Exhibit 99.1
[NATIONAL INDEMNITY COMPANY LETTERHEAD]
November 1, 2002
Mr. Xxxxxxx Xxxxxx
Trenwick Managing Agents Limited
Xx. 0 Xxxxxxx Xxxxx
Xxxxxxx Xxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Re: Agreement between National Indemnity Company and
Trenwick Managing Agents Limited ("Trenwick")
Dear Xx. Xxxxxx:
This will confirm the terms that we have agreed today. In consideration of
Xxxxxxxx's immediate payment to National Indemnity Company in the amount of
(pound)3,000,000 (British pounds sterling three million), National Indemnity
Company shall extend to Trenwick the option to have National Indemnity Company
increase its share of the capacity of Trenwick's syndicates at Lloyds up to an
aggregate of (pound)100 million (British pounds sterling one hundred million) in
respect of aviation business only and in respect of Trenwick's 2003 Xxxxx'x year
of account business only. The capacity shall be provided in a structure and
format to be mutually agreed by the parties and at terms no less favorable to
Trenwick than the original terms of the existing 2002 year of account Limited
Liability Quota Share and Qualifying Quota Share reinsurance agreements with
National Indemnity Company. In addition, National Indemnity Company will, at
Trenwick's option, provide a Qualifying Quota Share of up to (pound)30 million
in respect of aviation business only and in respect of Xxxxxxxx's 2003 Xxxxx'x
year of account business. The option fee shall be effected by adjusting the
terms of the existing 2002 Qualifying Quota Share agreement between Syndicate
839 and National Indemnity Company, payable by November 6, 2002, and shall be
non-refundable upon receipt.
In order to exercise this option, Xxxxxxxx must notify National Indemnity
Company of its acceptance in writing on or before December 21, 2002. The option
shall automatically expire if National Indemnity Company has not received
written notice by that date.
Any press release, public statement or similar advertisement of this arrangement
by Xxxxxxxx that refers to or suggests National Indemnity Company's involvement
in this arrangement shall be mutually pre-approved by the parties.
If your understanding of our agreement is completely consistent with the
foregoing, please confirm our agreement by counter-signing this letter and
returning it to me.
Very truly yours,
/s/ Xxxxx X. Xxxxxx
--------------------------------
Xxxxx X. Xxxxxx
Vice President
ACCEPTED AND AGREED:
TRENWICK MANAGING AGENTS LIMITED
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chairman and CEO
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