Common use of Reinsurance Trust Account Clause in Contracts

Reinsurance Trust Account. (a) For so long as all or some portion of the reinsurance of the Coinsured Liabilities is secured through the use of the Reinsurance Trust Account, the Reinsurer shall maintain in such Reinsurance Trust Account Authorized Investments having, with respect to any date of determination, a Fair Market Value equal to (i) the Required Balance as of such date of determination, minus (ii) the face amount of the Letter of Credit, if any, as of such date of determination (the “Reinsurance Trust Account Required Balance”). As promptly as practicable following the date on which payment of the applicable Quarterly Net Settlement Amount is due, the Reinsurer shall prepare and deliver to the Ceding Company a statement (the “Reinsurance Trust Account Statement”) setting forth: (x) the Reinsurance Trust Account Required Balance with respect to such Accounting Period and (y) the Fair Market Value of the assets held in the Reinsurance Trust Account as of the end of such Accounting Period. (b) The Reinsurer shall arrange for assets to be deposited into the Reinsurance Trust Account. Prior to depositing any assets with the trustee of such Reinsurance Trust Account, the Reinsurer shall execute assignments or endorsements in blank, or transfer legal title to the trustee of all shares, obligations or any other assets requiring assignment so that the Ceding Company, or the trustee upon the Ceding Company’s direction, may, whenever necessary, negotiate any such assets without the consent or signature of the Reinsurer or any other entity. Notwithstanding the composition of assets in the Reinsurance Trust Account, all settlements with respect to the Reinsurance Trust Account between the Ceding Company and the Reinsurer shall be in cash or its equivalent. (c) Upon the Ceding Company’s approval, which shall not be unreasonably withheld, conditioned or delayed, the Reinsurer may withdraw all or any of the assets held in the Reinsurance Trust Account and replace the withdrawn assets with other Authorized Investments having a Fair Market Value at least equal to the Fair Market Value of the assets so withdrawn so as to maintain at all times on deposit Authorized Investments in an amount at least equal to the Reinsurance Trust Account Required Balance.

Reinsurance Trust Account. 12.1 On or before the Effective Date, the Reinsurer, as grantor, shall enter into a trust agreement (a“Reinsurance Trust Agreement”) For so long as all or some portion of the reinsurance of the Coinsured Liabilities is secured through the use of the and establish and maintain a separate trust account (“Reinsurance Trust Account”) with the Reinsurance Trustee, as trustee for the benefit of the Ceding Insurer, as beneficiary. 12.2 The Reinsurer shall maintain in such Reinsurance Trust Account Authorized Investments having, with respect to any date of determination, a Fair Market Value equal to (i) the Required Balance as of such date of determination, minus (ii) the face amount of the Letter of Credit, if any, as of such date of determination (the “Reinsurance Trust Account Required Balance”). As promptly as practicable following the date on which payment of the applicable Quarterly Net Settlement Amount is due, the Reinsurer shall prepare and deliver to the Ceding Company a statement (the “Reinsurance Trust Account Statement”) setting forth: (x) deposit into the Reinsurance Trust Account Required Balance with respect on the Effective Date an amount that is equal to such Accounting Period and (y) the Fair Market Value of the assets held in the Reinsurance Trust Account as of the end of such Accounting PeriodOriginal Coverage Limit. (b) 12.3 The Reinsurer shall arrange for assets to be deposited into the Reinsurance Trust Account. Prior shall, prior to depositing any assets with the trustee of such Reinsurance Trust AccountTrustee, the Reinsurer shall execute assignments or assignments, endorsements in blank, or transfer legal title to the trustee Reinsurance Trustee of all shares, obligations or any other assets requiring assignment so assignments, in order that the Ceding CompanyInsurer, or the trustee Reinsurance Trustee upon the direction of the Ceding Company’s directionInsurer, may, whenever necessary, transfer, assign, or negotiate any such assets without the consent or signature of from the Reinsurer or any other entity. Notwithstanding Assets held in the composition Reinsurance Trust Account shall be valued at their current market value and shall consist solely of Permitted Investments or, if applicable, U.S. Treasury Money Market Funds. The principal portion of such Permitted Investments or, if applicable, U.S. Treasury Money Market Funds, held in the Reinsurance Trust Account will be available solely to satisfy any obligations of the Reinsurer to the Ceding Insurer under this Reinsurance Agreement and, only after fulfillment of such obligations, to make payments under the Indenture in respect of the Outstanding Principal Amount. All settlements of account between the Ceding Insurer and the Reinsurer shall be made in cash or its equivalent. 12.4 The Reinsurer shall be entitled to all dividends, interest, earnings, earned discount and other income resulting from the investment of the assets in the Reinsurance Trust Account. 12.5 The assets held in the Reinsurance Trust Account will be available to satisfy any obligations of the Reinsurer to the Ceding Insurer under this Reinsurance Agreement, without diminution because of the insolvency of the Ceding Insurer or the Reinsurer. 12.6 The Reinsurer and the Ceding Insurer agree that the assets in the Reinsurance Trust Account, all settlements with respect may be withdrawn by the Ceding Insurer at any time, notwithstanding any other provisions in this Reinsurance Agreement and shall be utilized and applied by the Ceding Insurer or any successor by operation of law, including, without limitation, any liquidator, rehabilitator, receiver or conservator of the Ceding Insurer, without diminution because of insolvency on the part of the Ceding Insurer or the Reinsurer, only for the following purposes: (i) to reimburse the Ceding Insurer for the Reinsurer’s share of premiums returned to the owners of policies reinsured under this Reinsurance Trust Account between Agreement on account of cancellations of such policies; (ii) to reimburse the Ceding Company Insurer for the Reinsurer’s share of surrenders and benefits or losses paid by the Reinsurer shall be in cash or its equivalent.Ceding Insurer pursuant to the provisions of the policies reinsured under this Reinsurance Agreement; (ciii) Upon to fund an account with the Ceding Company’s approval, which shall not be unreasonably withheld, conditioned or delayed, the Reinsurer may withdraw all or any of the assets held in the Reinsurance Trust Account and replace the withdrawn assets with other Authorized Investments having a Fair Market Value at least equal to the Fair Market Value of the assets so withdrawn so as to maintain at all times on deposit Authorized Investments Insurer in an amount at least equal to the deduction, for reinsurance ceded, from the Ceding Insurer’s liabilities for policies ceded under this Reinsurance Agreement. Such account shall include, but not be limited to, amounts for policy reserves, reserves for claims and Incurred Losses (including Losses Incurred But Not Reported), Loss Adjustment Expenses, and unearned premiums; and (iv) to pay any Reinsurer Payments or any other amounts the Ceding Insurer claims are due under this Reinsurance Agreement. 12.7 In the event that the Ceding Insurer withdraws assets from the Reinsurance Trust Account Required Balancefor the purposes set forth in Section 12.06(i) to (iv) in excess of actual amounts required to meet the Reinsurer’s obligations to the Ceding Insurer, or in excess of amounts determined to be due under Section 12.06(iv), the Ceding Insurer shall return such excess to the Reinsurer. The Ceding Insurer will pay the Reinsurer, on the last Business Day of each month, interest on such excess amounts not yet returned at a per annum rate equal to LIBOR (as calculated under the Indenture for the corresponding Accrual Period) plus 2 percent, but not to exceed the prime rate, until such excess amounts are returned and any interests owed thereof are paid. The Ceding Insurer shall notify the Reinsurance Trustee on the date of any such payment that it has made such payment, stating the amount thereof.