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Exhibit 10.38
EXCESS CESSION AND EVENT
REINSURANCE CONTRACT
EFFECTIVE: JANUARY 1, 1999
ISSUED TO
MEDICAL INTER-INSURANCE EXCHANGE OF NEW JERSEY
LAWRENCEVILLE, NEW JERSEY
(HEREINAFTER REFERRED TO AS THE "COMPANY")
BY
THE REINSURERS SUBSCRIBING THE RESPECTIVE
INTERESTS AND LIABILITIES AGREEMENTS HERETO
(HEREINAFTER REFERRED TO AS THE "REINSURERS")
ARTICLE I: BUSINESS REINSURED
A. By this Contract, the Reinsurers agree to reinsure the liability which
may accrue to the Company under all of its original policies, contracts,
binders and certificates of insurance or reinsurance (hereinafter
collectively referred to as "original policies") classified by the
Company as:
All business underwritten by New Jersey State Medical Underwriters, Inc.
and classified by the Company as Medical and Dental Practitioner
Professional Liability, Umbrella Liability, Hospital and Other Health
Care Institution Professional Liability and Commercial General Liability
Business, Directors and Officers Liability, Fiduciary Liability, Managed
Care Errors and Omissions Liability, Employment Practice Liability,
Miscellaneous Professional Indemnity (including but not limited to,
Lawyers Professional, Notary Public and Electronic Data Processors
coverage subject to agreement by Reinsurers) unless otherwise excluded
under Article III: Exclusions, issued or renewed on or after the
effective date, subject to the terms, conditions and limitations
hereinafter set forth.
Retroactive dates hereon shall be the same as any retroactive dates
contained in the original policies.
B. It is understood that this Contract applies to losses first occurring
during the original policy period under occurrence policies and Claims
First Made during the original period for claims made policies in respect
of risks attaching during the term of the Contract all following the
underlying terms and conditions.
Permanent Protection Plan policies underwritten by the Company shall in
all cases be deemed to be original policies covering on a losses
occurring during basis. Reinsurers shall be subject to all of the
conditions of the Permanent Protection Plan original policies and all
other original policies including policy limits and aggregate limit
formulas under any extended reporting coverage therein.
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C. It is understood that this contract applies only to original policies
with limits in excess of the company's retention.
ARTICLE II: COMMENCEMENT AND TERMINATION
A. This Contract shall become effective on January 1, 1999 and
shall continue in force thereafter until terminated.
B. Either party may terminate this Contract on any December 31 by
giving the other party not less than 90 days prior written
notice.
C. Reinsurers shall remain liable in respect to original policies
issued or renewed during the term their contract is in force
on the basis of the original coverage. Reinsurers shall
receive their share of premiums for such respective original
policies and there shall be no return of unearned premiums in
respect thereto.
D. This Contract shall apply to original policies underwritten by
the Company and incepting during the term of this Contract
subject to a maximum period any one policy not to exceed 36
months plus odd time.
E. In respect of multi-year original policies attaching to this
Contract then reinsurance coverage for the full policy period
shall be provided by those Reinsurers to whom the original net
ceded premium has been allocated to regardless of any
termination of the Contract.
ARTICLE III: EXCLUSIONS
This Contract does not apply to and specifically excludes the following:
1. Reinsurance assumed, except reinsurance assumed from American
Medical Mutual, Inc., A Risk Retention Group, Lawrenceville
Property and Casualty Co., Inc., Lawrenceville Re. Ltd., and
MIIX Insurance Company of New York, where the underwriting is
through New Jersey State Medical Underwriters, Inc.
underwritten by the Company for captives or other insurance facilities
of hospitals and all other health care institutions where the
Underwriting is through New Jersey State Medical Underwriters, Inc.
2. Claims emanating from policies issued by the Company with
effective dates after the termination date of this Contract.
3. Financial Guaranty and Insolvency Business.
4. All liability of the Company arising by contract, operation of
law, or otherwise, from its participation or membership,
whether voluntary or involuntary, in any insolvency fund.
"Insolvency Fund" includes any guaranty fund, insolvency fund,
plan, pool, association, fund or other arrangement, however
denominated, established or governed, which provides for any
assessment of or payment or assumption by the Company of part
or all of any claim, debt, charge, fee or other obligation or
an insurer, or its successors or assigns, which has been
declared by any competent authority to be insolvent, or which
is otherwise deemed unable to meet any claim, debt, charge,
fee or other obligation in
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whole or in part.
5. Nuclear risks as defined in the "Nuclear Incident Exclusion
Clause - Liability. Reinsurance U.S.A. and Canada" except for
incidents arising from nuclear medicine, attached to and
forming part of this Contract.
6. Any business derived from participation in any Pool,
Association or Syndicate.
ARTICLE IV: RETENTION AND LIMITS
A. Retention:
The Company shall retain and be liable for the first $10,000,000 of Ultimate Net
Loss as respects:
i) each original policy; or, where applicable
ii) each and every Event.
B. Limit Excess of Retention:
i) In respect of Medical and Dental Practitioner Liability, Umbrella
Liability, Hospital and other Healthcare Institution Professional
Liability and Commercial Liability Business:
Reinsurers shall be liable for 92% of $65,000,000 of Ultimate Net
Loss as respects each original policy, or, where applicable, each
and every Event, plus Pro rata Loss Adjustment Expenses.
ii) In respect of Directors and Officers Liability, Fiduciary
Liability, Managed Care Errors and Omissions Liability,
Employment Practice Liability, and Miscellaneous Professional
Indemnity (including but not limited to Lawyers Professional,
Notary Public and Electronic Data Processors Business --
coverage subject to agreement by Reinsurers):
Reinsurers shall be liable for 92% of $15,000,000 of Ultimate Net
Loss as respects each original policy, or, where applicable, each
and every Event, plus Pro rata Loss Adjustment Expenses.
