Exhibit 10-22
FIRST AMENDMENT AND RESTATEMENT
OF THE
TERMINATION BENEFITS AGREEMENT
This FIRST AMENDMENT AND RESTATEMENT OF THE TERMINATION BENEFITS
AGREEMENT (this "Agreement") is made and entered into as of October 25,
2000, by and between MERIDIAN INSURANCE GROUP, INC., an Indiana corporation
(hereinafter referred to as the "Corporation") and [EMPLOYEE NAME], a
resident of the State of Indiana (hereinafter referred to as "Employee").
RECITALS
A. Employee is now serving as a member of the executive staff of the
Corporation.
B. The Corporation believes that Employee has made valuable
contributions to the productivity and profitability of the Corporation.
C. The Board of Directors of the Corporation has determined that it
is in the best interests of the Corporation and its shareholders to assure
that the Corporation will have the continued undivided time, attention,
loyalty, and dedication of Employee, notwithstanding the possibility,
threat or occurrence of a Change in Control (as defined in Section 2
hereof) of the Corporation.
D. The Board believes it is imperative to diminish the inevitable
distraction of Employee by virtue of the personal uncertainties and risks
created by pending or threatened Change in Control and to encourage
Employee's full undivided time, attention, loyalty, and dedication to the
Corporation currently and in the event of any threatened or pending Change
in Control.
E. By this Agreement, the Board intends upon a Change in Control to
assure Employee with compensation and benefits arrangements if his or her
employment terminates as a result of a Change in Control which are
competitive with those of other corporations similarly situated to the
Corporation. Therefore, in order to accomplish these objectives, the Board
has caused the Corporation to enter into this Agreement.
F. In reliance on this Agreement, Employee is willing to continue
his or her employment with the Corporation on the terms agreed to by the
Employee and Corporation from time to time.
AGREEMENT
In consideration of the foregoing and of the mutual covenants herein
contained and the mutual benefits herein provided, the Corporation and
Employee hereby agree as follows:
Section 1. Term. The initial term of this Agreement shall be from
the date hereof through December 31, 2000. The term of this Agreement
shall be automatically extended for an additional year on December 31, 2000
(that is, to a term extending through December 31, 2001) and on December 31
of each year thereafter unless either party hereto gives written notice to
the other party not to so extend prior to November 30 of the year for which
notice is given, in which case no further automatic extension shall occur.
In addition, if a Change in Control of the Corporation (as defined in
Section 2 below) shall occur during the term of this Agreement, then the
term of this Agreement shall automatically be extended to a date one year
following the consummation of the Change in Control.
Section 2. Change in Control Defined. As used in this Agreement,
"Change in Control" of the Corporation means:
(A) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act as in effect from time to time) of fifty
percent (50%) or more of either (i) the then outstanding shares of
common stock of the Corporation or (ii) the combined voting power of
the then outstanding voting securities of the Corporation entitled to
vote generally in the election of directors; provided, however, that
the following acquisitions shall not constitute a Change in Control:
(i) any acquisition by the Corporation, (ii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by
the Corporation or any corporation controlled by or under common
control with the Corporation, or (iii) any acquisition by Meridian
Mutual Insurance Company ("Meridian Mutual"); or
(B) Individuals who, as of the date hereof, constitute the
Board of Directors of the Corporation (the "Incumbent Board") cease
for any reason to constitute at least a majority of Board of Directors
of the Corporation ("Board"); provided, however, that any individual
becoming a director subsequent to the date hereof whose election or
nomination for election by the Corporation's shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election contest
(as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board;
or
(C) So long as Meridian Mutual owns twenty-five percent (25%) or
more of either (i) the then outstanding shares of common stock of the
Corporation or (ii) the combined voting power of the then outstanding
voting securities of the Corporation entitled to vote generally in the
election of directors: individuals who, as of the date hereof,
constitute the Board of Directors of Meridian Mutual (the "Incumbent
Mutual Board") cease for any reason to constitute a majority of the
Board of Directors of Meridian Mutual (the "Mutual Board"); provided,
however, that any individual becoming a Director of the Mutual Board
subsequent to the date hereof whose election, or nomination for
election by Meridian Mutual's policyholders, was approved by a vote of
at least a majority of the Directors then comprising the Incumbent
Mutual Board shall be considered as though such individual were a
member of the Incumbent Mutual Board, but excluding, for this purpose,
any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest or other
actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Mutual Board; or
(D) Approval by the shareholders of the Corporation of (i) a
reorganization, merger, consolidation or share exchange, in each case,
unless, following such transaction the conditions specified in
clauses (a), (b) and (c) of this Section 2(D) are satisfied, or (ii) a
complete liquidation or dissolution of the Corporation or the sale or
other disposition of all or substantially all of the assets of the
Corporation, other than to a corporation with respect to which
following such transaction the conditions specified in clauses (a),
(b) or (c) of this Section 2(D) are satisfied. Such conditions are:
(a) more than sixty percent (60%) of, respectively, the then
outstanding shares of common stock of the corporation resulting from
such transaction and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
outstanding Corporation common stock and outstanding Corporation
voting securities immediately prior to such transaction in
substantially the same proportions as their ownership, immediately
prior to such transaction, of the outstanding Corporation stock and
outstanding Corporation voting securities, as the case may be, (b) no
Person (excluding the Corporation, any employee benefit plan or
related trust of the Corporation or such corporation resulting from
such transaction and any Person beneficially owning, immediately prior
to such transaction, directly or indirectly, twenty-five percent (25%)
or more of the outstanding Corporation common stock or outstanding
voting securities, as the case may be) beneficially owns, directly or
indirectly, twenty-five percent (25%) or more of, respectively, the
then outstanding shares of common stock of the corporation resulting
from such transaction or the combined voting power of the then
outstanding voting securities of such corporation entitled to vote
generally in the election of directors, and (c) at least a majority of
the members of the board of directors of the corporation resulting
from such transaction were members of the Incumbent Board at the time
of the execution of the initial agreement or action of the Board
providing for such transaction.
Section 3. Termination of Employment. The Corporation shall provide
Employee with the payment and benefits set forth in Section 5 of this
Agreement upon any termination of Employee's employment with the
Corporation (whether such termination of employment is initiated by the
Corporation or by Employee) that occurs within the two-year period
following a Change in Control, unless such termination of employment occurs
for any of the following reasons:
(A) Termination by reason of Employee's death.
(B) Termination by reason of Employee's "disability." For
purposes hereof, "disability" shall be deemed to conform to the
definition thereof contained in the Corporation's benefit plan
applicable immediately prior to the Change in Control as defined in
Section 2 of this Agreement.
(C) Termination upon Employee reaching normal retirement date,
which for purposes of this Agreement shall be deemed to conform to the
definition thereof contained in the Corporation's benefit plan
applicable immediately prior to the Change in Control as defined in
Section 2 of this Agreement.
(D) Termination for "cause." As used in this Agreement, the
term "cause" means Employee's conviction for fraud or a felony
involving the Corporation or for theft of corporate assets.
Section 4. Termination for "Good Reason."
(A) The Corporation shall provide Employee with the payment and
benefits set forth in Section 5 of this Agreement upon the Employee's
termination of employment with the Corporation for "Good Reason" (as
defined herein) that occurs during the third year following a Change
In Control.
(B) "Good Reason" means the occurrence of any one or more of the
following:
(1) The assignment to the Employee of duties which are
materially and adversely different from or inconsistent with the
duties, responsibilities, and status of the Employee's position
at any time during the 12-month period prior to the Change in
Control, or which result in a significant change in the
Employee's authority and responsibility as a senior Employee of
the employer or any of its Affiliates;
(2) A reduction by the Corporation in the Employee's Annual
Base Salary in place as of the day immediately prior to the
Change in Control, or the failure to grant salary increases and
bonus payments on a basis comparable to those granted to other
Employees of the Corporation, or a reduction of the Employee's
most recent highest incentive bonus potential under the
Employee's incentive bonus arrangement, if any, in place as of
the day immediately prior to the Change in Control, or any
successor to such arrangement;
(3) The failure by the Corporation to continue in effect
the Corporation's supplemental retirement income plan as
described in the Corporation's proxy statement relating to its
2000 annual meeting of shareholders and, in form substantially
equivalent to the employee benefit plans, fringe benefits and
perquisites, and other employee benefits described in the
employee handbooks and manuals of the Corporation in effect
immediately prior to the Change in Control, any employee benefit
plan (including any medical, hospitalization, life insurance or
disability benefit plan in which the Employee participates), or
any material fringe benefit or perquisite enjoyed by the Employee
immediately prior to the Change in Control, unless an equitable
arrangement (embodied in an ongoing substitute or alternative
plan) has been made with respect to such plan, or the failure by
the Corporation to continue the Employee's participation therein,
or any action by the Corporation which would directly or
indirectly materially reduce participation therein or reward
opportunities thereunder, or the failure by the Corporation to
provide the Employee with the number of paid vacation days to
which the Employee is entitled on the basis of years of service
with the Corporation in accordance with the Corporation's normal
vacation policy in effect immediately prior to the Change in
Control; and
(4) A demand by the Corporation that the Employee relocate
to a location in excess of 35 miles from the location where the
Employee is currently based, or in the event of any such
relocation with the Employee's express written consent, the
failure of the Corporation to pay (or reimburse the Employee for)
all reasonable moving expenses incurred by the Employee relating
to a change of principal residence in connection with such
relocation and to indemnify the Employee against any loss in the
sale of the Employee's principal residence in connection with any
such change of residence, all to the effect that the Employee
shall incur no loss on an after tax basis.
The existence of Good Reason shall not be affected by the Employee's
incapacity due to physical or mental illness. The Employee's continued
employment shall not constitute a waiver of the Employee's rights with
respect to any circumstance constituting Good Reason under this Agreement.
The Employee's determination of Good Reason shall be conclusive and binding
upon the Corporation and its Successors provided such determination has
been made in good faith.
Section 5. Payments and Benefits.
(A) Except for a termination of employment for a reason specified in
subsections (A), (B), (C) or (D) of Section 3 hereof, the following
payments and benefits, less any amounts required to be withheld therefrom
under any applicable federal, state or local income tax, other tax, or
social security laws or similar statutes, shall be paid to Employee (i)
upon any termination of Employee's employment with the Corporation that
occurs during the term of this Agreement and within the two-year period
following a Change in Control or (ii) upon the Employee's termination of
employment with the Corporation for "Good Reason," as defined in Section 4
of this Agreement, that occurs during the term of this Agreement and
during the third year following a Change in Control:
(1) Within thirty (30) days following such a termination,
Employee shall be paid: (i) at his or her then-effective salary, for
services performed through the date of termination, and (ii) any
earned and unpaid amount of any bonus or incentive payment (for
example, any bonus earned but not yet paid under the Corporation's
executive bonus compensation plan with respect to the calendar year
preceding the year in which the termination of employment occurs);
and
(2) Within thirty (30) days following such a termination,
Employee shall be paid a lump sum payment of an amount equal to
two and ninety-nine hundredths (2.99) times Employee's "Base
Amount." For purposes hereof, Base Amount is defined as
Employee's average includable compensation paid by the
Corporation for the five (5) most recent taxable years ending
before the date on which the Change in Control occurs. The
definition, interpretation and calculation of the dollar amount
of Base Amount shall be in a manner consistent with and as
required by the provisions of Section 280G of the Internal
Revenue Code of 1986, as amended ("Code"), and the regulations
and rulings of the Internal Revenue Service promulgated
thereunder.
(B) Employee acknowledges that payment in accordance with this
Section 5 shall be deemed to constitute a full settlement and
discharge of any and all obligations of the Corporation or Meridian
Mutual to Employee arising out of his or her employment with the
Corporation and the termination thereof, except for any vested rights
Employee may then have under any insurance, pension, supplemental
pension, thrift, employee stock ownership, stock option plans or other
benefit plans sponsored or made available by the Corporation or
Meridian Mutual.
Section 6. Legal Expenses. The Corporation is aware that upon the
occurrence of a Change in Control the Board of Directors or a shareholder
of the Corporation may then cause or attempt to cause the Corporation to
refuse to comply with its obligations under this Agreement, or may cause or
attempt to cause the Corporation to institute, or may
institute, litigation seeking to have this Agreement declared
unenforceable, or may take or attempt to take other action to deny
Employee the benefits intended under this Agreement. In these
circumstances, the purpose of this Agreement could be frustrated. It is
the intent of the Corporation that Employee not be required to incur the
expenses associated with the enforcement of his or her rights under this
Agreement by litigation or other legal action, nor be bound to negotiate
any settlement of his or her rights hereunder, because the cost and expense
of such legal action or settlement would substantially detract from the
benefits intended to be extended to Employee hereunder. Accordingly, if
following a Change in Control it should appear to Employee that the
Corporation has failed to comply with any of its obligations under this
Agreement or in the event that the Corporation or any other person takes
any action to declare this Agreement void or unenforceable, or institutes
any litigation or other legal action designed to deny, diminish or to
recover from Employee the benefits entitled to be provided to the Employee
hereunder, and that Employee has complied with all of his or her
obligations under this Agreement, the Corporation irrevocably authorizes
Employee from time to time to retain counsel of his or her choice, at the
expense of the Corporation as provided in this Section 6, to represent
Employee in connection with the initiation or defense of any litigation or
other legal action, whether such action is by or against the Corporation or
any director, officer, shareholder, or other person affiliated with the
Corporation, in any jurisdiction. Notwithstanding any existing or prior
attorney-client relationship between the Corporation and such counsel, the
Corporation irrevocably consents to Employee entering into an attorney-
client relationship with such counsel, and in that connection the
Corporation and Employee agree that a confidential relationship shall exist
between Employee and such counsel. The reasonable fees and expenses of
counsel selected from time to time by Employee as hereinabove provided
shall be paid or reimbursed to Employee by the Corporation on a regular,
periodic basis upon presentation by Employee of a statement or statements
prepared by such counsel in accordance with its customary practices, up to
a maximum aggregate amount of Two Hundred Thousand Dollars ($200,000). Any
legal expenses incurred by the Corporation by reason of any dispute between
the parties as to enforceability of or the terms contained in this
Agreement as provided by this Section 6, notwithstanding the outcome of any
such dispute, shall be the sole responsibility of the Corporation, and the
Corporation shall not take any action to seek reimbursement from Employee
for such expenses. Notwithstanding any limitation contained in this
Section 6 to the contrary, Employee shall be entitled to payment or
reimbursement of legal expenses in excess of Two Hundred Thousand Dollars
($200,000) if the expenses were incurred as a result of a dispute under
this Agreement in which Employee obtains a final judgment in his or her
favor from a court of competent jurisdiction or his or her claim is settled
by the Corporation prior to the rendering of a judgment by such a court.
Section 7. No Mitigation. Employee is not required to mitigate the
amount of benefit payments to be made by the Corporation pursuant to this
Agreement by seeking other employment or otherwise, nor shall the amount of
any benefit payments provided for in this Agreement be reduced by any
compensation earned by Employee as a result of employment by another
employer or which might have been earned by Employee had Employee sought
such employment, after the date of termination of his or her employment
with the Corporation or otherwise.
