Exhibit 10.31
100% QUOTA SHARE RETROCESSION AGREEMENT
(NON-TRADITIONAL - A)
BY AND BETWEEN
ST. XXXX REINSURANCE COMPANY LIMITED
(RETROCEDANT)
and
PLATINUM UNDERWRITERS REINSURANCE INC.
(RETROCESSIONAIRE)
DATED AS OF________, 2002
This QUOTA SHARE RETROCESSION AGREEMENT (this "AGREEMENT"), effective as of
12:01 a.m. London time on the day following the Closing (such term and all other
capitalized terms used but not defined herein shall have the meanings ascribed
to such terms in the Formation and Separation Agreement, as defined below; such
time the "EFFECTIVE TIME" and such date the "EFFECTIVE DATE"), is made by and
between ST. XXXX REINSURANCE COMPANY LIMITED, a United Kingdom domiciled
insurance company ("RETROCEDANT"), and PLATINUM UNDERWRITERS REINSURANCE INC.
(formerly known as USF&G Family Insurance Company), a Maryland domiciled stock
insurance company ("RETROCESSIONAIRE").
WHEREAS, pursuant to a Formation and Separation Agreement dated as of [ _____],
2002 (the "FORMATION AND SEPARATION AGREEMENT") between Platinum Underwriters
Holdings, Ltd. ("PLATINUM HOLDINGS"), the ultimate parent of Retrocessionaire,
and The St. Xxxx Companies, Inc. ("THE ST. XXXX"), the ultimate parent of
Retrocedant, Platinum Holdings acquired one hundred percent (100%) of the issued
and outstanding Shares; and
WHEREAS, pursuant to the Formation and Separation Agreement, The St. Xxxx agreed
to cause its insurance subsidiaries to cede specified liabilities under certain
reinsurance contracts of The St. Paul's insurance subsidiaries, and Platinum
Holdings agreed to cause its insurance subsidiaries to reinsure such
liabilities; and
WHEREAS, Retrocedant has agreed to retrocede to Retrocessionaire, and
Retrocessionaire has agreed to assume by indemnity reinsurance, as of the
Effective Time, a one hundred percent (100%) quota share of the liabilities
arising pursuant to the Reinsurance Contracts (as defined hereunder), subject to
the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and promises and upon
the terms and conditions set forth herein, the parties hereto agree as follows:
1. BUSINESS COVERED
Retrocedant hereby obligates itself to retrocede to Retrocessionaire
and Retrocessionaire hereby obligates itself to accept, pursuant to the
terms of this Agreement, a one hundred percent (100%) quota share of
any and all liabilities incurred by Retrocedant on or after January 1,
2002 but not yet paid as of the Effective Time, net of Inuring
Retrocessions (as defined in Section 7.1 herein) under all reinsurance
and retrocession contracts (each, a "REINSURANCE CONTRACT") as set
forth in Exhibit A-1 hereto (solely for the convenience of the parties
Exhibit A-2 sets forth Loss Reserves (as defined in Exhibit B hereto),
over all such Reinsurance Contracts, by Class of Business (as defined
below), each as of June 30, 2002), PROVIDED that (for the avoidance of
doubt and save as provided in Clause 10 of Part C of the Agency
Agreement) Retrocedant shall not retrocede, and Retrocessionaire shall
not accept, any liability incurred by Retrocedant under reinsurance and
retrocession contracts to the extent that they are entered into or
renewed after the authorisation of Platinum Re (UK) Limited under Part
IV of the Financial Services and Markets Xxx 0000 of the United Kingdom
to carry on reinsurance business in the United Kingdom.
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Notwithstanding the foregoing Retrocedant shall retain all liabilities
for ceding commission and brokerage fees up to the carrying value of
the related reserves on the books of the Retrocedant as of Sepember 30,
2002 (the "Initial Ceding Commission Reserves"), and as finally
determined pursuant to the provisions of Article IV herein, which
reserves shall be retained by Retrocedant. All liabilities for ceding
commissions and brokerage fees in excess of such carrying value shall
be assumed by Retrocessionaire, as provided for above.
Notwithstanding the foregoing, Retrocedant will retain all liabilities
arising under any Reinsurance Contract relating to or emanating from
the losses caused by the European floods in August 2002 (the "FLOOD
LIABILITIES").
With respect to any named storm(s) (which are any tropical cyclones
assigned a name by the National Hurricane Center) in existence as of
the Effective Time which cause insured damage within 10 days of the
Effective Date, except as provided for herein, Retrocedant shall
retrocede one hundred percent (100%) quota share of losses arising from
all such storms, net of the inuring benefit of Inuring Retrocessions as
allocated pursuant to Exhibits D and F (but excluding the inuring
benefit of the Holborn aggregate cover referenced as Item 13 in Exhibit
D) to Retrocessionaire and Retrocessionaire shall accept one hundred
percent (100%) quota share of such losses. However, Retrocedant shall
retain $25,000,000 of losses, in the aggregate, net of the inuring
benefit of Inuring Retrocessions as allocated pursuant to Exhibits D
and F, in excess of the first $25,000,000, net of the inuring benefit
of Inuring Retrocessions as allocated pursuant to Exhibits D and F,
that Retrocessionaire assumes. Retrocedant shall use commercially
reasonable efforts to arrange, on behalf of Retrocessionaire, third
party retrocessional coverage for losses arising from such named storms
in excess of $50,000,000 in the aggregate, net of the inuring benefit
of Inuring Retrocessions as allocated pursuant to Exhibits D and F. The
cost of such coverage shall not exceed $5 million with such cost shared
equally by Retrocedant and Retrocessionaire. The amount of such
coverage shall be $100,000,000 or such lesser amount as may be
available on the specified terms. It is understood that the calculation
of any losses or retentions by the Retrocedant or the Retrocessionaire,
as the case may be, pursuant to this subparagraph shall include all
losses or retentions, respectively, with respect to all subsidiaries of
The St. Xxxx or Platinum Holdings, as the case may be, under any Quota
Share Retrocession Agreement, as defined in the Formation and
Separation Agreement, between any subsidiary of The St. Xxxx, as
cedant, and a subsidiary of Platinum Holdings as retrocessionaire.
The Flood Liabilities and the liabilities in respect of the named
storms, as described above retained by Retrocedant as specified above
(collectively, the "EXCLUDED LOSSES") shall not be subject to this
Agreement.
No retrocession shall attach with respect to any contracts of
reinsurance of any kind or type whatsoever issued and/or assumed by
Retrocedant, other than the Reinsurance Contracts.
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2. TERM
This Agreement shall be continuous as to the Reinsurance Contracts.
Except as mutually agreed in writing by the Retrocedant and the
Retrocessionaire, this Agreement shall remain continuously in force
until all Reinsurance Contracts are terminated, expired, cancelled or
commuted.
3. COVERAGE
3.1 SECTION A (RETROSPECTIVE) COVERAGE PERIOD
The Section A (Retrospective) Coverage Period will be the period from
and including January 1, 2002 to but not including the Effective Time.
3.2 SECTION B (PROSPECTIVE) COVERAGE PERIOD
The Section B (Prospective) Coverage Period will be the period from and
including the Effective Time through the commutation, expiration or
final settlement of all liabilities under any of the Reinsurance
Contracts.
4. PREMIUMS AND ADDITIONAL CONSIDERATION
4.1 SECTION A (RETROSPECTIVE) COVERAGE PERIOD - PREMIUM
(A) On the Effective Date, in respect of the Section A
(Retrospective) Coverage Period, Retrocedant shall pay to the
account of Retrocessionaire an aggregate amount representing the
sum of all amounts related and specifically allocated to each
individual Class of Business (the "INITIAL SECTION A PREMIUM")
equal to one hundred percent (100%) of the carrying value on the
books of the Retrocedant as of September 30, 2002, of the
aggregate of all Loss Reserves relating to the Reinsurance
Contracts, determined in accordance with statutory accounting
principles on a basis consistent in all material respects with the
methods, principles, practices and policies employed in the
preparation and presentation of Retrocedant's annual statutory
financial statement as of 31 December 2001 as filed with the
Financial Services Authority (consistent with the methods,
principles, practices and policies applied at June 30, 2002) and
as submitted to The St. Xxxx, provided, that in no event shall
such amount be less than Retrocedant's good faith estimate, based
upon due investigation by the Retrocedant, as of the date at which
such calculation is being made, of all Loss Reserves relating to
the Reinsurance Contracts by applicable Class of Business that
would be required (i) in order for such reserves to be in full
compliance with customary practices and procedures of Retrocedant
for filings and financial statements as of September 30, 2002, and
(ii) to cause such reserves to bear a reasonable relationship to
the events, conditions, contingencies and risks which are the
bases for such reserves, to the extent known by Retrocedant at the
time of such calculation.
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(B) On the 90th day following the Effective Date (or if such 90th day
is not a Business Day, the first Business Day following such 90th
day), Retrocedant shall prepare and deliver to Retrocessionaire an
accounting (the "PROPOSED LOSS RESERVE ACCOUNTING") of all Loss
Reserves relating to the Reinsurance Contracts, as of the
Effective Date, determined in accordance with this Section 4.1 and
the Methodology for Calculation of the Final Section A Premium, as
set forth on Exhibit B hereto (the "FINAL SECTION A PREMIUM") and
the reserves for ceding commissions and brokerage fees relating to
the Reinsurance Contracts on the books of the Retrocedant as of
the Effective Date (the "Final Ceding Commission Reserves"), and
taking into consideration all relevant data becoming available to
Retrocedant subsequent to the Effective Date. In the event the
Final Section A Premium for any individual Class of Business is
greater than the Initial Section A Premium for such individual
Class of Business or the Final Ceding Commission Reserves are less
than the Initial Ceding Commission Reserves, Retrocedant shall
promptly pay to the account of Retrocessionaire the difference
plus interest on such amount at the Applicable Rate from and
including the Effective Date to and including the date of such
payment. In the event the Final Section A Premium for any
individual Class of Business is less than the Initial Section A
Premium for such individual Class of Business or the Final Ceding
Commission Reserves are greater than the Initial Ceding Commission
Reserves, Retrocessionaire shall promptly pay to the account of
Retrocedant the difference plus interest on such amount at the
Applicable Rate (as defined below) from and including the
Effective Date to and including the date of such payment. "Class
of Business" shall be defined as each individual class or line of
business as delineated by the Retrocedant as of the date hereof as
set forth on Exhibit A-1.
(C) In the event that a reinsurance contract is not included in one of
the classes set forth in Exhibit A-1, but is deemed to be a
Reinsurance Contract by the mutual agreement of the parties, the
parties shall determine whether the Final Section A Premium
reflected one hundred percent of the associated reserves with
respect to such Reinsurance Contract as of the Effective Date. If
the Final Section A Premium did not so reflect such associated
reserves with respect to such Reinsurance Contract as of the
Effective Date, Retrocedant shall promptly pay to the account of
Retrocessionaire an amount equal to the amount that should have
been included in the Final Section A Premium, as determined
pursuant to paragraph (b) of this Section 4.1, less any amounts
paid by Retrocedant on or after the Effective Date pursuant to
such Reinsurance Contract relating to such reserves, plus interest
on such amount at the Applicable Rate calculated from and
including the Effective Date to and including the date of such
payment to Retrocessionaire.
(D) Notwithstanding the foregoing, the parties agree that all gross
estimated premiums written prior to the Effective Date and earned
but not yet billed, net of applicable ceding commission and
retrocession premium (net of retrocession commissions) ("EBUB",
and also referred to as "estimated
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premiums receivable" or "EBNR" or "earned but unbilled") as of the
Effective Time and relating to the Reinsurance Contracts, as
determined on or before _____, 2002, as set forth in Exhibit C, in
a manner consistent with Retrocedant's customary practices and
procedures and as submitted to The St. Xxxx, shall be allocated to
Retrocedant. All payments received after the Effective Time by
Retrocedant or Retrocessionaire in respect of EBUB as of the
Effective Time shall be retained by Retrocedant or held on trust
for and paid by Retrocessionaire to or to the order of
Retrocedant, and all rights to collect such amounts shall be
retained by or transferred to Retrocedant. Any changes made on or
after the Effective Time as to the estimated amount of EBUB as of
the Effective Time shall be for the account of Retrocessionaire
and shall not affect the amount retained by Retrocedant. The
parties agree that as of the first anniversary of the date hereof,
Retrocessionaire shall pay to Retrocedant the difference, if any,
between the amount of EBUB as of the Effective Time and the
aggregate amount subsequently billed and paid to and/or retained
by Retrocedant prior to that date with respect to EBUB as of the
Effective Time, it being understood that Retrocedant shall bear
all risk of non-payment and non-collectibility with respect to
premiums written and unearned as of the Effective Date and
subsequently billed. All amounts, if any, in respect of EBUB which
are in excess of EBUB as of the Effective Time, calculated
pursuant to the first sentence of this Section 4.1(D), shall be
for the account of Retrocessionaire and no such amounts shall be
retained by or payable to Retrocedant.
4.2 SECTION B (PROSPECTIVE) COVERAGE PERIOD -- PREMIUMS.
(A) On the Effective Date, in respect of the Section B (Prospective)
Coverage Period, Retrocedant shall transfer to Retrocessionaire an
aggregate amount representing the sum of all amounts related and
specifically allocated to each individual Class of Business (the
"INITIAL SECTION B PREMIUM") equal to the carrying value on the
books of Retrocedant as of September 30, 2002, of one hundred
percent (100%) of the unearned premium reserves, net of unearned
ceding commission [and brokerage fees] and net of Inuring
Retrocession premiums as provided for in Section 7.4 and as
allocated pursuant to Exhibit E, in each case, relating to the
Reinsurance Contracts, determined in accordance with statutory
accounting principles on a basis consistent in all material
respects with the methods, principles, practices and policies
employed in the preparation and presentation of Retrocedant's
annual statutory financial statement as of 31 December 2001 as
filed with the Financial Services Authority (consistent with the
methods, principles, practices and policies applied at June 30,
2002) and as submitted to The St. Xxxx.
