Common use of Sliding Scale Commission Clause in Contracts

Sliding Scale Commission. A. The Reinsurer shall allow the Company a 28.0% provisional commission on all premiums (i.e., premium finance and direct ▇▇▇▇ premiums) ceded to the Reinsurer hereunder. The Company shall allow the Reinsurer return commission on return premiums at the same rate. B. The adjusted commission rate shall be calculated as follows and be applied to premiums earned for the first and second underwriting years collectively, and independently for each underwriting year thereafter, as follows: 1. If the ratio of losses incurred to premiums earned is 71.0% or greater, the adjusted commission rate for the contract year under consideration shall be 24.0%; 2. If the ratio of losses incurred to premiums earned is less than 71.0%, but not less than 49.0%, the adjusted commission rate for the underwriting year under consideration shall be 24.0%, plus the difference in percentage points between 71.0% and the actual ratio of losses incurred to premiums earned; 3. If the ratio of losses incurred to premiums earned is 49.0% or less, the adjusted commission rate for the underwriting year under consideration shall be 46.0%. C. If the ratio of losses incurred to premiums earned for any underwriting year is greater than 77.0%, the difference in percentage points between the actual ratio of losses incurred to premiums earned and 77.0% shall be multiplied by premiums earned for the underwriting year and the product shall be carried forward to the next underwriting year as a debit to losses incurred, subject to a maximum deficit carryforward of 23.0% of premiums earned. If the ratio of losses incurred to premiums earned for any underwriting year is less than 49.0%, the difference in percentage points between 49.0% and the actual ratio of losses incurred to premiums earned shall be multiplied by premiums earned for the underwriting year and the product shall be carried forward to the next underwriting year as a credit to losses incurred. D. Within 45 days after 12 months following the end of the second underwriting year and each subsequent underwriting year, and every 12 months thereafter until all losses subject to the underwriting year under consideration have been finally settled, the Company shall calculate and report the adjusted commission on premiums earned for the underwriting year, subject to the following: 1. As respects the first calculation, if the adjusted commission on premiums earned is greater than commissions previously allowed by the Reinsurer on premiums earned for the underwriting year, the Reinsurer shall remit 75.0% of the difference to the Company as promptly as possible after receipt and verification of the Company’s report. 2. As respects the second and each subsequent calculation, if the adjusted commission on premiums earned is less than commissions previously allowed by the Reinsurer on premiums earned for the underwriting year, the Company shall remit the difference to the Reinsurer with its report. If the adjusted commission on premiums earned is greater than commissions previously allowed by the Reinsurer on premiums earned for the underwriting year, the Reinsurer shall remit the difference to the Company as promptly as possible after receipt and verification of the Company’s report, but in any event no less than 30 days following receipt of the report. E. In the event the adjusted commission calculation for any underwriting year is based partly on ceded reserves for losses and/or loss adjustment expense, the adjusted commission shall be recalculated within 45 days after the end of each subsequent 12-month period until all losses under policies with effective or renewal dates during the underwriting year have been settled. Any balance shown to be due either party as a result of any such recalculation shall be remitted promptly by the owing party to the party due such balance.

Sliding Scale Commission. A. The Reinsurer shall allow the Company a 28.029.0% provisional commission on all premiums (i.e., premium finance and direct ▇▇▇▇ premiums) ceded to the Reinsurer hereunder. The Company shall allow the Reinsurer return commission on return premiums at the same rate. B. The provisional commission allowed the Company shall be adjusted periodically in accordance with the provisions set forth herein. The adjusted commission rate shall be calculated as follows and be applied to premiums earned for the first and second underwriting years collectively, and independently for each underwriting contract year thereafter, as followsunder consideration: 1. If the ratio of losses incurred to premiums earned is 71.057.0% or greater, the adjusted commission rate for the contract year under consideration shall be 24.023.0%; 2. If the ratio of losses incurred to premiums earned is less than 71.057.0%, but not less than 49.047.0%, the adjusted commission rate for the underwriting contract year under consideration shall be 24.023.0%, plus 50.0% of the difference in percentage points between 71.057.0% and the actual ratio of losses incurred to premiums earned; 3. If the ratio of losses incurred to premiums earned is 49.0less than 47.0%, but not less than 37.0%, the adjusted commission rate for the contract year under consideration shall be 28.0%, plus 100% of the difference in percentage points between 47.0% and the actual ratio of losses incurred to premiums earned; 4. If the ratio of losses incurred to premiums earned is 37.0% or less, the adjusted commission rate for the underwriting contract year under consideration shall be 46.038.0%. C. If the ratio of losses incurred to premiums earned for any underwriting contract year is greater than 77.057.0%, the difference in percentage points between the actual ratio of losses incurred to premiums earned and 77.057.0% shall be multiplied by premiums earned for the underwriting contract year and the product shall be carried forward to the next underwriting contract year as a debit to losses incurred, subject to a maximum deficit carryforward of 23.0% of premiums earned. If the ratio of losses incurred to premiums earned for any underwriting contract year is less than 49.037.0%, the difference in percentage points between 49.037.0% and the actual ratio of losses incurred to premiums earned shall be multiplied by premiums earned for the underwriting contract year and the product shall be carried forward to the next underwriting contract year as a credit to losses incurred. D. Within 45 days after 12 months following Except as provided in the end of the second underwriting year and each subsequent underwriting year, and every 12 months thereafter until all losses subject to the underwriting year under consideration have been finally settlednext paragraph, the Company shall calculate and report the adjusted commission on premiums earned for within 45 days after the underwriting end of each contract year, and within 45 days after the end of each 12-month period thereafter until all losses subject to hereto have been finally settled. Each such calculation shall be based on cumulative transactions hereunder from the following: 1beginning of the contract year through the date of adjustment, including, as respects losses incurred, any debit or credit from the preceding contract year. As respects the first calculation, if If the adjusted commission on premiums earned is greater than commissions previously allowed by the Reinsurer on premiums earned for the underwriting year, the Reinsurer shall remit 75.0% contract year as of the difference to the Company as promptly as possible after receipt and verification date of the Company’s report. 2. As respects the second and each subsequent calculation, if the adjusted commission on premiums earned adjustment is less than commissions previously allowed by the Reinsurer on premiums earned for the underwriting same contract year, the Company shall remit the difference to the Reinsurer with its report. If the adjusted commission on premiums earned for the contract year as of the date of adjustment is greater than commissions previously allowed by the Reinsurer on premiums earned for the underwriting same contract year, the Reinsurer shall remit the difference to the Company as promptly as possible after receipt and verification of the Company’s report, but in any event no less than 30 days following receipt of the report. E. In As respects the event final contract year, the Company shall calculate and report the adjusted commission calculation for any underwriting year is based partly on ceded reserves for losses and/or loss adjustment expensepremiums earned within 45 days after the date of termination of this Contract or the termination of a Subscribing Reinsurers percentage share in this Contract, the adjusted commission shall be recalculated and within 45 days after the end of each subsequent 12-month period thereafter until all losses under policies with effective or renewal dates during the underwriting year subject hereto have been finally settled. Any balance shown to be due either party as a result of any Each such recalculation calculation shall be remitted promptly based on cumulative transactions hereunder from the beginning of the final contract year through the date of adjustment, including, as respects losses incurred, any debit or credit from the preceding contract year. If the adjusted commission on premiums earned for the final contract year as of the date of adjustment is less than commissions previously allowed by the owing party Reinsurer on premiums earned for the same contract year, the Company shall remit the difference to the party due such balanceReinsurer with its report. If the adjusted commission on premiums earned for the final contract year as of the date of adjustment is greater than commissions previously allowed by the Reinsurer on premiums earned for the same contract year, the Reinsurer shall remit the difference to the Company as promptly as possible after receipt and verification of the Company’s report.

