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EXHIBIT 10.16
FOURTH EXCESS OF LOSS REINSURANCE AGREEMENT
(hereinafter referred to as the "Agreement")
entered into by and between
SOUTHERN CALIFORNIA PHYSICIANS INSURANCE EXCHANGE
and/or S.C.P.I.E. INDEMNITY COMPANY
and/or S.C.P.I.E. MANAGEMENT COMPANY
while acting on behalf of:
S.C.P.I.E. MANAGEMENT COMPANY
Beverly Hills, California
(hereinafter collectively referred to as the "Company")
and
The Subscribing Reinsurer(s) executing the
Interests and Liabilities Contract(s)
attached to and forming a part
of this Agreement
(hereinafter referred to as the "Reinsurer")
WITNESSETH:
The Reinsurer hereby reinsures the Company to the extent and the terms
and conditions subject to the exceptions, exclusions and limitations
hereinafter set forth and nothing hereinafter shall in any manner create any
obligations or establish any rights against the Reinsurer in favor of any third
parties or any persons not parties to this Agreement.
ARTICLE I
BUSINESS COVERED:
The Reinsurer agrees to reimburse the Company, on an excess of loss
basis, for the amount of ultimate net loss which the Company may pay as the
result of claims made during the term of this Agreement under the Company's
Physicians and Surgeons Comprehensive Professional and Business Liability
policies, including Clinics and Clinical Laboratories, Professional and
Business Liability policies for Hospitals and Errors and Omissions Liability
policies for Managed Care Organizations, which are in force or may hereinafter
come into force during the term of this Agreement, and are reported to the
Reinsurer within 7 years from the expiration hereof, except as excluded under
the Exclusions Article subject to the limitations set forth in the Limits of
Cover Article.
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ARTICLE II
EXCLUSIONS:
This Agreement specifically excludes:
1. All 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, plan, pool,
association, fund or other arrangement, howsoever denominated,
established or governed which provides for any assessment of or
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.
2. Loss or Liability excluded by the provisions of the attached
"Nuclear Incident Exclusion Clause - Liability - Reinsurance".
3. All Assumed Reinsurance.
ARTICLE III
TERM:
A. Except as provided in paragraph C. below, this Agreement shall apply to
claims made during the twelve month period beginning January 1, 1995. In the
event a loss, as defined in Article VI, involves a loss or losses covered under
the current Agreement Year and a prior Agreement Year(s) no recovery shall be
made hereunder in respect of any loss which occurred prior to:
1. January 1st, 1979 as regards Extra Contractual Obligation (as
provided for in Article X hereof)
2. January 1st, 1976 as regards all other business.
B. It is understood however, that in respect of Personal Liability and
Discovery Period coverage for Deceased, Disabled, Retired and Withdrawing
Physicians and for Physicians ceasing Medical Practice within the State, this
Agreement covers claims made during the period of this Reinsurance Agreement.
In the event this Agreement is not renewed, all such liability shall be assumed
by the Company with effect from the date of cancellation.
C. The provisions of paragraphs A. and B. notwithstanding, the Company
may, at its option, elect to continue to cover the in force portfolio of
liability on the date of expiration for a further period of 12 months. Should
the Company exercise this option, the Company shall give the Reinsurer notice
prior to expiration that they wish to exercise this option. The Company shall
pay to the Reinsurer as set forth in the Premium Article.
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D. It is further agreed that all claims hereunder shall be notified with
full particulars by the Company to the Reinsurer within 7 years from the
expiration of this Agreement (December 31, 1995) and no liability shall attach
hereunder for any claim or claims not notified within this period.
E. If any law or regulation of the Federal, State or Local Government or
any jurisdiction in which the Company is doing business shall render illegal
the arrangements made herein, this Agreement can be terminated immediately
insofar as it applies to such jurisdiction by the Company giving notice to the
Reinsurer to such effect.
F. Notwithstanding the expiration of this Agreement as hereinabove
provided, the provisions of this Agreement shall continue to apply to all
unfinished business hereunder to the end that all obligations and liabilities
incurred by each party hereunder prior to such termination shall be fully
performed and discharged.
ARTICLE IV
ATTACHMENT OF LIABILITY:
A. For purposes of determining the attachment of the Reinsurer's liability
hereunder as respects any one loss, all losses (including Discovery Period
Losses) involving one or more Original Insureds, arising from the same medical
incident, and in which First Notice of Claim or Circumstance is notified to the
Company during the term of this Agreement shall be covered hereunder. Where
first notice falls in Agreement Years incepting prior to January 1, 1992
paragraph B. (Interlocking Clause) of Article V below, shall apply hereon for
Physicians and Surgeons comprehensive Professional Liability policies only.
B. The date of a loss hereunder shall be the earliest date, within the
term of this Agreement, that the Company has received First Notice of Claim or
Circumstance.
ARTICLE V
LIMITS OF COVER:
A. The Company shall retain for its own account and pay under one or more
of the Company's policies the first $10,000,000 ultimate net loss, each and
every loss and the Reinsurer agrees to reimburse the Company for the amount of
ultimate net loss paid in excess of $10,000,000, each and every loss, but the
Reinsurer's maximum liability shall not exceed $10,000,000 resulting from each
and every loss; subject further to a maximum liability of the Reinsurer of
$20,000,000 in the aggregate for all losses during the period of this
Agreement.
B. (This paragraph shall apply only to those claims where first notice of
claim or circumstance falls in Agreement Years prior to January 1, 1992.) As
respects each and every loss where this Agreement responds on a claims made
basis, and more than one insured or policy is covered under this Agreement
period with claims made dates falling in more than one reinsurance agreement
period, the limit and retention as respects claims covered under this Agreement
shall be the percentage of the Limit and Retention under this Agreement that
the amount of covered claim or claims hereunder bears to the total of all
covered claims from the same loss.
