunder and (c) all amounts payable by Borrower shall be determined as if Lender had not sold such participation and shall be paid directly to Lender. Borrower agrees that if amounts outstanding under this Agreement are due and payable (as a result of acceleration or otherwise), each Participant shall be deemed to have the right of set-off in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as Lender under this Agreement; provided that such right of set-off shall be subject to the obligation of each Participant to share with Lender, and Lender agrees to share with each Participant, on a pro rata basis. Borrower also agrees that each Participant shall be entitled to the benefits of Section 5.5 or ARTICLE 6 as if it were Lender ( provided that on the date of the participation no Participant shall be entitled to any greater compensation pursuant to Section 5.5 or ARTICLE 6 than would have been paid to Lender on such date if no participation had been sold and that each Participant complies with Section 5.5 or ARTICLE 6 as if it were a direct assignee). Each Lender that sells a participation to a Participant shall, acting solely for this purpose as a non-fiduciary agent of Borrower, maintain at one of its offices a register for the recordation of the names and addresses of each such Participant, and the commitments of, and principal amount of the Term Loan owing to, such Participant (the “ Participant Register ”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in the Term Loan, commitments or its other obligations under any Loan Document) to any Person except to the extent that disclosure is required to establish that such a participation in a Term Loan, commitment or other obligation is held by a Participant who is a non-resident alien individual (within the meaning of Code Section 871) or a foreign corporation (within the meaning of Code Section 881) is in registered form (as described above). The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall have the right to treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.

13.14 Captions . Section captions used in this Agreement are for convenience only and shall not affect the construction of this Agreement.

13.15 Customer Identification - USA Patriot Act Notice . Lender (for itself and not on behalf of any other party) hereby notifies the Loan Parties that, pursuant to the requirements of the USA Patriot Act, Title III of Pub. L. 107-56, signed into law October 26, 2001 (the “Patriot Act”), it is required to obtain, verify and record information that identifies the Loan Parties, which information includes the name and address of the Loan Parties and other information that will allow Lender, as applicable, to identify the Loan Parties in accordance with the Patriot Act.

13.16 INDEMNIFICATION BY LOAN PARTIES . IN CONSIDERATION OF THE EXECUTION AND DELIVERY OF THIS AGREEMENT BY LENDER AND THE AGREEMENT BY LENDER TO EXTEND THE COMMITMENTS PROVIDED HEREUNDER, EACH LOAN PARTY HEREBY AGREES TO INDEMNIFY, EXONERATE AND HOLD LENDER AND EACH OF THE OFFICERS, DIRECTORS, EMPLOYEES, AFFILIATES AND AGENTS OF LENDER (EACH A “ LENDER PARTY ”) FREE AND HARMLESS FROM AND AGAINST ANY AND ALL ACTIONS, CAUSES OF ACTION, SUITS, LOSSES, LIABILITIES, DAMAGES AND EXPENSES, INCLUDING REASONABLE ATTORNEY’S FEES AND COURT COSTS (COLLECTIVELY, THE “INDEMNIFIED LIABILITIES”), INCURRED BY LENDER PARTIES OR ANY OF THEM AS A RESULT OF, OR ARISING OUT OF, OR RELATING TO (A) ANY TENDER OFFER, MERGER, PURCHASE OF CAPITAL SECURITIES, PURCHASE OF ASSETS OR OTHER SIMILAR TRANSACTION FINANCED OR PROPOSED TO BE FINANCED IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, WITH THE PROCEEDS OF THE TERM LOAN, (B) THE USE, HANDLING, RELEASE, EMISSION, DISCHARGE, TRANSPORTATION, STORAGE, TREATMENT OR DISPOSAL OF ANY HAZARDOUS SUBSTANCE AT ANY PROPERTY OWNED OR LEASED BY ANY LOAN PARTY OR ANY SUBSIDIARY OF ANY LOAN PARTY, (C) ANY VIOLATION OF ANY ENVIRONMENTAL LAWS WITH RESPECT TO CONDITIONS AT ANY PROPERTY OWNED OR LEASED BY ANY LOAN PARTY OR ANY SUBSIDIARY OF ANY LOAN PARTY OR THE OPERATIONS CONDUCTED THEREON, (D) THE INVESTIGATION, CLEANUP OR REMEDIATION OF OFFSITE LOCATIONS AT WHICH ANY LOAN PARTY OR ANY SUBSIDIARY OF ANY LOAN PARTY OR THEIR RESPECTIVE PREDECESSORS ARE ALLEGED TO HAVE DIRECTLY OR INDIRECTLY DISPOSED OF HAZARDOUS SUBSTANCES OR (E) THE EXECUTION, DELIVERY, PERFORMANCE OR ENFORCEMENT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT BY ANY OF LENDER PARTIES, EXCEPT FOR ANY SUCH INDEMNIFIED LIABILITIES ARISING ON ACCOUNT OF THE APPLICABLE LENDER PARTY’S BAD FAITH, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR THE APPLICABLE LENDER PARTY’S MATERIAL BREACH OF ITS OBLIGATIONS HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT AS DETERMINED BY A FINAL, NONAPPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION. IF AND TO THE EXTENT THAT THE FOREGOING UNDERTAKING MAY BE UNENFORCEABLE FOR ANY REASON, EACH LOAN PARTY HEREBY AGREES TO MAKE THE MAXIMUM CONTRIBUTION TO THE PAYMENT AND SATISFACTION OF EACH OF THE INDEMNIFIED LIABILITIES WHICH IS PERMISSIBLE UNDER APPLICABLE LAW. ALL OBLIGATIONS PROVIDED FOR IN THIS SECTION 13.16 SHALL SURVIVE REPAYMENT OF THE TERM LOAN, CANCELLATION OF THE NOTE, ANY FORECLOSURE UNDER, OR ANY MODIFICATION, RELEASE OR DISCHARGE OF, ANY OR ALL OF THE COLLATERAL DOCUMENTS AND TERMINATION OF THIS AGREEMENT.

13.17 Nonliability of Lender . The relationship between Borrower on the one hand and Lender on the other hand shall be solely that of borrower and lender. Lender has no fiduciary relationship with or duty

to any Loan Party arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Loan Parties, on the one hand, and Lender, on the other hand, in connection herewith or therewith is solely that of debtor and creditor. Lender undertakes no responsibility to any Loan Party to review or inform any Loan Party of any matter in connection with any phase of any Loan Party’s business or operations. Each Loan Party agrees that Lender shall have no liability to any Loan Party (whether sounding in tort, contract or otherwise) for losses suffered by any Loan Party in connection with, arising out of, or in any way related to the transactions contemplated and the relationship established by the Loan Documents, or any act, omission or event occurring in connection therewith, unless it is determined in a final non-appealable judgment by a court of competent jurisdiction that such losses resulted from the bad faith, gross negligence or willful misconduct of the party from which recovery is sought or from a material breach by such party of its obligations hereunder or under any other Loan Document. NO LENDER PARTY SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM THE USE BY OTHERS OF ANY INFORMATION OR OTHER MATERIALS OBTAINED THROUGH INTRALINKS OR OTHER SIMILAR INFORMATION TRANSMISSION SYSTEMS IN CONNECTION WITH THIS AGREEMENT, NOR SHALL ANY LENDER PARTY HAVE ANY LIABILITY WITH RESPECT TO, AND EACH LOAN PARTY HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE FOR ANY SPECIAL, PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ARISING OUT OF ITS ACTIVITIES IN CONNECTION HEREWITH OR THEREWITH (WHETHER BEFORE OR AFTER THE CLOSING DATE). Each Loan Party acknowledges that it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents to which it is a party. No joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Loan Parties and Lender.

13.18 FORUM SELECTION AND CONSENT TO JURISDICTION . ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS; PROVIDED THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE LENDER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION. EACH LOAN PARTY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. EACH LOAN PARTY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS. EACH LOAN PARTY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

13.19 WAIVER OF JURY TRIAL . EACH LOAN PARTY AND LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY LENDING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY

SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.


ARTICLE 14	LOAN GUARANTY.

14.1 Guaranty .

14.1.2 Each of the Loan Guarantors hereby, jointly and severally, unconditionally and irrevocably, as a primary obligor and not only a surety, guaranties to Lender and its successors, indorsees, transferees and assigns, the prompt and complete payment and performance by Borrower when due (whether at the stated maturity, by acceleration or otherwise) of the Secured Obligations. Each Loan Guarantor further agrees to pay all costs and expenses, including, without limitation, all Attorney Costs paid or incurred by Lender in endeavoring to collect all or any part of the Secured Obligations from, or in prosecuting any action against, any Loan Guarantor, Borrower or any other guarantor of all or any part of the Secured Obligations. All amounts payable by any Loan Guarantor under this ARTICLE 14 shall be payable upon demand by Lender, without set-off or counterclaim.

14.1.3 Anything herein or in any other Loan Document to the contrary notwithstanding, the maximum liability of each Loan Guarantor hereunder and under the other Loan Documents shall in no event exceed the amount which can be guaranteed by such Loan Guarantor under applicable federal and state laws relating to the insolvency of debtors (after giving effect to the right of contribution established in Section 14.2).

14.1.4 Each Loan Guarantor agrees that the Secured Obligations may at any time and from time to time exceed the amount of the liability of such Loan Guarantor hereunder without impairing the guaranty contained in this ARTICLE 14 or affecting the rights and remedies of Lender hereunder.

14.1.5 The guaranty contained in this ARTICLE 14 shall remain in full force and effect until all of the Secured Obligations shall have been Paid in Full.

14.1.6 No payment made by Borrower, any of the Loan Guarantors, any other guarantor or any other Person or received or collected by Lender from Borrower, any of the Loan Guarantors, any other guarantor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Secured Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Loan Guarantor hereunder which shall, notwithstanding any such payment (other than any payment made by such Loan Guarantor in respect of the Secured Obligations or any payment received or collected from such Loan Guarantor in respect of the Secured Obligations), remain liable for the Secured Obligations up to the maximum liability of such Loan Guarantor hereunder until the Secured Obligations are Paid in Full.

14.2 Right of Contribution . Each Loan Guarantor hereby agrees that, to the extent that a Loan Guarantor shall have paid more than its proportionate share of any payment made hereunder, such Loan Guarantor shall be entitled to seek and receive contribution from and against any other Loan Guarantor hereunder which has not paid its proportionate share of such payment. Each Loan Guarantor’s right of contribution shall be subject to the terms and conditions of Section 14.3 . The provisions of this Section 14.2 shall in no respect limit the obligations and liabilities of any Loan Guarantor to Lender, and each Loan Guarantor shall remain liable to Lender for the full amount guaranteed by such Loan Guarantor hereunder.

14.3 No Subrogation . Notwithstanding any payment made by any Loan Guarantor hereunder or any set-off or application of funds of any Loan Guarantor by Lender, no Loan Guarantor shall be entitled to be subrogated to any of the rights of Lender against Borrower or any other Loan Guarantor or any collateral security or guaranty or right of offset held by Lender for the payment of the Secured Obligations, nor shall any Loan Guarantor seek or be entitled to seek any contribution or reimbursement from Borrower or any other Loan Guarantor in respect of payments made by such Loan Guarantor hereunder, until all of the Secured Obligations are Paid in Full. Should any Loan Guarantor have the right, notwithstanding the foregoing, to exercise its subrogation rights, such Loan Guarantor hereby expressly and irrevocably (a) subordinates any and all rights at law or in equity to subrogation, reimbursement, exoneration, contribution, indemnification or set off that such Loan Guarantor may have to the payment and performance in full of the Secured Obligations until the Secured Obligations are Paid in Full and (b) waives any and all defenses available to a surety, guarantor or accommodation co-obligor until the Secured Obligations are Paid in Full. Each Loan Guarantor acknowledges and agrees that this subordination is intended to benefit Lender and shall not limit or otherwise affect any Loan Guarantor’s liability hereunder or the enforceability of this ARTICLE 14 , and that Lender and its successors and assigns are intended third party beneficiaries of the waivers and agreements set forth in this ARTICLE 14 . If any amount shall be paid to any Loan Guarantor on account of such subrogation rights at any time when all of the Secured Obligations shall not have been Paid in Full, such amount shall be held by such Loan Guarantor in trust for Lender, shall be segregated from other funds of such Loan Guarantor, and shall, forthwith upon receipt by such Loan Guarantor, be turned over to Lender in the exact form received by such Loan Guarantor (duly indorsed by such Loan Guarantor, if required), to be applied against the Secured Obligations, whether matured or unmatured, in such order as Lender may determine.

