Common use of Restrictions on Authority Clause in Contracts

Restrictions on Authority. The Administrator agrees that: A. It shall not underwrite risks and/or determine appropriate premium for insurance policies other than as prescribed in Schedule A and the Underwriting Guidelines in Schedule G, unless the Administrator requests and receives prior written approval from Palomar for such risks. Any approval granted by Palomar is limited to the specific risks for which approval has been sought unless expressly noted otherwise by Palomar; B. the Administrator shall not waive any condition or make any change to the Company’s insurance policies, endorsements or applications without Palomar’s prior written consent; C. the Administrator shall not, without Palomar’s prior written consent, (i) appoint insurance agents or producers, or sub-insurance agents or producers, to bind Palomar Specialty Insurance Company insurance coverage or countersign policies on behalf of Palomar, or (ii) make any other agreement rendering Palomar liable for the payment or repayment of expenses, commissions or other sums; D. the Administrator shall not negotiate, solicit, quote, bind, arrange for countersignature of or deliver on behalf of Palomar policies, endorsements, certificates or binders in any jurisdiction or territory except those listed in Schedule E to this Agreement, unless otherwise authorized in writing to do so by Palomar; E. the Administrator shall not affect any flat cancellations of policies issued pursuant to this Agreement, unless the flat cancellation is within the first forty-five (45) days after the effective date of the policy and is in compliance with applicable law; F. the Administrator shall not bind coverage after the effective date of the policy without prior written approval of Palomar, except during the fifteen (15) day period after the coverage effective date if the insured has warranted in writing that it is not aware of any losses; G. the Administrator shall not negotiate or bind ceded or assumed reinsurance or retrocessions on behalf of Palomar or commit Palomar to participate in insurance or reinsurance syndicates, pools, agency reinsurance arrangements or joint ventures of any nature. This sub-paragraph shall not preclude the Administrator from consulting with Palomar regarding reinsurance for coverage issued pursuant to this Agreement; H. the Administrator shall not charge any broker fees, policy fees, or service fees without express written authorization from Palomar.

Restrictions on Authority. The Administrator further agrees thatthat the Administrator shall not: A. It shall not (A) underwrite risks and/or determine appropriate premium for insurance policies other than as prescribed in Schedule A and the Underwriting Guidelines in Schedule GGuidelines, unless the Administrator requests and receives prior written approval from Palomar the Company for such risks. Any approval granted by Palomar the Company is limited to the specific risks for which approval has been sought unless expressly noted otherwise by Palomarthe Company; B. the Administrator shall not (B) waive any condition or make any change to the Company’s insurance policies, endorsements or applications without Palomarthe Company’s prior written consent; C. . In addition, if the Administrator determines that any policy requires the manuscripting of a new policy form or coverage part, the Administrator shall notnotify the Company of such need or requirement as soon as practicable and in no event later than 5 business days prior to: (i) the proposed binding of the policy; or (ii) the proposed effective date of the policy, whichever is earlier; (C) without Palomarthe Company’s prior written consent, (i) appoint authorize insurance agents or producers, producers or sub-insurance agents or producers, producers pursuant to Section 1.D to bind Palomar Specialty Insurance Company insurance coverage or countersign policies on behalf of Palomarthe Company, or (ii) make any other agreement rendering Palomar the Company liable for the payment or repayment of expenses, commissions or other sums; D. the Administrator shall not (D) negotiate, solicit, quote, bind, arrange for countersignature of or deliver on behalf of Palomar the Company any policies, endorsements, certificates or binders in any jurisdiction or territory except those listed in Schedule E D to this Agreement, unless otherwise authorized in writing to do so by Palomarthe Company; E. the Administrator shall not (E) affect any flat cancellations of policies issued pursuant to this Agreement, unless the flat cancellation is within the first forty-five thirty (4530) days after the effective date of the policy and is in compliance with applicable Underwriting Guidelines and law; F. , including, but not limited to, laws and regulations applicable to the return of premium. If any flat cancellation is processed, the Administrator shall not retain in its underwriting file proof of such flat cancellation by return of the original policy or a lost policy statement executed by the insured; (F) bind coverage after the effective date of the a policy without prior written approval of Palomarthe Company; provided, except during in the fifteen (15) day period after event of an inadvertent failure to bind a policy on the coverage proposed effective date if (due to communications error or otherwise), then the Administrator is authorized to bind the policy with the proposed effective date without prior written approval of the Company as long as (i) such binder is processed within (3) business days following the effective date, (ii) the prospective insured has warranted signed an application, or otherwise made a commitment to purchase a policy, on or before the proposed effective date, and (iii) all other criteria set forth in writing that it is not aware of any lossesthe Underwriting Guidelines are satisfied; G. the Administrator shall not (G) negotiate or bind ceded or assumed reinsurance or retrocessions on behalf of Palomar or the Company; commit Palomar the Company to participate in insurance or reinsurance syndicates, pools, agency reinsurance arrangements or joint ventures of any nature; or collect a payment from a reinsurer or commit the Company to a claim settlement without a reinsurer without the prior written approval of the Company. If such prior approval is given, the Administrator must promptly forward a report to the Company. This subSub-paragraph shall not preclude the Administrator from consulting with Palomar the Company regarding reinsurance for coverage issued pursuant to this Agreement; H. (H) use or permit or authorize the Administrator shall not use of the Company’s name, logo or other identifying xxxx(s) in any advertising or promotional material without the Company’s prior written consent and then only in strict compliance with any restrictions or guidelines contained in such consent; (I) charge any broker fees, policy fees, or service fees without express written authorization from Palomarthe Company, other than the fees listed in Schedule C; (J) permit its sub-insurance producers to serve on the Company’s board of directors; or (K) appoint a sub-managing general agent.