ARTICLE V: DEFINITIONS
A. "Ultimate Net Loss" as used herein is defined as the sum or sums
(including Loss in Excess of Policy Limits, Extra Contractual
Obligations, as hereinafter defined) paid or payable by the Company in
settlement of claims including any and all vicarious liability arising
from BUSINESS REINSURED and in satisfaction of judgments rendered on
account of such claims, after deduction of all salvage, all recoveries,
including the Pennsylvania catastrophe fund, if applicable, and all
claims in inuring insurance or reinsurance, whether collectible or not.
Ultimate Net Loss shall not include any Loss Adjustment Expense.
Nothing herein shall be construed to mean that losses under this
Contract are not recoverable until the Company's Ultimate Net Loss has
been ascertained. Ultimate Net Loss shall be calculated on a per claim,
per policy per insured basis or, where applicable, on a per Event
basis. If the Company issues multiple policies to an insured, the
policies will be deemed to be one original policy for purposes of
coverage under this Reinsurance Contract.
B. "Loss in Excess of Policy Limits" and "Extra Contractual Obligations"
as used herein
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shall be defined as follows:
1. "Loss in Excess of Policy Limits" as used herein shall mean
any amount paid or payable by the Company in excess of its
policy limits, but otherwise within the terms of its policy,
as a result of a settlement by the Company or an action
against it by its insured or its insured's assignee to recover
damages the insured is legally obligated to pay to a third
party claimant because of the Company's alleged or actual
negligence, breach of contract or bad faith in rejecting a
settlement within policy limits, or in discharging its duty to
defend or prepare the defense in the trial of an action
against its insured, or in discharging its duty to prepare or
prosecute an appeal consequent upon such an action. A Loss in
Excess of Policy Limits shall be deemed to have occurred on
the same date as the loss covered or alleged to be covered
under the policy.
2. "Extra Contractual Obligations" as used herein shall mean
any punitive, exemplary, compensatory, multiplied or
consequential damages, other than Loss in Excess of Policy
Limits paid or payable by the Company as a result of an action
against it by its insured, its insured's assignee or a third
party claimant, which action alleges negligence, breach of
contract or bad faith on the part of the Company in handling a
claim under a policy subject to this Contract. An Extra
Contractual Obligation shall be deemed to have occurred on the
same date as the loss covered or alleged to be covered under
the policy.
Notwithstanding anything stated herein, this Contract shall not
apply to any Loss in Excess of Policy Limits or Extra Contractual
Obligation incurred by the Company as a result of any fraudulent
and/or criminal act or any officer or director of the Company
acting individually or collectively or in collusion with any
individual or corporation or any other organization or party
involved in the presentation, defense or settlement if any claim
covered hereunder.
C. "Incident" as used herein shall mean a single loss occurrence, or
otherwise a series of accidents, acts, errors or omissions including
continuous or repeated exposure to substantially the same general harmful
conditions giving rise to coverage, all as defined and provided within
the original policies underwritten by the Company.
D. "Claims First Made" as used herein shall mean claims reported under
claims made original policies on the earlier date of (1) or (2) below:
1. When the insured first gives notice to the Company that a
claim has been made against the insured; or
2. When the insured first gives notice to the Company of an
Incident involving a particular person which may result in a
claim against the original insured.
Notwithstanding the above, and in all cases, the Claims First Made date
shall be as defined and provided within the underlying policies
underwritten by the Company.
E. 1. "Loss Adjustment Expense" as used herein shall mean
expenses allocable to the investigation defense and/or
settlement of specific claims, including litigation expenses
and postjudgment interest and legal expenses and costs
incurred in connection with coverage questions and legal
actions connected thereto, but not including office expenses
or salaries of the Company's regular employees.
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2. "Pro rata Loss Adjustment Expenses" as used herein shall mean the
result obtained by multiplying the covered indemnity percentage,
as calculated below by the Company's "Loss Adjustment Expense"
for a given claim. The percentage shall be determined by dividing
the amount of Ultimate Net Loss indemnity for a coverage section
by the Company's total Ultimate Net Loss for a given claim.
F. "Net Ceded Premium" as used herein shall mean Gross Allocated Premium
to this Contract less 25%.
G. "Gross Allocated Premium" as used herein shall mean the written premium
by the Company allocated to this Contract in annual policies or
instalments on multi-year policies.
H. "Event" as used herein shall mean all original claims arising from an
Incident involving more than one insured under original policies An Event
will be deemed to have occurred at the date of the first occurrence for
original occurrence policies and the Claims First Made date if the
original policy is on a "claims made" basis (for claims made original
policies.
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ARTICLE VI: CLAIMS REPORTING AND CLAIMS LOSS SETTLEMENT
A. Within 60 days after the end of each calendar quarter, the
Company shall provide the Reinsurers with a claims bordereau
outlining any claim on which the Company has placed a reserve
value of $3,000,000 or more each loss or event. At each
anniversary the Company shall provide a bordereau outlining
all claims and reserves excess of $250,000 each loss or
$2,000,000 each event. Losses and adjustment expenses
recoverable by the Company are payable immediately after
receipt of proof of loss subject to the retention.
B. The Company shall include with each claim bordereau, the following
information as respects new claims, pending claims and closed claims
during the quarter:
1. Claim number or reference number;
2. Name of Insured;
3. Name of Claimant;
4. Subject policy limit;
5. Claims Made date;
6. Loss Occurrence date;
7. Indemnity (paid and outstanding);
8. Expenses (paid and outstanding);
9. Indemnity recovery; if any;
10. Expense recovery; if any;
11. Status
12. Narrative Loss Description of claims of $3,000,000 or more
each loss or Event as respects new claims and closed claims
during the quarter or as otherwise upon request of Reinsurers.