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C. The Company warrants the following in respect of the business covered
hereunder:
1. In respect of Physicians and Surgeons Comprehensive
Professional and Business Liability policies, including Clinics
and Clinical Laboratories, the Company warrants the maximum
original policy limits shall not exceed $10,000,000 subject to
inuring protection of $8,000,000 excess of $2,000,000 or so
deemed.
2. In respect of Professional and Business Liability policies for
Hospitals, policy limits greater than $5,000,000 shall be
reinsured elsewhere on an excess of loss basis or so deemed.
3. In respect of Professional and Business Liability policies for
Hospitals written prior to January 1, 1996, policy limits
greater than $5,000,000 shall be reinsured elsewhere on an
excess of loss basis or so deemed.
4. In respect of Errors and Omissions Liability policies for
Managed Care Organizations, the maximum original policy limit
is $5,000,000.
ARTICLE VI
DEFINITIONS:
A. The term "each and every loss" shall mean the happening of one or a
series of related acts, errors, or omissions to act, accidents or occurrences
arising out of one event.
B. The term "Gross Net Earned Premium Income" shall mean the gross earned
premium on business the subject matter hereof less cancellations and return
premiums and less premiums paid for reinsurance recoveries under which would
inure to the benefit of the Reinsurer. Such Premium Income shall be understood
to include:
1. that content of pre-paid premiums under policies in respect of
Deceased, Disabled and Retired Insureds, the coverage for which
becomes effective during the Agreement period.
2. the premium transferred internally by the Company from a prior
Agreement year or years, in respect of Deceased, Disabled and
Retired Insureds and in respect of other withdrawing Insureds
who have purchased extended coverage under Reporting
Endorsements.
C. The term "claims made" as used herein shall mean (A) In respect of
Claims Made Policies, claims first notified to the Company during the term of
this Agreement on any in force policy or reporting endorsement arising out of
incidents subsequent to the retroactive date of said policy as the result of
the rendering of or failure to render a professional service or the reporting
of losses which arise from the insured premises and operations incidental to
the practice of a physician, hospital or managed care organization and/or (B)
In respect of Occurrence Policies, claims or losses first notified to the
Company during the term of this Agreement.
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ARTICLE VII
NET RETAINED LINES:
A. This Agreement applies to only that portion of any insurance which the
Company retains net for its own account; and in calculating the amount of any
loss hereunder and also in computing the amount or amounts in excess of which
this Agreement attaches, only loss or losses in respect of that portion of any
insurance which the Company retains net for its own account shall be included.
B. The amount of the Reinsurer's liability hereunder in respect of any
loss or losses shall not be increased by reason of the inability of the Company
to collect from any other underwriters, whether specific or general, any amount
which may become due from them, whether such inability arises from the
insolvency of such other underwriters or otherwise.
ARTICLE VIII
ULTIMATE NET LOSS:
A. The term "ultimate net loss" as used herein shall be understood to mean
the sum actually paid by the Company in settlement of losses for which it is
held liable, including pre judgment interest when made part of the award or
judgment, 80% of Extra Contractual Obligations in accordance with the
provisions of Article X and Excess of Original Policy Limits in accordance
with the provisions of Article IX, after making proper deductions for all
recoveries, salvages, and claims upon other reinsurances and insurances which
inure to the benefit of the Reinsurer under this Agreement, whether collectible
or not, and shall exclude all loss adjustment expenses (which shall be
separately allocated and paid as provided in paragraph B. below); provided,
however, that in the event of the insolvency of the Company, "ultimate net
loss" shall mean the amount of loss which the Company has incurred or for which
it is liable, and payment by the Reinsurer shall be made to the liquidator,
receiver or statutory successor of the Company in accordance with the
provisions of the Insolvency Article in this Agreement. Nothing in this
clause, however, shall be construed to mean that losses under this Agreement
are not recoverable until the ultimate net loss of the Company has been
ascertained.
B. All loss adjustment expenses incurred in investigation, adjustment and
litigation, defense and settlement of claims made against the Company under its
original policies reinsured hereunder, including pre judgment interest when not
part of an award or judgment and post judgment interest, shall be apportioned
in proportion to the respective interests of the parties hereto in the ultimate
net loss. Office expenses and salaries of officials and employees not
classified as loss adjusters are not chargeable as expenses for the purpose of
this paragraph.
C. In the event a verdict or judgment is reduced by an appeal or a
settlement, subsequent to the entry of a judgment, resulting in an ultimate
saving on such verdict or judgment, or a judgment is reversed outright, the
expense incurred in securing such final reduction or reversal shall (1) be
prorated between the Reinsurer and the Company in proportion that each benefits
from such reduction or reversal and the expense incurred up to the time of the
original verdict or judgment shall be prorated in proportion to each party's
interest in such verdict or judgment; or (2) when the terms and conditions of
the Company's original policies reinsured hereunder include expenses as part of
the policy limit, be added to the Company's ultimate net loss.
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D. It is understood that the Company has in effect First, Second and Third
Excess of Loss Reinsurance Agreements and recoveries thereunder will be for the
sole benefit of the Company and will be disregarded when computing the ultimate
net loss of the Company.
ARTICLE IX
EXCESS OF ORIGINAL POLICY LIMITS:
A. This Agreement shall protect the Company, within the limits hereof, in
connection with any loss in excess of the limit of its original policy, such
loss in excess of the limit having been incurred because of failure by it to
settle within the policy limit, or by reason of alleged or actual negligence,
fraud or bad faith in rejecting an offer of settlement or in the preparation of
the defense or in the trial of any action against its insured or in the
preparation or prosecution of an appeal consequent upon such action.
B. However, this Article shall not apply where the loss has been incurred
due to the fraud of a member of the Board of Directors or a corporate officer
of the Company acting individually or collectively or in collusion with any
individual or corporation or any other organization or party involved in the
presentation, defense or settlement of any claim covered hereunder.
C. For the purposes of this Article, the word "loss" shall mean any
amounts for which the Company would have been contractually liable to pay had
it not been for the limit of the original policy.
