Xx. 0000-0000-X000
XXXXXXXXXXX
Xxxxxxxx to and forming part of the PROPERTY AND CASUALTY EXCESS OF LOSS
REINSURANCE AGREEMENT NO. 3154-0016 between PENN-AMERICA INSURANCE COMPANY,
PENN-STAR INSURANCE COMPANY, both of Hatboro, Pennsylvania, (hereinafter
referred to as the "Company"), and AMERICAN RE-INSURANCE COMPANY, a Delaware
Corporation with administrative offices in Princeton, New Jersey (hereinafter
referred to as the "Reinsurer").
It is mutually understood and agreed by the parties hereto that effective May 1,
2003, as respects the Company's in-force, new and renewal policies, this
Agreement is amended as follows:
I. Subsection p., Massage Program, is added as an exception to the
Professional Liability Exclusion, C.1. and the exclusion reads as follows:
1. Professional Liability or Errors and Omissions Coverage other than for
the following:
a. "Beau-T-Pak";
b. Barbers;
c. Opticians;
d. Veterinarians that treat household pets;
e. Morticians; f. Clergy;
g. Employee Benefits Liability (E&O Coverage); h. Druggists;
i. "Day Care Pak";
j. "Adult Day Care;
k. "Health Club Pak";
l. "Instructor Pak";
m. In-Home Day Care;
n. "Pet Pak";
o. "Wellness Pak"; or
p. Massage Program.
II. Exclusion C.23. is amended to reflect the change in the number of building
stories to six and the exclusion reads as follows:
23. Wrecking or demolition of buildings, structures, watercraft or
aircraft, except for buildings six stories or less.
III. Exclusion C.44. is amended to reflect the change in the number of building
stories to six and the exclusion reads as follows:
44. Contractors engaged in the construction, erection or exterior
maintenance of structures in excess of six stories, except for window
washers or power washing operations.
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No. 3154-0016-E001
IV. Exclusion C.49. is amended to provide for amendment to the Company's
contractor guidelines and the exclusion reads as follows:
49. Contractors, except as provided for by the Company's Penn Amerigram
dated November 7, 2001, that is attached to this Agreement as APPENDIX
B, or when the Company's Penn Amerigram is subsequently amended by the
Company and notice is provided the Reinsurer.
X. Xxxxxxx 0, XXXXXXXX of EXHIBIT B, CASUALTY EXCESS OF LOSS, is amended to
include the maximum policy limits for Massage Program business and the
Section reads as follows:
Section 6
WARRANTY
The maximum limits of liability for any one policy of the Company shall
be deemed not to exceed the following:
1. General Liability - $1,000,000 each occurrence and $2,000,000
general aggregate. a) As respects Products and Completed
Operations - $1,000,000 in the aggregate.
2. Liquor Liability Coverage - $1,000,000 each occurrence (i.e., new
and renewal Restaurant policies, excluding Bars and Taverns, for
the A, B, and C states as per attached Appendix A, having liquor
receipts of 40% or less of total sales, effective on or after the
effective date of this Agreement).
3. Massage Program - $2,000,000 each occurrence and $3,000,000
general aggregate. However, for the purposes of recovery under
this Exhibit, only the first $1,000,000 shall be deemed
recoverable.
VI. EXHIBIT C, MASSAGE PROGRAM EXCESS OF LOSS, is added to the Agreement and
the Exhibit reads as follows:
EXHIBIT C
MASSAGE PROGRAM EXCESS OF LOSS
Section 1
BUSINESS COVERED
A. The Reinsurer agrees to reimburse the Company, on an excess of
loss basis, for the amounts of ultimate net loss which the
Company may pay as a result of losses occurring on and after
May 1, 2003, as respects the Company's new and renewal
policies becoming effective on and after said date, covering
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No. 3154-0016-E001
the Massage Program business, except as excluded under the
EXCLUSIONS Article of this Agreement, subject to the
limitations set forth herein.
B. The term "policies" as used herein means each of the Company'
s binders, policies and contracts providing insurance and
reinsurance on the Classes of Insurance covered hereunder.
Section 2
LIMITS OF COVER
As respects the class of business as stated in Section 1, the Reinsurer
shall not be liable for any loss until the Company's ultimate net loss
in each occurrence exceeds $1,000,000 and then the Reinsurer shall be
liable for the amount of the Company' s ultimate net loss in each
occurrence in excess of $1,000,000 but the Reinsurer's liability shall
not exceed 100% of $1,000,000 in any one occurrence or $3,000,000 in
any one Agreement Year.
Section 3
REINSURANCE PREMIUM
A. The premium for the reinsurance provided under this Exhibit
shall be computed at the rate of 10.837% of the Company's net
written premium for the new and renewal business covered
hereunder as of May 1, 2003.
B. Notwithstanding Section 4 of this Exhibit, the minimum premium
for the period May 1, 2003, through December 31, 2003, for
reinsurance provided under this Exhibit shall be $67,000,
which has been pro-rated from $100,000 because of the partial
period.
C. "Net written premium" shall mean the total of the Company's
gross premium written during the agreement year for the lines
of business covered hereunder, less expense constants on
admitted policies, and less return premiums and premiums paid
for reinsurance, if any, inuring to the benefit of the
Agreement.
Section 4
COMMISSION
The Reinsurer shall make a commission allowance of 37.50% to the
Company on the premiums ceded to this Agreement.
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No. 3154-0016-E001
Section 5
REPORTS AND REMITTANCES
A. The Company will provide the Reinsurer with all necessary data
respecting premiums and forward it to the Reinsurer within 45
days after the close of each quarter, on forms mutually
acceptable.
B. Any balance due the Reinsurer, shall be remitted by the
Company with the Account Current. The Reinsurer shall remit
any balance due the Company promptly upon the Reinsurer's
receipt of the Account Current. Within 15 days after the end
of each Agreement Year, and upon cancellation or termination
at the end of each Agreement Year thereafter, until all
premiums are accounted for, the Company shall render to the
Reinsurer a statement of the Company's net written premiums
during the year and a calculation of the annual premium
computed by the application of the rate set forth in the
Premium Section to the Company's net written premiums. If the
actual reinsurance premium previously paid is less than the
annual minimum premium owed to the Reinsurer under this
Agreement, such additional premium due the Reinsurer shall be
forwarded to the Reinsurer with the statement.
C. Payment by the Reinsurer of its portion of loss and loss
expenses paid by the Company will be made by the Reinsurer to
the Company within 5 days after proof of payment by the
Company is received by the Reinsurer.
Section 6
WARRANTY
The maximum limits of liability for any one policy of the
Company shall be deemed not to exceed the following:
Massage Program - $2,000,000 each occurrence and $3,000,000
general aggregate.
This Exhibit C is attached to and forms part of Reinsurance Agreement
No. 3154-0116 issued to PENN-AMERICA INSURANCE COMPANY, PENN-STAR
INSURANCE COMPANY.
Nothing herein contained shall alter, vary or extend any provision or condition
of the Agreement other than as above stated.
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IN WITNESS WHEREOF, the parties hereto have caused this Endorsement to be
executed by their duly authorized officers.
In Hatboro, PA, this 14th day of August, 2003;
ACCEPTED:
PENN-AMERICA INSURANCE COMPANY
PENN-STAR INSURANCE COMPANY
/s/ Xxxxxx X. Xxxxxx
___________________________________
and in Princeton, New Jersey, this 11th day of August, 2003.
AMERICAN RE-INSURANCE COMPANY
/s/
_______________________________
Vice President
Dated: August 11, 2003
RG/rg
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