Common use of Outwards Reinsurance Clause in Contracts

Outwards Reinsurance. 22.1 Subject to Clause 22.3, and provided that: (i) the Current Annual Plan is within pre-agreed parameters; and (ii) the reinsurance that the Coverholder is proposing to obtain for and on behalf of the Underwriter is consistent with the Outwards Reinsurance Strategy, the Underwriter delegates authority to the Coverholder to effect the Outwards Reinsurance Strategy in respect of each Underwriting Year by contracting with one or more third party reinsurers for and on behalf of the Underwriter to cede all or part of any risks that may be insured or guaranteed by the Underwriter under this Agreement. 22.2 The Parties acknowledge and agree that clauses 18.3 to 18.5 (inc.) of the Framework Agreement shall be incorporated mutatis mutandis by reference into this Agreement. 22.3 The authority that the Coverholder has to procure third party reinsurance cover pursuant to this Clause 22 shall be subject to the requirement that the Coverholder obtains prior approval from the Chief Underwriting Officer of the Underwriter (which shall not be unreasonably withheld). 22.4 The Underwriter shall procure that its Chief Underwriting Officer shall respond and, if thought fit, approve the third party reinsurance cover proposed by the Coverholder as soon as reasonably practicable following a reasonable review of the proposed third party reinsurance cover, and shall respond within two (2) Business Days of receiving the proposal from the Coverholder where the proposed third party reinsurance cover is consistent with the Outwards Reinsurance Strategy. 22.5 The Coverholder shall use reasonable endeavours to sweep and pay premium to the Underwriter as soon as practicable and in advance of any scheduled premium date under the terms of this Agreement, in relation to such premium that it holds for the Underwriter that equates to the amount that the Underwriter (or FIHL for and on behalf of the Underwriter) is required to pay to third party outwards reinsurers in respect of non-proportional outwards reinsurance where such outwards reinsurance has been procured by any member of the MGU Group.

Outwards Reinsurance. 22.1 18.1 In respect of each Underwriting Year, the Parties shall use best endeavours to agree a strategy (the “Outwards Reinsurance Strategy”) that sets out in detail how the Insurance Group will cede insurance and reinsurance risks underwritten by the MGU Group to one or more third party reinsurers, which shall include a plan for Insurance Group underwriting exposure both gross and net of outwards reinsurance (a “Gross / Net Basis”). This calculation shall exclude any outwards reinsurance in respect of any insurance and reinsurance risks that have not been underwritten by the MGU Group Companies. 18.2 Subject to Clause 22.318.6, and provided that: (i) the Current Annual Plan is within pre-agreed parameters; and (ii) the reinsurance that the Coverholder MGU Holdco is proposing to obtain for and on behalf of the Underwriter applicable Insurance Company is consistent with the Outwards Reinsurance Strategy, the Underwriter FIHL delegates authority authority, and shall procure that each Insurance Company delegates authority, to the Coverholder MGU DUA Companies to effect the Outwards Reinsurance Strategy in respect of each Underwriting Year by contracting with one or more third party reinsurers for and on behalf of the Underwriter FIHL to cede all or part of any risks that may be insured or guaranteed by the Underwriter Insurance Group under this Agreementthe Binder Agreements. 22.2 The Parties acknowledge 18.3 MGU Holdco and, as relevant, the MGU DUA Companies, shall use all reasonable endeavours to procure third party reinsurance cover in respect of each Underwriting Year for and agree that clauses 18.3 to 18.5 (inc.) on behalf of the Framework Agreement Insurance Group in accordance with the Outwards Reinsurance Strategy. 18.4 The Insurance Companies (or FIHL on behalf of any Insurance Company) shall retain the ability to independently procure any outwards reinsurance: (i) in all circumstances in respect of any other insurance and reinsurance risks that either they have underwritten, or that have been underwritten on their behalf by third parties not connected to the Binder Agreements; or (ii) in respect of any insurance and reinsurance risks underwritten by the corresponding MGU DUA Company, provided that, in the case of either (i) or (ii), on 10 Business Days’ prior notice the corresponding MGU DUA Company consents to the purchase of the additional outwards reinsurance, in which case the third party reinsurance shall be incorporated mutatis mutandis treated as having been procured by reference into this Agreementthe corresponding MGU DUA Company. In the alternative, if the corresponding MGU DUA Company does not consent, then the cost and associated financial effects of the purchase shall be excluded from any commission calculations (ceding commission, profit commission or otherwise) calculated pursuant to Schedule 11 (Commission and Expenses) (“FIHL Procured Outwards Reinsurance”). 22.3 18.5 As part of the Annual Plan negotiations between the parties to each applicable Binder Agreement, the Insurance Company and the corresponding MGU DUA Company shall consider and, if applicable, shall agree whether, in addition to any outwards reinsurance that either may be, or has been, obtained by the MGU Group pursuant to the Outwards Reinsurance Strategy, any further outwards reinsurance should be obtained specifically in respect of the risks that parties intend to underwrite in the following Underwriting Year. If the parties to the applicable Binder Agreement reasonably consider that it is, or may be, necessary to obtain such additional outwards reinsurance, the parties shall agree the parameters of such additional outwards reinsurance, which shall be included in the Annual Plan for the forthcoming Underwriting Year. 18.6 The authority that the Coverholder each MGU DUA Company has to procure third party reinsurance cover pursuant to this Clause 22 18 (Outwards Reinsurance) shall be subject to the requirement that the Coverholder applicable MGU DUA Company obtains prior approval from the Chief Underwriting Officer of the Underwriter corresponding Insurance Company (which shall not be unreasonably withheld). 22.4 The Underwriter 18.7 Each Insurance Company shall procure that its Chief Underwriting Officer shall respond and, if thought fit, approve the third party reinsurance cover proposed by the Coverholder corresponding MGU DUA Company as soon as reasonably practicable following a reasonable review of the proposed third party reinsurance cover, and shall respond within two (2) Business Days of receiving the proposal from the Coverholder corresponding MGU DUA Company where the proposed third party reinsurance cover is consistent with the Outwards Reinsurance Strategy. 22.5 18.8 The Coverholder Parties agree: (a) within thirty (30) calendar days of the expiry of the sixth calendar month of the then current Underwriting Year (or on any other interval the Parties shall use reasonable endeavours agree between them), to sweep and pay premium review and, if necessary, amend the Outwards Reinsurance Strategy; and (b) that it may be beneficial to the Underwriter as soon as practicable Insurance Group to obtain any opportunistic reinsurance treaties and in advance of any scheduled premium date under the terms of this Agreement, in relation to such premium that it holds for the Underwriter that equates to the amount that the Underwriter (/ or FIHL facultative reinsurance treaties for and on behalf of the Underwriter) is required to pay to third party outwards reinsurers in respect of non-proportional outwards reinsurance where such outwards reinsurance has been procured by any member Insurance Group that are outside of the parameters of the Outwards Reinsurance Strategy. In such circumstances, the Parties shall discuss the merits of obtaining such additional reinsurance cover and, if FIHL reasonably considers that it would be in the best interests of the Insurance Group to obtain such additional reinsurance cover, it shall delegate authority to MGU Holdco to obtain such additional reinsurance cover on behalf of the Insurance Group.