C. The Reinsurers shall have the right, at its own expense, to be associated
in the defense of any claim, suit or proceeding involving this
reinsurance.
D. The Company shall, at its full discretion, adjust and settle all claims
and losses. All such adjustments and settlements shall be binding on the
Reinsurers and the Reinsurers agree to pay all amounts for which they may
be liable immediately after receipt of reasonable evidence of the amount
paid by the Company.
ARTICLE VII: SALVAGE AND SUBROGATION
The Reinsurers shall be credited with salvage (i.e., reimbursement obtained or
recovery made by the Company, less the actual cost, excluding salaries of
officials and employees of the Company
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and sums paid to attorneys as retainer,
of obtaining such reimbursement or making such recovery) on account of claims
and settlements involving reinsurance hereunder. Salvage thereon shall always be
used to reimburse the excess carriers in the reverse order of their priority
according to their participation before being used in any way to reimburse the
Company for its primary loss. The Company hereby agrees to enforce its rights to
salvage or subrogation relating to any loss, a part of which loss was sustained
by the Reinsurers, and to prosecute all claims arising out of such rights.
ARTICLE VIII: PREMIUM
The Company shall pay the Reinsurers a Minimum and Deposit Premium of $750,000
annually which shall be payable quarterly as follows:-
31st March, 30th June, 30th September and 31st December.
The Minimum Premium shall be adjusted upwards at 92% of the net ceded premium
within 45 days of 31st December.
ARTICLE IX: OFFSET
The Company and the Reinsurers shall have the right to offset any balance or
amounts due from one party to the other under the terms of this Contract. The
party asserting the right of offset may exercise such right any time where the
balances are on account of premiums or losses or otherwise.
ARTICLE X: ACCESS TO RECORDS
A. The Company shall place at the disposal of the Reinsurers at all
reasonable time, and the Reinsurers shall have the right to inspect,
through authorized representatives, all books, records, policies,
endorsements and papers of the Company in connection with any reinsurance
hereunder, or claims in connection herewith.
B. The Reinsurers agree that they will not disclose any confidential
information obtained by them hereunder to parties not subject to this
Contract except under the following circumstances and then only when
necessary:
1. When disclosure of such information is required in the normal
course of the Reinsurers' business; or
2. With the prior written consent of the Company; or
3. When the Reinsurers are required by a subpoena or court order to
disclose such information. The Reinsurers shall promptly notify
the Company of any attempt by a third party to obtain from them
any such confidential information.
C. The Reinsurers will provide the Company or its designated representative
with such information as the Reinsurers and Company may agree is
necessary to the Company's handling of the business reinsured herein.
D. The obligations contained in this Article shall survive termination of
this Contract.
ARTICLE XI: LIABILITY OF THE REINSURER
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A. The liability of the Reinsurers shall follow that of the Company in every
case and be subject in all respects to all the general and specific
stipulations, clauses, waivers and modifications of the Company's
policies and any endorsements thereon. However, in no event shall this be
construed in any way to provide coverage outside the terms and conditions
set forth in this Contract.
B. Nothing herein shall in any manner create any obligation or establish any
rights against the Reinsurers in favor of any third party or any persons
not parties to this Contract.
ARTICLE XII: NET RETAINED LIABILITY
A. This Contract applies only to that portion of any insurance or
reinsurance which the Company retains net for its own account (prior to
deduction of any underlying reinsurance), and in calculating the amount
of any loss hereunder and also in computing the amount or amounts in
excess of which this Contract attaches only loss or losses in respect of
that portion of any policy which the Company retains net for its own
account shall be included.
B. The amount of the Reinsurers' liability hereunder in respect of any loss
or losses shall not be increased by reason of the inability of the
Company to collect from any other reinsurer(s), whether specific or
general, any amounts which may have become due from such reinsurer(s),
whether such inability arises from the insolvency of such other
reinsurer(s) or otherwise.
ARTICLE XIII: DELAYS, ERRORS OR OMISSIONS
Inadvertent delays, errors or omissions made in connections with this Contract
or any transaction hereunder shall not relieve either party from any liability
which would have attached had such delay, error or omission not occurred,
provided always that such error or omission will be rectified as soon as
possible after discovery. In no event shall later notification of any claim by
the Company constitute a ground upon which the Reinsurers have been prejudiced
by such late notice. As used in this Article, the term "prejudiced" shall mean
that a different outcome in the handling of any claim would have resulted but
for the untimely notice to Reinsurers.
ARTICLE XIV: CURRENCY
Whenever the word "Dollars" or the "$" appears in this Contract, they shall be
construed to mean United States Dollars and all transactions under this Contract
shall be in United States Dollars.
ARTICLE XV: FEDERAL EXCISE TAX
If the Reinsurers are subject to the Federal Excise Tax, the Reinsurers agree to
allow, for the purpose of paying Tax, up to 1% of the premium payable hereon to
the extent such premium is subject to the Tax. In the event of any return
premium becoming due hereunder, the Reinsurers will deduct from the amount of
the return premium the same percentage as it allowed, and the Company or its
agents should take steps to recover the Tax from the U.S. Government.
ARTICLE XVI: UNAUTHORIZED REINSURERS
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A. If the Reinsurers are unauthorized in any state of the United States of
America or the District of Columbia, the Reinsurers agree to fund their
share of the Company's outstanding portion of Ultimate Net Loss and Pro
rata Loss Adjustment Expense reserves as determined by the Company,
respectively by:
1. Clean, irrevocable and unconditional letters of credit
issued and confirmed, if confirmation is required by the
insurance regulatory authorities involved, by a bank or banks
meeting the NAIC Securities Valuation Office credit standards
for issuers of letters of credit and acceptable to said
insurance regulatory authorities; and/or
2. Trust accounts in conformity with New York Regulation 114
for the benefit of the Company and as may be required by any
other insurance regulatory authority; and/or
3. Cash advances;
if, without such funding, a penalty would accrue to the Company on any
financial statement it is required to file with the insurance regulatory
authorities involved. The Reinsurers, at their sole option, may fund in
other than cash if their method and form of funding are acceptable to the
insurance regulatory authorities involved and the Company.