(B) On the 90th day following the Effective Date (or if such 90th day
is not a Business Day, the first Business Day following such 90th
day), Retrocedant shall prepare and deliver to Retrocessionaire an
accounting (the "PROPOSED PREMIUM RESERVE ACCOUNTING", together
with the Proposed Loss Reserve
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Accounting, the "PROPOSED ACCOUNTING") of all unearned premium
reserves relating to the Reinsurance Contracts, as of the
Effective Date, determined in accordance with statutory accounting
principles on a basis consistent in all material respects with the
methods, principles, practices and policies employed in the
preparation and presentation of Retrocedant's annual statutory
financial statement as of 31 December 2001 as filed with the
Financial Services Authority (consistent with the methods,
principles, practices and policies applied at June 30, 2002) and
as submitted to The St. Xxxx, relating to the Reinsurance
Contracts, net of the unearned ceding commission and net of
Inuring Retrocession premiums as provided for in Section 7.4 and
as allocated pursuant to Exhibit E (the "FINAL SECTION B
PREMIUM"). In the event the Final Section B Premium for any
individual Class of Business is greater than the Initial Section B
Premium for such individual Class of Business, Retrocedant shall
promptly pay to the account of Retrocessionaire the difference
plus interest on such amount at the Applicable Rate from and
including the Effective Date to and including the date of such
payment. In the event the Initial Section B Premium for any
individual Class of Business is greater than the Final Section B
Premium for such individual Class of Business, Retrocessionaire
shall promptly pay to the account of Retrocedant the difference
plus interest on such amount at the Applicable Rate from and
including the Effective Date to and including the date of such
payment.
(C) Retrocedant shall transfer to Retrocessionaire with respect to all
Reinsurance Contracts, one hundred percent (100%) of all gross
premiums written on or after the Effective Time, net of premium
returns, allowances and cancellations and less any applicable
Retrocedant Ceding Commission and Inuring Retrocession premiums
provided for in Section 7.4 and as allocated pursuant to Exhibit
E.
(D) Retrocedant shall retain all gross premiums attributable to losses
arising from the Excluded Losses, including but not limited to
adjusted premiums, portions of reinstatement premiums and other
adjustments attributable to such losses.
4.3 DISPUTE RESOLUTION.
(A) After receipt of the Proposed Accounting, together with the work
papers used in preparation thereof, Retrocessionaire shall have 30
days (the "REVIEW PERIOD") to review such Proposed Accounting.
Unless Retrocessionaire delivers written notice to Retrocedant on
or prior to the 30th day of the Review Period stating that it has
material objections to the Proposed Accounting for one or more
Classes of Business or the Final Ceding Commission Reserves,
Retrocessionaire shall be deemed to have accepted and agreed to
the Proposed Accounting and the Final Ceding Commission Reserves.
If Retrocessionaire so notifies Retrocedant of any material
objection(s) to the Proposed Accounting or the Final Ceding
Commission Reserves, the parties shall in good faith attempt to
resolve, within 30 days (or
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such longer period as the parties may agree) following such notice
(the "RESOLUTION PERIOD"), their differences with respect to such
material objections related to any Class of Business so
identified. Retrocedant and Retrocessionaire agree that only those
Classes of Business (or the Final Ceding Commission Reserves, if
applicable) to which such notification relates shall be subject to
adjustment, and any resolution by them as to any disputed amounts,
as evidenced by a writing signed by both parties, shall be final,
binding and conclusive.
In the event that Retrocessionaire believes that Loss Reserves for
a Class of Business need to be increased beyond the amount implied
by the algorithm set forth in Exhibit C, or the Final Ceding
Commission Reserves need to be reduced, Retrocessionaire and
Retrocedant will endeavor to agree on an appropriate adjustment.
If the two parties cannot agree on an adjustment, Retrocedant may
elect to (i) retain the liabilities and the associated Loss
Reserves for the subject Class of Business and all unearned
premium and Retrocessionaire shall transfer to Retrocedant all
Initial Section A Premium and Initial Section B Premium paid by
Retrocedant for the subject Class of Business, plus interest on
the average daily amount at the Applicable Rate from the Effective
Date to the date of such transfer, or (ii) extend the time period
for adjusting the reserve to as much as 36 months or (iii) choose
to arbitrate according to Section 4.3(B), it being understood that
arbitration according to Section 4.3(B) shall be the sole remedy
for disputes regarding the Final Ceding Commission Reserves. In
the event that Retrocedant chooses to extend the time period for
adjusting the reserves for a Class of Business, Retrocedant
retains the exposure to adverse loss development and
Retrocessionaire will suffer no exposure to paid losses in excess
of the Initial Section A Premium and Initial Section B Premium
paid by Retrocedant. At the end of the extended period, any
continued disagreement between Retrocedant and Retrocessionaire
would be submitted to arbitration as set forth in Section 4.3(B)
hereto.
(B) Any amount remaining in dispute at the conclusion of the
Resolution Period for which Retrocedant has not elected the
remedies set forth in Section 4.3(A)(i) and (ii) above or as to
which any extension period has elapsed without agreement between
the parties ("UNRESOLVED CHANGES") shall be submitted to
arbitration. One arbiter (each arbiter, an "ARBITER") shall be
chosen by Retrocedant, the other by Retrocessionaire, and an
umpire (the "UMPIRE") shall be chosen by the two Arbiters before
they enter upon arbitration. In the event that either party should
fail to choose an Arbiter within 30 days following a written
request by the other party to do so, the requesting party may
choose two Arbiters, but only after providing 10 days' written
notice of its intention to do so and only if such other party has
failed to appoint an Arbiter within such 10 day period. The two
Arbiters shall in turn choose an Umpire who shall act as the
Umpire and preside over the hearing. If the two Arbiters fail to
agree upon the selection of an Umpire within 30 days after
notification of the appointment of the second Arbiter, the
selection of the
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Umpire shall be made by the X.X.X.X. Reinsurance and Insurance
Arbitration Society of the UK ("XXXXX UK"). All Arbiters and
Umpires shall be active or retired disinterested property/casualty
actuaries of insurance or reinsurance companies or Lloyd's of
London Underwriters.
(C) Each party shall present its case to the Arbiters within 30 days
following the date of appointment of the Umpire, unless the
parties mutually agree to an extension of time. Subject to the
provisions of paragraph (f) of this Section 4.3, the decision of
the Arbiters shall be final and binding on both parties; but
failing to agree, they shall call in the Umpire and the decision
of the majority shall be final and binding upon both parties.
Judgment upon the final decision of the Arbiters may be entered in
any court of competent jurisdiction.
(D) Each party shall bear the expense of its own Arbiter, and shall
jointly and equally bear with the other the expense of the Umpire
and of the arbitration unless otherwise directed by the Arbiters.
(E) Any arbitration proceedings shall take place in London, England
unless the parties agree otherwise.
(F) Once the Proposed Accounting has been finalized in accordance with
the above process, the Final Section A Premium and the Final
Section B Premium amounts shall be as set forth in the Proposed
Accounting, as determined by the Arbiters, if applicable (the
"ARBITRATED FINAL SECTION A PREMIUM" and/or "ARBITRATED FINAL
SECTION B PREMIUM", as the case may be). In the event the sum of
the Arbitrated Final Section A Premium and the Arbitrated Final
Section B Premium amounts (determined in accordance with the first
sentence of this Section 4.3(F)) is greater than the amount paid
by Retrocedant to Retrocessionaire on the Effective Date,
Retrocedant shall promptly pay to the account of Retrocessionaire
the difference plus interest on such amount at the Applicable Rate
from and including the Effective Date to and including the date of
such payment. In the event the sum of such amounts (determined in
accordance with the first sentence of this Section 4.3(f)) is
lower than the amount paid by Retrocedant to Retrocessionaire on
the Effective Date, Retrocessionaire shall promptly pay to the
account of Retrocedant the difference plus interest on such amount
at the Applicable Rate from the Effective Date to the date of such
payment.
(G) It is understood that the dispute resolution provisions set forth
in this Section 4.3 represent the exclusive remedy for disputes
arising between the parties with respect to the Proposed
Accounting and that the dispute mechanisms set forth in Article XV
shall be the exclusive remedy for all disputes not relating to the
Proposed Accounting.
(H) On the Effective Date, in respect of the Section A (Retrospective)
Coverage Period, Retrocedant shall pay to the account of
Retrocessionaire an amount (the "INITIAL SECTION A PREMIUM") equal
to one hundred percent (100%) of
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the carrying value on the books of Retrocedant as of September 30,
2002, of the aggregate of all Loss Reserves as set forth on
Exhibit B hereto relating to the Reinsurance Contracts, determined
in accordance with statutory accounting principles on a basis
consistent in all material respects with the methods, principles,
practices and policies employed in the preparation and
presentation of Retrocedant's annual statutory financial statement
as of 31 December 2001 as filed with the Financial Services
Authority and as submitted to The St. Xxxx.
(I) As soon as reasonably practicable, but in no event later than 90
days following the Effective Date, Retrocedant shall prepare and
deliver to Retrocessionaire an accounting, including the
calculation of all Loss Reserves as provided for herein (the
"PROPOSED LOSS RESERVE ACCOUNTING") relating to the Reinsurance
Contracts, as of the Effective Date, determined in accordance with
statutory accounting principles on a basis consistent in all
material respects with the methods, principles, practices and
policies employed in the preparation and presentation of
Retrocedant's annual statutory financial statement as of 31
December 2001 as filed with the Financial Services Authority and
as submitted to The St. Xxxx (the "FINAL SECTION A PREMIUM"). In
the event the Final Section A Premium is greater than the Initial
Section A Premium, Retrocedant shall promptly pay to the account
of Retrocessionaire the difference plus interest on such amount at
the Applicable Rate (as defined below) from and including the
Effective Date to and including the date of such payment. In the
event the Initial Section A Premium is greater than the Final
Section A Premium, Retrocessionaire shall promptly repay to the
account of Retrocedant the difference (as an adjustment to the
amount payable pursuant to Section 4.1(A) above) plus interest on
such amount at the Applicable Rate from and including the
Effective Date to and including the date of such payment.
5. RETROCEDANT CEDING COMMISSION
With respect to the Reinsurance Contracts, Retrocessionaire shall pay
to Retrocedant a ceding commission (the "RETROCEDANT CEDING
COMMISSION") with respect to the Section B (Prospective) Coverage
Period, and such Retrocedant Ceding Commission shall equal 100 percent
(100%) of the actual expenses incurred in writing each Reinsurance
Contract, including actual ceding commissions and brokerage fees, as
determined in accordance with Retrocedant's customary practices and
procedures and as submitted to The St. Xxxx, all as allocable pro rata
to periods from and after the Effective Time. Retrocedant Ceding
Commissions shall also include all underwriting fees and other costs
and expenses paid by Retrocedant pursuant to the Underwriting
Management Agreement between Retrocedant and Retrocessionaire, dated as
of the date hereof, and all underwriting and other expenses incurred by
Retrocedant on or after the Effective Date with respect to the
liabilities transferred hereunder, as determined in accordance with
Retrocedant's customary practices and procedures.
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6. ORIGINAL CONDITIONS
All retrocessions assumed under this Agreement shall be subject to the
same rates, terms, conditions, waivers and interpretations, and to the
same modifications and alterations, as the respective Reinsurance
Contracts.
7. INURING RETROCESSIONS
7.1 ALLOCATION TO RETROCESSIONAIRE
Retrocedant agrees that the retrocession contracts purchased by the
reinsurance division of The St. Xxxx ("ST. XXXX RE") from third party
retrocessionaires ("THIRD PARTY RETROCESSIONAIRES") on behalf of
Retrocedant prior to the Effective Time that are listed on Exhibit C
hereto shall inure to the benefit of Retrocessionaire to the extent of
liabilities covered under this Agreement ("INURING RETROCESSIONS"),
subject to the agreed allocations in Exhibits D, E and F. It is further
understood and agreed that facultative reinsurance not listed on
Exhibit C but relating to the Reinsurance Contracts shall also inure to
the benefit of Retrocessionaire to the extent of liabilities covered
under this Agreement and shall be considered Inuring Retrocessions
under this Agreement.
7.2 TRANSFER
Retrocedant and Retrocessionaire shall use their respective
commercially reasonable efforts to obtain the consent of Third Party
Retrocessionaires under the Inuring Retrocessions to include
Retrocessionaire as an additional reinsured with respect to the
Reinsurance Contracts or, in the alternative, to make all payments
directly to Retrocessionaire, to the extent allocable to the
Reinsurance Contracts, in the manner set forth in Exhibit D hereto, and
to seek all payments, to the extent allocable to the Reinsurance
Contracts, in the manner set forth herein in Exhibit E hereto, directly
from Retrocessionaire, it being understood that Retrocessionaire shall
bear all risk of non-payment or non-collectibility under the Inuring
Retrocessions.
7.3 INURING RETROCESSIONS CLAIMS
(A) Each of the parties agrees to transfer to the other party all
recoveries or any portion thereof that such party receives on or
after the Effective Time pursuant to the Inuring Retrocessions
which are allocated to the other party in the manner set forth in
Exhibit D hereto. Retrocedant shall use its commercially
reasonable efforts to collect any recoveries due to
Retrocessionaire under the Inuring Retrocessions that indemnify
Retrocedant for losses or expenses payable or return of premium
allocable to Retrocessionaire and shall hold them on trust for,
and pay them to or to the order of, Retrocessionaire. The parties
agree that Retrocessionaire's obligations to make payments
pursuant to the Inuring Retrocessions or to reimburse Retrocedant
pursuant to this Agreement shall not be waived by non-receipt of
any such amounts. Retrocessionaire shall reimburse
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Retrocedant for one hundred percent (100%) of any expenses
reasonably incurred by Retrocedant in attempting to make such
collection, including all allocated expenses, as determined in
accordance with St. Xxxx Re's customary practices and procedures.
Retrocessionaire shall have the right to associate with
Retrocedant, at Retrocessionaire's own expense, in any actions
brought by Retrocedant to make such collections.
(B) In the event claims of Retrocedant and Retrocessionaire aggregate
in excess of the applicable limit under an Inuring Retrocession,
all limits applicable to either Retrocedant or Retrocessionaire
shall be allocated between Retrocedant and Retrocessionaire in the
manner set forth in Exhibit F hereto.
