Common use of TRUST AGREEMENT PROVISIONS Clause in Contracts

TRUST AGREEMENT PROVISIONS. Under the circumstances described in the ‘RISK TRIGGER EVENT’ section of Schedule A of this Agreement, THE REINSURER may enter into, and maintain during the term of this Agreement, a Trust Agreement to establish a trust account securing the Security Amount (as defined in subsection b. of this ‘TRUST AGREEMENT PROVISIONS’ section), so as to avoid triggering THE COMPANY’s right of recapture under the ‘RECAPTURE’ section. If THE REINSURER enters into a Trust Agreement, the trust Agreement must satisfy the requirements of Subsections a, b., c., d., e., f. and g.of this ‘TRUST AGREEMENT PROVISIONS’ section. • Fifteen (15) days after the end of each calendar quarter or at any other time, THE COMPANY will determine and communicate the Security Amount (as defined in this Subsection ‘a’.) to THE REINSURER. The Security Amount shall be an amount at least equal to the deduction for reinsurance ceded from THE COMPANY’s liabilities for policies ceded under this Agreement plus a provision for adverse deviation and opportunity cost. Such amount shall include, but not be limited to, GAAP reserve credits, reserves for claims and losses incurred (including losses incurred but not reported), and loss adjustment expenses. THE COMPANY will determine and communicate this amount to THE REINSURER in order to enable THE REINSURER to ensure that the Trust is maintained with a sufficient balance. All costs and expenses of maintaining the trust will be borne by THE REINSURER and will not be paid by any of the assets held in the Trust. • THE REINSURER will deposit into the trust on or before a date agreed to by the parties assets that cause the market value of the trust to meet or exceed 102% of the most recently communicated Security Amount immediately prior to the date for the deposit of assets into the Trust. In addition, as provided by the Trust Agreement, THE REINSURER shall make future additional deposits into the Trust so as to cause the market value of the trust assets at all times to meet or exceed 103% of the Security Amount. THE REINSURER shall make such deposit(s) within fifteen (15) days of receiving notification of the Security Amount. • The assets deposited in the trust account shall be valued according to their current fair market value, and shall consist of only those instruments detailed within the Trust Agreement, provided that such investments are issued by an institution that is not a parent, subsidiary, or an affiliate of either THE COMPANY or THE REINSURER. Upon request from THE COMPANY, THE REINSURER shall provide a report setting forth the current fair market value of the trust assets. • THE REINSURER shall, prior to depositing assets with the Trustee, execute assignments, endorsements in blank, or transfer legal title to the Trustee of all shares, obligations or any other assets requiring assignments, in order that THE COMPANY, may, whenever necessary, negotiate any such assets without consent or signature from THE REINSURER or any other entity. • All settlements of account between THE COMPANY and THE REINSURER shall be made in cash or its equivalent. • THE REINSURER and THE COMPANY agree that the assets in the trust account may be drawn upon at any time, notwithstanding any other provisions in this Agreement, and be utilized and applied by THE COMPANY or any successor by operation of law of THE COMPANY including, without limitation, any liquidator, rehabilitator, receiver or conservator of THE COMPANY, for the following purposes: • To reimburse THE COMPANY for unearned reinsurance premiums on policies reinsured under this Agreement on account of cancellation of such policies; • To reimburse THE COMPANY for THE REINSURER’s share of benefits due to THE COMPANY under the terms and provisions of the policies reinsured under this Agreement; • To pay any other amounts THE COMPANY claims are due under this Agreement. All of the foregoing will be applied without diminution because of insolvency on the part of THE COMPANY or THE REINSURER or the inability of THE COMPANY to pay all or any part of a claim. THE COMPANY agrees to return to THE REINSURER any amounts withdrawn which are in excess of the actual amounts required for i and ii above, or in the case of iii, such amounts that are in excess of the amounts ultimately determined to be due under this Agreement. Following the receipt of a new Security Amount, but prior to the start of the new calendar quarter, THE REINSURER shall have the right to seek approval from THE COMPANY to withdraw from the trust account a portion of the assets contained therein and to transfer such assets to THE REINSURER, provided that after such withdrawal and transfer, the market value of the trust account is no less than 103% of the Security Amount most recently determined and communicated by THE COMPANY to THE REINSURER. THE COMPANY shall be the sole judge as to the appropriateness of any such withdrawal but shall not unreasonably or arbitrarily withhold its approval. • The Trust shall remain in effect until the later of the termination of this Reinsurance Agreement or the full satisfaction and discharge of any and all liabilities and obligations owed by THE REINSURER to THE COMPANY, unless THE REINSURER and THE COMPANY mutually agree in writing to terminate the Trust at an earlier date. Notwithstanding any provision contained in the Trust Agreement, THE REINSURER shall not seek to terminate the trust unless it has written permission from THE COMPANY. THE COMPANY shall not arbitrarily or unreasonably withhold such permission if another form of collateral acceptable to THE COMPANY is provided by THE REINSURER for the Security Amount. Prior to THE REINSURER’s establishing or funding the Trust, THE COMPANY shall submit a copy of the Trust Agreement to applicable state regulatory authorities for approval, if such approval is required by state insurance law or regulations. THE COMPANY shall promptly inform THE REINSURER of such approval or of any changes to such documents required by regulatory authorities.

