COMMERCIAL UMBRELLA EXCESS OF LOSS
FACULTATIVE AUTOMATIC REINSURANCE AGREEMENT
NO. 06AC960032
between
GUARANTY NATIONAL INSURANCE COMPANY
Englewood, Colorado
LANDMARK AMERICAN INSURANCE COMPANY
Oklahoma City, Oklahoma
PEAK PROPERTY AND CASUALTY INSURANCE CORPORATION
Englewood, Colorado
GUARANTY NATIONAL INSURANCE COMPANY OF CALIFORNIA
Englewood, Colorado
(hereinafter collectively referred to as the "COMPANY")
and
NATIONAL REINSURANCE CORPORATION
Stamford, Connecticut
(hereinafter referred to as the "REINSURER")
COMMERCIAL UMBRELLA EXCESS OF LOSS
FACULTATIVE AUTOMATIC REINSURANCE AGREEMENT
INDEX OF ARTICLES
ARTICLE PAGE #
1 PARTIES TO THE AGREEMENT 1
2 COMMENCEMENT 1
3 BUSINESS COVERED 1
4 SPECIAL ACCEPTANCES 1
5 TERRITORY 1
6 LIABILITY OF THE REINSURER 2
7 UNDERLYING POLICIES 2
8 UNDERWRITING GUIDELINES 3
9 REINSURANCE PREMIUM 3
10 CEDING COMMISSION 3
11 PREMIUM REPORTS AND REMITTANCES 4
12 CLAIM REPORTS 4
13 LOSS SETTLEMENTS 5
14 OFFSET 5
15 STATISTICS 5
16 UNDERWRITING AUDITS 6
17 ACCESS TO COMPANY RECORDS 6
18 TAXES 6
19 TERMINATION 6
20 ARBITRATION 7
21 INSOLVENCY 8
22 DEFINITIONS 8
23 RULING LAW 9
ATTACHMENTS:
EXHIBIT A - EXCLUSIONS
NUCLEAR INCIDENT EXLUSION CLAUSE - LIABILITY - REINSURANCE
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ARTICLE I - PARTIES TO THE AGREEMENT
This Agreement is solely between the COMPANY and the REINSURER. When
more than one COMPANY is named as a party to this Agreement, the first
COMPANY named shall be the agent of the other companies as to all
matters pertaining to this Agreement. Performance of the obligations
of each party under this Agreement shall be rendered solely to the
other party. In no instance shall any insured of the COMPANY, any
claimant against an insured of the COMPANY, or any other third party
have any rights under this Agreement.
This Agreement constitutes the entire Agreement between the COMPANY and
the REINSURER, and the obligations: of these parties are determined
solely by the terms of the Agreement. Any change or modification to
the Agreement shall be null and void unless made by written amendment
to the Agreement and signed by both parties.
ARTICLE 2 - COMMENCEMENT AND TERM
This Agreement shall be effective from 12:01 a.m., Standard Time,
February 1, 1996, to 12:01 a.m., Standard Time, February 1, 1997, and
shall apply to claims and losses occurring under policies written or
renewed during the term hereof, subject to the terms and conditions for
termination stipulated in the article entitled TERMINATION.
ARTICLE 3 - BUSINESS COVERED
The COMPANY, subject to the terms and conditions hereunder, and the
exclusions set forth in EXHIBIT A, shall cede to the REINSURER and the
REINSURER shall accept from the COMPANY all Commercial
Umbrella/Following Form Excess Business, under any and all binders,
policies, or contracts of insurance (all hereinafter referred to as
"policies") issued by the COMPANY in accordance with the COMPANY'S
Umbrella/Following Form Excess underwriting guidelines dated May 1995
(and revisions thereto, mutually agreed upon by the parties hereto),
provided the policy is properly ceded to this Agreement in accordance
with the Article entitled PREMIUM REPORTS AND REMITTANCES.
ARTICLE 4 - SPECIAL ACCEPTANCES
Business not within the terms and conditions of this Agreement must be
submitted to the REINSURER for special acceptance. It will then be the
REINSURER'S decision whether to accept such a risk into the program, to
provide facultative support outside the program, or to decline such it
submission. If for any reason an underwriter of the COMPANY is unsure
of the qualification of a risk, it shall contact the REINSURER for
clarification.