B. With regard to funding in whole or in part by letters of credit, it is
agreed that each letter of credit will be in a form acceptable to
insurance regulatory authorities involved, will be issued for a term of
at least one year and will include an "evergreen clause" which
automatically extends the term for at least one additional year at each
expiration date unless written notice of non-renewal is given to the
Company not less than 30 days prior to said expiration date. The Company
and the Reinsurers further agree, notwithstanding anything to the
contrary in this Contract, that said letters of credit may be drawn upon
by the Company or its successors in interest at any time, without
diminution because of the insolvency of the Company or the Reinsurers,
but only for one or more of the following purposes:
1. To reimburse itself for the Reinsurers' share of the paid
portion of Ultimate Net Loss and/or Pro rata Loss Adjustment
Expenses paid under the terms of policies reinsured hereunder,
unless paid in cash by the Reinsurers;
2. To fund a cash account in an amount equal to the Reinsurers'
share of any outstanding portion of Ultimate Net Loss and Pro
rata Loss Adjustment Expense reserves funded by means of a
letter of credit which (a) is under non-renewal notice, if
said letter of credit has not been renewed or replaced by the
Reinsurers 10 days prior to its expiration date, or (b) the
Reinsurers have failed to increase to the amount requested by
the Company, it being understood and nothing in this Contract
in any way shall restrict or limit the rights of the Company
under the terms of the letter of credit;
3. To refund to the Reinsurers any sum in excess of the actual
amount required to fund the Reinsurers' share of the Company's
outstanding portion of Ultimate Net Loss and Pro rata Loss
Adjustment Expense reserves if so requested by the Reinsurers.
In the event the amount drawn by the Company on any letter of credit is
in excess of the actual amount required then the Company shall promptly
return to the Reinsurers the excess amount so drawn.
ARTICLE XVII: INSOLVENCY
A. In the event of the Insolvency of the Company, this reinsurance shall be
payable directly to the
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Company or to its liquidator, receiver, conservator or statutory
successor immediately upon demand, with reasonable provision for
verification, on the basis of the liability of the Company without
diminution because of the Insolvency of the Company or because the
liquidator, receiver, conservator or statutory successor of the Company
has failed to pay all or a portion of any claim. It is agreed, however,
that the liquidator, receiver, conservator or statutory successor of
the Company shall give written notice to the Reinsurers of the pendency
of a claim against the Company indicating the policy or bond reinsured
which claim would involve a possible liability on the part of the
Reinsurers 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, the Reinsurers 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 the Company or its liquidator, receiver, conservator, or
statutory successor. Accidental failure to give such notice shall not
excuse the obligation unless Reinsurers are substantially prejudiced by
the failure to give such notice. The expense thus incurred by the
Reinsurers shall be chargeable, subject to the approval of the Court,
against the Company as part of the expense of conservation or
liquidation to the extent of a pro rata share of the benefit which may
accrue to the Company solely as a result of the defense undertaken by
the Reinsurers.
B. Where two or more of the Reinsurers are involved in the same claim and a
majority in interest elect to interpose defense to such claim, the
expense shall be apportioned in accordance with the terms of this
Contract as though such expense had been incurred by the Company.
C. It is further understood and agreed that, in the event of the Insolvency
of the Company, the reinsurance under this Contract shall be payable
directly by the Reinsurers to the Company or to its liquidator, receiver
or statutory successor.
ARTICLE XVIII: ARBITRATION
A. As a condition precedent to any right of action hereunder, in the event
of any dispute or difference of opinion hereafter arising with respect
to this Contract, it is hereby mutually agreed that such dispute or
difference of opinion shall be submitted to Arbitration. One Arbiter
shall be chosen by the Company, the other by the Reinsurers, and an
Umpire shall be chosen by the two Arbiters before they enter upon
Arbitration, all of whom shall be active or retired disinterested
executive officers of insurance or reinsurance companies. 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 who shall in turn choose an Umpire before
entering upon Arbitration. If the two Arbiters fail to agree upon the
selection of an Umpire within 30 days following their appointment, each
Arbiter shall nominate three candidates within 10 days thereafter, two
of whom the other shall decline, and the decision shall be made by
drawing lots. Nothing herein shall prevent either party from commencing
a proceeding in the United States District Court having jurisdiction
over the dispute for the purposes of having said court select an Umpire
pursuant to the Federal Arbitration Act 9 USC 1 (er seq).
B. Each party shall present its case to the Arbiters within 30 days
following the date of appointment of the Umpire. The Arbiters shall
consider this Contract as an honourable engagement rather than merely
as a legal obligation and they are relieved of all judicial formalities
and may abstain from following the strict rules of law. 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
written decision of the Arbiters may be entered in any court of
competent jurisdiction.
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C. If more than one of the Reinsurers is involved in the same dispute, all
such Reinsurers shall constitute and act as one party for purposes of
this Article and communications shall be made by the Company to each of
the reinsurers constituting one party, provided, however, that nothing
herein shall impair the rights of such Reinsurers to assert several,
rather than joint, defenses or claims, nor be construed as changing the
liability of the Reinsurers participating under the terms of this
Contract from several to joint.
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. In the event that the two Arbiters are chosen by one party,
as above provided, the expense of the Arbiters, the Umpire and the
Arbitration shall be equally divided between the two parties.
E. Any Arbitration proceedings shall take place at a location in
Lawrenceville, New Jersey. All proceedings pursuant hereto shall be
governed by the law of the State of New Jersey.
