Common use of Unauthorized Reinsurers Clause in Contracts

Unauthorized Reinsurers. A. If the Reinsurer is unauthorized in any state of the United States of America or the District of Columbia, the Reinsurer agrees to fund, on or before December 31, 2004, its share of the Company's ceded United States outstanding loss reserves (being the sum of all reinstatement premiums paid by the Company under the Underlying Contracts but not yet recovered from the Reinsurer, plus the Company's reserves for reinstatement premiums due under the Underlying Contracts, if any) by: 1. Clean, irrevocable and unconditional letters of credit issued and confirmed, if confirmation is required by the insurance regulatory authorities involved, by a bank or banks meeting the NAIC Securities Valuation Office credit standards for issuers of letters of credit and acceptable to said insurance regulatory authorities; and/or 2. Escrow accounts for the benefit of the Company; and/or 3. Cash advances; if, without such funding, a penalty would accrue to the Company on any financial statement it is required to file with the insurance regulatory authorities involved. The Reinsurer, at its sole option, may fund in other than cash if its method and form of funding are acceptable to the insurance regulatory authorities involved. B. If the Reinsurer is unauthorized in any province or jurisdiction of Canada, the Reinsurer agrees to fund, on or before December 31, 2004, 115% of its share of the Company's ceded Canadian outstanding loss reserves (being the sum of all reinstatement premiums paid by the Company under the Underlying Contracts but not yet recovered from the Reinsurer, plus the Company's reserves for reinstatement premiums due under the Underlying Contracts, if any) by: 1. A clean, irrevocable and unconditional letter of credit issued and confirmed, if confirmation is required by the insurance regulatory authorities involved, by a Canadian bank or banks meeting the NAIC Securities Valuation Office credit standards for issuers of letters of credit and acceptable to said insurance regulatory authorities, for no more than 15/115ths of the total funding required; and/or 2. Cash advances for the remaining balance of the funding required; if, without such funding, a penalty would accrue to the Company on any financial statement it is required to file with the insurance regulatory authorities involved. C. With regard to funding in whole or in part by letters of credit, it is agreed that each letter of credit will be in a form acceptable to insurance regulatory authorities involved, will be issued for a term of at least one year and will include an "evergreen clause," which automatically extends the term for at least one additional year at each expiration date unless written notice of non-renewal is given to the Company not less than 30 days prior to said expiration date or longer where required by insurance regulatory authorities. The Company and the Reinsurer further agree, notwithstanding anything to the contrary in this Contract, that said letters of credit may be drawn upon by the Company or its successors in interest at any time, without diminution because of the insolvency of the Company or the Reinsurer, but only for one or more of the following purposes: 1. To reimburse itself for the Reinsurer's share of reinstatement premiums paid by the Company under the terms of the Underlying Contracts, unless paid in cash by the Reinsurer; 2. To reimburse itself for the Reinsurer's share of any other amounts claimed to be due hereunder, unless paid in cash by the Reinsurer; 3. To fund a cash account in an amount equal to the Reinsurer's share of any ceded outstanding loss reserves funded by means of a letter of credit which is under non-renewal notice, if said letter of credit has not been renewed or replaced by the Reinsurer 10 days prior to its expiration date; 4. To refund to the Reinsurer any sum in excess of the actual amount required to fund the Reinsurer's share of the Company's ceded outstanding loss reserves, if so requested by the Reinsurer. In the event the amount drawn by the Company on any letter of credit is in excess of the actual amount required for C(1) or C(3), or in the case of C(2), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.