14.4 Amendments, etc. with respect to the Secured Obligations . Each Loan Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against any Loan Guarantor and without notice to or further assent by any Loan Guarantor, any demand for payment of any of the Secured Obligations made by Lender may be rescinded by Lender and any of the Secured Obligations continued, and the Secured Obligations, or the liability of Borrower or any other Person upon or for any part thereof, or any collateral security or guaranty therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by Lender, and this Agreement and the other Loan Documents and any other documents executed and delivered in connection herewith and therewith may be amended, modified, supplemented or terminated, in whole or in part, as Lender may deem advisable from time to time. Lender shall have no obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Secured Obligations or for the guaranty contained in this ARTICLE 14 or any property subject thereto.

14.5 Discharge . Each Loan Guarantor’s guaranty hereunder shall not be discharged or otherwise affected as a result of: (a) the invalidity or unenforceability of any security for or other guaranty of all or any part of the Secured Obligations or of any promissory note or other agreement, document or instrument (including, without limitation, this Agreement and the other Loan Documents) evidencing or in respect of all or any part of the Secured Obligations, or the lack of perfection or continuing perfection or failure of priority of any security for all or any part of the Secured Obligations or any other guaranty therefor; (b) the absence of any attempt to collect the Secured Obligations, or any portion thereof, from Borrower, or any other guarantor or other action to enforce the same; (c) any failure by Lender to acquire, perfect and maintain any security interest in, or to preserve any rights to, any security or collateral for all or any part of the Secured Obligations or any guaranty therefor; (d) any change, restructuring or termination of the corporate structure, ownership or existence of Borrower or any Loan Guarantor; (e) any election by Lender in any proceeding instituted under Chapter 11 of Title 11 of the United States Code (11 U.S.C. § 101 et seq.) (the “ Bankruptcy Code ”); (f) any borrowing or grant of a security interest by Borrower or any Loan Guarantor, as debtors-in-possession, or extension of credit, under the Bankruptcy Code; (g) the disallowance, under the Bankruptcy

Code, of all or any portion of Lender’s claim(s) for repayment of the Secured Obligations; (h) any use of cash collateral under the Bankruptcy Code; (i) any agreement or stipulation as to the provision of adequate protection in any bankruptcy proceeding; (j) the avoidance of any lien in favor of Lender for any reason; (k) any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, liquidation or dissolution proceeding commenced by or against Borrower, any Loan Guarantor or any other guarantor, maker or endorser, including without limitation, any discharge of, or bar or stay against collecting or accelerating, all or any of the Secured Obligations (or any interest thereon) in or as a result of any such proceeding; (l) any failure by Lender to file or enforce a claim against Borrower, any Loan Guarantor or such Person’s estate in any bankruptcy or insolvency case or proceeding; (m) any action taken by Lender that is authorized by this Agreement; (n) any election by Lender under Section 9-604(a) of the Uniform Commercial Code as enacted in any relevant jurisdiction as to any security for the Secured Obligations or any guaranty of all or any part of the Secured Obligations; or (o) any other circumstance which might otherwise constitute a statutory, legal or equitable discharge or defense of a surety or guarantor, including, without limitation, any defense any Loan Guarantor may have pursuant to the Illinois Sureties Act.

14.6 Notice . Lender may, from time to time, at its sole discretion and without notice to any Loan Guarantor (or any of them), take any or all of the following actions: (a) retain or obtain a security interest in any property to secure any of the Secured Obligations or any obligation hereunder, (b) retain or obtain the primary or secondary obligation of any obligor or obligors, in addition to the undersigned, with respect to any of the Secured Obligations, (c) extend or renew any of the Secured Obligations for one or more periods (whether or not longer than the original period), alter or exchange any of the Secured Obligations, or release or compromise any obligation of any Loan Guarantor or any obligation of any nature of any other obligor with respect to any of the Secured Obligations, (d) release any guaranty or right of offset or its security interest in, or surrender, release or permit any substitution or exchange for, all or any part of any property securing any of the Secured Obligations or any obligation hereunder, or extend or renew for one or more periods (whether or not longer than the original period) or release, compromise, alter or exchange any obligations of any nature of any obligor with respect to any such property, and (e) resort to any Loan Guarantor for payment of any of the Secured Obligations when due, whether or not Lender shall have resorted to any property securing any of the Secured Obligations or any obligation hereunder or shall have proceeded against any other of the undersigned, or any other obligor primarily or secondarily obligated with respect to any of the Secured Obligations.

14.7 Waivers . Each Loan Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Secured Obligations and notice of or proof of reliance by Lender upon the guaranty contained in this ARTICLE 14 or acceptance of the guaranty contained in this ARTICLE 14 ; the Secured Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guaranty contained in this ARTICLE 14 , and all dealings between Borrower and any of the Loan Guarantors, on the one hand, and Lender, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guaranty contained in this ARTICLE 14 . Each Loan Guarantor waives (a) diligence, presentment, protest, demand for payment and notice of default, dishonor or nonpayment and all other notices whatsoever to or upon Borrower or any of the Loan Guarantors with respect to the Secured Obligations, (b) notice of the existence or creation or non-payment of all or any of the Secured Obligations and (c) all diligence in collection or protection of or realization upon any Secured Obligations or any security for or guaranty of any Secured Obligations.

14.7.2 Each Loan Guarantor further waives, in each case to the extent permitted by applicable law:

(a) Notices: (i) of default in respect of the Secured Obligations or any other guaranty, (ii) of the existence, creation or incurrence of new or additional indebtedness or other Secured Obligations, arising either from additional loans extended to Borrower or otherwise, (iii) that the principal amount, or any portion thereof, and/or any interest on any document or instrument evidencing all or any part of the Secured Obligations is due, (iv) of any and all proceedings to collect from Borrower any maker, endorser or any other guarantor of all or any part of the Secured Obligations, or from anyone else, (v) of exchange, sale, surrender or other handling of any security or collateral given to Lender to secure payment of the Secured Obligations or any guaranty therefor, (vi) of assignment, sale or other transfer of the Note to a transferee thereof, (vii) of any action taken by Lender that is authorized by this Agreement and (viii) which such Loan Guarantor is otherwise entitled to receive;

(b) any right to require Lender to: (i) proceed first against Borrower or any other Person whatsoever, (ii) proceed against or exhaust any security given to or held by Lender in connection with the Secured Obligations or any other guaranty, or (iii) pursue any other remedy in Lender’s power whatsoever;

(c) any defense arising by reason of (i) any legal disability or other defense of Borrower or any Loan Guarantor with respect to all or any portion of the Secured Obligations, (ii) the cessation from any cause whatsoever (other than payment) of the liability of Borrower or any Loan Guarantor with respect to all or any portion of the Secured Obligations, or (iii) any act or omission of Lender or others which directly or indirectly, by operation of law or otherwise, results in or aids the discharge or release of Borrower, any Loan Guarantor, or any security given to or held by Lender in connection with the Secured Obligations or any other guaranty;

(d) any and all other guaranty or suretyship defenses under applicable law, including, without limitation, under the Illinois Sureties Act; and

(e) the benefit of any statute of limitations, bar date, equitable defense of laches affecting the Secured Obligations or any Loan Guarantor’s liability hereunder or the enforcement hereof.

All waivers granted by the Loan Guarantor hereunder shall be unconditional and irrevocable irrespective of whether the Secured Obligations have been Paid in Full by the Loan Guarantors or any other party.

14.7.3 Each Loan Guarantor consents and agrees that Lender shall be under no obligation to marshal any assets in favor of any Loan Guarantor or against or in payment of any or all of the Secured Obligations. Each Loan Guarantor further agrees that, to the extent that Borrower makes a payment or payments to Lender, or Lender receives any proceeds of collateral, which payment or payments or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to Borrower, its estates, trustee, receiver or any other party, including, without limitation, such Loan Guarantor, under any bankruptcy law, state or federal law, common law or equitable theory, then to the extent of such payment or repayment, the Secured Obligations or the part thereof which has been paid, reduced or satisfied by such amount, and any Loan Guarantor's obligations hereunder with respect to such portion of the Secured Obligations, shall be reinstated and continued in full force and effect as of the date such initial payment, reduction or satisfaction occurred.

14.7.4 Each Loan Guarantor agrees that, if an Event of Default shall have occurred and be continuing, any and all claims of any Loan Guarantor against Borrower, any endorser or any other guarantor of all or any part of the Secured Obligations, or against any of Borrower’s properties, whether arising by reason of any payment by such Loan Guarantor to Lender pursuant to this ARTICLE 14 or with respect to any “Intercompany Indebtedness” (as hereinafter defined), shall be subordinate and subject in right of payment to the prior payment, in full, of all of the Secured Obligations. Notwithstanding any right of any Loan Guarantor to ask, demand, sue for, take or receive any payment from Borrower, if an Event of Default shall have occurred and be continuing, all rights, liens and security interests of such Loan Guarantor, whether now or hereafter arising and howsoever existing, in any assets of Borrower shall be and are subordinated to the rights of Lender in those assets. If an Event of Default shall have occurred and be continuing, no Loan Guarantor shall have right to possession of any such asset or to foreclose upon any such asset, whether by judicial action or otherwise, unless and until all of the Secured Obligations shall have been Paid in Full. If all or any part of the assets of Borrower, or the proceeds thereof, are subject to any distribution, division or application to the creditors of Borrower, whether partial or complete, voluntary or involuntary, and whether by reason of liquidation, bankruptcy, arrangement, receivership, assignment for the benefit of creditors or any other action or proceeding, or if the business of Borrower is dissolved or if substantially all of the assets of Borrower are sold, then, and in any such event (such events being herein referred to as an “Insolvency Event”), any payment or distribution of any kind or character, either in cash, securities or other property, which shall be payable or deliverable upon or with respect to any indebtedness of Borrower to any Loan Guarantor (“Intercompany Indebtedness”) shall be paid or delivered directly to Lender for application on any of the Secured Obligations, due or to become due, until such Secured Obligations shall have first been Paid in Full. If an Insolvency Event shall have occurred and any amount shall be paid to any Loan Guarantor on account of Intercompany Indebtedness at any time when all of the Secured Obligations shall not have been Paid in Full, such amount shall be held by such Loan Guarantor in trust for Lender, segregated from other funds of such Loan Guarantor, and shall, forthwith upon receipt by such Loan Guarantor, be turned over to Lender in the exact form received by such Loan Guarantor (duly indorsed by such Loan Guarantor, if required), to be applied against the Secured Obligations, whether matured or unmatured, in such order as Lender may determine. Such Loan Guarantor agrees that until the Secured Obligations have been Paid in Full, such Loan Guarantor will not assign or transfer to any Person (other than Lender) any claim such Loan Guarantor has or may have against any Borrower.

14.8 Payments . Each Loan Guarantor hereby guaranties that payments hereunder will be paid to Lender without set-off or counterclaim in Dollars at the office of Lender specified herein.

14.9 Representations and Warranties . Each Loan Guarantor represents and warrants to Lender as of the date hereof, as of the date any Loan Party becomes a party hereto pursuant to a joinder, that there is no litigation or administrative proceeding pending or, to the knowledge of such Loan Guarantor, threatened to restrain or enjoin the transactions contemplated by this ARTICLE 14 , or questioning the validity hereof, or in any way contesting the powers of such Loan Guarantor to perform its obligations under this ARTICLE 14 , or in which an unfavorable decision, ruling or finding would reasonably be expected to adversely affect the transactions contemplated by this ARTICLE 14 .

[**Remainder Of Page Intentionally Left Blank; Signature Page Follows**]

The parties hereto have caused this Agreement to be duly executed and delivered by their duly authorized officers as of the date first set forth above.

KINSALE CAPITAL GROUP, INC. , as Borrower

By: /s/ Michael P. Kehoe

Name: Michael P. Kehoe

Title: CEO

KINSALE MANAGEMENT, INC. , as Loan Guarantor

By: /s/ Michael P. Kehoe

Name: Michael P. Kehoe

Title: CEO

ASPERA INSURANCE SERVICES, INC ., as Loan Guarantor

By: /s/ Michael P. Kehoe

Name: Michael P. Kehoe

Title: CEO

THE PRIVATEBANK AND TRUST COMPANY , as Lender

By: /s/ Austin G. Love

Name: Austin G. Love

Title: Associate Managing Director

ANNEX A

ADDRESSES FOR NOTICE



To the Lender :		The PrivateBank and Trust Company 120 South LaSalle Street Chicago, Illinois 60603 Attention: Andrew C. Haak, Managing Director

With a copy of notices sent to Lender sent to: ( provided such copy shall not constitute notice )		Freeborn & Peters LLP 311 South Wacker Drive, Suite 3000 Chicago, Illinois 60606 Attention: Anthony J. Zeoli, Esq.

