Common use of Commutation Clause in Contracts

Commutation. A. Either the Company or the Reinsurer may request commutation of that portion of any excess loss hereunder represented by any outstanding claim or claims after seven years from the date of an occurrence. If both parties desire to commute a claim or claims, then within 60 days after such agreement, the Company shall submit a statement of valuation of the outstanding claim or claims showing the elements considered reasonable to establish the ultimate net loss and the Reinsurer shall pay the amount requested. Commutation of loss will be calculated on the present value of the loss within the layer of coverage.