ARTICLE 5 - TERRITORY
This Agreement shall follow the territorial limits. of the COMPANY'S
original policies but is limited to policies issued to and covering
insureds whose principal locations are in the United States of America,
its territories and possessions, Puerto Rico, and Canada.
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ARTICLE 6 - LIABILITY OF THE REINSURER
The REINSURER shall be liable to the COMPANY for the amount of net loss
sustained by the COMPANY in excess of the COMPANY'S Retention, but not
exceeding the Limit of Liability of the REINSURER as stipulated in the
Schedule of Reinsurance.
SCHEDULE OF REINSURANCE COVERAGE
COMPANY Limit of Liability
Class of Business Retention (Net and Treaty) of the REINSURER
Commercial Umbrella/ $5,000,000 Each Policy, $5,000,000 Each Policy,
Following Form Excess Each Occurrence, Aggregate Each Occurrence,
where applicable Aggregate where
applicable
The REINSURER shall be liable to the COMPANY for loss adjustment
expenses in the proportion that the loss incurred by the REINSURER
bears to the total amount of the loss incurred by the COMPANY under the
applicable policy. The REINSURER'S proportion of loss adjustment
expenses shall be in addition to its Limit of Liability.
The foregoing notwithstanding, it is understood between the COMPANY and
the REINSURER that no loss adjustment expenses shall be allocated to
policies the subject matter of this Agreement when the COMPANY (or
other acceptable carrier where applicable) is obligated to pay such
loss adjustment expenses under any underlying insurance policy issued
by the COMPANY (or other acceptable carrier where applicable).
ARTICLE 7 - UNDERLYING POLICIES
A. Unless otherwise agreed to by the REINSURER, no reinsurance shall
be bound hereunder on any policy where the limits of the
underlying primary polices are less than the following:
General Liability $1,000,000 Each Occurrence
$1,000,000 General Aggregate
$1,000,000 Products and Completed
Operations Aggregate
Automobile Liability: $1,000,000 Combined Single Limit
Employers Liability: $100,000 Each Accident
$500,000 Policy Limit
$100,000 Each Employee
by Disease
or
$10,000 Self Insured Retention
whichever shall apply
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B. Underlying primary coverages not written by the COMPANY shall be
written only by insurance companies possessing a Best's rating of
"B" or better.
ARTICLE 8 - UNDERWRITING GUIDELINES
1. The maximum term for any policy the subject matter hereof shall be
18 months.
2. Any risk with an individual loss in excess of $500,000 or total
annual aggregate losses in any of the past 3 years in excess of
$500,000 will be submitted to the REINSURER prior to quoting for
special acceptance.
3. No umbrella binding authority shall be granted to agents.
ARTICLE 9 - REINSURANCE PREMIUM
The COMPANY shall cede to the REINSURER a reinsurance premium based on
the following rates:
A. 15% - $25% of the total gross written premium charge for the first
$5,000,000 of Umbrella/Following Form Excess policy limits,
subject to a minimum premium of $1,000 gross per million of
exposure hereunder.
B. 25% - 30% of the total gross written premium charge for the first
$5,000,000 of policy Umbrella/Following Form Excess policy limits,
subject to a minimum premium of S1,000 gross per million of
exposure hereunder for all risks primarily involved in trucking--
for hire, ready mix concrete, sand and gravel hauling, and
flammable fuels hauling not subject to exclusions 11-d.
If the annual premium charged for the first $5,000,000 of
Umbrella/Following Form Excess policy limit is $6,000 gross or less,
the minimum premium per million of exposure hereunder may be lowered to
$750.00 gross per million.
ARTICLE 10 - CEDING COMMISSION
The REINSURER shall allow the COMPANY a commission of 30% on premiums
ceded under this Agreement.
Such commission allowance shall include provision for all commissions,
brokerages, taxes, board,
exchange or bureau assessments. and for all other expenses of whatever
nature, excepting loss
adjustment expenses.
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ARTICLE 11 - PREMIUM REPORTS AND REMITTANCES
1. Within 30 days after the last day of each calendar month, the
COMPANY shall furnish to the REINSURER (at its home office with a
copy sent to the Dallas Branch Office) a Premium Activity
Bordereau with respect to each risk becoming effective during the
month, containing, but not limited to, the following information:
- Policy Number
- Named Insured
- Location of Insured
- Total Policy Limit
- Effective/Expiration Date
- Total written premium for each policy
- Ceded Premium for each policy
- Subsequent premium transactions
If a policy is not included on the bordereau of the month in which
it was bound, such policy will not be covered by this Agreement.