To Borrower :		Kinsale Capital Group, Inc. 2221 Edward Holland Drive, Suite 600 Richmond, Virginia 23230 Attention: Michael P. Kehoe
To The Loan Guarantors :		Kinsale Management, Inc.; Aspera Insurance Services, Inc. c/o Kinsale Capital Group, Inc. 2221 Edward Holland Drive, Suite 600 Richmond, Virginia 23230 Attention: Michael P. Kehoe
With a copy of notices sent to Borrower and/or Loan Guarantors to: ( provided such copy shall not constitute notice )		Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square, New York 10036-6522 Attention: Dwight S. Yoo, Esq.

SCHEDULE 8.8

EQUITY OWNERSHIP; SUBSIDIARIES



Loan Party/Subsidiary Kinsale Capital Group, Inc.	Authorized Capital 18,333,333 shares of Common Stock, $0.0001 par value per share, of which 15,000,000 shares are designated as Class A Common Voting Shares and 3,333,333 are designated as Class B Common Non-Voting Shares	Issued and Outstanding Shares 13,803,183 Class A Shares 1,538,836 Class B Shares	Owner Not Applicable
Kinsale Management, Inc.	10,000 authorized shares, par value $0.01	100	100% by Kinsale Capital Group, Inc.
Kinsale Insurance Company	5,000,000 authorized shares, par value $1.00	3,750,000	100% by Kinsale Capital Group, Inc.
Aspera Insurance Services, Inc.	5,000 authorized shares, par value $0.01	100	100% by Kinsale Capital Group, Inc.

SCHEDULE 10.2

EXISTING LIENS

NONE

SCHEDULE 10.10

EXISTING INVESTMENTS


1.	The Investments described in in the Investment Schedules.


2.	The inter-company obligations contemplated by that certain Management Services Agreement dated as of February 5, 2010 by and between Kinsale Management, Inc. and Kinsale Insurance Company.


3.	The inter-company obligations contemplated by that certain Management Services Agreement dated as of April 22, 2014 by and between Kinsale Management, Inc. and Aspera Insurance Services, Inc.


4.	The inter-company obligations contemplated by that certain Amended and Restated Tax Sharing & Allocation Agreement dated as of April 22, 2014 among Kinsale Capital Group, Inc., Kinsale Management, Inc., Kinsale Insurance Company and Aspera Insurance Services, Inc.

EXHIBIT A

FORM OF COMPLIANCE CERTIFICATE

To: The PrivateBank and Trust Company, as Lender

Please refer to the Amended and Restated Loan and Security Agreement dated as of June [__], 2016 (as amended, restated, supplemented or otherwise modified from time to time, the “ Loan Agreement ”) by and among KINSALE CAPITAL GROUP, INC. (“ Borrower ”), and THE PRIVATEBANK AND TRUST COMPANY (“ Lender ”), among others . Terms used but not otherwise defined herein are used herein as defined in the Loan Agreement.

Reports . Enclosed herewith is a copy of the [annual audited/quarterly] report of Borrower and its consolidated Subsidiaries as at _____________, ____ (the “ Computation Date ”), which report fairly presents in all material respects the financial condition and results of operations [(subject to the absence of footnotes and to normal year-end adjustments)] of Borrower and its consolidated Subsidiaries as of the Computation Date and has been prepared in accordance with GAAP consistently applied.


II.	Financial Tests . Borrower hereby certifies and warrants to you that the following is a true and correct computation as at the Computation Date of the following ratios and/or financial restrictions contained in the Loan Agreement:



A.		Section 10.13.1 - Minimum Risk Based Capital

	1.	Risk Based Capital Ratio
		for Kinsale Insurance as of
		December 31, 20__	________%

	2.	Minimum Required	350%

	3.	Met	Yes/No

B.		Section 10.13.2 - Statutory Surplus

	1.	Statutory Surplus for Kinsale
		Insurance as of March 31, 2016	________

	2.	90% of Item 1	________

	3.	Statutory Net Income
		for Kinsale Insurance



		from April 1, 2016 to
		the Computation Date	_________

	4.	50% of Item 3	_________

	5.	Minimum Statutory Surplus
		(Item 2, plus Item 4)	_________

	6.	Statutory Surplus as of Computation Date	_________

	7.	Met	Yes/No

C.		Section 10.13.3 - Total Debt to Capital Ratio

	1.	Total Debt of Borrower
		and its consolidated Subsidiaries
		as of the Computation Date	$_________

	2.	Net Worth of Borrower
		and its consolidated Subsidiaries
		plus Item 1	$_________

	3.	Ratio of (1) to (2)	___ to ___

	4.	Maximum allowed	1.00 to 2.50

	5.	Met	Yes/No

D.		Section 10.13.4 -Net Worth

	1.	Net Worth of Borrower
		and its consolidated subsidiaries
		as of March 31, 2016	_________

	2.	85% of Item 1	_________

	3.	Net Earnings as from April 1, 2016
		to the Computation Date	_________

	4.	50% of Item 3	_________



5.	Minimum Net Worth (Item 2, plus Item 4)	$_________

6.	Net Worth as of the Computation Date	$_________

7.	Met	Yes/No

Borrower further certifies to you that no Default or Event of Default has occurred and is continuing.

Borrower has caused this Compliance Certificate to be executed and delivered by its duly authorized officer on _________, ____.

KINSALE CAPITAL GROUP, INC.

By:

Name:

Title:

Exhibit 10.2

KINSALE CAPITAL GROUP, INC.

AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

dated as of August 2, 2016

TABLE OF CONTENTS



		Page
1.	Certain Definitions	2
2.	Demand Registrations	3
3.	Piggyback Registrations	6
4.	S-3 Registration	8
5.	Lock-Up Agreements	8
6.	Registration Procedures	9
7.	Registration Expenses	14
8.	Indemnification	15
9.	Participation in Underwritten Registrations	18
10.	Expenses	18
11.	Aggregation of Stock	18
12.	Entire Agreement	18
13.	Governing Law; Venue; Service of Process	18
14.	Successors and Assignees; Assignment	19
15.	Notices	19
16.	Modifications; No Implied Waiver	20
17.	Severability	20
18.	Headings	20
19.	Counterparts	20
20.	Construction; Interpretation	21
21.	No Inconsistent Agreement	21
22.	No Joint Venture, Etc.	21
23.	Specific Performance	21
24.	Securities Law Acknowledgment	21
Schedule 1	Virginia Capital Purchasers
Schedule 2	Other Purchasers

KINSALE CAPITAL GROUP, INC.

AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT, dated as of August 2, 2016 (this " Agreement "), is by and among Kinsale Capital Group, Inc. (as successor to Kinsale Capital Group, Ltd.), a Delaware corporation (the " Company "), Moelis Capital Partners Opportunity Fund I, LP (as successor to MCP I (Kinsale), L.P.), a Delaware limited partnership (" MCP I "), Moelis Capital Partners Opportunity Fund I-A, LP, a Delaware limited partnership (" MCP I-A " and, together with MCP I, " Moelis "), Virginia Capital Private Equity, LP (as successor to Virginia Capital SBIC, LP), a Virginia limited partnership (" VCPE "), and the other investors listed on Schedule 1 hereto (each a " Virginia Capital Purchaser " and, together with VCPE, " Virginia Capital "), M.P. Kehoe, LLC, a Virginia limited liability company, and the other investors listed on Schedule 2 hereto. Each of MCP I, MCP I-A, VCPE, each Virginal Capital Purchaser, M.P. Kehoe, LLC, each other investor listed on Schedule 2 and any other Person (as defined below) that may hereafter become a party hereto pursuant to Section 14 hereof are referred to herein as a " Shareholder " and collectively as the " Shareholders ".

WHEREAS, MCP I (Kinsale), L.P., a Cayman Islands exempted limited partnership, MCP I-A, Virginia Capital SBIC, LP, a Virginia limited partnership, the other investors named therein and Kinsale Capital Group, Ltd., a Bermuda holding company, entered into that certain registration rights agreement dated as of June 16, 2009;

WHEREAS, such registration agreement was amended and restated as of March 8, 2010 (the " 2010 Registration Rights Agreement ");

WHEREAS, the name under which the Company was originally incorporated in the State of Delaware following its domestication from the Islands of Bermuda was Kinsale Capital Group, Ltd. with the Certificate of Domestication of Non-United States Corporation and the original Certificate of Incorporation filed with the Secretary of State of the State of Delaware (the " Delaware Secretary of State ")on September 5, 2014; and the original Certificate of Incorporation was amended on September 5, 2014 by filing a certificate of ownership and merger with the Delaware Secretary of State, pursuant to which the Company changed its name to Kinsale Capital Group, Inc.;

WHEREAS, in connection with the Company's initial public offering of Common Stock (the " IPO "), the Company has filed an Amended and Restated Certificate of Incorporation (the " Restated Charter ") with the Delaware Secretary of State to become effective at the time specified in such Restated Charter;

WHEREAS, upon the effectiveness of the Restated Charter, all outstanding shares of Class A Common Stock, par value $0.0001 per share, of the Company (the " Class A Common Shares ") and all outstanding shares of Class B Common Stock, par value $0.0001 per share, of

the Company (the " Class B Common Shares ") will be reclassified as and converted into shares of common stock, par value $0.01 per share, of the Company (the " Common Stock "); and

WHEREAS, Moelis and VCPE, as the Shareholders (as defined in the 2010 Registration Rights Agreement) holding a majority of the outstanding Registrable Class A Common Shares (as defined in the 2010 Registration Rights Agreement), are entering into this Agreement as an amendment and restatement of the 2010 Registration Rights Agreement pursuant to Section 16 of the 2010 Registration Rights Agreement, to become effective upon completion of the IPO.

NOW, THEREFORE, in consideration of the foregoing and the mutual promises herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, covenant and agree as follows:


1.	Certain Definitions .

In addition to the terms defined elsewhere in this Agreement, the following terms shall have the following meanings:

" Affiliate " means, with reference to any Person, any other Person of which such Person is a member, director, officer, general partner or employee, or any other Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, such Person.

" Board " means the Company's Board of Directors.

" Business Day " means any day other than a Saturday or Sunday that is not a legal holiday or a day on which banks are generally authorized or obligated by law or regulation to close in the City of New York.

" Exchange Act " means the United States Securities Exchange Act of 1934, as amended.

" Indemnified Persons " means the Shareholder Indemnified Persons (as defined below) or the Company Indemnified Persons (as defined below), as the case may be.

" Person " means any individual, corporation, association, partnership, limited liability company, joint venture, joint stock or other company, business trust, trust, organization, governmental authority or other entity of any kind.

" Preliminary Prospectus " means any preliminary Prospectus or preliminary Prospectus supplement that may be included in any Registration Statement.

" Prospectus " means the prospectus or prospectuses included in any Registration Statement (including a prospectus that includes information previously omitted from a prospectus filed as part of an effective Registration Statement in reliance on Rule 430A under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement, and all supplements to the prospectus, including all material incorporated by reference in such prospectus.

" Public Offering " means the offer of shares of Common Stock (or securities exercisable or convertible into or redeemable for shares of Common Stock) on a broadly-distributed basis to the public pursuant to an effective Registration Statement under the Securities Act (other than a Registration Statement on Form S-4, Form S-8 or any similar or successor form) pursuant to a firm-commitment or best-efforts underwriting or purchase commitment.

" Registrable Securities " means (a) any shares of Common Stock owned by any Shareholder and (b) the securities issued or issuable with respect to such shares of Common Stock by way of stock dividend or stock split or in connection with a combination of shares, merger, consolidation, business combination, scheme of arrangement, amalgamation,

recapitalization or similar transaction; provided , however , that Registrable Securities shall not include (i) any securities sold or disposed of either pursuant to an effective Registration Statement or pursuant to Rule 144 under the Securities Act, (ii) any securities that have ceased to be outstanding or (iii) as to any Shareholder, the securities owned by such Shareholder to the extent that all such securities may be sold in a single transaction without volume limitations or other restrictions on transfer pursuant to Rule 144 under the Securities Act; provided that if at any time after a Public Offering, a Shareholder and its Affiliates beneficially own, in the aggregate, 5% or more of the then outstanding shares of Common Stock and no employee of or Affiliate of such Shareholder is a member of the Board, such Shareholder shall have the right to elect in its sole discretion that such shares of Common Stock remain Registrable Securities even though such shares may be sold without volume limitations or other restrictions on transfer pursuant to Rule 144 under the Securities Act for so long as such shares of Common Stock constitute 5% or more of the then outstanding shares of Common Stock.