Unauthorized Reinsurers. A. If the Reinsurer is unauthorized in any state of the United States of America or the District of Columbia, the Reinsurer agrees to fund, on or before December 31, 2004, fund its share of the Company's ceded United States unearned premium and outstanding loss and loss adjustment expense reserves (being the sum of all reinstatement premiums paid by the Company under the Underlying Contracts including incurred but not yet recovered from the Reinsurer, plus the Company's reserves for reinstatement premiums due under the Underlying Contracts, if anyreported loss reserves) by: 1. Clean, irrevocable and unconditional letters of credit issued and confirmed, if confirmation is required by the insurance regulatory authorities involved, by a bank or banks meeting the NAIC Securities Valuation Office credit standards for issuers of letters of credit and acceptable to said insurance regulatory authorities; and/or 2. Escrow accounts for the benefit of the Company; and/or 3. Cash advances; if, without such funding, a penalty would accrue to the Company on any financial statement it is required to file with the insurance regulatory authorities involved. The Reinsurer, at its sole option, may fund in other than cash if its method and form of funding are acceptable to the insurance regulatory authorities involved. B. If the Reinsurer is unauthorized in any province or jurisdiction of Canada, the Reinsurer agrees to fund, on or before December 31, 2004, fund 115% of its share of the Company's ceded Canadian unearned premium and outstanding loss and loss adjustment expense reserves (being the sum of all reinstatement premiums paid by the Company under the Underlying Contracts including incurred but not yet recovered from the Reinsurer, plus the Company's reserves for reinstatement premiums due under the Underlying Contracts, if anyreported loss reserves) by: 1. A clean, irrevocable and unconditional letter of credit issued and confirmed, if confirmation is required by the insurance regulatory authorities involved, by a Canadian bank or banks meeting the NAIC Securities Valuation Office credit standards for issuers of letters of credit and acceptable to said insurance regulatory authorities, for no more than 15/115ths of the total funding required; and/or 2. Cash advances for the remaining balance of the funding required; if, without such funding, a penalty would accrue to the Company on any financial statement it is required to file with the insurance regulatory authorities involved. C. With regard to funding in whole or in part by letters of credit, it is agreed that each letter of credit will be in a form acceptable to insurance regulatory authorities involved, will be issued for a term of at least one year and will include an "evergreen clause," which automatically extends the term for at least one additional year at each expiration date unless written notice of non-renewal is given to the Company not less than 30 days prior to said expiration date or longer where required by insurance regulatory authoritiesdate. The Company and the Reinsurer further agree, notwithstanding anything to the contrary in this Contract, that said letters of credit may be drawn upon by the Company or its successors in interest at any time, without diminution because of the insolvency of the Company or the Reinsurer, but only for one or more of the following purposes: 1. To reimburse itself for the Reinsurer's share of reinstatement unearned premiums paid by the Company under the terms returned to insureds on account of the Underlying Contractspolicy cancellations, unless paid in cash by the Reinsurer; 2. To reimburse itself for the Reinsurer's share of losses and/or loss adjustment expense paid under the terms of policies reinsured hereunder, unless paid in cash by the Reinsurer; 3. To reimburse itself for the Reinsurer's share of any other amounts claimed to be due hereunder, unless paid in cash by the Reinsurer; 34. To fund a cash account in an amount equal to the Reinsurer's share of any ceded unearned premium and/or outstanding loss and loss adjustment expense reserves (including incurred but not reported loss reserves) funded by means of a letter of credit which is under non-renewal notice, if said letter of credit has not been renewed or replaced by the Reinsurer 10 days prior to its expiration date; 45. To refund to the Reinsurer any sum in excess of the actual amount required to fund the Reinsurer's share of the Company's ceded unearned premium and/or outstanding loss and loss adjustment expense reserves (including incurred but not reported loss reserves), if so requested by the Reinsurer. In the event the amount drawn by the Company on any letter of credit is in excess of the actual amount required for C(1), C(2) or C(3C(4), or in the case of C(2C(3), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.