Sliding Scale Commission. A. The Reinsurer shall allow the Company a 28.029.0% provisional commission on all premiums (i.e., premium finance and direct ▇▇▇▇ premiums) ceded to the Reinsurer hereunder. The Company shall allow the Reinsurer return commission on return premiums at the same rate. B. The provisional commission allowed the Company shall be adjusted periodically in accordance with the provisions set forth herein. The adjusted commission rate shall be calculated as follows and be applied to premiums earned for the first and second underwriting years collectively, and independently for each underwriting contract year thereafter, as followsunder consideration: 1. If the ratio of losses incurred to premiums earned is 71.057.0% or greater, the adjusted commission rate for the contract year under consideration shall be 24.023.0%; 2. If the ratio of losses incurred to premiums earned is less than 71.057.0%, but not less than 49.047.0%, the adjusted commission rate for the underwriting contract year under consideration shall be 24.023.0%, plus 50.0% of the difference in percentage points between 71.057.0% and the actual ratio of losses incurred to premiums earned; 3. If the ratio of losses incurred to premiums earned is 49.0less than 47.0%, but not less than 37.0%, the adjusted commission rate for the contract year under consideration shall be 28.0%, plus 100% of the difference in percentage points between 47.0% and the actual ratio of losses incurred to premiums earned; 4. If the ratio of losses incurred to premiums earned is 37.0% or less, the adjusted commission rate for the underwriting contract year under consideration shall be 46.038.0%. C. If the ratio of losses incurred to premiums earned for any underwriting contract year is greater than 77.057.0%, the difference in percentage points between the actual ratio of losses incurred to premiums earned and 77.057.0% shall be multiplied by premiums earned for the underwriting contract year and the product shall be carried forward to the next underwriting contract year as a debit to losses incurred, subject to a maximum deficit carryforward of 23.0% of premiums earned. If the ratio of losses incurred to premiums earned for any underwriting contract year is less than 49.037.0%, the difference in percentage points between 49.037.0% and the actual ratio of losses incurred to premiums earned shall be multiplied by premiums earned for the underwriting contract year and the product shall be carried forward to the next underwriting contract year as a credit to losses incurred. D. Within 45 days after 12 months following Except as provided in the end of the second underwriting year and each subsequent underwriting year, and every 12 months thereafter until all losses subject to the underwriting year under consideration have been finally settlednext paragraph, the Company shall calculate and report the adjusted commission on premiums earned for within 45 days after the underwriting end of each contract year, and within 45 days after the end of each 12-month period thereafter until all losses subject to hereto have been finally settled. Each such calculation shall be based on cumulative transactions hereunder from the following: 1beginning of the contract year through the date of adjustment, including, as respects losses incurred, any debit or credit from the preceding contract year. As respects the first calculation, if If the adjusted commission on premiums earned is greater than commissions previously allowed by the Reinsurer on premiums earned for the underwriting year, the Reinsurer shall remit 75.0% contract year as of the difference to the Company as promptly as possible after receipt and verification date of the Company’s report. 2. As respects the second and each subsequent calculation, if the adjusted commission on premiums earned adjustment is less than commissions previously allowed by the Reinsurer on premiums earned for the underwriting same contract year, the Company shall remit the difference to the Reinsurer with its report. If the adjusted commission on premiums earned for the contract year as of the date of adjustment is greater than commissions previously allowed by the Reinsurer on premiums earned for the underwriting same contract year, the Reinsurer shall remit the difference to the Company as promptly as possible after receipt and verification of the Company’s report, but in any event no less than 30 days following receipt of the report. E. In As respects the event final contract year, the Company shall calculate and report the adjusted commission calculation for any underwriting year is based partly on ceded reserves for losses and/or loss adjustment expensepremiums earned within 45 days after the date of termination of this Contract or the termination of a Subscribing Reinsurer’s percentage share in this Contract, the adjusted commission shall be recalculated and within 45 days after the end of each subsequent 12-month period thereafter until all losses under policies with effective or renewal dates during the underwriting year subject hereto have been finally settled. Any balance shown to be due either party as a result of any Each such recalculation calculation shall be remitted promptly based on cumulative transactions hereunder from the beginning of the final contract year through the date of adjustment, including, as respects losses incurred, any debit or credit from the preceding contract year. If the adjusted commission on premiums earned for the final contract year as of the date of adjustment is less than commissions previously allowed by the owing party Reinsurer on premiums earned for the same contract year, the Company shall remit the difference to the party due such balanceReinsurer with its report. If the adjusted commission on premiums earned for the final contract year as of the date of adjustment is greater than commissions previously allowed by the Reinsurer on premiums earned for the same contract year, the Reinsurer shall remit the difference to the Company as promptly as possible after receipt and verification of the Company’s report.

