Common use of LOSS AND LOSS ADJUSTMENT EXPENSE Clause in Contracts

LOSS AND LOSS ADJUSTMENT EXPENSE. 11.01 The Reinsurer shall assume the Reinsurer’s Quota Share of the risks covered by this Agreement and shall be liable for and pay or cause to be paid on behalf of the Company the Reinsurer’s Quota Share of all losses, judgments, interest on judgments, settlements whether under strict policy conditions or because of compromise or settlement, and Loss Adjustment Expenses, Extra Contractual Obligations or Loss in Excess of Policy Limits incurred by the Company in connection with the Policies or the investigation or settlement or contesting the validity of claims or losses covered under this Agreement; the Reinsurer shall, on the other hand, be credited with the Reinsurer’ Quota Share of any amount received by the Company as salvage or recovery. Nothing in the previous sentence shall be deemed or construed to require the Company to first pay the claims or losses under the reinsured policies, then to seek reimbursement for such claims or losses from the Reinsurer; rather, the Reinsurer has assumed sole responsibility for the payment of the claims, losses, Loss Adjustment Expenses, Extra Contractual Obligations and Loss in Excess of Policy Limits under the Policies reinsured hereunder, to be performed in accordance with applicable law and the terms and conditions of the Policies and this Agreement. 11.02 The Company hereby empowers the Reinsurer, and the Reinsurer may, under its supervision appoint the Agent or another designated and properly licensed third party administrator, to accept notice of and investigate any claim arising under any of the Policies, and to pay, adjust, settle, resist, or compromise any such claim. All such loss settlements, whether under strict policy conditions or by way of compromise, shall be unconditionally binding upon the Reinsurer. However, should the Company be ordered by its DIR or any other regulatory agency of competent jurisdiction to take any action or refrain from taking any action with regard to any claim reinsured hereunder, the Reinsurer and the Agent shall be bound by and shall follow the order of such regulatory agency as though Reinsurer or the Agent were the object of such order. 11.03 The Company will promptly notify the Reinsurer of any claim, suit or action brought against the Company under any of the Policies when actually notified of a claim, suit or action against the Company, and will promptly furnish to the Reinsurer all summons, citations, complaints, petitions, counterclaims and other pleadings and legal instruments served upon the Company in connection therewith. The Company hereby further empowers the Reinsurer to dispose of any salvage received as the result of any loss settlement hereunder, and to enforce any right of the Company against any person or organization for damages or equitable relief for any loss under any of the Policies, employing legal counsel where necessary, and all sums received as a result thereof will be treated as current loss recoveries by the Company and Reinsurer. The Company further agrees to execute and furnish to the Reinsurer, on request, any and all legal instruments, powers of attorney, and/or other documentation reasonably necessary to evidence and implement the foregoing authorizations. Upon request, the Reinsurer shall furnish to the Company any or all documents and correspondence relating to the subject matter hereof. 11.04 All records pertaining to claims arising under the Policies shall be deemed to be jointly owned records of the Company and the Reinsurer, and shall be made available to the Company or the Reinsurer or their respective representatives or any duly appointed examiner for any State within the United States. The Company and the Reinsurer agree that they will each maintain and retain such records, or cause the Agent to maintain and retain such records, for a period of five (5) years or for so long as required by applicable law, whichever is longer, and shall not destroy any such records in their possession without the prior notice to the other, except that the Company and the Reinsurer shall not be required to retain files longer than required by the guidelines set by the Company’s DIR. 11.05 The Reinsurer shall establish a separate claim register or method of registering claims arising under the policies covered by this Agreement so that all claims may be segregated and identified separate and apart from other records of the Reinsurer with such claims register to identify each claim on an individual case basis both as to identify the insured(s) and the claimant and the reserve for loss and adjusting expense. Such claim register shall be kept in a form whereby the Company can, at any time, determine the status of any claim arising under Policies covered by this Agreement. Such records shall reflect the amount of reserves established for the individual claim and the date when such reserve was established, and if closed, whether such claim was closed with or without payment, and if with payment, the amount paid thereon. 11.06 The Reinsurer is authorized to have claims adjusted through independent claims adjusters and agents. Such independent claims adjusters and agents are not the agents of the Company and the Company shall be defended, held harmless and indemnified by the Reinsurer for any liability, claim, demand, expense and/or cost of whatever kind or character as a result of, related to or connected with any action or inaction of such claims adjusters and agents. 11.07 The Reinsurer acknowledges that it has been afforded the opportunity to review the records of the Agent including but not limited to rate levels, rate filings, underwriting guidelines and claims handling. Although the Company may perform reviews as well, it is understood that the participation of the Reinsurer in this Agreement is not based upon due diligence performed by the Company. The Company shall not be responsible for monitoring the Agent, and any acts or omissions of the Agent will not serve to relieve the Reinsurer of its obligations under this Agreement. 11.08 Policy cancellations will be made strictly in compliance with applicable statutes and regulations and the applicable provisions contained in this Agreement and the pertinent policy, by, or at the direction of, the Agent and/or the Reinsurer, and the Company shall not be responsible therefor. Cancellation authority shall be exercised only for causes inherent in the particular risk and shall not be construed as authority to make general or indiscriminate cancellations or replacement of the Policies with those of another Company, except upon specific written instructions from the Company. 11.09 Payment of losses shall be made on checks or drafts in the name of the Company. The Reinsurer shall be responsible for the safekeeping of all checks and/or drafts of the Company used for settling claims and shall perform the following: (a) The reinsurer shall immediately return all voided checks or drafts to the Company; and (b) The Reinsurer shall immediately notify the Company of any irregularities, theft, disappearance or destruction of checks or drafts. The Reinsurer shall indemnify and hold harmless the Company against any loss resulting from the Reinsurer’s misuse or failure to secure or keep-safe such Company checks. 11.10 Upon termination of this Agreement, the Reinsurer shall, or shall cause the Agent to take those actions necessary, including sending statutorily prescribed non-renewal notices to insureds in a timely manner to effectuate the intent that there be no renewals or new policies (but for those Mandatory Renewal Policies required under applicable law) after the termination of this Agreement. 11.11 The Reinsurer shall, or shall cause the Agent to, maintain on behalf of the Company, and furnish to the Company upon reasonable request, complete copies of all Policies issued hereunder and copies of all claim files created with respect to all loss occurrences thereunder. Any or all Policies and/or claim files required to be maintained pursuant to this Section 11.11 may be maintained in electronic data storage form accessible by computer and if so stored in this fashion, no physical copy of such items need be maintained. Where electronic claims files are maintained, any data from such files requested or required by the Company shall be provided within thirty (30) days or less if so requested by the Company, provided that said request is based upon a legitimate business need. 11.12 The Reinsurer shall be solely responsible for the Reinsurer or the Agent procuring any renewal, extension, or new policy or insurance that may be required by any applicable law or regulation with respect to Mandatory Renewal Policies. The Reinsurer shall indemnify the Company and hold it harmless from any loss, damage, cost, claim or expense whatsoever that the Company may incur, or for which it may become liable, as a result of the said failure, refusal or neglect to fulfill said responsibility. 11.13 Should the Company’s DIR make a request to the Company for any data required to comply with a statistical data call, the Reinsurer shall be solely responsible to provide the Company with such data. Should the request from the Company’s DIR require the Company to contract the services of an outside source, such as an actuarial firm, to compile the data required, the Reinsurer shall be responsible for its proportionate share of the total cost for services rendered.