2. The premium due the REINSURER for the month, calculated in
accordance with the provisions of the Article entitled REINSURANCE
PREMIUM, shall be paid (less applicable ceding commission) with
the above Bordereau.
ARTICLE 12 - CLAIM REPORTS
The COMPANY shall give written notice to the REINSURER'S home office of
any claim or loss which in the judgment of the COMPANY may result in a
net loss to the REINSURER. The COMPANY shall indicate its estimate of
loss and loss adjustment expense and shall provide subsequent written
reports to the REINSURER when such estimates Change. In addition, the
COMPANY shall give Written notice to the REINSURER of all claims having
an indemnity reserve equal to or exceeding $2,500,000, or involving any
of the following:
1. Brain damage or alleged brain damage;
2. Quadriplegics;
3. Paraplegics;
4. Amputations of one or more limbs or loss of use of one or more
limbs;
5. Major xxxxx;
6. Severe lacerations or disfigurement involving serious cosmetic
deformity;
7. Fatalities;
8. Loss of sight;
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9. Unusual exposure, including but not limited to Child molestation;
10. Psycho-Neurotic Illness; or
11. Permanent Total or Extended Disability
ALL information received by the COMPANY, written notice of which must
be sent to the REINSURER, shall be sent promptly upon the COMPANY
having received such information.
On open claims, follow up reports shall be submitted at least annually.
important developments (Such as major reserve increases or decreases,
settlements, or new information changing the liability situation or
value) shall be reported as they occur.
ARTICLE 13 - LOSS SETTLEMENTS
The COMPANY shall investigate and settle or defend all claims arising
under policies reinsured under this Agreement.
When requested by the REINSURER, the COMPANY shall permit the
REINSURER, at the expense of the REINSURER, to be associated with the
COMPANY in the defense or control of any claim, loss, or legal
proceeding which involves or is likely to involve the REINSURER.
All payments of claims or losses by the COMPANY within the limits,
terms, and conditions of its policies and within the limits, terms, and
conditions of this Agreement shall be binding upon the REINSURER.
Upon receipt of proof of loss payment, the REINSURER shall promptly pay
the COMPANY for that share of the net loss and loss adjustment expense
due in accordance with the reinsurance stipulated in this Agreement.
ARTICLE 14 - OFFSET
The COMPANY or the REINSURER may offset any balance, whether on account
of premium, commission, claims or losses, loss adjustment expenses,
recoveries, salvage, or any other amount due from one party to the
other under this Agreement. This right of offset shall not be affected
by the insolvency of either the COMPANY or the REINSURER except as may
be otherwise provided by a governmental agency having jurisdiction over
this Agreement.
ARTICLE 15 - STATISTICS
The COMPANY shall furnish such other statistics as may be required by
the REINSURER for the completion of the REINSURER'S statutory
requirements and internal records.
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ARTICLE 16 - UNDERWRITING AUDITS
The COMPANY shall allow the REINSURER to conduct underwriting audits at
least se annually. The COMPANY shall allow the REINSURER or its
authorized representatives inspect all papers, books, accounts,
documents, files and other records of the COMPANY necessary for a
thorough underwriting audit.
ARTICLE 17 - ACCESS TO COMPANY RECORDS
The COMPANY shall comply with the REINSURER'S request for any
information relating to this Agreement. Additionally, the REINSURER or
its authorized representatives shall have the right to inspect at any
reasonable time at the office of the COMPANY all papers, books,
accounts, documents, claims files and other records of the COMPANY
relating to this Agreement. The REINSURER'S right of inspection shall
continue to exist after the termination of this Agreement.