" Registration Statement " means any registration statement of the Company filed with the SEC that covers any of the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits and all materials incorporated by reference in such registration statement.

" SEC " means the United States Securities and Exchange Commission.

" Securities Act " means the United States Securities Act of 1933, as amended.

" Shareholder " shall have the meaning set forth in the Preamble.

" Underwritten registration or underwritten offering " means a transaction registered with the SEC in which securities of the Company are sold to underwriters for reoffering to the public.

2. Demand Registrations .

(a)

Right to Request Registration . At any time or from time to time following the date hereof, (i) Shareholders representing a majority of the then outstanding Registrable Securities may request in writing and require that the Company register under the Securities Act all or part of their Registrable Securities (a " Majority Demand Registration ") and (ii) Moelis may request in writing and require that the Company register under the Securities Act all or part of its Registrable Securities (a " Moelis Demand Registration " and, together with a Majority Demand Registration, a " Demand Registration "). Promptly after its receipt of any such request for Demand Registration, the Company shall give written notice of such request to all other Shareholders holding Registrable Securities and shall, subject to the provisions of Section 2(c) hereof, include in such registration all such Registrable Securities with respect to which the Company has received written requests for inclusion therein within fifteen (15) days after the receipt of the Company's written notice, except in the case of a

"takedown" of a shelf Registration Statement, in which case such time period shall be three (3) days after the receipt of the Company's written notice. Notwithstanding the foregoing, the Company shall have no obligation to register Registrable Securities pursuant to this Section 2(a) if, based on the current market prices, the number of Registrable Securities requested to be included in such registration by the Shareholders would not yield gross proceeds to the selling Shareholders of at least $15 million.

(b)

Priority on Demand Registrations . Subject to the provisions of this Section 2, the Company shall not include in any Demand Registration any securities other than Registrable Securities without: (i) in the case of a Majority Demand Registration, the written consent of the Shareholders representing at least a majority of the Registrable Securities to be included in such registration or (ii) in the case of a Moelis Demand Registration, the written consent of Moelis; and, if such Demand Registration is an underwritten offering, without the consent of the managing underwriter(s). If the managing underwriter(s) of the requested Demand Registration advise the Company, the Shareholders representing at least a majority of the Registrable Securities proposed to be registered (in the case of a Majority Demand Registration) and Moelis (in the case of a Moelis Demand Registration), as applicable, in writing that in their opinion the number of Registrable Securities proposed to be included in any such registration exceeds the largest number of securities that can be expected to be sold in such offering and/or that the number of Registrable Securities proposed to be included in any such registration would have an adverse effect on the offering, including the price per share at which the Company's equity securities can be sold in such offering, the Company shall include in such registration only the number of Registrable Securities that in the opinion of such managing underwriter(s) can be sold without adversely affecting the offering; provided , however , that the number of shares of Registrable Securities to be sold in such underwriting shall not be reduced unless all other securities are first entirely excluded from the underwriting. If the number of Registrable Securities that can be sold is less than the number of Registrable Securities proposed to be registered, the number of Registrable Securities to be so sold shall be allocated pro rata among the Shareholders of Registrable Securities that desire to participate in such registration on the basis of the amount of Registrable Securities beneficially owned by such Shareholders. If the number of shares that the Shareholder(s) are allowed to include in a Demand Registration is less than 75% of the number of Registrable Securities that such Shareholder(s) requested to be included in such Demand Registration due to a reduction by the Company pursuant to the provisions of this Section 2(b), such Demand Registration shall not be counted for purposes of the limitations to three registrations set forth in the second and fourth sentences of Section 2(c) of this Agreement for the Shareholder(s).


(c)	Restrictions on Demand Registrations . The Company shall not be obligated to effect more than one (1) Majority Demand Registration within any (i) twelve

(12)-month period unless the Company is eligible for S-3 Registration (as defined below) and (ii) six (6)-month period if the Company is eligible for S-3 Registration. The Company shall not be obligated to effect more than three (3) Moelis Demand Registrations. The Company shall not be obligated to effect any Majority Demand Registration within three (3) months after the effective date of a previous S-3 Registration or a previous registration under which the Shareholders had piggyback registration rights pursuant to Section 3 hereof wherein the Shareholders were permitted to register, and actually sold, at least 50% of the Registrable Securities requested to be included therein by such Shareholders. The Company shall not be obligated to take action to effect any Majority Demand Registration after the Company has effected three (3) such registrations pursuant to this Section 2(c) and such registrations have been declared effective. The Company may postpone or withdraw for up to one hundred twenty (120) days the filing or the effectiveness of (or suspend the use of) a Registration Statement for a Demand Registration if (A) based on the reasonable judgment of the Board, such postponement or withdrawal is necessary in order to avoid premature disclosure of a matter the Board has determined would not be in the best interest of the Company to be disclosed at such time or (B) the Company is pursuing a material financing, material acquisition or other material corporate transaction; provided that if the Company exercises its right to withdraw the filing or the effectiveness of a Registration Statement for a Demand Registration then Moelis, or the Shareholder(s) may withdraw its or their request for such Demand (and such Demand shall not count against Moelis or such Shareholder(s), as the case may be). The Company shall provide written notices to the relevant Shareholders requesting such Demand Registration of (x) any postponement or withdrawal of the filing or effectiveness of (or suspension of the use of) a Registration Statement pursuant to this Section 2(c), (y) the Company's decision to refile or seek effectiveness of such Registration Statement following such withdrawal or postponement (or suspension) and (z) the effectiveness of such Registration Statement. The Company may defer the filing of a particular Registration Statement pursuant to this Section 2(c) only once during any twelve-month period. The restrictions set forth in this Section 2(c) shall apply regardless of the form of the Registration Statement containing Registrable Securities and for the avoidance of doubt shall apply to S-3 Registrations. Notwithstanding anything to the contrary herein, the Company shall have no obligation to register, file any Registration Statement or take any other action during any underwriter lock-up period applicable to the Company's Public Offering to the extent any such action would result in a violation of such lock-up agreement of the Company.

(d)

Selection of Underwriters . If any of the Registrable Securities covered by a Majority Demand Registration is to be sold in an underwritten offering, the managing underwriter(s) to administer the offering shall be selected by Shareholders representing a majority of the Registrable Securities participating in such offering, subject to the approval of the Company, which approval shall not be unreasonably withheld or delayed. If any of the Registrable Securities covered

by a Moelis Demand Registration is to be sold in an underwritten offering, the managing underwriter(s) to administer the offering shall be selected by Moelis, subject to the approval of the Company, which approval shall not be unreasonably withheld or delayed.

(e)

Effective Period of Demand Registrations . If Moelis or any Shareholder(s) request(s) a Demand Registration pursuant to Section 2(a) above, such Demand Registration shall not be deemed to have been effected unless such Demand Registration has been effective for a period equal to ninety (90) days (or three hundred (300) days in the case of a shelf S-3 Registration Statement) from the date on which the SEC declares such Demand Registration effective (or if such Demand Registration is not effective during any period within such ninety (90) days (or three hundred (300) days in the case of a shelf S-3 Registration Statement), such ninety (90)-day (or three hundred (300)-day in the case of a shelf S-3 Registration Statement) period shall be extended by the number of days during such period when such Demand Registration is not effective), or such shorter period which shall terminate when all of the Registrable Securities covered by such Demand Registration have been sold pursuant to such Demand Registration or otherwise disposed of by Moelis or such Shareholder(s). If the Company shall withdraw any Demand Registration pursuant to Section 2(c) (a " Withdrawn Demand Registration "), the Shareholders of the Registrable Securities remaining unsold and originally covered by such Withdrawn Demand Registration shall be entitled to a replacement Demand Registration which (subject to the provisions of this Section 2) the Company shall use its reasonable best efforts to keep effective for a period commencing on the effective date of such Demand Registration and ending on the earlier to occur of the date (i) which is ninety (90) days (or three hundred (300) days in the case of a shelf S-3 Registration Statement) from the effective date of such Demand Registration and (ii) on which all of the Registrable Securities covered by such Demand Registration have been sold or otherwise disposed of by Moelis or such Shareholder(s). Each such additional Demand Registration otherwise shall be subject to all of the provisions of this Agreement.

3. Piggyback Registrations .

(a)

Right to Piggyback . At any time or from time to time following the date of this Agreement, whenever the Company proposes to register any equity securities under the Securities Act (other than a Registration Statement (i) relating to shares issuable upon exercise of employee share options or in connection with any employee benefit, equity incentive or similar plan of the Company or (ii) in connection with any merger, consolidation, business combination, scheme of arrangement or amalgamation by the Company or any Affiliate of the Company or the acquisition by the Company or any such Affiliate of the shares or the assets of any other Person or other registration statement on Form S-4 (clauses (i) and (ii) are referred to as " Permitted Offerings ")) for purposes of a Public Offering of

such shares for its own account, and the registration form to be used may be used for any registration of Registrable Securities (a " Piggyback Registration "), the Company shall give prompt written notice to all Shareholders of its intention to effect such a registration and, subject to Section 3(b) and Section 3(c) hereof, shall include in such registration all Registrable Securities with respect to which the Company has received written requests for inclusion therein within fifteen (15) days after the receipt of the Company's written notice; provided that any participation in such Public Offering shall be on terms not less favorable, taken as a whole, than the Company's participation therein. The Company may postpone or withdraw the filing or the effectiveness of a Piggyback Registration at any time in its discretion.

(b)

Priority on Primary Registrations . If a Piggyback Registration is an underwritten primary registration on behalf of the Company, and the managing underwriter(s) advise the Company in writing that in their opinion the number of securities requested to be included in such registration exceeds the largest number that can be sold in such offering and/or that the number of Registrable Securities proposed to be included in any such registration would have an adverse effect on the offering, including the price per share at which the Company's equity securities can be sold in such offering, the Company shall include in such registration (i) first, the securities the Company proposes to sell, (ii) second, the Registrable Securities requested to be included therein by the Shareholders, pro rata among the Shareholders of such Registrable Securities on the basis of the number of Registrable Securities requested to be registered by such Shareholders and (iii) third, other securities requested to be included in such registration pro rata among the holders of such securities on the basis of the number of shares requested to be registered by such holders or as such holders may otherwise agree in writing.

(c)

Priority on Secondary Registrations . If a Piggyback Registration is an underwritten secondary registration on behalf of a holder of the Company's securities other than Registrable Securities, and the managing underwriter(s) advise the Company in writing that in their opinion the number of securities requested to be included in such registration exceeds the largest number that can be sold in such offering and/or that the number of Registrable Securities proposed to be included in any such registration would have an adverse effect on the offering, including the price per share at which the Company's equity securities can be sold in such offering, the Company shall include in such registration (i) first, the securities requested to be included therein by the holders requesting such registration, together with the Registrable Securities requested to be included therein by the Shareholders, pro rata among (A) the holders of securities requesting such registration and (B) the Shareholders of such Registrable Securities, in each case, on the basis of the number of Registrable Securities requested to be registered by such Shareholders or holders of securities, as applicable, (ii) second, securities the Company proposes to sell and (iii) third, other securities requested to be included in such registration pro rata among the

holders of such securities on the basis of the number of shares requested to be registered by such holders or as such holders may otherwise agree in writing.


(d)	Selection of Underwriters . If any Piggyback Registration is a primary underwritten offering, the Company shall have the right to select the managing underwriter(s) to administer any such offering.

(e)

Other Jurisdictions . If the Company at any time proposes to effect a Public Offering in a jurisdiction other than the United States of any of its shares or any options, warrants or other rights to acquire, or securities convertible into or exchangeable for, its shares (other than a Public Offering relating to a Permitted Offering), the Company and the Shareholders will have the rights and be subject to the obligations agreed in this Section 3 to the extent and where applicable.

4. S-3 Registration . At any time that the Company is eligible to use Form S-3, the Company shall use its reasonable best efforts to register under the Securities Act on Form S-3 (an " S-3 Registration "), for Public Offering such number of Registrable Securities as shall be held by Moelis at such time and any additional number of Registrable Securities as any Shareholder requests in writing that are held by such Shareholder in accordance with the method of disposition specified in such written notice, provided that the Company shall not be obligated to effect more than two Public Offerings on an underwritten basis that are initiated by Moelis within any twelve (12)-month period. Whenever the Company is required pursuant to this Section 4 to use its reasonable best efforts to effect the registration of Registrable Securities, each of the procedures and requirements of Section 2 (including but not limited to the requirement that the Company notify all Shareholders from whom notice has not been received and provide them with the opportunity to participate in the offering and the postponement, withdrawal and suspension provisions) shall apply to such registration. The Company will use its reasonable best efforts to qualify for Form S-3 registration or a similar short-form registration. Notwithstanding anything to the contrary contained in this Agreement, an S-3 Registration that is initiated by Moelis under this Section 4 shall not constitute a Moelis Demand Registration for purposes of the limitation set forth in the second sentence of Section 2(c). Notwithstanding the foregoing, the Company shall have no obligation to effect any underwritten offering pursuant to this Section 4 if, based on the current market prices, the number of Registrable Securities requested to be included in such offering by the Shareholders would not yield gross proceeds to the selling Shareholders of at least $15 million.

