Exhibit 10.20.1
REINSURANCE AGREEMENT
BY AND AMONG
CAPITOL SPECIALTY INSURANCE CORPORATION
AS CEDING COMPANY
AND
DARWIN NATIONAL ASSURANCE COMPANY
AS REINSURER
DATED JULY 1, 2005
TABLE OF CONTENTS
PAGE
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ARTICLE 1 DEFINITIONS .................................................. 1
ARTICLE 2 TERM ......................................................... 2
ARTICLE 3 REINSURANCE DEED ............................................. 2
ARTICLE 4 EXTRA-CONTRACTUAL OBLIGATIONS ................................ 3
ARTICLE 5 CONSIDERATION ................................................ 3
ARTICLE 6 ADMINISTRATION ............................................... 4
ARTICLE 7 REPORTS AND RCONCILIATION .................................... 4
ARTICLE 8 RIGHT OF INSPECTION AND PARTICIPATION ........................ 5
ARTICLE 9 THIRD PARTY REINSURANCE AGREEMENTS ........................... 5
ARTICLE 10 INDEMNIFICATION .............................................. 6
ARTICLE 11 COVENANTS .................................................... 6
ARTICLE 12 ERRORS AND OMISSIONS ......................................... 7
ARTICLE 13 LEGAL PROCEEDINGS ............................................ 8
ARTICLE 14 INSOLVENCY ................................................... 8
ARTICLE 15 REGULATORY APPROVALS ......................................... 9
ARTICLE 16 TERMINATION .................................................. 9
ARTICLE 17 GENERAL PROVISIONS ........................................... 9
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REINSURANCE AGREEMENT
THIS REINSURANCE AGREEMENT (the "Reinsurance Agreement"), effective July 1,
2005, is made by and among Capitol Specialty Insurance Corporation, an insurance
company organized and existing under the laws of the State of Wisconsin (the
"Ceding Company"), and Darwin National Assurance Company, an insurance company
organized and existing under the laws of the State of Delaware (the "Reinsurer"
or "Darwin").
WITNESSETH:
WHEREAS, the Ceding Company and Reinsurer are engaged in the property and
casualty insurance business;
WHEREAS, the Reinsurer desires to reinsure 100% of the Policy Liabilities (as
defined herein), effective on the Reinsurance Effective Date (as defined
herein); and
WHEREAS, the Ceding Company desires to have the Reinsurer reinsure the Policy
Liabilities, effective on the Reinsurance Effective Date.
NOW, THEREFORE, for and in consideration of the foregoing premises and the
promises and the mutual agreements hereinafter set forth, the parties hereto
agree as follows:
ARTICLE 1
DEFINITIONS
As used in this Reinsurance Agreement, the Following terms shall have the
following respective meanings:
"Affiliate" means, with respect to any Person, at the time in question, any
other Person directly or indirectly controlling, controlled by or under common
control with such Person.
"Applicable Law" means any federal, state or local statute, law, ordinance,
regulation, order, writ, injunction, directive, judgment or decree applicable to
the parties hereto, or any of their respective Affiliates, properties, or
assets, as the case may be.
"Books and Records" means all records, documents, data and information, in any
form whatsoever, including, but not limited to, hard copies, computer tapes and
drives, CD-ROM or other physical or electronic media, relating to the Policy
Liabilities, including all such materials relating to any third-party
reinsurance relating to such Policy Liabilities.
"Business Day" means any dlay other than a Saturday, Sunday, a day on which
banking institutions in either oaf the States of Wisconsin or Connecticut are
permitted or obligated by law to be closed or a day on which the New York Stock
Exchange is closed for trading.
"Extra Contractual Obligations" means all liabilities for compensatory,
consequential, exemplary, punitive, statutory or similar damages which relate to
or arise (i) in connection with any alleged or actual act, error or omission by
the Ceding Company or any of its Affiliates
relating to the Policy Liabilities and/or the Policies, or (ii) in connection
with any such alleged or actual act, error or omission by the Reinsurer acting
on behalf of Ceding Company or any of its Affiliates.