ARTICLE X
EXTRA CONTRACTUAL OBLIGATIONS CLAUSE:
A. This Agreement shall protect the Company within the limits hereof,
where the ultimate net loss includes Extra Contractual Obligations. "Extra
Contractual Obligations" are defined as those liabilities not covered under
any other provision of this Agreement and which arise from handling of any
claim on business covered hereunder, such liabilities arising because of, but
not limited to the following: failure by the Company to settle within the
policy limit, or by reason of alleged or actual negligence, fraud or bad faith
in rejecting an offer of settlement or in the preparation of the defense or in
the trial of any action against its insured or reinsured or in the preparation
or prosecution of an appeal consequent upon such action.
B. The date on which an Extra Contractual Obligation is incurred by the
Company shall be deemed, in all circumstances, to be the date of the original
accident, casualty, disaster or loss and furthermore, for the purposes hereof
be deemed to follow the claims made provisions of this Agreement, subject
always to the provisions of the Term Article.
C. However, this Article shall not apply where the loss has been incurred
due to the fraud of a member of the Board of Directors or a corporate officer
of the Company acting individually or collectively or in collusion with any
individual or corporation or any other organization or party involved in the
presentation, defense or settlement of any claim covered hereunder.
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ARTICLE XI
CLAIMS:
A. In the event of a claim of $3,000,000 or greater arising hereunder
which either results in or appears to be of serious enough nature as probably
to result in a loss involving this Agreement, the Company shall give notice as
soon as reasonably practicable to Reinsurers and the Company shall keep the
Reinsurer advised of all subsequent developments in connection therewith.
B. All loss settlements made by the Company provided they are within the
terms of the Company's original policies and of this Agreement, shall be
unconditionally binding upon Reinsurer and amounts falling to the share of the
Reinsurer shall be payable to the Company in accordance with the provisions set
forth in paragraph C. of Article XV.
ARTICLE XII
COMMUTATION CLAUSE:
The Company or the Reinsurer may, at any time express their desire to
the other party to commute all losses which are applicable to any Agreement
year and which are still unsettled. In such event the Company and the
Reinsurer shall mutually determine and evaluate such losses and the payment by
the Reinsurer of their proportion of the amount so ascertained and mutually
agreed to be the value of such losses shall relieve them of all further
liability, in respect of that Agreement year both in respect of known or
unknown losses.
ARTICLE XIII
PREMIUM:
A. The Company shall pay to the Reinsurer a minimum and deposit premium of
$500,000 payable in equal quarterly installments of $138,750 on January 1st,
April 1st, July 1st and October 1st, 1995. In the event the Company elects to
run off its policies in force until natural expiration, not to exceed 12 months
from the expiration date hereon, the Company shall pay to the Reinsurer a
run-off premium equal to 50% of the Actual Earned Reinsurance Premium, as set
forth in paragraph B. on such policies. The run-off premium shall be paid in
equal quarterly installments on January 1st, April 1st, July 1st and October
1st, 1996.
B. As soon as practicable after expiration of this Agreement, the Company
shall calculate the premium due the Reinsurer based on a rate of .48% of the
Gross Net Earned Premium Income accounted for by the Company during the term of
this Agreement on all business subject matter of the Agreement. In the event
the premium due hereunder is greater than the deposit premium paid, the
difference shall be paid to the Reinsurer forthwith. If the actual premium is
less then the deposit premium paid, the difference shall be refunded to the
Company, subject to the minimum premium.
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ARTICLE XIV
REINSTATEMENT:
A. In the event of any portion of the coverage under this Agreement being
depleted or exhausted by loss, the amount so depleted or exhausted may, at the
option of the Company, be reinstated from the time claim is first made and the
Company will pay to the Reinsurer for such reinstatement an additional premium
calculated at 100% of the annual reinsurance premium pro rated as to the amount
so reinstated. Nevertheless, the Reinsurer's liability will never be more than
$10,000,000 in respect of any one claim made nor more than $20,000,000 in all
during the term of this Agreement.
B. All calculations of reinstatement premium shall be based on paid losses
only. The decision of the Company to exercise its reinstatement option must be
relayed to Reinsurers within three (3) months from the time any reserve invades
this Agreement.
ARTICLE XV
REPORTS AND REMITTANCES:
A. The Company will provide the Reinsurer within forty-five (45) days at
the end of each quarter, all necessary data respecting premiums and losses,
including reserves thereon, as at dates and on forms mutually acceptable to the
Company and the Reinsurer.
B. Payments of deposit premium and annual adjustments shall be made in
accordance with the provisions of the Premium Article.
C. Payment by the Reinsurer of its portion of loss and loss expenses paid
by the Company will be made by the Reinsurer to the Company as soon as
possible, but not later than 60 days after proof of payment by the Company is
received by the Reinsurer.
ARTICLE XVI
OFFSET:
The Company and the Reinsurer shall have the right to offset any
balance or amounts due from one party to the other under terms of this
Agreement. The party asserting the right of offset may exercise such right any
time whether the balances due are on account of premiums or losses or otherwise.
ARTICLE XVII
CONFIDENTIALITY:
A. This Agreement and the pre Agreement documentation may contain
confidential or proprietary information of either party to this Agreement. All
parties shall maintain the confidentiality of this information and shall not
disclose these to any third party without both parties approval.
B. Notwithstanding the above, any party may disclose such information
without further approval from the other party in answer to interrogations,
subpoenas or other legal/arbitration process as well as to the Company's
reinsurance intermediary hereon, the Reinsurer's retrocessionaires or in
response to requests by governmental and regulatory agencies. In addition the
parties may disclose such information to their accountants and outside legal
counsel as may be necessary.
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ARTICLE XVIII
CURRENCY:
Premiums shall be payable by the Company and losses shall be paid to
the Company in United States currency.
ARTICLE XIX
FEDERAL EXCISE TAX:
(Applicable to those Reinsurers, excepting Underwriters at Lloyd's, London and
other Reinsurers exempt from Federal Excise Tax, who are domiciled outside the
United States of America.)