LOSS AND LOSS ADJUSTMENT EXPENSE. 11.01 The Reinsurer shall assume the Reinsurer’s Quota Share of the risks covered by this Agreement and shall be liable for and pay or cause to be paid on behalf of the Company the Reinsurer’s Quota Share of all losses, judgments, interest on judgments, 4.01 All loss settlements whether under strict policy conditions or because of compromise or settlement, and Loss Adjustment Expenses, Extra Contractual Obligations or Loss in Excess of Policy Limits incurred made by the Company in connection with the Policies or the investigation or settlement or contesting General Agent under the validity terms of claims or losses covered under this Agreement; the Reinsurer shall, on the other hand, be credited with the Reinsurer’ Quota Share of any amount received by the Company as salvage or recovery. Nothing in the previous sentence shall be deemed or construed to require the Company to first pay the claims or losses under the reinsured policies, then to seek reimbursement for such claims or losses from the Reinsurer; rather, the Reinsurer has assumed sole responsibility for the payment of the claims, losses, Loss Adjustment Expenses, Extra Contractual Obligations and Loss in Excess of Policy Limits under the Policies reinsured hereunder, to be performed in accordance with applicable law and the terms and conditions of the Policies and this Agreement. 11.02 The Company hereby empowers the Reinsurer, and the Reinsurer may, under its supervision appoint the Agent or another designated and properly licensed third party administrator, to accept notice of and investigate any claim arising under any of the Policies, and to pay, adjust, settle, resist, or compromise any such claim. All such loss settlements, whether under strict policy conditions or by way of compromise, shall be unconditionally binding upon the Reinsurer. HoweverReinsurer in proportion to its participation, should the Company be ordered by its DIR or any other regulatory agency of competent jurisdiction to take any action or refrain from taking any action with regard to any claim reinsured hereunder, and the Reinsurer shall benefit proportionately in all salvage and the Agent recoveries. The Reinsurer shall assume and be bound by liable for and shall follow the order pay on behalf of such regulatory agency as though Reinsurer or the Agent were the object of such order. 11.03 The Company will promptly notify the Reinsurer of any claim, suit or action brought against the Company under any of the Policies when actually notified of a claim, suit or action against the Company, all losses incurred in connection with the risks covered by this Agreement, including, but not limited to, judgments (including interest thereon) and will promptly furnish to the Reinsurer all summons, citations, complaints, petitions, counterclaims and other pleadings and legal instruments served upon the Company settlements in connection therewith. The Company hereby further empowers the Reinsurer to dispose of any salvage received as the result of any loss settlement hereunder, shall also be liable for and to enforce any right pay on behalf of the Company against any person or organization for damages or equitable relief for any loss under any of the Policiesall costs, employing legal counsel where necessaryexpenses, and all sums received as a result thereof will be treated as current loss recoveries fees (including, but not limited to, attorney's fees) incurred by the Company in connection with the investigation or settlement or contesting the validity of claims or losses covered under this Agreement (this shall include but, of course, is not limited to, costs, expenses and Reinsurer. The Company further agrees to execute and furnish to the Reinsurer, on request, any and all legal instruments, powers of attorney, and/or fees resulting from a declaratory judgment or injunctive action brought by an insured or other documentation reasonably necessary to evidence and implement the foregoing authorizations. Upon request, the Reinsurer shall furnish to the Company any or all documents and correspondence relating to the subject matter hereofperson). 11.04 4.02 The Reinsurer's share of losses, expense and loss recovery shall be carried into the monthly accounting for which provision is hereinafter made. 4.03 All records pertaining to claims arising under insurance policies issued on behalf of the Policies Company through or by the General Agent subject to this Agreement shall be deemed to be jointly owned records of the Company and the Reinsurer, and shall be made available to the Company or the Reinsurer or their respective representatives or any duly appointed examiner for any State state within the United States. The Company ; and these records shall be kept in the Reinsurer agree that they will each maintain and retain State of New York or such records, or cause the Agent to maintain and retain such records, for a period of five (5) years or for so long other jurisdiction as may be required by applicable lawstate law or regulation. Notwithstanding the foregoing, whichever the Reinsurer is longerauthorized to maintain duplicate working files of all such records outside the State of New York. The Company, the Reinsurer and shall the General Agent each agree that it will not destroy any such records in their its possession without the prior notice to written approval of the other, other parties except that the Company and the Reinsurer shall not be required to retain files longer than required by the guidelines set forth by the Company’s DIRany applicable state department of insurance. 11.05 4.04 The Reinsurer shall, or shall cause the General Agent to, establish a separate claim register or method of registering recording claims arising under the policies Policies covered by this Agreement so that all claims may be segregated and identified separate and apart from other records of the Reinsurer or General Agent, with such claims register to identify each claim on an individual case basis both as to identify the insured(s) and the claimant and claimant, the reserve for loss and adjusting expense. Such claim register shall be kept in a form manner whereby the Company can, at any time, determine the status of any claim arising under Policies covered by this Agreement. Such records shall reflect the amount of reserves established for the individual claim and the date when such reserve was established, and if closed, whether such claim was closed with or without payment, and if with payment, the amount paid thereon. 11.06 The Reinsurer is authorized to have claims adjusted through independent claims adjusters and agents. Such independent claims adjusters and agents are not the agents of the Company and the Company shall be defended, held harmless and indemnified by the Reinsurer for any liability, claim, demand, expense and/or cost of whatever kind or character as a result of, related to or connected with any action or inaction of such claims adjusters and agents. 11.07 The Reinsurer acknowledges that it has been afforded the opportunity to review the records of the Agent including but not limited to rate levels, rate filings, underwriting guidelines and claims handling. Although the Company may perform reviews as well, it is understood that the participation of the Reinsurer in this Agreement is not based upon due diligence performed by the Company. The Company shall not be responsible for monitoring the Agent, and any acts or omissions of the Agent will not serve to relieve the Reinsurer of its obligations under this Agreement. 11.08 Policy cancellations will be made strictly in compliance with applicable statutes and regulations and the applicable provisions contained in this Agreement and the pertinent policy, by, or at the direction of, the Agent and/or the Reinsurer, and the Company shall not be responsible therefor. Cancellation authority shall be exercised only for causes inherent in the particular risk and shall not be construed as authority to make general or indiscriminate cancellations or replacement of the Policies with those of another Company, except upon specific written instructions from the Company. 11.09 Payment of losses shall be made on checks or drafts in the name of the Company. The Reinsurer shall be responsible for the safekeeping of all checks and/or drafts of the Company used for settling claims and shall perform the following: (a) The reinsurer shall immediately return all voided checks or drafts to the Company; and (b) The Reinsurer shall immediately notify the Company of any irregularities, theft, disappearance or destruction of checks or drafts. The Reinsurer shall indemnify and hold harmless the Company against any loss resulting from the Reinsurer’s misuse or failure to secure or keep-safe such Company checks. 11.10 Upon termination of this Agreement, the Reinsurer shall, or shall cause the Agent to take those actions necessary, including sending statutorily prescribed non-renewal notices to insureds in a timely manner to effectuate the intent that there be no renewals or new policies (but for those Mandatory Renewal Policies required under applicable law) after the termination of this Agreement. 11.11 The Reinsurer shall, or shall cause the Agent to, maintain on behalf of the Company, and furnish to the Company upon reasonable request, complete copies of all Policies issued hereunder and copies of all claim files created with respect to all loss occurrences thereunder. Any or all Policies and/or claim files required to be maintained pursuant to this Section 11.11 may be maintained in electronic data storage form accessible by computer and if so stored in this fashion, no physical copy of such items need be maintained. Where electronic claims files are maintained, any data from such files requested or required by the Company shall be provided within thirty (30) days or less if so requested by the Company, provided that said request is based upon a legitimate business need. 11.12 The Reinsurer shall be solely responsible for the Reinsurer or the Agent procuring any renewal, extension, or new policy or insurance that may be required by any applicable law or regulation with respect to Mandatory Renewal Policies. The Reinsurer shall indemnify the Company and hold it harmless from any loss, damage, cost, claim or expense whatsoever that the Company may incur, or for which it may become liable, as a result of the said failure, refusal or neglect to fulfill said responsibility. 11.13 Should the Company’s DIR make a request to the Company for any data required to comply with a statistical data call, the Reinsurer shall be solely responsible to provide the Company with such data. Should the request from the Company’s DIR require the Company to contract the services of an outside source, such as an actuarial firm, to compile the data required, the Reinsurer shall be responsible for its proportionate share of the total cost for services rendered.