Sliding Scale Commission. A. The Reinsurer shall allow the Company a 28.027.00% provisional commission on all premiums (i.e., premium finance and direct ▇▇▇▇ premiums) ceded to the Reinsurer hereunder. The Company shall allow the Reinsurer return commission on return premiums at the same rate. B. The provisional commission allowed the Company shall be adjusted for each underwriting year in accordance with the provisions set forth herein. The adjusted commission shall be based upon the combined experiences of this Contract and those of the Non Standard Private Passenger Automobile Quota Share Reinsurance Contract, effective May 1, 2002, issued to Vesta Fire Insurance Corporation, Chicago, Illinois (hereinafter referred to as the “Companion Contract”). The adjusted commission rate shall be calculated as follows and be applied to premiums earned for the first and second underwriting years collectively, and independently for each underwriting year thereafter, as followsunder consideration: 1. If the ratio of losses incurred to premiums earned is 71.071.00% or greater, the adjusted commission rate for the contract underwriting year under consideration shall be 24.024.50%; 2. If the ratio of losses incurred to premiums earned is less than 71.071.00%, but not less than 49.066.00%, the adjusted commission rate for the underwriting year under consideration shall be 24.024.50%, plus 50.00% of the difference in percentage points between 71.071.00% and the actual ratio rate of losses incurred to premiums earned; 3. If the ratio of losses incurred to premiums earned is 49.0less than 66.00%, but not less than 54.00%, the adjusted commission rate for the underwriting year under consideration shall be 27.00%, plus 75.00% of the difference in percentage points between 66.00% and the actual ratio of losses incurred to premiums earned; 4. If the ratio of losses incurred to premiums earned is 54.00% or less, the adjusted commission rate for the underwriting year under consideration shall be 46.036.00%. C. If the ratio of losses incurred to premiums earned for any underwriting year is greater than 77.071.00%, the difference in percentage points between the actual ratio of losses incurred to premiums earned and 77.071.00% shall be multiplied by premiums earned for the underwriting year and the product shall be carried forward to the next underwriting year as a debit to losses incurred, subject to a maximum deficit carryforward of 23.0% of premiums earned. If the ratio of losses incurred to premiums earned for any underwriting year is less than 49.054.00%, the difference in percentage points between 49.054.00% and the actual ratio of losses incurred to premiums earned shall be multiplied by premiums earned for the underwriting year and the product shall be carried forward to the next underwriting year adjustment period as a credit to losses incurred. D. Within 45 days after 12 24 months following the end of the second each underwriting year and each subsequent underwriting year, and every 12 months thereafter until all losses subject to the underwriting year under consideration have been finally settled, the Company shall calculate and report the adjusted commission on premiums earned for the underwriting year, subject to the following: 1. As respects the first calculation, if the adjusted commission on premiums earned is greater than commissions previously allowed by the Reinsurer on premiums earned for the underwriting year, the Reinsurer shall remit 75.0% of the difference to the Company as promptly as possible after receipt and verification of the Company’s report. 2. As respects the second and each subsequent calculation, if If the adjusted commission on premiums earned is less than commissions previously allowed by the Reinsurer on premiums earned for the underwriting year, the Company shall remit the difference to the Reinsurer with its report. If the adjusted commission on premiums earned is greater than commissions previously allowed by the Reinsurer on premiums earned for the underwriting year, the Reinsurer shall remit the difference to the Company as promptly as possible after receipt and verification of the Company’s report, but in any event no less than 30 days following receipt of the report. E. In the event the adjusted commission calculation for any underwriting year is based partly on ceded reserves for losses and/or loss adjustment expense, the adjusted commission shall be recalculated within 45 days after the end of each subsequent 12-month period until all losses under policies with effective or renewal dates during the underwriting year have been settled. Any balance shown to be due either party as a result of any such recalculation shall be remitted promptly by the owing party to the party due such balance.

Sliding Scale Commission. A. The Reinsurer shall allow the Company a 28.0% [****] provisional commission on all premiums (i.e., premium finance and direct ▇▇▇▇ premiums) ceded to the Reinsurer hereunder. The Company shall allow the Reinsurer return commission on return premiums at the same rate. B. The provisional commission allowed the Company shall be adjusted periodically in accordance with the provisions set forth herein. The adjusted commission rate shall be calculated as follows and be applied to premiums earned for the first and second underwriting years collectively, and independently for each underwriting contract year thereafter, as followsunder consideration: 1. If the ratio of losses incurred to premiums earned is 71.0% [****] or greater, the adjusted commission rate for the contract year under consideration shall be 24.0%[****]; 2. If the ratio of losses incurred to premiums earned is less than 71.0%[****], but not less than 49.0%[****], the adjusted commission rate for the underwriting contract year under consideration shall be 24.0%[****], plus [****] of the difference in percentage points between 71.0% [****] and the actual ratio of losses incurred to premiums earned; 3. If the ratio of losses incurred to premiums earned is 49.0% less than [****], but not less than [****], the adjusted commission rate for the contract year under consideration shall be [****], plus [****] of the difference in percentage points between [****] and the actual ratio of losses incurred to premiums earned; 4. If the ratio of losses incurred to premiums earned is [****] or less, the adjusted commission rate for the underwriting contract year under consideration shall be 46.0%[****]. C. If the ratio of losses incurred to premiums earned for any underwriting contract year is greater less than 77.0%[****], the difference in percentage points between the actual ratio of losses incurred to premiums earned and 77.0% shall be multiplied by premiums earned for the underwriting year and the product shall be carried forward to the next underwriting year as a debit to losses incurred, subject to a maximum deficit carryforward of 23.0% of premiums earned. If the ratio of losses incurred to premiums earned for any underwriting year is less than 49.0%, the difference in percentage points between 49.0% [****] and the actual ratio of losses incurred to premiums earned shall be multiplied by premiums earned for the underwriting contract year and the product shall be carried forward to the next underwriting contract year as a credit to losses incurred. D. Within 45 days after 12 months following Except as provided in the end of the second underwriting year and each subsequent underwriting year, and every 12 months thereafter until all losses subject to the underwriting year under consideration have been finally settlednext paragraph, the Company shall calculate and report the adjusted commission on premiums earned for within 45 days after the underwriting end of each contract year, and within 45 days after the end of each 12‑month period thereafter until all losses subject to hereto have been finally settled. Each such calculation shall be based on cumulative transactions hereunder from the following: 1beginning of the contract year through the date of adjustment, including, as respects losses incurred, any credit from the preceding contract year. As respects the first calculation, if If the adjusted commission on premiums earned is greater than commissions previously allowed by the Reinsurer on premiums earned for the underwriting year, the Reinsurer shall remit 75.0% contract year as of the difference to the Company as promptly as possible after receipt and verification date of the Company’s report. 2. As respects the second and each subsequent calculation, if the adjusted commission on premiums earned adjustment is less than commissions previously allowed by the Reinsurer on premiums earned for the underwriting same contract year, the Company shall remit the difference to the Reinsurer with its report. If the adjusted commission on premiums earned for the contract year as of the date of adjustment is greater than commissions previously allowed by the Reinsurer on premiums earned for the underwriting same contract year, the Reinsurer shall remit the difference to the Company as promptly as possible after receipt and verification of the Company’s report, but in any event no less than 30 days following receipt of the 's report. E. In As respects the event final contract year, the Company shall calculate and report the adjusted commission calculation for any underwriting year is based partly on ceded reserves for losses and/or loss adjustment expensepremiums earned within 45 days after the date of termination of this Contract or the termination of a Subscribing Reinsurer's percentage share in this Contract, the adjusted commission shall be recalculated and within 45 days after the end of each subsequent 12-month 12‑month period thereafter until all losses under policies with effective or renewal dates during the underwriting year subject hereto have been finally settled. Any balance shown to be due either party as a result of any Each such recalculation calculation shall be remitted promptly based on cumulative transactions hereunder from the beginning of the final contract year through the date of adjustment, including, as respects losses incurred, any credit from the preceding contract year. If the adjusted commission on premiums earned for the final contract year as of the date of adjustment is less than commissions previously allowed by the owing party Reinsurer on premiums earned for the same contract year, the Company shall remit the difference to the party due such balanceReinsurer with its report. If the adjusted commission on premiums earned for the final contract year as of the date of adjustment is greater than commissions previously allowed by the Reinsurer on premiums earned for the same contract year, the Reinsurer shall remit the difference to the Company as promptly as possible after receipt and verification of the Company's report.