"Loss or Losses" mean all claims, judgments, awards, losses, liabilities,
obligations, damages, payments, deficiencies, costs or expenses (including
allocated loss adjustment expenses), including, without limit, any penalties and
attorneys' fees and disbursements.
"Person" means any individual, corporation, partnership, firm, joint venture,
association, company, trust, unincorporated organization, governmental, judicial
or regulatory body, business unit division or other entity.
"Policy Liabilities" means all Losses (net of reinsurance payments actually
received by Ceding Company from reinsurers not affiliated with Ceding Company)
arising out of or relating to policies written through Darwin Professional
Underwriters, Inc. ("DPU") on Ceding Company paper pursuant to an Underwriting
Management Agreement between DPU and Ceding Company effective June 1, 2003 and
not otherwise ceded by Ceding Company to Darwin National Assurance Company or
otherwise paid by the Ceding Company prior to the Reinsurance Effective Date
(the "Policies"),
"Policy Reserves" means the reserves of Ceding Company as of the Reinsurance
Effective Date with respect to the Policy Liabilities without giving effect to
this Reinsurance Agreement.
"Reinsurance Effective Date" shall be July 1, 2005.
"Tax or Taxes" means reinsurance premium taxes, reinsurance excise taxes, second
injury fund assessments (net of reimbursements, if any), guarantee fund
assessments (net of premium tax credits as used) or any other similar
premium-based taxes or similar assessments directly arising from, or directly
relating to, the Policy Liabilities, including any interest, penalties or
additions attributable thereto.
ARTICLE 2
TERM
Subject to all of the provisions set forth herein, this Reinsurance Agreement
shall be effective as of the Reinsurance Effective Date and shall remain in
effect so long as there are any outstanding Policy Liabilities or until this
Reinsurance Agreement is terminated in accordance with the provisions of Article
16 hereof.
ARTICLE 3
REINSURANCE CEDED
A. The Ceding Company hereby cedes, and the Reinsurer hereby accepts and
assumes, as of the Reinsurance Effective Date, one hundred percent (100%)
of the Policy Liabilities incurred by the Ceding Company, including any
Taxes.
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B. The Ceding Company will use reasonable efforts to provide to the Reinsurer
available information relating to the Policy Liabilities. Failure to
provide any such information, or include any claim, policy form or other
information relating to the Policy Liabilities, shall not affect the
reinsurance coverage provided for by this Reinsurance Agreement.
C. Neither the Ceding Company nor the Reinsurer shall have the right to
commute The reinsurance ceded under this Reinsurance Agreement, except
pursuant to the provisions of paragraph B of Article 16 of this Reinsurance
Agreement.
D. The Reinsurer shall follow the fortunes of the Ceding Company for all
Policy liabilities and matters covered by this Reinsurance Agreement in all
respects, and the Reinsurer shall be bound by all payments and settlements
entered into by the Ceding Company and/or DPU on behalf of the Ceding
Company.
ARTICLE 4
EXTRA-CONTRACTUAL OBLIGATIONS
The Reinsurer shall pay and be responsible for 100% of any Extra Contractual
Obligations arising out of or relating to the Policy Liabilities.
ARTICLE 5
CONSIDERATION
A. The Ceding Company will compute and credit the amount due to the Reinsurer
in consideration for the reinsurance provided hereunder a sums equal to the
June 30, 2005 GAAP book value of the loss and loss adjustment expense
reserves and unearned premium, less any deferred acquisition expense
related to the unearned premium, for the Policies, less any ceded unearned
premiums and reinsurance receivables from unaffiliated reinsurers on paid
and unpaid Losses for the Policies. In addition to any other amounts due
Ceding Company, Reinsurer shall reimburse Ceding Company for any and all
amounts paid and/or payable by Ceding Company to DPU under the Underwriting
Management Agreement between DPU and Ceding Company effective June 1, 2003.