LOSS AND LOSS ADJUSTMENT EXPENSE. 11.01 The Reinsurer shall assume the Reinsurer’s Quota Share of the risks covered by this Agreement and shall be liable for and pay or cause to be paid on behalf of the Company the Reinsurer’s Quota Share of all losses, judgments, interest on judgments, 4.01 All loss settlements whether under strict policy conditions or because of compromise or settlement, and Loss Adjustment Expenses, Extra Contractual Obligations or Loss in Excess of Policy Limits incurred made by the Company in connection with the Policies or the investigation or settlement or contesting General Agent under the validity terms of claims or losses covered under this Agreement; the Reinsurer shall, on the other hand, be credited with the Reinsurer’ Quota Share of any amount received by the Company as salvage or recovery. Nothing in the previous sentence shall be deemed or construed to require the Company to first pay the claims or losses under the reinsured policies, then to seek reimbursement for such claims or losses from the Reinsurer; rather, the Reinsurer has assumed sole responsibility for the payment of the claims, losses, Loss Adjustment Expenses, Extra Contractual Obligations and Loss in Excess of Policy Limits under the Policies reinsured hereunder, to be performed in accordance with applicable law and the terms and conditions of the Policies and this Agreement. 11.02 The Company hereby empowers the Reinsurer, and the Reinsurer may, under its supervision appoint the Agent or another designated and properly licensed third party administrator, to accept notice of and investigate any claim arising under any of the Policies, and to pay, adjust, settle, resist, or compromise any such claim. All such loss settlements, whether under strict policy conditions or by way of compromise, shall be unconditionally binding upon the Reinsurer. HoweverReinsurer in proportion to its participation, should the Company be ordered by its DIR or any other regulatory agency of competent jurisdiction to take any action or refrain from taking any action with regard to any claim reinsured hereunder, and the Reinsurer shall benefit proportionately in all salvage and the Agent recoveries. The Reinsurer shall assume and be bound by liable for and shall follow the order pay on behalf of such regulatory agency as though Reinsurer or the Agent were the object of such order. 11.03 The Company will promptly notify the Reinsurer of any claim, suit or action brought against the Company under any of the Policies when actually notified of a claim, suit or action against the Company, all losses incurred in connection with the risks covered by this Agreement, including, but not limited to, judgments (including interest thereon) and will promptly furnish to the Reinsurer all summons, citations, complaints, petitions, counterclaims and other pleadings and legal instruments served upon the Company settlements in connection therewith. The Company hereby further empowers the Reinsurer to dispose of any salvage received as the result of any loss settlement hereunder, shall also be liable for and to enforce any right pay on behalf of the Company against any person or organization for damages or equitable relief for any loss under any of the Policiesall costs, employing legal counsel where necessaryexpenses, and all sums received as a result thereof will be treated as current loss recoveries fees (including, but not limited to, attorney's fees) incurred by the Company in connection with the investigation or settlement or contesting the validity of claims or losses covered under this Agreement (this shall include but, of course, is not limited to, costs, expenses and Reinsurer. The Company further agrees to execute and furnish to the Reinsurer, on request, any and all legal instruments, powers of attorney, and/or fees resulting from a declaratory judgment or injunctive action brought by an insured or other documentation reasonably necessary to evidence and implement the foregoing authorizations. Upon request, the Reinsurer shall furnish to the Company any or all documents and correspondence relating to the subject matter hereofperson). 11.04 4.02 The Reinsurer's share of losses, expense and loss recovery shall be carried into the monthly accounting for which provision is hereinafter made. 4.03 All records pertaining to claims arising under insurance policies issued on behalf of the Policies Company through or by the General Agent subject to this Agreement shall be deemed to be jointly owned records of the Company and the Reinsurer, and shall be made available to the Company or the Reinsurer or their respective representatives or any duly appointed examiner for any State state within the United States; and these records shall be kept in the State of North Carolina or such other jurisdiction as may be required or permitted by applicable state law or regulation. Notwithstanding the foregoing, the Reinsurer is authorized to maintain duplicate working files of all such records outside the State of North Carolina. The Company Company, the Reinsurer and the Reinsurer General Agent each agree that they it will each maintain and retain such records, or cause the Agent to maintain and retain such records, for a period of five (5) years or for so long as required by applicable law, whichever is longer, and shall not destroy any such records in their its possession without the prior notice to written approval of the other, other parties except that the Company and the Reinsurer neither party shall not be required to retain files longer than required by the guidelines set forth by the Company’s DIRany applicable state department of insurance. 11.05 4.04 The Reinsurer shall, or shall cause the General Agent to, establish a separate claim register or method of registering recording claims arising under the policies Policies covered by this Agreement so that all claims may be segregated and identified separate and apart from other records of the Reinsurer or General Agent, with such claims register to identify each claim on an individual case basis both as to identify the insured(s) and the claimant and claimant, the reserve for loss and adjusting expense. Such claim register shall be kept in a form manner whereby the Company can, at any time, determine the status of any claim arising under Policies covered by this Agreement. Such records shall reflect the amount of reserves established for the individual claim and the date when such reserve was established, and if closed, whether such claim was closed with or without payment, and if with payment, the amount paid thereon. 11.06 The Reinsurer is authorized to have claims adjusted through independent claims adjusters and agents. Such independent claims adjusters and agents are not the agents of the Company and the Company shall be defended, held harmless and indemnified by the Reinsurer for any liability, claim, demand, expense and/or cost of whatever kind or character as a result of, related to or connected with any action or inaction of such claims adjusters and agents. 11.07 The Reinsurer acknowledges that it has been afforded the opportunity to review the records of the Agent including but not limited to rate levels, rate filings, underwriting guidelines and claims handling. Although the Company may perform reviews as well, it is understood that the participation of the Reinsurer in this Agreement is not based upon due diligence performed by the Company. The Company shall not be responsible for monitoring the Agent, and any acts or omissions of the Agent will not serve to relieve the Reinsurer of its obligations under this Agreement. 11.08 Policy cancellations will be made strictly in compliance with applicable statutes and regulations and the applicable provisions contained in this Agreement and the pertinent policy, by, or at the direction of, the Agent and/or the Reinsurer, and the Company shall not be responsible therefor. Cancellation authority shall be exercised only for causes inherent in the particular risk and shall not be construed as authority to make general or indiscriminate cancellations or replacement of the Policies with those of another Company, except upon specific written instructions from the Company. 11.09 Payment of losses shall be made on checks or drafts in the name of the Company. The Reinsurer shall be responsible for the safekeeping of all checks and/or drafts of the Company used for settling claims and shall perform the following: (a) The reinsurer shall immediately return all voided checks or drafts to the Company; and (b) The Reinsurer shall immediately notify the Company of any irregularities, theft, disappearance or destruction of checks or drafts. The Reinsurer shall indemnify and hold harmless the Company against any loss resulting from the Reinsurer’s misuse or failure to secure or keep-safe such Company checks. 11.10 Upon termination of this Agreement, the Reinsurer shall, or shall cause the Agent to take those actions necessary, including sending statutorily prescribed non-renewal notices to insureds in a timely manner to effectuate the intent that there be no renewals or new policies (but for those Mandatory Renewal Policies required under applicable law) after the termination of this Agreement. 11.11 The Reinsurer shall, or shall cause the Agent to, maintain on behalf of the Company, and furnish to the Company upon reasonable request, complete copies of all Policies issued hereunder and copies of all claim files created with respect to all loss occurrences thereunder. Any or all Policies and/or claim files required to be maintained pursuant to this Section 11.11 may be maintained in electronic data storage form accessible by computer and if so stored in this fashion, no physical copy of such items need be maintained. Where electronic claims files are maintained, any data from such files requested or required by the Company shall be provided within thirty (30) days or less if so requested by the Company, provided that said request is based upon a legitimate business need. 11.12 The Reinsurer shall be solely responsible for the Reinsurer or the Agent procuring any renewal, extension, or new policy or insurance that may be required by any applicable law or regulation with respect to Mandatory Renewal Policies. The Reinsurer shall indemnify the Company and hold it harmless from any loss, damage, cost, claim or expense whatsoever that the Company may incur, or for which it may become liable, as a result of the said failure, refusal or neglect to fulfill said responsibility. 11.13 Should the Company’s DIR make a request to the Company for any data required to comply with a statistical data call, the Reinsurer shall be solely responsible to provide the Company with such data. Should the request from the Company’s DIR require the Company to contract the services of an outside source, such as an actuarial firm, to compile the data required, the Reinsurer shall be responsible for its proportionate share of the total cost for services rendered.