ARTICLE 18 - TAXES
The COMPANY shall be liable for paying all taxes other than income or
profit taxes levied on the REINSURER for business reinsured under this
Agreement. If the REINSURER is obligated to pay taxes other than
income or profit taxes for business reinsured under this Agreement the
COMPANY shall reimburse the REINSURER, provided that the COMPANY shall
not be required to pay the same tax twice
ARTICLE 19 - TERMINATION
A. Termination of Agreement
Either party may terminate this Agreement at any time by giving to
the other party (and to the Insurance Department of the State of
Colorado) not less than 90 days advance notice of termination in
writing by registered or certified mail to the principal office of
the other part
Unless otherwise mutually agreed, the REINSURER shall remain
liable for policies in force at the time and date of termination
until the natural expiration or anniversary of such policies
whichever comes first, but in no event longer than 12 months. The
COMPANY agrees that no cessions to this Agreement shall be made
during the notice period except as respects policies placed under
binder effective before the 60 day notice period.
B. Termination of Individual Policies:
Except with respect to policies which, under applicable laws, may
not be canceled mid-term except for specific reasons stated in law
or a regulation of the governmental body having jurisdiction, the
REINSURER may terminate reinsurance in respect of any policy
falling within the scope of this Agreement at any time by sending
to the COMPANY, by registered mail to its principal office, notice
stating the time and date when, not less than 60 days after the
date of mailing- of such notice, termination shall be effective.
The REINSURER may
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terminate reinsurance as respects any such policy at any
anniversary therof by sending to the COMPANY by registered mail to
their principal office, notice of such termination at least 90
days prior to the anniversary date of such policy. However, if
the COMPANY is obligated by law to continue the policy for a fixed
period beyond anniversary, reinsurance shall continue for the
duration of such period, but in no event longer than twelve (12)
months, whichever comes first.
C. Special Termination Provisions
If any amount payable under this Agreement becomes more than 30
days overdue, the party due to be paid may terminate this
Agreement, by sending to the other party, by registered or
certified mail, notice stating the time and date when, not less
than 15 days after the mailing of such notice, termination shall
be effective. The REINSURER shall not be liable for any loss(es)
taking place after the effective time and date of termination, in
consideration of which the REINSURER shall return to the COMPANY
the unearned premium (calculated on the monthly pro rata basis) as
respects policies in force at such time and date.
ARTICLE 20 - ARBITRATION
All unresolved differences of opinion between the COMPANY and the
REINSURER relating to this Agreement, including its formation and
validity, shall be submitted to a Board of Arbitration consisting of
one arbitrator chosen by the COMPANY, one arbitrator chosen by the
REINSURER, and a third arbitrator chosen by the first two arbitrators.
The party demanding arbitration shall communicate its demand for
arbitration to the other party by registered or certified mail,
identifying the nature of the dispute and the name of its arbitrator,
and the other party shall then be bound to name its arbitrator within
thirty days after receipt of the demand.
Failure or refusal of the other party to so name its arbitrator shall
empower the demanding party to name the second arbitrator within thirty
days thereafter. If the first two arbitrators are unable to agree upon
a third arbitrator within thirty days after the second arbitrator is
named, each shall be declined arbitrator shall name three candidates
within ten days thereafter, two of whom by the other arbitrator within
fifteen days after receiving their names, and within the next five days
the choice shall be made between the two remaining candidates by
drawing lots. The arbitrators shall be impartial and shall be active
or retired officers of property or casualty insurance or reinsurance
companies authorized to transact business in the United States of
America.
The Board of Arbitration shall have the power to fix all procedural
rules for the holding of the arbitration, including discretionary power
to make orders as to any matters which it may consider proper in the
circumstances of the case with regard to pleadings, discovery,
inspection of documents, examination of witnesses, and any other matter
whatsoever relating to the conduct of the arbitration. The Board of
Arbitration shall have the power to receive and act upon such evidence,
whether oral or written, Strictly admissible or not, as it shall in its
discretion think fit. It is expressly agreed that the jurisdiction of
the arbitrators to make or render any decision or award shall be
limited by the limits of liability expressly set forth in this
Agreement.
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The decision of the majority of the arbitrators shall be in writing and
shall be final and binding upon the parties. If either of the parties
fails to comply with this decision, the other party may apply for its
enforcement to a court of competent jurisdiction in which the party in
default is domiciled, or has assets, or carries on business.
Each party shall bear the cost of its own arbitrator and shall jointly
and equally bear with the other party the expense of the third
arbitrator. In the event both arbitrators are chosen by one party, the
fees of all arbitrators shall be equally divided between the parties.
The remaining costs of the arbitration proceeding shall be allocated by
the Board of Arbitration.
The arbitration shall be held at the times and places agreed upon by
the Board of Arbitration.