A. The Reinsurer has agreed to allow, for the purpose of paying the
Federal Excise Tax, the applicable percentage of the premium payable hereon (as
imposed under Section 4371 of the Internal Revenue Service Code) to the extent
such premium is subject to the Federal Excise Tax.
B. In the event of any return of premium becoming due hereunder the
Reinsurer will deduct the aforesaid percentage from the return premium payable
hereon and the Company or its agent should take steps to recover the tax from
the United States government.
ARTICLE XX
ERRORS AND OMISSIONS:
Any inadvertent delay, omission or error shall not be held to relieve
either party hereto from any liability which would attach to it hereunder if
such delay, omission or error had not been made, provided such delay, omission
or error is rectified immediately upon discovery; provided, however, this
Article shall not invalidate the provisions of paragraph D. in Article III or
override the retroactive dates specified in Article III.
ARTICLE XXI
ACCESS TO RECORDS:
A. The Company shall place at the disposal of the Reinsurer at all
reasonable times, and the Reinsurer shall have the right to inspect, through
its authorized representatives, all books, records and papers of the Company in
connection with this reinsurance hereunder or the subject matter thereof.
B. The Reinsurer shall be afforded the opportunity, at its own expense to
appoint an attorney of its own choice to assess the Company's claims procedures
who shall report to the Reinsurer the results of such.
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ARTICLE XXII
FUNDING:
(This clause is only applicable to those Reinsurer(s) who cannot qualify for
credit by the State having jurisdiction over the Company's loss reserves.)
A. As regards policies or bonds issued by the Company coming within the
scope of this Agreement, the Company agrees that, when it shall file with the
Insurance Department or set up on its books reserves for losses covered
hereunder which it shall be required by law to set up, it will forward to the
Reinsurer a statement showing the proportion of such loss reserves which is
applicable to the Reinsurer. The Reinsurer hereby agrees that it will apply
for and secure delivery to the Company of a clean, irrevocable and
unconditional Letter of Credit, issued by a bank which is acceptable to the
regulatory authority(ies) having jurisdiction over the Company's loss reserves
in an amount equal to the Reinsurer's proportion of reserves in respect of
known outstanding losses that have been reported to the Reinsurer and allocated
loss expenses relating thereto, plus reserves for losses incurred but not
reported, as shown in the statement prepared by the Company.
B. The Letter of Credit shall be issued for a period of not less than one
year, and shall be automatically extended for one year from its date of
expiration or any future expiration date unless thirty (30) days prior to any
expiration date the issuing bank shall notify the Company by registered mail
that the bank elects not to consider the Letter of Credit extended for any
additional period. An issuing bank, not a member of the Federal Reserve System
or not chartered in New York State shall provide sixty (60) days notice to the
Company prior to any expiration in the event of non-extension.
C. Notwithstanding any other provision of this Agreement, the Company or
its successors in interest may draw upon such credit at any time without
diminution because of the insolvency of the Company or of the Reinsurer for one
or more of the following purposes only:
1. To pay the Reinsurer's share or to reimburse the Company for
the Reinsurer's share of any loss reinsured by this Agreement,
the payment of which has been agreed by the Reinsurer and which
has not been otherwise paid.
2. To make refund of any sum which is in excess of the actual
amount required to pay the Reinsurer's share of any liability
reinsured by this Agreement.
3. In the event of expiration of the Letter of Credit as provided
for above, to establish deposit of the Reinsurer's share of
known and reported outstanding losses and allocated expenses
relating thereto under this Agreement. Such cash deposit shall
be held in an interest bearing account separate from the
Company's other assets, and interest thereon shall accrue to
the benefit of the Reinsurer.
D. The issuing bank shall have no responsibility whatsoever in connection
with the propriety of withdrawals made by the Company or the disposition of
funds withdrawn, except to ensure that withdrawals are made only upon the order
of properly authorized representatives of the Company.
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E. At annual intervals, or more frequently as agreed but never more
frequently than quarterly, the Company shall prepare a specific statement, for
the sole purpose of amending the Letter of Credit, of the Reinsurer's share of
known and reported outstanding losses and allocated expenses relating thereto,
plus reserves for losses incurred but not reported. If the statement shows
that Reinsurer's share of such losses and allocated loss expenses exceeds the
balance of credit as of the statement date, the Reinsurer shall, within thirty
(30) days after receipt of notice of such excess, secure delivery to the
Company of an amendment of the Letter of Credit increasing the amount of credit
by the amount of such difference. If, however, the statement shows that the
Reinsurer's share of known and reported outstanding losses plus allocated loss
expenses relating thereto, plus reserves for losses incurred but not reported
is less than the balance of credit as of the statement date, the Company shall,
within thirty (30) days after receipt of written request from the Reinsurer,
release such excess credit by agreeing to secure an amendment to the Letter of
Credit reducing the amount of credit available by the amount of such excess
credit.
ARTICLE XXIII
SPECIAL FUNDING CLAUSE:
A. If, during the period of this Agreement and thereafter, as respects any
outstanding liabilities hereunder, the Reinsurer shall fail to pay any loss
payable hereunder within the time prescribed, the Reinsurer agrees that it will
fund uncollected paid losses and loss adjustment expenses within 30 days from
the date of written demand by the Company to so fund. Such demand shall not be
made unless balances are 60 days or more past the due date of payment specified
in this Agreement.
B. The Reinsurer shall have the sole option of determining the method of
funding referred to above, provided it is acceptable to the insurance
regulatory authorities involved. If the Reinsurer elects to fund the aforesaid
loss by a Letter of Credit, the procedures set forth in the Funding Article in
respect of Letters of Credit shall apply. If the Reinsurer has already funded
obligations hereunder in accordance with the Funding Article in this Agreement,
it agrees that such funds as are required to pay overdue losses may immediately
be drawn down by the Company.
C. The phrase "any loss payable" as used in paragraph A. above shall mean
any ultimate net loss subject to recovery under this Agreement wherein the
Reinsurer has not disputed said loss in writing within the due date for
payment.