Section 8. Employee's Covenants. In order to induce the Corporation
to enter into this Agreement, Employee hereby agrees to keep confidential
and not improperly divulge for the benefit of any other party any of the
Corporation's confidential information or business secrets including, but
not limited to, confidential information and business secrets relating to
such matters as the Corporation's finances, operations and customer lists.
All of the Corporation's confidential information and business secrets
shall be the sole and exclusive property of the Corporation.
In the event of a breach or threatened breach by Employee of the
provisions of this Section 8, the Corporation shall be entitled to an
injunction restraining Employee from committing or continuing such breach.
Nothing herein contained shall be construed as prohibiting the Corporation
from pursuing any other remedies available to it for such breach or
threatened breach including the recovery of damages from Employee. The
covenants of this Section 8 shall run not only in favor of the Corporation
and its successors and assigns, but also in favor of its subsidiaries and
their respective successors and assigns and shall survive the termination
of this Agreement.
Section 9. Successors to Corporation. The Corporation shall require
any successor (whether direct or indirect, by purchase, merger,
consolidation, share exchange or otherwise) to all or substantially all of
the business and/or assets of the Corporation, by agreement in form and
substance satisfactory to Employee, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Corporation would be required to perform it if no such succession had taken
place. Failure of the Corporation to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement
and shall entitle Employee to compensation from the Corporation in the same
amount and on the same terms as Employee would be entitled hereunder if he
or she were to terminate his or her employment pursuant to Section 3 or
Section 4 hereof, except that for purposes of implementing the foregoing,
the date on which succession becomes effective shall be deemed the date of
termination of Employee's employment with the Corporation. As used in this
Agreement, "Corporation" shall mean corporation as hereinbefore defined and
any successor to the business or assets of it as aforesaid which executes
and delivers the agreement provided for in this Section 9 or which
otherwise becomes bound by all of the terms and provisions of this
Agreement by operation of law.
Section 10. Effect of Employee's Death. Should Employee die while
any amounts are payable to him or her hereunder, this Agreement shall inure
to the benefit of and be enforceable by Employee's executors,
administrators, heirs, distributees, devisees and legatees and all amounts
payable hereunder shall be paid in accordance with the terms of this
Agreement to Employee's devisee, legatee or other designee or if there be
no such designee, to Employee's estate.
Section 11. Notices. For purposes of this Agreement, notices and all
other communications provided for herein shall be in writing and shall be
deemed to have been given when delivered or mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to Employee: [EMPLOYEE NAME]
[STREET ADDRESS]
[CITY, STATE ZIP CODE]
If to Corporation: Meridian Insurance Group, Inc.
Attention: Corporate Secretary
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
or to such other address as any party may have furnished to the other party
in writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
Section 12. Governing Law. The validity, interpretation, and
performance of this Agreement shall be governed by the laws of the State of
Indiana. The parties agree that all legal disputes regarding this
Agreement will be resolved in Indianapolis, Indiana, and irrevocably
consent to service of process in such City for such purpose.
Section 13. Waivers. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing signed by Employee and the Corporation.
No waiver by any party hereto at any time of any breach by any other party
hereto of, or compliance with, any condition or provision of this Agreement
to be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or any prior or subsequent
time. No agreements or representation, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by any
party which are not set forth expressly in this Agreement.
Section 14. Partial Invalidity. The invalidity or unenforceability
of any provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain
in full force and effect.
Section 15. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of
which together will constitute one and the same Agreement.
Section 16. Assignment. This Agreement is personal in nature and
neither of the parties hereto shall, without the consent of the other,
assign or transfer this Agreement or any rights or obligations hereunder,
except as provided in Section 9 and Section 10 above. Without limiting the
foregoing, Employee's right to receive payments hereunder shall not be
assignable or transferable, whether by pledge, creation of a security
interest or otherwise, other than a transfer by his or her Will or by the
laws of descent and distribution as set forth in Section 9 hereof, and in
the event of any attempted assignment or transfer contrary to this Section
16, the Corporation shall have no liability to pay any amount so attempted
to be assigned or transferred.
Any benefits payable under this Agreement shall be paid solely from
the general assets of the Corporation. Neither Employee nor Employee's
beneficiary shall have interest in any specific assets of the Corporation
under the terms of this Agreement. This Agreement shall not be considered
to create an escrow account, trust fund or other funding arrangement of any
kind or a fiduciary relationship between Employee and the Corporation.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the day and year first written above.
MERIDIAN INSURANCE GROUP, INC.
("Corporation")
By:___________________________
EMPLOYEE:
______________________________
[EMPLOYEE NAME]
Exhibit 10.23
FIRST AMENDMENT AND RESTATEMENT
OF THE
TERMINATION BENEFITS AGREEMENT
This FIRST AMENDMENT AND RESTATEMENT OF THE TERMINATION BENEFITS
AGREEMENT (this "Agreement") is made and entered into as of October 25,
2000, by and between MERIDIAN INSURANCE GROUP, INC., an Indiana corporation
(hereinafter referred to as the "Corporation") and [EMPLOYEE NAME], a
resident of the State of Indiana (hereinafter referred to as "Employee").
RECITALS
A. Employee is now serving as a member of the executive staff of the
Corporation.
B. The Corporation believes that Employee has made valuable
contributions to the productivity and profitability of the Corporation.
C. The Board of Directors of the Corporation has determined that it
is in the best interests of the Corporation and its shareholders to assure
that the Corporation will have the continued undivided time, attention,
loyalty, and dedication of Employee, notwithstanding the possibility,
threat or occurrence of a Change in Control (as defined in Section 2
hereof) of the Corporation.
D. The Board believes it is imperative to diminish the inevitable
distraction of Employee by virtue of the personal uncertainties and risks
created by pending or threatened Change in Control and to encourage
Employee's full undivided time, attention, loyalty, and dedication to the
Corporation currently and in the event of any threatened or pending Change
in Control.
E. By this Agreement, the Board intends upon a Change in Control to
assure Employee with compensation and benefits arrangements if his or her
employment terminates as a result of a Change in Control which are
competitive with those of other corporations similarly situated to the
Corporation. Therefore, in order to accomplish these objectives, the Board
has caused the Corporation to enter into this Agreement.
F. In reliance on this Agreement, Employee is willing to continue
his or her employment with the Corporation on the terms agreed to by the
Employee and Corporation from time to time.
AGREEMENT
In consideration of the foregoing and of the mutual covenants herein
contained and the mutual benefits herein provided, the Corporation and
Employee hereby agree as follows:
Section 1. Term. The initial term of this Agreement shall be from
the date hereof through December 31, 2000. The term of this Agreement
shall be automatically extended for an additional year on December 31, 2000
(that is, to a term extending through December 31, 2001) and on December 31
of each year thereafter unless either party hereto gives written notice to
the other party not to so extend prior to November 30 of the year for which
notice is given, in which case no further automatic extension shall occur.
In addition, if a Change in Control of the Corporation (as defined in
Section 2 below) shall occur during the term of this Agreement, then the
term of this Agreement shall automatically be extended to a date one year
following the consummation of the Change in Control.
Section 2. Change in Control Defined. As used in this Agreement,
"Change in Control" of the Corporation means:
(A) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act as in effect from time to time) of fifty
percent (50%) or more of either (i) the then outstanding shares of
common stock of the Corporation or (ii) the combined voting power of
the then outstanding voting securities of the Corporation entitled to
vote generally in the election of directors; provided, however, that
the following acquisitions shall not constitute a Change in Control:
(i) any acquisition by the Corporation, (ii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by
the Corporation or any corporation controlled by or under common
control with the Corporation, or (iii) any acquisition by Meridian
Mutual Insurance Company ("Meridian Mutual"); or
(B) Individuals who, as of the date hereof, constitute the
Board of Directors of the Corporation (the "Incumbent Board") cease
for any reason to constitute at least a majority of Board of Directors
of the Corporation ("Board"); provided, however, that any individual
becoming a director subsequent to the date hereof whose election or
nomination for election by the Corporation's shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election contest
(as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board;
or
(C) So long as Meridian Mutual owns twenty-five percent (25%) or
more of either (i) the then outstanding shares of common stock of the
Corporation or (ii) the combined voting power of the then outstanding
voting securities of the Corporation entitled to vote generally in the
election of directors: individuals who, as of the date hereof,
constitute the Board of Directors of Meridian Mutual (the "Incumbent
Mutual Board") cease for any reason to constitute a majority of the
Board of Directors of Meridian Mutual (the "Mutual Board"); provided,
however, that any individual becoming a Director of the Mutual Board
subsequent to the date hereof whose election, or nomination for
election by Meridian Mutual's policyholders, was approved by a vote of
at least a majority of the Directors then comprising the Incumbent
Mutual Board shall be considered as though such individual were a
member of the Incumbent Mutual Board, but excluding, for this purpose,
any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest or other
actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Mutual Board; or
(D) Approval by the shareholders of the Corporation of (i) a
reorganization, merger, consolidation or share exchange, in each case,
unless, following such transaction the conditions specified in
clauses (a), (b) and (c) of this Section 2(D) are satisfied, or (ii) a
complete liquidation or dissolution of the Corporation or the sale or
other disposition of all or substantially all of the assets of the
Corporation, other than to a corporation with respect to which
following such transaction the conditions specified in clauses (a),
(b) or (c) of this Section 2(D) are satisfied. Such conditions are:
(a) more than sixty percent (60%) of, respectively, the then
outstanding shares of common stock of the corporation resulting from
such transaction and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
outstanding Corporation common stock and outstanding Corporation
voting securities immediately prior to such transaction in
substantially the same proportions as their ownership, immediately
prior to such transaction, of the outstanding Corporation stock and
outstanding Corporation voting securities, as the case may be, (b) no
Person (excluding the Corporation, any employee benefit plan or
related trust of the Corporation or such corporation resulting from
such transaction and any Person beneficially owning, immediately prior
to such transaction, directly or indirectly, twenty-five percent (25%)
or more of the outstanding Corporation common stock or outstanding
voting securities, as the case may be) beneficially owns, directly or
indirectly, twenty-five percent (25%) or more of, respectively, the
then outstanding shares of common stock of the corporation resulting
from such transaction or the combined voting power of the then
outstanding voting securities of such corporation entitled to vote
generally in the election of directors, and (c) at least a majority of
the members of the board of directors of the corporation resulting
from such transaction were members of the Incumbent Board at the time
of the execution of the initial agreement or action of the Board
providing for such transaction.
Section 3. Termination of Employment. The Corporation shall provide
Employee with the payment and benefits set forth in Section 5 of this
Agreement upon any termination of Employee's employment with the
Corporation (whether such termination of employment is initiated by the
Corporation or by Employee) that occurs within the two-year period
following a Change in Control, unless such termination of employment occurs
for any of the following reasons:
(A) Termination by reason of Employee's death.
(B) Termination by reason of Employee's "disability." For
purposes hereof, "disability" shall be deemed to conform to the
definition thereof contained in the Corporation's benefit plan
applicable immediately prior to the Change in Control as defined in
Section 2 of this Agreement.
(C) Termination upon Employee reaching normal retirement date,
which for purposes of this Agreement shall be deemed to conform to the
definition thereof contained in the Corporation's benefit plan
applicable immediately prior to the Change in Control as defined in
Section 2 of this Agreement.
(D) Termination for "cause." As used in this Agreement, the
term "cause" means Employee's conviction for fraud or a felony
involving the Corporation or for theft of corporate assets.
Section 4. Termination for "Good Reason."
(A) The Corporation shall provide Employee with the payment and
benefits set forth in Section 5 of this Agreement upon the Employee's
termination of employment with the Corporation for "Good Reason" (as
defined herein) that occurs during the third year following a Change
In Control.
(B) "Good Reason" means the occurrence of any one or more of the
following:
(1) The assignment to the Employee of duties which are
materially and adversely different from or inconsistent with the
duties, responsibilities, and status of the Employee's position
at any time during the 12-month period prior to the Change in
Control, or which result in a significant change in the
Employee's authority and responsibility as a senior Employee of
the employer or any of its Affiliates;
(2) A reduction by the Corporation in the Employee's Annual
Base Salary in place as of the day immediately prior to the
Change in Control, or the failure to grant salary increases and
bonus payments on a basis comparable to those granted to other
Employees of the Corporation, or a reduction of the Employee's
most recent highest incentive bonus potential under the
Employee's incentive bonus arrangement, if any, in place as of
the day immediately prior to the Change in Control, or any
successor to such arrangement;
(3) The failure by the Corporation to continue in effect
the Corporation's supplemental retirement income plan as
described in the Corporation's proxy statement relating to its
2000 annual meeting of shareholders and, in form substantially
equivalent to the employee benefit plans, fringe benefits and
perquisites, and other employee benefits described in the
employee handbooks and manuals of the Corporation in effect
immediately prior to the Change in Control, any employee benefit
plan (including any medical, hospitalization, life insurance or
disability benefit plan in which the Employee participates), or
any material fringe benefit or perquisite enjoyed by the Employee
immediately prior to the Change in Control, unless an equitable
arrangement (embodied in an ongoing substitute or alternative
plan) has been made with respect to such plan, or the failure by
the Corporation to continue the Employee's participation therein,
or any action by the Corporation which would directly or
indirectly materially reduce participation therein or reward
opportunities thereunder, or the failure by the Corporation to
provide the Employee with the number of paid vacation days to
which the Employee is entitled on the basis of years of service
with the Corporation in accordance with the Corporation's normal
vacation policy in effect immediately prior to the Change in
Control; and
(4) A demand by the Corporation that the Employee relocate
to a location in excess of 35 miles from the location where the
Employee is currently based, or in the event of any such
relocation with the Employee's express written consent, the
failure of the Corporation to pay (or reimburse the Employee for)
all reasonable moving expenses incurred by the Employee relating
to a change of principal residence in connection with such
relocation and to indemnify the Employee against any loss in the
sale of the Employee's principal residence in connection with any
such change of residence, all to the effect that the Employee
shall incur no loss on an after tax basis.
The existence of Good Reason shall not be affected by the Employee's
incapacity due to physical or mental illness. The Employee's continued
employment shall not constitute a waiver of the Employee's rights with
respect to any circumstance constituting Good Reason under this Agreement.
The Employee's determination of Good Reason shall be conclusive and binding
upon the Corporation and its Successors provided such determination has
been made in good faith.
Section 5. Payments and Benefits.
(A) Except for a termination of employment for a reason specified in
subsections (A), (B), (C) or (D) of Section 3 hereof, the following
payments and benefits, less any amounts required to be withheld therefrom
under any applicable federal, state or local income tax, other tax, or
social security laws or similar statutes, shall be paid to Employee (i)
upon any termination of Employee's employment with the Corporation that
occurs during the term of this Agreement and within the two-year period
following a Change in Control or (ii) upon the Employee's termination of
employment with the Corporation for "Good Reason," as defined in Section 4
of this Agreement, that occurs during the term of this Agreement and
during the third year following a Change in Control:
(1) Within thirty (30) days following such a termination,
Employee shall be paid: (i) at his or her then-effective salary, for
services performed through the date of termination, and (ii) any
earned and unpaid amount of any bonus or incentive payment (for
example, any bonus earned but not yet paid under the Corporation's
executive bonus compensation plan with respect to the calendar year
preceding the year in which the termination of employment occurs);
and
(2) Within thirty (30) days following such a termination,
Employee shall be paid a lump sum payment of an amount equal to
two (2) times Employee's "Base Amount." For purposes hereof,
Base Amount is defined as Employee's average includable
compensation paid by the Corporation for the five (5) most recent
taxable years ending before the date on which the Change in
Control occurs. The definition, interpretation and calculation
of the dollar amount of Base Amount shall be in a manner
consistent with and as required by the provisions of Section 280G
of the Internal Revenue Code of 1986, as amended ("Code"), and
the regulations and rulings of the Internal Revenue Service
promulgated thereunder.