LOSS AND LOSS ADJUSTMENT EXPENSE. 11.01 The Reinsurer shall assume the Reinsurer’s Quota Share of the risks covered 5.01 All loss settlements made by this Agreement and shall be liable for and pay or cause to be paid on behalf of the Company or the Reinsurer’s Quota Share General Agent under the terms of all lossesthis Agreement, judgments, interest on judgments, settlements whether under strict policy conditions or because by way of compromise or settlementcompromise, shall be unconditionally binding upon the Reinsurer in proportion to its participation, and Loss Adjustment Expensesthe Reinsurer shall benefit proportionately in all salvage and recoveries. The Reinsurer shall assume and be liable for and pay on behalf of the Company, Extra Contractual Obligations or Loss 100% of all losses incurred in Excess connection with the risks covered by this Agreement, including, but not limited to, judgments (including interest thereon) and settlements in connection therewith. The Reinsurer shall also be liable for 100% of Policy Limits and pay on behalf of the Company all costs, expenses, and fees (including, but not limited to, attorney's fees) incurred by the Company in connection with the Policies or the investigation or settlement or contesting the validity of claims or losses covered under this Agreement; the Reinsurer shallAgreement (this shall include but, on the of course, is not limited to, costs, expenses and fees resulting from a declaratory judgment or injunctive action brought by an insured or other handperson). 5.02 The Reinsurer's 100% share of losses, be credited with the Reinsurer’ Quota Share of any amount received by the Company as salvage or recovery. Nothing in the previous sentence expense and loss recovery shall be deemed or construed to require carried into the Company to first pay the claims or losses under the reinsured policies, then to seek reimbursement monthly accounting for such claims or losses from the Reinsurer; rather, the Reinsurer has assumed sole responsibility for the payment of the claims, losses, Loss Adjustment Expenses, Extra Contractual Obligations and Loss in Excess of Policy Limits under the Policies reinsured hereunder, to be performed in accordance with applicable law and the terms and conditions of the Policies and this Agreementwhich provision is hereinafter made. 11.02 5.03 The Company hereby empowers the Reinsurer, and the Reinsurer may, in its discretion, and under its supervision appoint the Agent or another designated and properly licensed third party administratorGeneral Agent, to accept notice of and investigate any claim arising under any of the Policies, and to pay, adjust, settle, resist, resist or compromise any such claim, unless the Company specifically directs to the contrary with respect to any individual claim. In the latter event, the Reinsurer and/or General Agent shall follow the instructions of the Company as respects such claim. All such loss settlements, whether under strict policy conditions or by the way of compromise, shall be unconditionally binding upon the Reinsurer. However, should the Company be ordered or instructed by its DIR an applicable Department of Insurance or any other regulatory agency of competent jurisdiction to take any action or refrain from taking any action with regard to any claim reinsured hereunderclaim, the Reinsurer and the Agent shall be bound by and shall follow the order or instructions of such regulatory agency as though Reinsurer or the Agent were the object of such order. 11.03 The Company will promptly notify the Reinsurer of any claim, suit order or action brought against the Company under any of the Policies when actually notified of a claim, suit or action against the Company, and will promptly furnish to the Reinsurer all summons, citations, complaints, petitions, counterclaims and other pleadings and legal instruments served upon the Company in connection therewithinstruction. The Company hereby further empowers Reinsurer will exercise the Reinsurer to dispose authority granted hereunder in good faith and toward the end of any salvage received as the result of any loss settlement hereunder, and to enforce any right of the Company against any person or organization for damages or equitable relief for any loss under any of the Policies, employing legal counsel where necessary, and all sums received as a result thereof will be treated as current loss recoveries by the Company and Reinsurer. The Company further agrees to execute and furnish to the Reinsurer, on request, paying any and all legal instruments, powers of attorney, and/or other documentation reasonably necessary to evidence and implement the foregoing authorizations. Upon request, the Reinsurer shall furnish to the Company any or all documents and correspondence relating to the subject matter hereofvalid claims. 11.04 5.04 All records pertaining to claims arising under insurance policies issued on behalf of the Policies Company through or by the General Agent subject to this Agreement shall be deemed to be jointly owned records of the Company and the Reinsurer, and shall be made available to the Company or the Reinsurer or their respective representatives or any duly appointed examiner for any State state within the United States. The Company ; and these records shall be kept in the Reinsurer agree that they will each maintain and retain State of Michigan or such records, or cause the Agent to maintain and retain such records, for a period of five (5) years or for so long other jurisdiction as may be required by applicable lawstate law or regulation. Notwithstanding the foregoing, whichever the Company is longerauthorized to maintain duplicate working files of all such records outside the State of Michigan. The Company, the Reinsurer and shall the General Agent each agree that it will not destroy any such records in their its possession without the prior notice to written approval of the other, other parties except that the Company and the Reinsurer shall not be required to retain files longer than required by the guidelines set forth by the Company’s DIRany applicable state department of insurance. 11.05 5.05 The Reinsurer shall, or shall cause the General Agent to, establish a separate claim register or method of registering recording claims arising under the policies Policies covered by this Agreement so that all claims may be segregated and identified separate and apart from other records of the Reinsurer or General Agent, with such claims register to identify each claim on an individual case basis both as to identify the insured(s) and the claimant and claimant, the reserve for loss and adjusting expense. Such claim register shall be kept in a form manner whereby the Company can, at any time, determine the status of any claim arising under Policies covered by this Agreement. Such records shall reflect the amount of reserves established for the individual claim and the date when such reserve was established, and if closed, whether such claim was closed with or without payment, and if with payment, the amount paid thereon. 11.06 The Reinsurer is authorized to have claims adjusted through independent claims adjusters and agents. Such independent claims adjusters and agents are not the agents of the Company and the Company shall be defended, held harmless and indemnified by the Reinsurer for any liability, claim, demand, expense and/or cost of whatever kind or character as a result of, related to or connected with any action or inaction of such claims adjusters and agents. 11.07 The Reinsurer acknowledges that it has been afforded the opportunity to review the records of the Agent including but not limited to rate levels, rate filings, underwriting guidelines and claims handling. Although the Company may perform reviews as well, it is understood that the participation of the Reinsurer in this Agreement is not based upon due diligence performed by the Company. The Company shall not be responsible for monitoring the Agent, and any acts or omissions of the Agent will not serve to relieve the Reinsurer of its obligations under this Agreement. 11.08 Policy cancellations will be made strictly in compliance with applicable statutes and regulations and the applicable provisions contained in this Agreement and the pertinent policy, by, or at the direction of, the Agent and/or the Reinsurer, and the Company shall not be responsible therefor. Cancellation authority shall be exercised only for causes inherent in the particular risk and shall not be construed as authority to make general or indiscriminate cancellations or replacement of the Policies with those of another Company, except upon specific written instructions from the Company. 