5. Lock-Up Agreements .

(a)

Each Shareholder agrees, for the benefit of the managing underwriter(s), not to effect any sale or distribution, including any private placement or any sale pursuant to Rule 144 under the Securities Act of any Registrable Securities, and not to effect any such sale or distribution of any other equity security of the Company or of any security convertible or redeemable into or exchangeable or exercisable for any equity security of the Company during the five (5) days prior to, and during a period not to exceed ninety (90) days following an offering that occurs within eighteen (18) months following the date hereof, after the effective

date of any Registration Statement filed pursuant to this Agreement in connection with an underwritten offering, without the consent of the managing underwriter(s) of such offering, except as part of such registration, if permitted ( provided that all Shareholders are subject to the same restrictions and if any Shareholder is released from such restriction all other Shareholders shall be so released and the Company notifies each Shareholder of such registration at least two (2) Business Days prior to the beginning of the five (5) day period referred to above. Each Shareholder agrees that it will enter into any agreement reasonably requested by the managing underwriter(s) of any such underwritten offering to confirm its agreement set forth in the preceding sentence.

(b)

The Company agrees (i) that if any registration of Registrable Securities shall be in connection with an underwritten offering, not to effect any public sale or distribution of any of its equity securities or of any security convertible or redeemable into or exchangeable or exercisable for any equity security of the Company (other than any such sale or distribution of such securities in connection with any Permitted Offering) during the five (5) days prior to, and during a period not to exceed ninety (90) days following an offering that occurs within eighteen (18) months following the date hereof, after the effective date of any Registration Statement filed pursuant to this Agreement in connection with an underwritten offering, without the consent of the managing underwriter(s) of such offering and (ii) that any agreement entered into after the date hereof pursuant to which the Company issues or agrees to issue any privately placed shares of Common Stock or equity securities convertible into shares of Common Stock shall contain a provision under which the holders of such securities agree not to effect any public sale or distribution of any such securities during the period and in the manner referred to in the foregoing clause (i), including any private placement and any sale pursuant to Rule 144 under the Securities Act, except as part of such registration, if permitted, or substantially similar provisions

6. Registration Procedures .


(a)	Whenever the Shareholders request that any Registrable Securities be registered with the SEC pursuant to this Agreement, the Company shall use its reasonable best efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended methods of disposition thereof, and pursuant thereto the Company shall:

(i)

prepare and file with the SEC a Registration Statement with respect to such Registrable Securities as soon as practicable, but in any event within sixty (60) days of written request from a Shareholder, and use its reasonable best efforts to cause such Registration Statement to become effective as soon as practicable thereafter; and before filing a Registration Statement or Prospectus or any amendments or supplements thereto, furnish to the Shareholders of Registrable Securities covered by such

Registration Statement and the underwriter or underwriters, if any, copies of all such documents proposed to be filed, including documents incorporated by reference in the Prospectus and, if reasonably requested by such Shareholders, the exhibits incorporated by reference, and such Shareholders shall have the reasonable opportunity to object to any information pertaining to such Shareholders that is contained therein and the Company will make the corrections reasonably requested by such Shareholders with respect to such information prior to filing any Registration Statement or Prospectus;

(ii)

prepare and file with the SEC such amendments and supplements to such Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement effective for a period of not less than ninety (90) days (or three hundred (300) days in the case of a shelf S-3 Registration Statement), in the case of a Demand Registration, or such shorter period as is necessary to complete the distribution of the securities covered by such Registration Statement and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such Registration Statement;

(iii)

furnish the number of copies of such Registration Statement and the Prospectus included in such Registration Statement (including each preliminary Prospectus and each amendment and supplement thereto) as reasonably required by each seller of Registrable Securities under such Registration Statement, and such other documents as each seller may reasonably request in writing in order to facilitate the disposition of Registrable Securities owned by each seller; provided , however , that the Company shall have no obligation to furnish copies of a final prospectus if the conditions of Rule 172(c) under the Securities Act are satisfied by the Company;

(iv)

use its reasonable best efforts to register or qualify such Registrable Securities under such other securities or "blue sky" laws of such jurisdictions as any seller reasonably requests in writing and do any and all other acts and things that may be reasonably necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of the Registrable Securities owned by such seller; provided that the Company will not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this clause (iv), (B) subject itself to taxation in any such jurisdiction or (C) consent to general service of process in any such jurisdiction;

(v)

promptly notify each seller of such Registrable Securities, at any time when a Prospectus relating thereto is required to be delivered under the Securities Act, of the occurrence of any event as a result of which the Prospectus included in such Registration Statement contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and, at the request of any such seller, the Company shall prepare a supplement to such Prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such Prospectus shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

(vi)

in the case of an underwritten offering, enter into such customary agreements (including underwriting agreements in customary form and containing customary indemnification provisions in favor of the underwriters) and take all such other actions as the Shareholders representing a majority of the Registrable Securities being sold or the underwriters reasonably request in order to expedite or facilitate the disposition of such Registrable Securities (including making members of senior management of the Company reasonably available to participate in, and cause them to reasonably cooperate with the underwriters in connection with, "road-show" and other customary marketing activities ) and cause to be delivered to the underwriters and the sellers, if any, opinions of counsel to the Company in customary form, covering such matters as are customarily covered by opinions for an underwritten offering as the underwriters may reasonably request and addressed to the underwriters and the sellers;

(vii)

make available for inspection by a seller of Registrable Securities pursuant to a Registration Statement hereunder, any underwriter participating in any disposition pursuant to such Registration Statement, and any attorney, accountant or other agent retained on behalf of such seller or underwriter, all material financial and other records, material corporate documents and material properties of the Company, and cause the Company's officers, directors, employees and independent accountants to supply all information reasonably requested by any such seller representative, underwriter, attorney, accountant or agent in connection with such Registration Statement;


(viii)	use its reasonable best efforts to cause all such Registrable Securities to be listed or quoted on each securities exchange or automated interdealer quotation system on which securities of the same class issued by the Company are then listed or quoted;


(ix)	provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of such Registration Statement;

(x)

if requested, cause to be delivered, immediately prior to the effectiveness of the Registration Statement (and, in the case of an underwritten offering, at the time of delivery of any Registrable Securities sold pursuant thereto), letters from the Company's independent certified public accountants (and the independent certified public accountants for any other acquired company or business whose financial statements are required to be included in such Registration Statement in accordance with the applicable requirements of Regulation S-X) addressed to the underwriters stating that such accountants are independent public accountants or an independent registered public accounting firm within the meaning of the Securities Act and the applicable rules and regulations adopted by the SEC thereunder and, to the extent applicable, the PCAOB, and otherwise in customary form and covering such financial and accounting matters as are customarily covered by letters of the independent certified public accountants delivered in connection with primary or secondary underwritten offerings, as the case may be;


(xi)	make generally available to Shareholders a consolidated earnings statement (which need not be audited) for the twelve (12) months beginning after the effective date of a Registration Statement as soon as reasonably practicable after the end of such period, which earnings statement shall satisfy the requirements of an earnings statement under Section 11(a) of the Securities Act;


(xii)	promptly notify each seller of Registrable Securities and the underwriter or underwriters, if any:


(1)	when the Registration Statement, any pre-effective amendment, the Prospectus or any Prospectus supplement or post-effective amendment to the Registration Statement has been filed and, with respect to the Registration Statement or any post-effective amendment, when the same has become effective;


(2)	of any written request by the SEC for amendments or supplements to the Registration Statement or Prospectus;


(3)	of the notification to the Company by the SEC of its initiation of any proceeding with respect to the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement; and


(4)	of the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for

sale under the applicable securities or "blue sky" laws of any jurisdiction; and


(xiii)	use its reasonable best efforts to obtain as soon as practicable the lifting of any stop order that might be issued suspending the effectiveness of such Registration Statement.

(b)

The Company shall make available to each Shareholder whose Registrable Securities is included in a Registration Statement (i) promptly after the same is prepared and publicly distributed, filed with the SEC, or received by the Company, one (1) copy of each Registration Statement and any amendment thereto and each Preliminary Prospectus and Prospectus and each supplement thereto. The Company will promptly notify each such Shareholder by facsimile of the effectiveness of each Registration Statement or any post-effective amendment. The Company will promptly respond to any and all comments received from the SEC, with a view towards causing each Registration Statement or any amendment thereto to be declared effective by the SEC as soon as practicable and shall file an acceleration request as soon as practicable following the resolution or clearance of all SEC comments or, if applicable, following notification by the SEC that any such Registration Statement or any amendment thereto will not be subject to review.

(c)

At all times after the Company has filed a Registration Statement with the SEC pursuant to the requirements of either the Securities Act or the Exchange Act, the Company shall file all reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder, all to the extent required to enable such Shareholders to be eligible to sell Registrable Securities pursuant to Rule 144 under the Securities Act.

(d)

The Company may require each seller of Registrable Securities as to which any registration is being effected to furnish to the Company any information regarding such seller and the distribution of such securities as the Company may from time to time reasonably request in writing in connection with such registration. The Company's obligations to a Shareholder under this Agreement shall be subject to the compliance by such Shareholder with the terms and conditions applicable to such Shareholder under this Agreement.

(e)

Each seller of Registrable Securities agrees that, upon written notice by the Company of the happening of any event as a result of which the Prospectus included in such Registration Statement contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, such seller will forthwith discontinue disposition of Registrable Securities for a reasonable length of time not to exceed sixty (60) days until such seller is advised in writing by the Company that the use of the Prospectus may be resumed and is furnished with a supplemented Prospectus as

contemplated by Section 6(b) hereof, and, if so directed by the Company, such seller will promptly deliver to the Company (at the Company's expense) all copies, other than permanent file copies then in such seller's possession which shall not be disseminated or made available to any Person, of the Prospectus covering such Registrable Securities current at the time of receipt of such notice; provided , however , that such postponement of sales of Registrable Securities by the Shareholders shall not exceed ninety (90) days in the aggregate in any twelve (12)-month period. If the Company shall give any written notice to suspend the disposition of Registrable Securities pursuant to a Prospectus, the Company shall extend the period of time during which the Company is required to maintain the Registration Statement effective pursuant to this Agreement by the number of days during the period from and including the date of the giving of such notice to and including the date such seller either is advised by the Company in writing that the use of the Prospectus may be resumed or receives the copies of the supplemented Prospectus contemplated by Section 6(a)(iii) and Section 6(b) hereof.

7. Registration Expenses .

(a)

All expenses incident to the Company's performance of or compliance with this Agreement, including, all registration and filing fees, fees and expenses of compliance with securities or "blue sky" laws, listing application fees, printing expenses, transfer agent's and registrar's fees, costs of distributing Prospectuses in preliminary and final form as well as any supplements thereto, and fees and disbursements of counsel for the Company and all independent certified public accountants and other Persons retained by the Company (all such expenses being herein called " Registration Expenses ") (but not including any underwriting discounts or commissions or transfer taxes attributable to the sale or disposition of Registrable Securities), shall be borne by the Company. In addition, the Company shall pay its internal expenses (including all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit or quarterly review, the expense of any liability insurance and the expenses and fees for listing or quoting the securities to be registered on each securities exchange or automated interdealer quotation system on which they are to be listed or quoted.

(b)

In connection with each Demand Registration, S-3 Registration or Piggyback Registration initiated hereunder, the Company shall reimburse the Shareholders covered by such registration or sale for the reasonable fees and disbursements of one (1) law firm to represent all Shareholders participating in such registration or sale chosen by: (i) in the case of a Majority Demand Registration, the Shareholders holding a majority of the Registrable Securities included in such registration or sale; or (ii) in the case of a Moelis Demand Registration or an S-3 Registration initiated by Moelis, Moelis.