7.4 INITIAL CONSIDERATION
To the extent not already reflected in the calculation of Final Section
B Premium, as part of the Section B (Prospective) Coverage Period
premiums described in Section 4.2, Retrocessionaire shall reimburse
Retrocedant for one hundred percent (100%) of any and all unearned
premiums paid by Retrocedant under such Inuring Retrocessions net of
any applicable unearned ceding commissions paid to Retrocedant
thereunder.
7.5 ADDITIONAL CONSIDERATION
Retrocessionaire agrees to pay under the Inuring Retrocessions all
future premiums Retrocedant is obligated to pay pursuant to the terms
of the Inuring Retrocessions to the extent that such premiums are
allocable to Retrocessionaire in the manner set forth in Exhibit E
hereto, and not otherwise paid by Retrocessionaire and to indemnify
Retrocedant for all such premiums paid directly by Retrocedant, net of
any ceding commissions and similar amounts paid by Third Party
Retrocessionaires to Retrocedant.
7.6 TERMINATION OR COMMUTATION OF INURING RETROCESSIONS
(A) With respect to any Inuring Retrocessions providing coverage
solely with respect to the Reinsurance Contracts, Retrocedant
agrees, on behalf of itself and its affiliates, that Retrocedant
shall not take any action or fail to take any action that would
reasonably result in the termination or commutation of or any
material change in the coverage provided by any Inuring
Retrocession, without the prior written consent of the
Retrocessionaire, such consent not to be unreasonably withheld.
(B) With respect to any Inuring Retrocessions providing coverage for
both Reinsurance Contracts and to business not being transferred,
neither party shall take any action or fail to take any action
that would reasonably result in the termination or commutation of
or any material change in the coverage provided by any Inuring
Retrocession, without the prior written consent of the
Retrocessionaire, such consent not to be unreasonably withheld.
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8. LOSS AND LOSS EXPENSE; SALVAGE AND SUBROGATION; FOLLOW THE FORTUNES
8.1 (A) Retrocessionaire shall be liable for one hundred percent (100%) of
all future loss, loss adjustment expenses, incurred but not
reported losses and other payment obligations that arise
(including ceding commissions, as and to the extent determined in
Article IV) under the Reinsurance Contracts on and after January
1, 2002 and are payable as of or after the Effective Time and
shall reimburse Retrocedant for any losses, loss adjustment
expenses and other payment obligations paid by Retrocedant
following the Effective Time in respect of the Reinsurance
Contracts, net of any recoveries received by Retrocedant with
respect thereto, including recoveries under Inuring Retrocessions.
Retrocessionaire shall have the right to all salvage and
subrogation on the account of claims and settlements with respect
to the Reinsurance Contracts.
(B) In the event of a claim under a Reinsurance Contract, the
Retrocedant will assess the validity of the claim and make a
determination as to payment, consistent with the claims handling
guidelines previously provided to Retrocedant in writing by
Retrocessionaire and Retrocessionaire may exercise its rights
under Section 10.1 in respect thereof. Retrocedant shall provide
prompt notice of any claim in excess of $500,000 to
Retrocessionaire. All payments made by Retrocedant, whether under
strict contract terms or by way of compromise, shall be binding on
Retrocessionaire. In addition, if Retrocedant refuses to pay a
claim in full and a legal proceeding results, Retrocessionaire
will be unconditionally bound by any settlement agreed to by
Retrocedant or the adverse judgment of any court or arbitrator
(which could include any judgment for bad faith, punitive damages,
excess policy limit losses or extra contractual obligations) and
Retrocedant may recover with respect to such settlements and
judgments under this Agreement. Though Retrocedant will settle
such claims and litigation in good faith, Retrocessionaire is
bound to accept the settlements paid by Retrocedant and such
settlements may be for amounts that could be greater than the
amounts that would be agreed to by Retrocessionaire if
Retrocessionaire were to settle such claims or litigation
directly. It is the intent of this Agreement that Retrocessionaire
shall in every case in which this Agreement applies and in the
proportions specified herein, "follow the fortunes" of Retrocedant
in respect of risks Retrocessionaire has accepted under this
Agreement.
9. EXTRA CONTRACTUAL OBLIGATIONS
In the event Retrocedant or Retrocessionaire is held liable to pay any
punitive, exemplary, compensatory or consequential damages because of
alleged or actual bad faith or negligence related to the handling of
any claim under any Reinsurance Contract or otherwise in respect of
such Reinsurance Contract, the parties shall be liable for such damages
in proportion to their responsibility for the conduct giving rise to
the damages. Such determination shall be made by Retrocedant and
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Retrocessionaire, acting jointly and in good faith, and in the event
the parties are unable to reach agreement as to such determination,
recourse shall be had to Section 15 hereof.
10. ADMINISTRATION OF REINSURANCE CONTRACTS
10.1 (A) The parties agree that, as of the Effective Time, Retrocedant
shall have the sole authority to administer the Reinsurance
Contracts in all respects, which authority shall include, but not
be limited to, authority to xxxx for and collect premiums, adjust
all claims and handle all disputes thereunder and to effect any
and all amendments, commutations and cancellations of the
Reinsurance Contracts, subject, however, in the case of
administration of claims, to all claims handling guidelines
provided in advance in writing by Retrocessionaire to Retrocedant.
Retrocedant shall not, on its own, settle any claim, waive any
right, defense, setoff or counterclaim relating to the Reinsurance
Contracts with respect to amounts in excess of $500,000 or make
any ex gratia payments, and shall not amend, commute or terminate
any of the Reinsurance Contracts, in each case without the prior
written consent of Retrocessionaire.
(B) Notwithstanding the foregoing, to the extent permitted by law
Retrocessionaire may, at its discretion and at its own expense,
assume the administration, defense and settlement of any claim
upon prior written notice to Retrocedant. Upon receipt of such
notice, Retrocedant shall not compromise, discharge or settle such
claim except with the prior written consent of Retrocessionaire.
Retrocessionaire shall not take any action in the administration
of such claim that would reasonably be expected to adversely
affect Retrocedant, its business or its reputation, without the
prior written consent of Retrocedant. Subject to the terms of
Section 9 hereof, Retrocessionaire shall indemnify Retrocedant for
all Losses, including punitive, exemplary, compensatory or
consequential damages arising from such assumption of the conduct
of such settlement pursuant to Section 14 herein.
10.2 REPORTING AND REGULATORY MATTERS
Each party shall provide the notices and filings required to be made by
it to relevant regulatory authorities as a result of this Agreement.
Notwithstanding the foregoing, each party shall provide to the other
party any information in its possession regarding the Reinsurance
Contracts as reasonably required by the other party to make such
filings and in a form as agreed to by the parties.
10.3 DUTY TO COOPERATE
Upon the terms and subject to the conditions and other agreements set
forth herein, each party agrees to use its commercially reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause
to be done, and to assist and cooperate with
14
the other party in doing, all things necessary or advisable to perform
the transactions contemplated by this Agreement.
10.4 COMMUNICATIONS RELATING TO THE REINSURANCE CONTRACTS
Following the Effective Time, Retrocedant and Retrocessionaire shall
each promptly forward to the other copies of all material notices and
other written communications it receives relating to the Reinsurance
Contracts (including, without limitation, all inquiries and complaints
from relevant insurance regulators, brokers and other service providers
and reinsureds and all notices of claims, suits and actions for which
it receives service of process.)
11. REPORTS AND REMITTANCES
11.1 REPORT FROM RETROCEDANT
Within thirty days following the end of each month, Retrocedant shall
provide Retrocessionaire with a summary statement of account for the
previous month showing all activity relating to each of the Reinsurance
Contracts, including related administration costs and expenses incurred
by Retrocedant, consisting of the categories of information set forth
in Exhibit G hereto. The monthly statement of account shall also
provide a breakdown of any amounts due to Retrocedant or
Retrocessionaire, as the case may be, as reimbursement for paid claims,
collected premiums or other amounts due pursuant to the terms of this
Agreement, including amounts relating to Inuring Retrocessions.
11.2 REMITTANCES
Within two Business Days after delivery of each monthly report pursuant
to Section 11.1, Retrocedant and Retrocessionaire shall settle all
amounts then due under this Agreement for that month. It is agreed that
Retrocedant shall retain all premiums received arising from all
business written for which the first day of the original cedant's
account period occurs prior to the Effective Date until such time as
such aggregate amount of such premiums received equals the net amount
to be retained by Retrocedant pursuant to Sections 4.1(D) and 4.2(B)
herein, after which time, such premiums shall be remitted by
Retrocedant to Retrocessionaire.
11.3 LATE PAYMENTS
Should any payment due any party to this Agreement be received by such
party after the due date for such payment under this Agreement,
interest shall accrue from the date on which such payment was due until
payment is received by the party entitled thereto, at an annual rate
equal to the London Interbank Offered Rate quoted for six month periods
as reported in The Wall Street Journal on the first Business Day of the
month in which such payment first becomes due plus one hundred basis
points (the "APPLICABLE RATE").
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11.4 COST REIMBURSEMENT
Retrocessionaire shall reimburse for its allocated share of all costs
and expenses incurred by Retrocedant in administering the Reinsurance
Contracts as set forth in Exhibit H hereto.
11.5 CURRENCY
For purposes of this Agreement, where Retrocedant receives premiums or
pays losses in currencies other than United States dollars, such
premiums or losses shall be converted into United States dollars at the
actual rates of exchange at which these premiums or losses are entered
in Retrocedant's books.
12. MAINTENANCE OF LICENSES
Each of Retrocedant and Retrocessionaire hereby covenants to maintain
at all times all licences and authorisations required to undertake the
actions contemplated hereby.
13. ACCESS TO RECORDS
13.1 From and after the Closing Date, Retrocedant shall afford to
Retrocessionaire and its respective authorised accountants, counsel and
other designated representatives (collectively, "REPRESENTATIVES")
reasonable access (including using commercially reasonable best efforts
to give access to Persons possessing information) during normal
business hours to all data and information that is specifically
described in writing (collectively, "INFORMATION") within the
possession of Retrocedant relating to the liabilities transferred
hereunder, insofar as such information is reasonably required by
Retrocessionaire. Similarly, from and after the Closing Date,
Retrocessionaire shall afford to Retrocedant, any Post-closing
Subsidiary of Retrocedant and their respective Representatives
reasonable access (including using commercially reasonable best efforts
to give access to Persons possessing information) during normal
business hours to Information within Retrocessionaire's possession
relating to Retrocedant, insofar as such information is reasonably
required by Retrocedant. Information may be requested under this
Section 13 for, without limitation, audit, accounting, claims,
litigation (other than any claims or litigation between the parties
hereto) and tax purposes, as well as for purposes of fulfilling
disclosure and reporting obligations and for performing this Agreement
and the transactions contemplated hereby.
13.2 From and after the Closing Date, Retrocessionaire and Retrocedant
or their designated representatives may inspect, at the place where
such records are located, any and all data and information that is
specifically described in writing within the possession of the other
party hereto reasonably relating to this Agreement, on reasonable prior
notice and during normal business hours. The rights of the parties
16
under this Section 13 shall survive termination of this Agreement and
shall continue for as long as there may be liabilities under the
Reinsurance Contracts or reporting or retention requirements under
applicable law. In addition, each party shall have the right to take
copies (including electronic copies) of any information held by the
other party that reasonably relates to this Agreement or the
Reinsurance Contracts. Each party shall, and shall cause its designated
representatives to, treat and hold as confidential information any
information it receives or obtains pursuant to this Section 13.
14. INDEMNIFICATION
14.1 INDEMNIFICATION BY RETROCEDANT
Retrocedant agrees to indemnify, defend and hold harmless
Retrocessionaire, and its officers, directors and employees with
respect to any and all Losses arising from any breach by Retrocedant of
any representation, warranty or covenant herein. Retrocedant further
agrees to indemnify, defend and hold harmless Retrocessionaire and its
officers, directors and employees against any and all Losses arising
out of Retrocedant's administration of the Reinsurance Contracts,
including but not limited to extracontractual obligations, payments in
excess of policy limits and settlements made in respect of any such
claims to the extent arising from the gross negligence or wilful
misconduct of Retrocedant except to the extent such actions are taken
with the prior consent or direction of Retrocessionaire. Such
indemnification obligations shall be limited to the aggregate of all
fees paid to Retrocedant pursuant to Section 11.4 hereof.
14.2 INDEMNIFICATION BY RETROCESSIONAIRE
Retrocessionaire agrees to indemnify, defend and hold harmless
Retrocedant, and its officers, directors and employees with respect to
any and all Losses arising from any breach by Retrocessionaire of any
representation, warranty or covenant herein. Retrocessionaire further
agrees to indemnify, defend and hold harmless Retrocedant and its
officers, directors and employees against any and all Losses arising
out of Retrocessionaire's administration of the Reinsurance Contracts,
including but not limited to extracontractual obligations, payments in
excess of policy limits and settlements made in respect of any such
claims.
14.3 INDEMNIFICATION PROCEDURES
(A) If a party seeking indemnification pursuant to this Section 14
(each, an "INDEMNITEE") receives notice or otherwise learns of the
assertion by a Person (including, without limitation, any
governmental entity) who is not a party to this Agreement or an
Affiliate thereof, of any claim or of the commencement by any such
Person of any Action (a "THIRD PARTY CLAIM") with respect to which
the party from whom indemnification is sought (each, an
"INDEMNIFYING PARTY") may be obligated to provide indemnification
pursuant to this Section 14.1 or 14.2, such Indemnitee shall give
such Indemnifying
17
Party written notice thereof promptly after becoming aware of such
Third Party Claim; PROVIDED that the failure of any Indemnitee to
give notice as provided in this Section 14.3 shall not relieve the
Indemnifying Party of its obligations under this Section 14,
except to the extent that such Indemnifying Party is prejudiced by
such failure to give notice. Such notice shall describe the Third
Party Claim in as much detail as is reasonably possible and, if
ascertainable, shall indicate the amount (estimated if necessary)
of the Loss that has been or may be sustained by such Indemnitee.