11.09 Payment of losses shall be made on checks or drafts in the name of the Company. The Reinsurer shall be responsible for the safekeeping of all checks and/or drafts of the Company used for settling claims and shall perform the following: (a) The reinsurer shall immediately return all voided checks or drafts to the Company; and (b) The Reinsurer shall immediately notify the Company of any irregularities, theft, disappearance or destruction of checks or drafts. The Reinsurer shall indemnify and hold harmless the Company against any loss resulting from the Reinsurer’s misuse or failure to secure or keep-safe such Company checks. 11.10 Upon termination of this Agreement, the Reinsurer shall, or shall cause the Agent to take those actions necessary, including sending statutorily prescribed non-renewal notices to insureds in a timely manner to effectuate the intent that there be no renewals or new policies (but for those Mandatory Renewal Policies required under applicable law) after the termination of this Agreement. 11.11 The Reinsurer shall, or shall cause the Agent to, maintain on behalf of the Company, and furnish to the Company upon reasonable request, complete copies of all Policies issued hereunder and copies of all claim files created with respect to all loss occurrences thereunder. Any or all Policies and/or claim files required to be maintained pursuant to this Section 11.11 may be maintained in electronic data storage form accessible by computer and if so stored in this fashion, no physical copy of such items need be maintained. Where electronic claims files are maintained, any data from such files requested or required by the Company shall be provided within thirty (30) days or less if so requested by the Company, provided that said request is based upon a legitimate business need. 11.12 The Reinsurer shall be solely responsible for the Reinsurer or the Agent procuring any renewal, extension, or new policy or insurance that may be required by any applicable law or regulation with respect to Mandatory Renewal Policies. The Reinsurer shall indemnify the Company and hold it harmless from any loss, damage, cost, claim or expense whatsoever that the Company may incur, or for which it may become liable, as a result of the said failure, refusal or neglect to fulfill said responsibility. 11.13 Should the Company’s DIR make a request to the Company for any data required to comply with a statistical data call, the Reinsurer shall be solely responsible to provide the Company with such data. Should the request from the Company’s DIR require the Company to contract the services of an outside source, such as an actuarial firm, to compile the data required, the Reinsurer shall be responsible for its proportionate share of the total cost for services rendered.

LOSS AND LOSS ADJUSTMENT EXPENSE. 11.01 13.01 The Reinsurer shall assume the Reinsurer’s Quota Share 100% of the risks covered by this Agreement and shall be liable for and pay or cause directly to be paid the insureds on behalf of the Company the Reinsurer’s Quota Share 100% of all claims, losses, judgments, interest on judgments, settlements whether under strict policy conditions or because of compromise or settlementcompromise, and Loss Adjustment Expenses, Extra Contractual Obligations or Loss in Excess of Policy Limits expenses incurred by the Company in connection with the Policies and/or General Agent (including, but not limited to, costs, expenses and fees, including attorneys' fees and expenses, resulting from a declaratory judgment or the investigation injunctive action brought by an insured or settlement or contesting the validity of claims or losses covered under this Agreement; the other person). The Reinsurer shall, on the other hand, shall be credited with the Reinsurer’ Quota Share 100% of any amount received by the Company as salvage or recovery. Nothing in the previous sentence shall be deemed or construed to require the Company to first pay the claims or losses under the reinsured policies, then to seek reimbursement for such claims or losses from the Reinsurer; rather, the Reinsurer has assumed sole responsibility for the payment of the claims, losses, Loss Adjustment Expenses, Extra Contractual Obligations and Loss in Excess of Policy Limits under the Policies reinsured hereunder, to be performed in accordance with applicable law and the terms and conditions of the Policies and this Agreement. 11.02 13.02 The Company hereby empowers the Reinsurer, and the Reinsurer may, in its discretion, and under its supervision appoint the Agent or another designated and properly licensed third party administratorGeneral Agent, to accept notice of and investigate any claim arising under any of the Policies, and to pay, adjust, settle, resist, or compromise any such claim, unless the Company with reasonable justification specifically directs to the contrary with respect to any individual claim. In the latter event, the Reinsurer and/or General Agent shall follow the instructions of the Company as respects such claim. All such loss settlements, whether under strict policy conditions or by way of compromise, shall be unconditionally binding upon the Reinsurer. However, should the Company be ordered or instructed by its DIR the Texas Department of Insurance or any other regulatory agency of competent jurisdiction to take any action or refrain from taking any action with regard to any claim reinsured hereunderclaim, and prompt notice of such order or instruction is provided by the Company to the Reinsurer and General Agent, the Reinsurer and and/or the General Agent shall be bound by and shall follow the order or instructions of such regulatory agency as though the Reinsurer or and/or the General Agent were the object of such orderorder or instruction. The Reinsurer and/or the General Agent will exercise the authority granted hereunder in good faith and toward the end of paying any and all valid claims. 11.03 13.03 The Company will promptly notify the Reinsurer or the General Agent of any claim, suit or action brought against the Company under any of the Policies when actually notified of a claim, suit or action against the Company, and will promptly furnish to the Reinsurer or the General Agent all summons, citations, complaints, petitions, counterclaims and other pleadings and legal instruments served upon the Company in connection therewith. The Company hereby further empowers the Reinsurer to dispose of any salvage received as the result of any loss settlement hereunder, and to enforce any right of the Company against any person or organization for damages or equitable relief for any loss under any of the Policies, employing legal counsel where necessary, and all sums received as a result thereof will be treated as current loss recoveries by the Company and the Reinsurer. The Company further agrees to execute and furnish to the Reinsurer, on request, any and all legal instruments, powers of attorney, and/or other documentation reasonably instruments necessary to evidence and implement the foregoing authorizations. Upon reasonable request, the Reinsurer shall furnish to the Company any or all documents and correspondence relating to the subject matter hereof. 11.04 13.04 All records pertaining to claims arising under the Policies shall be deemed to be jointly owned records of the Company and the Reinsurer, and shall be made available to the Company or the Reinsurer or their respective representatives or any duly appointed examiner for any State state within the United States. The Company Company, the Reinsurer and the Reinsurer General Agent agree that they will each maintain and retain such records, or cause the Agent to maintain and retain such records, for a period of five (5) years or for so long as required by applicable law, whichever is longer, and shall not destroy any such records in their possession without the prior notice to written approval of the otherothers, except that the Company and the Reinsurer shall not be required to retain files longer than required by the guidelines set by the Company’s DIRTexas Department of Insurance. 11.05 13.05 The Reinsurer shall, or shall cause the General Agent to, establish a separate claim register or method of registering claims arising under the policies Policies covered by this Agreement so that all claims may be segregated and identified separate and apart from other records of the Reinsurer or General Agent, with such claims register to identify each claim on an individual case basis both as to identify the insured(s) and the claimant and the reserve for loss and adjusting expense. Such claim register shall be kept in a form whereby the Company can, at any time, determine the status of any claim arising under Policies covered by this Agreement. Such records shall reflect the amount of reserves established for the individual claim and the date when such reserve was established, and if closed, whether such claim was closed with or without payment, and if with payment, the amount paid thereon. 