(c)

The obligation of the Company to bear the Registration Expenses and to reimburse the Shareholders for the expenses described in Section 7(b) hereof shall apply irrespective of whether a registration, once properly demanded, if applicable, becomes effective, is withdrawn or suspended, is converted to another form of registration and irrespective of when any of the foregoing shall occur; provided , however , that Registration Expenses and the fees and disbursements reimbursed by the Company under Section 7(b) hereof for any Registration Statement withdrawn solely at the request of a Shareholder(s) (unless withdrawn following postponement of filing by the Company in accordance with Section 2(c)(A) or Section 2(c)(B) hereof or due to adverse market conditions) or any supplements or amendments to a Registration Statement or Prospectus resulting from a misstatement furnished to or on behalf of the Company by or on behalf of a Shareholder shall be borne by such Shareholder; provided that , for the avoidance of doubt, if a Registration Statement is withdrawn solely at the request of a Shareholder due to adverse market conditions, such Registration Statement shall count as a Demand Registration for purposes of Section 2(c) hereof.

8. Indemnification .

(a)

In connection with any Registration Statement in which a Shareholder of Registrable Securities is participating, the Company shall in consideration of the agreements of the Shareholders contained herein, the Company shall agree that in the event of any registration under the Securities Act pursuant to this Agreement, the Company shall indemnify and hold harmless, to the fullest extent permitted by applicable law, each Shareholder, and the respective directors, officers, members, general partners, limited partners, employees, agents and representatives of each Shareholder, each Person who controls each such Shareholder (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) and the directors, officers, members, general partners, limited partners, employees, agents and representatives of each such controlling Person (collectively, the " Shareholder Indemnified Persons ") from and against any and all losses, claims, damages, liabilities (joint or several), costs (including attorney's fees and disbursements), and expenses, including amounts paid in settlement (collectively, " Losses "), without duplication, (i) in connection with, arising out of or based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement, Prospectus or Preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus, in light of the circumstances under which they were made) not misleading, except (A) to the extent that such untrue statement or alleged untrue statement or omission or alleged omission has been made in reliance upon and in conformity with information furnished in writing to or on behalf of the Company by or on behalf of such Shareholder expressly for use therein, (B) if it was caused by the Shareholder's failure to deliver to the Shareholder's immediate purchaser a copy of the Registration Statement,

Preliminary Prospectus or Prospectus (if the same was required by applicable law to be so delivered) after the Company has furnished the Shareholder with a sufficient number of copies of the same or (C) if it arises out of or is based upon offers or sales by the Shareholder "by means of" (as defined in Rule 159A under the Securities Act) a "free writing prospectus" (as defined in Rule 405 under the Securities Act) that was not authorized in writing by the Company, or (ii) any violation or alleged violation by the Company of any United States federal, state or common law rule or regulation applicable to the Company. The Company shall reimburse each such Shareholder Indemnified Person for any out-of-pocket legal or any other expenses actually and reasonably incurred by it in connection with investigating or defending such Losses.

(b)

In connection with any Registration Statement in which a Shareholder is participating, each such Shareholder shall indemnify and hold harmless, to the fullest extent permitted by applicable law, the Company, and the respective directors, officers, members, general partners, limited partners, employees, agents and representatives of the Company, each Person who controls the Company and (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) and the directors, officers, members, general partners, limited partners, employees, agents and representatives of each such controlling Person (collectively, the " Company Indemnified Persons ") from and against any and all Losses, without duplication, in connection with, arising out of or based upon (i) any untrue or alleged untrue statement of a material fact contained in the Registration Statement, Preliminary Prospectus or Prospectus or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus, in light of the circumstances under which they were made) not misleading, but only to the extent that such untrue statement or alleged untrue statement or omission or alleged omission has been made in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of such Shareholder expressly for use therein, (ii) such Shareholder's failure to deliver to its immediate purchaser a copy of the Registration Statement, Preliminary Prospectus or Prospectus (if the same was required by applicable law to be so delivered by such Shareholder) after the Company has furnished the Shareholder with a sufficient number of copies of the same or (iii) offers or sales by the Shareholder "by means of" (as defined in Rule 159A under the Securities Act) a "free writing prospectus" (as defined in Rule 405 under the Securities Act ) that was not authorized in writing by the Company; provided , however , that the obligation to indemnify and hold harmless shall be several, not joint and several, among such Shareholders and the liability of each such Shareholder shall be in proportion to and limited to the gross proceeds received by such Shareholder from the sale of Registrable Securities pursuant to such Registration Statement. Such Shareholder shall reimburse each such Company Indemnified Person for any out-of-pocket legal or any other expenses actually and reasonably incurred by it in connection with investigating or defending such Losses.

(c)

Each Indemnified Person shall give prompt written notice to the party or parties from which indemnity is sought (the " Indemnifying Party ") of the commencement of any action or proceeding (including any governmental investigation) (collectively, a " Proceeding ") with respect to which such Indemnified Person seeks indemnification or contribution pursuant hereto; provided , however , that the failure so to notify the Indemnifying Party shall not relieve the Indemnifying Party from any obligation or liability hereunder, except to the extent the Indemnifying Party was prejudiced by such failure. The Indemnifying Party shall have the right, exercisable by giving written notice to an Indemnified Person within twenty (20) days after receipt of written notice from such Indemnified Person of such Proceeding, to assume, at the Indemnifying Party's expense, the defense of such Proceeding, with counsel reasonably satisfactory to such Indemnified Person and shall pay as incurred the fees and disbursements of such counsel related to such Proceeding; provided , however , that an Indemnified Person or Indemnified Persons (if more than one Indemnified Person is named any Proceeding) shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of the Indemnified Person or Indemnified Persons. Whether or not such defense is assumed by the Indemnifying Party, such Indemnifying Party or Indemnified Person or Indemnified Persons will not be subject to any obligation or liability for any settlement made without its or their written consent, which settlement shall include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Person an irrevocable release from all liability in respect of such claim or litigation.


(d)	The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer of Registrable Securities.

(e)

If the indemnification provided for in this Section 8 is unavailable to an Indemnified Person or is insufficient to hold such Indemnified Person harmless for any Losses in respect to which this Section 8 would otherwise apply by its terms, then, in lieu of the amount paid or payable under Section 8(a) or Section 8(b) hereof, as applicable, the Indemnifying Party and the Indemnified Person, shall contribute to the aggregate Losses (i) in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand, and the Indemnified Person on the other hand, with respect to the statements or omissions which resulted in such Losses, as well as any other relevant equitable considerations. The relative fault of the Indemnifying Party on the one hand, and the Indemnified Person on the other hand, shall be determined by reference to, among other things, whether the untrue statement or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by or on behalf of the Indemnifying Party or by or on behalf of the Indemnified Person, and by the parties' relative intent, knowledge, access to

information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just or equitable if the contribution pursuant to this Section 8(e) were to be determined solely by pro rata allocation or by any other method of allocation that does not take into account such equitable considerations. In no event shall the liability of an Indemnifying Party under this Section 8(e) be greater in amount than such Person would have been obligated to pay by way of indemnification if the indemnification provided for under Section 8(a) or Section 8(b) hereof, as applicable, had been available under the circumstances. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of fraudulent misrepresentation. A Shareholder's obligation to contribute pursuant to this Section 8(e) shall be in proportion to and limited to the gross proceeds received by such Shareholder from the sale of Registrable Securities pursuant to such Registration Statement.

9. Participation in Underwritten Registrations . Notwithstanding anything in this Agreement to the contrary, no Person may participate in any registration hereunder that is underwritten unless such Person (a) agrees to sell such Person's securities on the basis provided in any underwriting arrangements not inconsistent with the terms of this Agreement approved by the Person or Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements; provided that a Shareholder shall only be required to make customary representations or warranties to the Company or the underwriters (including representations and warranties regarding such Shareholder and such Shareholder's intended method of distribution) and to undertake only customary indemnification obligations to the underwriters with respect thereto.

10. Expenses . Except as otherwise expressly provided for herein, all costs, fees and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be borne by the party incurring such costs and expenses.

11. Aggregation of Stock . All Registrable Securities held by or acquired by any Affiliate(s) of a Shareholder will be aggregated together for the purpose of determining the availability of any rights under this Agreement.

12. Entire Agreement . This Agreement and the schedules, exhibits and annexes attached thereto set forth all of the promises, agreements, conditions, understandings and covenants between and among the parties hereto with respect to the subject matter referred to herein. Any and all prior agreements with respect to such subject matter are hereby revoked. This Agreement and the schedules, exhibits and annexes attached thereto are, and are intended to be, an integration of any and all prior agreements or understandings, oral or written, with respect to such subject matter. Upon execution of this Agreement, this Agreement shall amend and restate the 2010 Registration Rights Agreement in its entirety and the rights and obligations of the parties under the 2010 Registration Agreement shall be subsumed within and be governed by this Agreement.

13. Governing Law; Venue; Service of Process . This Agreement shall be governed, construed and enforced in accordance with the laws of the State of New York, without reference to any principles of conflicts of law thereof, except New York General Obligation Law Section 5-1401. Each party to this Agreement, by its execution hereof, hereby (a) irrevocably submits to the exclusive jurisdiction of the state courts of the State of New York or the United States District Court located in the Southern District of the State of New York for the purpose of any litigation or proceeding between and among the parties hereto arising in whole or in part under or in connection with this Agreement, (b) waives to the extent not prohibited by applicable law, and agrees not to assert, by way of motion, as a defense or otherwise, in any such litigation or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that any such litigation or proceeding brought in one of the above-named courts should be dismissed on grounds of forum non conveniens, should be transferred or removed to any court other than one of the above-named courts, or should be stayed by reason of the pendency of some other proceeding in any other court other than one of the above-named courts, or that this Agreement or the subject matter hereof may not be enforced in or by such court and (c) agrees not to commence any such litigation or any other type of proceeding or action other than before one of the above-named courts. Notwithstanding the previous sentence a party may commence any litigation or proceeding in a court other than the above-named courts solely for the purpose of enforcing an order, judgment or writ issued by one of the above-named courts. Each party agrees that for any litigation or proceeding between or among the parties hereto arising in whole or in part under or in connection with this Agreement, such party will bring litigation or a proceeding only in the Borough of Manhattan. Each party hereto further waives any claim and will not assert that venue should properly lie in any other location within the selected jurisdiction. Each party hereto hereby (i) agrees that service of process made by registered or certified mail, return receipt requested, at its address specified pursuant to Section 15 hereof, will constitute good and valid service of process in any such litigation or proceeding and (ii) waives and agrees not to assert (by way of motion, as a defense, or otherwise) in any such litigation or proceeding any claim that service of process made in accordance with clause (i) above does not constitute good and valid service of process.

14. Successors and Assignees; Assignment . This Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors, permitted transferees and permitted assignees and this Agreement shall not inure to the benefit of or be enforceable by any other Person. Such successor or assign shall not be entitled to such rights unless the successor or assign, unless already a Shareholder hereunder, shall have executed and delivered to the Company a joinder providing that such Person shall be bound by and shall fully comply with the terms of this Agreement (which shall also be executed by the Company) promptly following the acquisition of such Registrable Securities, in which event such successor or assign shall be deemed a Shareholder for purposes of this Agreement. Neither this Agreement nor any obligation hereunder may be assigned without the prior written consent of the Company and the party proposing such assignment, including by operation of law. Notwithstanding the foregoing, nothing contained in this Section 14 shall have any effect on (a) any other provision of this Agreement that contemplates or requires that any transferee or assignee of the parties hereto be required to be bound by any obligation hereunder and (b) any of

the rights of a Shareholder of any of the Registrable Securities as such. Notwithstanding the foregoing, Moelis may only assign its rights under the Moelis Demand Registration in connection with an assignment or other transfer of (i) Registrable Securities to an Affiliate of any Moelis entity, (ii) all of its Registrable Securities or (iii) Registrable Securities representing 5% or more of the then outstanding shares of Common Stock.

15. Notices . All notices, requests, demands and other communications made under or by reason of the provisions of this Agreement shall be in writing and shall be given by hand delivery, certified or registered mail, return receipt requested, facsimile, e-mail or internationally recognized courier to the recipient party at such address, facsimile number or e-mail address as shall be submitted to the Company in writing. Any such notice, request, demand or other communication shall be deemed given: (a) at the time personally delivered to the recipient with receipt acknowledged in writing, if delivered by hand; (b) at the time received by the recipient, if sent by certified or registered mail, return receipt requested; (c) upon issuance by the transmitting machine of a confirmation slip that the number of pages constituting the notice has been transmitted by facsimile without error and confirmed telephonically, if sent by facsimile; (d) upon confirmation by return e-mail from the recipient of its receipt of the e-mail, if sent by e-mail; and (e) at 5:00 p.m., local time, on the third Business Day after timely delivery to the courier, if sent by courier specifying delivery on or before the third-Business Day after delivery to the courier and signature of recipient required. Notwithstanding the foregoing, if any such notice, request, demand or other communication shall be given under both clause (c) and clause (d), such delivery shall be valid for all purposes of this Agreement notwithstanding that such receipt has not been confirmed telephonically in the case of clause (c) or has not been confirmed by return e-mail in the case of clause (d).