(B) An Indemnifying Party may elect to defend or to seek to settle or
compromise, at such Indemnifying Party's own expense and by such
Indemnifying Party's own counsel, any Third Party Claim. Within 30
days of the receipt of notice from an Indemnitee in accordance
with Section 14.3(A) (or sooner, if the nature of such Third Party
Claim so requires), the Indemnifying Party shall notify the
Indemnitee of its election whether the Indemnifying Party will
assume responsibility for defending such Third Party Claim, which
election shall specify any reservations or exceptions. After
notice from an Indemnifying Party to an Indemnitee of its election
to assume the defense of a Third Party Claim, such Indemnifying
Party shall not be liable to such Indemnitee under this Section 14
for any legal or other expenses (except expenses approved in
writing in advance by the Indemnifying Party) subsequently
incurred by such Indemnitee in connection with the defense
thereof; PROVIDED that, if the defendants in any such claim
include both the Indemnifying Party and one or more Indemnitees
and in any Indemnitee's reasonable judgment a conflict of interest
between one or more of such Indemnitees and such Indemnifying
Party exists in respect of such claim or if the Indemnifying Party
shall have assumed responsibility for such claim with reservations
or exceptions that would materially prejudice such Indemnitees,
such Indemnitees shall have the right to employ separate counsel
to represent such Indemnitees and in that event the reasonable
fees and expenses of such separate counsel (but not more than one
separate counsel for all such Indemnitees reasonably satisfactory
to the Indemnifying Party) shall be paid by such Indemnifying
Party. If an Indemnifying Party elects not to assume
responsibility for defending a Third Party Claim, or fails to
notify an Indemnitee of its election as provided in this Section
14, such Indemnitee may defend or (subject to the remainder of
this Section 14) seek to compromise or settle such Third Party
Claim at the expense of the Indemnifying Party.
(C) Neither an Indemnifying Party nor an Indemnitee shall consent to
entry of any judgment or enter into any settlement of any Third
Party Claim which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such
Indemnitee, in the case of a consent or settlement by an
Indemnifying Party, or the Indemnifying Party, in the case of a
consent or settlement by the Indemnitee, of a written release from
all liability in respect to such Third Party Claim.
18
(D) If an Indemnifying Party chooses to defend or to seek to
compromise or settle any Third Party Claim, the Indemnitee shall
make available at reasonable times to such Indemnifying Party any
personnel or any books, records or other documents within its
control or which it otherwise has the ability to make available
that are necessary or appropriate for such defense, settlement or
compromise, and shall otherwise cooperate in a reasonable manner
in the defense, settlement or compromise of such Third Party
Claim.
(E) Notwithstanding anything in this Section 14 to the contrary,
neither an Indemnifying Party nor an Indemnitee may settle or
compromise any claim over the objection of the other; PROVIDED
that consent to settlement or compromise shall not be unreasonably
withheld or delayed. If an Indemnifying Party notifies the
Indemnitee in writing of such Indemnifying Party's desire to
settle or compromise a Third Party Claim on the basis set forth in
such notice (provided that such settlement or compromise includes
as an unconditional term thereof the giving by the claimant or
plaintiff of a written release of the Indemnitee from all
liability in respect thereof) and the Indemnitee shall notify the
Indemnifying Party in writing that such Indemnitee declines to
accept any such settlement or compromise, such Indemnitee may
continue to contest such Third Party Claim, free of any
participation by such Indemnifying Party, at such Indemnitee's
sole expense. In such event, the obligation of such Indemnifying
Party to such Indemnitee with respect to such Third Party Claim
shall be equal to (i) the costs and expenses of such Indemnitee
prior to the date such Indemnifying Party notifies such Indemnitee
of the offer to settle or compromise (to the extent such costs and
expenses are otherwise indemnifiable hereunder) PLUS (ii) the
lesser of (A) the amount of any offer of settlement or compromise
which such Indemnitee declined to accept and (B) the actual
out-of-pocket amount such Indemnitee is obligated to pay
subsequent to such date as a result of such Indemnitee's
continuing to pursue such Third Party Claim.
(F) In the event of payment by an Indemnifying Party to any Indemnitee
in connection with any Third Party Claim, such Indemnifying Party
shall be subrogated to and shall stand in the place of such
Indemnitee as to any events or circumstances in respect of which
such Indemnitee may have any right or claim relating to such Third
Party Claim against any claimant or plaintiff asserting such Third
Party Claim or against any other Person. Such Indemnitee shall
cooperate with such Indemnifying Party in a reasonable manner, and
at the cost and expense of such Indemnifying Party, in prosecuting
any subrogated right or claim.
(G) Except with respect to claims relating to actual fraud, the
indemnification provisions set forth in this section are the sole
and exclusive remedy of the parties hereto for any and all claims
for indemnification under this Agreement.
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14.4 SURVIVAL
This Section 14 shall survive termination of this Agreement.
15. ARBITRATION
(A) All disputes and differences arising under or in connection with
this Agreement shall be referred to arbitration under the
Arbitration Rules of XXXXX (UK).
(B) The Arbitration Tribunal shall consist of three arbitrators, one
to be appointed by the claimant party, one to be appointed by the
respondent party and the third to be appointed by the two
appointed arbitrators.
(C) The third member of the Tribunal shall be appointed as soon as
practicable (and no later than 28 days) after the appointment of
the two party-appointed arbitrators. The Tribunal shall be
constituted upon the appointment of the third arbitrator.
(D) The Arbitrators shall be persons (including those who have
retired) with not less than ten years' experience of insurance or
reinsurance within the industry or as lawyers or other
professional advisers serving the industry.
(E) Where a party fails to appoint an arbitrator within 14 days of
being called upon to do so or where the two party-appointed
arbitrators fail to appoint a third within 28 days of their
appointment, then upon application XXXXX (UK) will appoint an
arbitrator to fill the vacancy. At any time prior to the
appointment by XXXXX (UK) the party or arbitrators in default may
make such appointment.
(F) The Tribunal may in its sole discretion make such orders and
directions as it considers to be necessary for the final
determination of the matters in dispute. The Tribunal shall have
the widest discretion permitted under the law governing the
arbitral procedure when making such orders or directions.
(G) The seat of arbitration shall be London.
(H) Each party shall bear the expense of its own arbitrator and shall
share equally with the other party the expense of the third
arbitrator and of the arbitration.
(I) This Section 15 shall survive termination of this Agreement.
16. INSOLVENCY
(A) On the occurrence of the insolvency in respect of Retrocedant,
this reinsurance shall be payable directly to Retrocedant, or to
its liquidator, receiver, conservator or statutory successor on
the basis of the liability of
20
Retrocedant without diminution because of the insolvency of
Retrocedant or because the liquidator, receiver, conservator or
statutory successor of Retrocedant has failed to pay all or a
portion of any claim.
(B) It is agreed, however, that the liquidator, receiver, conservator
or statutory successor of Retrocedant shall give written notice to
Retrocessionaire of the pendency of a claim against Retrocedant
indicating the Reinsurance Contract, which claim would involve a
possible liability on the part of Retrocessionaire within a
reasonable time after such claim is filed in the conservation or
liquidation proceeding or in the receivership, and that during the
pendency of such claim, Retrocessionaire may investigate such
claim and interpose, at its own expense, in the proceeding where
such claim is to be adjudicated any defense or defenses that it
may deem available to Retrocedant or its liquidator, receiver,
conservator or statutory successor. The expense thus incurred by
Retrocessionaire shall be chargeable, subject to the approval of
the court, against Retrocedant as part of the expense of
conservation or liquidation to the extent of a pro rata share of
the benefit which may accrue to Retrocedant solely as a result of
the defense undertaken by Retrocessionaire.
(C) As to all reinsurance made, ceded, renewed or otherwise becoming
effective under this Agreement, the reinsurance shall be payable
as set forth above by Retrocessionaire to Retrocedant or to its
liquidator, receiver, conservator or statutory successor, except
(i) where the Reinsurance Contracts specifically provide another
payee on the occurrence of an Insolvency Event in respect of
Retrocedant, and (ii) where Retrocessionaire, with the consent of
the reinsured or reinsureds under the Reinsurance Contracts, has
assumed such Reinsurance Contract obligations of Retrocedant as
direct obligations of Retrocessionaire to the payees under such
Reinsurance Contracts and in substitution for the obligations of
the Retrocedant to such payees.
(D) For the purposes of this Section 16, an Insolvency Event shall
occur if:
(i) a winding up petition is presented in respect of Retrocedant
or a provisional liquidator is appointed over it or if
Retrocedant goes into administration, administrative
receivership or receivership or if Retrocedant has a scheme
of arrangement or voluntary arrangement proposed in relation
to all or any part of its affairs; or
(ii) Retrocedant goes into compulsory or voluntary liquidation;
or, in each case, if Retrocedant becomes subject to any
other similar insolvency process (whether under the laws of
England and Wales or elsewhere); and
21
(iii) Retrocedant is unable to pay its debts as and when they fall
due within the meaning of section 123 of the Insolvency Xxx
0000 (or any statutory amendment or re-enactment of that
section).
17. OFFSET
Retrocedant and Retrocessionaire shall have the right to offset any
balance or amounts due from one party to the other under the terms of
this Agreement. The party asserting the right of offset may exercise
such right at any time whether the balances due are on account of
premiums, losses or otherwise.
18. ERRORS AND OMISSIONS
Any inadvertent delay, omission, error or failure shall not relieve
either party hereto from any liability which would attach hereunder if
such delay, omission, error or failure had not been made provided such
delay, omission, error or failure is rectified as soon as reasonably
practicable upon discovery.
19. CREDIT FOR REINSURANCE; SECURITY
19.1 CREDIT FOR REINSURANCE
Retrocessionaire shall take all actions reasonably necessary, if any,
to permit Retrocedant to obtain full financial statement credit in all
applicable jurisdictions for all liabilities assumed by the
Retrocessionaire pursuant to this Agreement, including but not limited
to loss and loss adjustment expense reserves, unearned premium
reserves, reserves for incurred but not reported losses, allocated loss
adjustment expenses and ceding commissions, and to provide the security
required for such purpose, in a form reasonably acceptable to
Retrocedant. Any reserves required by the foregoing in no event shall
be less than the amounts required under the law of the jurisdiction
having regulatory authority with respect to the establishment of
reserves relating to the relevant Reinsurance Contracts. For purposes
of this Section 19, such "actions reasonably necessary" may include,
without limitation, the furnishing of a letter of credit or the
establishment of a custodial or trust account, as permitted under
applicable law, to secure the payment of the amounts due the
Retrocedant under this Agreement.
19.2 EXPENSES
All expenses of establishing and maintaining any letter of credit or
other security arrangement shall be paid by Retrocessionaire.
19.3 SECURITY
(A) Retrocessionaire shall establish and maintain a trust fund or
other security arrangement for the benefit of Retrocedant as
security for the obligations of Retrocessionaire under this
Agreement. The trust fund or other security
22
arrangement shall be in a form reasonably satisfactory to
Retrocedant and shall comply with such requirements (if any) as
may be laid down by the Financial Services Authority. It is
understood that to the extent Retrocessionaire provides such
other security arrangement reasonably satisfactory to
Retrocedant, Retrocesssionaire shall not be required to provide a
trust fund under this provision.
(B) Retrocessionaire shall be permitted to liquidate the trust at the
earlier of (i) such time as Retrocessionaire's obligations under
this Agreement have been met or are terminated or waived or (ii)
the reserves so reported by Retrocessionaire do not exceed $100
million as of two successive calendar year ends.
(C) Retrocedant shall bear the costs and expenses of the trustee
relating to the trust.
20. MISCELLANEOUS PROVISIONS
20.1 SEVERABILITY
If any term or provision of this Agreement shall be held void, illegal,
or unenforceable, the validity of the remaining portions or provisions
shall not be affected thereby.
20.2 SUCCESSORS AND ASSIGNS
This Agreement may not be assigned by either party without the prior
written consent of the other. The provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the
parties hereto and their respective successors and assigns as permitted
herein.
20.3 EQUITABLE RELIEF
Each party hereto acknowledges that if it or its employees or agents
violate the terms of this Agreement, the other party will not have an
adequate remedy at law. In the event of such a violation, the other
party shall have the right, in addition to any other rights that may be
available to it, to obtain in any court of competent jurisdiction
injunctive relief to restrain any such violation and to compel specific
performance of the provisions of this Agreement. The seeking or
obtaining of such injunctive relief shall not foreclose or limit in any
way relief against either party hereto for any monetary damage arising
out of such violation.
20.4 EXECUTION IN COUNTERPARTS
This Agreement may be executed by the parties hereto in any number of
counterparts and by each of the parties hereto in separate
counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
23
20.5 NOTICES
All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly
given if delivered by hand (with receipt confirmed), or by facsimile
(with transmission confirmed), or by certified mail, postage prepaid
and return receipt requested, addressed as follows (or to such other
address as a party may designate by written notice to the others) and
shall be deemed given on the date on which such notice is received:
If to Retrocedant:
St. Xxxx Reinsurance Company Limited
00 Xxxxxxxxxx Xxxxxx
Xxxxxx
X0 0XX
Facsimile: + 44 20 7488 6345
Attention: Company Secretary
If to Retrocessionaire:
Platinum Underwriters Reinsurance, Inc.
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 001 212 238 9202
Attention: Chief Financial Officer
20.6 WIRE TRANSFER
All settlements in accordance with this Agreement shall be made by wire
transfer of immediately available funds on the due date, or if such day
is not a Business Day, on the next day which is a Business Day,
pursuant to the following wire transfer instructions:
For credit to Platinum Underwriters Reinsurance, Inc.
Citibank
Newcastle, Delaware
Account Number 00000000
Bank ABA Number 000000000
For credit to St. Xxxx Reinsurance Company Limited [ ]
Payment may be made by cheque payable in immediately available funds in
the event the party entitled to receive payment has failed to provide
wire transfer instructions.
20.7 HEADINGS
Headings used herein are not a part of this Agreement and shall not
affect the terms hereof.
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20.8 FURTHER ASSURANCES
Each of the parties shall from time to time, on being reasonably
requested to do so by the other party to this Agreement, shall do such
acts and/or execute such documents in a form reasonably satisfactory to
the party concerned as may be necessary to give full effect to this
Agreement and securing to that party the full benefit of the rights,
powers and remedies conferred upon it by this Agreement.