11.06 13.06 The Reinsurer is authorized to have claims adjusted through independent claims adjusters and agents. Such independent claims adjusters and agents are not the agents shall be liable for 100% of the Company and loss adjustment expenses incurred by the Company shall be defendedin connection with claims and settlements under Policies subject hereto, held harmless including, but not limited to, all attorney's fees, other litigation expenses and indemnified by the Reinsurer for any liability, claim, demand, expense and/or cost of whatever kind or character as a result of, related to or connected with any action or inaction of such claims adjusters interest on judgments and agents. 11.07 The Reinsurer acknowledges that it has been afforded the opportunity to review the records of the Agent all other expenses (including but not limited to rate levelsattorney's fees and costs incurred in a declaratory judgment or injunctive action with an insured or other), rate filings, underwriting guidelines and claims handling. Although the Company may perform reviews as well, it is understood that the participation of the Reinsurer in this Agreement is but not based upon due diligence performed by the Company. The Company shall not be responsible for monitoring the Agent, and any acts including office expenses or omissions of the Agent will not serve to relieve the Reinsurer of its obligations under this Agreement. 11.08 Policy cancellations will be made strictly in compliance with applicable statutes and regulations and the applicable provisions contained in this Agreement and the pertinent policy, by, or at the direction of, the Agent and/or the Reinsurer, and the Company shall not be responsible therefor. Cancellation authority shall be exercised only for causes inherent in the particular risk and shall not be construed as authority to make general or indiscriminate cancellations or replacement of the Policies with those of another Company, except upon specific written instructions from the Company. 11.09 Payment of losses shall be made on checks or drafts in the name salaries of the Company's regular employees. The Reinsurer shall be responsible for the safekeeping of all checks and/or drafts of the Company used for settling claims and shall perform the following: (a) The reinsurer shall immediately return all voided checks or drafts to the Company; and (b) The Reinsurer shall immediately notify the Company credited with 100% of any irregularities, theft, disappearance or destruction of checks or drafts. The Reinsurer shall indemnify and hold harmless the Company against any loss resulting from the Reinsurer’s misuse or failure to secure or keep-safe such Company checks. 11.10 Upon termination of this Agreement, the Reinsurer shall, or shall cause the Agent to take those actions necessary, including sending statutorily prescribed non-renewal notices to insureds in a timely manner to effectuate the intent that there be no renewals or new policies (but for those Mandatory Renewal Policies required under applicable law) after the termination of this Agreement. 11.11 The Reinsurer shall, or shall cause the Agent to, maintain on behalf of the Company, and furnish to the Company upon reasonable request, complete copies of all Policies issued hereunder and copies of all claim files created with respect to all loss occurrences thereunder. Any or all Policies and/or claim files required to be maintained pursuant to this Section 11.11 may be maintained in electronic data storage form accessible by computer and if so stored in this fashion, no physical copy recoveries of such items need be maintained. Where electronic claims files are maintained, any data from such files requested or required by the Company shall be provided within thirty (30) days or less if so requested by the Company, provided that said request is based upon a legitimate business needloss adjustment expense. 11.12 The Reinsurer shall be solely responsible for the Reinsurer or the Agent procuring any renewal, extension, or new policy or insurance that may be required by any applicable law or regulation with respect to Mandatory Renewal Policies. The Reinsurer shall indemnify the Company and hold it harmless from any loss, damage, cost, claim or expense whatsoever that the Company may incur, or for which it may become liable, as a result of the said failure, refusal or neglect to fulfill said responsibility. 11.13 Should the Company’s DIR make a request to the Company for any data required to comply with a statistical data call, the Reinsurer shall be solely responsible to provide the Company with such data. Should the request from the Company’s DIR require the Company to contract the services of an outside source, such as an actuarial firm, to compile the data required, the Reinsurer shall be responsible for its proportionate share of the total cost for services rendered.

LOSS AND LOSS ADJUSTMENT EXPENSE. 11.01 The Reinsurer shall assume the Reinsurer’s Quota Share of the risks covered by this Agreement and shall be liable for and pay or cause to be paid on behalf of the Company the Reinsurer’s Quota Share of all losses, judgments, interest on judgments, 5.1 All loss settlements whether under strict policy conditions or because of compromise or settlement, and Loss Adjustment Expenses, Extra Contractual Obligations or Loss in Excess of Policy Limits incurred made by the Company in connection with the Policies or the investigation or settlement or contesting General Agent under the validity terms of claims or losses covered under this Agreement; the Reinsurer shall, on the other hand, be credited with the Reinsurer’ Quota Share of any amount received by the Company as salvage or recovery. Nothing in the previous sentence shall be deemed or construed to require the Company to first pay the claims or losses under the reinsured policies, then to seek reimbursement for such claims or losses from the Reinsurer; rather, the Reinsurer has assumed sole responsibility for the payment of the claims, losses, Loss Adjustment Expenses, Extra Contractual Obligations and Loss in Excess of Policy Limits under the Policies reinsured hereunder, to be performed in accordance with applicable law and the terms and conditions of the Policies and this Agreement. 11.02 The Company hereby empowers the Reinsurer, and the Reinsurer may, under its supervision appoint the Agent or another designated and properly licensed third party administrator, to accept notice of and investigate any claim arising under any of the Policies, and to pay, adjust, settle, resist, or compromise any such claim. All such loss settlements, whether under strict policy conditions or by way of compromise, shall be unconditionally binding upon the Reinsurer, and the Reinsurer shall benefit in all salvage and recoveries. The Reinsurer shall assume and be liable for and pay on behalf of the Company, 45% of all losses incurred in connection with the risks covered by this Agreement, including, but not limited to, judgments (including interest thereon) and settlements in connection therewith as well as all risks arising from the Subject Program other than those reinsured by the Corresponding Reinsurer. The Reinsurer shall also be liable for 45% of and pay on behalf of the Company all costs, expenses, and fees (including, but not limited to, attorney's fees) incurred by the Company in connection with the investigation or settlement or contesting the validity of claims or losses covered under this Agreement (this shall include but, of course, is not limited to, costs, expenses and fees resulting from a declaratory judgment or injunctive action brought by an insured or other person) as well as all risks arising from the Subject Program other than those reinsured by the Corresponding Reinsurer. 5.2 The Reinsurer's 45% share of losses, expense and loss recovery as well as all risks arising from the Subject Program other than those reinsured by the Corresponding Reinsurer, shall be carried into the monthly accounting for which provision is hereinafter made. It is agreed, however, that if the Reinsurer's share of any loss is equal to or greater than $100,000 (being 45% of 100,000 = 45,000), the Reinsurer will pay its share of said loss as promptly as possible after receipt of reasonable evidence of the amount paid by the General Agent. 