(B) Employee acknowledges that payment in accordance with this
Section 5 shall be deemed to constitute a full settlement and
discharge of any and all obligations of the Corporation or Meridian
Mutual to Employee arising out of his or her employment with the
Corporation and the termination thereof, except for any vested rights
Employee may then have under any insurance, pension, supplemental
pension, thrift, employee stock ownership, stock option plans or other
benefit plans sponsored or made available by the Corporation or
Meridian Mutual.
Section 6. Legal Expenses. The Corporation is aware that upon the
occurrence of a Change in Control the Board of Directors or a shareholder
of the Corporation may then cause or attempt to cause the Corporation to
refuse to comply with its obligations under this Agreement, or may cause or
attempt to cause the Corporation to institute, or may
institute, litigation seeking to have this Agreement declared
unenforceable, or may take or attempt to take other action to deny
Employee the benefits intended under this Agreement. In these
circumstances, the purpose of this Agreement could be frustrated. It is
the intent of the Corporation that Employee not be required to incur the
expenses associated with the enforcement of his or her rights under this
Agreement by litigation or other legal action, nor be bound to negotiate
any settlement of his or her rights hereunder, because the cost and expense
of such legal action or settlement would substantially detract from the
benefits intended to be extended to Employee hereunder. Accordingly, if
following a Change in Control it should appear to Employee that the
Corporation has failed to comply with any of its obligations under this
Agreement or in the event that the Corporation or any other person takes
any action to declare this Agreement void or unenforceable, or institutes
any litigation or other legal action designed to deny, diminish or to
recover from Employee the benefits entitled to be provided to the Employee
hereunder, and that Employee has complied with all of his or her
obligations under this Agreement, the Corporation irrevocably authorizes
Employee from time to time to retain counsel of his or her choice, at the
expense of the Corporation as provided in this Section 6, to represent
Employee in connection with the initiation or defense of any litigation or
other legal action, whether such action is by or against the Corporation or
any director, officer, shareholder, or other person affiliated with the
Corporation, in any jurisdiction. Notwithstanding any existing or prior
attorney-client relationship between the Corporation and such counsel, the
Corporation irrevocably consents to Employee entering into an attorney-
client relationship with such counsel, and in that connection the
Corporation and Employee agree that a confidential relationship shall exist
between Employee and such counsel. The reasonable fees and expenses of
counsel selected from time to time by Employee as hereinabove provided
shall be paid or reimbursed to Employee by the Corporation on a regular,
periodic basis upon presentation by Employee of a statement or statements
prepared by such counsel in accordance with its customary practices, up to
a maximum aggregate amount of Two Hundred Thousand Dollars ($200,000). Any
legal expenses incurred by the Corporation by reason of any dispute between
the parties as to enforceability of or the terms contained in this
Agreement as provided by this Section 6, notwithstanding the outcome of any
such dispute, shall be the sole responsibility of the Corporation, and the
Corporation shall not take any action to seek reimbursement from Employee
for such expenses. Notwithstanding any limitation contained in this
Section 6 to the contrary, Employee shall be entitled to payment or
reimbursement of legal expenses in excess of Two Hundred Thousand Dollars
($200,000) if the expenses were incurred as a result of a dispute under
this Agreement in which Employee obtains a final judgment in his or her
favor from a court of competent jurisdiction or his or her claim is settled
by the Corporation prior to the rendering of a judgment by such a court.
Section 7. No Mitigation. Employee is not required to mitigate the
amount of benefit payments to be made by the Corporation pursuant to this
Agreement by seeking other employment or otherwise, nor shall the amount of
any benefit payments provided for in this Agreement be reduced by any
compensation earned by Employee as a result of employment by another
employer or which might have been earned by Employee had Employee sought
such employment, after the date of termination of his or her employment
with the Corporation or otherwise.
Section 8. Employee's Covenants. In order to induce the Corporation
to enter into this Agreement, Employee hereby agrees to keep confidential
and not improperly divulge for the benefit of any other party any of the
Corporation's confidential information or business secrets including, but
not limited to, confidential information and business secrets relating to
such matters as the Corporation's finances, operations and customer lists.
All of the Corporation's confidential information and business secrets
shall be the sole and exclusive property of the Corporation.
In the event of a breach or threatened breach by Employee of the
provisions of this Section 8, the Corporation shall be entitled to an
injunction restraining Employee from committing or continuing such breach.
Nothing herein contained shall be construed as prohibiting the Corporation
from pursuing any other remedies available to it for such breach or
threatened breach including the recovery of damages from Employee. The
covenants of this Section 8 shall run not only in favor of the Corporation
and its successors and assigns, but also in favor of its subsidiaries and
their respective successors and assigns and shall survive the termination
of this Agreement.
Section 9. Successors to Corporation. The Corporation shall require
any successor (whether direct or indirect, by purchase, merger,
consolidation, share exchange or otherwise) to all or substantially all of
the business and/or assets of the Corporation, by agreement in form and
substance satisfactory to Employee, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Corporation would be required to perform it if no such succession had taken
place. Failure of the Corporation to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement
and shall entitle Employee to compensation from the Corporation in the same
amount and on the same terms as Employee would be entitled hereunder if he
or she were to terminate his or her employment pursuant to Section 3 or
Section 4 hereof, except that for purposes of implementing the foregoing,
the date on which succession becomes effective shall be deemed the date of
termination of Employee's employment with the Corporation. As used in this
Agreement, "Corporation" shall mean corporation as hereinbefore defined and
any successor to the business or assets of it as aforesaid which executes
and delivers the agreement provided for in this Section 9 or which
otherwise becomes bound by all of the terms and provisions of this
Agreement by operation of law.
Section 10. Effect of Employee's Death. Should Employee die while
any amounts are payable to him or her hereunder, this Agreement shall inure
to the benefit of and be enforceable by Employee's executors,
administrators, heirs, distributees, devisees and legatees and all amounts
payable hereunder shall be paid in accordance with the terms of this
Agreement to Employee's devisee, legatee or other designee or if there be
no such designee, to Employee's estate.
Section 11. Notices. For purposes of this Agreement, notices and all
other communications provided for herein shall be in writing and shall be
deemed to have been given when delivered or mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to Employee: [EMPLOYEE NAME]
[STREET ADDRESS]
[CITY, STATE ZIP CODE]
If to Corporation: Meridian Insurance Group, Inc.
Attention: Corporate Secretary
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
or to such other address as any party may have furnished to the other party
in writing in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
Section 12. Governing Law. The validity, interpretation, and
performance of this Agreement shall be governed by the laws of the State of
Indiana. The parties agree that all legal disputes regarding this
Agreement will be resolved in Indianapolis, Indiana, and irrevocably
consent to service of process in such City for such purpose.
Section 13. Waivers. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing signed by Employee and the Corporation.
No waiver by any party hereto at any time of any breach by any other party
hereto of, or compliance with, any condition or provision of this Agreement
to be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or any prior or subsequent
time. No agreements or representation, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by any
party which are not set forth expressly in this Agreement.
Section 14. Partial Invalidity. The invalidity or unenforceability
of any provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain
in full force and effect.
Section 15. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of
which together will constitute one and the same Agreement.
Section 16. Assignment. This Agreement is personal in nature and
neither of the parties hereto shall, without the consent of the other,
assign or transfer this Agreement or any rights or obligations hereunder,
except as provided in Section 9 and Section 10 above. Without limiting the
foregoing, Employee's right to receive payments hereunder shall not be
assignable or transferable, whether by pledge, creation of a security
interest or otherwise, other than a transfer by his or her Will or by the
laws of descent and distribution as set forth in Section 9 hereof, and in
the event of any attempted assignment or transfer contrary to this Section
16, the Corporation shall have no liability to pay any amount so attempted
to be assigned or transferred.
Any benefits payable under this Agreement shall be paid solely from
the general assets of the Corporation. Neither Employee nor Employee's
beneficiary shall have interest in any specific assets of the Corporation
under the terms of this Agreement. This Agreement shall not be considered
to create an escrow account, trust fund or other funding arrangement of any
kind or a fiduciary relationship between Employee and the Corporation.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the day and year first written above.
MERIDIAN INSURANCE GROUP, INC.
("Corporation")
By:___________________________
EMPLOYEE:
______________________________
[EMPLOYEE NAME]
Exhibit 10.48
P99-0123
AMENDMENT NO.8
The Personal Excess Liability Reinsurance Agreement of June 1, 1969,
between EMPLOYERS REINSURANCE CORPORATION of Overland Park, Kansas and
MERIDIAN MUTUAL INSURANCE COMPANY, XXXXXX FIRE AND CASUALTY INSURANCE
COMPANY and MERIDIAN SECURITY INSURANCE COMPANY, all of Indianapolis,
Indiana, and CITIZENS SECURITY MUTUAL INSURANCE COMPANY and CITIZENS FUND
INSURANCE COMPANY, both of Red Wing, Minnesota, and INSURANCE COMPANY OF
OHIO of Mansfield, Ohio, is hereby amended as follows:
I. As respects occurrences taking place on or after December 30, 1996,
XXXXXX FIRE AND CASUALTY INSURANCE COMPANY is deleted as a named
REINSURED hereunder.
II. In recognition of their corporate name changes, effective June 19,
1998:
A. CITIZENS SECURITY MUTUAL INSURANCE COMPANY shall, from and after
said date, be known as MERIDIAN CITIZENS MUTUAL INSURANCE
COMPANY.
B. CITIZENS FUND INSURANCE COMPANY shall, from and after said date,
be known as MERIDIAN CITIZENS FUND INSURANCE COMPANY.
III. In recognition of its corporate name change, effective July 22,
1998, MERIDIAN CITIZENS FUND INSURANCE COMPANY shall, from and after
said date, be known as MERIDIAN CITIZENS SECURITY INSURANCE COMPANY.
Therefore, it is understood and agreed that effective July 22, 1998,
the REINSURED hereunder shall be comprised of:
MERIDIAN MUTUAL INSURANCE COMPANY and MERIDIAN SECURITY INSURANCE
COMPANY both of Indianapolis, Indiana, MERIDIAN CITIZENS MUTUAL
INSURANCE COMPANY and MERIDIAN CITIZENS SECURITY INSURANCE
COMPANY both of Red Wing, Minnesota and INSURANCE COMPANY OF OHIO
of Mansfield, Ohio.
In all other respects not inconsistent herewith, said agreement shall
remain unchanged.
IN WITNESS WHEREOF, the parties hereto have caused this amendment to
be executed in duplicate.
MERIDIAN MUTUAL INSURANCE
COMPANY
MERIDIAN SECURITY INSURANCE EMPLOYERS REINSURANCE
COMPANY CORPORATION
____________________________ ___________________________
Title: Title:
____________________________ ___________________________
Title: Title:
Date:_______________________ Date:______________________
MERIDIAN CITIZENS MUTUAL
INSURANCE COMPANY
MERIDIAN CITIZENS SECURITY
INSURANCE COMPANY INSURANCE COMPANY OF OHIO
____________________________ ___________________________
Title: Title:
____________________________ ___________________________
Title: Title:
Date:_______________________ Date:______________________
XXXXXX FIRE AND CASUALTY
INSURANCE COMPANY
____________________________
Title:
____________________________
Title:
Date:_______________________
Exhibit 10.49
P99-0122
AMENDMENT NO. 10
The Commercial and Personal Umbrella Reinsurance Agreement of June 1,
1986, between EMPLOYERS REINSURANCE CORPORATION of Overland Park,
Kansas and MERIDIAN MUTUAL INSURANCE COMPANY and MERIDIAN SECURITY
INSURANCE COMPANY, both of Indianapolis, Indiana, and CITIZENS
SECURITY MUTUAL INSURANCE COMPANY and CITIZENS FUND INSURANCE COMPANY,
both of Red Wing, Minnesota, and INSURANCE COMPANY OF OHIO of
Mansfield, Ohio, is hereby amended as follows:
I. In recognition of their corporate name changes, effective June
19, 1998:
A. CITIZENS SECURITY MUTUAL INSURANCE COMPANY shall, from and
after said date, be known as MERIDIAN CITIZENS MUTUAL
INSURANCE COMPANY.
B. CITIZENS FUND INSURANCE COMPANY shall, from and after said
date, be known as MERIDIAN CITIZENS FUND INSURANCE COMPANY.
II. In recognition of its corporate name change, effective July 22,
1998, MERIDIAN CITIZENS FUND INSURANCE COMPANY shall, from and
after said date, be known as MERIDIAN CITIZENS SECURITY INSURANCE
COMPANY.
Therefore, it is understood and agreed that effective July 22, 1998,
the REINSURED hereunder shall be comprised of:
MERIDIAN MUTUAL INSURANCE COMPANY and MERIDIAN SECURITY
INSURANCE COMPANY both of Indianapolis, Indiana, MERIDIAN
CITIZENS MUTUAL INSURANCE COMPANY and MERIDIAN CITIZENS
SECURITY INSURANCE COMPANY both of Red Wing, Minnesota and
INSURANCE COMPANY OF OHIO of Mansfield, Ohio.
In all other respects not inconsistent herewith, said agreement shall
remain unchanged.
IN WITNESS WHEREOF, the parties hereto have caused this amendment to
be executed in duplicate.
MERIDIAN MUTUAL INSURANCE
COMPANY
MERIDIAN SECURITY INSURANCE EMPLOYERS REINSURANCE
COMPANY CORPORATION
_____________________________ __________________________
Title: Title:
_____________________________ __________________________
Title: Title:
Date:________________________ Date:_____________________
MERIDIAN CITIZENS MUTUAL
INSURANCE COMPANY
MERIDIAN CITIZENS SECURITY INSURANCE COMPANY OF
INSURANCE COMPANY OHIO
_____________________________ __________________________
Title: Title:
_____________________________ __________________________
Title: Title:
Date:________________________ Date:_____________________
XXXXXX FIRE AND CASUALTY
INSURANCE COMPANY
_____________________________
Title:
_____________________________
Title:
Date:________________________
POO-0050
AMENDMENT NO. 11
The Commercial and Personal Umbrella Reinsurance Agreement of June 1,
1986, between EMPLOYERS REINSURANCE CORPORATION of Overland Park,
Kansas and MERIDIAN MUTUAL INSURANCE COMPANY and MERIDIAN SECURITY
INSURANCE COMPANY both of Indianapolis, Indiana, MERIDIAN CITIZENS
MUTUAL INSURANCE COMPANY and MERIDIAN CITIZENS SECURITY INSURANCE
COMPANY both of Red Wing, Minnesota and INSURANCE COMPANY OF OHIO of
Mansfield, Ohio, is hereby amended as follows:
As respects net reinsurance premium derived from policies issued by
the REINSURED on and after January 1, 2000, the ceding commission set
forth in Article VII, Reinsurance Premiums, is hereby increased from
30% to 32.5%.