B. Within fifteen (15) business days following the Reinsurance Effective Date,
the Ceding, Company will remit to the Reinsurer the consideration to be
calculated pursuant to paragraph A of this Article. The form of the total
consideration may include reinsurance recoverables relating to business
reinsured (credited at full GAAP book value), cash, and invested assets of
the entities reinsured (as determined by the Ceding Company and credited at
market value). All invested assets transferred shall be free and clear of
all claims, liens and encumbrances. The Ceding Company and the Reinsurer
may, upon mutual agreement, offset amounts due under this Agreement against
other amounts due between the parties.
C. The Reinsurer shall be entitled, as a reinsurance premium, to 100% of all
collected premiums, salvage and subrogation and any other moneys received
by the Ceding Company with respect to the Policies after the Reinsurance
Effective Date, except for any
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amount received by Ceding Company for reinsurance recoverables not
transferred to the Reinsurer. Any costs, expenses and commissions incurred
in collecting the amounts set forth in this Paragraph D shall be borne by
the Reinsurer.
D. The Reinsurer shall fully reimburse the Ceding Company for any and all
losses and expenses (including collection expenses and attorney's fees)
arising from the failure of an unaffiliated reinsurer to timely pay the
Ceding Company amounts due the Ceding Company in connection with the
business covered by this Agreement.
ARTICLE 6
ADMINISTRATION
In further consideration of the mutual promises under this Reinsurance
Agreement, the Ceding Company and the Reinsurer agree that the Policy
Liabilities will be administered by the Reinsurer; provided, however, that
Reinsurer may permit DPU to provide administrative services related to these
Policy Liabilities in the same manner and to the same extent that DPU provides
such services on business written by Ceding Company through DPU. However,
notwithstanding the performance of such services by DPU, Reinsurer shall remain
directly liable for the performance of such services and Ceding Company shall
not be required to compensate DPU in any manner for such services performed as
permitted under this Reinsurance Agreement.
ARTICLE 7
REPORTS AND RECONCILIATION
A. Periodically, within a time frame as mutually agreed upon by the parties,
during the term of this Reinsurance Agreement, there shall be transmitted
by the Reinsurer to the Ceding Company, in form and substance Mutually
agreed upon by the parties, a "summary report" for the period reported on,
of all activity relating to the Policy Liabilities. The report shall
include, but not be limited to, the amount of gross premiums, commissions,
related expenses, reserves and paid losses, as applicable. The report shall
also reconcile any amounts due the Ceding Company and Reinsurer under this
Reinsurance Agreement.
B. Except to the extent that this Reinsurance Agreement provides otherwise,
all amounts shall be paid within twenty (20) Business Days of delivery of
such report, and any amount not paid within such twenty (20) Business Day
period shall bear simple interest at the 60-Day C.P. Rate (as such rate is
published under the caption "Commercial Paper" for a 60-Day duration in
Federal Reserve Statistical Release H.15 (519) on the date the payment is
made) (the "60-Day C.P. Rate") from the twentieth Business Day until the
date of payment.
C. To the extent Reinsurer has reasonably available the applicable
information, or such information as can reasonably be made available,
Reinsurer shall prepare all reports reasonably requested by the Ceding
Company in connection with the Policy Liabilities to enable the Ceding
Company to comply with any contractual requirements, any and all Applicable
Laws, including, without limitation, all statutory insurance reporting
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requirements and, as the case may be, reasonable informational or reporting
requests from reinsurers. Any monthly or quarterly reports required to be
prepared by Reinsurer shall be prepared within fifteen (15) Business Days
following the last day of the applicable month or calendar quarter, as the
case may be. Any year-end reports and reports for the Ceding Company's
reinsurers required to be prepared by Reinsurer shall be prepared on a
timely basis in order for the Ceding Company to comply with any filing
deadlines required by law or by contract. All such reports shall include
such information as may reasonably be required by the Ceding Company.