5.3 The Company hereby empowers the Reinsurer, and the Reinsurer may, in its discretion, and under its supervision appoint the General Agent, to accept notice of and investigate any claim arising under any of the Policies, to pay, adjust, settle, resist or compromise any such claim, unless the Company specifically directs to the contrary with respect to any individual claim. In the latter event, the Reinsurer and/or General Agent shall follow the instructions of the Company as respects such claim. All such loss settlements, whether under strict policy conditions or by the way of compromise, shall be unconditionally binding upon the Reinsurer. However, should the Company be ordered or instructed by its DIR the Texas Department of Insurance or any other regulatory agency of competent jurisdiction to take any action or refrain from taking any action with regard to any claim reinsured hereunderclaim, the Reinsurer and the Agent shall be bound by and shall follow the order or instructions of such regulatory agency as though Reinsurer or the Agent were the object of such order. 11.03 The Company will promptly notify the Reinsurer of any claim, suit order or action brought against the Company under any of the Policies when actually notified of a claim, suit or action against the Company, and will promptly furnish to the Reinsurer all summons, citations, complaints, petitions, counterclaims and other pleadings and legal instruments served upon the Company in connection therewithinstruction. The Company hereby further empowers Reinsurer will exercise the Reinsurer to dispose authority granted hereunder in good faith and toward the end of any salvage received as the result of any loss settlement hereunder, and to enforce any right of the Company against any person or organization for damages or equitable relief for any loss under any of the Policies, employing legal counsel where necessary, and all sums received as a result thereof will be treated as current loss recoveries by the Company and Reinsurer. The Company further agrees to execute and furnish to the Reinsurer, on request, paying any and all legal instruments, powers of attorney, and/or other documentation reasonably necessary to evidence and implement the foregoing authorizations. Upon request, the Reinsurer shall furnish to the Company any or all documents and correspondence relating to the subject matter hereofvalid claims. 11.04 5.4 All records pertaining to claims arising under insurance policies issued on behalf of the Policies Company through or by the General Agent subject to this Agreement shall be deemed to be jointly owned records of the Company and the Reinsurer, and shall be made available to the Company or the Reinsurer or their respective representatives or any duly appointed examiner for any State state within the United States. The Company ; and these records shall be kept in the Reinsurer agree that they will each maintain and retain State of Texas or such records, or cause the Agent to maintain and retain such records, for a period of five (5) years or for so long other jurisdiction as may be required by applicable lawstate law or regulation. Notwithstanding the foregoing, whichever the Reinsurer is longerauthorized to maintain duplicate working files of all such records outside the State of Texas. The Company, the Reinsurer and shall the General Agent each agree that it will not destroy any such records in their its possession without the prior notice to written approval of the other, other parties except that the Company and the Reinsurer shall not be required to retain files longer than required by the guidelines set forth by the Company’s DIRany applicable state department of insurance. 11.05 5.5 The Reinsurer shall, or shall cause the General Agent to, establish a separate claim register or method of registering recording claims arising under the policies Policies covered by this Agreement so that all claims may be segregated and identified separate and apart from other records of the Reinsurer or General Agent, with such claims register to identify each claim on an individual case basis both as to identify the insured(s) and the claimant and claimant, the reserve for loss and adjusting expense. Such claim register shall be kept in a form manner whereby the Company can, at any time, determine the status of any claim arising under Policies covered by this Agreement. Such records shall reflect the amount of reserves established for the individual claim and the date when such reserve was established, and if closed, whether such claim was closed with or without payment, and if with payment, the amount paid thereon. 11.06 The Reinsurer is authorized to have claims adjusted through independent claims adjusters and agents. Such independent claims adjusters and agents are not the agents of the Company and the Company shall be defended, held harmless and indemnified by the Reinsurer for any liability, claim, demand, expense and/or cost of whatever kind or character as a result of, related to or connected with any action or inaction of such claims adjusters and agents. 11.07 The Reinsurer acknowledges that it has been afforded the opportunity to review the records of the Agent including but not limited to rate levels, rate filings, underwriting guidelines and claims handling. Although the Company may perform reviews as well, it is understood that the participation of the Reinsurer in this Agreement is not based upon due diligence performed by the Company. The Company shall not be responsible for monitoring the Agent, and any acts or omissions of the Agent will not serve to relieve the Reinsurer of its obligations under this Agreement. 11.08 Policy cancellations will be made strictly in compliance with applicable statutes and regulations and the applicable provisions contained in this Agreement and the pertinent policy, by, or at the direction of, the Agent and/or the Reinsurer, and the Company shall not be responsible therefor. Cancellation authority shall be exercised only for causes inherent in the particular risk and shall not be construed as authority to make general or indiscriminate cancellations or replacement of the Policies with those of another Company, except upon specific written instructions from the Company. 11.09 Payment of losses shall be made on checks or drafts in the name of the Company. The Reinsurer shall be responsible for the safekeeping of all checks and/or drafts of the Company used for settling claims and shall perform the following: (a) The reinsurer shall immediately return all voided checks or drafts to the Company; and (b) The Reinsurer shall immediately notify the Company of any irregularities, theft, disappearance or destruction of checks or drafts. The Reinsurer shall indemnify and hold harmless the Company against any loss resulting from the Reinsurer’s misuse or failure to secure or keep-safe such Company checks. 11.10 Upon termination of this Agreement, the Reinsurer shall, or shall cause the Agent to take those actions necessary, including sending statutorily prescribed non-renewal notices to insureds in a timely manner to effectuate the intent that there be no renewals or new policies (but for those Mandatory Renewal Policies required under applicable law) after the termination of this Agreement. 11.11 The Reinsurer shall, or shall cause the Agent to, maintain on behalf of the Company, and furnish to the Company upon reasonable request, complete copies of all Policies issued hereunder and copies of all claim files created with respect to all loss occurrences thereunder. Any or all Policies and/or claim files required to be maintained pursuant to this Section 11.11 may be maintained in electronic data storage form accessible by computer and if so stored in this fashion, no physical copy of such items need be maintained. Where electronic claims files are maintained, any data from such files requested or required by the Company shall be provided within thirty (30) days or less if so requested by the Company, provided that said request is based upon a legitimate business need. 11.12 The Reinsurer shall be solely responsible for the Reinsurer or the Agent procuring any renewal, extension, or new policy or insurance that may be required by any applicable law or regulation with respect to Mandatory Renewal Policies. The Reinsurer shall indemnify the Company and hold it harmless from any loss, damage, cost, claim or expense whatsoever that the Company may incur, or for which it may become liable, as a result of the said failure, refusal or neglect to fulfill said responsibility. 11.13 Should the Company’s DIR make a request to the Company for any data required to comply with a statistical data call, the Reinsurer shall be solely responsible to provide the Company with such data. Should the request from the Company’s DIR require the Company to contract the services of an outside source, such as an actuarial firm, to compile the data required, the Reinsurer shall be responsible for its proportionate share of the total cost for services rendered.