In all other respects not inconsistent herewith, said agreement shall
remain unchanged.
IN WITNESS WHEREOF, the parties hereto have caused this amendment to
be executed in duplicate.
MERIDIAN MUTUAL INSURANCE
COMPANY
MERIDIAN SECURITY INSURANCE EMPLOYERS REINSURANCE
COMPANY CORPORATION
_____________________________ __________________________
Title: Title:
_____________________________ __________________________
Title: Title:
Date:________________________ Date:_____________________
MERIDIAN CITIZENS MUTUAL
INSURANCE COMPANY
MERIDIAN CITIZENS SECURITY
INSURANCE COMPANY INSURANCE COMPANY OF OHIO
_____________________________ __________________________
Title: Title:
_____________________________ __________________________
Title: Title:
Date:________________________ Date:_____________________
Effective: 6/l/86 Page 1 of 1 Page
XXX-0000
XXX: 02/1 1/00
Exhibit 10.50
P00-0049
AMENDMENT NO.2
The Basket Reinsurance Agreement of January 1, 1997, between EMPLOYERS
REINSURANCE CORPORATION of Overland Park, Kansas and MERIDIAN MUTUAL
INSURANCE COMPANY and MERIDIAN SECURITY INSURANCE COMPANY both of
Indianapolis, Indiana, MERIDIAN CITIZENS MUTUAL INSURANCE COMPANY and
MERIDIAN CITIZENS SECURITY INSURANCE COMPANY both of Red Wing, Minnesota
and INSURANCE COMPANY OF OHIO of Mansfield, Ohio, is hereby amended as
follows:
As respects occurrences taking place on or after January 1, 2000, Article
II, Retention and Reinsurance, as amended by Amendment No. 1, is deleted
and the following is substituted therefor:
ARTICLE II
RETENTION AND REINSURANCE. As respects such loss sustained and
retained by the REINSURED as a result of each common occurrence,
the REINSURED shall retain as its own net retention under this
agreement the first $400,000 of such loss and the CORPORATION
hereby agrees to indemnify the REINSURED against 100% of loss
excess thereof, subject to a reinsurance limit of $300,000 each
occurrence; provided, however, that as respects each such common
occurrence, only loss pertaining to a single property risk shall be
covered hereunder and in the event such common occurrence results
in loss to two or more property risks, the REINSURED shall elect
the property risk to be covered hereunder.
In all other respects not inconsistent herewith, said agreement shall
remain unchanged.
IN WITNESS WHEREOF, the parties hereto have caused this amendment to be
executed in duplicate.
MERIDIAN MUTUAL INSURANCE
COMPANY
MERIDIAN SECURITY INSURANCE EMPLOYERS REINSURANCE
COMPANY CORPORATION
_____________________________ __________________________
Title: Title:
_____________________________ __________________________
Title: Title:
Date:________________________ Date:_____________________
MERIDIAN CITIZENS MUTUAL
INSURANCE COMPANY
MERIDIAN CITIZENS SECURITY INSURANCE COMPANY OF
INSURANCE COMPANY OHIO
_____________________________ __________________________
Title: Title:
_____________________________ __________________________
Title: Title:
Date:________________________ Date:_____________________
Effective: 1/l/97
XXX-0000
XXX: 02/11/00
Exhibit 10.51
P00-0051
AMENDMENT NO.5
The Property Per Risk Excess of Loss Reinsurance Agreement of January 1,
1992, between EMPLOYERS REINSURANCE CORPORATION of Overland Park, Kansas
and MERIDIAN MUTUAL INSURANCE COMPANY and MERIDIAN SECURITY INSURANCE
COMPANY both of Indianapolis, Indiana, MERIDIAN CITIZENS MUTUAL INSURANCE
COMPANY and MERIDIAN CITIZENS SECURITY INSURANCE COMPANY both of Red Wing,
Minnesota and INSURANCE COMPANY OF OHIO of Mansfield, Ohio, is hereby
amended as follows:
I. As respects occurrences taking place on or after January 1, 2000,
Layer 1 of the Table set out in Article III, as amended, is hereby
deleted and the following is substituted therefor:
Layer I
Retention Reinsurance
$300,000 each risk involved in $1,200,000 each risk involved in
each occurrence. each occurrence excess $300,000,
subject to a limit of $3,000,000 all
risks involved in each occurrence.
II. As respects the calendar year 2000, and each calendar year
thereafter, Article VIII is hereby deleted and the following is
substituted therefor:
ARTICLE VIII
REINSURANCE PREMIUM AND RATE. The REINSURED shall pay a
reinsurance premium determined by the application of the
reinsurance premium rate hereinafter specified with respect to
each Layer to the net premium income derived by the REINSURED from
the underlying insurance to which this agreement applies.
Reinsurance
Layer Premium Rate
1 4.5%
2 0.5%
The term "net premium income" shall mean premiums earned by the
REINSURED, less premiums paid by the REINSURED for facultative
reinsurance which inures to the benefit of this agreement, on or
after the effective date and prior to the termination date of this
agreement.
As respects multiple peril underlying insurance written with
indivisible premium, 90% of the net premium income derived from
underlying homeowners multiple peril policies and 70% of the net
premium income derived from underlying businessowners multiple
peril policies shall be allocated to the perils to which this
agreement applies.
In all other respects not inconsistent herewith, said agreement shall
remain unchanged.
IN WITNESS WHEREOF, the parties hereto have caused this amendment to
be executed in duplicate.
MERIDIAN MUTUAL INSURANCE
COMPANY
MERIDIAN SECURITY INSURANCE EMPLOYERS REINSURANCE
COMPANY CORPORATION
_____________________________ __________________________
Title: Title:
_____________________________ __________________________
Title: Title:
Date:________________________ Date:_____________________
MERIDIAN CITIZENS MUTUAL
INSURANCE COMPANY
MERIDIAN CITIZENS SECURITY INSURANCE COMPANY OF
INSURANCE COMPANY OHIO
_____________________________ __________________________
Title: Title:
_____________________________ __________________________
Title: Title:
Date:________________________ Date:_____________________
Effective: 1/l/92
XXX-0000
XXX: 02/11/00
Exhibit 10.52
Property Excess of Loss Reinsurance Binding Agreement
Between
Meridian Insurance Company
Meridian Security Insurance Company
Meridian Citizen's Mutual Insurance Company
Meridian Citizen's Security Insurance Company
Indianapolis, Indiana
(Hereinafter collectively referred to as the "Company")
and
NAC Reinsurance Corporation
New York, New York
(Hereinafter referred to as the "Reinsurer")
ARTICLE 1
PARTIES TO THE AGREEMENT
This Agreement is solely between the Company and the Reinsurer. When more
than one Company is named as a party to this Agreement, the first Company
named shall be the agent of the other companies as to all matters
pertaining to this Agreement. Performance of the obligations of each party
under this Agreement shall be rendered solely to the other party. In no
instance shall any insured of the Company, and claimant against an insured
of the Company, or any other third party have any rights under this
Agreement.
The rights and obligations of the parties to this Agreement shall not be
affected by the termination of this Agreement and all necessary
transactions relating to this Agreement will continue in accordance with
the terms and conditions stipulated herein until all obligations of either
party to the other are fully concluded.
ARTICLE 2
TERM AND CANCELLATION
Anything contained herein to the contrary notwithstanding, coverage is
continuous for all new and renewal policies attaching from 12:01 A.M.
Central Daylight Time, January 15, 2000 until 12:01 A.M. Central Time, May
31, 2001. In the event this Agreement is terminated by either party, the
Reinsurer shall be liable for all original policies or portions thereof in
force as of the date of termination up to the natural expiration or prior
termination date of said policies, plus odd time, but not to exceed
eighteen (18) months in total.
ARTICLE 3
BUSINESS COVERED
By this Agreement and subject to the terms and conditions herein contained,
the Reinsurer agrees to indemnify the Company in respect to the net excess
liability stipulated in this Agreement which may accrue to the Company as a
result of each loss occurrence during the term of this Agreement under any
and all written binders, policies, or contracts of farm insurance issued by
the Company and classified by the Company as Farm Business . Binding
authority for risks ceded hereunder is granted to the Company subject to
all terms and conditions herein. Any changes to the terms and conditions of
this Agreement must be made by endorsement to the Agreement and
countersigned by a duly authorized representative of the Reinsurer.
ARTICLE 4
PERILS COVERED
The policies ceded to this Agreement are reinsured for All Risks of
physical loss including Earthquake, excluding Flood, covering Property
Damage and Time Element in accordance with the terms of the Company's
policy and this Agreement, for single amount subject risks individually
ceded to the Agreement and excluding livestock mortality coverage. All
Risks including Flood and Earthquake coverage is provided for those risks
classified as Inland Marine.
Risks located in ISO Earthquake Zones 1 and 2 are excluded for the peril of
Earthquake.
ARTICLE 5
TERRITORY
This agreement shall apply to policies covering risks located in Illinois,
Indiana, Kentucky, Michigan, Minnesota, Ohio, Pennsylvania, Wisconsin,
Tennessee, Iowa, South Dakota, North Dakota, Missouri, Minnesota,
Virginia, and Maryland in accordance with the Company's regulatory filing.
The Company shall notify the Reinsurer in advance of any regulatory filing
to insure risks in additional states, and subject to the Reinsurer's
approval, the territory clause of this Agreement will be amended.
ARTICLE 6
LIMIT OF LIABILITY OF THE REINSURER
Reinsurance limits shall be subject to a maximum limit of Five Million
Dollars ($5,000,000) any one risk.
These reinsurance limits are subject to a Ten Million Dollars ($10,000,000)
limitation in any one occurrence.
ARTICLE 7
BINDING AUTHORITY
Authority to bind the Reinsurer is granted to all Company underwriters
above the Level Two underwriting designations. Specific authority is
granted to Xxxxx Xxxxxx and Xxxx Xxxxxx for an additional ten percent (10%)
over line of the limit for Total Insurable Value and for Reinsurer's
maximum limit.
ARTICLE 8
TOTAL INSURED VALUE LIMITATION
Total Insured Value for any one risk ceded to the Agreement shall not
exceed Five Million Dollars ($5,000,000). Reinsurance rates for this
Agreement are designed to reinsure excess of the Company's net and treaty
retention up to One Hundred Percent (100%) of the total risk values. Risks
that require additional limits should be submitted to the Reinsurer for
Special Acceptance or for individual risk certificate coverage.
The Agreement includes only those accounts insured One Hundred Percent
(100%) by the Company. Any policy which otherwise satisfies the terms and
conditions of this Agreement must be cleared with the Reinsurer prior to
binding if the Company participates jointly with any other insurer.
ARTICLE 9
RATES
Reinsurance Premium for this Agreement shall be based upon the Company's
retention and calculated in accordance with the schedule of Reinsurance
rates below which shall be applied to the Company's One Hundred Percent
(100%) Gross Original Premium of the Policy as follows:
Layer Rate
$4,500,000 xs $500,000 8.5%
$4,375,000 xs $625,000 6.5%
$4,250,000 xs $750,000 5.0%
ARTICLE 10
RIGHT OF REJECTION
The Reinsurer may reject any individual cession and shall so notify the
Company in writing of its declination within fifteen (15) working days of
receipt of the bordereau. The Company shall replace the reinsurance
promptly, but within a period not to exceed thirty (30) days after receipt
by the Company of the notice of declination from the Reinsurer.
ARTICLE 11
REPORTING AND PAYMENT PROCEDURES
Risk Summary Sheets for each risk and a monthly bordereau of all risks
ceded shall be submitted to the Reinsurer within (twenty) 20 working days
after the last day of each month. Any premium amounts due the Reinsurer
shall be paid with the bordereau.
Risk Summary Sheets for each insured shall include the following
information:
1. Total Insured Values
2. Construction
3. Protection Class
4. 100% of Company's Gross Premium for
the Risk
5. Net Reinsurance Rate
6. Net Reinsurance Premium
Bordereau for all risks ceded during the preceding month shall list the
following information:
1. Named Insured
2. Reinsurance Premium
3. Reinsurance Period
4. Policy Number
ARTICLE 12
LOSS NOTIFICATION, NET LOSS, LOSS ADJUSTMENT EXPENSES AND RECOVERIES
Loss Notification
The Company shall give prompt written notice to the Reinsurer of any claim
or loss which, in the sound judgment of the Company, may result in a net
loss to the Reinsurer.
While the Reinsurer does not have the duty to investigate or defend claims
or suits, it shall nevertheless have the right and the opportunity, with
the full cooperation of the Company, to associate with the Company at its
own expense in the defense of any claim, suit or proceeding which involves
or is likely to involve this Agreement.
All loss settlements, provided they are within the terms and conditions of
the Company's policy and this Agreement, shall be binding upon the
Reinsurer. Upon receipt of satisfactory proof of loss payment, the
Reinsurer shall promptly pay the Company for amounts due under this
Agreement.
Net Loss
The term "Net Loss" as used herein shall be understood to mean the sum
actually paid or to be paid by the Company in settlement of losses
reinsured hereunder for which it is liable after making deductions for all
other inuring reinsurance, whether collectible or not, and all salvages and
other recoveries, including subrogation recoveries; provided however, that
in the event of insolvency of the Company, "Net Loss" shall be determined
in accordance with the provisions of the Article entitled Insolvency of
this Agreement. Net Loss shall not include loss adjustment expenses.
It is agreed that the existence of underlying reinsurance, if any, shall be
entirely disregarded in determining the Company's net loss.
Nothing in this Article shall imply that losses are not recoverable under
this Agreement until the Company's Net Loss has been finally ascertained.
Loss Adjustment Expenses
The term "Loss Adjustment Expenses" shall mean expenses of the Company,
including court costs, prejudgment interest and post-judgment interest,
incurred in the investigation, adjustment and defense of claims under the
terms of policies subject to this Agreement, which expenses are allocable
to a specific net loss, but shall not include administrative and office
expenses and salaries and expenses of employees and officials of the
Company.
The Reinsurer shall indemnify the Company for the Reinsurer's proportionate
share of Loss Adjustment Expenses, which shall be in addition to its Limit
of Liability. 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 savings to the Reinsurer, or a judgment is reversed outright, the
expenses incurred in securing such reduction or reversal shall be prorated
between the Company and the Reinsurer in the proportion that each benefits
from such reduction or reversal, and the expenses incurred up to the time
of the original verdict or judgment shall be prorated in proportion to each
party's interest in such original verdict or judgment.
Recoveries
The Reinsurer shall be subrogated, as respects to any loss for which the
Reinsurer shall actually pay or become liable to pay, to all the rights of
the Company against any person or other entity who may be legally
responsible in damages for said loss. The Company hereby agrees to enforce
such rights, but in case the Company shall refuse or neglect to do so the
Reinsurer is hereby authorized and empowered to enforce such rights.