Unauthorized Reinsurers. A. If the Reinsurer is unauthorized in any state of the United States of America or the District of Columbia, the Reinsurer agrees to fund, on or before December 31, 2004, fund its share of the Company's ceded United States unearned premium and outstanding loss and loss adjustment expense reserves (being the sum of all reinstatement premiums paid by the Company under the Underlying Contracts including incurred but not yet recovered from the Reinsurerreported loss reserves, plus the Company's reserves for reinstatement premiums due under the Underlying Contracts, if anyhereinafter referred to as "IBNR") by: 1. Clean, irrevocable and unconditional letters of credit issued and confirmed, if confirmation is required by the insurance regulatory authorities involved, by a bank or banks meeting the NAIC Securities Valuation Office credit standards for issuers of letters of credit and acceptable to said insurance regulatory authorities; and/or 2. Escrow accounts for the benefit of the Company; and/or 3. Cash advances; if, without such funding, a penalty would accrue to the Company on any financial statement it is required to file with the insurance regulatory authorities involved. The Reinsurer, at its sole option, may fund in other than cash if its method and form of funding are acceptable to the insurance regulatory authorities involved. B. If the Reinsurer is unauthorized in any province or jurisdiction of Canada, the Reinsurer agrees to fund, on or before December 31, 2004, fund 115% of its share of the Company's ceded Canadian unearned premium and outstanding loss and loss adjustment expense reserves (being the sum of all reinstatement premiums paid by the Company under the Underlying Contracts but not yet recovered from the Reinsurer, plus the Company's reserves for reinstatement premiums due under the Underlying Contracts, if anyexcluding IBNR) by: 1. A clean, irrevocable and unconditional letter of credit issued and confirmed, if confirmation is required by the insurance regulatory authorities involved, by a Canadian bank or banks meeting the NAIC Securities Valuation Office credit standards for issuers of letters of credit and acceptable to said insurance regulatory authorities, for no more than 15/115ths of the total funding required; and/or 2. Cash advances for the remaining balance of the funding required; if, without such funding, a penalty would accrue to the Company on any financial statement it is required to file with the insurance regulatory authorities involved. C. With regard to funding in whole or in part by letters of credit, it is agreed that each letter of credit will be in a form acceptable to insurance regulatory authorities involved, will be issued for a term of at least one year and will include an "evergreen clause," which automatically extends the term for at least one additional year at each expiration date unless written notice of non-renewal is given to the Company not less than 30 days prior to said expiration date or longer where required by insurance regulatory authoritiesdate. The Company and the Reinsurer further agree, notwithstanding anything to the contrary in this Contract, that said letters of credit may be drawn upon by the Company or its successors in interest at any time, without diminution because of the insolvency of the Company or the Reinsurer, but only for one or more of the following purposes: 1. To reimburse itself for the Reinsurer's share of reinstatement unearned premiums paid by the Company under the terms returned to insureds on account of the Underlying Contractsbond cancellations, unless paid in cash by the Reinsurer; 2. To reimburse itself for the Reinsurer's share of losses and/or loss adjustment expense paid under the terms of policies reinsured hereunder, unless paid in cash by the Reinsurer; 3. To reimburse itself for the Reinsurer's share of any other amounts claimed to be due hereunder, unless paid in cash by the Reinsurer; 34. To fund a cash account in an amount equal to the Reinsurer's share of any ceded unearned premium and/or outstanding loss and loss adjustment expense reserves (including IBNR) funded by means of a letter of credit which is under non-renewal notice, if said letter of credit has not been renewed or replaced by the Reinsurer 10 days prior to its expiration date; 45. To refund to the Reinsurer any sum in excess of the actual amount required to fund the Reinsurer's share of the Company's ceded unearned premium and/or outstanding loss reservesand loss adjustment expense reserves (including IBNR), if so requested by the Reinsurer. In the event the amount drawn by the Company on any letter of credit is in excess of the actual amount required for C(1), C(2) or C(3C(4), or in the case of C(2C(3), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn. D. For purposes of determining the amount to be funded under this Article, IBNR shall be calculated on a per principal basis, and shall not exceed 10.0% of total known subject losses discovered per principal in excess of the Company's retention hereunder (outstanding loss and loss adjustment expense reserves only).