Sliding Scale Commission. A. The Reinsurer shall allow the Company a 28.029.0% provisional commission on all premiums (i.e., premium finance and direct ▇▇▇▇ premiums) ceded to the Reinsurer hereunder. The Company shall allow the Reinsurer return commission on return premiums at the same rate. B. The provisional commission allowed the Company shall be adjusted periodically in accordance with the provisions set forth herein. The adjusted commission rate shall be calculated as follows and be applied to premiums earned for the first and second underwriting years collectively, and independently for each underwriting contract year thereafter, as followsunder consideration: 1. If the ratio of losses incurred to premiums earned is 71.055.0% or greater, the adjusted commission rate for the contract year under consideration shall be 24.025.0%; 2. If the ratio of losses incurred to premiums earned is less than 71.055.0%, but not less than 49.045.0%, the adjusted commission rate for the underwriting contract year under consideration shall be 24.025.0%, plus 50.0% of the difference in percentage points between 71.055.0% and the actual ratio of losses incurred to premiums earned; 3. If the ratio of losses incurred to premiums earned is 49.0less than 45.0%, but not less than 35.0%, the adjusted commission rate for the contract year under consideration shall be 30.0%, plus 100% of the difference in percentage points between 45.0% and the actual ratio of losses incurred to premiums earned; 4. If the ratio of losses incurred to premiums earned is 35.0% or less, the adjusted commission rate for the underwriting contract year under consideration shall be 46.040.0%. C. If the ratio of losses incurred to premiums earned for any underwriting contract year is greater than 77.055.0%, the difference in percentage points between the actual ratio of losses incurred to premiums earned and 77.055.0% shall be multiplied by premiums earned for the underwriting contract year and the product shall be carried forward to the next underwriting contract year as a debit to losses incurred, subject to a maximum deficit carryforward of 23.0% of premiums earned. If the ratio of losses incurred to premiums earned for any underwriting contract year is less than 49.035.0%, the difference in percentage points between 49.035.0% and the actual ratio of losses incurred to premiums earned shall be multiplied by premiums earned for the underwriting contract year and the product shall be carried forward to the next underwriting contract year as a credit to losses incurred. D. Within 45 days after 12 months following Except as provided in the end of the second underwriting year and each subsequent underwriting year, and every 12 months thereafter until all losses subject to the underwriting year under consideration have been finally settlednext paragraph, the Company shall calculate and report the adjusted commission on premiums earned for within 45 days after the underwriting end of each contract year, and within 45 days after the end of each 12‑month period thereafter until all losses subject to hereto have been finally settled. Each such calculation shall be based on cumulative transactions hereunder from the following: 1beginning of the contract year through the date of adjustment, including, as respects losses incurred, any debit or credit from the preceding contract year. As respects the first calculation, if If the adjusted commission on premiums earned is greater than commissions previously allowed by the Reinsurer on premiums earned for the underwriting year, the Reinsurer shall remit 75.0% contract year as of the difference to the Company as promptly as possible after receipt and verification date of the Company’s report. 2. As respects the second and each subsequent calculation, if the adjusted commission on premiums earned adjustment is less than commissions previously allowed by the Reinsurer on premiums earned for the underwriting same contract year, the Company shall remit the difference to the Reinsurer with its report. If the adjusted commission on premiums earned for the contract year as of the date of adjustment is greater than commissions previously allowed by the Reinsurer on premiums earned for the underwriting same contract year, the Reinsurer shall remit the difference to the Company as promptly as possible after receipt and verification of the Company’s report, but in any event no less than 30 days following receipt of the 's report. E. In As respects the event final contract year, the Company shall calculate and report the adjusted commission calculation for any underwriting year is based partly on ceded reserves for losses and/or loss adjustment expensepremiums earned within 45 days after the date of termination of this Contract or the termination of a Subscribing Reinsurer's percentage share in this Contract, the adjusted commission shall be recalculated and within 45 days after the end of each subsequent 12-month 12‑month period thereafter until all losses under policies with effective or renewal dates during the underwriting year subject hereto have been finally settled. Any balance shown to be due either party as a result of any Each such recalculation calculation shall be remitted promptly based on cumulative transactions hereunder from the beginning of the final contract year through the date of adjustment, including, as respects losses incurred, any debit or credit from the preceding contract year. If the adjusted commission on premiums earned for the final contract year as of the date of adjustment is less than commissions previously allowed by the owing party Reinsurer on premiums earned for the same contract year, the Company shall remit the difference to the party due such balanceReinsurer with its report. If the adjusted commission on premiums earned for the final contract year as of the date of adjustment is greater than commissions previously allowed by the Reinsurer on premiums earned for the same contract year, the Reinsurer shall remit the difference to the Company as promptly as possible after receipt and verification of the Company's report.