Any recoveries, salvages or reimbursements applying to risks covered under
this Agreement shall always be used to reimburse the excess reinsurer,
according to their participation, before being used in any way to reimburse
the Company for its primary loss.
All salvages, recoveries, or reimbursements received subsequent to a loss
settlement under this Agreement shall be applied as if recovered or
received prior to the aforesaid settlement and all necessary adjustments
shall be made by the parties hereto.
ARTICLE 14
AUDITS
The Company shall place at the disposal of the Reinsurer and the Reinsurer
shall have the right to inspect, through its authorized representatives, at
all reasonable times during the term of this Agreement and thereafter, the
books, records and papers of the Company pertaining to the reinsurance
provided hereunder and all claims made in connection therewith.
ARTICLE 15
OFFSET
The Company and the Reinsurer may offset any balance or amount due from one
party to the other under this Agreement or any other reinsurance agreement
of any kind heretofore or hereafter entered into between the Company and
the Reinsurer, whether acting as assuming reinsurer or ceding company. If
the Company (including all affiliates and/or subsidiaries, whether or not
covered by this Agreement) is comprised of more than one entity all such
entities will be considered the Company for purposes of offset. In the
event of insolvency of either the Company or the Reinsurer, offset shall be
permitted in accordance with the terms of this Article and as otherwise
permitted by law.
ARTICLE 16
INSOLVENCY
In the event of the insolvency of the Company and the appointment of a
liquidator or receiver, reinsurance due under this Agreement shall be
payable, with reasonable provision for verification, on the basis of the
liability of the Company resulting from claims allowed against the Company
in the liquidation proceeding without diminution because such liquidator or
receiver has failed to pay all or a portion of any claims.
Payments by the Reinsurer as set forth above shall be made directly and
exclusively to the Company or to its liquidator or receiver, except as
provided by subsection (a) of section 4118 of New York Insurance Law and
except (a) where this Agreement specifies another payee in the event of the
insolvency, and (b) the Reinsurer, with the consent of the direct insureds,
has assumed such policy obligations of the Company as direct obligations to
the payees under such policies in substitution for the obligations of the
Company to such payees.
In the event of the insolvency of the Company, the liquidator or receiver
shall give written notice of the pendency of a claim against the Company
under policies reinsured within a reasonable time after such claim is filed
in the insolvency proceeding. During the pendency of such claim, the
Reinsurer has the right but not the duty to investigate said claim and
interpose in the proceeding where the claim is to be adjudicated, at its
own expense, any defense that it may deem available to the Company, or its
liquidator or receiver. The expense thus incurred by the Reinsurer will be
chargeable against the Company, 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.
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 shall be
apportioned in accordance with the terms of this Agreement as though such
expense had been incurred by the Company.
ARTICLE 17
TAXES
The Company shall be liable for paying all taxes, other than income or
profit taxes, levied on the Reinsurer for business reinsured under this
Agreement. If the Reinsurer is obligated to pay taxes other than income or
profit taxes for business reinsured under this Agreement the Company shall
reimburse the Reinsurer, provided that the Company shall not be required to
pay the same tax twice.
EXCLUSIONS
1. Grain Risks - including feed mixing, grain elevators and grain
terminals;
2. Petro Chemical Risks and High Hazard Chemical - including
manufacturing and storage. High Hazard chemical business is defined as
chemical exposures consisting of acids, coal chemicals, industrial gases,
petrochemical (including, but not limited to, polypropylene, polyethylene
phenols and polymers) petroleum and synthetic fuel refining, chlorine,
methane, caustic soda, electrolytic and electro thermal chemical
manufacturing, ammonia, urea and nitrogen compounds (including nitric
acid). In general, any chemical with over 250 psig would be classified
hereunder as high hazard.
3. Damage to Growing Crops or Standing Timber;
4. Satellites, Aerospace, and Aviation;
5. Boiler and Machinery when written as such;
6. Transmission and Distribution Lines except coverage provided within
1,000 feet of insured's building;
7. Underground Mines, Tunnels, and Storage Facilities;
8. Wind and/or Solar Powered Electrical Generation Facilities;
9. Railroad Rolling Stock;
10. Builders Risks Contracts written for a term in excess of 36 months;
11. Jewelers' and Furriers' Block;
12. Auto Physical Damage and Dealer's Open Lot;
13. Ocean Marine;
14. Covered Stadiums and Domes;
15. Flood and Earthquake when written as such;
16. Animal Mortality;
17. Strike Insurance;
18. Offshore Drilling Rigs, Pipeline Risks and Property belonging thereto;
19. Fidelity and Surety;
20. Losses arising out of seepage and/or pollution as per the COMPANY's
standard pollution and seepage exclusion. However, this exclusion will not
apply when the COMPANY includes its standard pollution exclusion on a
policy and the judicial entity having legal jurisdiction invalidates the
COMPANY's exclusion thereby obligating the COMPANY for liability arising
out of seepage and/or pollution when such liability was intended to be
excluded from coverage;
21. Insolvency Funds and Financial Guaranty Funds;
22. Retroactive Liability including IBNR and known losses;
23. Extra Contractual Obligations and Loss in Excess of Policy Limits;
24. United States Longshoremen and Harbor Workers Compensation Act and
Xxxxx Act business;
25. War Risks as per the North American War Exclusion Clause
(Reinsurance), BRMA Clause Number 56A;
26. Business included in the Nuclear Incident Exclusion Clause attached
hereto (BRMAClause No. 35B);
27. Assumed Reinsurance except for reinsurance assumed from subsidiaries;
28. Business Produced By Managing General Agents;
29. The COMPANY'S liability as a member, subscriber or REINSURER of any
pool, syndicate, or association including, but not limited to, Fair Plans
and Coastal Pools;
30. Losses arising out of asbestos as per the COMPANY's standard asbestos
exclusion. However, this exclusion will not apply when the COMPANY includes
its standard asbestos exclusion on a policy, or when the COMPANY includes
its standard asbestos exclusion on a policy and the judicial entity having
legal jurisdiction invalidates the COMPANY's exclusion thereby obligating
the COMPANY for liability arising out of asbestos such liability was
intended to be excluded from coverage.
The exclusions enumerated above, with the exception of 21, 22, 23, 24, 25,
26, 27, 28, and 29, will not apply when they are merely incidental to the
main operations of the insured, provided such main operations are covered
by the Company and are not themselves excluded from the scope of this
Agreement. The company shall be sole judge of what is "incidental."
Errors and Omissions on the part of the Company, shall not invalidate the
reinsurance under this Agreement, provided such errors and omissions are
corrected promptly after discovery thereof, but the liability of the
Reinsurer under this Agreement or any exhibits or endorsements attached
thereto shall in no event exceed the limits specified herein.
Risks which are specifically excluded by the Agreement may be individually
submitted hereunder, and, if accepted by the Reinsurer, such business shall
then be covered under the terms of this Agreement, except as such terms
shall be modified by such acceptance.
EARTHQUAKE EXCLUSIONS
ILLINOIS North Dakota
Alexander None
Massac OHIO
Pulaski None
Union Pennsylvania
INDIANA None
None South Dakota
IOWA none
None Tennessee
Kentucky Xxxxxxxx
Xxxxxxx Xxxx
Xxxxxxxx Xxxxxxx
Xxxxxx Lake
Xxxxxx Lauderdale
Xxxxxxx Obion
XxXxxxxxx Xxxxxx
Michigan Xxxxxx
None Wisconsin
Minnesota None
None
Missouri
Xxxxxxxxx
Xxxxxx
Cape Girardeau
Dunkin
Mississippi
New Madrid
Pemiscot
Xxxxx
Xxxxxxxx
NORTH AMERICAN WAR EXCLUSION CLAUSE (REINSURANCE)
As regards interests which at time of loss or damage are on shore, no
liability shall attach hereto in respect of any loss or damage which is
occasioned by war, invasion, hostilities, acts of foreign enemies, civil
war, rebellion, insurrection, military or usurped power, or martial law or
confiscation by order of any government or public authority.
This War Exclusion Clause shall not, however, apply to interests which at
time of loss or damage are within the territorial limits of the United
States of America (comprising the fifty States of the Union and the
District of Columbia and including Bridges between the U.S.A. and Mexico
provided they are under United States ownership), Canada, St. Pierre and
Miquelon, provided such interests are insured under policies, endorsements
or binders containing a standard war or hostilities or warlike operations
exclusion clause.
NUCLEAR INCIDENT EXCLUSION CLAUSE - PHYSICAL DAMAGE - REINSURANCE U.S.A.
1. This Reinsurance does not cover any loss or liability accruing to the
Reassured, directly or indirectly and whether as Insurer or Reinsurer,
from any Pool of Insurers or Reinsurers formed for the purpose of
covering Atomic or Nuclear Energy risks.
2. Without in any way restricting the operation of paragraph (1) of this
Clause, this Reinsurance does not cover any loss or liability accruing
to the Reassured, directly or indirectly and whether as Insurer or
Reinsurer, from any insurance against Physical Damage (including
business interruption or consequential loss arising out of such Physical
Damage) to:
I. Nuclear reactor power plants including all auxiliary property on the
site, or
II. Any other nuclear reactor installation, including laboratories
handling radioactive materials in connection with reactor
installations, and "critical facilities" as such, or
III. Installations for fabricating complete fuel elements or for
processing substantial quantities of "special nuclear material", and
for reprocessing, salvaging, chemically separating, storing or
disposing of "spent" nuclear fuel or waste materials, or
IV Installations other than those listed in paragraph (2) III above
using substantial quantities of radioactive isotopes or other
products of nuclear fission.
3. Without in any way restricting the operations of paragraphs (1) and (2)
hereof, this Reinsurance does not cover any loss or liability by
radioactive contamination accruing to the Reassured, directly or
indirectly, and whether as Insurer or Reinsurer, from any insurance on
property which is on the same site as a nuclear reactor power plant or
other nuclear installation and which normally would be insured therewith
except that this paragraph (3) shall not operate
(a) where Reassured does not have knowledge of such nuclear reactor
power plant or nuclear installation, or (b) where said insurance
contains a provision excluding coverage for damage to property caused
by or resulting from radioactive contamination, however caused.
However on and after 1st January 1960 this sub-paragraph
(b) shall only apply provided the said radioactive contamination
exclusion provision has been approved by the Governmental Authority
having jurisdiction thereof.
4. Without in any way restricting the operations of paragraphs (1), (2) and
(3) hereof, this Reinsurance does not cover any loss or liability by
radioactive contamination accruing to the Reassured, directly or
indirectly, and whether as Insurer or Reinsurer, when such radioactive
contamination is a named hazard specifically insured against.
5. It is understood and agreed that this Clause shall not extend to risks
using radioactive isotopes in any form where the nuclear exposure is not
considered by the Reassured to be the primary hazard.
6. The term "special nuclear material" shall have the meaning given it in
the Atomic Energy Act of 1954 or by any law amendatory thereof.
7. Reassured to be sole judge of what constitutes:
(a) substantial quantities, and
(b) the extent of installation, plant or site.
Note: Without in any way restricting the operation of paragraph (1)
hereof, it is understood and agreed that
(a) all policies issued by the Reassured on or before 31st December
1957 shall be free from the application of the other provisions of this
Clause until expiry date or 31st December 1960 whichever first occurs
whereupon all the provisions of this Clause shall apply,
(b)with respect to any risk located in Canada policies issued by the
Company on or before 31st December 1958 shall be free from the
application of the other provisions of this Clause until expiry date or
31st December 1960 whichever first occurs whereupon all the provisions
of this Clause shall apply.
DEFINITION OF LOCATION
The Company shall be the sole judge of what constitutes a single location
provided that:
1. One location shall always be determined from the standpoint of the
peril of fire, whether or not the fire insurance is written by the
Company;
2. A non-fire resistive building and its contents shall never be considered
as constituting more than one location, nor shall time element
coverage's be considered a separate location apart from the building and
its contents.
3. When two or more buildings and personal property are situated at the
same general location, with no single building located farther than 1 00
yards from the nearest other building, the Company shall identify on its
records at the time of acceptance by the Company those two or more
original buildings which are deemed to constitute a single location. If
such identification is not made, each building and its contents shall be
considered to be a separate location.
4. The term building shall mean each structure which is within the local
fire insurance rating organization's definition of a separate building
or fire division for rate making purposes. With respect to those
structures not within such definition(s), the term "building" shall mean
each separately roofed structure enclosed within exterior walls.
LOSS OCCURRENCE DEFINITION
The term "Loss Occurrence" shall mean the sum of all individual losses
directly occasioned by any one disaster, accident or loss or series of
disaster, accidents or losses arising out of one event which occurs within
the area of one state of the United States or province of Canada and states
or provinces contiguous thereto and to one another. However, the duration
and extent of any one "Loss Occurrence" shall be limited to all individual
losses sustained by the Company occurring during any period of 168
consecutive hours arising out of and directly occasioned by the same event
except that the term "Loss Occurrence" shall be further defined as follows:
(i) As regards windstorms, hail, tornado, hurricane, cyclone,
including ensuing collapse and water damage, all individual
losses sustained by the Company occurring during any period of 72
consecutive hours arising out of and directly occasioned by the
same event. However, the event need not be limited to one state
or province or states or provinces contiguous thereto.
(ii) As regards riot, riot attending a strike, civil commotion,
vandalism and malicious mischief, all individual losses sustained
by the Company occurring during any period of 72 consecutive
hours within the area of one municipality or county and the
municipalities or counties contiguous thereto arising out of and
directly occasioned by the same event. The maximum duration of
72 consecutive hours may be extended in respect of individual
losses which occur beyond such 72 consecutive hours during the
continued occupation of an assured's premises by strikers,
provided such occupation commenced during the aforesaid period.
(iii) As regards earthquake (the epicenter of which need not
necessarily be within the territorial confines referred to in the
opening paragraph of this Article) and fire following directly
occasioned by the earthquake, only those individual fire losses
which commence during the period of 168 consecutive hours may be
included in the Company's "Loss Occurrence."
(iv) As regards to "Freeze," only individual losses directly
occasioned by collapse, breakage of glass and water damage
(caused by bursting of frozen pipes and tanks) may be included in
the Company's "Loss Occurrence." For all "Loss Occurrences" the
Company may choose the date and time when any such period of
consecutive hours commences provided that it is not earlier than
the date and time of the occurrence of the first recorded
individual loss sustained by the Company arising out of that
disaster, accident or loss and provided that only one such period
of 168 consecutive hours shall apply with respect to one event,
except for those "Loss Occurrences" referred to in subparagraphs
(i) and (ii) above where only one such period of 72 consecutive
hours shall apply with respect to one event, regardless of the
duration of the event.
No individual losses occasioned by an event that would be covered by 72
hours Clauses may be included in any "Loss Occurrence" claimed under the
168 hours provision.
Accepted By:
_________________________________ __________________
Xxxx X. Xxxxxx Date
_________________________________ __________________
Xxxxxxx Xxx Xxxxxx August 1, 2000
Assistant Vice President
NAC Reinsurance Corporation
Exhibit 10.53
MERIDIAN MUTUAL INSURANCE GROUP, INC.