20.9 THIRD PARTY RIGHTS
(A) Section 14 confers a benefit on the officers, directors and
employees of Retrocedant and of Retrocessionaire (the "Third
Parties") and, subject to the remaining provisions of this
Section, is intended to be enforceable by the Third Parties by
virtue of the Contracts (Rights of Third Parties) Xxx 0000.
(B) The parties to this Agreement do not intend that any term of this
Agreement, apart from Section 14, should be enforceable, by virtue
of the Contracts (Rights of Third Parties) Xxx 0000, by any person
who is not a party to this Agreement.
(C) Notwithstanding the provisions of Section 20.9(A), this Agreement
may be rescinded or varied in any way and at any time by the
parties to this Agreement without the consent of any or all of the
Third Parties.
20.10 AMENDMENTS; ENTIRE AGREEMENT
This Agreement may be amended only by written agreement of the parties.
This Agreement, together with the Formation and Separation Agreement,
supersedes all prior discussions and written and oral agreements and
constitutes the sole and entire agreement between the parties with
respect to the subject matter hereof.
20.11 GOVERNING LAW
This Agreement shall be governed by English law.
25
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorised representatives as of the date first above written.
ST. XXXX REINSURANCE COMPANY LIMITED
By
----------------------------------
Name:
Title:
PLATINUM UNDERWRITERS REINSURANCE INC.
By
----------------------------------
Name:
Title:
EXHIBIT A-1
REINSURANCE CONTRACTS
ST. XXXX REINSURANCE COMPANY LIMITED : NON-TRADITIONAL [A] QUOTA SHARE TREATY
SCHEDULE A- REINSURANCE CONTRACTS.
Reserving Class Genius Class Policy Reference Inception Expiry Cedant Title
93 93 Non Trad Dep Ac 003223021FXP 4/1/02 3/31/03 Transatlantic Re Co *AC* TRC Property Reeplicat XL
88 88 Non Trad Intl 003356021FXP 1/1/02 12/31/02 Bahamas First Gen Ins *TO* Bahamas First Property
EXHIBIT A-2
LOSS RESERVES BY CLASS OF BUSINESS
None.
EXHIBIT B
LOSS RESERVES
Loss Reserves shall consist of loss and loss adjustment expense reserves,
including incurred but not reported loss and loss adjustment expense reserves as
of the Effective Time with respect to premium earned on the Reinsurance
Contracts net of retrocessional recoverables under the Inuring Retrocessions.
Loss Reserves shall not include any loss and loss adjustment expense reserves or
ceding commission reserves relating to Excluded Losses. Aggregate Loss Reserves
as of June 30, 2002, are set forth on Exhibit A-2.
METHODOLOGY FOR CALCULATION OF FINAL SECTION A PREMIUM
It is understood that the Loss Reserve analysis will be performed by
Retrocessionaire's employees under the direction of Retrocedant and reviewed by
Retrocedant's employees.
Excluding catastrophes, the IBNR component of Loss Reserves will be
booked, by Class of Business, to the planned IBNR. Planned IBNR is determined
using the Xxxxxxxxxxx-Xxxxxxxx methodology, using the planned loss ratio
(adjusted for the difference between actual and planned commission and
brokerage) as the initial expected loss ratio and the development pattern used
for the class in the September 30, 2002 analysis. In the case of a Class of
Business where the expected reported losses are less than 75% of the expected
ultimate losses, as per the loss development patterns in use as of September 30,
2002, the IBNR will not be less than that amount needed to produce an ultimate
loss ratio equal to the ultimate plan loss ratio (adjusted for the difference
between actual and planned commission and brokerage).
In addition to the above, known large events and catastrophe variances
from plan as of the Effective Date will be added to the ultimate losses.
Subsequent adjustments to the reserves for known large events and catastrophe
variances from plan in the 90 days following the Effective Date could be upward
or downward.
CALCULATION METHODOLOGY FOR EARNED BUT NOT YET BILLED PREMIUM
Earned But Not Yet Billed Premium shall equal estimated premiums receivable with
respect to the Reinsurance Contracts net of estimated ceding commissions and
Inuring Retrocession premiums. Earned But Not Yet Billed Premium as of June 30,
2002 is equal to $[ ].
C-1
EXHIBIT C
INURING RETROCESSIONS
FER 17/10/02
Platinum Re _Inuring Reinsurance 17_10_02.xls
PLATINUM RE UK / US / BERMUDA - SCHEDULE OF INURING REINSURANCE : PROPORTIONAL
AS AT 17/10/02
Reference Inception Expiration
No. Name of Contract Date Date Cover Limit
-------------------------------------------------------------------------------------------------------------------
1) Worldwide Property 1/1/02 12/31/02 International Property Risk USD 40,000,000
Excluding Japan Excess of Loss & Catastrophe Aggregate Cession Limit
Excess of Loss Business
(protects Europe)
2) UK/Eire Cat. XL Q.S. / 1/1/02 12/31/02 U.K. / Eire Cat. Excess GBP 100,000,000
1st & / 2nd Surplus of Loss Treaty Business Aggregate Cession Limit
(protects Europe)
3) UK/Europe Cat. XL Quota 1/1/02 12/31/02 International Property GBP 75,000,000
Share Treaty Catastrophe Excess of Loss Aggregate Cession Limit
Business (protects Europe)
Reference
No. Name of Contract Projected Prem. Participants % Placed
-------------------------------------------------------------------------------------------
1) Worldwide Property USD 9m - USD 12m [100% Nisshin - 50% 55%
Excluding Japan treaty estimate] Nichido - 5%
2) UK/Eire Cat. XL Q.S. / GBP 5m [100% treaty Nisshin - 14% 29%
1st & / 2nd Surplus estimate] PX Re - 10%
TOA Re - 5%
3) UK/Europe Cat. XL Quota GBP 3m - GBP 3.5m Montpelier Re - 100%
Share Treaty 100%
F-1
4) Japan Cat. XL Surplus 1/1/02 12/31/02 Japan / Japanese Islands USD 30,000,000 Aggregate
Treaty Property Cat. Excess of Loss Cession Limit : quake USD
Business (protects New York 20,000,000 Aggregate
& Europe) Cession Limit : windstorm
5) Casualty Clash Quota 1/1/96 12/31/02 Casualty Clash, Casualty 20% Quota Share of
Share Contingency, Casualty Cat. USD 7,500,000 any
and Workers Comp. Cat. (NY) one occurrence etc.
6) Nisshin NM Open Cover 7/1/01 6/30/02 Business in the Pacific Rim SGD 2,000,000
Region from our NY,
Xxxxxxxxx & XX xxxxxxx
0) Xxxxx Xxxxxxx Property 4/1/02 12/1/02 North America Property 50% Quota Share
Cat. Quota Share Catastrophe business written
by NY & Chicago
4) Japan Cat. XL Surplus USD 1.2m PX Re - 100% 100%
Treaty
5) Casualty Clash Quota $ 4,200,000 Auto-Owners 100%
Share Ins. Co.
6) Nisshin NM Open Cover $ 500,000 Nisshin F & M 100%
7) North America Property estimated Montpelier Re 100%
Cat. Quota Share $ 12,500,000
F-2
FER 17/10/02
Platinum Re_Inuring Reinsurance 17_10_02.xls
PLATINUM RE UK / US / BERMUDA - SCHEDULE OF INURING REINSURANCE :
NON-PROPORTIONAL
AS AT 17/10/02
Reference Inception Expiration
No. Name of Contract Date Date Cover Limit Retention Reinstatement
-------------------------------------------------------------------------------------------------------------
1a) Marine XL (a) 5/1/01 4/30/02 Protects Europe $ 1,500,000 $ 1,000,000 1 @ 100%
XL account L 750,000 L 500,000
1b) Marine XL (b) 1/1/02 12/31/02 Protects Europe $ 5,000,000 $ 5,000,000 2 @ 100%
XL account L 2,500,000 L 2,500,000
1c) Marine XL (c) 1/1/02 12/31/02 Protects Europe $ 5,000,000 $ 10,000,000 2 @ 100%
XL account L 2,500,000 L 5,000,000
2a) International 7/11/01 7/10/02 Protects Europe $ 7,500,000 $ 7,500,000 1 @ 100%
Property Cat. XL Risk/Prorata/Cat L 5,000,000 L 5,000,000
XL business
Reference Projected
No. Name of Contract Premium ROL % Placed Participants
---------------------------------------------------------------------------------------------------
1a) Marine XL (a) $ 360,000 26.67% 100% PX Re - 44.20%
L 20,000 Lloyd's Synd. 2121 (HYL) - 10%
Cornhill Ins. - 33.33%
XL Re - 12.47%
1b) Marine XL (b) $ 1,125,000 25.00% 100% Lloyd's Synd. 1861 (BRM) - 20%
L 62,500 QBE Intnl. London - 30%
Cornhill - 25%
Odyssey London Branch - 25%
1c) Marine XL (c) $ 675,000 15.00% 100% QBE Intnl. London - 50%
L 37,500 Cornhill - 25%
Odyssey London Branch - 25%
2a) International $ 843,750 22.50% 100% PX Re - 40%
Property Cat. XL L 562,500 GE Frankona Re (Germany) - 20%
Xxxxxxx Global (UK) - 1.91%
Safety National Casualty Corp. - 7.61%
Lloyd's Synd. 566 (STN) - 15.24%
Lloyd's Synd. 780 (BFC) - 3.81%
Lloyd's Synd. 2121 (HYL) - 3.81%
Lloyd's Synd. 2027 (COX) - 3.81%
Lloyd's Synd. 2010 (MMX) - 3.81%
F-3
2b) International 7/11/01 7/10/02 Protects Europe $ 7,500,000 $ 15,000,000 1 @ 100%
Property Cat. XL Risk/Prorata/Cat L 5,000,000 L 10,000,000
XL business
2c) International 7/11/01 7/10/02 Protects Europe $ 7,500,000 $ 22,500,000 1 @ 100%
Property Cat. XL Risk/Prorata/Cat L 5,000,000 L 15,000,000
XL business
3a) Joint Risk XOL 2/13/02 2/12/03 1st layer XS 5M $ 2,500,000 $ 2,500,000 1 @ 100%
Cover - First aggregate
Layer
2b) International $ 1,162,500 31.00% 100% PX Re - 15.66%
Property Cat. XL L 775,000 [18.91% w.e.f. 1/11/02]
GE Frankona Re (Germany) - 25%
XL Re (UK) - 15%
Xxxxxxx Global (UK) - 1.54%
Taisei F&M - 3.25% (replaced
@1/11/02)
Protective Ins. Co. - 3.25%
Safety National Corp. - 6.5%
Lloyd's Synd. 000 (XXX) - 19.23%
Lloyd's Synd. 566 (STN) - 7.69%
Lloyd's Synd. 958 (GSC) - 1.92%
Lloyd's Synd. 529 (SHE) - 0.96%
2c) International $ 900,000 24.00% 100% PX Re - 12% [14.93% w.e.f. 1/11/02]
Property Cat. XL L 600,000 GE Frankona Re (Germany) - 20%
XL Re (UK) - 15%
Xxxxxxx Global (UK) - 1.17%
Taisei F&M - 2.93% (replaced @
1/11/02)
Royal Bank of Canada Ins. Co. -
5.87%
Protective Ins. Co. - 2.93%
Safety National Corp. - 5.86%
Lloyd's Synd. 000 (XXX) - 17.5%
Lloyd's Synd. 566 (STN) - 6.75%
Lloyd's Synd. 2027 (COX) - 4.42%
Lloyd's Synd. 958 (GSC) - 1.76%
Lloyd's Synd. 529 (SHE) - 0.88%
Lloyd's Synd. 727 (XXX) - 2.93%
3a) Joint Risk XOL $ 875,000 35.00% 100% Lloyd's Synd. 566 (STN) - 25%
Cover - First Lloyd's Synd. 780 (BFC) - 15%
Layer Xxxxxxx Global (UK) - 2.373%
XL Re - 8.898%
Transatlantic Re - 15%
Lloyd's Synd. 000 (XXX) - 5.933%
Lloyd's Synd. 2010 (MMX) - 4.449%
Lloyd's Synd. 282 (LSM) - 4.449%
GE Frankona - 8.898%
PX Re - 10%
F-4
3b) Joint Risk XOL 2/13/02 2/12/03 Property Risk & $ 5,000,000 $ 5,000,000 1 @ 100%
Cover - Second Prorata
Layer business
(all offices)
4a) International 3/9/02 2/8/03 International $ 20,000,000 $ 50,000,000 1 @ 100%
Cat. XOL - First Risk/Prorata/Cat.
Layer XL (all offices)
4b) International 3/9/02 2/8/03 International $ 30,000,000 $ 70,000,000 1 @ 100%
Cat. XOL - Second Risk/Prorata/Cat.
Layer XL (all offices)
5) Satellite XL 6/12/02 6/11/03 Protects all $ 10,000,000 $ 10,000 0
[Geosynchronous / offices. 3
Geostationary satellite
In-Orbit warranty.
Reinsurance] Covers
naturally
occurring
phenomena in
space.