D. The Company will provide the Reinsurer with a reinsurance proof of loss
and such other substantive loss material reflecting the nature of the
settlement (i.e., applicable Proofs of Loss, Releases, adjuster's reports,
etc.). If, subsequent to receipt of this material, the information supplied is
insufficient or not in accordance with the contractual conditions, then the
payment due date as defined in the Reports and Remittances Article, will be
deemed to be the date upon which the Reinsurer received such additional
substantive material necessary to approve payment of the claim, or the date the
claim is presented in a manner acceptable to the Reinsurer.
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ARTICLE XXIV
ARBITRATION:
A. As a condition precedent to any right of action hereunder, any dispute
arising out of the interpretation, performance or breach of this Agreement,
including the formation or validity thereof, shall be submitted for decision to
a panel of three arbitrators. Notice requesting arbitration will be in writing
and sent certified or registered mail, return receipt requested.
B. One arbitrator shall be chosen by each party and the two arbitrators
shall, before instituting the hearing, choose an impartial third arbitrator who
shall preside at the hearing. If either party fails to appoint its arbitrator
within thirty (30) days after being requested to do so by the other party, the
latter, after ten (10) days notice by certified or registered mail of its
intention to do so, may appoint the second arbitrator.
C. If the two arbitrators are unable to agree upon the third arbitrator
within thirty (30) days of their appointment, the deficiency shall be supplied
on the application of the party requesting arbitration by an appointment made
by the American Arbitration Association. Notwithstanding the appointment of
any third Arbitrator by the American Arbitration Association, the arbitration
proceedings shall not be governed by the American Arbitration Association's
commercial arbitration rules.
D. All arbitrators shall be disinterested active or former executive
officers of insurance or reinsurance companies or Underwriters at Lloyd's,
London.
E. Within thirty (30) days after notice of appointment of all arbitrators,
the panel shall meet and determine timely periods for briefs, discovery
procedures and schedules for hearings.
F. The panel shall be relieved of all judicial formality and shall not be
bound by the strict rules of procedure and evidence. Unless the panel agrees
otherwise, arbitration shall take place in Beverly Hills, California, but the
venue may be changed when deemed by the panel to be in the best interest of the
arbitration proceeding. Insofar as the arbitration panel looks to substantive
law, it shall consider the law of the State of California. The decision of any
two arbitrators when rendered in writing shall be final and binding. The panel
is empowered to grant interim relief as it may deem appropriate.
G. The panel shall interpret this Agreement as if it were an honorable
engagement rather than as merely a legal obligation and shall make its decision
considering the custom and practice of the applicable insurance and reinsurance
business within sixty (60) days following the termination of the hearings.
Judgment upon the award may be entered in any court having jurisdiction
thereof.
H. Each party shall bear the expense of its own arbitrator and shall
jointly and equally bear with the other party the cost of the third arbitrator.
The remaining costs of the arbitration shall be allocated by the panel. The
panel may, at its discretion, award such further costs and expenses as it
considers appropriate, including but not limited to attorneys fees, to the
extent permitted by law.
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ARTICLE XXV
SERVICE OF SUIT CLAUSE (U.S.A.):
A. It is agreed that in the event of the failure of the Reinsurer hereon
to pay any amount claimed to be due hereunder, the Reinsurer hereon, at the
request of the Company, will submit to the jurisdiction of a Court of competent
jurisdiction within the United States. Nothing in this Clause constitutes or
should be understood to constitute a waiver of the Reinsurer's rights to
commence an action in any Court of competent jurisdiction in the United States,
to remove an action to a United States District Court, or to seek a transfer of
a case to another Court as permitted by the laws of the United States or of any
State in the United States. It is further agreed that service of process in
such suit may be made upon Messrs. Mendes & Mount, 000 Xxxxx Xxxxxxxx, Xxxxx
0000, Xxx Xxxxxxx, XX 00000, and that in any suit instituted, the Reinsurer
will abide by the final decision of such Court or of any Appellate Court in the
event of an appeal.
B. The above-named are authorized and directed to accept service of
process on behalf of the Reinsurer in any such suit and/or upon the request of
the Company to give written undertaking to the Company that they will enter a
general appearance upon the Reinsurer's behalf in the event such a suit shall
be instituted.
C. Further, pursuant to any statute of any state, territory or district of
the United States which makes provision therefor, the Reinsurer hereon hereby
designates the Superintendent, Commissioner or Director of Insurance or other
officer specified for that purpose in the statute, or his successor or
successors in office, as their true and lawful attorney upon whom may be served
any lawful process in action, suit or proceeding instituted by or on behalf of
the Company or any beneficiary hereunder arising out of this Agreement, and
hereby designate the above-named as the person to whom the said officer is
authorized to mail such process or a true copy thereof.
ARTICLE XXVI
INSOLVENCY:
A. The portion of any risk or obligation assumed by the Reinsurer, when
such portion is ascertained, shall be payable on demand of the Company at the
same time as the Company shall pay its net retained portion of such risk or
obligation, with reasonable provision for verification before payment, and the
reinsurance shall be payable by the Reinsurer, on the basis of the liability of
the Company under the policy or policies reinsured without diminution because
of the insolvency of the Company.
B. In the event of the insolvency of one or more than one of the
Companies, reinsurance under this Agreement shall be payable immediately on
demand, with reasonable provision for verification, on the basis of claims
allowed against the insolvent Company(ies) by any court of competent
jurisdiction or by any liquidator, receiver, or statutory successor of the
Company(ies) having authority to allow such claims, without diminution because
of such insolvency or because such liquidator, receiver, or statutory successor
has failed to pay all or a portion of any claims. Such payments by the
Reinsurer shall be made directly to the Company or its liquidator, receiver or
statutory successor, except where the contract of insurance or reinsurance
provides another payee of such reinsurance in the event of the insolvency of
the Company(ies).