INSURANCE COMPANY OF OHIO
Mansfield, Ohio
MERIDIAN CITIZENS MUTUAL INSURANCE COMPANY
Red Wing, Minnesota
MERIDIAN CITIZENS SECURITY INSURANCE COMPANY
Red Wing, Minnesota
MERIDIAN MUTUAL INSURANCE COMPANY
Indianapolis, Indiana
MERIDIAN SECURITY INSURANCE COMPANY
Indianapolis, Indiana
PROPERTY CATASTROPHE EXCESS OF LOSS
REINSURANCE PROGRAM
CONSISTING OF THE FOLLOWING EXCESS LAYERS
FIRST PROPERTY CATASTROPHE EXCESS OF LOSS REINSURANCE
CONTRACT NO. 30074
SECOND PROPERTY CATASTROPHE EXCESS OF LOSS REINSURANCE
CONTRACT NO. 30075
THIRD PROPERTY CATASTROPHE EXCESS OF LOSS REINSURANCE
CONTRACT NO. 30076
THIRD PROPERTY CATASTROPHE EXCESS OF LOSS REINSURANCE
CONTRACT NO. 30077
MERIDIAN MUTUAL INSURANCE GROUP, INC.
INSURANCE COMPANY OF OHIO
MERIDIAN CITIZENS MUTUAL INSURANCE COMPANY
MERIDIAN CITIZENS SECURITY INSURANCE COMPANY
MERIDIAN MUTUAL INSURANCE COMPANY
MERIDIAN SECURITY INSURANCE COMPANY
CATASTROPHE REINSURANCE CONTRACT
TABLE OF CONTENTS
ARTICLE NO. TITLE PAGE
ARTICLE I BUSINESS COVERED 1
ARTICLE II EXCLUSIONS 2-3
ARTICLE III TERM 3
ARTICLE IV TERRITORY 4
ARTICLE V AMOUNT OF LIMIT AND RETENTION 4
ARTICLE VI ULTIMATE NET LOSS 4-5
ARTICLE VII NET RETAINED LINES 5
ARTICLE VIII NET RETENTION REQUIREMENT 6
ARTICLE IX DEFINITION OF LOSS OCCURRENCE 6-7
ARTICLE X NOTICE OF LOSS AND LOSS SETTLEMENT 7-8
ARTICLE XI PREMIUM 8
ARTICLE XII REINSTATEMENT 8-9
ARTICLE XIII CURRENCY 9
ARTICLE XIV OFFSET 9
ARTICLE XV ACCESS TO RECORDS 9
ARTICLE XVI ERRORS AND OMISSIONS 10
ARTICLE XVII TAXES 10
ARTICLE XVIII FEDERAL EXCISE TAX 10
ARTICLE XIX LETTERS OF CREDIT 11-12
ARTICLE XX INSOLVENCY 13
ARTICLE XXI ARBITRATION 14
ARTICLE XXII SERVICE OF SUIT 15
ARTICLE XXIII GOVERNING LAW 16
ARTICLE XXIV CONFIDENTIALITY 16
ARTICLE XXV SEVERABILITY 16
PROPERTY CATASTROPHE EXCESS OF LOSS
REINSURANCE CONTRACT
(hereinafter referred to as the "Contract")
between
MERIDIAN MUTUAL INSURANCE GROUP, INC.
INSURANCE COMPANY OF OHIO
Mansfield, Ohio
MERIDIAN CITIZENS MUTUAL INSURANCE COMPANY
Red Wing, Minnesota
MERIDIAN CITIZENS SECURITY INSURANCE COMPANY
Red Wing, Minnesota
MERIDIAN MUTUAL INSURANCE COMPANY
Indianapolis, Indiana
MERIDIAN SECURITY INSURANCE COMPANY
Indianapolis, Indiana
(hereinafter collectively referred to as the "Company")
and
STATE AUTOMOBILE MUTUAL INSURANCE COMPANY
Columbus, Ohio
(hereinafter referred to as the "Reinsurer")
ARTICLE I
BUSINESS COVERED
The Reinsurer shall indemnify the Company for the net
excess liability as hereinafter provided and specified,
which may accrue to the Company as a result of any loss
or losses which may occur during the currency of this
Contract under any and all Policies, contracts, binders
and other evidence of insurance and reinsurance, oral or
written (hereinafter referred to as "Policies")
heretofore or hereafter issued or entered into by or on
behalf of the Company and classified by the Company as
Fire, Allied Lines, Homeowners (property coverages),
Farmowners (property coverages), Commercial Multiple
Peril Policies (property coverages), Ocean Marine, Inland
Marine, Businessowners (property coverages), Mobile
Homeowners, Earthquake when written as an endorsement,
and Automobile Physical Damage.
ARTICLE II
EXCLUSIONS
The following shall be excluded from the scope of this
Contract:
1. Business written and classified by the Company as:
a) Aviation Insurance;
b) Casualty Insurance (i.e. Accident, Health, Third Party
Liability, Workers Compensation and Employers Liability,
Fidelity, Plate Glass and Burglary and Theft when written
as such);
c) Credit Insurance;
d) Financial Guarantee Insurance;
e) Insolvency Insurance;
f) Life Insurance;
g) Mortgage Impairment Insurance;
h) Title Insurance;
i) Surety;
j) Flood Insurance when written as such;
k) Earthquake Insurance when written as such;
l) Difference in Conditions Insurance;
m) Ocean Marine Insurance, except yachts;
n) Boiler and Machinery;
o) Multiple Peril Policies other than the Property
coverages as included
in the Business Covered Section, hereof;
p) Reinsurance, except so-called agency
reinsurance and except
reinsurance of an individual risk or policy.
2. Wind and Hail on growing and standing crops.
3. Manufacture, processing, storage, filling or
breaking down of explosives.
4. Oil and petrochemical refineries and pipelines and
oil or gas drilling rigs.
5. Excess of Loss insurance or reinsurance where the
deductible exceeds $100,000.
6. Bridges and Tunnels where the Total Insured Value
over all interests exceeds
$300,000,000.
7. Loss/or Damage/or Costs/or Expenses arising from
seepage and/or Pollution and/or Contamination, other
than Contamination from Smoke Damage. Nevertheless,
this exclusion does not preclude payment of the cost
of removal of debris of property damaged by a loss
otherwise covered hereunder, but subject always to a
limit of 25% of the Company's property loss under
the original Policy.
8. Loss in respect of overhead transmission and
distribution lines and their supporting structure
other than those on or within 150 meters (or 500
feet) of the insured premises. It is understood and
agreed that public utilities extension and/or
suppliers extension and/or contingent business
interruption coverages are not subject to this
exclusion, provided that these are not part of a
transmitters' or distributors' Policy.
9. Insolvency Funds as per the "Insolvency Funds
Exclusion Clause" attached hereto.
10. War Risks as per the "North American War Exclusion
Clause (Reinsurance)" attached hereto.
11. Pools, Associations and Syndicates as per the
"Pools, Associations and Syndicates Exclusion
Clause" attached hereto.
12. Nuclear Incident as per the "Nuclear Incident
Exclusion Clause - Physical Damage - Reinsurance -
U.S.A." attached hereto.
13. Nuclear Incident as per the "Nuclear Incident
Exclusion Clause - Physical Damage - Reinsurance -
Canada" attached hereto.
ARTICLE III
TERM
The term of this Contract shall be from 12:01 a.m.,
Eastern Time, January 1, 2001, to 12:01 a.m., Eastern
Time, January 1, 2002.
Should this Contract terminate while a Loss Occurrence is
in progress, the entire Loss arising out of the Loss
Occurrence shall be subject to this Contract. This
contract is cancelable by either party giving not less
than 90 days prior notice or on a mutually agreed upon
date. If this contract is canceled before the
termination date, final contract premium will be
calculated for the expired term at pro rata premium.
ARTICLE IV
TERRITORY
This Contract shall cover wherever the Company's Policies
cover.
ARTICLE V
AMOUNT OF LIMIT AND RETENTION
The Reinsurer shall be liable for the amount of Ultimate
Net Loss in excess of the "Company's Retention" for each
excess layer stated in Item 1 of Exhibit A, each Loss
Occurrence. The limit of liability of the Reinsurer
under each excess layer in respect of any one Loss
Occurrence shall not exceed one hundred percent (100%) of
the "each Loss Occurrence limit" stated in Item 2 of
Exhibit A for such excess layer.
The limit of liability of the Reinsurer under each excess
layer in respect of all Loss Occurrences during the term
of this Contract shall not exceed one hundred percent
(100%) of the "all Loss Occurrences limit" stated in Item
3 of Exhibit A for such excess layer.
The amount of coverage is subject to at least two risks
being involved in the same Loss Occurrence.
ARTICLE VI
ULTIMATE NET LOSS
The term "Ultimate Net Loss" shall mean the amount that
the Company pays, such loss to include all expenses
incurred by the Company in connection with the settlement
of losses or resistance to or negotiations concerning a
loss, including salaries and expenses of employees of the
Company while diverted from their normal duties to the
service of field adjustment but shall not include any
office expenses of the Company. "Ultimate Net Loss"
shall also include loss in excess of policy limits and
extra contractual obligations as hereinafer defined.
"Loss in excess of policy limits" shall mean 90.0% of any
amount paid or payable by the Company in excess of its
policy limits, but otherwise within the terms of its
policy, as a result of an action against it by its
insured or its insured's assignee to recover damages the
insured is legally obligated to pay because of the
Company's alleged or actual negligence or bad faith in
rejecting a settlement within policy limits, or in
discharging its duty to defend or prepare the defense in
the trial of an action against its insured, or in
discharging its duty to prepare or prosecute an appeal
consequent upon such an action. A loss in excess of
policy limits shall be deemed to have occurred on the
same date as the loss covered or alleged to be covered
under the policy. However, for purposes of this
Contract, a loss in excess of policy limits arising out
of any one loss occurrence shall not exceed 25.0% of the
contractual loss under all policies involved in the loss
occurrence.
"Extra contractual obligations" shall mean 90.0% of any
punitive, exemplary, compensatory or consequential
damages, other than loss in excess of policy limits, paid
or payable by the Company as a result of an action
against it by its insured or its insured's assignee,
which action alleges negligence or bad faith on the part
of the Company in handling a claim under a policy subject
to this Contract. An extra contractual obligation shall
be deemed to have occurred on the same date as the loss
covered or alleged to be covered under the policy.
However, for purposes of this Contract, extra contractual
obligations arising out of any one loss occurrence shall
not exceed 25.0% of the contractual loss under all
policies involved in the loss occurrence.
Notwithstanding anything stated herein, this Contract
shall not apply to any loss in excess of policy limits or
any extra contractual obligation incurred by the Company
as a result of any fraudulent and/or criminal act by any
officer or director 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.
All salvages and recoveries and payments (net of the cost
of obtaining any salvage, recovery or payment), whether
recovered or received prior or subsequent to loss
settlement under this Contract, including amounts
recoverable under all Reinsurances whether collected or
not, shall be applied as if recovered or received prior
to the aforesaid settlement and shall be deducted from
the actual loss incurred to arrive at the amount of
Ultimate Net Loss. Nothing in this Article shall be
construed to mean losses are not recoverable until the
Ultimate Net Loss to the Company has been ascertained.
ARTICLE VII
NET RETAINED LINES
This Contract applies to only that portion of any Policy
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
Contract attaches, only loss or losses in respect of that
portion of any Policy which the Company retains net for
its own account shall be included.
ARTICLE VIII
NET RETENTION REQUIREMENT
It is a condition of this Contract that in respect of
each Loss Occurrence for which a claim is made, the
Company will retain net for its own account and
unreinsured in any way at least five percent (5%) of the
amount of Ultimate Net Loss sustained by the Company in
excess of the retentions in Item 1 of Exhibit A, each and
every Loss Occurrence.
ARTICLE IX
DEFINITION OF LOSS OCCURRENCE
The term "Loss Occurrence" shall mean the sum of all
individual losses directly occasioned by any one
disaster, accident or loss or series of disasters,
accidents or losses arising out of one event which occurs
within the area of one state of the United States or
province of Canada and states or provinces contiguous
thereto and to one another. However, the duration and
extent of any one Loss Occurrence shall be limited to all
individual losses sustained by the Company occurring
during any period of one hundred sixty-eight (168)
consecutive hours arising out of and directly occasioned
by the same event except that the term Loss Occurrence
shall be further defined as follows:
A. As regards windstorm, hail, tornado, hurricane,
cyclone, including ensuing collapse and water
damage, all individual losses sustained by the
Company occurring during any period of seventy-
two (72) consecutive hours arising out of and
directly occasioned by the same event.
However, the event need not be limited to one
state or province or states or provinces
contiguous thereto.
B. As regards riot, riot attending a strike, civil
commotion, vandalism and malicious mischief,
all individual losses sustained by the Company
occurring during any period of seventy-two (72)
consecutive hours within the area of one
municipality or county and the municipalities
or counties contiguous thereto arising out of
and directly occasioned by the same event. The
maximum duration of seventy-two (72)
consecutive hours may be extended in respect of
individual losses which occur beyond such
seventy-two (72) consecutive hours during the
continued occupation of an insured's premises
by strikers, provided such occupation commenced
during the aforesaid period.
C. As regards earthquake (the epicentre of which
need not necessarily be within the territorial
confines referred to in the opening paragraph
of this Article) and fire following directly
occasioned by the earthquake, only those
individual fire losses which commence during
the period of one hundred and sixty-eight (168)
consecutive hours may be included in the
Company's Loss Occurrence.
D. As regards "freeze," only individual losses
directly occasioned by collapse, breakage of
glass and water damage (caused by bursting of
frozen pipes and tanks) may be included in the
Company's Loss Occurrence.
For all "Loss Occurrences" except as referred to under
sub-paragraph B, the Company may choose the date and time
when any such period of consecutive hours commences,
provided that it is not earlier than the date and time of
the occurrence of the first recorded individual loss
sustained by the Company arising out of that disaster,
accident, or loss and provided that only one such period
of one hundred and sixty-eight (168) consecutive hours
shall apply with respect to one event, except for those
Loss Occurrences referred to in sub-paragraph A above,
where only one such period of seventy-two (72)
consecutive hours shall apply with respect to one event,
regardless of the duration of the event.
As respect those Loss Occurrences referred to in sub-
paragraph B above, if the disaster, accident or loss
occasioned by the event is of greater duration than
seventy-two (72) consecutive hours, then the Company may
divide that disaster, accident or loss into two or more
Loss Occurrences provided no two periods overlap and no
individual loss is included in more than one such period
and provided that no period
commences earlier than the date and time of the
occurrence of the first recorded individual loss
sustained by the Company arising out of that disaster,
accident or loss.
No individual losses occasioned by an event that would be
covered by seventy-two (72) hours clauses may be included
in any Loss Occurrence claimed under the one hundred and
sixty-eight (168) hours provision.
ARTICLE X
NOTICE OF LOSS AND LOSS SETTLEMENT
The Company shall adjust, settle, or compromise all
claims and losses hereunder.
All loss settlements by the Company which comply with the
terms hereof shall be unconditionally binding upon the
Reinsurer.