3b) Joint Risk XOL $ 2,000,000 40.00% 100% Lloyd's Synd. 566 (STN) - 10%
Cover - Second Lloyd's Synd. 780 (BFC) - 15%
Layer Xxxxxxx Global (UK) - 4%
XL Re - 15%
Transatlantic Re - 20%
Lloyd's Synd. 2010 (MMX) - 3.50%
Lloyd's Synd. 282 (LSM) - 7.50%
GE Frankona - 15%
PX Re - 10%
4a) International $ 4,800,000 24.00% 100% Lloyd's Synd. 566 (STN) - 12.5%
Cat. XOL - First Lloyd's Synd. 780 (BFC) - 10%
Layer Lloyd's Synd. 282 (LSM) - 8%
PX Re - 8%
Renaissance Re - 25%
Di Vinci Re - 12.5%
Transatlantic Re - 10%
GE Frankona Re - 10%
Royal Bank of Canada - 4%
4b) International $ 4,500,000 15.00% 100% Lloyd's Synd. 566 (STN) - 5%
Cat. XOL - Second Lloyd's Synd. 780 (BFC) - 12.5%
Layer Lloyd's Synd. 000 (XXX) - 4.004%
Lloyd's Synd. 2010 (MMX) - 1.202%
Lloyd's Synd. 282 (LSM) - 10.01%
Lloyd's Synd. 1096 (RAS) - 1.602%
Xxxxxxx Global (UK) - 0.801%
PX Re - 8.007%
Folksamerica - 16.014%
Renaissance Re - 8.007%
Di Vinci Re - 4.004%
Transatlantic Re - 7.5%
Auto-Owners - 16.015%
Royal Bank of Canada - 2.667%
Protective - 2.667%
5) Satellite XL $ 575,000 5.75% 100% Renaissance Re - 100%
[Geosynchronous /
Geostationary
In-Orbit
Reinsurance]
F-5
6) Latin America & 7/1/00 6/3/06 All loss $ 25,000,000 $ 15,000,000
Caribbean ILW XOL recoveries on Term Aggregate
Latin America Limit - USD 75M
and Caribbean
business
subject to USD
1 Billion ILW
7) Caribbean ILW XOL 11/1/01 10/31/02 Caribbean $ 15,000,000 $ 100,000 Nil
Property
business
subject to an
Industry Loss
of USD1.5
Billion
8) N.A. $10 Billion 7/1/01 6/30/02 North American $ 2,500,000 $ 10,000 1 @ 100%
ILW Property
business
subject to
Industry Loss
of USD 10B
9) N.A. $10 Billion 8/1/01 7/31/02 North American $ 2,500,000 $ 1,000,000 1 @ 100%
ILW Property
business
subject to
Industry Loss
of USD 10B
10) N.A. Property / 1/1/02 12/31/02 North American $ 10,000,000 $ 100,000 1 @ 100%
WCA Cat $ 30B ILW Property and
Workers
Compensation
business
subject to ILW
of USD 30
Billion
11) N.A. Property Cat 1/5/02 1/5/03 North American $ 5,000,000 $ 50,000 1 @ 100%
$15B ILW Property
business
subject to ILW
of USD 15
Billion
6) Latin America & margin - $ 400,000 N/A 56.50% Fuji F & M - 5%
Caribbean ILW XOL Nisshin F & M - 13.5%
Sumitomo - 10%
Taisei F & M - 8%
Toa Re - 20%
7) Caribbean ILW XOL $ 3,450,000 23.00% 100% Continental Casualty - 100%
8) N.A. $10 Billion $ 500,000 20.00% 100% Transatlantic Re - 100%
ILW
9) N.A. $10 Billion $ 475,000 19.00% 100% IPC Re Limited - 100%
ILW
10) N.A. Property / $ 420,000 4.20% 100% Tokio Millenium Re - 100%
WCA Cat $ 30B ILW
11) N.A. Property Cat $ 950,000 19.00% 100% Odyssey Re - 100%
$15B ILW
F-6
12a) Marine XOL - 1st 1/1/02 12/31/02 Marine business $ 5,000,000 $ 5,000,000 1 @ 100%
layer [NY] for New York
Office
12b) Marine XOL - 2nd 1/1/02 12/31/02 Marine business $ 5,000,000 $ 10,000,000 1 @ 100%
layer [NY] for New York
Office
13) Single Period 1/1/02 12/31/02 Covers $ 200,000,000 79.4% Traditional bus.
Accident Year aggregate net 93.5% Non-traditional
Aggregate XOL losses incurred business
(Holborn) on an ultimate
accident year
basis IRO all
business
written by All
offices
including
Discovery Re.
14) Workers' 1/1/02 12/31/02 Covers Workers' $ 50,000,000 $ 75,000,000
Compensation Cat. 1/1/03 12/31/05 Compensation $ 50,000,000 $ 75,000,000 Annual Agg. Of 50M
XOL (Holborn) treaty business
15) Puerto Rico ILW 7/26/02 7/25/03 Property $ 10,000,000 $ 10,000 Nil
XOL business
subject to an
Industry Loss
of USD1.5
Billion
12a) Marine XOL - 1st $ 1,125,052 22.50% 100% Lloyd's Synd. 457 (WTK) - 7.5%
layer [NY] Cornhill - 21.5%
Folksamerica Re - 30%
Lloyd's Synd. 2 (WHS) - 20%
Nisshin F & M - 1%
XL Mid Ocean Re - 20%
12b) Marine XOL - 2nd $ 624,982 12.50% 100% Lloyd's Synd. 457 (WTK) - 7.5%
layer [NY] Cornhill - 21.5%
Folksamerica Re - 30%
Lloyd's Synd. 2 (WHS) - 20%
Nisshin F & M - 1%
XL Mid Ocean Re - 20%
13) Single Period $ 4,750,000 100% Underwriters Reinsurance - 53.75%
Accident Year London Life & General - 25%
Aggregate XOL PMA Reins. - 10%
(Holborn) Hannover Re - 9%
E & S Reins. - 2.25%
14) Workers' $ 10,000,000 100% Swiss Re - 81.25%
Compensation Cat. Hannover - 15%
XOL (Holborn) E & S Reins. - 3.75%
15) Puerto Rico ILW $ 1,250,000 12.50% 100% ACE Tempest Re - 50%
XOL Renaissance Re - 50%
F-7
EXHIBIT D
ALLOCATION OF RECOVERIES
1. Recoveries allocable to this contract under an Inuring Retrocession
shall be allocated between the parties in proportion to the losses
otherwise recoverable.
2. Any and all loss recoveries and premium adjustments allocable to this
contract resulting from triggering the 2002 Holborn cover will be
allocated between The St. Xxxx Companies and Retrocessionaire and its
affiliates ("Platinum Re") based on variance from plan and in
accordance with the existing methodology shown below.
Variance from plan at an underwriting year level will be the basis for
the allocation. The 2000, 2001 and 2002 underwriting year plan loss
ratios associated with the 2002 calendar year plan loss ratio will be
compared to indicated ultimate loss ratios for the same underwriting
years. These indicated ultimate loss ratios are the same ones used to
determine if the Holborn cover has been triggered. The 2002
underwriting year must be segmented into three pieces. Namely, that
business written on Fire and Marine paper and subject to transfer, that
written on Fire and Marine paper and not subject to transfer and that
written on Platinum Re paper. The distinction is warranted as the
cession to Platinum Re will be net of the Holborn cover. The variance
in loss ratio by underwriting year will be multiplied by the respective
underwriting year's EP component in the 2002 calendar year. This is the
same EP by underwriting year that was used to calculate the total 2002
Holborn Year's EP. This dollar variance will be the basis for
determining the distribution to be applied to the total loss recovery
and AP. It is in this manner that the total loss recovery and AP
attributable to the 2002 Holborn Year will be allocated to underwriting
year. To the extent that the recoveries and AP's have been allocated to
the 2000 and 2001 underwriting years they will be afforded to The St.
Xxxx Companies. Similarly, the allocation to that part of the 2002
underwriting year pertaining to non-transferred business will also be
realised by The St. Xxxx Companies. The allocation pertaining to
business written on The St. Xxxx xxxxx and transferred will be used in
determining the net transferred business that will be ceded to Platinum
Re. The remaining allocation associated with 2002 underwriting year
business written on Platinum Re paper will inure to the benefit of
Platinum Re directly. The margin for the 2002 Holborn cover will be
distributed based on earned premium and allocated between The St. Xxxx
Companies and Platinum Re by underwriting year.
EXHIBIT E
ALLOCATION OF RETROCESSIONAL PREMIUMS
1. Ceded premium allocable to this contract will be allocated between the
parties and to the underwriting year in proportion to the earned
subject premium. Ceding commission will be allocated in the same
manner.
2. Reinstatement premium allocable to this contract due in respect of
non-proportional Inuring Retrocessions will be allocated between the
parties in proportion to the related allocated recoverable losses.
3. Any and all loss recoveries and premium adjustments allocable to this
contract resulting from triggering the 2002 Holborn cover will be
allocated between The St. Xxxx Companies and Platinum Re based on
variance from plan and in accordance with the existing methodology
shown below.
Variance from plan at an underwriting year level will be the basis for
the allocation. The 2000, 2001 and 2002 underwriting year plan loss
ratios associated with the 2002 calendar year plan loss ratio will be
compared to indicated ultimate loss ratios for the same underwriting
years. These indicated ultimate loss ratios are the same ones used to
determine if the Holborn cover has been triggered. The 2002
underwriting year must be segmented into three pieces. Namely, that
business written on Fire and Marine paper and subject to transfer, that
written on Fire and Marine paper and not subject to transfer and that
written on Platinum Re paper. The distinction is warranted as the
cession to Platinum Re will be net of the Holborn cover. The variance
in loss ratio by underwriting year will be multiplied by the respective
underwriting year's EP component in the 2002 calendar year. This is the
same EP by underwriting year that was used to calculate the total 2002
Holborn Year's EP. This dollar variance will be the basis for
determining the distribution to be applied to the total loss recovery
and AP. It is in this manner that the total loss recovery and AP
attributable to the 2002 Holborn Year will be allocated to underwriting
year. To the extent that the recoveries and AP's have been allocated to
the 2000 and 2001 underwriting years they will be afforded to The St.
Xxxx Companies. Similarly, the allocation to that part of the 2002
underwriting year pertaining to non-transferred business will also be
realised by The St. Xxxx Companies. The allocation pertaining to
business written on The St. Xxxx xxxxx and transferred will be used in
determining the net transferred business that will be ceded to Platinum
Re. The remaining allocation associated with 2002 underwriting year
business written on Platinum Re paper will inure to the benefit of
Platinum Re directly. The margin for the 2002 Holborn cover will be
distributed based on earned premium and allocated between The St. Xxxx
Companies and Platinum Re by underwriting year.
4. The $10 million of premium payable for 2002 under the Workers
Compensation Catastrophe Excess of Loss $50 million excess of $75
million Retrocession Contract will be split $1 million for Platinum Re
and $9 million for The St. Xxxx Companies. Such contract has a feature
that states that for certain unfavourable experience on
the Whole Account Stop Loss Cover the premium on this cover could
reduce by as much as $9 million. In this event the reduction in ceded
premium would benefit The St. Xxxx Companies exclusively. The Platinum
Re share would remain at $1 million.
The contract has a feature that allows the Retrocessionaire to renew
the cover if it is in a loss position. In this event the subsequent
years' premium will be split in proportion to the losses incurred to
the cover.
E-2
EXHIBIT F
ALLOCATION OF LIMITS
Available limits under an Inuring Retrocession shall be allocated between the
parties in proportion to the losses otherwise recoverable.
EXHIBIT G
FORM OF RETROCEDANT'S REPORT
Retrocedant will provide the following information separately for each coverage
period on a monthly basis:
a) Transaction listing at assumed policy level showing all revenue items
including booked premiums, booked acquisition costs and paid losses
entered in Retrocedant's books during the relevant accounting period.
b) Claims listing at assumed policy level showing loss description, date
of loss, paid amount and outstanding case reserve.
c) Listing of Inuring Retrocession amounts allocated to Retrocessionaire
during the relevant accounting period including details of
non-proportional Inuring Retrocession premiums and recoverables.
Note 1 relating to (a) and (b): Revenue and reserve amounts will be shown in the
accounting currency used by Retrocedant for the purposes of its own books.
Note 2 relating to (a) and (b): Transaction and claims listings will include
gross amounts and proportional Inuring Retrocession amounts.
Note 3 relating to (c): Retrocession amounts will be paid to Retrocessionaire
only following receipt by Retrocedant. These amounts together with any unpaid
amounts that are due to Retrocessionaire but not yet received by Retrocedant
will be included in the listing of Inuring Retrocession amounts.
