Exhibit 10 (bi)
ENDORSEMENT NO. 6
to the
QUOTA SHARE RETROCESSION AGREEMENT
Effective: January 1, 1997
issued to
AMERICAN HALLMARK INSURANCE COMPANY OF TEXAS
Dallas, Texas
by
DORINCO REINSURANCE COMPANY
Midland, Michigan
IT IS HEREBY AGREED, as respects Adjustment Periods commencing on or
after January 1, 1999, that paragraph B of ARTICLE 9 - COMMISSION
ADJUSTMENT (as amended by Endorsement Nos. 2, 3 and 5) shall be deleted
and the following substituted therefor:
"B. As respects the second Adjustment Period hereunder, the
adjusted commission shall be:
1. If the ratio of losses incurred to premium earned is
70.0% or higher for the period January 1, 1999 through
June 30, 1999, then the adjusted ceding commission shall
be 26.0% for that period; plus
If the ratio of losses incurred to premium earned is
69.5% or higher for the period July 1, 1999 through the
end of the second Adjustment Period, then the adjusted
ceding commission shall be 26.5% for that period.
2. If the ratio of losses incurred to premium earned is
less than 70.0% for the period January 1, 1999 through
June 30, 1999, or 69.5% for the period July 1, 1999
through the end of the second Adjustment Period, then
the adjusted commission shall be determined by adding
one percent (1.0%) to the ceding commission for each one
percent reduction of loss ratio subject to a ceding
commission of 30.0% at a loss ratio of 66.0%. If the
loss ratio is less than 66.0%, then the commission shall
be further adjusted by adding one percent (1.0%) to the
ceding commission for each one percent reduction in the
loss ratio below 66% subject to a ceding commission of
32.0% at a loss ratio of 64.0%. If the loss ratio is
less than 64.0%, then the commission shall be further
adjusted by adding seven-tenths of one percent (.70%) to
the ceding commission for each one percent reduction in
the loss ratio below 64.0%, subject to a maximum ceding
commission of 35.5% at a loss ratio of 59.0% or less.
3. If the ratio of losses incurred to premium earned is
greater than 70.0% for the period January 1, 1999
through June 30, 1999, 69.5% for the period July 1, 1999
through the end of the second Adjustment Period or less
than 59.0%, the difference between the actual loss
ratio and 70.0%, 69.5% or 59.0%, as applicable, will be
multiplied by the earned premium for the Underwriting
Year and carried forward as a debit or credit to the
ensuing Underwriting Year calculation. Following
termination of this Agreement any debit or credit
carryforward remaining after the final adjustment of the
concluding Underwriting Year will be null and void.
As respects the third and each subsequent Adjustment Period
hereunder, the adjusted commission shall be:
1. If the ratio of losses incurred to premium earned is
69.5% or higher, then the adjusted ceding commission
shall be 26.5%.
2. If the ratio of losses incurred to premium earned is
less than 69.5%, then the adjusted commission shall be
determined by adding one percent (1.0%) to the ceding
commission for each one percent reduction of loss ratio
subject to a ceding commission of 30.0% at a loss ratio
of 66.0%. If the loss ratio is less than 66.0%, then
the commission shall be further adjusted by adding one
percent (1.0%) to the ceding commission for each one
percent reduction in the loss ratio below 66% subject to
a ceding commission of 32.0% at a loss ratio of 64.0%.
If the loss ratio is less than 64.0%, then the
commission shall be further adjusted by adding seven-
tenths of one percent (.70%) to the ceding commission
for each one percent reduction in the loss ratio below
64.0%, subject to a maximum ceding commission of 35.5%
at a loss ratio of 59.0% or less.
3. Should the ratio of losses incurred to premium earned be
greater than 69.5% or less than 59.0%, the difference
between the actual loss ratio and 69.5% or 59.0%, as the
case may be, will be multiplied by the earned premium
for the Underwriting Year and carried forward as a debit
or credit to the ensuing Underwriting Year calculation.
Following termination of this Agreement any debit or
credit carryforward remaining after the final adjustment
of the concluding Underwriting Year will be null and
void."
The provisions of this Agreement shall remain otherwise unchanged.
IN WITNESS WHEREOF the parties hereto have caused this Endorsement to
be executed by their duly authorized representatives at:
Dallas, Texas, this ________ day of ______________________, ____.
_____________________________________________
AMERICAN HALLMARK INSURANCE COMPANY OF TEXAS
Midland, Michigan, this _____ day of _____________________, ____.
_____________________________________________
DORINCO REINSURANCE COMPANY