TRUST AGREEMENT PROVISIONS. Under the circumstances described in the ‘RISK TRIGGER EVENT’ section of Schedule A of this Agreement, THE REINSURER may enter into, and maintain during the term of this Agreement, a Trust Agreement to establish a trust account securing the Security Amount (as defined in subsection b. of this ‘TRUST AGREEMENT PROVISIONS’ section), so as to avoid triggering THE COMPANY’s right of recapture under the ‘RECAPTURE’ section. If THE REINSURER enters into a Trust Agreement, the trust Agreement must satisfy the requirements of Subsections a, b., c., d., e., f. and g.of this ‘TRUST AGREEMENT PROVISIONS’ section. • . a. Fifteen (15) days after the end of each calendar quarter or at any other time, THE COMPANY will determine and communicate the Security Amount (as defined in this Subsection ‘a’.) to THE REINSURER. The Security Amount shall be an amount at least equal to the deduction for reinsurance ceded from THE COMPANY’s liabilities for policies ceded under this Agreement plus a provision for adverse deviation and opportunity cost. Such amount shall include, but not be limited to, GAAP reserve credits, reserves for claims and losses incurred (including losses incurred but not reported), and loss adjustment expenses. THE COMPANY will determine and communicate this amount to THE REINSURER in order to enable THE REINSURER to ensure that the Trust is maintained with a sufficient balance. All costs and expenses of maintaining the trust will be borne by THE REINSURER and will not be paid by any of the assets held in the Trust. • . b. THE REINSURER will deposit into the trust on or before a date agreed to by the parties assets that cause the market value of the trust to meet or exceed 102% of the most recently communicated Security Amount immediately prior to the date for the deposit of assets into the Trust. In addition, as provided by the Trust Agreement, THE REINSURER shall make future additional deposits into the Trust so as to cause the market value of the trust assets at all times to meet or exceed 103% of the Security Amount. THE REINSURER shall make such deposit(s) within fifteen (15) days of receiving notification of the Security Amount. • . c. The assets deposited in the trust account shall be valued according to their current fair market value, and shall consist of only those instruments detailed within the Trust Agreement, provided that such investments are issued by an institution that is not a parent, subsidiary, or an affiliate of either THE COMPANY or THE REINSURER. Upon request from THE COMPANY, THE REINSURER shall provide a report setting forth the current fair market value of the trust assets. • . d. THE REINSURER shall, prior to depositing assets with the Trustee, execute assignments, endorsements in blank, or transfer legal title to the Trustee of all shares, obligations or any other assets requiring assignments, in order that THE COMPANY, may, whenever necessary, negotiate any such assets without consent or signature from THE REINSURER or any other entity. • . e. All settlements of account between THE COMPANY and THE REINSURER shall be made in cash or its equivalent. • . f. THE REINSURER and THE COMPANY agree that the assets in the trust account may be drawn upon at any time, notwithstanding any other provisions in this Agreement, and be utilized and applied by THE COMPANY or any successor by operation of law of THE COMPANY including, without limitation, any liquidator, rehabilitator, receiver or conservator of THE COMPANY, for the following purposes: • : i. To reimburse THE COMPANY for unearned reinsurance premiums on policies reinsured under this Agreement on account of cancellation of such policies; • ; ii. To reimburse THE COMPANY for THE REINSURER’s share of benefits due to THE COMPANY under the terms and provisions of the policies reinsured under this Agreement; • ; iii. To pay any other amounts THE COMPANY claims are due under this Agreement. All of the foregoing will be applied without diminution because of insolvency on the part of THE COMPANY or THE REINSURER or the inability of THE COMPANY to pay all or any part of a claim. THE COMPANY agrees to return to THE REINSURER any amounts withdrawn which are in excess of the actual amounts required for i and ii above, or in the case of iii, such amounts that are in excess of the amounts ultimately determined to be due under this Agreement. Following the receipt of a new Security Amount, but prior to the start of the new calendar quarter, THE REINSURER shall have the right to seek approval from THE COMPANY to withdraw from the trust account a portion of the assets contained therein and to transfer such assets to THE REINSURER, provided that after such withdrawal and transfer, the market value of the trust account is no less than 103% of the Security Amount most recently determined and communicated by THE COMPANY to THE REINSURER. THE COMPANY shall be the sole judge as to the appropriateness of any such withdrawal but shall not unreasonably or arbitrarily withhold its approval. • . g. The Trust shall remain in effect until the later of the termination of this Reinsurance Agreement or the full satisfaction and discharge of any and all liabilities and obligations owed by THE REINSURER to THE COMPANY, unless THE REINSURER and THE COMPANY mutually agree in writing to terminate the Trust at an earlier date. Notwithstanding any provision contained in the Trust Agreement, THE REINSURER shall not seek to terminate the trust unless it has written permission from THE COMPANY. THE COMPANY shall not arbitrarily or unreasonably withhold such permission if another form of collateral acceptable to THE COMPANY is provided by THE REINSURER for the Security Amount. Prior to THE REINSURER’s establishing or funding the Trust, THE COMPANY shall submit a copy of the Trust Agreement to applicable state regulatory authorities for approval, if such approval is required by state insurance law or regulations. THE COMPANY shall promptly inform THE REINSURER of such approval or of any changes to such documents required by regulatory authorities.