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01-96-0599
C. It is agreed, however, that the liquidator or receiver or statutory
successor of the insolvent Company(ies) will give written notice to the
Reinsurer of the pendency of a claim against the insolvent Company(ies) on the
policy or policies reinsured within a reasonable time after such claim is filed
in the insolvency proceeding and that during the pendency of such claim the
Reinsurer may investigate such claim and interpose, at its own expense, in the
proceeding where such claim is to be adjudicated any defense or defenses which
it may deem available to the Company(ies) or its liquidator or receiver or
statutory successor. The expense thus incurred by the Reinsurer will be
chargeable, subject to court approval, against the insolvent Company(ies) as
part of the expense of liquidation to the extent of a proportionate share of
the benefit which may accrue to the Company(ies) solely as a result of the
defense undertaken by the Reinsurer.
D. Where two or more reinsurers are involved in the same claim and a
majority in interest elect to interpose defense to such claim, the expense will
be apportioned in accordance with the terms of this Agreement as though such
expense had been incurred by the insolvent Company(ies).
ARTICLE XXVII
INTERMEDIARY:
Xxxxxxx Incorporated Reinsurance Intermediaries is hereby recognized as
the Intermediary negotiating this Agreement for all business hereunder. All
communications (including but not limited to notices, statements, premium,
return premium, commissions, taxes, losses, loss adjustment expense, salvages
and loss settlements) relating thereto shall be transmitted to the Company or
the Reinsurer through Xxxxxxx Incorporated Reinsurance Intermediaries, 000
Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000-0000. Payments by the Company to the
Intermediary shall be deemed to constitute payment to the Reinsurer. Payments
by the Reinsurer to the Intermediary shall be deemed to constitute payment to
the Company only to the extent that such payments are actually received by the
Company.
ARTICLE XXVIII
GOVERNING LAW:
This Agreement shall be governed by and interpreted in accordance with
the laws of the State of California, U.S.A.
ARTICLE XXIX
SEVERAL LIABILITY NOTICE:
The subscribing reinsurers' obligations under contracts of reinsurance
to which they subscribe are several and not joint and are limited solely to the
extent of their individual subscriptions. The subscribing reinsurers are not
responsible for the subscription of any co-subscribing reinsurer who for any
reason does not satisfy all or part of its obligations.
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01-96-0599
INTERESTS AND LIABILITIES CONTRACT
(hereinafter referred to as the "Contract")
to the
FOURTH EXCESS OF LOSS REINSURANCE AGREEMENT
(hereinafter referred to as the "Agreement")
It is hereby mutually agreed by
SOUTHERN CALIFORNIA PHYSICIANS INSURANCE EXCHANGE
and/or S.C.P.I.E. INDEMNITY COMPANY
and/or S.C.P.I.E. MANAGEMENT COMPANY
while acting on behalf of:
S.C.P.I.E. MANAGEMENT COMPANY
Beverly Hills, California
(hereinafter referred to as the "Company")
and
THE TRAVELERS INDEMNITY COMPANY
(hereinafter referred to as the "Subscribing Reinsurer")
that the Subscribing Reinsurer shall have a 5.00% participation in the Interests
and Liabilities of the Reinsurer as set forth in the Agreement attached hereto
entitled Fourth Excess of Loss Reinsurance Agreement.
Such participation shall be several and not joint with the
participation of other subscribing reinsurers, and the Subscribing Reinsurer
shall under no circumstances participate in the Interests and Liabilities, if
any, of the other subscribing reinsurers in said Agreement.
The Company shall pay to the Subscribing Reinsurer 5.00% of all premiums
due or which may become due the Reinsurer in accordance with the provisions of
the Agreement attached.
This Contract shall attach on January 1, 1996, and is subject to the
provisions contained in the Term Article of the attached Agreement, which are
hereby incorporated by reference into this Contract and which shall apply as
though they had been specifically provided for herein.
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01-96-0599
The Agreement to which this Contract is attached and therefore the
Interests and Liabilities of the Subscribing Reinsurer therein, may be changed,
altered and amended as the parties may agree, provided such change, alteration
and amendment is evidenced in writing or by Addendum to this Contract, executed
by the Company and the Subscribing Reinsurer.
IN WITNESS WHEREOF, the parties hereto have caused this Interests and
Liabilities Contract to be signed in duplicate by their duly authorized
representatives.
Signed in Beverly Hills, California
this day of , 199
SOUTHERN CALIFORNIA PHYSICIANS INSURANCE EXCHANGE
and/or S.C.P.I.E. INDEMNITY COMPANY
and/or S.C.P.I.E. MANAGEMENT COMPANY
while acting on behalf of:
S.C.P.I.E. MANAGEMENT COMPANY
By:
---------------------------------
Signed in
this day of , 199
THE TRAVELERS INDEMNITY COMPANY
By: /s/
---------------------------------
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17
01-96-0599
INTERESTS AND LIABILITIES CONTRACT
(hereinafter referred to as the "Contract")
to the
FOURTH EXCESS OF LOSS REINSURANCE AGREEMENT
(hereinafter referred to as the "Agreement")
It is hereby mutually agreed by
SOUTHERN CALIFORNIA PHYSICIANS INSURANCE EXCHANGE
and/or S.C.P.I.E. INDEMNITY COMPANY
and/or S.C.P.I.E. MANAGEMENT COMPANY
while acting on behalf of:
S.C.P.I.E. MANAGEMENT COMPANY
Beverly Hills, California
(hereinafter referred to as the "Company")
and
AXA REINSURANCE
(hereinafter referred to as the "Subscribing Reinsurer")
that the Subscribing Reinsurer shall have a 5.00% participation in the
Interests and Liabilities of the Reinsurer as set forth in the Agreement
attached hereto entitled Fourth Excess of Loss Reinsurance Agreement.
Such participation shall be several and not joint with the
participation of other subscribing reinsurers, and the Subscribing Reinsurer
shall under no circumstances participate in the Interests and Liabilities, if
any, of the other subscribing reinsurers in said Agreement.