16. Modifications; No Implied Waiver . The provisions of this Agreement, including the provisions of this sentence, may not be terminated, amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, without the prior written consent of Shareholders representing at least a majority of then outstanding Registrable Securities; provided , however , that without a Shareholder's written consent no such termination, amendment, modification, supplement, waiver or consent shall (a) adversely affect such Shareholder's rights and protections hereunder in a discriminatory manner or (b) result in such Shareholder incurring a material financial obligation (or materially increasing an existing material financial obligation) hereunder that it was not responsible for immediately prior to the effectiveness of such termination, amendment, modification, supplement, waiver or consent; provided , further , that in order to adversely amend the foregoing proviso or Section 2(a) hereof, all Shareholders of the outstanding Registrable Securities at the time and the Board must consent in writing; provided that the Company shall be permitted to grant immaterial waivers hereunder without the consent of any of the Shareholders; provided , further , that without the prior written consent of Moelis no such termination, amendment, modification, supplement, waiver or consent shall affect any of Moelis' rights, protections or obligations hereunder in any manner. The failure of any party at any time to insist upon, or any delay by any party at any time to insist upon, strict performance of any condition, promise, agreement or understanding set forth herein shall not be construed as a waiver or relinquishment of the right to insist upon strict performance of the same condition, promise, agreement or understanding at a future time.

17. Severability . The holding of any provision of this Agreement to be invalid or unenforceable by a court of competent jurisdiction shall not affect any other provision of this Agreement, which shall remain in full force and effect.

18. Headings . The headings and other captions in this Agreement are for convenience and reference only and shall not be used in interpreting, construing or enforcing any provision of this Agreement.

19. Counterparts . This Agreement may be executed in one or more counterparts, which may be by facsimile, each of which shall be deemed an original, but all of which shall together constitute one and the same instrument.

20. Construction; Interpretation . The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties hereto and no presumption or burden of proof will arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. The parties intend that each representation, warranty, covenant, obligation, agreement and condition contained herein will have independent significance. The phrases "the date of this Agreement," "the date hereof" and terms of similar import, shall be deemed to refer to the date set forth in the first paragraph of this Agreement. The words "hereof," "herein," "hereby" and other words of similar import refer to this Agreement as a whole unless otherwise indicated. Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." All references in this Agreement to "$" are to United States currency. All references in this Agreement to "Form S-3" shall include any successor form thereto. Whenever the singular is used herein, the same shall include the plural, and whenever the plural is used herein, the same shall include the singular, where appropriate. A reference to the male gender shall be deemed to be a reference to the female gender and vice versa. Whenever the last day for the exercise of any right or the discharge of any duty under this Agreement falls on other than a Business Day, the party having such right or duty shall have until the next Business Day to exercise such right or discharge such duty. Unless otherwise indicated, the word "day" shall be interpreted as a calendar day. For purposes of this Agreement, the Company may deem and treat the registered holder of Registrable Securities as the Shareholder and absolute owner thereof, and the Company shall not be affected by any notice to the contrary.

21. No Inconsistent Agreement . No Shareholder shall enter into, or remain a party to, any agreement with respect to, or that is implicated by, the Registrable Securities beneficially owned or held of record by such Shareholder that is inconsistent with the rights granted to, or agreements between or among, the Shareholders and the Company in this Agreement or otherwise conflicts with the provisions hereof. The Company has not entered into nor will it enter into, or remain a party to, any agreement with respect to, or that is implicated by, the Registrable Securities beneficially owned or held of record by the Shareholders that is inconsistent with the rights granted to, or agreements between and among, the Company and the Shareholders in this Agreement or otherwise conflicts with the provisions hereof, except with the

prior written consent of Shareholders representing at least a majority of then outstanding Registrable Securities.

22. No Joint Venture, Etc. The entering into of this Agreement and the performance by any party hereto of the matters contemplated hereby shall not be deemed to create a partnership, limited liability company, joint venture, or principal/agency relationship between or among the parties hereto.

23. Specific Performance . The parties hereto agree that legal remedies may be inadequate to enforce the provisions of this Agreement and that equitable relief, including specific performance and injunctive relief, may be used to enforce the provisions of this Agreement.

24. Securities Law Acknowledgment . Each Shareholder acknowledges and agrees that such Shareholder may receive material non-public information in connection with the matters contemplated by this Agreement, and further that such Shareholder is aware that the United States securities laws impose restrictions on purchasing or selling debt or equity securities of the Company or any of its subsidiaries when in possession of such information.

25. Term . This Agreement shall terminate with respect to each Shareholder on the date on which, and at the time at which, such Shareholder ceases to own Registrable Securities; provided , that , such Shareholder's rights and obligations pursuant to Section 8, as well as the Company's obligations to pay expenses pursuant to Section 7, shall survive with respect to any Registration Statement in which any Registrable Securities of the Shareholder were included.

26. Effectiveness . This Agreement shall become effective upon completion of the IPO.

[Signature Pages Follow]

Accepted and agreed as of the date first written above:

KINSALE CAPITAL GROUP, INC.

By:          /s/ Michael P. Kehoe
    Name:    Michael P. Kehoe
    Title:    President and
        Chief Executive Officer

Contact information for Person authorized to receive notices on behalf of the Company pursuant to Section 15 of the Agreement (which shall not constitute notice):

Kinsale Capital Group, Inc.

2221 Edward Holland Drive, Suite 600

Richmond, VA 23230

Attention: President and Chief Executive Officer

[Signature Page to Amended and Restated Registration Rights Agreement]

IN WITNESS WHEREOF, a duly authorized signatory of each of Moelis and VCPE has executed this Agreement as of the date first written above.

MOELIS CAPITAL PARTNERS OPPORTUNITY FUND I, LP

By: Moelis Capital Partners Opportunity
Fund I LLC, its General Partner

By: Moelis Capital Partners LLC,
its Managing Member

By:          /s/ Christopher Ryan
    Name:    Christopher Ryan
    Title:    Managing Director

MOELIS CAPITAL PARTNERS OPPORTUNITY FUND I-A, LP

By: Moelis Capital Partners Opportunity
Fund I LLC, its General Partner

By: Moelis Capital Partners LLC,
its Managing Member

By:          /s/ Christopher Ryan
    Name:    Christopher Ryan
    Title:    Managing Director

VIRGINIA CAPITAL PRIVATE EQUITY, LP

By: VCP GP LLC, its general partner

By:          /s/ Frederick L. Russell, Jr.
    Name:    Frederick L. Russell, Jr.
    Title:    Manager

[Signature Page to Amended and Restated Registration Rights Agreement]

Schedule 1

Virginia Capital Purchasers


1.	Virginia Capital Private Equity, LP


2.	Hunter Goodwin


3.	Private Advisors Coinvestment Fund, LP


4.	SFM Opportunities III, LP


5.	Sunity International Limited


6.	MGAW, L.L.C.


7.	Thomas G. Johnson, Jr.


8.	CS Vosmik, Trustee of the CS Vosmik Amended and Restated Revocable Trust Agreement, Dated as of June 30, 2006


9.	West End Investment Venture, LLC


10.	Allan Gerald Donn TOD Susan Berman Donn


11.	Walker Chapman Simmons


12.	William E. Rachels, Jr.


13.	DEFCON 1, LLC


14.	Matthew L. Austin


15.	Margin of Safety, LLC (c/o Frederick L. Russell, Jr.)


16.	Scott Stevens


17.	Charles G. Hartung


18.	Petra T. Hartung


19.	Gregory J. Rochlin


20.	Willowleaf Capital, LLC


21.	BlackSmith Limited Partnership, LLC

Schedule 2

Other Purchasers


1.	Ella G Valentine Children's Trust dated 6-29-1987, JG Valentine, EM Valentine Jr & SV Ellington ttees


2.	E. Massie Valentine Living Trust


3.	Janney Montgomery Scott LLC custodian FBO John W. Maloney IRA


4.	Paul D. Koonce


5.	Thomas Rafferty


6.	Malcolm Parks


7.	William F. Shumadine, Jr.


8.	Jay Tini


9.	Richard B. Fleischhacker


10.	Brian F. and Suzanne S. Pitkin


11.	Anne Marie Rafferty-DiPierro


12.	Yael Levin and Scott Sheldon


13.	David A. and Kimberly L. Hulcher


14.	Student Assurance Services, Inc.


15.	John Davenport


16.	Sungjin Lee


17.	Brian D. and Elizabeth T. Haney


18.	M.P. Kehoe, LLC


19.	Marilyn F Kehoe Revocable Trust dated 5-8-2006, Michael P Kehoe Trustee


20.	William J. Kenney


21.	Pamela A. Kenney


22.	RBC Capital Markets Custodian FBO William J. Kenney IRA


23.	Edward Desch


24.	Bryan and Ann Marie Petrucelli


25.	MP Kehoe Revocable Grantor Trust


26.	Robert Neal


27.	Ann Marie and Scott L. Marson


28.	Stuart Samuel and Melissa B. Gaines Samuel


29.	Janney Montgomery Scott LLC Custodian FBO Ann T. Burgess IRA


30.	Clayton Rhoades


31.	John Shumadine


32.	Philip E. and Ann L. Stephens


33.	Robert Lippincott


34.	Jim Ritchie


35.	Steven Bensinger


36.	Mark Fuller

Exhibit 10.3

DIRECTOR NOMINATION AGREEMENT

DIRECTOR NOMINATION AGREEMENT, dated as of July 28, 2016 (this “ Agreement ”), by and among Kinsale Capital Group, Inc., a Delaware corporation (the “ Company ”), Moelis Capital Partners Opportunity Fund I, L.P. and Moelis Capital Partners Opportunity Fund I-A, L.P. (collectively, together with their respective Permitted Transferees, the “ Moelis Funds ”).

WHEREAS, the Company has determined that it is in its best interests to effect an initial public offering (“ IPO ”) of shares of common stock, par value $0.01 per share, of the Company (the “ Common Stock ”); and

WHEREAS, in connection with the IPO, the Company and the Moelis Funds desire to enter into this Agreement setting forth certain rights and obligations with respect to the nomination of directors to the Board of Directors of the Company (the “ Board ”) and other matters relating to the Board from and after the IPO.

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

Section 1. Definitions. As used in this Agreement, the following terms shall have the meanings ascribed to them below:

“ Affiliate ” means, with respect to a specified Person, any Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Person specified. For purposes of this definition, “control” (including the terms “controlling,” “controlled by” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

“ By-Laws ” means the Amended and Restated By-Laws of the Company, as may be amended from time to time.

“ First Threshold Date ” means the first date on which the Moelis Funds cease to beneficially own 35% or more of the total number of shares of Common Stock outstanding.

“ Certificate of Incorporation ” means the Amended and Restated Certificate of Incorporation of the Company, as may be amended from time to time.

“ Permitted Transferee ” shall mean, with respect to the Moelis Funds, (i) any Affiliates of the Moelis Funds, which for purposes of this definition only includes any investment fund or holding company that is directly or indirectly managed or advised by the same manager or

investment adviser as the Moelis Funds or by an Affiliate of such manager or investment adviser, and (ii) any member or general or limited partner of the Moelis Funds.

“ Person ” means any individual, corporation, partnership, limited liability company, joint venture, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“ Second Threshold Date ” means the first date on which the Moelis Funds cease to beneficially own 20% or more of the total number of shares of Common Stock outstanding.

“ Third Threshold Date ” means the first date on which the Moelis Funds cease to beneficially own 10% or more of the total number of shares of Common Stock outstanding.

Section 2. Board Number; Board Nomination .

(a) Until the First Threshold Date, the Moelis Funds shall have the right (but not the obligation) pursuant to this Agreement to submit for nomination to the Board three (3) individuals and the Company shall obtain any necessary approvals from the Board, the Compensation, Nominating and Corporate Governance Committee of the Board or other duly authorized committee of the Board and shall include in the slate of nominees recommended to stockholders of the Company (the “ Stockholders ”) for election as a director at any annual or special meeting of the Stockholders (or, if permitted, by any action by written consent of the Stockholders) at which directors of the Company are to be elected, the up to three individuals identified in advance by the Moelis Funds.