ARTICLE 21 - INSOLVENCY
In the event of the insolvency of the COMPANY, claims or losses arising
under this Agreement shall be payable by the REINSURER directly to the
COMPANY or its liquidator, receiver or statutory successor without
diminution because of such insolvency, except as otherwise specified in
the statutes of any state having jurisdiction of the insolvency
proceedings or except where this Agreement specifically provides
another payee of such reinsurance in the event of the insolvency of the
COMPANY. The REINSURER shall be given written notice of the pendency
of each claim or loss which may involve the reinsurance afforded by
this Agreement within a reasonable time after such claim or loss is
filed in the insolvency proceeding
The REINSURER shall have the right to investigate each such claim or
loss and interpose, at its own expense, in the proceeding where the
claim or loss is to be adjudicated, any defense which it may deem
available to the COMPANY or its liquidator, receiver or statutory
successor. A proportionate share of the expense thus incurred by the
REINSURER shall be chargeable, subject to court approval, against the
insolvent COMPANY as part of the expense of liquidation to the extent
of the benefit accruing to the COMPANY solely as a result of the
defense undertaken by the REINSURER.
ARTICLE 22 - DEFINITIONS
Net Loss
The term "net loss" shall mean the sum actually paid or to be paid by
the COMPANY in settlement of losses for which it is liable, including
prejudgment interest on such losses, after making deductions for all
inuring facultative reinsurance, whether collectible or not, find all
other recoveries, including salvage and subrogation recoveries. Net
loss shall not include liability for loss adjustment expenses; however
loss adjustment expenses shall be reinsured as stipulated in the
Article entitled LIABILITY OF THE REINSURER. Also, net loss shall not
include liability for damages, whether compensatory or punitive,
assessed against the COMPANY because Of its Own allegedly wrongful acts
in the handling of claims or in any of its dealings with its insureds
or other third parties, or for any loss adjustment expenses relating to
such actions or dealings.
It is agreed, however, that the existence of underlying treaty
reinsurance, if any, shall be entirely
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disregarded in arriving at the COMPANY'S net loss.
Nothing in this definition shall imply that losses are not recoverable
under this Agreement until
the COMPANY'S net loss has been finally ascertained.
Loss Adjustment Expenses
The term "loss adjustment expenses" shall mean court costs,
postjudgment interest, and allocated investigation, adjustment and
legal expenses, but shall not include office expenses and salaries and
expenses of employees and officials of the COMPANY or of outside claim
administrators/adjusters.
Loss adjustment expenses shall not include any expenses incurred by the
COMPANY in bringing
or in defending a Declaratory Action.
Recoveries
The COMPANY shall pay to or credit the REINSURER with the REINSURER'S
portion of any recovery connected with a net loss obtained from
subrogation, or other insurance. Expenses of the COMPANY in obtaining
any such recovery shall be apportioned between the COMPANY and the
REINSURER in the proportion that the benefit to each party from such
recovery bears to the total amount of the recovery.
Any such recoveries subsequent to any loss settlement hereunder shall
be applied as if received prior to the aforesaid loss settlement and
all necessary adjustments in such regard shall be transacted
accordingly.
The REINSURER shall be subrogated to the rights of the COMPANY to the
extent of its loss payments to the COMPANY. The COMPANY agrees to
enforce its right of salvage, subrogation, and its rights against
insurers.
ARTICLE 23 - RULING LAW
It is under stood and agreed between the parties hereto that all the
terms and conditions of this agreement shall be subject to the laws,
statutes, rules and regulations now or hereinafter in effect in the
State of Colorado. It is specifically understood and agreed that any
arbitration, in the event of the insolvency of the COMPANY, shall also
be subject to such laws, statutes, rules and regulations.
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This Agreement No. 06AC960032 made and executed in Englewood, Colorado
this 26th day
of March, 1996.