TRUST AGREEMENT PROVISIONS. a. Under the circumstances described in the ‘RISK TRIGGER EVENT’ section last paragraph of Schedule A Section 23 of this AgreementAgreement or under the circumstances described in Section 12 of this Schedule A, THE REINSURER may enter into, and maintain during the entire term of this Agreement, a Trust Agreement to establish a trust account securing the Security Credit Amount (as defined in subsection b. of this ‘TRUST AGREEMENT PROVISIONS’ sectionbelow), so as to avoid triggering THE COMPANY’s 's right of recapture under the ‘RECAPTURE’ sectionSection 20. If THE REINSURER enters into a Trust AgreementAgreement to establish a trust account securing the Credit Amount, the trust Trust Agreement must satisfy the requirements of Subsections a, subsections b., c., d., e., f. f., g., h. and g.of this ‘TRUST AGREEMENT PROVISIONS’ sectioni. below. • The trustee of the Trust shall be a "Qualified Financial Institution" in accordance with applicable New Jersey regulations.. b. Fifteen (15) days after prior to the end of each calendar quarter or at any other time, THE COMPANY will determine and communicate the Security Credit Amount (as defined in this Subsection ‘a’.) to THE REINSURER. The Security Credit Amount shall be an amount at least equal to the deduction for reinsurance ceded from THE COMPANY’s 's liabilities for policies ceded under this Agreement plus a provision for adverse deviation and opportunity costAgreement. Such amount shall include, but not be limited to, GAAP reserve reinsurance reserves credits, reserves for claims and losses incurred (including losses incurred but not reported), and loss adjustment expenses, and unearned premiums. The amount shall also include a provision for adverse deviation in claims and losses over the subsequent 3-month period that is in excess of any conservation already included in the reinsurance reserve credits. THE COMPANY will determine and communicate this amount to THE REINSURER in order to enable THE REINSURER to ensure that the Trust is maintained with a sufficient balance. All costs and expenses of maintaining the trust will be borne by THE REINSURER and will not be paid by any of the assets Assets held in the Trust. • . c. THE REINSURER will deposit into the trust Trust on or before a date agreed to by the parties assets Assets that cause the market value of the trust to meet or exceed 102103% of the most recently communicated Security Amount immediately prior to the date for the deposit of assets into the TrustCredit Amount. In addition, as provided by the Trust Agreement, THE REINSURER shall make future additional deposits into the Trust so as to cause the market value of the trust assets at all times to meet or exceed 103% of the Security Credit Amount. THE REINSURER shall make such deposit(s) within fifteen (15) days of receiving notification of the Security Credit Amount. • . d. The assets deposited in the trust account shall be valued according to their current fair market value, and shall consist of only those instruments detailed within the Trust Agreement, provided that such investments are issued by an institution that is not a parent, subsidiary, or an affiliate of either THE COMPANY or THE REINSURER. Upon request from THE COMPANYrequest, THE REINSURER shall provide COMPANY will be entitled to a report setting forth the current fair market value of the trust assets. • . e. THE REINSURER shall, prior to depositing assets with the Trustee, execute assignments, endorsements in blank, or transfer legal title to the Trustee of all shares, obligations or any other assets requiring assignments, in order that THE COMPANY, may, whenever necessary, negotiate any such assets without consent or signature from THE REINSURER or any other entity. • . f. All settlements of account between THE COMPANY and THE REINSURER shall be made in cash or its equivalent. • . g. THE REINSURER and THE COMPANY agree that the assets in the trust account may be drawn upon at any time, notwithstanding any other provisions in this Agreement, and be utilized and applied by THE COMPANY or any successor by operation of law of THE COMPANY including, without limitation, any liquidator, rehabilitator, receiver or conservator of THE COMPANY, for the following purposes: • : i. To reimburse THE COMPANY for unearned reinsurance THE REINSURER's share of premiums on returned to the owners of policies reinsured under this Agreement on account of cancellation of such policies; • ; ii. To reimburse THE COMPANY for THE REINSURER’s 's share of benefits due to or losses paid by THE COMPANY under the terms and provisions of the policies reinsured under this Agreement; • ; iii. To pay any other amounts THE COMPANY claims are due under xxxxx this Agreement. All of the foregoing will be applied without diminution because of insolvency on the part of THE COMPANY or THE REINSURER or the inability of THE COMPANY to pay all or any part of a claimREINSURER. THE COMPANY agrees to return to THE REINSURER any amounts withdrawn which are in excess of the actual amounts required for i and ii above, or in the case of iii, such amounts that are in excess of the amounts ultimately determined to be due under this Agreement. Following the receipt of a new Security Credit Amount, but prior to the start of the new calendar quarter, THE REINSURER shall have the right to seek approval from THE COMPANY to withdraw from the trust account a portion of the assets contained therein and to transfer such assets to THE REINSURER, provided that after such withdrawal and transfer, the market value of the trust account is no less than one hundred and three percent (103% %) of the Security Credit Amount most recently determined and communicated by THE COMPANY to THE REINSURER. THE COMPANY shall should be the sole judge as to the appropriateness applicability of any such withdrawal the provision, but it shall not unreasonably or arbitrarily withhold its approval. • . h. The Trust shall remain in effect until the later of the termination of this Reinsurance Agreement or the full satisfaction and discharge of any and all liabilities and obligations owed by THE REINSURER to THE COMPANY, unless THE REINSURER and THE COMPANY mutually agree in writing to terminate the Trust at an earlier date. Notwithstanding any provision contained in the Trust Agreement, THE REINSURER shall not seek to terminate the trust Trust unless it has written permission from THE COMPANY. THE COMPANY shall not arbitrarily or unreasonably withhold such permission if another form of collateral acceptable to THE COMPANY is provided by THE REINSURER for the Security Credit Amount. Upon termination of the Trust by mutual agreement or full satisfaction and discharge of any and all liabilities and obligations owed by THE REINSURER to THE COMPANY under this Agreement, any remaining assets shall be transferred to THE REINSURER. i. Prior to THE REINSURER’s 's establishing or funding the Trust, THE COMPANY shall submit a copy of the Trust Agreement to applicable state regulatory authorities for approval, if any such approval is approvals are required by state insurance law or regulations. THE COMPANY shall promptly inform THE REINSURER of such approval or of any changes to such documents required by regulatory authorities.