The Company shall advise the Reinsurer promptly of all
claims and any subsequent developments pertaining
thereto, which may, in the Company's opinion, develop
into losses involving reinsurance hereunder. Inadvertent
omission or oversight in dispatching such advices shall
in no way affect the liability of the Reinsurer under
this Contract provided the Company informs the Reinsurer
of such omission or oversight promptly upon its
discovery.
The Reinsurer shall tender all loss payments as soon as
practicable after receipt of any proof of loss.
ARTICLE XI
PREMIUM
The premium to be paid to the Reinsurer for each layer of
Property Catastrophe Excess reinsurance provided by this
Contract shall be calculated by applying the
corresponding premium rate stated in Item 6 of Exhibit A
to the Gross Net Written Premium income accounted for by
the Company during the term of this Contract on all
business the subject matter hereof.
"Gross Net Written Premium Income" is defined as gross
written premiums less return premiums and less premiums
paid for reinsurances, recoveries under which inure to
the benefit of this Contract.
For each layer of catastrophe excess of loss reinsurance
provided by this Contract the Company shall pay to the
Reinsurer the corresponding deposit premium stated in
Item 4 of Exhibit A, in quarterly installments of the
amount stated in Item 5 of Exhibit A due January 1, April
1, July 1, and October 1, 2001.
Within ninety (90) days following the expiration of this
Contract, the Company shall render to the Reinsurer a
statement of premium due for each excess layer calculated
in accordance with the first paragraph of this article.
An adjustment of premium shall thereupon be made in
accordance with the statement submitted by the Company,
subject to the corresponding minimum premium stated in
Item 7 of Exhibit A being due the Reinsurer.
ARTICLE XII
REINSTATEMENT
Each claim under each layer of catastrophe excess of loss
reinsurance provided by this Contract reduces the amount
of indemnity under such excess layer from the time of
occurrence of the loss by the amount of the claim paid,
but such amount is hereby reinstated from the time of
occurrence of the loss in consideration of payment by the
Company of an additional premium calculated by applying
to the final adjusted premium for such excess layer the
percentage of the Reinsurer limit stated in Item 2 of
Exhibit A, which is reinstated; such additional premium
shall be paid by the Company when any loss payments are
made by the Reinsurer. Nevertheless, the Reinsurer's
liability under such excess layer shall never exceed one
hundred percent (100%) of the limit stated in Item 2 of
Exhibit A in respect of any one Loss Occurrence and one
hundred percent (100%) of the limit stated in Item 3 of
Exhibit A in respect of all Loss Occurrences during the
term of this Contract.
ARTICLE XIII
CURRENCY
All retentions, limits and premiums referenced in this
Contract are expressed in United States Dollars and all
payments made by either party shall be made in United
States Dollars.
Amounts paid or received by the Company in any other
currency shall be converted to United States Dollars at
the rate of exchange at the date such transaction is
entered on the books of the Company.
ARTICLE XIV
OFFSET
The Company and the Reinsurer, each at its option, may
offset any balance or balances, whether on account of
premiums, claims and losses, loss expenses or salvages
due from one party to the other under this Contract;
provided, however, that in the event of the insolvency of
a party hereto, offsets shall only be allowed in
accordance with applicable statutes and regulations.
ARTICLE XV
ACCESS TO RECORDS
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 designated representatives,
during the term of this Contract and thereafter, all
books, records and papers of the Company in connection
with any reinsurance hereunder, or the subject matter
hereof.
ARTICLE XVI
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 either party if such delay,
omission or error had not been made, provided such delay,
omission or error is rectified as soon as practicable
after discovery.
ARTICLE XVII
TAXES
In consideration of the terms under which this Contract
is issued, the Company undertakes not to claim any
deduction of the premium hereon when making Canadian tax
returns, or when making tax returns, other than income or
profits tax returns, to any state or territory of the
United States of America or to the District of Columbia.
ARTICLE XVIII
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.)
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 Code) to the extent such
premium is subject to the Federal Excise Tax.
In the event of any return of premium becoming due
hereunder the Reinsurer will deduct the applicable
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 XIX
LETTERS OF CREDIT
(This clause is only applicable to those subscribing
Reinsurers who cannot qualify for credit by the
regulatory authority(ies) having jurisdiction over the
Company.)
It is the intention of the parties hereto that this
Article shall set forth the terms and conditions under
which any Letter(s) of Credit required hereunder shall be
held in trust.
If a jurisdiction of the United States will not permit
the Company, in the statements required to be filed with
its regulatory authority(ies), to receive full credit as
admitted reinsurance for any Reinsurer's share of Losses
and reserves for premiums unearned, if any, the Company
shall forward to the Reinsurer a statement of the
Reinsurer's share of such Losses and unearned premiums.
Upon receipt of such statement the Reinsurer shall
promptly provide the Company with a "clean,"
unconditional and irrevocable Letter of Credit, in the
amount specified in the statement submitted, with terms
and bank acceptable to the regulatory authority(ies)
having jurisdiction over the Company.
"Losses," as used in this Article, is defined as the sum
of all Losses paid and allocated loss adjustment expenses
paid by the Company but not yet recovered from the
Reinsurer, plus reserves for Losses and allocated loss
adjustment expenses outstanding, plus reserves for Losses
incurred but not reported (IBNR) as determined by the
Company.
The Reinsurer hereby agrees that the Letter of Credit
will provide for automatic extension of the Letter of
Credit without amendment for one year from the date of
expiration of said letter or any future expiration date
unless thirty (30) days prior to any expiration the
issuing bank shall notify the Company by registered mail
that the issuing bank elects not to consider the Letter
of Credit renewed for any additional period. An issuing
bank which is not acceptable to the regulatory
authority(ies) having jurisdiction over the Company shall
provide sixty (60) days notice to the Company prior to
any expiration, and be confirmed in a manner and by a
bank which is acceptable to the regulatory authority(ies)
having jurisdiction over the Company.
Notwithstanding any other provision of this Contract, the
Company or its successors by operation of law including,
without limitation, any liquidator, rehabilitator,
receiver, or conservator may draw upon such credit at any
time for one or more of the following purposes only:
A. To pay the Reinsurer's share or to reimburse
the Company for the Reinsurer's share of any
Losses and unearned premiums, as stipulated in
the statement submitted by the Company to the
Reinsurer, which is due to the Company and not
otherwise paid by the Reinsurer.
B To make refund of any sum which is in excess of
the actual amount required to fund the
Reinsurer's share of any Losses as stipulated
in the statement submitted by the Company to
the Reinsurer.
C. To withdraw, for the uses and purposes
specified herein which remain executory after
such withdrawal, the balance of such credit if
the Company has received effective notice of
non-renewal of the Letter of Credit and the
Reinsurer's liability remains unliquidated and
undischarged thirty (30) days prior to the
expiry date of the Letter of Credit. The
Company shall deposit the amount so withdrawn
in a separate account in the name of the
Company in any bank or trust company and apart
from its general assets, in trust nevertheless
for such uses and purposes specified above as
may remain executory after such withdrawal and
for any period after such expiry date.
D. To pay or reimburse itself for the Reinsurer's
share of any other amounts the Company claims
are due under this Contract.
At annual intervals or more frequently as determined by
the Company, 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 any Losses and unearned premiums.
If the statement shows that the Reinsurer's share of
Losses plus unearned premiums 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 the statement shows,
however, that the Reinsurer's share of Losses plus
unearned premiums 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.
The 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
assure that withdrawals are made only upon the order of
properly authorized representatives of the Company. The
Company shall incur no obligation to the bank in acting
upon the credit, other than as appears in the express
terms thereof.
The rights and obligations of the Company and the
Reinsurer, as set forth in this Article, shall not be
diminished in any manner whatsoever by the insolvency of
any party hereto.
ARTICLE XX
INSOLVENCY
The reinsurance under this Contract shall be payable by
the Reinsurer on the basis of the liability of one or
more of the Companies under the Policy or Policies
reinsured without diminution because of the insolvency of
one or more of the Companies
reinsured or because the liquidator, receiver,
conservator or statutory successor of the Company(ies)
has failed to pay all or a portion of any claim.
In the event of the insolvency of one or more of the
Companies reinsured, the liquidator, receiver,
conservator or statutory successor of the Company(ies)
shall 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 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, receiver, conservator
or statutory successor. The expense thus incurred by the
Reinsurer shall 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.
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 shall be apportioned
in accordance with the terms of this Contract as though
such expense had been incurred by the Company(ies).
In the event of the insolvency of one or more of the
Companies reinsured, the reinsurance under this Contract
shall be payable by the Reinsurer directly to the
Company(ies) or to the liquidator, receiver, conservator
or statutory successor, except as provided by subsection
(A) of section 4118 of the Insurance Law of New York or
except where (I) the Contract specifies another payee of
such Reinsurance in the event of the insolvency of the
Company(ies) and (II) the Reinsurer with the consent of
the direct insureds and, with the prior approval of the
Superintendent of Insurance of New York to the
certificate of assumption issued to New York direct
insureds, has assumed such Policy obligations of the
Company(ies) as its direct obligations to the payees
under such Policies, in substitution for the obligations
of the Company(ies) to such payees.
ARTICLE XXI
ARBITRATION
If any dispute shall arise between the parties to this
Contract, either before or after its termination, with
reference to the interpretation of this Contract or the
rights of either party with respect to any transactions
under this Contract, including the formation or validity
thereof, the dispute shall be referred to three (3)
arbitrators as a condition precedent to any right of
action arising under this Contract. The arbitrators
shall be active or retired disinterested officers of
insurance or reinsurance companies or Lloyd's
Underwriters other than the parties or their affiliates.
One arbitrator shall be chosen by each party and the
third by the two so chosen. If either party refuses or
neglects to appoint an arbitrator within thirty (30) days
after the receipt of written notice from the other party
requesting it to do so, the requesting party may nominate
two (2) arbitrators who shall choose the third.
In the event the arbitrators do not agree on the
selection of the third arbitrator within thirty (30) days
after both arbitrators have been named, the Company shall
petition the American Arbitration Association to appoint
the third arbitrator. If the American Arbitration
Association fails to appoint the third arbitrator within
thirty (30) days after it has been requested to do so,
either party may request a justice of a court of general
jurisdiction of the state in which the arbitration is to
be held, to appoint an officer or retired officer of an
insurance or reinsurance company or Lloyd's Underwriter
as the third arbitrator. In the event both parties
request the appointment of the third arbitrator, the
third arbitrator shall be the soonest named in writing by
the justice of the court.
Each party shall submit its case to the arbitrators
within thirty (30) days of the appointment of the
arbitrators. The arbitrators shall consider this
Contract an honorable engagement rather than merely a
legal obligation; they are relieved of all judicial
formalities and may abstain from following the strict
rules of law. The decision of a majority of the
arbitrators shall be final and binding on both the
Company and the Reinsurer. Judgment may be entered upon
the award of the arbitrators in any court having
jurisdiction.
Each party shall bear the fee and expenses of its own
arbitrator, one half of the fee and the expenses of the
third arbitrator and one half of the other expenses of
the arbitration. In the event both arbitrators are
chosen by one party, the fees of the arbitrators shall be
equally divided between the parties.
Any such arbitration shall take place in Columbus, Ohio
unless some other location is mutually agreed upon by the
parties.
ARTICLE XXII
SERVICE OF SUIT
(Applies to any Reinsurer not domiciled in the United
States and/or any Reinsurer not authorized in any state,
territory or district of the United States where
insurance regulatory authorities require authorization.
This Article is not intended to conflict with or override
the parties' obligation to arbitrate their disputes in
accordance with the Arbitration Article.)
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 Mendes & Mount, 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, and that in any suit instituted
against the Reinsurer upon this Contract, the Reinsurer
will abide by the final decision of such court or of any
appellate court in the event of an appeal.
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 a
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.
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 its true and
lawful attorney upon whom may be served any lawful
process in any action, suit or proceeding instituted by
or on behalf of the Company or any beneficiary hereunder
arising out of this Contract of reinsurance, and hereby
designates the above-named as the person to whom the said
officer is authorized to mail such process or a true copy
thereof.
ARTICLE XXIII
GOVERNING LAW
This Contract shall be governed as to performance,
administration and interpretation by the laws of the
State of Ohio, exclusive of the rules with respect to
conflicts of law, except as to rules with respect to
credit for reinsurance in which case the applicable rules
of all states shall apply.
ARTICLE XXIV
CONFIDENTIALITY
The Reinsurer, except with the express prior written
consent of the Company, shall not directly or indirectly,
communicate, disclose or divulge to any third party, any
knowledge or information that may be acquired either
directly or indirectly as a result of the inspection of
the Company's books, records and papers. The
restrictions as outlined in this Article shall not apply
to communication or disclosures that the Reinsurer is
required to make to its statutory auditors,
retrocessionaires, legal counsel, arbitrators involved in
any arbitration procedures under this Contract or
disclosures required upon subpoena or other duly-issued
order of a court or other governmental agency or
regulatory authority.
ARTICLE XXV
SEVERABILITY
If any provision of this Contract should be invalid under
applicable laws, the latter shall control but only to the
extent of the conflict without affecting the remaining
provisions of this Contract.
EXHIBIT A
MERIDIAN MUTUAL INSURANCE GROUP, INC.
INSURANCE COMPANY OF OHIO
MERIDIAN CITIZENS MUTUAL INSURANCE COMPANY
MERIDIAN CITIZENS SECURITY INSURANCE COMPANY
MERIDIAN MUTUAL INSURANCE COMPANY
MERIDIAN SECURITY INSURANCE COMPANY
PROPERTY CATASTROPHE EXCESS OF LOSS REINSURANCE CONTRACT
FOR THE PERIOD
12:01 A.M., EASTERN TIME, JANUARY 1, 2001
THROUGH
12:01 A.M., EASTERN TIME, JANUARY 1, 2002
First Second Third Fourth
Excess Excess Excess Excess
30074 30075 30076 30077
Item 1. Company's Retention $6,000,000 $10,000,000 $18,000,000 $30,000,000
Item 2. Reinsurer Each Loss $4,000,000 $ 8,000,000 $12,000,000 $35,000,000
Occurrence Limit (100%)
Item 3. Reinsurer's Limit for all $8,000,000 $16,000,000 $24,000,000 $70,000,000
Loss Occurrences during
the term (100% of)
Item 4. Annual Deposit Premium $1,406,000 $ 760,000 $ 392,160 $ 698,250
Item 5. Quarterly Deposit Premium $ 351,500 $ 190,000 $ 98,040 $ 174,562
Item 6. Premium Rate (GNWPI) 1.4300% .7729% .3988% .7101%
Item 7. Minimum Premium $1,124,800 $ 608,000 $ 313,730 $ 558,600
The amounts and percentages stated above apply to each Subscribing
Reinsurer to the extent of the percentage
participation(s) stated in the Subscribing Reinsurer's Interests
and Liabilities Agreement attached hereto.
INTERESTS AND LIABILITIES AGREEMENT
between
MERIDIAN MUTUAL INSURANCE GROUP, INC.
