Exhibit 10.1
3/31/97 10-Q
[[Note: Employee Solutions, Inc. has requested confidential treatment for
certain portions of this document. The portions for which confidential treatment
has been requested, and which are redacted herein, are designated by "****"
marks herein.]]
REINSURANCE AGREEMENT
---------------------
This Reinsurance Agreement effective May 1, 1995, between Reliance
National Indemnity Company and Reliance Insurance Company, insurance
corporations with business offices at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ (the
"Company") and Camelback Insurance Ltd., an insurance corporation with its
principal business office at c/o American International, Ltd., 29 Richmond Road,
P.O. Box HM 152, ▇▇▇▇▇▇▇▇, Bermuda HM AX (the "Reinsurer")
In consideration of the payment of the reinsurance premium, and subject
to the terms, conditions and limits of liability set forth below, the Reinsurer
does hereby reinsure the Company in respect of the Company's Policies.
ARTICLE I. DEFINITIONS
The following terms shall have these meanings:
A. "Policy" or "Policies" - Policies of insurance and any extension or
renewals including endorsements written through Alexander & Alexander
of Arizona, Inc. and ESI Risk Management Agency, Inc. under Producer
Code Numbers 80581 and 82344 respectively, and issued on behalf of the
Company to Employee Solutions, Inc., first named insured, and as
described in Schedule I to this Agreement.
B. "Incurred Losses" - All Paid Losses, plus reserves for unpaid Losses
both reported and unreported attributable to Policies and as
established by the Company.
C. "Paid Losses" - Payments for claims under the Policies, including
any Deductible Amounts made by the Company, and not reimbursed by the
Insured;
D. "Allocated Loss Adjustment Expenses" - Expenses that the Company, or
any claims administrator, under the Company's accounting practices,
directly allocates to a particular claim which shall include expenses
paid by the Company in connection with the Policies, whether or not
related to Paid Losses, and any other expenses paid by the Company in
connection with the administration of claims arising under the
Policies, not
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including Unallocated Loss Adjustment Expenses. These Allocated Loss
Adjustment Expenses may include: attorney's fees, court costs and
related costs such as filing fees; the costs of medical examinations,
expert medical or other review or testimony, laboratory services,
x-rays, autopsies; and the costs for stenographic services, witnesses,
summonses and copies of documents. Allocated Loss Adjustment Expenses
shall also include expenses incurred in connection with determining
questions of the construction of Policies, their validity, and
proceedings to determine the rights, duties or obligations if any of
any Insureds or parties to the Policies. Allocated Loss Adjustment
Expenses do not include Unallocated Loss Adjustment Expenses.
E. "Unallocated Loss Adjustment Expenses" - Expenses which are not
directly allocated to a particular claim and shall include the expenses
of the Company's employees or of a claims administrator including their
salaries and traveling expenses, and the Company's overhead.
F. "Return Premiums" - Amounts payable to Insureds under Policies as
return of unearned premiums on canceled or amended policies,
adjustments arising out of premium audits or as required by law or
rating plans, or as dividends.
G. Terms defined or given special meanings within Policies have the
same meanings in this Agreement as those given to them in the Policies.
H. Other terms or phrases may be given special meanings within this
Agreement.
ARTICLE II. COVERAGE
The Reinsurer is liable to the Company under this Agreement for the
following:
A. Workers' Compensation
---------------------
1. Up to and including the first $250,000 of Incurred Losses
covered under Part One - Workers' Compensation Insurance of
Policies described as Workers' Compensation in Schedule I
arising out of any accident involving one or more employees of
an Insured; plus all Allocated Loss Adjustment Expenses
attributable to such Losses.
2. Up to and including the first $250,000 of Incurred Losses
covered under Part One - Workers' Compensation Insurance of
Policies described as Workers' Compensation in Schedule I
arising out of occupational disease affecting any one employee
of the Insured; plus all
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Allocated Loss Adjustment Expenses attributable to such
Losses.
B. Workers' Compensation/Employer's Liability
------------------------------------------
1. Up to and including the first $250,000 of Incurred Losses
covered under Part Two - Employer's Liability Insurance of
Policies described as Workers' Compensation in Schedule I
arising out of bodily injury by accident or occurrence; plus
all Allocated Loss Adjustment Expenses attributable to such
Losses; and
2. Up to and including the first $250,000 of Incurred Losses
covered under Part Two - Employer's Liability Insurance of
Policies described as Workers' Compensation in Schedule I
arising out of bodily injury by disease; plus all Allocated
Loss Adjustment Expenses attributable
to such Losses.