ARTICLE 8
RIGHT OF INSPECTION AND PARTICIPATION
To the extent permitted by Applicable Law, from the date hereof until the date
on which Reinsurer has fulfilled all of its obligations to the Ceding Company
under this Reinsurance Agreement, and at any time (without limitation) as may be
required in the Ceding Company's judgment in order for the Ceding Company to
comply with any Applicable Law or to perform its obligations or responsibilities
under this Reinsurance Agreement, the Ceding Company and its authorized
representatives may from time to time reasonably request, and Reinsurer shall
provide, during normal business hours, full and open access to examine all Books
and Records under the control of Reinsures relating to the Policy Liabilities
and to discuss the Policy Liabilities or the reinsurance provided under this
Reinsurance Agreement with the employees and agents of Reinsurer who are
familiar therewith, so that the Ceding Company shall have sufficient opportunity
to make whatever investigation it shall reasonably deem necessary and desirable
in connection with the transactions contemplated by this Reinsurance Agreement.
Such access and opportunity shall be exercised by the Ceding Company and such
authorized representatives in a manner that shall not interfere unreasonably
with the operations of Reinsurer. Such access shall include provision by
Reinsurer to the Ceding Company of copies of any Books and Records to the extent
that the Ceding Company reasonably determines that it requires copies of any
such Books and Records in order to carry out the transactions contemplated by
this Reinsurance Agreement or for any legitimate business purposes related to
this Reinsurance Agreement.
ARTICLE 9
THIRD-PARTY REINSURANCE AGREEMENTS
A. Future potential recoveries under reinsurance contracts providing aggregate
limits shall be apportioned pursuant to generally accepted allocation
practices or procedures; provided that the method or the combination of
methods actually utilized shall be reasonable and equitable; provided,
further, that if the Ceding Company and the Reinsurer do not agree on any
allocation, such dispute shall he subject to resolution pursuant to Article
13 hereof.
B. Nothing in this Agreement shall be deemed a warranty or guaranty by the
Ceding Company of the reinsurance recoverables transferred to the Reinsurer
pursuant to Article 5 hereof.
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ARTICLE 10
INDEMNIFICATION
A. The Reinsurer agrees to indemnify, defend and hold harmless the Ceding
Company and its directors, officers, employees, successors and permitted
assigns from and against all Losses arising under or related to the Policy
Liabilities assumed by the Reinsurer under this Reinsurance Agreement and
the Extra Contractual Obligations assumed by the Reinsurer pursuant to
Article 4 hereof.
B. In the event the Ceding Company (or its directors, officers, employees,
successors and permitted assigns) shall have a claim for indemnity against
the Reinsurer, the Ceding Company shall deliver written notice of such
claim with reasonable promptness to the Reinsurer specifying in reasonable
detail the facts constituting the basis for and the amount of, the claim
asserted. The failure by the Ceding Company to notify the Reinsurer shall
not relieve the Reinsurer from any liability that it may have to the Ceding
Company with respect to any claim made pursuant to this Article 10. The
Ceding Company shall have authority to select counsel and control all
aspects of the defense of any matters subject to this Article 10, subject
to the approval of the Reinsurer, not to be unreasonably withheld.
ARTICLE 11
COVENANTS
A. The Reinsurer shall maintain Policy Reserves consistent with the law of any
jurisdiction having regulatory authority with respect to the Policy
Liabilities.
B. The Reinsurer shall, at its own expense, take all steps necessary to ensure
that the Ceding Company obtain full financial statement credit in all
applicable jurisdictions for the reinsurance ceded under this Reinsurance
Agreement, including, to the extent required, the posting of letters of
credit or other acceptable security.
C. Notwithstanding any other provision of this Agreement to the contrary, if
the Reinsurer becomes unauthorized in any State or Commonwealth of the
United States of America or tile District of Columbia or any other
jurisdiction where authorization is required by insurance regulatory
authorities in order for the Ceding Company to obtain credit on its
statutory annual statements for the reinsurance being provided under this
Reinsurance Agreement, the Reinsurer will establish such escrow accounts,
trust accounts for the benefit of the Ceding Company, letters of credit, or
a combination thereof as required by Applicable Law to permit the Ceding
Company to obtain credit for such reinsurance upon the request of the
Ceding Company if a penalty would accrue to the Ceding Company on its
statutory annual statement without such funding. The Ceding Company shall
have the option of determining the method of funding to be utilized.