Unauthorized Reinsurers. A. If the Reinsurer is unauthorized in any state of the United States of America or the District of Columbia, the Reinsurer agrees to fund, on or before December 31, 2004, as respects Section I of Article VI, its share of the Company's ceded United States unearned premium and outstanding loss and loss adjustment expense reserves (including all case reserves plus any reasonable amount estimated to be unreported, as determined by the Company, from known loss occurrences) and, as respects Section II of Article VI, its share of the Company's ceded United States unearned premium and outstanding loss reserves (being the sum of all reinstatement premiums paid by the Company under the Underlying Contracts but not yet recovered from the Reinsurer, plus the Company's reserves for reinstatement premiums due under the Underlying Contracts, if any) by: 1. Clean, irrevocable and unconditional letters of credit issued and confirmed, if confirmation is required by the insurance regulatory authorities involved, by a bank or banks meeting the NAIC Securities Valuation Office credit standards for issuers of letters of credit and acceptable to said insurance regulatory authorities; and/or 2. Escrow accounts for the benefit of the Company; and/or 3. Cash advances; if, without such funding, a penalty would accrue to the Company on any financial statement it is required to file with the insurance regulatory authorities involved. The Reinsurer, at its sole option, may fund in other than cash if its method and form of funding are acceptable to the insurance regulatory authorities involved.. [XXXXXXXX LOGO] B. If the Reinsurer is unauthorized in any province or jurisdiction of Canada, the Reinsurer agrees to fund, on or before December 31, 2004, as respects Section I of Article VI, 115% of its share of the Company's ceded Canadian unearned premium and outstanding loss and loss adjustment expense reserves (including all case reserves plus any reasonable amount estimated to be unreported, as determined by the Company, from known loss occurrences) and, as respects Section II of Article VI, 115% of its share of the Company's ceded Canadian unearned premium and outstanding loss reserves (being the sum of all reinstatement premiums paid by the Company under the Underlying Contracts but not yet recovered from the Reinsurer, plus the Company's reserves for reinstatement premiums due under the Underlying Contracts, if any) by: 1. A clean, irrevocable and unconditional letter of credit issued and confirmed, if confirmation is required by the insurance regulatory authorities involved, by a Canadian bank or banks meeting the NAIC Securities Valuation Office credit standards for issuers of letters of credit and acceptable to said insurance regulatory authorities, for no more than 15/115ths of the total funding required; and/or 2. Cash advances for the remaining balance of the funding required; if, without such funding, a penalty would accrue to the Company on any financial statement it is required to file with the insurance regulatory authorities involved. C. With regard to funding in whole or in part by letters of credit, it is agreed that each letter of credit will be in a form acceptable to insurance regulatory authorities involved, will be issued for a term of at least one year and will include an "evergreen clause," which automatically extends the term for at least one additional year at each expiration date unless written notice of non-renewal is given to the Company not less than 30 days prior to said expiration date or longer where required by insurance regulatory authorities. The Company and the Reinsurer further agree, notwithstanding anything to the contrary in this Contract, that said letters of credit may be drawn upon by the Company or its successors in interest at any time, without diminution because of the insolvency of the Company or the Reinsurer, but only for one or more of the following purposes: 1. To As respects Section I , to reimburse itself for the Reinsurer's share of unearned premiums returned to insureds on account of policy cancellations and, as respects Section II, to reimburse itself for the Reinsurer's share of reinstatement premiums paid by the Company under the terms of the Underlying Contracts, unless paid in cash by the Reinsurer; 2. To As respects Section I, to reimburse itself for the Reinsurer's share of losses and/or loss adjustment expense paid under the terms of policies reinsured hereunder, unless paid in cash by the Reinsurer; 3. As respects Sections I and II, to reimburse itself for the Reinsurer's share of any other amounts claimed to be due hereunder, unless paid in cash by the Reinsurer; 34. To fund a cash account in an amount equal to the Reinsurer's share share, as respects Section I, of any ceded unearned premium and/or outstanding loss and loss adjustment expense reserves (including all case reserves plus any reasonable amount estimated to be unreported, as determined by the Company, from known loss occurrences) and as respects Section II, any ceded outstanding loss reserves (being the sum of all reinstatement premiums paid by the Company under the Underlying Contracts but not yet recovered from the Reinsurer, plus the Company's reserves for reinstatement premium due under the Underlying Contracts, if any) funded by means of a letter of credit which is under non-renewal notice, if said letter of credit has not been renewed or replaced by the Reinsurer 10 days prior to its expiration date; 45. To refund to the Reinsurer any sum in excess of the actual amount required to fund the Reinsurer's share, as respects Section I, of the Company's ceded unearned premium and/or outstanding loss and loss adjustment expense reserves (including all case reserves plus any reasonable amount estimated to be unreported, as determined by the Company, from known loss occurrences) and, as respects Section II, the Reinsurer's share of the Company's ceded unearned premium and/or outstanding loss reservesreserves (being the sum of all reinstatement premiums paid by the Company under the Underlying Contracts but not yet recovered from the Reinsurer, plus the Company's reserves for reinstatement premium due under the Underlying Contracts, if any) if so requested by the Reinsurer. In the event the amount drawn by the Company on any letter of credit is in excess of the actual amount required for C(1), C(2) or C(3C(4), or in the case of C(2C(3), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn.