C. For all costs and expenses incurred by the Company in connection
with seeking recovery as salvage or subrogation for Paid Losses subject
to reinsurance under this Article.
D. For Unallocated Loss Adjustment Expenses, in accordance with
Schedule II attached to this Agreement.
E. For 100% of Paid Losses in excess of Policy limits, but otherwise
within the terms and conditions of the Policy arising as the result of
an action against the Company to recover damages, which an Insured
under the Policy is legally obligated to pay to a third party, alleging
negligence or bad faith in rejecting a settlement within the Policy
limits, or in discharging its duty to defend an Insured under the
Policy including prosecuting any appeals; plus all Allocated Loss
Adjustment Expenses attributable to such Losses.
F. For 100% of any punitive, exemplary, compensatory or consequential
damages, but not including amounts payable under II.E, payable by the
Company as the result of an action against the Company alleging
negligence or bad faith in the handling of any claim made under a
Policy as a result of a direct act by the Reinsurer; plus Allocated
Loss Adjustment Expenses attributable to such Losses.
ARTICLE III. CLAIMS
A. The Company or its authorized representatives shall adjust, settle
or compromise any and all claims arising under the Policies and shall
further commence, continue, defend, or withdraw from actions, suits or
proceedings under the Policies, and generally do all things relating to
claims thereunder that it deems necessary or expedient. Any
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authorized representative shall follow the Company's claims processing
guidelines. While the Reinsurer is not required to investigate or
defend claims or suits under the Policies, it may associate, at its own
expense, with the Company and its authorized representatives in the
defense of any claim, suit or proceeding involving this reinsurance.
Except as otherwise specifically provided for in this Agreement, it is
the intent of this Agreement that the Reinsurer's liability shall, in
all respect, follow the fortunes of the Company under the Policies. All
adjustments, settlements and compromises by the Company and its
authorized representatives of claims involving Policies, when made by
the Company or its authorized representatives, shall be unconditionally
binding on the Reinsurer.
B. All records pertaining to this Agreement and claims arising under
the Policies shall be owned by the Company. The Company will, at the
request of the Reinsurer, furnish the Reinsurer a copy of any of the
Policies and all endorsements and shall make available for inspection
and place at the disposal of the Reinsurer at reasonable times any of
its records or claims subject to reinsurance under this Agreement.
C. The Company will pay or credit the Reinsurer up to the amount of the
Reinsurer's interest for amounts attributable to salvage, reimbursement
obtained or recovery made by the Company relating to any of the
Policies, including recovery for any Deductible Amounts as set forth in
the Policies which were paid by the Company, after deducting the direct
cost (excluding Unallocated Loss Adjustment Expenses) of obtaining such
salvage or reimbursement or making such recovery, and after the Company
has been reimbursed up to the amount of any Paid Losses for which the
Reinsurer is not liable under Article II.
ARTICLE IV. PAID LOSS DEPOSIT FUND
A. The Reinsurer will provide funds for the Company to establish and
maintain in its own name a Paid Loss Deposit Fund, for payment of the
Reinsurer's liabilities under Article II of this Agreement. The
initially required minimum level of the Paid Loss Deposit Fund shall be
$****. The Company may at its option adjust the required level of the
Paid Loss Deposit Fund quarterly. The adjusted level of the Paid Loss
Deposit Fund shall not be greater than 100% of the amount of the total
Paid Losses including Allocated Loss Adjustment Expenses paid for the
preceding quarter.
B. The Reinsurer shall, upon receipt of a written request by the
Company or a designated claims administrator forward by wire transfer
within three (3) business days funds to the
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Company sufficient to maintain the Paid Loss Deposit Fund balance at
the minimum level required in Section A above.
C. In the event the Company is required to make a payment for Paid
Losses including Allocated Loss Adjustment Expenses on any one claim in
the amount of $25,000, or greater, the Reinsurer shall, notwithstanding
the availability of funds in the Paid Loss Deposit Fund, immediately
upon receipt of notice forward by wire transfer funds for the full
amount of the payments.
D. The Company may increase the required level of the Paid Loss Deposit
Fund each time the Reinsurer fails to make any payment to the Company
within the time required by this Agreement. No one individual increase
will increase the required level to more than twice that required
before the increase.