The Reinsurer shall promptly notify the Ceding Company of any loss of
license or authorization or other change or condition which, in the
reasonable judgment of the
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Ceding Company, may affect the ability of the Ceding Company to obtain
credit on its statutory financial statements for such reinsurance.
D. In the event (a) the Reinsurer is required to file a "Company Action Plan"
as a result of its risk based capital level falling below required levels,
which condition is not promptly cured by the Reinsurer upon notice by the
Ceding Company, or (b) the AM Rest rating of the Reinsurer falls below all
"A-", the Reinsurer shall promptly collateralize its reinsurance
obligations to the Ceding Company under this Reinsurance Agreement in a
manner reasonably satisfactory to the Ceding Company. Such
collateralization shall only be required during the period in which the
Reinsurer's risk based capital level is below required levels under
Applicable Law or (b) if the prior sentence applies.
E. The Reinsurer shall promptly notify the Ceding Company of the occurrence of
any of the following events:
a. As a result of the Reinsurer's risk based capital falling
below required levels, the Reinsurer is required to file a
"Company Action Plan" or (b) the AM Best rating of the
Reinsurer falls below an "A-",
b. The insolvency of the Reinsurer or the existence of any
condition that would provide grounds for the commencement of
a rehabilitation, conservation, liquidation or other
delinquency proceedings by a governmental entity with
respect to the Reinsurer.
F. The Reinsurer shall, within twenty (20) Business Days of notification by
the Ceding Company, pay all Taxes.
ARTICLE 12
ERRORS AND OMISSIONS
Any delays, errors or omissions on the part of one party occurring in connection
with its obligations under this Reinsurance Agreement or ally transaction
hereunder shall not relieve any other party from any liability which would have
otherwise attached had such delay, error or omission not occurred, provided that
such error or omission is rectified as soon as reasonably practicable after
discovery thereof. Notwithstanding the foregoing, no inadvertent failure by the
Ceding Company to give notice to the Reinsurer of a claim or occurrence relating
to the Policy Liabilities being reinsured hereunder, regardless of prejudice to
the Reinsurer, shall render unenforceable or void the reinsurance relating to
such claim being provided under this Reinsurance Agreement.
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ARTICLE 13
LEGAL PROCEEDINGS
Each of the parties hereto agrees that any legal action or proceeding with
respect to this Reinsurance Agreement shall be brought in the Courts of the
State of Wisconsin, or the United States District Court for the Western District
of Wisconsin and, by execution and delivery of this Reinsurance Agreement, each
party hereto irrevocably submits itself in respect of its property, generally
and unconditionally, to the jurisdiction of the aforesaid courts in any legal
action or proceeding arising out of this Reinsurance Agreement. Each of the
parties hereto hereby irrevocably waives any objection which it may now or
hereafter have to the laying of venue or any of the aforesaid actions or
proceedings arising out of or in connection with this Reinsurance Agreement
brought in the courts referred to in the preceding sentence. Each party hereby
consents to process being served in any such action or proceeding by the mailing
of a copy thereof to the address set forth in Article 17 (M) hereof and agrees
that such service upon receipt shall constitute good and sufficient service of
process or notice thereof. Nothing herein shall affect or eliminate any right to
serve process in any other platter matter by law.