J-1
CONTRACTS EFFECTIVE FROM IPO CLOSE TO 12/31/02
ALL RESERVING CLASSES
Month 1
ASSUMED RESULTS CEDED CONTRACT NET ACCOUNT
US$ Equivalents
--------------- --------------- ---------------
Premiums written
--------------- --------------- ---------------
Change in UPR
--------------- --------------- ---------------
Premiums earned
--------------- --------------- ---------------
Losses paid
--------------- --------------- ---------------
Change in loss reserves
--------------- --------------- ---------------
Incurred losses
--------------- --------------- ---------------
Original commissions
--------------- --------------- ---------------
Brokerage
--------------- --------------- ---------------
Other
--------------- --------------- ---------------
Total charges
--------------- --------------- ---------------
Underwriting result
=============== =============== ===============
SP Commissions
--------------- --------------- ---------------
UPR's
--------------- --------------- ---------------
G-2
Case Reserves
--------------- --------------- ---------------
Funds Withheld
--------------- --------------- ---------------
G-3
CONTRACTS EFFECTIVE FROM IPO CLOSE TO 12/31/02
ASSUMED RESULTS BY REVENUE CLASS
Month 1
RESERVING CLASS 1 RESERVING CLASS 2 RESERVING CLASS 3 TOTAL
US$ Equivalents
----------------- ----------------- ----------------- -------------------
Premiums written
----------------- ----------------- ----------------- -------------------
Change in UPR
----------------- ----------------- ----------------- -------------------
Premiums earned
----------------- ----------------- ----------------- -------------------
Losses paid
----------------- ----------------- ----------------- -------------------
Change in loss reserves
----------------- ----------------- ----------------- -------------------
G-4
Incurred losses
----------------- ----------------- ----------------- -------------------
Original commissions
----------------- ----------------- ----------------- -------------------
Brokerage
----------------- ----------------- ----------------- -------------------
Other
----------------- ----------------- ----------------- -------------------
Total charges
----------------- ----------------- ----------------- -------------------
Underwriting result
================= ================= ================= ===================
SP Commissions
----------------- ----------------- ----------------- -------------------
UPR's
----------------- ----------------- ----------------- -------------------
G-5
Case Reserves
----------------- ----------------- ----------------- -------------------
G-6
CONTRACTS EFFECTIVE FROM IPO CLOSE TO 12/31/02
ASSUMED RESULTS BY CONTRACT
CONTRACT/ CAT SOA PREMIUMS CHG IN PREMIUMS LOSSES CHGE IN INCURRED
CONTRACT/CLAIM NO CEDANT CLAIM DES ID PD/ DOL WRITTEN UPR EARNED PAID CASE LOSSES COMMISSIONS BROKERAGE
----------------- ------ --------- --- ------- -------- ------ ------- ------ ------- ------- ----------- ---------
US$ Equivalents
Reserving Class 1
Contract 1
Claim No 1
Contract 2
Contract 3
Claim No 2
Contract 4
Contract 5
Contract 6
Total Reserving Class 1
Reserving Class 2
Contract 7
Contract 8
Contract 9
Contract 10
Contract 11
Contract 12
Total Reserving Class 2
Reserving Class 3
Contract 13
Contract 14
Contract 15
Contract 16
Contract 17
Contract 18
Contract 19
Contract 20
Total Reserving Class 3
Total
TOTAL U/W FUNDS
CONTRACT/CLAIM NO OTHER CHGS RESULT UPR CASE W/H
----------------- ----- ----- ------ --- ---- -----
US$ Equivalents
Reserving Class 1
Contract 1
Claim No 1
Contract 2
Contract 3
Claim No 2
Contract 4
Contract 5
Contract 6
Total Reserving Class 1
Reserving Class 2
Contract 7
Contract 8
Contract 9
Contract 10
Contract 11
Contract 12
Total Reserving Class 2
Reserving Class 3
Contract 13
Contract 14
Contract 15
Contract 16
Contract 17
Contract 18
Contract 19
Contract 20
Total Reserving Class 3
Total
G-7
CONTRACTS EFFECTIVE 1/1/02 TO IPO CLOSE
ALL RESERVING CLASSES
Month 1
ASSUMED RESULTS CEDED CONTRACT NET ACCOUNT
US$ Equivalents
--------------- --------------- ---------------
Premiums written
--------------- --------------- ---------------
Change in UPR
--------------- --------------- ---------------
Premiums earned
--------------- --------------- ---------------
Losses paid
--------------- --------------- ---------------
Change in loss reserves
--------------- --------------- ---------------
G-8
Incurred losses
--------------- --------------- ---------------
Original commissions
--------------- --------------- ---------------
Brokerage
--------------- --------------- ---------------
Other
--------------- --------------- ---------------
Total charges
--------------- --------------- ---------------
Underwriting result
=============== =============== ===============
SP Commissions
--------------- --------------- ---------------
UPR's
--------------- --------------- ---------------
G-9
Case Reserves
--------------- --------------- ---------------
Funds Withheld
--------------- --------------- ---------------
G-10
CONTRACTS EFFECTIVE 1/1/02 TO IPO CLOSE
ASSUMED RESULTS BY REVENUE CLASS
Month 1
RESERVING CLASS 1 RESERVING CLASS 2 RESERVING CLASS 3 TOTAL
US$ Equivalents
----------------- ----------------- ----------------- -------------------
Premiums written
----------------- ----------------- ----------------- -------------------
Change in UPR
----------------- ----------------- ----------------- -------------------
Premiums earned
----------------- ----------------- ----------------- -------------------
Losses paid
----------------- ----------------- ----------------- -------------------
Change in loss reserves
----------------- ----------------- ----------------- -------------------
G-11
Incurred losses
----------------- ----------------- ----------------- -------------------
Original commissions
----------------- ----------------- ----------------- -------------------
Brokerage
----------------- ----------------- ----------------- -------------------
Other
----------------- ----------------- ----------------- -------------------
Total charges
----------------- ----------------- ----------------- -------------------
Underwriting result
================= ================= ================= ===================
SP Commissions
----------------- ----------------- ----------------- -------------------
UPR's
----------------- ----------------- ----------------- -------------------
G-12
Case Reserves
----------------- ----------------- ----------------- -------------------
G-13
CONTRACTS EFFECTIVE 1/1/02 TO IPO CLOSE
ASSUMED RESULTS BY CONTRACT
CONTRACT/ CAT SOA PREMIUMS CHG IN PREMIUMS LOSSES CHGE IN INCURRED
CONTRACT/CLAIM NO CEDANT CLAIM DES ID PD/ DOL WRITTEN UPR EARNED PAID CASE LOSSES COMMISSIONS BROKERAGE
----------------- ------ --------- --- -------- --------- ------ -------- ------ ------- -------- ----------- ---------
US$ Equivalents
Reserving Class 1
Contract 1
Claim No 1
Contract 2
Contract 3
Claim No 2
Contract 4
Contract 5
Contract 6
Total Reserving
Class 1
Reserving Class 2
Contract 7
Contract 8
Contract 9
Contract 10
Contract 11
Contract 12
Total Reserving
Class 2
Reserving Class 3
Contract 13
Contract 14
Contract 15
Contract 16
Contract 17
Contract 18
Contract 19
Contract 20
Total Reserving
Class 3
Total
TOTAL U/W FUNDS
CONTRACT/CLAIM NO OTHER CHGS RESULT UPR CASE W/H
----------------- ------ ----- ------ --- ---- ----
US$ Equivalents
Reserving Class 1
Contract 1
Claim No 1
Contract 2
Contract 3
Claim No 2
Contract 4
Contract 5
Contract 6
Total Reserving
Class 1
Reserving Class 2
Contract 7
Contract 8
Contract 9
Contract 10
Contract 11
Contract 12
Total Reserving
Class 2
Reserving Class 3
Contract 13
Contract 14
Contract 15
Contract 16
Contract 17
Contract 18
Contract 19
Contract 20
Total Reserving
Class 3
Total
G-14
OPEN CLAIM REPORT BY BROKER, OFFICE, DEPARTMENT, UW YEAR, PRIMARY UW
COMPANY: StPaulRe
BROKER: Aon Re. Le Blanc PAGE: 2 of 30
OFFICE: Los Angeles PROCESS DATE: 6-May
DEPT: International Treaty Marine
UW CONTRACT PRIMARY CEDANT INSURED CLAIM OSR
BROKER YEAR NUMBER UNDERWRITER NAME NAME STATUS AMOUNT
Aon Re. Le Blanc 2000 00000123400 LRYAN Xxxxxx Group Abacus Corp Open 1,500
Aon Re. Le Blanc 2000 00000298100 LRYAN Commercial Aztec Open 100
America Properties
Total UW Year: 2000 1600
Total Dept: International 1600
Treaty Marine
Total Office: Los Angeles 1600
ACR/DCR PAID INCURRED
BROKER AMOUNT AMOUNT AMOUNT
Aon Re. Le Blanc 123 500 2,123
Aon Re. Le Blanc 50 75 225
Total UW Year: 2000 173 575 2,348
Total Dept: International 173 575 2,348
Treaty Marine
Total Office: Los Angeles 173 575 2,348
G-15
Total Broker Aon Re. Le Blanc 1600
BROKER: Global Risk LLC
OFFICE: New York
DEPT: International Treaty Marine
Global Risk LLC 2000 00000123400 KMARI Xxxxxx Group Abacus Corp. Open 120
Global Risk LLC 2000 00000298100 KMARI Commercial Aztec Open 50
America Properties
Total UW Year: 2000 170
Total Dept: International 170
Treaty Marine
Total Office: New York 170
Total Broker Global Risk LLC 170
Total Broker Aon Re. Le Blanc 173 575 2,348
BROKER: Global Risk LLC
OFFICE: New York
DEPT: International Treaty Marine
Global Risk LLC 30 25 175
Global Risk LLC 10 20 80
Total UW Year: 2000 40 45 255
Total Dept: International 40 45 255
Treaty Marine
Total Office: New York 40 45 255
Total Broker Global Risk LLC 40 45 255
G-16
RPT 2: REPORT BY OFFICE DEPARTMENT, CONTRACT #, UNDERWRITING YEAR
OPEN CLAIM REPORT BY OFFICE, DEPARTMENT, UW YEAR, PRIMARY UW
COMPANY: StPaulRe
OFFICE: Los Angeles
DEPT: International Treaty Marine PAGE: 2 of 30
UW YEAR: 2000 PROCESS DATE: 6-May
CAT NAME: 0021 Flood Hail Tornados PROCESS DATE: 6-May
Wind
UW CONTRACT PRIMARY CEDANT INSURED CLAIM OSR ACR/DCR
YEAR NUMBER UNDERWRITER NAME NAME STATUS AMOUNT AMOUNT
2000 00000123400 LRYAN Xxxxxx Group Abacus Corp Open 1,500 123
2000 00000298100 LRYAN Commercial America Aztec Properties Open 100 50
UW CONTRACT PAID INCURRED
YEAR NUMBER AMOUNT AMOUNT
2000 00000123400 500 2,123
2000 00000298100 75 225
G-17
Total Primary Underwriter: LRYAN 1600 173
2000 00000123400 KMARI Xxxxxx Group Abacus Corp. Open 120 30
2000 00000298100 KMARI Commercial America Aztec Properties Open 50 10
Total Primary Underwriter: KMARI 170 40
Total UW Year: 2000 1770 213
Total Dept: International Treaty Marine 1770 213
Total Office: Los Angeles 1770 213
Total Primary Underwriter: LRYAN 575 2,348
2000 00000123400 25 175
2000 00000298100 20 80
Total Primary Underwriter: KMARI 45 255
Total UW Year: 2000 620 2,603
Total Dept: International Treaty Marine 620 2,603
Total Office: Los Angeles 620 2,603
G-18
RPT 3: REPORT BY CLAIM, LOB, CURRENCY
OPEN CLAIM REPORT BY CLAIM NUMBER LOB CURRENCY
COMPANY: StPaulRe PAGE: 2 of 30
OFFICE: Los Angeles PROCESS DATE 6-May
DEPT: International Treaty Marine
CONTRACT UW PRIMARY CLAIM SHORT DATE OF DATE CAUSE OF CLAIM CEDANT
NUMBER YEAR UNDERWRITER NUMBER LOB LOSS REPORTED INJURY LOSS STATUS NAME
00000123400 1998 LRYAN 000927826 Cas-FDLTY 4/9/96 4/9/96 Paraplegic Derailment Open Xxxxxx Group
00000123400 1998 LRYAN 000927826 Cas-Environm 4/9/96 4/9/96 Paraplegic Derailment Open Xxxxxx Group
Birth
00000123400 1998 LRYAN 000927826 Cas-Umb/Cor 4/9/96 4/9/96 Defect Derailment Open Xxxxxx Group
CONTRACT UW INSURED OSR ACR/DCR PAID INCURRED
NUMBER YEAR NAME CCY AMOUNT AMOUNT AMOUNT AMONT
00000123400 1998 Abacus Corp USD 1,500 123 500
00000123400 1998 USD 100 10 30
00000123400 1998 USD 200 15 10
G-19
00000123400 2000 LRYAN 000927123 Cas-Umb/Cor 3/3/99 3/3/99 Birth High Open Xxxxxx Group Abacus
Defect Winds Corp
00000123400 2001 LRYAN 000929820 Cas-Umb/Cor 5/1/00 5/1/00 Serious Misc. Open Xxxxxx Group Abacus
Burn Corp
Total Dept: International Treaty Marine
Total Office: Los Angeles
00000123400 2000 CAD 500 80 45
00000123400 2001 FRF 800 25 30
Total Dept: International Treaty Marine 3,100 253 615
Total Office: Los Angeles 3,100 253 615
G-20
RPT 4: CATASTROPHE COMPARISON REPORT (STAND ALONE)
CATASTROPHE REPORT - INCURRED COMPARISON BY ACCT PERIOD
COMPANY: StPaulRe
