Common use of Reinsurer’s Limited Participation Clause in Contracts

Reinsurer’s Limited Participation. The parties recognize that circumstances may arise in which equity would require the Reinsurer, to the extent permitted by law, to share proportionately in Punitive and Compensatory Damages. Such circumstances are difficult to define in advance, but would generally be those situations in which the Reinsurer was an active party and, in writing, recommended, consented to, or ratified the act or course of conduct of the Company that ultimately resulted in the assessment of the extra-contractual damages. In such situations, the Reinsurer and the Company may share such damages so assessed, in equitable proportions. For purposes of this Article 12, the following are examples of where the Reinsurer’s conduct may give rise to such responsibility: a. the Reinsurer has actively taken control of the litigation and is directing the Company’s action; and b. the Reinsurer is attempting to compel acceptance of its direction by a specific written threat of withholding payment of reinsurance proceeds. The parties further agree that the mere decision to participate in a contest is not a sufficiently direct, active, decision making role so as to give rise to extracontractual damages nor is the provision of advice concerning a claim that was solicited by the Company.

Reinsurer’s Limited Participation. The parties recognize that circumstances may arise in which equity would require the Reinsurer, to the extent permitted by law, to share proportionately in Punitive and Compensatory Damages. Such circumstances are difficult to define in advance, but would generally be those situations in which the Reinsurer was an active party and, in writing, recommended, consented to, or ratified the act or course of conduct of the Company that ultimately resulted in the assessment of the extra-contractual damagesPunitive Damages. In such situations, the Reinsurer and the Company may share such damages so assessed, in equitable proportions. For purposes of this Article 12Article, the following are examples of where the Reinsurer’s conduct may give rise to such responsibilityresponsibility include, but are not limited to, the following: a. the The Reinsurer has actively taken control of the litigation and is directing the Company’s action; and b. the The Reinsurer is attempting to compel acceptance of its direction by a specific written threat of withholding payment of reinsurance proceeds. The parties further agree that the mere decision to participate in a contest is not a sufficiently direct, active, decision making role so as to give rise to extracontractual damages Punitive Damages nor is the provision of advice concerning a claim that was solicited by the Company.

Reinsurer’s Limited Participation. The parties recognize that circumstances may arise in which equity would require the Reinsurer, to the extent permitted by law, to share proportionately in Punitive and Compensatory Damages. Such circumstances are difficult to define in advance, but would generally be those situations in which the Reinsurer was an active party and, in writing, recommended, consented to, or ratified the act or course of conduct of the Company that ultimately resulted in the assessment of the extra-contractual damagesPunitive Damages. In such situations, the Reinsurer and the Company may share such damages so assessed, in equitable proportions. For purposes of this Article 12Article, the following are examples of where the Reinsurer’s conduct may give rise to such responsibilityresponsibility include, but are not limited to, the following: a. the Reinsurer has actively taken control of the litigation and is directing the Company’s action; and b. the Reinsurer is attempting to compel acceptance of its direction by a specific written threat of withholding payment of reinsurance proceeds. The parties further agree that the mere decision to participate in a contest is not a sufficiently direct, active, decision making role so as to give rise to extracontractual damages Punitive Damages nor is the provision of advice concerning a claim that was solicited by the Company.