The Company shall pay to the Subscribing Reinsurer 5.00% of all
premiums due or which may become due the Reinsurer in accordance with the
provisions of the Agreement attached.
This Contract shall attach on January 1, 1996, and is subject to the
provisions contained in the Term Article of the attached Agreement, which are
hereby incorporated by reference into this Contract and which shall apply as
though they had been specifically provided for herein.
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01-96-0599
The Agreement to which this Contract is attached and therefore the
Interests and Liabilities of the Subscribing Reinsurer therein, may be changed,
altered and amended as the parties may agree, provided such change, alteration
and amendment is evidenced in writing or by Addendum to this Contract, executed
by the Company and the Subscribing Reinsurer.
IN WITNESS WHEREOF, the parties hereto have caused this Interests and
Liabilities Contract to be signed in duplicate by their duly authorized
representatives.
Signed in Beverly Hills, California
this day of , 199
SOUTHERN CALIFORNIA PHYSICIANS INSURANCE EXCHANGE
and/or S.C.P.I.E. INDEMNITY COMPANY
and/or S.C.P.I.E. MANAGEMENT COMPANY
while acting on behalf of:
S.C.P.I.E. MANAGEMENT COMPANY
By:_________________________________
Signed in
this day of , 199
AXA REASSURANCE
Through
COURTAGE DE REASSURANCES
H. DES XXXXXXX X.X.
By: /s/
----------------------------------
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19
01-96-0599
INTERESTS AND LIABILITIES CONTRACT
(hereinafter referred to as the "Contract")
to the
FOURTH EXCESS OF LOSS REINSURANCE AGREEMENT
(hereinafter referred to as the "Agreement")
It is hereby mutually agreed by
SOUTHERN CALIFORNIA PHYSICIANS INSURANCE EXCHANGE
and/or S.C.P.I.E. INDEMNITY COMPANY
and/or S.C.P.I.E. MANAGEMENT COMPANY
while acting on behalf of:
S.C.P.I.E. MANAGEMENT COMPANY
Beverly Hills, California
(hereinafter referred to as the "Company")
and
SWISS REINSURANCE COMPANY
(hereinafter referred to as the "Subscribing Reinsurer")
that the Subscribing Reinsurer shall have a 5.00% participation in the
Interests and Liabilities of the Reinsurer as set forth in the Agreement
attached hereto entitled Fourth Excess of Loss Reinsurance Agreement.
Such participation shall be several and not joint with the
participation of other subscribing reinsurers, and the Subscribing Reinsurer
shall under no circumstances participate in the Interests and Liabilities, if
any, of the other subscribing reinsurers in said Agreement.
The Company shall pay to the Subscribing Reinsurer 5.00% of all
premiums due or which may become due the Reinsurer in accordance with the
provisions of the Agreement attached.
This Contract shall attach on January 1, 1996, and is subject to the
provisions contained in the Term Article of the attached Agreement, which are
hereby incorporated by reference into this Contract and which shall apply as
though they had been specifically provided for herein.
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20
01-96-0599
The Agreement to which this Contract is attached and therefore the
Interests and Liabilities of the Subscribing Reinsurer therein, may be changed,
altered and amended as the parties may agree, provided such change, alteration
and amendment is evidenced in writing or by Addendum to this Contract, executed
by the Company and the Subscribing Reinsurer.
IN WITNESS WHEREOF, the parties hereto have caused this Interests and
Liabilities Contract to be signed in duplicate by their duly authorized
representatives.
Signed in Beverly Hills, California
this day of , 199
SOUTHERN CALIFORNIA PHYSICIANS INSURANCE EXCHANGE
and/or S.C.P.I.E. INDEMNITY COMPANY
and/or S.C.P.I.E. MANAGEMENT COMPANY
while acting on behalf of:
S.C.P.I.E. MANAGEMENT COMPANY
By:_________________________________
Signed in
this day of , 199
SWISS REINSURANCE COMPANY
By: /s/
----------------------------------
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21
01-96-0599
INTERESTS AND LIABILITIES CONTRACT
(hereinafter referred to as the "Contract")
to the
FOURTH EXCESS OF LOSS REINSURANCE AGREEMENT
(hereinafter referred to as the "Agreement")
It is hereby mutually agreed by
SOUTHERN CALIFORNIA PHYSICIANS INSURANCE EXCHANGE
and/or S.C.P.I.E. INDEMNITY COMPANY
and/or S.C.P.I.E. MANAGEMENT COMPANY
while acting on behalf of:
S.C.P.I.E. MANAGEMENT COMPANY
Beverly Hills, California
(hereinafter referred to as the "Company")
and
GIO INSURANCE LIMITED
(hereinafter referred to as the "Subscribing Reinsurer")
that the Subscribing Reinsurer shall have a 10.00% participation in the
Interests and Liabilities of the Reinsurer as set forth in the Agreement
attached hereto entitled Fourth Excess of Loss Reinsurance Agreement.
Such participation shall be several and not joint with the
participation of other subscribing reinsurers, and the Subscribing Reinsurer
shall under no circumstances participate in the Interests and Liabilities, if
any, of the other subscribing reinsurers in said Agreement.
The Company shall pay to the Subscribing Reinsurer 10.00% of all
premiums due or which may become due the Reinsurer in accordance with the
provisions of the Agreement attached.
This Contract shall attach on January 1, 1996, and is subject to the
provisions contained in the Term Article of the attached Agreement, which are
hereby incorporated by reference into this Contract and which shall apply as
though they had been specifically provided for herein.
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01-96-0599
The Agreement to which this Contract is attached and therefore the
Interests and Liabilities of the Subscribing Reinsurer therein, may be changed,
altered and amended as the parties may agree, provided such change, alteration
and amendment is evidenced in writing or by Addendum to this Contract, executed
by the Company and the Subscribing Reinsurer.
IN WITNESS WHEREOF, the parties hereto have caused this Interests and
Liabilities Contract to be signed in duplicate by their duly authorized
representatives.