(b) After the First Threshold Date and until the Second Threshold Date, the Moelis Funds shall have the right (but not the obligation) pursuant to this Agreement to submit for nomination to the Board two (2) individuals and the Company shall obtain any necessary approvals from the Board, the Compensation, Nominating and Corporate Governance Committee of the Board or other duly authorized committee of the Board and shall include in the slate of nominees recommended to the Stockholders for election as a director at any annual or special meeting of the Stockholders (or, if permitted, by any action by written consent of the Stockholders) at which directors of the Company are to be elected, the up to two individuals identified in advance by the Moelis Funds.

(c) After the Second Threshold Date and until the Third Threshold Date, the Moelis Funds shall have the right (but not the obligation) pursuant to this Agreement to submit for nomination to the Board one (1) individual and the Company shall obtain any necessary approvals from the Board, the Compensation, Nominating and Corporate Governance Committee of the Board or other duly authorized committee of the Board and shall include in the slate of nominees recommended to the Stockholders for election as a director at any annual or special meeting of the Stockholders (or, if permitted, by any action by written consent of the Stockholders) at which directors of the Company are to be elected, the one individual identified in advance by the Moelis Funds (any such individuals identified pursuant to Section 2(a), Section 2(b) or Section 2(c) hereof, the “ Moelis Nominees ”).

(d) In the event that the Moelis Funds have nominated less than the total number of individuals that the Moelis Funds shall be entitled to nominate pursuant to this Section 2(a), Section 2(b) or Section 2(c), then the Moelis Funds shall have the right, at any time, to nominate such additional individual(s) to which the Moelis Funds are entitled, in which case, the Company shall cause the Board to take all necessary corporate action to (1) increase the size of the Board as required to enable the Moelis Funds to so nominate such additional individuals and (2) nominate such additional individuals identified by the Moelis Funds to fill such newly created vacancies.

(e) Vacancies arising through the death, resignation or removal of any Moelis Nominee who was nominated to the Board pursuant to this Section 2, may be filled by the Board only with a Moelis Nominee, and the director so chosen shall hold office until the next election and until his or her successor is duly elected and qualified, or until his or her earlier death, resignation or removal.

(f) Notwithstanding the provisions of this Section 2, the Moelis Funds shall not be entitled to designate a Person as a nominee to the Board upon a written determination by the Compensation, Nominating and Corporate Governance Committee of the Board or equivalent duly authorized committee of the Board with nominating responsibility (which determination shall set forth in writing reasonable grounds for such determination) that such Person would not be qualified under any applicable law, rule or regulation to serve as a director of the Company. In such an event, the Moelis Funds shall be entitled to select a Person as a replacement nominee and the Company shall cause such Person to be nominated as the Moelis Nominee at the same meeting (or, if permitted, pursuant to the same action by written consent of the Stockholders) as such initial Person was to be nominated. Other than with respect to the issue set forth in the first sentence of this Section 2(f), neither the Company nor any other party to this Agreement shall have the right to object to any Moelis Nominee. Notwithstanding anything in this Agreement to the contrary, no Moelis Nominee shall be required to qualify as an independent director under applicable rules or regulations of the U.S. Securities and Exchange Commission or a stock exchange on which shares of Common Stock are listed.

(g) Until the Third Threshold Date, the Company shall notify the Moelis Funds in writing of the date on which proxy materials are expected to be mailed by the Company in connection with an election of directors at an annual or special meeting of the Stockholders (and the Company shall deliver such notice at least 60 days (or such shorter period to which the Moelis Funds consent, which consent need not be in writing) prior to such expected mailing date or such earlier date as may be specified by the Company reasonably in advance of such earlier delivery date on the basis that such earlier delivery is necessary so as to ensure that such nominee may be included in such proxy materials at the time such proxy materials are mailed). The Company shall provide the Moelis Funds with a reasonable opportunity to review and provide comments on any portion of the proxy materials relating to the Moelis Nominees or the rights and obligations provided under this Agreement and to discuss any such comments with the Company. The Company shall notify the Moelis Funds of any opposition to a Moelis Nominee in accordance with Section 2(f) sufficiently in advance of the date on which such proxy materials are to be mailed by the Company in connection with such election of directors so as to enable the Moelis Funds to propose a replacement Moelis Nominee, if necessary, in accordance with the terms of this

Agreement, and the Moelis Funds shall have 10 business days to identify such replacement Moelis Nominee.

(h) The Company shall cause the Board to maintain a Compensation, Nominating and Corporate Governance Committee and subject to applicable laws and stock exchange regulations (including any phase in periods or other limitations thereunder), the Moelis Funds shall have the right (but not the obligation) to have a Moelis Nominee that is then a director of the Company serve as a member of the Compensation, Nominating and Corporate Governance Committee.

(i) In the event that the Moelis Funds cease to have the requisite nomination rights pursuant to Section 2, the Moelis Funds shall use their best efforts to cause the applicable Moelis Nominee to resign as promptly as practicable thereafter.

(j) So long as this Agreement shall remain in effect, subject to applicable legal requirements, the By-Laws and the Certificate of Incorporation shall accommodate and be subject to and not in any respect conflict with the rights and obligations set forth herein.

Section 3. Miscellaneous .

(a) Effective Date . This Agreement shall become effective upon the closing of the IPO.

(b) Governing Law . This Agreement and the rights and obligations of the parties hereto and the Persons subject hereto shall be governed by, and construed and interpreted in accordance with, the laws of the State of Delaware, without giving effect to the choice of law principles thereof.

(c) Certain Adjustments . The provisions of this Agreement shall apply to the full extent set forth herein with respect to any and all shares of capital stock of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in exchange for, or in substitution for the shares of Common Stock, by combination, recapitalization, reclassification, merger, consolidation or otherwise and the term “Common Stock” shall include all such other securities.

(d) Enforcement . Each of the parties hereto agrees that in the event of a breach of any provision of this Agreement, the aggrieved party may elect to institute and prosecute proceedings in any court of competent jurisdiction to enforce specific performance or to enjoin the continuing breach of this Agreement. Such remedies, however, shall be cumulative and not exclusive, and shall be in addition to any other remedy which any party hereto may have.

(e) Jurisdiction . In any judicial proceeding involving any dispute, controversy or claim arising out of or relating to this Agreement, each of the parties hereto unconditionally accepts the non-exclusive jurisdiction and venue of any United States District Court located in the State of Delaware, or of the Court of Chancery of the State of Delaware, and the appellate courts to which orders and judgments thereof may be appealed. In any such judicial proceeding, each of the parties hereto agrees that in addition to any method for the service of

process permitted or required by such courts, to the fullest extent permitted by law, service of process may be made by delivery provided pursuant to the directions in Section 3(h). EACH OF THE PARTIES HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING ANY DISPUTE, CONTROVERSY OR CLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

(f) Successors and Assigns . Except as otherwise provided herein, the provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors and permitted assigns.

(g) Entire Agreement; Termination . This Agreement constitutes the full and entire understanding and agreement between the parties with regard to the subject matter hereof and supersedes all prior oral or written (and all contemporaneous oral) agreements or understandings with respect to the subject matter hereof. This Agreement shall terminate and be of no further force and effect at such time as the Moelis Funds cease to beneficially own at least 10% of the total number of shares of Common Stock outstanding.

(h) Notices . All notices, requests, demands, waivers, consents and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered personally, (b) mailed by certified or registered mail with postage prepaid, (c) sent by next-day or overnight mail or delivery with proof of receipt maintained or (d) sent by fax, to the following addresses (or to such other address as the party entitled to notice shall hereafter designate in accordance with the terms hereof):

If to the Company:

Kinsale Capital Group, Inc.

2221 Edward Holland Drive, Suite 600

Richmond, VA 23230

Attention: Michael P. Kehoe

with a copy (which shall not constitute notice) to:

Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, NY 10036
Attention: Dwight S. Yoo
Facsimile No.: (212) 735-2000

If to the Moelis Funds:

c/o Moelis Capital Partners LLC
399 Park Avenue, 6 ^th Floor

New York, New York 10022
Attention: Marie Bober

and

c/o Nexphase Capital LLC
399 Park Avenue, 6 ^th Floor

New York, New York 10022
Attention: Joel Killion

with copies (which shall not constitute notice) to:

Ropes & Gray LLP

Prudential Tower, 800 Boylston Street

Boston, MA 02199-3600

Attention: Craig E. Marcus

Facsimile: (617) 235-0514

and

Ropes & Gray LLP

1211 Avenue of the Americas

New York, NY 10036-8704

Attention: Christopher B. Parsons

Facsimile: (646) 728-1588

All such notices, requests, demands, waivers, consents and other communications shall be deemed to have been received by (a) if by personal delivery, on the day delivered, (b) if by certified or registered mail, on the fifth business day after the mailing thereof, (c) if by next-day or overnight mail or delivery, on the day delivered, or (d) if by fax, on the day delivered, provided that such delivery is confirmed.

(i) Waiver . Waiver by any party hereto of any breach or default by the other party of any of the terms of this Agreement shall not operate as a waiver of any other breach or default, whether similar to or different from the breach or default waived. No waiver of any provision of this Agreement shall be implied from any course of dealing between the parties hereto or from any failure by either party to assert its or his or her rights hereunder on any occasion or series of occasions.

(j) Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

(k) Headings . The headings in this Agreement are for the convenience of the parties only and shall not control or affect the meaning or construction of any provision hereof.

(l) Invalidity of Provision . The invalidity or unenforceability of any provision of this Agreement in any jurisdiction shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of this Agreement, including that provision, in any other jurisdiction.

(m) Amendments and Waivers . The provisions of this Agreement may be amended at any time and from time to time, and particular provisions of this Agreement may be waived or modified, with and only with an agreement or consent in writing signed by each of the parties hereto.

(n) Further Assurances . Each party hereto shall do and perform or cause to be done and performed all such further acts and things and shall execute and deliver all such other agreements, certificates, instruments and documents as any other party hereto or Person subject hereto may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement. The Company shall not directly or indirectly take any action that is intended to, or would reasonably be expected to result in, the Moelis Funds being deprived of the rights contemplated by this Agreement.

(o) No Third-Party Beneficiaries . This Agreement is not intended to, and does not, confer upon any Person other than the parties hereto any rights or remedies.

[ Remainder of Page Intentionally Left Blank ]

IN WITNESS WHEREOF this Agreement has been signed by each of the parties hereto, and shall be effective as of the date first above written.

KINSALE CAPITAL GROUP, INC.



By:	/s/ Bryan P. Petrucelli
	Name:	Bryan P Petrucelli
	Title:	Senior Vice President, Treasurer and
		Chief Financial Officer



MOELIS CAPITAL PARTNERS OPPORTUNITY FUND I, L.P.
By:	Moelis Capital Partners Opportunity
	Fund I LLC, its General Partner

By:	Moelis Capital Partners LLC,
	its Managing Member

By:	/s/ Christopher Ryan
	Name:	Christopher Ryan
	Title:	Managing Director



MOELIS CAPITAL PARTNERS OPPORTUNITY FUND I-A, L.P.
By:	Moelis Capital Partners Opportunity
	Fund I LLC, its General Partner

By:	Moelis Capital Partners LLC,
	its Managing Member

By:	/s/ Christopher Ryan
	Name:	Christopher Ryan
	Title:	Managing Director

Exhibit 31.1

CERTIFICATION

I, Michael P. Kehoe, certify that:


1.	I have reviewed this quarterly report on Form 10-Q of Kinsale Capital Group, Inc.;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) 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.	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


c.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and


5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):


a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and


b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.



September 7, 2016		/s/ Michael P. Kehoe
		Michael P. Kehoe
		President and Chief Executive Officer
		(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION

I, Bryan P. Petrucelli, certify that:


1.	I have reviewed this quarterly report on Form 10-Q of Kinsale Capital Group, Inc.;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) 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.	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


c.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and


5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):


a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and


b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.



September 7, 2016		/s/ Bryan P. Petrucelli
		Bryan P. Petrucelli
		Senior Vice President and Chief Financial Officer
		(Principal Financial Officer)

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report on Form 10-Q of Kinsale Capital Group, Inc. (the "Company") for the period ended June 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Michael P. Kehoe, President and Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:


1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



September 7, 2016		/s/ Michael P. Kehoe
		Michael P. Kehoe
		President and Chief Executive Officer
		(Principal Executive Officer)

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report on Form 10-Q of Kinsale Capital Group, Inc. (the "Company") for the period ended June 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Bryan P. Petrucelli, Senior Vice President and Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:


1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



September 7, 2016		/s/ Bryan P. Petrucelli
		Bryan P. Petrucelli
		Senior Vice President and Chief Financial Officer
		(Principal Financial Officer)