TRUST AGREEMENT PROVISIONS. a. Under the circumstances described in the ‘RISK TRIGGER EVENT’ section last paragraph of Schedule A Section 23 of this AgreementAgreement or under the circumstances described in Section 12 of this Schedule A, THE REINSURER may enter into, and maintain during the entire term of this Agreement, a Trust Agreement to establish a trust account securing the Security Credit Amount (as defined in subsection b. of this ‘TRUST AGREEMENT PROVISIONS’ sectionbelow), so as to avoid triggering THE COMPANY’s 's right of recapture under the ‘RECAPTURE’ sectionSection 20. If THE REINSURER enters into a Trust AgreementAgreement to establish a trust account securing the Credit Amount, the trust Trust Agreement must satisfy the requirements of Subsections a, subsections b., c., d., e., f. f., g., h. and g.of this ‘TRUST AGREEMENT PROVISIONS’ sectioni. below. • The trustee of the Trust shall be a "Qualified Financial Institution" as defined in A.R.S. § 20-261.03. b. Fifteen (15) days after prior to the end of each calendar quarter or at any other time, THE COMPANY will determine and communicate the Security Credit Amount (as defined in this Subsection ‘a’.) to THE REINSURER. REINSURER The Security Credit Amount shall be an amount at least equal to the deduction for reinsurance ceded from THE COMPANY’s 's liabilities for policies ceded under this Agreement plus a provision for adverse deviation and opportunity costAgreement. Such amount shall include, but not be limited to, GAAP reserve reinsurance reserves credits, reserves for claims and losses incurred (including losses incurred but not reported), and loss adjustment expenses, and unearned premiums. The amount shall also include a provision for adverse deviation in claims and losses over the subsequent 3-month period that is in excess of any conservation already included in the reinsurance reserve credits. THE COMPANY will determine and communicate this amount to THE REINSURER in order to enable THE REINSURER to ensure that the Trust is maintained with a sufficient balance. All costs and expenses of maintaining the trust will be borne by THE REINSURER and will not be paid by any of the assets Assets held in the Trust. • . c. THE REINSURER will deposit into the trust Trust on or before a date agreed to by the parties assets Assets that cause the market value of the trust to meet or exceed 102103% of the most recently communicated Security Amount immediately prior to the date for the deposit of assets into the TrustCredit Amount. In addition, as provided by the Trust Agreement, THE REINSURER shall make future additional deposits into the Trust so as to cause the market value of the trust assets at all times to meet or exceed 103% of the Security Credit Amount. THE REINSURER shall make such deposit(s) within fifteen (15) days of receiving notification of the Security Credit Amount. • . d. The assets deposited in the trust account shall be valued according to their current fair market value, and shall consist of only those instruments detailed within the Trust Agreement, provided that such investments are issued by an institution that is not a parent, subsidiary, or an affiliate of either THE COMPANY or THE REINSURER. Upon request from THE COMPANYrequest, THE REINSURER shall provide COMPANY will be entitled to a report setting forth the current fair market value of the trust assets. • . e. THE REINSURER shall, prior to depositing assets with the Trustee, execute assignments, endorsements in blank, or transfer legal title to the Trustee of all shares, obligations or any other assets requiring assignments, in order that THE COMPANY, may, whenever necessary, negotiate any such assets without consent or signature from THE REINSURER or any other entity. • . f. All settlements of account between THE COMPANY and THE REINSURER shall be made in cash or its equivalent. • . g. THE REINSURER and THE COMPANY agree that the assets in the trust account may be drawn upon at any time, notwithstanding any other provisions in this Agreement, and be utilized and applied by THE COMPANY