Sliding Scale Commission. A. The Reinsurer shall allow the Company a 28.027.5% provisional commission on all premiums (i.e., premium finance and direct ▇▇▇▇ premiums) ceded to the Reinsurer hereunder. The Company shall allow the Reinsurer return commission on return premiums at the same rate. The provisional commission allowed the Company shall be adjusted periodically in accordance with the provisions set forth herein. B. The adjusted commission rate shall be calculated as follows and be applied to premiums earned for the first and second underwriting years collectively, and independently for each underwriting year thereafter, as followsunder consideration: 1. If the ratio of losses incurred to premiums earned is 71.064.0% or greater, the adjusted commission rate for the contract underwriting year under consideration shall be 24.023.5%; 2. If the ratio of losses incurred to premiums earned is less than 71.064.0%, but not less than 49.060.0%, the adjusted commission rate for the underwriting year under consideration shall be 24.023.5%, plus the difference in percentage points between 71.064.0% and the actual ratio of losses incurred to premiums earned; 3. If the ratio of losses incurred to premiums earned is 49.0less than 60.0%, but not less than 47.5%, the adjusted commission rate for the underwriting year under consideration shall be 27.5% plus 60.0% of the difference in percentage points between 60.0% and the actual ratio of losses incurred to premiums earned; 4. If the ratio of losses incurred to premiums earned is 47.5% or less, the adjusted commission rate for the underwriting year under consideration shall be 46.035.0%. C. D. If the ratio of losses incurred to premiums earned for any underwriting year is greater than 77.064.0%, the difference in percentage points between the actual ratio of losses incurred to premiums earned and 77.064.0% shall be multiplied by premiums earned for the underwriting year and the product shall be carried forward to the next underwriting year as a debit to losses incurred, subject to a maximum deficit carryforward of 23.0% of premiums earned. If the ratio of losses incurred to premiums earned for any underwriting year period is less than 49.047.5%, the difference in percentage points between 49.047.5% and the actual ratio of losses incurred to premiums earned shall be multiplied by premiums earned for the underwriting year and the product shall be carried forward to the next underwriting year as a credit to losses incurred. D. E. Within 45 30 days after 12 months following the end of the second each underwriting year and each subsequent underwriting year, and every 12 months thereafter until all losses subject to the underwriting year under consideration have been finally settled, the Company shall calculate and report the adjusted commission on premiums earned for the underwriting year, subject to the following: 1. As respects the first calculation, if the adjusted commission on premiums earned is greater than commissions previously allowed by the Reinsurer on premiums earned for the underwriting year, the Reinsurer shall remit 75.0% of the difference to the Company as promptly as possible after receipt and verification of the Company’s report. 2. As respects the second and each subsequent calculation, if If the adjusted commission on premiums earned is less than commissions previously allowed by the Reinsurer on premiums earned for the underwriting year, the Company shall remit the difference to the Reinsurer with its report. If the adjusted commission on premiums earned is greater than commissions previously allowed by the Reinsurer on premiums earned for the underwriting year, the Reinsurer shall remit the difference to the Company as promptly as possible after receipt and verification of the Company’s report, but in any event no less than 30 days following receipt of the 's report. E. F. In the event the adjusted commission calculation for any underwriting year is based partly on ceded reserves for losses and/or loss adjustment expense, the adjusted commission shall be recalculated within 45 30 days after the end of each subsequent 12-month period underwriting year until all losses under policies with effective or renewal dates during the underwriting year have been settled. Any balance shown to be due either party as a result of any such recalculation shall be remitted promptly by the owing party to the party due such balanceother party.

Sliding Scale Commission. A. The Reinsurer shall allow the Company a 28.030.0% provisional commission on all premiums (i.e., the net unearned premium finance and direct ▇▇▇▇ premiums) ceded to the Reinsurer hereunder. The Company shall allow the Reinsurer return commission on return premiums net unearned premium at the same rate. B. The provisional commission allowed the Company shall be adjusted periodically in accordance with the provisions set forth herein. The adjusted commission rate shall be calculated as follows and be applied to premiums earned for the first and second underwriting years collectively, and independently for each underwriting year thereafter, as followsterm of this Contract: 1. If the ratio of losses incurred to premiums earned is 71.073.0% or greater, the adjusted commission rate for the contract year under consideration term of this Contract shall be 24.020.0%; 2. If the ratio of losses incurred to premiums earned is less than 71.073.0%, but not less than 49.063.0%, the adjusted commission rate for the underwriting year under consideration term of this Contract shall be 24.020.0%, plus the difference in percentage points between 71.073.0% and the actual ratio of losses incurred to premiums earned; 3. If the ratio of losses incurred to premiums earned is 49.0less than 63.0%, but not less than 54.0%, the adjusted commission rate for the term of this Contract shall be 30.0%, plus two-thirds of the difference in percentage points between 63.0% and the actual ratio of losses incurred to premiums earned; 4. If the ratio of losses incurred to premiums earned is 54.0% or less, the adjusted commission rate for the underwriting year under consideration term of this Contract shall be 46.036.0%. C. If the ratio of losses incurred to premiums earned for any underwriting year is greater than 77.0%, the difference in percentage points between the actual ratio of losses incurred to premiums earned and 77.0% shall be multiplied by premiums earned for the underwriting year and the product shall be carried forward to the next underwriting year as a debit to losses incurred, subject to a maximum deficit carryforward of 23.0% of premiums earned. If the ratio of losses incurred to premiums earned for any underwriting year is less than 49.0%, the difference in percentage points between 49.0% and the actual ratio of losses incurred to premiums earned shall be multiplied by premiums earned for the underwriting year and the product shall be carried forward to the next underwriting year as a credit to losses incurred. D. Within 45 days after 12 months following the end of the second underwriting year and each subsequent underwriting year, and every 12 months thereafter until all losses subject to the underwriting year under consideration have been finally settled, the The Company shall calculate and report the adjusted commission on premiums earned for within 45 days following the underwriting yeartermination or expiration of this Contract and within (1) 45 days after the end of each six-month period thereafter as respects any downward adjustment of ceding commission below the provisional ceding commission, and (2) 45 days after the end of each 12-month period thereafter as respects any upward adjustment of ceding commission above the provisional ceding commission, until all losses subject to hereto have been finally settled. Each such calculation shall be based on cumulative transactions hereunder from the following: 1effective date of this Contract through the date of adjustment. As respects the first calculation, if If the adjusted commission on premiums earned is greater than commissions previously allowed by the Reinsurer on premiums earned for the underwriting year, the Reinsurer shall remit 75.0% as of the difference to the Company as promptly as possible after receipt and verification date of the Company’s report. 2. As respects the second and each subsequent calculation, if the adjusted commission on premiums earned adjustment is less than commissions previously allowed by the Reinsurer on premiums earned for the underwriting yearterm of this Contract, the Company shall remit the difference to the Reinsurer with its report. If the adjusted commission on premiums earned as of the date of adjustment is greater than commissions previously allowed by the Reinsurer on premiums earned for the underwriting yearterm of this Contract, the Reinsurer shall remit the difference to the Company as promptly as possible after receipt and verification of the Company’s report. However, but in any event no less than 30 days following receipt of the report. E. In the event the adjusted commission calculation for any underwriting year is based partly on ceded reserves for losses and/or loss adjustment expense, the adjusted commission there shall be recalculated within 45 days after no upward adjustment of ceding commission above the end provisional ceding commission until 24 months following the effective date of each subsequent 12-month period until all losses under policies with effective termination or renewal dates during the underwriting year have been settled. Any balance shown to be due either party as a result of any such recalculation shall be remitted promptly by the owing party to the party due such balanceexpiration.