GUARANTY NATIONAL INSURANCE COMPANY
s/Xxxxxxxx X. Xxxxxx
ATTEST: s/Xxxxxxx X. Xxxxx
And in Stamford, Connecticut, this 15th day of February, 1996
NATIONAL REINSURANCE CORPORATION
s/Lex Smart
Second Vice President
ATTEST: Xxxxxx Xxxxxxxxxx
EXHIBIT A - EXCLUSIONS
This Agreement does not apply to:
1. Reinsurance assumed by the COMPANY, except as respects
intercompany reinsurance;
2. Any liability of the COMPANY arising by contract, operation of
law, or otherwise, from its participation or membership, whether
voluntary or involuntary, in any insolvency fund. "Insolvency
Fund" includes any guaranty fund, insolvency fund, plan, pool,
association, fund, or other arrangement, howsoever denominated,
established, or governed, which provides for any assessment of,
payment, or assumption by the COMPANY of part or all of any claim,
debt, charge, fee, or other obligation of an insurer, or its
successors or assigns, which has been declared by any competent
authority to be insolvent, or which is otherwise deemed unable to
meet any claim, debt, charge, fee, or other obligation in whole or
in part;
3. Loss or Liability excluded by the Nuclear Incident Exclusion
Clause - Liability -Reinsurance attached to this Agreement.
4. War risk, bombardment, invasion, insurrection, rebellion,
revolution, military or usurped power, or confiscation by order of
any government or public authority, as excluded under a standard
policy containing a standard war exclusion clause;
5. All business derived from any Pool, Association (including Joint
Underwriting Associations), Syndicate, Exchange, Plan, or other
facility directly as a member subscriber, or participant, or
indirectly by way of reinsurance; and,
6. Any risk not placed into the National Reinsurance Treaty No. 3973-
05 for the First $5,000,000 with at least 50% participation by the
COMPANY. Any such business shall be considered for special
acceptance in accordance with the terms of the Article entitled
SPECIAL ACCEPTANCES;
7. All exclusions contained within the referenced Treaty No. 3973-05;
8. Pollution liability, except for hostile fire or upset and
overturn;
9. Environmental impairment Liability;
10. Asbestos as excluded by the COMPANY'S Asbestos exclusion;
11. Automobile liability insurance including garage liability relating
to the ownership, maintenance, or use of:
a. Vehicles leased or rented to others if the lessor's
principle business operation involves the lease or rental of
automobiles;
b. Taxicabs, public or private liveries (except bus fleets
in conjunction with municipalities not subject to exclusion
12.k.);
c. Insureds in the business of long haul for hire with over
20% long haul exposure. "Long haul" is defined as
customarily operating beyond a 300 mile radius;
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d. Any fleet of 50 or more extra heavy and/or truck tractor
units involved in trucking hire, ready mix concrete, sand and
gravel hauling or flammable fuels hauling;
12. Liability other than automobile insurance relating to risks
involved
a. Any risk with gross receipts greater than $250,000,000;
b. General contractors with gross receipts excess of $50,000,0
c. General contractors whose primary business is residential
home construction
d. Amusement parks, carnivals, and circuses
e. Underground mining operation
f. Tunnel or subway construction;
g. Navigation, towing, construction, repair, conversion,
cleaning, work on, stevedoring demolition, wrecking,
uprighting, or salvage of any commercial vessel, barge, dry
dock oil rig, and any other commercial vessel;
h. Offshore or subaqueous operations;
i. Railroads, including street railways, except sidetrack
agreements;
j. Governmental subdivisions, bodies, authorities, or
agencies over 100,000 people population;
k. Oil and Ps refinery operation
1. Onshore and offshore gas and oil drilling operations;
m. Manufacture of explosives, caps, primers, or detonators
and other similar material fireworks, ammunition, or ammonium
nitrate;
n. Gas and electric utility companies;
o. Shoring, underpinning, or moving, of buildings or structures;
p. Manufacture, blending, mixing, repackaging, relabeling,
handling, or distribution of agricultural and industrial
chemicals;
q. Malpractice or professional liability and/or errors and
omissions insurance including liability of any insurer or
reinsurer for alleged misconduct in the handling of claims or
in any of its dealings with policyholders, except for
incidental malpractice, beauticians, barbers, morticians,
opticians, optometrists, hearing aid specialists, and
clergymens counseling, Emergency Medical Technicians, nurses,
nursing home professional, veterinaries, druggists, personal
trainers and law enforcement legal liability;
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r. Directors and Officers, Public Officials, Security
Exchange Commission, and ERI liability, except for Public
Officials written in conjunction with a municipality;
s. Liquor law liability other than host liquor when liquor
receipts are greater than 75% of total receipts;
t. Products and completed operations as respects:
1. The manufacture, sale, handling, or
distribution of aircraft, aerospacecraft, satellite and
missiles and parts for. or components of, aircraft,
aerospacecraft, satellites, a missiles;
2. The manufacture, blending, mixing,
repackaging, relabeling, importing, or wholes
distribution of ethical and non-ethical drugs,
cosmetics, and health and beauty aid
3. The manufacture, or wholesale distribution of
tobacco based products; and,
4. The manufacture of all motorized vehicles,
mobile equipment, heavy equipment machinery, home power
tools, and oil drilling equipment;
NUCLEAR INCIDENT EXCLUSION CLAUSE - LIABILITY - REINSURANCE
(1) This reinsurance does not cover any loss or liability
accruing to the COMPANY as a member of, or subscriber to, any
association of insurers or reinsurers formed for the purpose of
covering nuclear energy risks or as a direct or indirect reinsurer of
any such member, subscriber or association.