ARTICLE XVIIII: SERVICE OF SUIT
A. It is agreed that in the event of the failure of the Reinsurers hereon to
pay any amount claimed to be due hereunder, the Reinsurers hereon, at the
request of the Company, will submit to the jurisdiction of a court of
competent jurisdiction within the United States. The foregoing shall not
constitute a waiver of the right of the Reinsurers to commence any suit
in, or to remove, remand or transfer any suit to any other court of
competent jurisdiction in accordance with the applicable statutes of the
state or United States pertinent thereto.
B. It is further agreed that service of process in such suit may be made
upon Saiber Xxxxxxxxxxx Xxxx & Xxxxxxxxx, Xxx Xxxxxxx Xxxxxx, Xxxxxx, XX
00000-0000, Xxxxxx Xxxxxx of America, and that in any suit instituted
against any one of them upon this Contract, the Reinsurers will abide by
the final decision of such Court or of any Appellate Court in the event
of an appeal.
C. The above named are authorized and directed to accept service of process
on behalf of the Reinsurers in any suit and/or upon the request of the
Company to give a written undertaking to the Company that they will enter
a general appearance upon the Reinsurers behalf in the event such suit
shall be instituted.
D. Further, pursuant to any statute of any state, territory or District of
the United States which makes provision therefor, the Reinsurers hereon
hereby designate the Superintendent, Commissioner or Director of
Insurance or other officer specified for that purposes in the statute, or
his successor or successors in office, as their true and lawful attorney
upon whom may be served any lawful proceeding in any action, suit or
proceeding instituted by or on behalf of the Company or any beneficiary
hereunder arising out of this Contract, and hereby designate the above
named as the person to whom said officer is authorized to mail such
process or a true copy thereof.
ARTICLE XX: INTERMEDIARIES
Medical Brokers, Inc and JLT Risk Solutions are hereby recognized as the
Intermediaries negotiating this Contract for all business hereunder. All
communications (including but not limited to notices of: statements, premium,
return premium, commissions, taxes, losses, Loss Adjustment Expense, salvage and
loss settlements) relating thereto shall be transmitted to the Company or the
Reinsurers through JLT Risk Solutions. Payments by the Company to the
Intermediaries shall be deemed to constitute payment to the Reinsurers. Payments
by the Reinsurers to the Intermediaries
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shall be deemed to constitute payment to the Company only to the extent that
such payments are actually received by the Company.
Notwithstanding the above, the Company and Reinsurers hereby agree that all
payments will be direct from the Reinsurers to the Company, or from the Company
to the Reinsurers, as appropriate.
ARTICLE XXI: PROPERTY COVERAGE
The Company may incept at any time during the Contract Period, Property coverage
including Fire, Allied Lines and Extended Coverages, Inland Marine and
Commercial Multi-Peril coverages all when written in conjunction with other
coverages specified elsewhere within the Contract for limits for:-
$14,500,000 Ultimate Net loss plus pro-rata loss adjustment expenses as
respects each and every loss, each original policy
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Excess of:-
$ 500,000 Ultimate Net loss plus pro-rata loss adjustment expenses as
respect each and every loss, each original policy
Coverage shall be subject to the following exclusions and conditions:-
1) Earthquake coverages
2) Seepage and Pollution
3) Within 60 days after the end of each quarter the Company shall provide
Reinsurers with a claims bordereaux outlining any claim on which the
Company has placed a reserve value of more than $300,000.
Losses and adjustment expenses are recoverable by the Company immediately
after receipt of proof of loss subject to the retention applicable
herein.
4) Within 60 days after the end of the quarter that any coverage attaches
the Company shall provide the Reinsurers with a Premium bordereaux
outlining the premium applicable to the original policy and also the
premium applicable to reinsurance.
NUCLEAR INCIDENT EXCLUSION CLAUSE
LIABILITY - REINSURANCE - U.S.A
1. This Agreement does not cover any loss or liability accruing to the
Cedent as a member of, or subscriber to, any association of insurers or
reinsurers formed for the purpose of covering nuclear energy risks or as
a direct or indirect reinsurer of any such member, subscriber or
association.
2. Without in any way restricting the operation of paragraph (1) of this
Clause it is understood and agreed that all purposes of this Agreement
all the original policies of the Cedent (new, renewal and replacement) of
the classes specified in Clause II of this paragraph (2) from the time
specified in Clause III of this paragraph (2) shall be deemed to include
the following provision (specified as the Limited Exclusion Provision):
Limited Exclusion Provision
I. It is agreed that the policy does not apply under any
liability coverage, to (injury, sickness, disease, death or
destruction (bodily injury or property damage
with respect to which an insured under the policy is also an
insured under a nuclear energy liability policy issued by
Nuclear Energy Liability Insurance Association, Mutual Atomic
Energy Liability Underwriters or Nuclear Insurance Association
of Canada, or would be an insured under any such policy but
for its termination upon exhaustion of its limit of liability.
II. Family Automobile Policies (liability only), Special
Automobile Policies (private passenger automobiles, liability
only), Farmers Comprehensive Personal Liability Policies
(liability only), Comprehensive Personal Liability Policies
(liability only) or policies of a similar nature; and the
liability portion of combination forms related to the four
classes of policies stated above, such as the Comprehensive
Dwelling Policy and
14
the applicable types of Homeowners Policies.
III. The inception dates and thereafter of all original policies as
described in II above, whether new, renewal or replacement,
being policies which either
(a) become effective on or after 1st May, 1960, or
(b) become effective before that date and contain the
Limited Exclusion Provision set out above; provided
this paragraph (2) shall not be applicable to Family
Automobile Policies, Special Automobile Policies or
policies or combination policies of a similar nature,
issued by the Cedent on New York risks, until 90 days
following approval of the Limited Exclusion Provision
by the Governmental Authority having jurisdiction
thereof.