ARTICLE V. REINSURANCE PREMIUM
A. The reinsurance premium shall be the monies actually received and
recorded by the Company as premium for the Policies less Return
Premiums minus Ceding Commission for the Company:
1. For Workers' Compensation Policies:
a. Hazar
-----
1. Deposit Premium of $**** flat for Company
expenses, including excess loss premium and fees
for Boards and Bureaus.
2. Deposit Premium of $**** adjustable based on
actual Standard Premium at a factor of ****%
(estimated Standard Premium of $****) for:
a. premium taxes; and
b. liabilities for assessments and pools.
b. ESI Corporate Program
---------------------
1. Company expenses of $**** flat; Excess Loss
Premium, limited loss control services required
by state law; additionally, premium for taxes,
fees for boards and bureaus, liability for
assessments and pools and residual market loads
shall be adjustable based on audited Standard
Premium.
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c. "Stand Alone" Captive Program
-----------------------------
1. Deposit Premium shall be based on ****%
(Profit and Administration charge of ****%,
Excess Loss Premium Factor of ****%, Boards and
Bureaus charge of ****%) of the estimated
Standard Premium for Company expenses, excess
loss premium, and fees for boards and bureaus.
2. Premium taxes and residual market loads shall
be based on estimated policy premium multiplied
by the applicable state factors.
B. Within fifteen (15) days after the end of each calendar quarter, the
Company will send the Reinsurer a Reconciliation Statement including:
a. Premiums received by the Company under the Policies;
b. Return Premiums;
c. Premiums payable to the Reinsurer;
d. Payments made by the Reinsurer;
e. Paid Losses;
f. Allocated Loss Adjustment Expenses;
g. Unallocated Loss Adjustment Expenses;
h. Amounts required to fund the Paid Loss Deposit Fund;
i. Federal Insurance Excise Tax or other tax on
Reinsurance Premium paid by the Company;
j. Any other amounts paid or recovered by the Company
subject to this Agreement;
k. Reconciliation Balance;
l. Claims reported; and
m. Such other information and in such form and detail as
shall be mutually agreed upon in writing by the
Company and the Reinsurer, or that may be required by
regulatory authorities with jurisdiction over either
party.
C. If the result of any such reconciliation is that the Reinsurer owes
money to the Company, the Reinsurer will within fifteen (15) days after
receipt of the Reconciliation Statement pay the amount due.
D. If the result of any such reconciliation is that the Company owes
money to the Reinsurer, the Company will pay the amount due as set
forth in the Reconciliation Statement.
E. All amounts due the Reinsurer or the Company under this Agreement or
any other agreement between the parties shall be subject to the right
of offset.
ARTICLE VI. COLLATERAL TRUST
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A. The Reinsurer shall execute a Trust Agreement and establish a trust
account for the benefit of the Company as security for the Reinsurer's
obligations under this Agreement. The bank must be approved by the
Company. The Trust Agreement shall be in a form acceptable to the
Company.
B. The Reinsurer's obligations being secured shall include:
1. Losses and Allocated Loss Adjustment Expenses, for which
the Reinsurer is liable under Article II paid by the Company,
but not recovered from Reinsurer;
2. Company's reserves for Losses reported and Allocated Loss
Adjustment Expenses on such Losses for which the Reinsurer is
liable under Article II;
3. Company's reserves for Losses incurred but not reported for
which the Reinsurer is liable under Article II;
4. The Reinsurer's liabilities under Articles II.E and II.F.
5. Return premiums paid by the Company, but not recovered from
the Reinsurer;
6. Company's reserves for unearned premiums;
7. Maintaining the level of the Paid Loss Deposit Fund in
Article IV;
All without diminution because of the insolvency of the Company or the
Reinsurer.
C. The Reinsurer shall deposit assets with the Trustee only in cash.
All assets held in the trust account must as appropriate include
executed assignments, endorsements in blank, or have title transferred
to the Trustee so that the Trustee may, upon the direction of the
Company, negotiate the trust account assets without further consent,
authorization or signature required.
D. The Company may, notwithstanding any other provisions to the
contrary contained in this Agreement, withdraw assets from the trust to
be used and applied by the Company or its successors in interest
without diminution because of the Company's insolvency only for the
following purposes:
1. to reimburse the Company for the Reinsurer's share of
Return Premiums.