Sliding Scale Commission. A. The Reinsurer shall allow the Company a 28.032.0% provisional commission on all premiums (i.e., premium finance and direct ▇▇▇▇ premiums) ceded to the Reinsurer hereunder. The Company shall allow the Reinsurer return commission on return premiums at the same rate. The provisional commission allowed the Company shall be adjusted periodically in accordance with the provisions set forth herein. B. The adjusted commission rate shall be calculated as follows and be applied to premiums earned for the first and second underwriting years collectively, and independently for each underwriting year thereafter, as followsterm of this Contract: 1. If the ratio of losses incurred to premiums earned is 71.059.0% or greater, the adjusted commission rate for the contract year under consideration term of this Contract shall be 24.026.0%; 2. If the ratio of losses incurred to premiums earned is less than 71.059.0%, but not less than 49.050.0%, the adjusted commission rate for the underwriting year under consideration term of this Contract shall be 24.026.0%, plus 67.0% of the difference in percentage points between 71.059.0% and the actual ratio of losses incurred to premiums earned; 3. If the ratio of losses incurred to premiums earned is 49.0less than 50.0%, but not less than 40.0%, the adjusted commission rate for the term of this Contract shall be 32.0% plus 60.0% of the difference in percentage points between 50.0% and the actual ratio of losses incurred to premiums earned; 4. If the ratio of losses incurred to premiums earned is 40.0% or less, the adjusted commission rate for the underwriting year under consideration term of this Contract shall be 46.038.0%. C. If the ratio of losses incurred to premiums earned for any underwriting year is greater than 77.0%, the difference in percentage points between the actual ratio of losses incurred to premiums earned and 77.0% shall be multiplied by premiums earned for the underwriting year and the product shall be carried forward to the next underwriting year as a debit to losses incurred, subject to a maximum deficit carryforward of 23.0% of premiums earned. If the ratio of losses incurred to premiums earned for any underwriting year is less than 49.0%, the difference in percentage points between 49.0% and the actual ratio of losses incurred to premiums earned shall be multiplied by premiums earned for the underwriting year and the product shall be carried forward to the next underwriting year as a credit to losses incurred. D. Within 45 30 days after 12 months following the end expiration of the second underwriting year and each subsequent underwriting year, and every 12 months thereafter until all losses subject to the underwriting year under consideration have been finally settledthis Contract, the Company shall calculate and report the adjusted commission on premiums earned for the underwriting year, subject to the following: 1term of this Contract. As respects the first calculation, if the adjusted commission on premiums earned is greater than commissions previously allowed by the Reinsurer on premiums earned for the underwriting year, the Reinsurer shall remit 75.0% of the difference to the Company as promptly as possible after receipt and verification of the Company’s report. 2. As respects the second and each subsequent calculation, if If the adjusted commission on premiums earned is less than commissions previously allowed by the Reinsurer on premiums earned for the underwriting yearterm of this Contract, the Company shall remit the difference to the Reinsurer with its report. If the adjusted commission on premiums earned is greater than commissions previously allowed by the Reinsurer on premiums earned for the underwriting yearterm of this Contract, the Reinsurer shall remit the difference to the Company as promptly as possible after receipt and verification of the Company’s report, but in any event no less than 30 days following receipt of the 's report. E. D. In the event the adjusted commission calculation for any underwriting year the term of this Contract is based partly on ceded reserves for losses and/or loss adjustment expense, the adjusted commission shall be recalculated within 45 30 days after the end of each subsequent 12-month period until all losses under policies with effective or renewal dates during the underwriting year term of this Contract have been settled. Any balance shown to be due either party as a result of any such recalculation shall be remitted promptly by the owing party to the party due such balanceother party.

Sliding Scale Commission. A. The Reinsurer shall allow the Company a 28.025.0% provisional commission on all premiums (i.e., premium finance and direct ▇▇▇▇ premiums) ceded to the Reinsurer hereunder. The Company shall allow the Reinsurer return commission on return premiums at the same rate. B. The provisional commission allowed the Company shall be adjusted periodically in accordance with the provisions set forth herein. The first adjustment period shall be from the effective date of this Contract through June 30, 1998, and each subsequent contract period shall be a separate adjustment period. However, if this Contract is terminated, the final adjustment period shall be from the beginning of the then current adjustment period through the date of termination if this Contract is terminated on a "cutoff" basis, or the end of the runoff period if this Contract is terminated on a "runoff" basis. C. The adjusted commission rate shall be calculated as follows and be applied to premiums earned for the first and second underwriting years collectively, and independently for each underwriting year thereafter, as followsperiod under consideration: 1. If the ratio of losses incurred to premiums earned is 71.074.0% or greater, the adjusted commission rate for the contract year period under consideration shall be 24.020.0%; 2. If the ratio of losses incurred to premiums earned is less than 71.074.0%, but not less than 49.069.0%, the adjusted commission rate for the underwriting year period under consideration shall be 24.020.0%, plus the difference in percentage points between 71.074.0% and the actual ratio of losses incurred to premiums earned; 3. If the ratio of losses incurred to premiums earned is less than 69.0%, but not less than 49.0%, the adjusted commission rate for the period under consideration shall be 25.0%, plus one-half of the difference in percentage points between 69.0% and the actual ratio of losses incurred to premiums earned; 4. If the ratio of losses incurred to premiums earned is 49.0% or less, the adjusted commission rate for the underwriting year period under consideration shall be 46.035.0%. C. D. If the ratio of losses incurred to premiums earned for any underwriting year period is greater than 77.074.0%, the difference in percentage points between the actual ratio of losses incurred to premiums earned and 77.074.0% shall be multiplied by premiums earned for the underwriting year period and the product shall be carried forward to the next underwriting year adjustment period as a debit to losses incurred, subject to a maximum deficit carryforward of 23.0% of premiums earned. If the ratio of losses incurred to premiums earned for any underwriting year period is less than 49.0%, the difference in percentage points between 49.0% and the actual ratio of losses incurred to premiums earned shall be multiplied by premiums earned for the underwriting year period and the product shall be carried forward to the next underwriting year adjustment period as a credit to losses incurred. D. Within 45 days after 12 months following E. Except as provided in the end of the second underwriting year and each subsequent underwriting year, and every 12 months thereafter until all losses subject to the underwriting year under consideration have been finally settlednext paragraph, the Company shall calculate and report the adjusted commission on premiums earned for within 45 days after the underwriting yearend of each adjustment period, and within 45 days after the end of each 12-month period thereafter until all losses subject to hereto have been finally settled. Each such calculation shall be based on cumulative transactions hereunder from the following: 1beginning of the adjustment period through the date of adjustment, including, as respects losses incurred, any debit or credit from the preceding adjustment period. As respects the first calculation, if If the adjusted commission on premiums earned is greater than commissions previously allowed by the Reinsurer on premiums earned for the underwriting year, the Reinsurer shall remit 75.0% adjustment period as of the difference to the Company as promptly as possible after receipt and verification date of the Company’s report. 2. As respects the second and each subsequent calculation, if the adjusted commission on premiums earned adjustment is less than commissions previously allowed by the Reinsurer on premiums earned for the underwriting yearsame period, the Company shall remit the difference to the Reinsurer with its report. If the adjusted commission on premiums earned for the adjustment period as of the date of adjustment is greater than commissions previously allowed by the Reinsurer on premiums earned for the underwriting yearsame period, the Reinsurer shall remit the difference to the Company as promptly as possible after receipt and verification of the Company’s report, but in any event no less than 30 days following receipt of the 's report. E. In F. As respects the event final adjustment period, the Company shall calculate and report the adjusted commission calculation for any underwriting year is based partly on ceded reserves for losses and/or loss adjustment expensepremiums earned within 45 days after the date of termination, the adjusted commission shall be recalculated and within 45 days after the end of each subsequent 12-month period thereafter until all losses under policies with effective or renewal dates during the underwriting year subject hereto have been finally settled. Any balance shown to be due either party as a result of any Each such recalculation calculation shall be remitted promptly based on cumulative transactions hereunder from the beginning of the final adjustment period through the date of adjustment, including, as respects losses incurred, any debit or credit from the preceding adjustment period. If the adjusted commission on premiums earned for the final adjustment period as of the date of adjustment is less than commissions previously allowed by the owing party Reinsurer on premiums earned for the same period, the Company shall remit the difference to the party due such balanceReinsurer with its report. If the adjusted commission on premiums earned for the final adjustment period as of the date of adjustment is greater than commissions previously allowed by the Reinsurer on premiums earned for the same period, the Reinsurer shall remit the difference to the Company as promptly as possible after receipt and verification of the Company's report.

