EXHIBIT 10.21
REINSURANCE POOLING AGREEMENT
THIS AGREEMENT, effective as of January 1, 1999, by and between PXRE
Reinsurance Company (hereinafter sometimes called "PXRE Reinsurance"), a
corporation organized and existing under the laws of the State of Connecticut,
and Transnational Insurance Company (hereinafter sometimes called
"Transnational"), a corporation organized and existing under the laws of the
State of Connecticut.
W I T N E S S E T H :
WHEREAS, the parties hereto are engaged inter alia in the business of
insurance and reinsurance in the United States and elsewhere; and
WHEREAS, the parties hereto believe that it will be to their mutual
benefit and advantage that the aggregate net retained portion of their policies
and treaties of insurance and reinsurance be adjusted by mutual reinsurance to
specified percentages;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the parties hereto agree as follows:
FIRST: The phrase "Business" as used herein shall mean the net
retained portion of policies and treaties of insurance and reinsurance of all
kinds written by any of the parties hereto effective on and after January 1,
1999, and during the term of this Agreement, excluding any such insurance or
reinsurance which the parties agree in writing to exclude from this Agreement.
SECOND: Beginning January 1, 1999, and continuing during the term of
this Agreement, the parties hereto shall participate in each other's Business to
the extent of the following percentages (hereinafter referred to as the
"Specified Percentages"):
PXRE Reinsurance 75%
Transnational 25%
This result shall be accomplished as follows:
(a) Transnational shall cede to PXRE Reinsurance, and PXRE Reinsurance shall
accept, 100% of the liability on account of Business of Transnational; and
(b) PXRE Reinsurance shall cede and retrocede to Transnational, and
Transnational shall accept, the Transnational Specified Percentage of
liability on account of both the Business of PXRE Reinsurance and the
Business of Transnational.
THIRD: In consideration of the acceptance of liability by way of
reinsurance as hereinabove provided, each of the ceding parties shall pay to
each of the accepting parties an amount equal to the retained portion of the
premium written by the ceding company with respect to the Business comprising
each cession hereunder; it being understood that in lieu of any commission
thereon all of the underwriting expenses (other than federal income and profit
taxes) pertaining to the Business comprising each such cession hereunder shall
be apportioned among the parties to this Agreement in accordance with the
Specified Percentages.
FOURTH: Each party hereto may maintain its own reinsurance or
retrocession covers for its protection. It is understood and agreed that PXRE
Reinsurance may arrange for general reinsurances to apply to the combined
Business of both the parties to this Agreement and that the premiums paid
therefor shall be apportioned among said parties to this Agreement in accordance
with the Specified Percentages.
FIFTH: Accounts shall be rendered quarterly by each party (as the
ceding company) to the other party (as the accepting company) within 30 days
after the close of the quarter for which the account is tendered. The balance on
either side shall be paid within 60 days thereafter.
SIXTH: Losses shall be adjusted, settled or compromised by the ceding
party on each risk and the result shall be binding upon the other party hereto
and the parties hereto shall pay their Specified Percentages of such losses and
all expenses connected therewith, but such other parties shall be credited with
their Specified Percentages of any salvage or recovery which may be realized by
the ceding party.
SEVENTH: Each accepting party shall at all reasonable times have the
right to inspect at the offices of the ceding party the books and documents
referring to the Business ceded hereunder, but it is agreed that errors or
omissions inadvertently made shall not invalidate the liability of any accepting
party hereunder.
EIGHTH: The term of this Agreement shall be unlimited in duration but
this Agreement may be canceled upon written notice given by any party to the
other party hereto prior to June 30 of any calendar year, such cancellation to
become effective as of midnight of December 31 following. Cancellation by any
one party shall terminate this Agreement as to all parties as of the same date.
Upon cancellation of this Agreement, the liability of all accepting parties with
respect to all Business ceded hereunder and still outstanding and unexpired at
the effective date of such cancellation shall, unless otherwise mutually agreed
in writing among the parties hereto, continue in force until expiry in ordinary
course, or until the cancellation of such Business can be effected.