OFFICE: Los Angeles PAGE: 2 of 30
PROCESS DATE: 6-May
ISO CAT CATASTROPHE DATE PROP PREV PROP CURR PROP
CAT CODE YEAR NAME FROM INCURRED AMT INCURRED AMOUNT TOT CHANGE
0013 2000 0013 Freeze Hail Wind 1/22/2000 200 300 100
0021 Flood Hail
0021 2000 Tornados Wind 5/8/2000 100 130 30
TOTAL OFFICE: Los Angeles 300 430
ISO CAT NON PROP PREV NON PROP CURR NON PROP
CAT CODE YEAR INCURRED AMT INCURRED AMT TOT CHANGE
0013 2000 20 90 70
0021 2000 140 160 20
TOTAL OFFICE: Los Angeles 160 250
G-21
RPT 5: CATASTROPHE DETAIL REPORT
CAT REPORT DETAIL BY CONTRACT NUM, CLAIM NUM
COMPANY: StPaulRe
OFFICE: Los Angeles
DEPT: International Treaty Marine PAGE: 2 of 30
CAT NAME: 0021 Flood Hail Tornados Wind PROCESS DATE: 6-May
CONTRACT UW PRIMARY CLAIM DATE OF DATE CAUSE OF CLAIM CEDANT INSURED OSR ACR/DCR
NUMBER YEAR UNDERWRITER NUMBER LOSS REPORTED LOSS STATUS NAME NAME AMOUNT AMOUNT
00000123400 1998 LRYAN 000927826 4/9/86 4/9/86 Derailment Open Xxxxxx Abacus Corp. 29,500 123
Group
CONTRACT UW PAID INCURRED CONTRACT ATTACH
NUMBER YEAR AMOUNT AMOUNT LIMIT RETENTION POINT
00000123400 1998 500 30,123 23 2
G-22
00000123400 2000 LRYAN 000927123 3/3/89 3/3/89 Winds Open Xxxxxx Abacus Corp. 500 80
Group
00000123400 2001 LRYAN 000927826 5/1/00 5/1/00 Misc. Open Xxxxxx Abacus Corp. 800 25
Group
Total Cat: 0021 Flood Hail Tornados Wind 30,800 228
Total Dept: International Treaty Marine 30,800 228
Total Office: Los Angeles 30,800 228
00000123400 2000 45 625 23 3
00000123400 2001 30 875 22 4
Total Cat: 0021 Flood Hail Tornados Wind 575 31,623
Total Dept: International Treaty Marine 575 31,623
Total Office: Los Angeles 575 31,623
G-23
RPT 6: CATASTROPHE SUMMARY REPORT
CATASTROPHE REPORT - SUMMARY
COMPANY: StPaulRe PAGE: 1 of 15
OFFICE: Los Angeles PROCESS DATE: 12/8/2001
ISO CAT CATASTROPHE DATE DATE OSR ACR/DCR PAID INCURRED
CAT CODE YEAR NAME FROM TO AMOUNT AMOUNT AMOUNT AMOUNT
0013 2000 013 Freeze Hail Wind 1/22/2000 1/22/2000 200 300 100 600
0021 2000 0021 Flood Hail Tornados Wind 5/8/2000 5/8/2000 100 130 30 260
TOTAL OFFICE: Los Angeles 300 430 860
G-24
ST XXXX RE CONTRACT ACTIVITY EXECUTIVE SYSTEM GENERATED QUARTERLY
SUMMARY BY DEPARTMENT, REPORTING CLASS, UW YEAR
USER NAME: XXXXXXXX XXXXXX
RUN TIME: 18-MAY-2002 03:57 AM
NON CAT RPT TRACKED CAT
UW WRITTEN LOSS RPT
RESERVING CLASS YEAR OFFICE PREMIUM UNEARNED BEGIN UNEARNED END EARNED PREMIUM CHNG LOSS CHNG
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ---------------
DEPARTMENT GROUP: NORTH AMERICAN CASUALTY
FIRST DOLLAR WC 1984 0 0 0 0 -13,163 0
Morristown
TOTAL FOR 1984 0 0 0 0 -13,163 0
FIRST DOLLAR WC 1985 0 0 0 0 -1,151 0
Morristown
TOTAL FOR 1985 0 0 0 0 -1,151 0
FIRST DOLLAR XX 0000 0 0 0 0 -15,029 0
Morristown
TOTAL FOR 1986 0 0 0 0 -15,029 0
FIRST DOLLAR WC 1996 New York 2,559 0 0 2,559 -262,308 0
TOTAL FOR 1996 2,559 0 0 2,559 -262,308 0
FIRST DOLLAR WC 1997 New York 116,031 0 0 116,031 115,278 0
TOTAL FOR 1997 116,031 0 0 116,031 115,278 0
FIRST DOLLAR WC 1998 New York 144,163 0 0 144,163 12,779 0
TOTAL FOR 1998 144,163 0 0 144,163 12,779 0
FIRST DOLLAR WC 1999 Chicago -7,995 0 0 -7,995 -17,974 0
FIRST DOLLAR WC 1999 New York -346,522 357,485 0 10,963 280,573 0
TOTAL FOR 1999 -354,517 357,485 0 2,968 262,600 0
FIRST DOLLAR WC 2000 Chicago 28,807 160,559 37,313 152,053 110,642 0
TOTAL FOR 2000 28,807 160,559 37,313 152,053 110,642 0
FIRST DOLLAR WC 2001 Chicago 315,159 222,965 338,571 199,553 39,368 0
FIRST DOLLAR WC 2001 New York -1,561,316 2,445,990 132,779 751,895 311,976 0
TOTAL FOR 2001 -1,246,258 2,668,955 471,350 951,447 351,344 0
TOTAL FOR FIRST DOLLAR WC -1,309,114 3,186,999 508,663 1,369,222 560,991 0
TOTAL RPT LOSS COMMI
RESERVING CLASS CHNG X.X. RATIO BROK
------------------ --------------- --------------- ---------------
DEPARTMENT GROUP: NORTH AMERICAN CASUALTY
FIRST DOLLAR WC -13,163 0%
TOTAL FOR 1984 -13,163 0%
FIRST DOLLAR WC -1,151 0%
TOTAL FOR 1985 -1,151 0%
FIRST DOLLAR WC -15,029 0%
TOTAL FOR 1986 -15,029 0%
FIRST DOLLAR WC -262,308 -10252%
TOTAL FOR 1996 -262,308 -10252%
FIRST DOLLAR WC 115,278 99%
TOTAL FOR 1997 115,278 99%
FIRST DOLLAR WC 12,779 9%
TOTAL FOR 1998 12,779 9%
FIRST DOLLAR WC -17,974 2259%
FIRST DOLLAR WC 280,573 2559%
TOTAL FOR 1999 262,600 8847%
FIRST DOLLAR WC 110,642 73%
TOTAL FOR 2000 110,642 73%
FIRST DOLLAR WC 39,368 20%
FIRST DOLLAR WC 311,976 41%
TOTAL FOR 2001 351,344 37%
TOTAL FOR FIRST DOLLAR WC 560,991 41%
G-25
ST XXXX RE CONTRACT ACTIVITY EXECUTIVE SYSTEM GENERATED QUARTERLY
BY DEPARTMENT, REPORTING CLASS, UW YEAR, OFFICE, CEDANT
USER NAME: XXXXXXXX XXXXXX
RUN TIME: 18-MAY-2002 03:57 AM
NON CAT
UW CONTRACT USER TITLE/INSURED WRITTEN UNEARNED EARNED RPT
YEAR CEDANT OFFICE NUMBER NAME UWER PREMIUM UNEARNED END PREMIUM LOSS CHNG
----------------------------------------------------------------------------------------------------------------------------------
DEPARTMENT GROUP: NORTH AMERICAN CASUALTY
REPORTING CLASS: FIRST DOLLAR WC
1984 Warwick Ins Co. Morristown M00000033U0 70% QUOTA SHARE JHIGG 0 0 0 0 -13,163
TOTAL FOR MORRISTOWN 0 0 0 0 -13,163
TOTAL FOR 1984 / / / / -13,163
1985 Warwick Ins Co. Morristown M00000033U0 70% QUOTA SHARE JHIGG 0 0 0 0 -1,151
TOTAL FOR MORRISTOWN 0 0 0 0 -1,151
TOTAL FOR 1985 / / / / -1,151
1986 Warwick Ins Co. Morristown M00000033U0 50% QUOTA SHARE JHIGG 0 0 0 0 -15,029
TOTAL FOR MORRISTOWN 0 0 0 0 -15,029
TOTAL FOR 1986 / / / / -15,029
1996 Florida New York TC961532500 WORKERS' COMP. Q/S MSMIL 3,603 0 0 3,603 30,549
Hospitality
1996 Zurich New York TC970319300 WORKERS' COMP. JBEND -1,044 0 0 -1,044 -292,857
Reinsurance C
TOTAL FOR NEW YORK 2,559 0 0 2,559 -262,308
TOTAL FOR 1996 2,559 0 0 2,559 -262,308
1997 Bridgefield New York TC970573400 WORKERS' COMP. MFELD 25,642 0 0 25,642 86,406
Employer
1997 Great American New York 00000295400 Deep South WC Quota MSMIL 0 0 0 0 -15,759
Ins.
1997 Safety National New York 00001056400 Primary Workers' Comp. ASARI 90,389 0 0 90,389 44,630
TRACKED
UW CAT TOTAL RPT
YEAR CEDANT RPT LOSS CHNG
------------------------------------------------------------------------
DEPARTMENT GROUP: NORTH AMERICAN CASUALTY
REPORTING CLASS: FIRST DOLLAR WC
1984 Warwick Ins Co. 0 -1
---
TOTAL FOR MORRISTOWN 0 -1
TOTAL FOR 1984 0 -0
0000 Xxxxxxx Ins Co. 0 -
---
TOTAL FOR XXXXXXXXXX 0 -
XXXXX XXX 0000 0 -
0000 Xxxxxxx Ins Co. 0 -1
---
TOTAL FOR MORRISTOWN 0 -1
TOTAL FOR 1986 0 -1
1996 Florida 0 3
Hospitality ---
0000 Xxxxxx 0 -29
Reinsurance C ---
TOTAL FOR NEW YORK 0 -26
TOTAL FOR 1996 0 -26
1997 Bridgefield 0 8
Employer ---
1997 Great American 0 -1
Ins. ---
1997 Safety National 0 4
---
G-26
Cas.
TOTAL FOR NEW YORK 116,031 0 0 116,031 115,278
TOTAL FOR 1997 116,031 0 0 116,031 115,278
1998 Associated New York 00000687600 WORKERS WDZUG 0 0 0 0 -80,296
Industrie
1998 Florida New York TC961532500 WORKERS' COMP. Q/S MSMIL 1,781 0 0 1,781 42,439
Hospitality
0000 Xxxxx Xxxxxxxx Xxx Xxxx 00000295400 Deep South WC Quota MSMIL 401 0 0 401 -4,440
Ins.
1998 Safety National New York 00001056400 Primary Workers' Comp. ASARI 205,974 0 0 205,974 58,602
Cas.
1998 Zurich New York TC970319300 WORKERS' COMP. JBEND -63,992 0 0 -63,992 -2,897
Reinsurance C
TOTAL FOR NEW YORK 144,163 0 0 144,163 12,779
TOTAL FOR 1998 144,163 0 0 144,163 12,779
Cas.
TOTAL FOR NEW YORK 0 11
TOTAL FOR 1997 0 11
1998 Associated 0 -8
Industrie ---
1998 Florida 0 4
Hospitality ---
1998 Great American 0 -
Ins. ---
1998 Safety National 0 5
Cas. ---
1998 Zurich 0 -
Reinsurance C ---
TOTAL FOR NEW YORK 0 1
TOTAL FOR 1998 0 1
G-27
ST XXXX RE CONTRACT ACTIVITY EXECUTIVE SYSTEM GENERATED QUARTERLY
BY DEPARTMENT, REPORTING CLASS, UW YEAR, OFFICE, CEDANT
USER NAME: XXXXXXXX XXXXXX
RUN TIME: 18-MAY-2002 03:57 AM
UW CONTRACT USER TITLE/INSURED WRITTEN UNEARNED EARNED
YEAR CEDANT OFFICE NUMBER NAME UWER PREMIUM UNEARNED END PREMIUM
---------------------------------------------------------------------------------------------------------------------------
DEPARTMENT GROUP: NORTH AMERICAN CASUALTY
REPORTING CLASS: FIRST DOLLAR XX
0000 National Chicago 00002488700 Hawaii WC QS THEIN -7,995 0 0 -7,995
Interstate
TOTAL FOR CHICAGO -7,995 0 0 -7,995
(TREATY)
1999 Associated New York 00000687600 WC WDZUG 0 0 0 0
Industrie
1999 Safety National New York 00001056400 Primary Workers' Comp. ASARI -244,350 357,485 0 113,135
Cas.
1999 Zurich New York TC970319300 WORKERS' COMP. JBEND -102,172 0 0 -102,172
Reinsurance C
TOTAL FOR NEW YORK -346,522 357,485 0 10,963
TOTAL FOR 1999 -354,517 357,485 0 2,968
2000 National Chicago 00002488700 Hawaii WC QS THEIN 28,807 160,559 37,313 152,053
Interstate
TOTAL FOR CHICAGO 28,807 160,559 37,313 152,053
(TREATY)
TOTAL FOR 2000 28,807 160,559 37,313 152,053
2001 National Chicago 00002488700 Hawaii WC QS THEIN 226,253 222,965 338,571 110,647
Interstate
2001 Safety National Chicago 00003670600 Talon W/C Quota Share KFRY 88,906 0 0 88,906
Cas.
TOTAL FOR CHICAGO 315,159 222,965 338,571 199,553
(TREATY)
2001 Associated New York 00000687600 Workers' Comp. WDZUG -2,062,720 2,317,552 0 254,943
NON CAT TRACKED
UW RPT CAT TOTAL RPT
YEAR CEDANT LOSS CHNG RPT LOSS CHNG
-------------------------------------------------------------------------
DEPARTMENT GROUP: NORTH AMERICAN CASUALTY
REPORTING CLASS: FIRST DOLLAR XX
0000 National -17,974 0 -1
Interstate ---
TOTAL FOR CHICAGO -17,974 0 -1
(TREATY)
1999 Associated -186,848 0 -18
Industrie ---
1999 Safety National 362,415 0 36
Cas. ---
0000 Xxxxxx 105,007 0 10
Reinsurance C ---
TOTAL FOR NEW YORK 280,573 0 28
TOTAL FOR 1999 262,600 0 26
2000 National 110,642 0 11
Interstate ---
TOTAL FOR CHICAGO 110,642 0 11
(TREATY)
TOTAL FOR 2000 110,642 0 11
2001 National 14,162 0 1
Interstate ---
2001 Safety National 25,206 0 2
Cas. ---
TOTAL FOR CHICAGO 39,368 0 3
(TREATY)
2001 Associated 122,646 0 12
---
G-28
Industrie
2001 Discover New York 00003978700 Sec B Agg QS JGEAR 8,338 0 0 8,338
Reinsurance
2001 Safety National New York 00001056400 Primary Workers' Comp. ASARI 493,065 128,327 132,779 488,613
Cas.
TOTAL FOR NEW YORK -1,561,316 2,445,990 132,779 751,895
TOTAL FOR 2001 -1,246,158 2,668,955 471,350 951,447
TOTAL FOR FIRST DOLLAR WC -1,309,114 3,186,999 508,663 1,369,222
Industrie
2001 Discover 0 0
Reinsurance
2001 Safety National 189,330 0 18
Cas. ---
TOTAL FOR NEW YORK 311,976 0 31
TOTAL FOR 2001 351,344 0 35
TOTAL FOR FIRST DOLLAR WC 560,991 0 56
G-29
EXHIBIT H
ALLOCATION OF ADMINISTRATIVE EXPENSES
Retrocessionaire shall pay to Retrocedant the "actual cost" to Retrocedant
(which shall consist of Retrocedant's direct and reasonable indirect costs), as
certified in good faith by Retrocedant. For greater certainty, the parties agree
that "actual cost" will include any incremental and out-of-pocket costs incurred
by Retrocedant in connection with the administrative services provided
hereunder, including the conversion, acquisition and disposition cost of
software and equipment acquired for the purposes of providing the services and
the cost of establishing requisite systems and data feeds and hiring necessary
personnel.
No later than 30 days following the last day of each calendar quarter,
Retrocedant shall provide Retrocessionaire with a report setting forth an
itemised list of the services provided to Retrocessionaire during such last
calendar quarter, in a form agreed to by the parties. Retrocessionaire shall
promptly (and in no event later than 30 days after receipt of such report,
unless Retrocessionaire is contesting the amount set forth in the report in good
faith) pay to Retrocedant by wire transfer of immediately available funds all
amounts payable as set forth in such report. Each party will pay all taxes for
which it is the primary obligor as a result of the provision of any service
under this Agreement; provided, that Retrocessionaire shall be solely
responsible for, and shall reimburse Retrocedant in respect of, any sales, gross
receipts or transfer tax payable with respect to the provision of any service
under this Agreement, and any such reimbursement obligation shall be in addition
to Retrocessionaire's obligation to pay for such service.