Sliding Scale Commission. A. The Reinsurer shall allow the Company a 28.025.0% provisional commission on all premiums (i.e., premium finance and direct ▇▇▇▇ premiums) ceded to the Reinsurer hereunder. The Company shall allow the Reinsurer return commission on return premiums at the same rate. B. The provisional commission allowed the Company shall be adjusted periodically in accordance with the provisions set forth herein. The adjusted commission rate shall be calculated as follows and be applied to premiums earned for the first and second underwriting years collectively, and independently for each underwriting year thereafter, as followsunder consideration: 1. If the ratio of losses incurred to premiums earned is 71.080.0% or greater, the adjusted commission rate for the contract underwriting year under consideration shall be 24.015.0%;; 07\I6L1001 2. If the ratio of losses incurred to premiums earned is less than 71.080.0%, but not less than 49.075.0%, the adjusted commission rate for the underwriting year under consideration shall be 24.015.0%, plus 60.0% of the difference in percentage points between 71.080.0% and the actual ratio of losses incurred to premiums earned; 3. If the ratio of losses incurred to premiums earned is 49.0less than 75.0%, but not less than 65.0%, the adjusted commission rate for the underwriting year under consideration shall be 18.0%, plus the difference in percentage points between 75.0% and the actual ratio of losses incurred to premiums earned; 4. If the ratio of losses incurred to premiums earned is less than 65.0%, but not less than 55.0%, the adjusted commission rate for the underwriting year under consideration shall be 28.0%, plus 80.0% of the difference in percentage points between 65.0% and the actual ratio of losses incurred to premiums earned; 5. If the ratio of losses incurred to premiums earned is less than 55.0%, but not less than 50.0%, the adjusted commission rate for the underwriting year under consideration shall be 36.0%, plus the difference in percentage points between 55.0% and the actual ratio of losses incurred to premiums earned; 6. If the ratio of losses incurred to premiums earned is 50.0% or less, the adjusted commission rate for the underwriting year under consideration shall be 46.041.0%. C. If the ratio of losses incurred to premiums earned for any underwriting year is greater than 77.0%, the difference in percentage points between the actual ratio of losses incurred to premiums earned and 77.0% shall be multiplied by premiums earned for the underwriting year and the product shall be carried forward to the next underwriting year as a debit to losses incurred, subject to a maximum deficit carryforward of 23.0% of premiums earned. If the ratio of losses incurred to premiums earned for any underwriting year is less than 49.0%, the difference in percentage points between 49.0% and the actual ratio of losses incurred to premiums earned shall be multiplied by premiums earned for the underwriting year and the product shall be carried forward to the next underwriting year as a credit to losses incurred. D. Within 45 days after 12 six months following the end of the second underwriting year and each subsequent underwriting year, and every 12 months thereafter until all losses subject to the underwriting year under consideration have been finally settled, the Company shall calculate and report the adjusted commission on premiums earned for the underwriting year, subject to the following: 1. As respects the first calculation, if the adjusted commission on premiums earned is greater than commissions previously allowed by the Reinsurer on premiums earned for the underwriting year, the Reinsurer shall remit 75.0% of the difference to the Company as promptly as possible after receipt and verification of the Company’s report. 2. As respects the second and each subsequent calculation, if If the adjusted commission on premiums earned is less than commissions previously allowed by the Reinsurer on premiums earned for the underwriting year, the Company shall remit the difference to the Reinsurer with its report. If the adjusted commission on premiums earned is greater than commissions previously allowed by the Reinsurer on premiums earned for the underwriting year, the Reinsurer shall remit the difference to the Company as promptly as possible within 15 days after receipt and verification of the Company’s report, but in any event no less than 30 days following receipt of the report. E. D. In the event the adjusted commission calculation for any underwriting year is based partly on ceded reserves for losses and/or loss adjustment expenselosses, the adjusted commission shall be recalculated within 45 days after the end of each subsequent 12six-month period until all losses under policies with effective or renewal dates during allocated to the underwriting year have been settled. Any balance shown to be due either party as a result of any such recalculation shall be remitted promptly within 15 days by the owing party to the party due such balanceother party.