Restrictions on Authority. The Administrator further agrees that: A. It (A) The Administrator shall not underwrite risks and/or determine appropriate premium for insurance policies other than as prescribed in Schedule A and the Underwriting Guidelines in Schedule GExhibit A, unless the Administrator requests and receives prior written approval from Palomar the Company for such risks. Any approval granted by Palomar the Company is limited to the specific risks for which approval has been sought unless expressly noted in writing otherwise by Palomar;the Company. B. the (B) The Administrator understands and agrees that there will be no deviation from filed and approved forms and shall not waive any condition or make any change to the Company’s insurance policies, endorsements or applications without Palomarthe Company’s prior written consent;. In addition, as applicable to statutory requirements, if the Administrator determines that any policy requires the manuscripting of a new policy form or coverage part, the Administrator shall notify the Company of such need or requirement as soon as practicable. C. the (C) The Administrator shall not, without Palomarthe Company’s prior written consentconsent pursuant to 1.D, (i) appoint insurance agents or producers, producers or sub-insurance agents or producers, producers to bind Palomar Specialty Insurance Company insurance coverage or countersign policies on behalf of Palomarthe Company, or (ii) make any other agreement rendering Palomar the Company liable for the payment or repayment of expenses, commissions or other sums;. D. the (D) The Administrator shall not negotiate, solicit, quote, bind, arrange for countersignature of or deliver on behalf of Palomar the Company policies, endorsements, certificates or binders in any jurisdiction or territory except those listed in Schedule E to this Agreementterritory, unless otherwise authorized in writing to do so by Palomar;the Company. E. the Administrator shall not affect any flat cancellations of policies issued pursuant to this Agreement, unless the flat cancellation is within the first forty-five (45E) days after the effective date of the policy and is in compliance with applicable law; F. the Administrator shall not bind coverage after the effective date of the policy without prior written approval of Palomar, except during the fifteen (15) day period after the coverage effective date if the insured has warranted in writing that it is not aware of any losses; G. the The Administrator shall not negotiate or bind ceded or assumed reinsurance or retrocessions of any kind on behalf of Palomar the Company or commit Palomar the Company to participate in insurance or reinsurance syndicates, pools, agency reinsurance arrangements or joint ventures of any nature. This sub-paragraph . (F) The Administrator shall not preclude adjust, compromise or settle claims on the Company’s behalf. (G) The Administrator from consulting with Palomar regarding reinsurance for coverage issued pursuant to this is bound by separate agreement titled Federated National Insurance Company Logo Usage Agreement; H. the (H) The Administrator shall not charge any broker fees, policy fees, fees or service fees without express written authorization from Palomarthe Company, other than the fees listed in filed and approved Company rates. (I) Administrator will work cooperatively with Company to make any adjustments to Underwriting Guidelines as mutually agreed. Should Company require changes to Underwriting Guidelines that it determines in its sole discretion, Company will provide written notice as follows: a. For changes reducing eligible policies by less than 5% (as calculated based on prior 12 months of new business policies for each affected state(s)) – 60 days written notice 2 AM 20767075.1 b. For changes reducing eligible policies by more than 5% (as calculated based on prior 12 months of new business policies for each affected state(s)) either in a single change or multiple changes that result in more than 5% – 180 days written notice c. For changes in catastrophe modeling versions yielding a 1:100 return time Probable Maximum Loss (“PML”) greater than 15% - 90 days written notice d. For changes in the reinsurance rate on line costs greater than 15% - 90 days written notice e. After the first twelve months of operations, if, in any six-month reporting period, the ratio of Incurred Losses to Gross Earned Premiums (the “Loss Ratio” as defined by loss and loss adjustment expense both paid and reserved divided by gross earned premium for the same period) exceeds fifty percent (50%), with 10 days written notice to Administrator, Company shall have the right to take reasonable action to reduce said Loss Ratio. Such actions could include the immediate suspension of writing new and or renewal business in territory under review or, any reasonable action the Company or its unaffiliated reinsurers deem necessary to reduce the Loss Ratio. Such actions shall remain in place until the loss ratio for subsequent rolling six-month periods falls below 50% (or at any time Administrator and Company mutually agree in writing), at which time Company will be obligated to remove such restrictions. f. For declines greater than 10% in the Company’s statutory surplus from quarter to quarter and year to year as filed in connection with NAIC filing requirements – 90 days written notice. g. For any diminished or exhausted reinsurance capacity used in connection with policies written under this agreement such as facultative, excess of loss, or quota share treaties.