Unauthorized Reinsurers. A. If the Reinsurer is unauthorized in any state of the United States of America or the District of Columbia, the Reinsurer agrees to fund, on or before December 31, 2004, fund its share of the Company's ceded United States unearned premium and outstanding loss and loss adjustment expense reserves (being the sum of all reinstatement premiums paid by the Company under the Underlying Contracts including incurred but not yet recovered from the Reinsurerreported loss reserves, plus the Company's reserves for reinstatement premiums due under the Underlying Contracts, if anyhereinafter referred to as "IBNR") by: 1. Clean, irrevocable and unconditional letters of credit issued and confirmed, if confirmation is required by the insurance regulatory authorities involved, by a bank or banks meeting the NAIC Securities Valuation Office credit standards for issuers of letters of credit and acceptable to said insurance regulatory authorities; and/or 2. Escrow accounts for the benefit of the Company; and/or 3. Cash advances; if, without such funding, a penalty would accrue to the Company on any financial statement it is required to file with the insurance regulatory authorities involved. The Reinsurer, at its sole option, may fund in other than cash if its method and form of funding are acceptable to the insurance regulatory authorities involved. B. If the Reinsurer is unauthorized in any province or jurisdiction of Canada, the Reinsurer agrees to fund, on or before December 31, 2004, fund 115% of its share of the Company's ceded Canadian unearned premium and outstanding loss and loss adjustment expense reserves (being the sum of all reinstatement premiums paid by the Company under the Underlying Contracts but not yet recovered from the Reinsurer, plus the Company's reserves for reinstatement premiums due under the Underlying Contracts, if anyexcluding IBNR) by: 1. A clean, irrevocable and unconditional letter of credit issued and confirmed, if confirmation is required by the insurance regulatory authorities involved, by a Canadian bank or banks meeting the NAIC Securities Valuation Office credit standards for issuers of letters of credit and acceptable to said insurance regulatory authorities, for no more than 15/115ths of the total funding required; and/or 2. Cash advances for the remaining balance of the funding required; if, without such funding, a penalty would accrue to the Company on any financial statement it is required to file with the insurance regulatory authorities involved. C. With regard to funding in whole or in part by letters of credit, it is agreed that each letter of credit will be in a form acceptable to insurance regulatory authorities involved, will be issued for a term of at least one year and will include an "evergreen clause," which automatically extends the term for at least one additional year at each expiration date unless written notice of non-renewal is given to the Company not less than 30 days prior to said expiration date or longer where required by insurance regulatory authoritiesdate. The Company and the Reinsurer further agree, notwithstanding anything to the contrary in this Contract, that said letters of credit may be drawn upon by the Company or its successors in interest at any time, without diminution because of the insolvency of the Company or the Reinsurer, but only for one or more of the following purposes: 1. To reimburse itself for the Reinsurer's share of reinstatement unearned premiums paid by the Company under the terms returned to insureds on account of the Underlying Contractsbond cancellations, unless paid in cash by the Reinsurer; 2. To reimburse itself for the Reinsurer's share of losses and/or loss adjustment expenses paid under the terms of bonds reinsured hereunder, unless paid in cash by the Reinsurer; 3. To reimburse itself for the Reinsurer's share of any other amounts claimed to be due hereunder, unless paid in cash by the Reinsurer; 34. To fund a cash account in an amount equal to the Reinsurer's share of any ceded unearned premium and/or outstanding loss and loss adjustment expense reserves (including IBNR) funded by means of a letter of credit which is under non-renewal notice, if said letter of credit has not been renewed or replaced by the Reinsurer 10 days prior to its expiration date; 45. To refund to the Reinsurer any sum in excess of the actual amount required to fund the Reinsurer's share of the Company's ceded unearned premium and/or outstanding loss reservesand loss adjustment expense reserves (including IBNR), if so requested by the ReinsurerReinxxxxr. In the event the amount drawn by the Company on any letter of credit is in excess of the actual amount required for C(1), C(2) or C(3C(4), or in the case of C(2C(3), the actual amount determined to be due, the Company shall promptly return to the Reinsurer the excess amount so drawn. D. For purposes of determining the amount to be funded under this Article, IBNR shall be calculated on a per principal basis, and shall not exceed 10.0% of total known subject losses discovered per principal in excess of the Company's retention hereunder (outstanding loss and loss adjustment expense reserves only), subject to a maximum of $450,000 per principal.