or any successor by operation of law of THE COMPANY including, without limitation, any liquidator, rehabilitator, receiver or conservator of THE COMPANY, for the following purposes: • : i. To reimburse THE COMPANY for unearned reinsurance THE REINSURER's share of premiums on returned to the owners of policies reinsured under this Agreement on account of cancellation of such policies; • ; ii. To reimburse THE COMPANY for THE REINSURER’s 's share of benefits due to or losses paid by THE COMPANY under the terms and provisions of the policies reinsured under this Agreement; • ; iii. To fund an account with THE COMPANY in an amount at least equal to the deduction for reinsurance ceded from THE COMPANY's liabilities for policies ceded under this Agreement. Such amount shall include, but not be limited to, amounts for policy reserves, reserves for claims and losses incurred (including losses incurred but not reported), loss adjustment expenses, and unearned premiums; iv. To pay any other amounts THE COMPANY claims are due under this Agreement. All of the foregoing will be applied without diminution because of insolvency on the part of THE COMPANY or THE REINSURER or the inability of THE COMPANY to pay all or any part of a claimREINSURER. THE COMPANY agrees to return to THE REINSURER any amounts withdrawn which are in excess of the actual amounts required for i i, ii and ii iii above, or in the case of iiiiv, such amounts that are in excess of the amounts ultimately determined to be due under this Agreement. Following In addition, THE COMPANY shall make interest payments to THE REINSURER on amounts withdrawn pursuant to item (iii) above, to the receipt extent such interest is not needed to be retained to maintain the account at the Credit Amount. The rate of a new Security Amountinterest charged will be equal to MOODY's 30-Day AAA Rate, but prior to no greater than the start Prime Rate of interest as published in Federal Reserve Bulletin. The XXXXX'x 30-Day AAA Rate and the new calendar quarter, Prime Rate shall be determined on the first business day of each month in which interest is payable. THE REINSURER shall have the right to seek approval from THE COMPANY to withdraw from the trust account a portion of the assets contained therein and to transfer such assets to THE REINSURER, provided that after such withdrawal and transfer, the market value of the trust account is no less than one hundred and three percent (103% %) of the Security Credit Amount most recently determined and communicated by THE COMPANY to THE REINSURER. THE COMPANY shall should be the sole judge as to the appropriateness applicability of any such withdrawal the provision, but it shall not unreasonably or arbitrarily withhold its approval. • . h. The Trust shall remain in effect until the later of the termination of this Reinsurance Agreement or the full satisfaction and discharge of any and all liabilities and obligations owed by THE REINSURER to THE COMPANY, unless THE REINSURER and THE COMPANY mutually agree in writing to terminate the Trust at an earlier date. Notwithstanding any provision contained in the Trust Agreement, THE REINSURER shall not seek to terminate the trust Trust unless it has written permission from THE COMPANY. THE COMPANY shall not arbitrarily or unreasonably withhold such permission if another form of collateral acceptable to THE COMPANY is provided by THE REINSURER for the Security Credit Amount. Upon termination of the Trust by mutual agreement or full satisfaction and discharge of any and all liabilities and obligations owed by THE REINSURER to THE COMPANY under this Agreement, any remaining assets shall be transferred to THE REINSURER. i. Prior to THE REINSURER’s 's establishing or funding the Trust, THE COMPANY shall submit a copy of the Trust Agreement to applicable state regulatory authorities for approval, if any such approval is approvals are required by state insurance law or regulations. THE COMPANY shall promptly inform THE REINSURER of such approval or of any changes to such documents required by regulatory authorities.