Signed in Beverly Hills, California
this day of , 199
SOUTHERN CALIFORNIA PHYSICIANS INSURANCE EXCHANGE
and/or S.C.P.I.E. INDEMNITY COMPANY
and/or S.C.P.I.E. MANAGEMENT COMPANY
while acting on behalf of:
S.C.P.I.E. MANAGEMENT COMPANY
By:_________________________________
Signed in
this day of , 199
GIO INSURANCE LIMITED
Through
AUSTRALIAN INDEPENDENT REINSURANCE SERVICES
By: /s/
---------------------------------
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23
01-96-0599
INTERESTS AND LIABILITIES CONTRACT
(hereinafter referred to as the "Contract")
to the
FOURTH EXCESS OF LOSS REINSURANCE AGREEMENT
(hereinafter referred to as the "Agreement")
It is hereby mutually agreed by
SOUTHERN CALIFORNIA PHYSICIANS INSURANCE EXCHANGE
and/or S.C.P.I.E. INDEMNITY COMPANY
and/or S.C.P.I.E. MANAGEMENT COMPANY
while acting on behalf of:
S.C.P.I.E. MANAGEMENT COMPANY
Beverly Hills, California
(hereinafter referred to as the "Company")
and
HANNOVER RUCKVERSICHERUNGS-AKTIENGESELLSCHAFT
XXXXX UND XXXXX RUCKVERSICHERUNGS-AKTIENGESELLSCHAFT
(hereinafter referred to as the "Subscribing Reinsurer")
that the Subscribing Reinsurer shall have a 5.00% participation in the Interests
and Liabilities of the Reinsurer as set forth in the Agreement attached hereto
entitled Fourth Excess of Loss Reinsurance Agreement.
Such participation shall be several and not joint with the
participation of other subscribing reinsurers, and the Subscribing Reinsurer
shall under no circumstances participate in the Interests and Liabilities, if
any, of the other subscribing reinsurers in said Agreement.
The Company shall pay to the Subscribing Reinsurer 5.00% of all premiums
due or which may become due the Reinsurer in accordance with the provisions of
the Agreement attached.
This Contract shall attach on January 1, 1996, and is subject to the
provisions contained in the Term Article of the attached Agreement, which are
hereby incorporated by reference into this Contract and which shall apply as
though they had been specifically provided for herein.
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01-96-0599
The Agreement to which this Contract is attached and therefore the
Interests and Liabilities of the Subscribing Reinsurer therein, may be changed,
altered and amended as the parties may agree, provided such change, alteration
and amendment is evidenced in writing or by Addendum to this Contract, executed
by the Company and the Subscribing Reinsurer.
IN WITNESS WHEREOF, the parties hereto have caused this Interests and
Liabilities Contract to be signed in duplicate by their duly authorized
representatives.
Signed in Beverly Hills, California
this day of , 199
SOUTHERN CALIFORNIA PHYSICIANS INSURANCE EXCHANGE
and/or S.C.P.I.E. INDEMNITY COMPANY
and/or S.C.P.I.E. MANAGEMENT COMPANY
while acting on behalf of:
S.C.P.I.E. MANAGEMENT COMPANY
By:_________________________________
Signed in
this day of , 199
On behalf of each of the following companies, whose liability shall be several
and not joint, for their respective shares of the percentage shown on page one
of this Contract.
HANNOVER RUCKVERSICHERUNGS-AKTIENGESELLSCHAFT - 80%
XXXXX UND XXXXX RUCKVERSICHERUNGS-AKTIENGESELLSCHAFT - 20%
By: /s/
--------------------------------
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25
NUCLEAR INCIDENT EXCLUSION CLAUSE --
LIABILITY -- REINSURANCE U.S.A.
(Wherever the word "Reassured" appears in this clause, it shall be deemed to
read "Reassured," "Reinsured," "Company," or whatever other word is employed
throughout the text of the reinsurance agreement to which this clause is
attached to designate the company or companies reinsured.)
(1) This reinsurance does not cover any loss or liability accruing
to the Reassured 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 Reassured (new, renewal and
replacement) of the classes specified in Clause II of this paragraph
(2) from the time specified in Clause III 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.
( injury, sickness, disease, death or destruction
to ( with respect to which an insured
( under the policy is also an insured
( bodily injury or property damage
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 1st May, 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 Reassured on
New York risks, until 90 days following approval of the
Limited Exclusion Provision by the Governmental Authority
have 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 Reassured (new, renewal and
replacement) affording the following coverages:
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:
1. 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 State of America, or any agency thereof,
with any person or organization.
XXXXXXX INCORPORATED REINSURANCE INTERMEDIARIES
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II. Under any Medical Payments Coverage, or under any Supplementary
Payments Provision relating
( immediate medical or surgical death
to ( to expenses incurred with respect
( first aid.
( bodily injury, sickness, disease or death
to ( resulting from the hazardous
( properties of nuclear material and bodily injury
arising out of the operation of a nuclear facility by any person or
organization.
( injury, sickness, disease, death or
III. Under any Liability Coverage to ( destruction
( bodily injury or property damage
resulting from the hazardous properties of nuclear material, if
(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
( injury, sickness, disease, death or destruction
(c) ( arises out of the furnishing by an insured
( of services, bodily injury or property damage
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
( injury to or destruction of property at such nuclear facility.
to (
( 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 amendatory thereof; "SPENT
FUEL" means any fuel element or fuel component, solid 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
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 under the first two
paragraphs of the definition of nuclear facility; "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;
(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 self-supporting chain reaction or to
contain a xxxxxxxx xxxx of fissionable material;
With respect to injury to or destruction of property, the word "injury"
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 1st May,
1960, provided this paragraph (3) shall not be applicable to
(i) Garage and Automobile Policies issued by the Reassured on New
York risks, or
(ii) 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 Reassured 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 printed in italics in the Limited Exclusion Provision 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.
-------------------------------------------------------------------------------
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