NINTH: (a) Reinsurer's Obligation: In the event of the insolvency of
PXRE Reinsurance, the reinsurance afforded by this Agreement shall be
payable by Transnational on the basis of the liability of PXRE Reinsurance
under the Business, without diminution because of such insolvency, directly
to PXRE Reinsurance or its domiciliary liquidator,
receiver or conservator, except (i) where this Agreement specifically
provides another payee of such reinsurance in the event of the insolvency
of PXRE Reinsurance or (ii) where Transnational, with the consent of the
direct insured or insureds, has assumed such policy obligations as direct
obligations of Transnational to such payees and in substitution for the
obligations of PXRE Reinsurance to such payees.
(b) Notice and Defense of Claims: Transnational 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 proceedings. Transnational 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 PXRE Reinsurance or its
liquidator, receiver, conservator, or statutory successor. If more than one
reinsurer is involved, they may designate one reinsurer to act for all.
(c) Defense Expense: The expense thus incurred by Transnational shall be
chargeable, subject to court approval, against the insolvent PXRE
Reinsurance as part of the expense of liquidation to the extent of a
proportionate share of the benefit which may accrue to PXRE Reinsurance
solely as a result of the defense undertaken by Transnational.
(d) Reinsurer's Obligation: In the event of the insolvency of Transnational,
the reinsurance afforded by this Agreement shall be payable by PXRE
Reinsurance on the basis of the liability of Transnational under the
Business, without diminution because of such insolvency, directly to
Transnational or its domiciliary liquidator, receiver or conservator except
(i) where this Agreement specifically provides another payee of such
reinsurance in the event of the insolvency of Transnational or (ii) where
PXRE Reinsurance, with the consent of the direct insured or insureds, has
assumed such policy obligations as direct obligations of PXRE Reinsurance
to such payees and in substitution for the obligations of Transnational to
such payees.
(e) Notice and Defense of Claims: PXRE Reinsurance 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 proceedings. PXRE Reinsurance
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 Transnational or
its liquidator, receiver, conservator, or statutory successor. If more than
one reinsurer is involved, they may designate one reinsurer to act for all.
(f) Defense Expense: The expense thus incurred by PXRE Reinsurance shall be
chargeable, subject to court approval, against the insolvent Transnational
as part of the expense of liquidation to the extent of a proportionate
share of the benefit which may accrue to Transnational solely as a result
of the defense undertaken by PXRE Reinsurance.
(g) Offset: Any debts or credits of the same class, liquidated or unliquidated,
in favor of or against either party on the date of the receivership or
liquidation order, under this Agreement and any other reinsurance
agreements heretofore or hereafter entered into between PXRE Reinsurance
and Transnational (except where the obligation was purchased by or
transferred to be used as an offset) are deemed mutual debts or credits and
shall be set off with the balance only to be allowed or paid. Although such
claim on the part of either party against the other may be unliquidated or
undetermined in amount on the date of the entry of the receivership or
liquidation order, such claim will be regarded as being in existence as of
such date and any credits or claims of the same class then in existence and
held by the other party may be offset against it.
(h) Rights of Parties: Nothing hereinabove set forth in this Insolvency Article
shall in any way change the relationship or status of the parties hereto,
nor enlarge the obligations of either party to any other except as
specifically hereinabove provided, to wit, to pay the receiver on the basis
of the amount of liability determined in the liquidation or receivership
proceeding rather than on the basis of the actual amount of loss
(dividends) paid by the domiciliary liquidator, receiver or conservator to
allowed claimants. Nor, except as hereinabove specifically provided, shall
anything in this Insolvency Article in any manner create any obligations or
establish any right against Transnational or PXRE Reinsurance in favor of
any third parties or any other persons not parties to this Agreement.
TENTH: It is understood and agreed that the proceeds of any security
posted in favor of either party to this Agreement to secure the performance of
obligations on any business subject to pooling under this Agreement, whether by
letter of credit, trust agreement, funds withheld or otherwise, shall be pooled
pursuant to all of the terms and conditions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement by their proper respective officers as of June 4th, 1999.
ATTEST: PXRE REINSURANCE COMPANY
Xxxxx X. Xxxxxxx By Xxxxxxx X. Xxxxxx
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Secretary Xxxxxxx X. Xxxxxx
Senior Vice President & Treasurer
ATTEST: TRANSNATIONAL INSURANCE
COMPANY
Xxxxx X. Xxxxxxx By Xxxxxxx X. Xxxxxx
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Secretary Xxxxxxx X. Xxxxxx
Senior Vice President & Treasurer