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2. to reimburse the Company for the Reinsurer's share of Paid
Losses.
3. to fund an account with the Company in an amount at least
equal to the deduction, for reinsurance ceded, from the
Company's liabilities for Policies ceded under this Agreement.
Such amount shall include, but not be limited to, amounts for
policy reserves, claims and losses incurred, and unearned
premium reserves; and
4. to pay any other amounts the Company claims are due under
this Agreement.
E. The Company may require the Reinsurer to provide additional
collateral before the end of any calendar year by giving at least sixty
(60) days notice to the Reinsurer of the amount of additional
collateral that will be required. Such Collateral shall comply with all
the requirements of this Article and the Reinsurance Trust Agreement.
F. The Reinsurer shall deliver any Collateral to the Company at:
RELIANCE NATIONAL RISK SPECIALISTS
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(Attn: Financial Department)
G. If the Reinsurer fails to provide the Company with any additional or
substitute collateral, the Company shall have the right to draw upon
the full amount of any existing Letter of Credit or other collateral
and to apply such funds to secure the obligations of the Reinsurer
hereunder.
ARTICLE VII. TAXES
A. The Company is responsible for the payment of all taxes on premiums
received under the Policies.
B. The Reinsurer is responsible for the payment of all taxes on
reinsurance premiums hereunder, and shall reimburse the Company for any
taxes it may pay on such premiums including any Federal Insurance
Excise Tax (FIET).
ARTICLE VIII. ARBITRATION
A. Submission to Arbitration. As a condition precedent to any right of
action hereunder, any dispute arising out of this Agreement shall be
submitted to the decision of a board of arbitration composed of two
arbitrators and an umpire meeting at the Company's offices in New York
unless otherwise mutually agreed.
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B. Notice. The notice requesting arbitration shall state in particulars
all principal issues to be resolved and shall set a date for the
hearing, which date shall be no sooner than 90 days and no later that
120 days from the date that the notice requesting arbitration is
mailed.
C. Discovery. Each party may obtain discovery from the other through
written interrogatories and through requests for documentation, or may
depose witnesses upon notice to the other. Any objections to production
of documents or to the scope of discovery shall be submitted to the
umpire for resolution. The umpire may schedule a conference at which
the parties may present oral arguments and submit written briefs with
respect to the production of documents or the scope of discovery. The
umpire shall render a decision within two business days of the
conference. The decision shall be binding on the parties.
D. Arbitration Board Membership. The members of the board of
arbitration shall be active or retired and disinterested officials of
insurance companies or lawyers. Each party shall appoint its own
arbitrator and the two arbitrators shall choose a third arbitrator as
umpire before the date set for the hearing. The umpire shall be a
lawyer. If a party fails to appoint its arbitrator within 30 days after
having received a written request from the other, the other shall
appoint the second arbitrator. If the two arbitrators fail to agree
upon the appointment of the umpire within 30 days after their
appointment, each of them shall name three, of whom the other shall
decline two and the selection of the umpire from the remaining two
nominees shall be made by drawing lots. The umpire shall promptly
notify all parties to the arbitration of his selection.
E. Submission of Briefs. The patties shall submit their initial briefs
within 20 days from appointment of the umpire. Each may submit reply
briefs within 10 days after filing the initial briefs.
F. Arbitration Award. The board shall make an award with regard to the
custom and usage of the insurance business which shall be in writing
and shall state the factual and legal basis for the award. The board
may award interest but may not award punitive, exemplary or similar
damages arising out of or in connection with a breach of this
Agreement. The award shall be based upon a hearing in which evidence
may be introduced without following strict rules of evidence but in
which cross examination and rebuttal shall be allowed. At its own
election or at the request of the board, either party may submit a
post-hearing brief for consideration of the board within 20 days of the
close of the hearing. The board shall make its award within 30 days
following the close of the
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hearing or the submission of post-hearing briefs, whichever is longer,
unless the parties consent to an extension. A decision by the majority
of the members of the board shall become the award of the board and
shall be final and binding upon all parties to the proceeding. Either
party may apply to the United States District Court for the District of
New York or to a State Court of competent jurisdiction for an order
confirming the award or to enforce any decision by the umpire with
respect to discovery. A judgement of such Court shall thereupon be
entered on the award. If such an order is issued, the attorneys' fees
of the party so applying and court costs will be paid by the party
against whom confirmation is sought.