3. Except for those classes of policies specified in Clause II of
paragraph (2) and without in any way restricting the operation of
paragraph (1) of this Clause, it is understood and agreed that for all
purposes of this Agreement the original liability policies of the
Cedent (new, renewal and replacement) affording the following
coverages: Owners, Landlords and Tenants Liability, Contractual
Liability, Elevator Liability, Owners or Contractors (including
railroad), Protective Liability, Manufacturers and Contractors
Liability, Product Liability, Professional and Malpractice Liability,
Storekeepers Liability, Garage Liability, Automobile Liability
(including Massachusetts Motor Vehicle or Garage Liability)
shall be deemed to include, with respect to such coverages, from the
time specified in Clause V of this paragraph (3), the following
provision (specified as the Broad Exclusion Provision):
Broad Exclusion Provision
It is agreed that the policy does not apply:
Under an Liability Coverage, to
(injury, sickness, disease, death or destruction
(bodily injury or property damage
(a) with respect to which an insured under the policy
is also an insured under a nuclear energy liability policy
issued by Nuclear Energy Liability Insurance Association,
Mutual Atomic Energy Liability Underwriters or Nuclear
Insurance Association of Canada, or would be an insured under
any such policy but for its termination upon exhaustion of its
limit of liability; or
(b) resulting from the hazardous properties of nuclear
material and with respect to which (1) any person or
organization is required to maintain financial protection
pursuant to the Atomic Energy Act of 1954, or any law
amendatory thereof, or (2) the insured is, or had this policy
not been issued would be, entitled to indemnity from the
United States of America, or any agency thereof, under any
agreement entered into by the United States of America, or any
agency thereof, with any person or organization.
I. Under any Medical Payments Coverage, or under any Supplementary Payment
Provision relating to
(immediate medical or surgical relief,
(first aid,
15
to expenses incurred with respect to
(bodily injury, sickness, disease or death
(bodily injury
resulting from the hazardous properties of nuclear material
and arising out of the operation of a nuclear facility by any
person or organization.
16
II. Under any liability Coverage, to
(injury, sickness, disease, death or destruction (bodily injury or
property damage resulting from the hazardous properties or nuclear
material if
(a) the nuclear material (1) is at any nuclear facility owned by,
or operated by or on behalf of, an insured or (2) has been discharged
or dispersed therefrom;
(b) the nuclear material is contained in spent fuel or waste at
any time possessed, handled, used, processed, stored, transported or
disposed or by or on behalf of an insured; or
(c) (the injury, sickness, disease, death or destruction (the
bodily injury or property damage arises out of the furnishing by an
insured of services, materials, parts or equipment in connection with
the planning, construction, maintenance, operation or use of any
nuclear facility, but if such facility is located within the United
States of America, its territories, or possessions or Canada, this
exclusion (c) applies only to (injury to or destruction of property at
such nuclear facility. (property damage to such nuclear facility and
any property thereat.
III. As used in this endorsement:
"hazardous properties" include radioactive, toxic or explosive
properties; "nuclear material" means source material, special nuclear
material or by-product material; "source material", "special nuclear
material" and by-product material" have the meanings given to them in
the Atomic Energy Act of 1954 or in any law amendatory thereof; "spent
fuel" means any fuel element or fuel component, solid or liquid, which
has been used or exposed to radiation in a nuclear reactor; "waste"
means any waste material (1) containing by-product material and (2)
resulting from the operation by any person or organization of any
nuclear facility included within the definition of nuclear facility
under paragraph (a) or (b) thereof; "nuclear facility" means
(a) any nuclear reactor,
(b) any equipment or device designed or used for (1) separating
the isotopes of uranium or plutonium, (2) processing or
utilizing spent fuel, or (3) handling, processing or packaging
waste,
(c) any equipment or device used for the processing, fabricating
or alloying of special nuclear material if at any time the
total amount of such material in the custody of the Insured at
the premises where such equipment or device is located
consists of or contains more than 25 grams of plutonium or
uranium 233 or any combination thereof, or more than 250 grams
of uranium 235,
(d) any structure, basin, excavation, premises or place prepared
or used for the storage or disposal of waste,
and includes the site on which any of the foregoing is located, all
operations conducted on such site and all premises used for such
operations; "nuclear reactor" means any apparatus designed or used to
sustain nuclear fission in a self-supporting chain reaction or to contain a
xxxxxxxx xxxx of fissionable material; (with respect to injury to or
destruction of property, the word "injury" or "destruction" (property
damage" includes all forms of radioactive contamination of property.
17
(includes all forms of radioactive contamination of property.
IV. The inception dates and thereafter of all original policies
affording coverages specified in this paragraph (3), whether
new, renewal or replacement, being policies which become
effective on or after 1st May, 1960, provided this paragraph
(3) shall not be applicable to
(i) Garage and Automobile Policies issued by the Cedent
on New York risks, or
(ii) Statutory liability insurance required under Chapter
90, General Laws of Massachusetts, until 90 days
following approval of the Broad Exclusion Provision
by the Governmental Authority having jurisdiction
thereof.
4. Without in anyway restricting the operation of paragraph (1) of this
Clause, it is understood and agreed that paragraphs (2) and (3) above
are not applicable to original liability policies of the Cedent in
Canada and that with respect of such policies this Clause shall be
deemed to include the Nuclear Energy Liability Exclusion Provisions
adopted by the Canadian Underwriters' Association or the Independent
Insurance Conference of Canada.
Note: The words printed in italics in the Limited Exclusion provision and in
the Broad Exclusion provision apply only in relation to original
liability policies which include a Limited Exclusion provision or a
Broad Exclusion Provision containing these words.
NUCLEAR INCIDENT EXCLUSION CLAUSE
LIABILITY - REINSURANCE - CANADA
1. This Contract does not cover any loss or liability accruing to the
Company as a member of, or subscriber to, any association of insurers or
reinsurers formed for the purpose of covering nuclear energy risks or as
a direct or indirect reinsurer of any such member, subscriber, or
association.