TRUST AGREEMENT PROVISIONS. a. Under the circumstances described in the ‘RISK TRIGGER EVENT’ section last paragraph of Schedule A Section 23 of this AgreementAgreement or under the circumstances described in Section 12 of this Schedule A, THE REINSURER may enter into, and maintain during the entire term of this Agreement, a Trust Agreement to establish a trust account securing the Security Credit Amount (as defined in subsection b. of this ‘TRUST AGREEMENT PROVISIONS’ sectionbelow), so as to avoid triggering THE COMPANY’s 's right of recapture under the ‘RECAPTURE’ sectionSection 20. If THE REINSURER enters into a Trust AgreementAgreement to establish a trust account securing the Credit Amount, the trust Trust Agreement must satisfy the requirements of Subsections a, subsections b., c., d., e., f. f., g., h. and g.of this ‘TRUST AGREEMENT PROVISIONS’ sectioni. below. • The trustee of the Trust shall be a "Qualified Financial Institution" as defined in accordance with applicable New Jersey regulations. b. Fifteen (15) days after prior to the end of each calendar quarter or at any other time, THE COMPANY will determine and communicate the Security Credit Amount (as defined in this Subsection ‘a’.) to THE REINSURER. REINSURER The Security Credit Amount shall be an amount at least equal to the deduction for reinsurance ceded from THE COMPANY’s 's liabilities for policies ceded under this Agreement plus a provision for adverse deviation and opportunity costAgreement. Such amount shall include, but not be limited to, GAAP reserve reinsurance reserves credits, reserves for claims and losses incurred (including losses incurred but not reported), and loss adjustment expenses, and unearned premiums. The amount shall also include a provision for adverse deviation in claims and losses over the subsequent 3-month period that is in excess of any conservation already included in the reinsurance reserve credits. THE COMPANY will determine and communicate this amount to THE REINSURER in order to enable THE REINSURER to ensure that the Trust is maintained with a sufficient balance. All costs and expenses of maintaining the trust will be borne by THE REINSURER and will not be paid by any of the assets Assets held in the Trust. • . c. THE REINSURER will deposit into the trust Trust on or before a date agreed to by the parties assets Assets that cause the market value of the trust to meet or exceed 102103% of the most recently communicated Security Amount immediately prior to the date for the deposit of assets into the TrustCredit Amount. In addition, as provided by the Trust Agreement, THE REINSURER shall make future additional deposits into the Trust so as to cause the market value of the trust assets at all times to meet or exceed 103% of the Security Credit Amount. THE REINSURER shall make such deposit(s) within fifteen (15) days of receiving notification of the Security Credit Amount. • . d. The assets deposited in the trust account shall be valued according to their current fair market value, and shall consist of only those instruments detailed within the Trust Agreement, provided that such investments are issued by an institution that is not a parent, subsidiary, or an affiliate of either THE COMPANY or THE REINSURER. Upon request from THE COMPANYrequest, THE REINSURER shall provide COMPANY will be entitled to a report setting forth the current fair market value of the trust assets. • . e. THE REINSURER shall, prior to depositing assets with the Trustee, execute assignments, endorsements in blank, or transfer legal title to the Trustee of all shares, obligations or any other assets requiring assignments, in order that THE COMPANY, may, whenever necessary, negotiate any such assets without consent or signature from THE REINSURER or any other entity. • . f. All settlements of account between THE COMPANY and THE REINSURER shall be made in cash or its equivalent. • . g. THE REINSURER and THE COMPANY agree that the assets in the trust account may be drawn upon at any time, notwithstanding any other provisions in this Agreement, and be utilized and applied