ARTICLE 14
INSOLVENCY
In the event of the insolvency, liquidation or rehabilitation of the Ceding
Company or the appointment of a liquidator, receiver or statutory successor of
the Ceding Company, the reinsurance coverage provided hereunder shall be payable
by the Reinsurer directly to the Ceding Company or to its liquidator, receiver
or statutory successor, on the basis of the liability of the Ceding Company for
the Policy Liabilities without diminution because of such insolvency,
liquidation, rehabilitation or appointment or because such liquidator, receiver
or statutory successor has failed to pay any or a portion of any claims. In any
such event, the reinsurance being provided hereunder shall be payable
immediately upon demand, with reasonable provision for verification, on the
basis of claims allowed against the Ceding Company by any court of competent
jurisdiction or by any liquidator, receiver or statutory successor. In any such
event, the liquidator, receiver or statutory successor of the Ceding Company
shall give written notice to the Reinsurer of the pendency of each claim against
the Ceding Company with respect to such Policy Liabilities within a reasonable
time after each such claim is filed in the insolvency, liquidation or
rehabilitation proceeding. During the pendency of any such claims, the Reinsurer
may, at its own expense, investigate such claim and interpose in the proceeding
in which such claim is to be adjudicated any defense or defenses, which the
Reinsurer may reasonably deem available to the Ceding Company or its liquidator,
receiver or statutory successor. The expenses incurred in connection (therewith
by the Reinsurer shall be chargeable, subject to court approval, against the
Ceding Company as part of the expense of such insolvency, liquidation or
rehabilitation to the extent of any benefit, which accrues to the Ceding
Company, solely as a result of the defense or defenses undertaken by the
Reinsurer.
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ARTICLE 15
REGULATORY APPROVALS
A. It shall be a condition to the effectiveness of this Reinsurance Agreement
that the Ceding Company and the Reinsurer shall have obtained prior
approval of this Reinsurance Agreement from those state insurance
departments or other regulatory authorities, the approval of which is
required for the effectiveness of this Reinsurance Agreement.
B. At all times during the term of this Reinsurance Agreement, Reinsurer shall
hold and maintain all licenses and authorities required under Applicable
Laws to perform its obligations hereunder.
ARTICLE 16
TERMINATION
A. This Reinsurance Agreement shall be terminated:
1. upon the termination of all of the Policy Liabilities;
2. by mutual written agreement of the parties; or
3. at the option of the Ceding Company, upon the occurrence of the
commencement of a rehabilitation, liquidation, conservation or
other delinquency proceeding against the Reinsurer, or the
existence of any condition (continuing as of the date of
termination) that would provide reasonable grounds for the
commencement of a rehabilitation, liquidation, conservation or
other delinquency proceeding against the Reinsurer, under
applicable state insurance laws and regulations, which condition
is not promptly cured by the Reinsurer upon notice by the Ceding
Company of its intent to exercise its rights under this
provision.
B. In the event of the termination of this Reinsurance Agreement under
paragraph A (3) of this Article, the Ceding Company shall be permitted, at
its sole option, to commute the Policy Liabilities. In such an event, the
Reinsurer shall transfer to the Ceding Company, subject to any necessary
court approval, assets with a fair market value equal to the Policy
Liabilities subject to such commutation as of the effective date of the
commutation ("Commutation Payment"). All parties shall use their best
efforts to cooperate in effectuating the necessary transitions.
ARTICLE 17
GENERAL PROVISIONS
A. Invalidity. Unless the invalidity or unenforceability of any provision or
portion thereof frustrates the intent of the parties or the purpose of this
Reinsuurance Agreement, such invalidity or unenforceability shall not
affect the validity or enforceability of the other
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provisions or portions thereof. In the event that such provision shall be
declared unenforceable by a court of competent jurisdiction, such provision
or portion thereof, to the extent declared unenforceable, shall be
stricken. However, in the event any such provision or portion thereof shall
be declared unenforceable due to its scope, breadth or duration, then it
shall be modified to the scope, breadth or duration permitted by law and
shall continue to be fully enforceable as so modified.
B. Entire Agreement. This Reinsurance Agreement constitutes the entire
contract between the parties with respect to the reinsurance and
administration of the Policy Liabilities and there are no understandings
between the parties as to the reinsurance or administrative services to be
provided other than as expressed in this Reinsurance Agreement and the
Administrative Services Agreement. Any amendment or modification hereto
shall be null and void unless made in writing by amendment to this
Reinsurance Agreement and executed by all parties.