(2) Without in any way restricting the operation of paragraph (1)
of this Clause, it is understood and agreed that for all purposes of
this reinsurance all the original policies of the COMPANY (new, renewal
and replacement) of the classes specified in Clause H of this paragraph
(2) from the time specified in Clause El in this paragraph (2) shall be
deemed to include the following provision (specified as the Limited
Exclusion Provision):
LIMITED EXCLUSION PROVISION*
I. It is agreed that the policy does not apply under any
Liability Coverage, to (injury. sickness, disease, death or
destruction (bodily injury or property damage
with respect to which an insured under the policy is also an
insured under a nuclear energy liability policy issued by Nuclear
Energy Liability Insurance Association, Mutual Atomic Energy
Liability Underwriters or Nuclear Insurance Association of Canada,
or would be an insured under any such policy but for its
termination upon exhaustion of its limit of liability.
II. Family Automobile Policies (liability only), Special
Automobile Policies (private passenger automobiles, liability
only), Farmers Comprehensive Personal Liability Policies
(liability only), Comprehensive Personal Liability Policies
(liability only) or policies of a similar nature; and the
liability portion of combination forms related to the four
classes of policies stated above, such as the Comprehensive
Dwelling Policy and the applicable types of Homeowners
Policies.
III. The inception dates and thereafter of all original
policies as described in II above, whether new, renewal or
replacement, being policies which either
(a) become effective on or after May 1, 1960, or
(b) become effective before that date and
contain the Limited Exclusion Provision set out above;
provided this paragraph (2) shall not be applicable to
Family Automobile Policies, Special Automobile Policies, or
policies or combination policies of a similar nature, issued
by the COMPANY on New York risks, until 90 days following
approval of the Limited Exclusion Provision by the
Governmental Authority having jurisdiction thereof.
(3) Except for those classes of policies specified in Clause II
of paragraph (2) and without in any way restricting the operation of
paragraph (1) of this Clause, it is understood and agreed that for all
purposes of this reinsurance the original liability policies of the
COMPANY (new, renewal and replacement) affording the following
coverages:
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Owners, Landlords and Tenants Liability, Contractual Liability,
Elevator Liability, Owners or Contractors (including railroad)
Protective Liability, Manufacturers and Contractors Liability,
Product Liability, Professional and Malpractice Liability,
Storekeepers Liability, Garage Liability, Automobile Liability
(including Massachusetts Motor Vehicle or Garage Liability)
shall be deemed to include, with respect to such coverages, from the
time specified in Clause
V of this paragraph (3), the following provision (specified as the
Broad Exclusion Provision):
BROAD EXCLUSION PROVISION*
It is agreed that the policy does not apply:
I. Under any Liability Coverage, to (injury, sickness, disease,
death or destruction (bodily injury or property damage
(a) with respect to which an insured under the
policy is also an insured under a nuclear energy
liability policy issued by Nuclear Energy Liability
Insurance Association, Mutual Atomic Energy Liability
Underwriters or Nuclear Insurance Association of Canada,
or would be an insured under any such policy but for its
termination upon exhaustion of its limit of liability;
or
(b) resulting from the hazardous properties of
nuclear material and with respect to which (1) any
person or organization is required to maintain financial
protection pursuant to the Atomic Energy Act of 1954, or
any law amendatory thereof, or (2) the Insured is, or
had this policy not been issued would be, entitled to
indemnity from the United States of America, or any
agency thereof, under any agreement entered into by the
United States of America, or any agency thereof, with
any person or organization.