by THE COMPANY or any successor by operation of law of THE COMPANY including, without limitation, any liquidator, rehabilitator, receiver or conservator of THE COMPANY, for the following purposes: • : i. To reimburse THE COMPANY for unearned reinsurance THE REINSURER's share of premiums on returned to the owners of policies reinsured under this Agreement on account of cancellation of such policies; • ; ii. To reimburse THE COMPANY for THE REINSURER’s 's share of benefits due to or losses paid by THE COMPANY under the terms and provisions of the policies reinsured under this Agreement; • ; iii. To fund an account with THE COMPANY in an amount at least equal to the deduction for reinsurance ceded from THE COMPANY's liabilities for policies ceded under this Agreement. Such amount shall include, but not be limited to, amounts for policy reserves, reserves for claims and losses incurred (including losses incurred but not reported), loss adjustment expenses, and unearned premiums; iv. To pay any other amounts THE COMPANY claims are due under this Agreement. All of the foregoing will be applied without diminution because of insolvency on the part of THE COMPANY or THE REINSURER or the inability of THE COMPANY to pay all or any part of a claimREINSURER. THE COMPANY agrees to return to THE REINSURER any amounts withdrawn which are in excess of the actual amounts required for i i, ii and ii iii above, or in the case of iiiiv, such amounts that are in excess of the amounts ultimately determined to be due under this Agreement. Following In addition, THE COMPANY shall make interest payments to THE REINSURER on amounts withdrawn pursuant to item (iii) above, to the receipt extent such interest is not needed to be retained to maintain the account at the Credit Amount. The rate of a new Security Amountinterest charged will be equal to MOODY's 30-Day AAA Rate, but prior to no greater than the start Prime Rate of interest as published in Federal Reserve Bulletin. The XXXXX'x 30-Day AAA Rate and the new calendar quarter, Prime Rate shall be determined on the first business day of each month in which interest is payable. THE REINSURER shall have the right to seek approval from THE COMPANY to withdraw from the trust account a portion of the assets contained therein and to transfer such assets to THE REINSURER, provided that after such withdrawal and transfer, the market value of the trust account is no less than one hundred and three percent (103% %) of the Security Credit Amount most recently determined and communicated by THE COMPANY to THE REINSURER. THE COMPANY shall should be the sole judge as to the appropriateness applicability of any such withdrawal the provision, but it shall not unreasonably or arbitrarily withhold its approval. • . h. The Trust shall remain in effect until the later of the termination of this Reinsurance Agreement or the full satisfaction and discharge of any and all liabilities and obligations owed by THE REINSURER to THE COMPANY, unless THE REINSURER and THE COMPANY mutually agree in writing to terminate the Trust at an earlier date. Notwithstanding any provision contained in the Trust Agreement, THE REINSURER shall not seek to terminate the trust Trust unless it has written permission from THE COMPANY. THE COMPANY shall not arbitrarily or unreasonably withhold such permission if another form of collateral acceptable to THE COMPANY is provided by THE REINSURER for the Security Credit Amount. Upon termination of the Trust by mutual agreement or full satisfaction and discharge of any and all liabilities and obligations owed by THE REINSURER to THE COMPANY under this Agreement, any remaining assets shall be transferred to THE REINSURER. i. Prior to THE REINSURER’s 's establishing or funding the Trust, THE COMPANY shall submit a copy of the Trust Agreement to applicable state regulatory authorities for approval, if any such approval is approvals are required by state insurance law or regulations. THE COMPANY shall promptly inform THE REINSURER of such approval or of any changes to such documents required by regulatory authorities.