INSURANCE COMPANY OF OHIO
MERIDIAN CITIZENS MUTUAL INSURANCE COMPANY
MERIDIAN CITIZENS SECURITY INSURANCE COMPANY
MERIDIAN MUTUAL INSURANCE COMPANY
MERIDIAN SECURITY INSURANCE COMPANY
(the "Company")
and
STATE AUTOMOBILE MUTUAL INSURANCE COMPANY
(the "Subscribing Reinsurer")
The Company and the Subscribing Reinsurer agree as follows:
The Subscribing Reinsurer shall have a 100% percentage
participation(s) in the interests, liabilities and premiums of the
"Reinsurer" as set forth in the PROPERTY CATASTROPHE EXCESS OF LOSS
REINSURANCE PROGRAM consisting of Contract Numbers 30074 (First
Property Catastrophe Excess of Loss), 30075 (Second Property
Catastrophe Excess of Loss) 30076 (Third Property Catastrophe
Excess of Loss) and 30077 (Fourth Property Catastrophe Excess of
Loss), including EXHIBIT A which is attached hereto and
incorporated herein in its entirety by this reference. The
Subscribing Reinsurer's individual participation(s) shall be
several and not joint with the participation(s) of any other
Subscribing Reinsurer.
The term of this Interests and Liabilities Agreement shall commence
on January 1, 2001 and shall be subject, without limitation, to
Article III of the document attached hereto.
This Interests and Liabilities Agreement and the Contract attached
hereto may be validly amended only by Endorsement executed by both
of the parties hereto.
INTERESTS AND LIABILITIES AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be signed in duplicate by their authorized representatives.
Signed in Columbus, Ohio this day of , 2001.
STATE AUTOMOBILE MUTUAL INSURANCE COMPANY
By_______________________________________________
Title__________________________________________________
INTERESTS AND LIABILITIES AGREEMENT
Signed in Indianapolis, Indiana this day of , 2001.
MERIDIAN MUTUAL INSURANCE GROUP, INC.
INSURANCE COMPANY OF OHIO
MERIDIAN CITIZENS MUTUAL INSURANCE COMPANY
MERIDIAN CITIZENS SECURITY INSURANCE COMPANY
MERIDIAN MUTUAL INSURANCE COMPANY
MERIDIAN SECURITY INSURANCE COMPANY
By_______________________________________________
Title__________________________________________________
INSOLVENCY FUNDS EXCLUSIONS CLAUSE
This Contract excludes: 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, insolvency
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.
NUCLEAR INCIDENT EXCLUSION CLAUSE -
PHYSICAL DAMAGE - REINSURANCE - CANADA
1. This Reinsurance does not cover any loss or liability accruing
to the Company, directly or indirectly, and whether as Insurer
or Reinsurer, from any Pool of Insurers or Reinsurers formed
for the purpose of covering Atomic or Nuclear Energy risks.
2. Without in any way restricting the operation of paragraph 1 of
this clause, this Reinsurance
does not cover any loss or liability accruing to the Company,
directly or indirectly, and whether as Insurer or Reinsurer,
from any insurance against Physical Damage (including business
interruption or consequential loss arising out of such Physical
Damage) to:
(a) Nuclear reactor power plants including all auxiliary
property on the site, or
(b) Any other nuclear reactor installation, including
laboratories handling radioactive
materials in connection with reactor installations, and
critical facilities as such, or
(c) Installations for fabricating complete fuel elements or for
processing substantial quantities of prescribed
substances, and for reprocessing salvaging, chemically
separating, storing or disposing of spent nuclear fuel
or waste materials, or
(d) Installations other than those listed in (c) above using
substantial quantities of radioactive isotopes
or other products of nuclear fission.
3. Without in any way restricting the operation of paragraphs 1
and 2 of this clause,this Reinsurance does not cover any
loss or liability by radioactive contamination accruing
to the Company, directly or indirectly and whether as Insurer
or Reinsurer, from any insurance on property which is on
the same site as a nuclear reactor power plant or
other nuclear installation and which normally would be insured
therewith, except that this paragraph 3 shall not operate:
(a) where the Company does not have knowledge of such
nuclear reactor power plant or nuclear installation, or
(b) where the said insurance contains a provision excluding
coverage for damage to property caused by or
resulting from radioactive contamination, however caused.
4. Without in any way restricting the operation of paragraphs 1,
2, and 3 of this clause, this Reinsurance does not cover any
loss or liability by radioactive contamination accruing to the
Company, directly or indirectly, and whether as Insurer or
Reinsurer, when such radioactive contamination is a named
hazard specifically insured against.
5. This clause shall not extend to risks using radioactive
isotopes in any form where the nuclear exposure is not
considered by the Company to be the primary hazard.
6. The term "radioactive material" means uranium, thorium,
plutonium, neptunium, their derivatives and compounds,
radioactive isotopes of other elements and any other
substances which may be designated by or pursuant to any law,
act or statute, or any law amendatory thereof as being
prescribed substances capable of releasing atomic
energy, or as being requisite for the production, use or
application of atomic energy.
7. Company to be sole judge of what constitutes:
(a) substantial quantities, and
(b) the extent of installation, plant or site.
8. Without in any way restricting the operation of paragraphs 1, 2,
3, and 4 of this clause, this Reinsurance does not cover any
loss or liability accruing to the Company, directly
or indirectly, and whether as Insurer or Reinsurer caused:
(a) by any nuclear incident as defined in The Nuclear Liability
Act or any other nuclear liability act, law or statute,
or any law amendatory thereof or nuclear
explosion, except for ensuing loss or damage which results
directly from fire, lightning or explosion of natural,
coal or manufactured gas;
(b) by contamination by radioactive material.
NOTE:
Without in any way restricting the operation of paragraph 1, 2, 3
and 4 of this clause, paragraph 8 of this clause shall only
apply to all original contracts of the Company whether
new, renewal or replacement which become effective on or after
December 31, 1992.
NUCLEAR INCIDENT EXCLUSION CLAUSE -
PHYSICAL DAMAGE - REINSURANCE - U.S.A.
1. This Reinsurance does not cover any loss or liability accruing
to the Company, directly or indirectly, and whether
as Insurer or Reinsurer, from any Pool of Insurers or Reinsurers
formed for the purpose of covering Atomic or Nuclear Energy risks.
2. Without in any way restricting the operation of paragraph 1 of
this Clause, this Reinsurance does not cover any loss
or liability accruing to the Company, directly or indirectly
and whether as Insurer or Reinsurer, from any insurance against
Physical Damage (including business interruption or consequential
loss arising out of such Physical Damage) to:
(a) Nuclear reactor power plants including all auxiliary
property on the site, or
(b) Any other nuclear reactor installation including
laboratories handling radioactive materials in
connection with reactor installations, and "critical
facilities" as such, or
(c) Installations for fabricating complete fuel elements or
for processing substantial quantities of "special
nuclear material," and for reprocessing, salvaging,
chemically separating, storing or disposing of "spent"
nuclear fuel or waste materials, or
(d) Installations other than those listed in paragraph (c)
above using substantial quantities of radioactive
isotopes or other products of nuclear fission.
3. Without in any way restricting the operations of paragraphs 1
and 2 hereof, this Reinsurance does not cover any loss or liability
by radioactive contamination accruing to the Company, directly
or indirectly, and whether as Insurer or Reinsurer, from any
insurance on property which is on the same site as a nuclear
reactor power plant or other nuclear installation and which
normally would be insured therewith except that this paragraph
3 shall not operate:
(a) Where the Company does not have knowledge of such nuclear
reactor power plant or nuclear installation, or
(b) Where said insurance contains a provision excluding
coverage for damage to property caused by or
resulting from radioactive contamination, however caused.
However on and after 1st January 1960 this sub-paragraph (b)
shall only apply provided the said radioactive
contamination exclusion provision has been approved by
the Governmental Authority having jurisdiction thereof.
4. Without in any way restricting the operations of paragraphs 1,
2 and 3 hereof, this Reinsurance does not cover any loss or liability
by radioactive contamination accruing to the Company, directly
or indirectly, and whether as Insurer or Reinsurer, when such
radioactive contamination is a named hazard specifically
insured against.
5. It is understood and agreed that this Clause shall not extend
to risks using radioactive isotopes in any form where the nuclear
exposure is not considered by the Company to be the primary hazard.
6. The term "special nuclear material" shall have the meaning
given it in the Atomic Energy Act of 1954, or by any law
amendatory thereof.
7. The Company to be sole judge of what constitutes:
(a) substantial quantities, and
(b) the extent of installation, plant or site.
NOTE:
Without in any way restricting the operation of paragraph 1
hereof, it is understood and agreed that:
(a) all policies issued by the Company on or before 31st
December 1957 shall be free from the application of the other
provision of this Clause until expiry date or 31st
December 1960, whichever first occurs whereupon all the
provisions of this Clause shall apply,
(b) with respect to any risk located in Canada policies
issued by the Company on or before 31st December 1958 shall be
free from the application of the other provisions of this
Clause until expiry date or 31st December 1960, whichever
first occurs whereupon all the provisions of this Clause
shall apply.
POOLS, ASSOCIATIONS & SYNDICATES EXCLUSION CLAUSE
SECTION A:
EXCLUDING:
(a) All Business derived directly or indirectly from any
Pool, Association or Syndicate which maintains its own
reinsurance facilities.
(b) Any Pool or Scheme (whether voluntary or mandatory)
formed after March 1, 1968 for the purpose of insuring Property
whether on a country- wide basis or in respect of designated areas.
This exclusion shall not apply to so-called Automobile
Insurance Plans or other Pools formed to provide coverage
for Automobile Physical Damage.
SECTION B:
It is agreed that business written by the Company for the same
perils, which is known at the time to be insured by, or in excess
of underlying amounts placed in the following Pools, Associations,
or Syndicates, whether by way of insurance or reinsurance, is
excluded hereunder:
Industrial Risk Insurers,
Associated Factory Mutuals,
Improved Risk Mutuals,
Any Pool, Association or Syndicate formed for the purpose of
writing Oil, Gas or Petro-Chemical Plants and/or Oil
or Gas Drilling Rigs,
United States Aircraft Insurance Group,
Canadian Aircraft Insurance Group,
Associated Aviation Underwriters,
American Aviation Underwriters.
SECTION B does not apply:
(a) Where the Total Insured Value over all interests of the
risk in question is less than $300,000,000.
(b) To interests traditionally underwritten as Inland Marine
or Stock and/or Contents written on a Blanket basis.
(c) To Contingent Business Interruption, except when the
Company is aware that the key location is known at the
time to be insured in any Pool, Association or Syndicate
named above, other than as provided for under Section B
(a).
(d) To risks as follows:
Offices, Hotels, Apartments, Hospitals, Educational
Establishments, Public Utilities (other than Railroad
Schedules) and Builder's Risks on the classes of risks
specified in this subsection (d) only.
SECTION C:
NEVERTHELESS the Reinsurer specifically agrees that liability
accruing to the Company from its participation in residual market
mechanisms including but not limited to:
(l) The following so-called "Coastal Pools":
ALABAMA INSURANCE UNDERWRITING ASSOCIATION
FLORIDA WINDSTORM UNDERWRITING ASSOCIATION ("FWUA")
LOUISIANA INSURANCE UNDERWRITING ASSOCIATION
MISSISSIPPI WINDSTORM UNDERWRITING ASSOCIATION
NORTH CAROLINA INSURANCE UNDERWRITING ASSOCIATION
SOUTH CAROLINA WINDSTORM AND HAIL UNDERWRITING
ASSOCIATION
TEXAS WINDSTORM INSURANCE ASSOCIATION
AND
(2) All "FAIR Plan" and "Rural Risk Plan" business
AND
(3) The Florida Property and Casualty Joint Underwriting
Association ("FPCJUA"), the Florida Residential Property
and Casualty Joint Underwriting Association
("RPCJUA")
and the California Earthquake Authority ("CEA")
for all perils otherwise protected hereunder shall not be excluded,
except, however, that this reinsurance does not include any
increase in such liability resulting from:
(i) The inability of any other participant in such "Coastal Pool"
and/or "FAIR Plan" and/or "Rural Risk Plan" and/or Residual Market
Mechanisms to meet its liability.
(ii) Any claim against such "Coastal Pool" and/or "FAIR Plan"
and/or "Rural Risk Plan"
and/or Residual Market Mechanisms, or any participant
therein, including the Company, whether by way of
subrogation or otherwise, brought by or on behalf of any
Insolvency Fund (as defined in the Insolvency Fund
Exclusion Clause incorporated in this Contract).
SECTION D:
(1) Notwithstanding Section C above, in respect of the CEA,
where an assessment is made against the Company by the CEA,
the Company may include in the Ultimate Net Loss
only that assessment directly attributable to each separate
loss occurrence covered hereunder. The Company's initial capital
contribution to the CEA shall not be included in the
Ultimate Net Loss.
(2) Notwithstanding Section C above, in respect of the FWUA,
FPCJUA and RPCJUA, where an assessment is made against
the Company by the FWUA, the FPCJUA, the RPCJUA, or
any combination thereof, the maximum loss that the Company
may include in the Ultimate Net Loss in respect of any Loss
Occurrence hereunder shall not exceed the lesser of:
(a) The Company's assessment from the relevant entity
(FWUA, FPCJUA and/or RPCJUA) for the accounting year
in which the Loss Occurrence commenced, or
(b) The product of the following:
(i) The Company's percentage participation in the
relevant entity for the accounting year in
which the Loss Occurrence commenced; and
(ii) The relevant entity's total losses in such Loss
Occurrence.
Any assessments for accounting years subsequent to that in
which the loss occurrence commenced may not be included in the
Ultimate Net Loss hereunder. Moreover, notwithstanding
Section C above, in respect of the FWUA, the FPCJUA and/or the
RPCJUA, the Ultimate Net Loss hereunder shall not include any
monies expended to purchase or retire bonds as a consequence
of being a member of the FWUA, the FPCJUA and/or the RPCJUA.
For the purposes of this Contract, the Company may not include
in the Ultimate Net Loss any assessment or any percentage
assessment levied by the FWUA, the FPCJUA and/or the RPCJUA to
meet the obligations of an insolvent insurer member or other
party, or to meet any obligations arising from the deferment
by the FWUA, FPCJUA and/or RPCJUA of the collection of monies.
NORTH AMERICAN WAR EXCLUSION CLAUSE (REINSURANCE)
As regards interests which at time of loss or damage are on shore,
no liability shall attach hereto in respect of any loss or damage
which is occasioned by war, invasion, hostilities, acts of foreign
enemies, civil war, rebellion, insurrection, military or usurped
power, or martial law or confiscation by order of any government or
public authority.
This War Exclusion Clause shall not, however, apply to interests
which at time of loss or damage are within the territorial limits
of the United States of America (comprising the fifty States of the
Union and the District of Columbia, its territories and possessions
including the Commonwealth of Puerto Rico and including Bridges
between the U.S.A. and Mexico provided they are under United States
ownership), Canada, St. Pierre and Miquelon, provided such
interests are insured under Policies, endorsements or binders
containing a standard war or hostilities or warlike operations
exclusion clause.
Nevertheless, this Clause shall not be construed to apply to riots,
strikes, civil commotion, vandalism, malicious damage including
acts committed by the agent of any government, party or faction
engaged in war, hostilities, or other warlike operation, providing
such agent is acting secretly and not in connection with any
operations of military or naval armed forces in the country where
the interest insured is situated.