2. Without in any was restricting the operation of paragraph 1 of this
Clause it is agreed that for all purposes of this Contract all the
original liability contracts of the Company, whether new, renewal or
replacement, of the following classes, namely,
Personal Liability,
Farmers Liability,
Storekeepers Liability,
Which become effective on or after 31st December 1984, shall be deemed to
include, from their inception dates and thereafter, the following provision:
Limited Exclusion Provision
This Policy does not apply to bodily injury or property damage with
respect to which the Insured is also insured under a contract of
nuclear energy liability insurance (whether the insured is named in
such contract or not and whether or not it is legally enforceable by
the Insured) issued by the Nuclear Insurance Association of Canada or
any other group or pool of insurers or would be an Insured under any
such policy but for its termination upon exhaustion of its limit of
liability.
With respect to property, loss of use of such property shall be deemed
to be property damage.
18
3. Without in any way restricting the operation of paragraph 1 of this
Clause it is agreed that for all purposes of this Contract all the
original liability contracts of the Company, whether new, renewal or
replacement, of any class whatsoever (other than Personal Liability,
Farmers Liability, Storekeepers Liability or Automobile Liability
contracts), which become effective on or after 31st December 1984,
shall be deemed to include, from their inception dates and thereafter,
the following provision:-
Broad Exclusion Provision
It is agreed that this Policy does not apply:
(a) to liability imposed by or arising under the Nuclear Liability
Act; or
(b) to bodily injury or property damage with respect to which an
Insured under this Policy is also insured under a contract of
nuclear energy liability insurance (whether the Insured is
named in such contract or not and whether or not it is legally
enforceable by the Insured) issued by the Nuclear Insurance
Association of Canada or any other insurer or group or pool of
insurers or would be an Insured under any such policy but for
its termination upon exhaustion of its limit of liability; or
(c) to bodily injury or property damage resulting directly or
indirectly from the nuclear energy hazard arising from:
(1) the ownership, maintenance, operation or use of a
nuclear facility by or on behalf if an Insured;
(2) the furnishing by an Insured of services,
materials, parts or equipment in connection with the
planning, construction, maintenance, operation or use
of any nuclear facility; and
(3) the possession, consumption, use, handling,
disposal or transportation of fissionable substances
or of other radioactive material (except radioactive
isotopes away from a nuclear facility, which have
reached the final stage of fabrication so as to be
usable for any scientific, medical, agricultural,
commercial or industrial purpose) used, distributed,
handled or sold by an Insured.
As used in this Policy:
(I) the term "nuclear energy hazard" means the radioactive, toxic,
explosive or other hazardous properties of radioactive
material;
(II) the term "radioactive material" means uranium, thorium,
plutonium, neptunium, their respective derivatives and
compounds, radioactive isotopes of other element and any other
substances that the Atomic Energy Control Board may, by
regulation, designate as being prescribed substances capable
of releasing atomic energy, or as being requisite for the
production, use or application of atomic energy;
(III) The term "nuclear facility" means:
(a) any apparatus designed or used to sustain nuclear
fission in a self-supporting chain reaction or to
contain a xxxxxxxx xxxx of plutonium, thorium and
uranium or any one or more of them;
(b) any equipment or device designed or used for (i)
separating the
19
isotopes of plutonium, thorium and uranium or any one
or more of them, (ii) processing or utilizing spent
fuel, or (iii) handling, processing or packaging
waste;
(c) any equipment or device used for the processing,
fabricating or alloying of plutonium, thorium or
uranium enriched in the isotope uranium 233 or in the
isotope uranium 235, or any one or more of them if at
any time the total amount of such material in the
custody of the Insured at the premises where such
equipment or device is located consists of or
contains more than 25 grams of plutonium or uranium
233 or any combination thereof, or more than 250
grams of uranium 235;
(d) any structure, basin, excavation, premises or
place prepared or used for the storage or disposal of
waste radioactive material; and includes the site on
which any of the foregoing is located, together with
all operations conducted thereon and all premises
used for such operations,
(IV) the term "fissionable substance" means any prescribed substance that
is, or from which can be obtained, a substance capable of releasing
atomic energy by nuclear fission.
(V) With respect to property, loss of use of such property shall be deemed
to be property damage.
20
IN ALL COMMUNICATIONS PLEASE QUOTE
THE FOLLOWING REFERENCE
901/LK9905081
REINSURANCE
POLICY
THE COMPANY IS REQUESTED TO READ THIS POLICY CAREFULLY. IF IT IS BELIEVED TO BE
INCORRECT THE POLICY SHOULD BE IMMEDIATELY RETURNED, WITH AN EXPLANATION TO:
JLT Risk Solutions Limited
0 Xxxxxxxx Xxxxxx,
Xxxxxx,
XX0X 0XX.
21
----------------------------------------------------------
HANNOVER RUCKVERSICHERUNGS-AKTIENGESELLSCHAFT POLICY
THE COMPANY IS REQUESTED TO READ THIS POLICY CAREFULLY. IF IT IS BELIEVED TO BE
INCORRECT THE POLICY SHOULD BE IMMEDIATELY RETURNED, WITH AN EXPLANATION, TO THE
PERSON OR ENTITY DESIGNATED ON THE BACK PAGE OF THIS POLICY .
-------------------------------------------------------------
IN CONSIDERATION of the Company named in the Schedule having paid the premium
specified in the said Schedule to Hannover Ruckversicherungs-Aktiengesellschaft,
(hereinafter referred to as "Reinsurers"), whose duly authorised representative
has hereunto subscribed his name.
REINSURERS HEREBY AGREE to reinsure the Company against loss as more fully set
forth in this Policy and the attachments hereto during the Period of Reinsurance
stated in the said Schedule, or during any subsequent period as may be mutually
agreed upon between the Company and Reinsurers.