TRUST AGREEMENT PROVISIONS. Under the circumstances described in the ‘RISK TRIGGER EVENT’ section of Schedule A of this Agreement, THE REINSURER may enter into, and maintain during the term of this Agreement, a Trust Agreement to establish a trust account securing the Security Amount (as defined in subsection b. of this ‘TRUST AGREEMENT PROVISIONS’ section), so as to avoid triggering THE COMPANY’s right of recapture under the ‘RECAPTURE’ section. If THE REINSURER enters into a Trust Agreement, the trust Agreement must satisfy the requirements of Subsections a, b., c., d., e., f. and g.of this ‘TRUST AGREEMENT PROVISIONS’ section. • Fifteen (15) days after the end of each calendar quarter or at any other time, THE COMPANY will determine and communicate the Security Amount (as defined in this Subsection ‘a’.) to THE REINSURER. The Security Amount shall be an amount at least equal to the deduction for reinsurance ceded from THE COMPANY’s liabilities for policies ceded under this Agreement plus a provision for adverse deviation and opportunity cost. Such amount shall include, but not be limited to, GAAP reserve credits, reserves for claims and losses incurred (including losses incurred but not reported), and loss adjustment expenses. THE COMPANY will determine and communicate this amount to THE REINSURER in order to enable THE REINSURER to ensure that the Trust is maintained with a sufficient balance. All costs and expenses of maintaining the trust will be borne by THE REINSURER and will not be paid by any of the assets held in the Trust. • THE REINSURER will deposit into the trust on or before a date agreed to by the parties assets that cause the market value of the trust to meet or exceed 102% of the most recently communicated Security Amount immediately prior to the date for the deposit of assets into the Trust. In addition, as provided by the Trust Agreement, THE REINSURER shall make future additional deposits into the Trust so as to cause the market value of the trust assets at all times to meet or exceed 103% of the Security Amount. THE REINSURER shall make such deposit(s) within fifteen (15) days of receiving notification of the Security Amount. • The assets deposited in the trust account shall be valued according to their current fair market value, and shall consist of only those instruments detailed within the Trust Agreement, provided that such investments are issued by an institution that is not a parent, subsidiary, or an affiliate of either THE COMPANY or THE REINSURER. Upon request from THE COMPANY, THE REINSURER shall provide a report setting forth the current fair market value of the trust assets. • THE REINSURER shall, prior to depositing assets with the Trustee, execute assignments, endorsements in blank, or transfer legal title to the Trustee of all shares, obligations or any [Missing Graphic Reference] other assets requiring assignments, in order that THE COMPANY, may, whenever necessary, negotiate any such assets without consent or signature from THE REINSURER or any other entity. • All settlements of account between THE COMPANY and THE REINSURER shall be made in cash or its equivalent. • THE REINSURER and THE COMPANY agree that the assets in the trust account may be drawn upon at any time, notwithstanding any other provisions in this Agreement, and be utilized and applied by THE COMPANY or any successor by operation of law of THE COMPANY including, without limitation, any liquidator, rehabilitator, receiver or conservator of THE COMPANY, for the following purposes: • To reimburse THE COMPANY for unearned reinsurance premiums on policies reinsured under this Agreement on account of cancellation of such policies; • To reimburse THE COMPANY for THE REINSURER’s share of benefits due to THE COMPANY under the terms and provisions of the policies reinsured under this Agreement; • To pay any other amounts THE COMPANY claims are due under this Agreement. All of the foregoing will be applied without diminution because of insolvency on the part of THE COMPANY or THE REINSURER or the inability of THE COMPANY to pay all or any part of a claim. THE COMPANY agrees to return to THE REINSURER any amounts withdrawn which are in excess of the actual amounts required for i and ii above, or in the case of iii, such amounts that are in excess of the amounts ultimately determined to be due under this Agreement. Following the receipt of a new Security Amount, but prior to the start of the new calendar quarter, THE REINSURER shall have the right to seek approval from THE COMPANY to withdraw from the trust account a portion of the assets contained therein and to transfer such assets to THE REINSURER, provided that after such withdrawal and transfer, the market value of the trust account is no less than 103% of the Security Amount most recently determined and communicated by THE COMPANY to THE REINSURER. THE COMPANY shall be the sole judge as to the appropriateness of any such withdrawal but shall not unreasonably or arbitrarily withhold its approval. • The Trust shall remain in effect until the later of the termination of this Reinsurance Agreement or the full satisfaction and discharge of any and all liabilities and obligations owed by THE REINSURER to THE COMPANY, unless THE REINSURER and THE COMPANY mutually agree in writing to terminate the Trust at an earlier date. Notwithstanding any provision contained in the Trust Agreement, THE REINSURER shall not seek to terminate the trust unless it has written permission from THE COMPANY. THE COMPANY shall not arbitrarily or unreasonably withhold such permission if another form of collateral acceptable to THE COMPANY is provided by THE REINSURER for the Security Amount. Prior to THE REINSURER’s establishing or funding the Trust, THE COMPANY shall submit a copy of the Trust Agreement to applicable state regulatory authorities for approval, if such approval is required by state insurance law or regulations. THE COMPANY shall promptly inform THE REINSURER of such approval or of any changes to such documents required by regulatory authorities.. [Missing Graphic Reference]