G. Arbitration Expense. Each party shall bear the expense of its own
arbitrator and shall jointly and equally bear with the other party the
expense of the umpire. The remaining costs of the arbitration
proceedings or any other costs relating to the arbitration may be
allocated by the board.
H. Survival. This Article shall survive the termination of this
Agreement.
ARTICLE IX. TERMINATION
A. This Agreement may be terminated in whole or in part by the Company
by giving ninety (90) days prior written notice to the Reinsurer. The
Reinsurer shall have the right to terminate this Agreement by giving
prior written notice to the Company which shall be not less than sixty
(60) days more than the longest period required for notice of
cancellation under the Policies or the laws and regulations of any
jurisdiction in which policies are issued or delivered.
B. The Reinsurer shall be entitled to credit for a pro-rata portion of
the reinsurance premium to which it would have been entitled had this
Agreement not been terminated.
ARTICLE X. SURVIVAL OF OBLIGATIONS
A. Reinsurer recognizes that the Company's obligations which accrue
during the term of the Policies will survive the termination of those
Policies, and that Reinsurer's obligations under this Agreement will
survive the termination of those Policies and this Agreement.
B. If this Agreement terminates, the Reinsurer's obligations and
responsibilities under this Agreement will continue with respect to
Losses on Policies issued or renewed prior to the effective date of
termination of this Agreement.
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C. Any Policy required to be renewed under any state law, or regulation
or order shall be deemed renewed prior to the termination of this
Agreement whether or not renewed prior to the date of termination.
D. The Company and Reinsurer agree that they will cooperate in the
handling of all such outstanding business existing on the effective
date of termination until such business has expired either by
cancellation or by the terms of the Policies, and all regulatory
requirements are met.
ARTICLE XI. INTEREST AND COLLECTION COSTS
A. Reinsurer will reimburse the Company for Company's attorneys' fees
and court costs incurred in attempting to collect amounts, including
interest, which are due the Company under this Agreement hut not paid
within the time requited by this Agreement.
B. Either party will pay to the other interest at the monthly rate of
one and one-half percent (1.5%) on any amount that is not paid within
the time required by this Agreement. Interest shall accrue from the
time any payment is payable under this Agreement.
ARTICLE XII. ERRORS AND OMISSIONS
Inadvertent delays (other than in payments due), errors or omissions
made by the Company or the Reinsurer in connection with this Agreement
or any transaction hereunder shall not relieve the other party from any
liability which would have attached, had such delay, error or omission
not occurred, provided that such error or omission is rectified as soon
as possible after discovery.
ARTICLE XIII. INSOLVENCY
A. The Reinsurer hereby agrees that, as to all reinsurance made, ceded,
renewed or otherwise becoming effective hereunder, all amounts payable
under this Agreement shall be paid by the Reinsurer on the basis of the
liability of the Company under the Policies, without diminution because
of the insolvency of the Company, directly to the Company or to its
liquidator, receiver or other statutory successor.
B. It is further agreed and understood that in the event of insolvency
of the Company, the liquidator or receiver or statutory successor of
the Company shall give written notice to the Reinsurer of the pendency
of any claim against the insolvent Company under any of the Policies
within a reasonable time after such claim is filed in the insolvency
proceeding; and that during the pendency of any such claim the
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Reinsurer may investigate such claim and interpose, at its own expense,
in the proceeding where any such claim is to be adjudicated any defense
or defenses which it may deem available to the Company or its
liquidator or receiver or statutory successor. Any 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 a proportionate share of the benefit which may accrue to
the Company solely as a result of the defense undertaken by the
Reinsurer as the assuming insurer.
C. It is further agreed and understood that as to all reinsurance made,
ceded, renewed or otherwise becoming effective hereunder, in the event
of insolvency of the Company all amounts payable under this Agreement
shall be paid by the Reinsurer to the named Insured under the Policies
when the Reinsurer with the consent of the Named Insureds under the
Policies has assumed the obligations of the Company under any of the
Policies as direct obligations of the Reinsurer to the payees under any
such Policy and in substitution for the obligations of the Company to
such payees.
ARTICLE XIV. MISCELLANEOUS
A. This Agreement shall be governed by and construed according to the
laws of the State of New York.
B. This Agreement may not be assigned by the Reinsurer unless the
written approval of the Company is first obtained.
