Common use of Statutory Impairments Clause in Contracts

Statutory Impairments. (i) Determinations of statutory impairments of ModCo Assets which are made by the Ceding Company shall be based upon the statutory rules and guidelines and the impairment policy used by the Ceding Company for purposes of calculating statutory impairments reflected in the Ceding Company’s Statutory Financial Statements and without regard to the existence of this Agreement. Notwithstanding Section 10.3, any disagreements with respect to determinations of statutory impairments of ModCo Assets shall be subject to this Section 4.1(f). If the Ceding Company determines that any ModCo Assets have become impaired for purposes of determining Statutory Book Value and such impairments exceed $10,000,000 in the aggregate as respects any Accounting Period (a “Significant Impairment”), the Ceding Company shall notify the Reinsurer as promptly as practicable after such determination and in no event later than ten (10) Business Days following the last day of such Accounting Period. Any report notifying the Reinsurer of a Significant Impairment shall provide the CUSIP, ISIN or similar security identifier (as applicable) for the impaired ModCo Assets and describe the reason for each such impairment and the effect on Statutory Book Value of the applicable ModCo Assets. In addition, any such report shall state whether any impaired assets are held in other portfolios of the Ceding Company or any of its Affiliates and, if so, shall confirm that the Statutory Book Value treatment for each such asset is consistent across all such portfolios. Within five (5) Business Days following the Reinsurer’s receipt of written notification of a Significant Impairment, the Reinsurer shall provide written notice to the Ceding Company of its objection (the “Objection Notice”) to any such impairment determination. If the Reinsurer fails to provide such Objection Notice to the Ceding Company within such time period, the Reinsurer shall be deemed to have accepted such impairment determination. During the five (5) Business Days immediately following the delivery of an Objection Notice, the Ceding Company and the Reinsurer will seek in good faith to resolve any disputes as to the determination or calculation of statutory impairments of the applicable ModCo Assets. The Parties shall use reasonable efforts and work together in good faith to resolve any such dispute prior to the date on which the Ceding Company is required to file the relevant Statutory Financial Statement with the relevant insurance regulator. If the Parties are unable to resolve any such dispute prior to the date on which the Ceding Company is required to file a Statutory Financial Statement with an applicable insurance regulator, the Ceding Company may use its own good faith calculation of the statutory impairment for purposes of preparing its Statutory Financial Statements. If the Parties are unable to resolve any such dispute prior to the date on which a quarterly settlement is due hereunder, the Parties shall use the Ceding Company’s good faith calculation of the statutory impairment for purposes of effecting such required quarterly settlement. If thereafter the dispute is ultimately decided in the Reinsurer’s favor pursuant to the arbitration process set forth in Section 4.1(f)(ii), then the necessary adjustment will be made between the Parties and reflected in the quarterly settlement for the Accounting Period in which such dispute is ultimately resolved.