C. Governing Law. This Reinsurance Agreement shall be deemed to have been made
under and governed by the laws of the State of Wisconsin without regard to
Wisconsin's choice of law rules.
D. Counterparts. This Reinsurance Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Reinsurance
Agreement shall become effective when one or more counterparts have been
signed by each party hereto and delivered to the other parties hereto,
which consent shall not unreasonably be withheld.
E. No Third-Party Beneficiaries. Nothing in this Reinsurance Agreement is
intended or shall be construed to give any Person, other than the parties
hereto, any legal or equitable right, remedy or claim under or in respect
of this Reinsurance Agreement or any provision contained herein; provided,
however, that any person entitled to indemnification pursuant to Article 10
hereof shall he entitled to enforce such article.
F. Assignment. This Reinsurance Agreement shall be binding upon and inure to
the benefit of the, parties hereto and their respective successors and
assigns and legal representatives. This Reinsurance Agreement is not
assignable except by operation of law or by mutual written consent of the
parties hereto.
G. Waivers. The terms of this Reinsurance Agreement may be waived only by a
written instrument signed by the party waiving compliance. No delay on the
part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof. Nor shall any waiver on the part of any
party of any right, power or privilege, nor any single or partial exercise
of any such right, power or privilege, preclude any further exercise
thereof or the exercise of any other such right, power or privilege.
H. Headings. The headings in this Reinsurance Agreement are for the
convenience of reference only and shall not affect its interpretation.
I. Exhibits. Each Exhibit referred to herein is incorporated into this
Reinsurance Agreement by such reference.
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J. Preparation. This Reinsurance Agreement has been jointly prepared by the
parties hereto and the terms hereof will not be construed in favor of or
against any such party by reason of its participation in such preparation.
K. Reasonableness. Each of the Parties will act reasonably and in good faith
on all matters within the terms of this Reinsurance Agreement.
L. Incontestability. In consideration of the mutual covenants and agreements
contained herein, each party hereto does hereby agree that this Reinsurance
Agreement, and each and every provision hereof, is and shall be enforceable
by and between them according to its terms, and each party does hereby
agree that it shall not contest the validity or enforceability hereof.
M. Notices. All notices, requests, demands, approvals and other communications
under this Reinsurance Agreement shall be in writing and shall be delivered
personally, sent by facsimile transmission or sent by certified, registered
or express mall, postage prepaid. Any such notice or other communication
shall be deemed given upon actual delivery if presented personally or sent
by facsimile transmission, in each case to the following addresses:
If to the Ceding Company:
Chief Financial Officer
Capitol Insurance Companies
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
With copies to:
General Counsel
Capitol Insurance Companies
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▇.▇. ▇▇▇▇
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Fax: ▇▇▇-▇▇▇-▇▇▇▇
If to Reinsurer:
Chief Financial Officer
Darwin National Assurance Company
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▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
With copies to:
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General Counsel
Darwin National Assurance Company
▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Any party may, by notice given in accordance with this Reinsurance Agreement to
the other parties, designate another address, fax number or person for receipt
of notices hereunder.
N. Offsets. Ceding Company and Reinsurer may offset any balance, whether on
account of premiums, commissions, losses or claim expenses, due from one
party to the other under this Reinsurance Agreement or under any other
reinsurance agreement hereafter entered into between Ceding Company and
Reinsurer; provided, however, that in the event of the insolvency,
liquidation, or rehabilitation of a party hereto, offsets shall only be
permitted to the extent allowed under the terms of this Reinsurance
Agreement and applicable law.
IN WITNESS WHEREOF, and intending to be legally bound, the parties have
signed this Reinsurance Agreement.
CAPITOL SPECIALTY INSURANCE CORPORATION
Date: September 1, 2005 By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: President
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DARWIN NATIONAL ASSURANCE COMPANY
Date: August 31, 2005 By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
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Title: CFO
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