II Under any Medical Payments Coverage, or under any
Supplementary Payments Provision relating to (immediate
medical or surgical relief, (first aid, to expenses incurred
with respect to (bodily injury, sickness, disease or death
(bodily injury) resulting from the hazardous properties of
bodily injury nuclear material and arising out of the
operation of a nuclear facility by any person or
organization.
III. Under any Liability Coverage, to (injury, sickness,
disease, death or destruction (bodily injury or property
damage resulting from the hazardous properties of nuclear
material, if
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(a) the nuclear material (1) is at any nuclear
facility owned by, or operated by or on behalf of, an
insured or (2) has been discharged or dispersed
therefrom;
(b) the nuclear material is contained in spent
fuel or waste at any time possessed, handled, used,
processed, stored, transported or disposed of by or on
behalf of an insured; or
(c) the injury sickness disease death or
destruction (bodily injury or property damage arises out
of the furnishing by an insured of services, materials,
parts or equipment in connection with the planning,
construction, maintenance, operation or use of any
nuclear facility, but if such facility is located within
the United States of America, its territories, or
possessions or Canada, this exclusion (c) applies only
to (injury to or destruction of property at such nuclear
(facility (property damage to such nuclear facility and
any (property thereat.
IV. As used in this endorsement:
"hazardous properties" include radioactive, toxic or
explosive properties; "nuclear material" means source
material, special nuclear material or by-product material;
"source material", 'special nuclear material", and 'by-
product material" have the meanings given them in the Atomic
Energy Act of 1954 or in any law thereof; "spent fuel" means
any fuel element or fuel component, solid amendatory or
liquid, which has been used or exposed to radiation in a
nuclear reactor; "waste" means any waste material (1)
containing by-product material other than the tailings or
wastes produced by the extraction or concentration of uranium
or thorium. from any ore processed primarily for its source
material content and (2) resulting from the operation by any
person or organization of any nuclear facility included
within the definition of nuclear facility under paragraph (a)
or (b) thereof-, "nuclear facility" means
(a) any nuclear reactor,
(b) any equipment or device designed or used for
(1) separating the isotopes of uranium or plutonium, (2)
processing or utilizing spent fuel. or (3) handling,
processing or packaging waste,
(c) any equipment or device used for the
processing, fabricating or alloying of special nuclear
material if at any time the total amount of such
material in the custody of the insured at the premises
where such equipment or device is located consists of or
contains more than 25 grams of plutonium or uranium 233
or any combination thereof, or more than 250 grams of
uranium 235,
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(d) any structure, basin, excavation, premises or
place prepared or used for the storage or disposal of
waste,
and includes the site on which any of the foregoing is
located, all operations conducted on such site and all
premises used for such operations; "nuclear reactor" means
any apparatus designed or used to sustain nuclear fission in
a selfsupporting chain reaction or to contain a xxxxxxxx xxxx
of fissionable material; (with respect to iniury to or
destruction of property, the (word "iniury" or "destruction"
("property damage" includes all forms of radioactive
(contamination of property. (includes all forms of
radioactive contamination of property.
V. The inception dates and thereafter of all original
policies affording coverages specified in this paragraph (3),
whether new, renewal or replacement, being policies which
become effective on or after May 1, 1960, provided this
paragraph
(3) shall not be applicable to
(a) Garage and Automobile Policies issued by the
COMPANY on New York risks, or
(b) statutory liability insurance required under
Chapter 90, General Laws of Massachusetts, until 90 days
following approval of the Broad Exclusion Provision by
the Governmental Authority having jurisdiction thereof.
(4) Without in any way restricting the operation of paragraph (1)
of this Clause, it is understood and agreed that paragraphs (2) and (3)
above are not applicable to original liability policies of the COMPANY
in Canada and that with respect to such policies this Clause shall be
deemed to include the Nuclear Energy Liability Exclusion Provisions
adopted by the Canadian Underwriters Association or the Independent
Insurance Conference of Canada-
* NOTE. The words underlined in the Limited Exclusion Provision and in
the Broad Exclusion Provision shall apply only in relation to original
liability policies which include a Limited Exclusion Provision or a
Broad Exclusion Provision containing those words.