Statutory Impairments. (i) Determinations of statutory impairments of ModCo Assets which are made by the Ceding Company shall be based upon the statutory rules and guidelines and the impairment policy used by the Ceding Company for purposes of calculating statutory impairments reflected in the Ceding Company’s Statutory Financial Statements and without regard to the existence of this Agreement. Notwithstanding Section 10.39.3, any disagreements with respect to determinations of statutory impairments of ModCo Assets shall be subject to this Section 4.1(f). If the Ceding Company determines that any ModCo Assets have become impaired for purposes of determining Statutory Book Value and such impairments exceed $10,000,000 in the aggregate as respects any Accounting Period (a “Significant Impairment”), the Ceding Company shall notify the Reinsurer as promptly as practicable after such determination and in no event later than ten (10) Business Days following the last day of such Accounting Period. Any report notifying the Reinsurer of a Significant Impairment shall provide the CUSIP, ISIN or similar security identifier (as applicable) for the impaired ModCo Assets and describe the reason for each such impairment and the effect on Statutory Book Value of the applicable ModCo Assets. In addition, any such report shall state whether any impaired assets are held in other portfolios of the Ceding Company or any of its Affiliates and, if so, shall confirm that the Statutory Book Value treatment for each such asset is consistent across all such portfolios. Within five (5) Business Days following the Reinsurer’s receipt of written notification of a Significant Impairment, the Reinsurer shall provide written notice to the Ceding Company of its objection (the “Objection Notice”) to any such impairment determination. If the Reinsurer fails to provide such Objection Notice to the Ceding Company within such time period, the Reinsurer shall be deemed to have accepted such impairment determination. During the five (5) Business Days immediately following the delivery of an Objection Notice, the Ceding Company and the Reinsurer will seek in good faith to resolve any disputes as to the determination or calculation of statutory impairments of the applicable ModCo Assets. The Parties shall use reasonable efforts and work together in good faith to resolve any such dispute prior to the date on which the Ceding Company is required to file the relevant Statutory Financial Statement with the relevant insurance regulator. If the Parties are unable to resolve any such dispute prior to the date on which the Ceding Company is required to file a Statutory Financial Statement with an applicable insurance regulator, the Ceding Company may use its own good faith calculation of the statutory impairment for purposes of preparing its Statutory Financial Statements. If the Parties are unable to resolve any such dispute prior to the date on which a quarterly settlement is due hereunder, the Parties shall use the Ceding Company’s good faith calculation of the statutory impairment for purposes of effecting such required quarterly settlement. If thereafter the dispute is ultimately decided in the Reinsurer’s favor pursuant to the arbitration process set forth in Section 4.1(f)(ii), then the necessary adjustment will be made between the Parties and reflected in the quarterly settlement for the Accounting Period in which such dispute is ultimately resolved.

Statutory Impairments. (i) Determinations of statutory impairments of ModCo Assets which are made by the Ceding Company shall be based upon the statutory rules and guidelines and the impairment policy used by the Ceding Company for purposes of calculating statutory impairments reflected in the Ceding Company’s Statutory Financial Statements and without regard to the existence of this Agreement. Notwithstanding Section 10.3, any disagreements with respect to determinations of statutory impairments of ModCo Assets shall be subject to this Section 4.1(f). If the Ceding Company determines that any ModCo Assets have become impaired for purposes of determining Statutory Book Value and such impairments exceed $10,000,000 in the aggregate as respects any Accounting Period (a “Significant Impairment”), the Ceding Company shall notify the Reinsurer as promptly as practicable after such determination and in no event later than ten (10) Business Days following the last day of such Accounting Period. Any report notifying the Reinsurer of a Significant Impairment shall provide the CUSIP, ISIN or similar security identifier (as applicable) for the impaired ModCo Assets and describe the reason for each such impairment and the effect on Statutory Book Value of the applicable ModCo Assets. In addition, any such report shall state whether any impaired assets are held in other portfolios of the Ceding Company or any of its Affiliates and, if so, shall confirm that the Statutory Book Value treatment for each such asset is consistent across all such portfolios. Within five (5) Business Days following the Reinsurer’s receipt of written notification of a Significant Impairment, the Reinsurer shall provide written notice to the Ceding Company of its objection (the “Objection Notice”) to any such impairment determination. If the Reinsurer fails to provide such Objection Notice to the Ceding Company within such time period, the Reinsurer shall be deemed to have accepted such impairment determination. During the five (5) Business Days immediately following the delivery of an Objection Notice, the Ceding Company and the Reinsurer will seek in good faith to resolve any disputes as to the determination or calculation of statutory impairments of the applicable ModCo Assets. The Parties shall use reasonable efforts and work together in good faith to resolve any such dispute prior to the date on which the Ceding Company is required to file the relevant Statutory Financial Statement with the relevant insurance regulator. If the Parties are unable to resolve any such dispute prior to the date on which the Ceding Company is required to file a Statutory Financial Statement with an applicable insurance regulator, the Ceding Company may use its own good faith calculation of the statutory impairment for purposes of preparing its Statutory Financial Statements. If the Parties are unable to resolve any such dispute prior to the date on which a quarterly settlement is due hereunder, the Parties shall use the Ceding Company’s good faith calculation of the statutory impairment for purposes of effecting such required quarterly settlement. If thereafter the dispute is ultimately decided in the Reinsurer’s favor pursuant to the arbitration process set forth in Section 4.1(f)(ii), then the necessary adjustment will be made between the Parties and reflected in the quarterly settlement for the Accounting Period in which such dispute is ultimately resolved.. 39