Sliding Scale Commission. A. The Reinsurer shall allow the Company a 28.032.5% provisional commission on all premiums (i.e., premium finance and direct ▇▇▇▇ premiums) ceded to the Reinsurer hereunder. The Company shall allow the Reinsurer return commission on return premiums at the same rate. B. The provisional commission allowed the Company shall be adjusted periodically in accordance with the provisions set forth herein. The first adjustment period shall be from the effective date of this Contract through December 31, 1998, and each subsequent 12-month period shall be a separate adjustment period. However, if this Contract is terminated, the final adjustment period shall be from the beginning of the then current adjustment period through the date of termination if this Contract is terminated on a "cutoff" basis, or the end of the runoff period if this Contract is terminated on a "runoff" basis. C. The adjusted commission rate shall be calculated as follows and be applied to premiums earned for the first and second underwriting years collectively, and independently for each underwriting year thereafter, as followsperiod under consideration: 1. If the ratio of losses incurred to premiums earned is 71.010% or greater, the adjusted commission rate for the contract year period under consideration shall be 24.030%; 2. If the ratio of losses incurred to premiums earned is less than 71.0%, but not less than 49.010%, the adjusted commission rate for the underwriting year period under consideration shall be 24.030%, plus 50% of the difference in percentage points between 71.010% and the actual ratio of losses incurred to premiums earned; 3. If the ratio of losses incurred to premiums earned is 49.0% or less0%, the adjusted commission rate for the underwriting year period under consideration shall be 46.035%. C. D. If the ratio of losses incurred to premiums earned for any underwriting year period is greater than 77.010%, the difference in percentage points between the actual ratio of losses incurred to premiums earned and 77.010% shall be multiplied by premiums earned for the underwriting year period and the product shall be carried forward to the next underwriting year adjustment period as a debit to losses incurred, subject to a maximum deficit carryforward of 23.0% of premiums earned. If the ratio of losses incurred to premiums earned for any underwriting year is less than 49.0%, the difference . E. Except as provided in percentage points between 49.0% and the actual ratio of losses incurred to premiums earned shall be multiplied by premiums earned for the underwriting year and the product shall be carried forward to the next underwriting year as a credit to losses incurred. D. Within 45 days after 12 months following the end of the second underwriting year and each subsequent underwriting year, and every 12 months thereafter until all losses subject to the underwriting year under consideration have been finally settledparagraph, the Company shall calculate and report the adjusted commission on premiums earned for within 60 days after the underwriting yearend of each adjustment period, and within 60 days after the end of each 12-month period thereafter until all losses subject to hereto have been finally settled. Each such calculation shall be based on cumulative transactions hereunder from the following: 1beginning of the adjustment period through the date of adjustment, including, as respects losses incurred, any debit or credit from the preceding adjustment period. As respects the first calculation, if If the adjusted commission on premiums earned is greater than commissions previously allowed by the Reinsurer on premiums earned for the underwriting year, the Reinsurer shall remit 75.0% adjustment period as of the difference to the Company as promptly as possible after receipt and verification date of the Company’s report. 2. As respects the second and each subsequent calculation, if the adjusted commission on premiums earned adjustment is less than commissions previously allowed by the Reinsurer on premiums earned for the underwriting yearsame period, the Company shall remit the difference to the Reinsurer with its report. If the adjusted commission on premiums earned for the adjustment period as of the date of adjustment is greater than commissions previously allowed by the Reinsurer on premiums earned for the underwriting yearsame period, the Reinsurer shall remit the difference to the Company as promptly as possible after receipt and verification of the Company’s report, but in any event no less than 30 days following receipt of the 's report. E. In F. As respects the event final adjustment period, the Company shall calculate and report the adjusted commission calculation for any underwriting year is based partly on ceded reserves for losses and/or loss adjustment expensepremiums earned within 60 days after the date of termination, the adjusted commission shall be recalculated and within 45 60 days after the end of each subsequent 12-month period thereafter until all losses under policies with effective or renewal dates during the underwriting year subject hereto have been finally settled. Any balance shown to be due either party as a result of any Each such recalculation calculation shall be remitted promptly based on cumulative transactions hereunder from the beginning of the final adjustment period through the date of adjustment, including, as respects losses incurred, any debit from the preceding adjustment period. If the adjusted commission on premiums earned for the final adjustment period as of the date of adjustment is less than commissions previously allowed by the owing party Reinsurer on premiums earned for the same period, the Company shall remit the difference to the party due such balanceReinsurer with its report. If the adjusted commission on premiums earned for the final adjustment period as of the date of adjustment is greater than commissions previously allowed by the Reinsurer on premiums earned for the same period, the Reinsurer shall remit the difference to the Company as promptly as possible after receipt and verification of the Company's report.

Sliding Scale Commission. A. The Reinsurer shall allow the Company a 28.033.00% provisional commission on all premiums (i.e., premium finance and direct ▇▇▇▇ premiums) ceded to the Reinsurer hereunder. The Company shall allow the Reinsurer return commission on return premiums at the same rate. B. The provisional commission allowed the Company shall be adjusted periodically for each contract year in accordance with the provisions set forth herein. The adjusted commission rate shall be calculated as follows and be applied to premiums earned for the first and second underwriting years collectively, and independently for each underwriting contract year thereafter, as followsunder consideration: 1. If the ratio of losses incurred to premiums earned is 71.069.67% or greater, the adjusted commission rate for the contract year under consideration shall be 24.028.00%;; [▇▇▇▇▇▇▇▇ LOGO] 2. If the ratio of losses incurred to premiums earned is less than 71.069.67%, but not less than 49.045.67%, the adjusted commission rate for the underwriting contract year under consideration shall be 24.028.00%, plus three-fourths of the difference in percentage points between 71.069.67% and the actual ratio of losses incurred to premiums earned; 3. If the ratio of losses incurred to premiums earned is 49.045.67% or less, the adjusted commission rate for the underwriting contract year under consideration shall be 46.046.00%. C. If the ratio of losses incurred to premiums earned for any underwriting contract year is greater than 77.069.67%, the difference in percentage points between the actual ratio of losses incurred to premiums earned and 77.069.67% shall be multiplied by premiums earned for the underwriting contract year and the product shall be carried forward to the next underwriting contract year as a debit to losses incurred, subject to a maximum deficit carryforward of 23.0% of premiums earned. If the ratio of losses incurred to premiums earned for any underwriting contract year is less than 49.045.67%, the difference in percentage points between 49.045.67% and the actual ratio of losses incurred to premiums earned shall be multiplied by premiums earned for the underwriting contract year and the product shall be carried forward to the next underwriting contract year as a credit to losses incurred. D. Within 45 days after 12 months following the end of the second underwriting year and each subsequent underwriting year, and every 12 months thereafter until all losses subject to the underwriting year under consideration have been finally settled, the The Company shall calculate and report the adjusted commission on premiums earned for within 60 days after the underwriting end of each contract year (or, as respects the final contract year, within 60 days after the effective date of termination), and within 60 days after the end of each 12-month period thereafter until all losses subject to hereto have been finally settled. Each such calculation shall be based on cumulative transactions hereunder from the following: 1beginning of the contract year through the date of adjustment, including, as respects losses incurred, any debit or credit from the preceding contract year. As respects the first calculation, if If the adjusted commission on premiums earned for the contract year as of the date of adjustment is less than commissions previously allowed by the Reinsurer on premiums earned for the same period, the difference shall be due the Reinsurer as of the date of the Company's report. If the adjusted commission on premiums earned for the contract year as of the date of adjustment is greater than commissions previously allowed by the Reinsurer on premiums earned for the underwriting yearsame period, the Reinsurer difference shall remit 75.0% of the difference to be due the Company as promptly as possible after receipt and verification of the date of the Company’s report. 2. As respects the second and each subsequent calculation, if the adjusted commission on premiums earned is less than commissions previously allowed by the Reinsurer on premiums earned for the underwriting year, the Company shall remit the difference to the Reinsurer with its 's report. If Any ceding commission adjustments due will be added to (or deducted from) the adjusted commission on premiums earned is greater than commissions previously allowed by funds withheld account, and the Reinsurer on premiums earned for the underwriting year, the Reinsurer shall remit the difference to the Company as promptly as possible after receipt and verification of the Company’s report, but in any event no less than 30 days following receipt of the report. E. In the event the adjusted commission calculation for any underwriting year is based partly on ceded reserves for losses and/or loss adjustment expense, the adjusted commission funds withheld account (including interest credits) shall be recalculated within 45 days after the end of each subsequent 12-month period until all losses under policies with effective or renewal dates maintained as if such adjustments were made during the underwriting year have been settled. Any balance shown to be due either party as a result of any such recalculation shall be remitted promptly by the owing party to the party due such balanceapplicable contract year.