LOSS AND LOSS ADJUSTMENT EXPENSE. 11.01 The Reinsurer shall assume the Reinsurer’s Quota Share of the risks covered 5.01 All loss settlements made by this Agreement and shall be liable for and pay or cause to be paid on behalf of the Company or the Reinsurer’s Quota Share General Agent under the terms of all lossesthis Agreement, judgments, interest on judgments, settlements whether under strict policy conditions or because by way of compromise or settlementcompromise, shall be unconditionally binding upon the Reinsurer in proportion to its participation, and Loss Adjustment Expensesthe Reinsurer shall benefit proportionately in all salvage and recoveries. The Reinsurer shall assume and be liable for and pay on behalf of the Company, Extra Contractual Obligations or Loss 100% of all losses incurred in Excess connection with the risks covered by this Agreement, including, but not limited to, judgments (including interest thereon) and settlements in connection therewith. The Reinsurer shall also be liable for 100% of Policy Limits and pay on behalf of the Company all costs, expenses, and fees (including, but not limited to, attorney's fees) incurred by the Company in connection with the Policies or the investigation or settlement or contesting the validity of claims or losses covered under this Agreement; the Reinsurer shallAgreement (this shall include but, on the of course, is not limited to, costs, expenses and fees resulting from a declaratory judgment or injunctive action brought by an insured or other handperson). 5.02 The Reinsurer's 100% share of losses, be credited with the Reinsurer’ Quota Share of any amount received by the Company as salvage or recovery. Nothing in the previous sentence expense and loss recovery shall be deemed or construed to require carried into the Company to first pay monthly accounting for which provision is hereinafter made. 5.03 As provided in this Agreement and the claims or losses under the reinsured policies, then to seek reimbursement for such claims or losses from the Reinsurer; ratherGeneral Agency Agreement, the Reinsurer has assumed sole responsibility for the payment of the claims, losses, Loss Adjustment Expenses, Extra Contractual Obligations and Loss in Excess of Policy Limits under the Policies reinsured hereunder, to be performed in accordance with applicable law and the terms and conditions of the Policies and this Agreement. 11.02 The Company hereby empowers the Reinsurer, and Reinsurer and/or the Reinsurer may, under its supervision appoint the Agent or another designated and properly licensed third party administratorGeneral Agent, to accept notice of and investigate any claim arising under any of the Policies, and to pay, adjust, settle, resist, resist or compromise any such claim, unless the Company specifically directs to the contrary with respect to any individual claim. In the latter event, the Reinsurer and/or General Agent shall follow the instructions of the Company as respects such claim. All such loss settlements, whether under strict policy conditions or by the way of compromise, shall be unconditionally binding upon the Reinsurer. However, should the Company be ordered or instructed by its DIR an applicable Department of Insurance or any other regulatory agency of competent jurisdiction to take any action or refrain from taking any action with regard to any claim reinsured hereunderclaim, the Reinsurer and the Agent shall be bound by and shall follow the order or instructions of such regulatory agency as though Reinsurer or the Agent were the object of such order. 11.03 The Company will promptly notify the Reinsurer of any claim, suit order or action brought against the Company under any of the Policies when actually notified of a claim, suit or action against the Company, and will promptly furnish to the Reinsurer all summons, citations, complaints, petitions, counterclaims and other pleadings and legal instruments served upon the Company in connection therewithinstruction. The Company hereby further empowers Reinsurer will exercise the Reinsurer to dispose authority granted hereunder in good faith and toward the end of any salvage received as the result of any loss settlement hereunder, and to enforce any right of the Company against any person or organization for damages or equitable relief for any loss under any of the Policies, employing legal counsel where necessary, and all sums received as a result thereof will be treated as current loss recoveries by the Company and Reinsurer. The Company further agrees to execute and furnish to the Reinsurer, on request, paying any and all legal instruments, powers of attorney, and/or other documentation reasonably necessary to evidence and implement the foregoing authorizations. Upon request, the Reinsurer shall furnish to the Company any or all documents and correspondence relating to the subject matter hereofvalid claims. 11.04 5.04 All records pertaining to claims arising under insurance policies issued on behalf of the Policies Company through or by the General Agent subject to this Agreement shall be deemed to be jointly owned records of the Company and the Reinsurer, and shall be made available to the Company or the Reinsurer or their respective representatives or any duly appointed examiner for any State state within the United States; and these records shall be kept in the State of North Carolina or such other jurisdiction as may be required or permitted by applicable state law or regulation. Notwithstanding the foregoing, the Reinsurer is authorized to maintain duplicate working files of all such records outside the State of North Carolina. The Company Company, the Reinsurer and the Reinsurer General Agent each agree that they it will each maintain and retain such records, or cause the Agent to maintain and retain such records, for a period of five (5) years or for so long as required by applicable law, whichever is longer, and shall not destroy any such records in their its possession without the prior notice to written approval of the other, other parties except that the Company and the Reinsurer neither Party shall not be required to retain files longer than required by the guidelines set forth by the Company’s DIRany applicable state department of insurance. 11.05 5.05 The Reinsurer shall, or shall cause the General Agent to, establish a separate claim register or method of registering recording claims arising under the policies Policies covered by this Agreement so that all claims may be segregated and identified separate and apart from other records of the Reinsurer or General Agent, with such claims register to identify each claim on an individual case basis both as to identify the insured(s) and the claimant and claimant, the reserve for loss and adjusting expense. Such claim register shall be kept in a form manner whereby the Company can, at any time, determine the status of any claim arising under Policies covered by this Agreement. Such records shall reflect the amount of reserves established for the individual claim and the date when such reserve was established, and if closed, whether such claim was closed with or without payment, and if with payment, the amount paid thereon. 11.06 The Reinsurer is authorized to have claims adjusted through independent claims adjusters and agents. Such independent claims adjusters and agents are not the agents of the Company and the Company shall be defended, held harmless and indemnified by the Reinsurer for any liability, claim, demand, expense and/or cost of whatever kind or character as a result of, related to or connected with any action or inaction of such claims adjusters and agents. 11.07 The Reinsurer acknowledges that it has been afforded the opportunity to review the records of the Agent including but not limited to rate levels, rate filings, underwriting guidelines and claims handling. Although the Company may perform reviews as well, it is understood that the participation of the Reinsurer in this Agreement is not based upon due diligence performed by the Company. The Company shall not be responsible for monitoring the Agent, and any acts or omissions of the Agent will not serve to relieve the Reinsurer of its obligations under this Agreement. 11.08 Policy cancellations will be made strictly in compliance with applicable statutes and regulations and the applicable provisions contained in this Agreement and the pertinent policy, by, or at the direction of, the Agent and/or the Reinsurer, and the Company shall not be responsible therefor. Cancellation authority shall be exercised only for causes inherent in the particular risk and shall not be construed as authority to make general or indiscriminate cancellations or replacement of the Policies with those of another Company, except upon specific written instructions from the Company. 11.09 Payment of losses shall be made on checks or drafts in the name of the Company. The Reinsurer shall be responsible for the safekeeping of all checks and/or drafts of the Company used for settling claims and shall perform the following: (a) The reinsurer shall immediately return all voided checks or drafts to the Company; and (b) The Reinsurer shall immediately notify the Company of any irregularities, theft, disappearance or destruction of checks or drafts. The Reinsurer shall indemnify and hold harmless the Company against any loss resulting from the Reinsurer’s misuse or failure to secure or keep-safe such Company checks. 11.10 Upon termination of this Agreement, the Reinsurer shall, or shall cause the Agent to take those actions necessary, including sending statutorily prescribed non-renewal notices to insureds in a timely manner to effectuate the intent that there be no renewals or new policies (but for those Mandatory Renewal Policies required under applicable law) after the termination of this Agreement. 11.11 The Reinsurer shall, or shall cause the Agent to, maintain on behalf of the Company, and furnish to the Company upon reasonable request, complete copies of all Policies issued hereunder and copies of all claim files created with respect to all loss occurrences thereunder. Any or all Policies and/or claim files required to be maintained pursuant to this Section 11.11 may be maintained in electronic data storage form accessible by computer and if so stored in this fashion, no physical copy of such items need be maintained. Where electronic claims files are maintained, any data from such files requested or required by the Company shall be provided within thirty (30) days or less if so requested by the Company, provided that said request is based upon a legitimate business need. 11.12 The Reinsurer shall be solely responsible for the Reinsurer or the Agent procuring any renewal, extension, or new policy or insurance that may be required by any applicable law or regulation with respect to Mandatory Renewal Policies. The Reinsurer shall indemnify the Company and hold it harmless from any loss, damage, cost, claim or expense whatsoever that the Company may incur, or for which it may become liable, as a result of the said failure, refusal or neglect to fulfill said responsibility. 11.13 Should the Company’s DIR make a request to the Company for any data required to comply with a statistical data call, the Reinsurer shall be solely responsible to provide the Company with such data. Should the request from the Company’s DIR require the Company to contract the services of an outside source, such as an actuarial firm, to compile the data required, the Reinsurer shall be responsible for its proportionate share of the total cost for services rendered.