PROVIDED that the liability of Reinsurers subscribing to this Policy shall not
exceed their proportion of the limits of liability expressed in the said
Schedule or such other limits of liability as may be substituted therefor by
Addendum hereon or attached hereto signed by or on behalf of Reinsurers.
If Reinsurers shall make any claim under this Policy with knowledge that the
same is false or fraudulent as regards amount or otherwise, this Policy shall
become null and void forthwith and any and all claims hereunder shall be
forfeited and of no force and effect.
IN WITNESS HEREOF I, being a representative of Reinsurers and duly authorised by
the said Reinsurers to sign this Policy on their behalf, have hereunto
subscribed my name.
Dated this 29th day of September, One Thousand Nine Hundred and Ninety-Nine.
/s/ Xxxxxxx Xxxxxxx
22
Policy Number: 901/LK9905081 Reinsurers reference:
THE SCHEDULE
COMPANY: MEDICAL INTER-INSURANCE EXCHANGE OF NEW JERSEY
ADDRESS: Xxx Xxxxxxxx Xxxx, Xxxxxxxxxxxxx, Xxx Xxxxxx, Xxxxxx
Xxxxxx of America.
PERIOD OF REINSURANCE: Effective 1st January, 1999 covering on a risks
attaching basis for Business Covered and continuous
thereafter unless terminated.
LIMIT OF LIABILITY: All as more fully set forth in the attached Policy
This Policy reinsures 4% part of the 92% of the Limit of Liability expressed in
the attached wording.
INTEREST: All as more fully set forth in the attached Policy
PREMIUM: US$30,000 (being 4% of Minimum and Deposit Premium of
US$750,000) annual, payable quarterly on 31st March,
30th June, 30th September and 31st December.
--------------------------------------------------------------------------------
SEVERAL LIABILITY NOTICE
The subscribing Reinsurers' obligation under contracts of reinsurance to which
they subscribe are several and not joint and are limited solely to the extent of
their individual subscriptions. The subscribing Reinsurers are not responsible
for the subscription of any co-subscribing reinsurer who for any reason does not
satisfy all or part of its obligations.
23
IN ALL COMMUNICATIONS PLEASE QUOTE
THE FOLLOWING REFERENCE
901/LK9905081
REINSURANCE
POLICY
THE COMPANY IS REQUESTED TO READ THIS POLICY CAREFULLY. IF IT IS BELIEVED TO BE
INCORRECT THE POLICY SHOULD BE IMMEDIATELY RETURNED, WITH AN EXPLANATION TO:
JLT Risk Solutions Limited
0 Xxxxxxxx Xxxxxx,
Xxxxxx,
XX0X 0XX.
24
-------------------------------------------------------------
SWISS REINSURANCE COMPANY POLICY
THE COMPANY IS REQUESTED TO READ THIS POLICY CAREFULLY. IF IT IS BELIEVED TO BE
INCORRECT THE POLICY SHOULD BE IMMEDIATELY RETURNED, WITH AN EXPLANATION, TO THE
PERSON OR ENTITY DESIGNATED ON THE BACK PAGE OF THIS POLICY .
-------------------------------------------------------------
IN CONSIDERATION of the Company named in the Schedule having paid the premium
specified in the said Schedule to Swiss Reinsurance Company, (hereinafter
referred to as "Reinsurers"), whose duly authorised representative has hereunto
subscribed his name.
REINSURERS HEREBY AGREE to reinsure the Company against loss as more fully set
forth in this Policy and the attachments hereto during the Period of Reinsurance
stated in the said Schedule, or during any subsequent period as may be mutually
agreed upon between the Company and Reinsurers.
PROVIDED that the liability of Reinsurers subscribing to this Policy shall not
exceed their proportion of the limits of liability expressed in the said
Schedule or such other limits of liability as may be substituted therefor by
Addendum hereon or attached hereto signed by or on behalf of Reinsurers.
If Reinsurers shall make any claim under this Policy with knowledge that the
same is false or fraudulent as regards amount or otherwise, this Policy shall
become null and void forthwith and any and all claims hereunder shall be
forfeited and of no force and effect.
IN WITNESS HEREOF I, being a representative of Reinsurers and duly authorised by
the said Reinsurers to sign this Policy on their behalf, have hereunto
subscribed my name.
Dated this 29th day of September, One Thousand Nine Hundred and Ninety-Nine.
/s/ Xxxxxx Xxxxxxxxx
25
Policy Number: 901/LK9905081 Reinsurers reference:
THE SCHEDULE
COMPANY: MEDICAL INTER-INSURANCE EXCHANGE OF NEW JERSEY
ADDRESS: Xxx Xxxxxxxx Xxxx, Xxxxxxxxxxxxx, Xxx Xxxxxx, Xxxxxx
Xxxxxx of America.
PERIOD OF REINSURANCE: Effective 1st January, 1999 covering on a risks
attaching basis for Business Covered and continuous
thereafter unless terminated.
LIMIT OF LIABILITY: All as more fully set forth in the attached Policy
This Policy reinsures 60% part of the 92% of the Limit of Liability expressed in
the attached wording.
INTEREST: All as more fully set forth in the attached Policy
PREMIUM: US$450,000 (being 60% of Minimum and Deposit Premium
of US$750,000) annual, payable quarterly on 31st
March, 30th June, 30th September and 31st December.
--------------------------------------------------------------------------------
SEVERAL LIABILITY NOTICE
The subscribing Reinsurers' obligation under contracts of reinsurance to which
they subscribe are several and not joint and are limited solely to the extent of
their individual subscriptions. The subscribing Reinsurers are not responsible
for the subscription of any co-subscribing reinsurer who for any reason does not
satisfy all or part of its obligations.