C. Any notices, requests or other communications hereunder will be in
writing and will be deemed to have been received when deposited in the
United States mail with proper postage fees prepaid, addressed as
follows:
1. If to the Reinsurer, then to:
Camelback Insurance Ltd.
c/o American International Ltd.
29 Richmond Road, P.O. Box HM 152
▇▇▇▇▇▇▇▇, Bermuda HM AX
(Attn: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇)
2. If to Company, then to:
RELIANCE NATIONAL RISK SPECIALISTS
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(Attn: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Risk Management)
3. If to the Insured, then to:
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Employee Solutions, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
D. Except for a termination in accordance with the provisions of
Article IX.A, this Agreement may not be released, discharged, changed
or modified except by an instrument in writing signed by a duly
authorized representative of both of the parties.
IN WITNESS WHEREOF, the parties hereto, by their respective duly
authorized persons, intending to be legally bound have signed this Agreement.
REINSURER: COMPANY:
Camelback Insurance, Ltd. Reliance National Indemnity
Company and Reliance Insurance
Company
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/
----------------------------------- --------------------------------
Title: CEO, Chairman, Pres Title: First Vice President
-------------------------------- -----------------------------
Date: 4/4/97 Date: March 24, 1997
--------------------------------- ------------------------------
Witness: Witness:
------------------------------ ---------------------------
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SCHEDULE I
to the Reinsurance Agreement
between
Reliance National Indemnity Company
Reliance Insurance Company
(the "Company")
and
Camelback Insurance Ltd.
(the "Reinsurer")
Effective: May 1, 1995
----------------------
POLICY #
--------
NWA1744400-00 through NWA1744500-00
NWA1754307-00 through NWA1754607-00
NWA1754206-00 through NWA1754306-00
NWA1754900-00 through NWA1755500-00
NWA2000100-00 through NWA2000200-00
NWA1279600-00 through NWA1280100-00
NWA0118958-00 - Effective 11/7/94 - 6/l/95
All Policies issued by the Company's agent shall be deemed included in this
Schedule and subject to this Agreement.
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ADDENDUM NUMBER ONE
TO
REINSURANCE AGREEMENT
WHEREAS, a Reinsurance Agreement effective May 1, 1995, was entered
into by and between Reliance National Indemnity Company and Reliance Insurance
Company (collectively and individually referred to as "Company") and Camelback
Insurance Ltd. ("Reinsurer");
WHEREAS, the parties wish to amend the terms of the Reinsurance
Agreement;
NOW THEREFORE, IT IS MUTUALLY AGREED AS FOLLOWS:
1. The parties ratify and confirm the Reinsurance Agreement except as
provided herein.
2. Effective May 1, 1996, Schedule I shall be amended to add the
following Policies:
POLICY NUMBERS
--------------
NWA1280101-00 through NWA1280150-00
3. For Policies effective on or after May 1, 1996, Article V.A. -
Reinsurance Premium shall be amended as follows:
A. The reinsurance premium shall be the monies actually
received and recorded by the Company as premium for the
Policies less Return Premiums minus Ceding Commission for the
Company:
1. For Workers' Compensation Policies:
a. ESI Corporate Program
---------------------
1. Deposit Premium of $**** for
Company expenses, including excess loss
premium and fees for Boards and Bureaus at a
factor of ****% (estimated Standard Premium
of $****).
2. Deposit Premium of $****
adjustable based on actual Standard Premium
at a Multiplier of **** (estimated Standard
Premium of $****) for:
a. premium taxes; and
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b. liabilities for assessments
and pools.
b. "Stand Alone" Captive Program
-----------------------------
1. Profit and Administration charge
of ****% to $15,000,000 annual
premium, ****% from $15,000,000 to
$30,000,000 and ****% from
$30,000,000 to $50,000,000).
2. Premium taxes and residual market
loads shall be based on estimated
policy premium multiplied by the
applicable state factors.
IN WITNESS WHEREOF, the parties intending to be legally bound have
executed this Addendum as of the date set forth below.
REINSURER: COMPANY:
Camelback Insurance, Ltd. RNRS on behalf of Reliance
National Indemnity Company and
Reliance Insurance Company
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/
------------------------ ----------------------------------
Title: CEO, Chairman, Pres Title: First Vice President
--------------------- -------------------------------
Date: 4/4/97 Date: March 24, 1997
---------------------- --------------------------------
Witness: Witness:
------------------- -----------------------------
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