SPECIAL EXCESS OF LOSS REINSURANCE AGREEMENT
(hereinafter referred to as "Agreement")
made and entered into by and between
MBIA Insurance Corporation, Armonk, New York; and/or MBIA
Assurance S. A., Paris, France; and/or any other insurance or
reinsurance company subsidiaries of MBIA Inc. listed in Exhibit
No. 1 attached to this Agreement (hereinafter referred to as
the "Company"), and
MUENCHENER RUECKVERSICHERUNGS-GESELLSHAFT
(hereinafter referred to as the "Reinsurer').
In consideration of the mutual covenants hereinafter contained, the parties
hereto agree as follows:
ARTICLE 1
ACQUISITION
In the event that, following the execution of this Agreement, the Company
notifies the Reinsurer of a proposed acquisition by the Company of an insurance
company (a "Target") and provides the Reinsurer with such due diligence
information as the Reinsurer may reasonably request with respect to such Target
(including without limitation information relating to the effect on this
Agreement of the inclusion of the Target as a reinsured hereunder) (the
"Information"), the Reinsurer shall use its best efforts to provide, within 30
days following receipt of the Information, a written notice to the Company which
notice shall state whether or not the Reinsurer will consent to the inclusion of
such Target as a reinsured hereunder upon consummation of the acquisition of
such Target by the Company. If the Reinsurer consents to the inclusion of a
Target as a reinsured hereunder, such Target shall be included in the term
"Company" from and after the date on which the Company's acquisition of the
Target is consummated, and the Company shall prepare and deliver to the
Reinsurer an addendum to this Agreement that revises Exhibit #1 to include the
name of such Target thereon. The 30-day period referred to above shall not
commence until all of the Information reasonably requested by the Reinsurer has
been received by the Reinsurer.
Effective: September 1, 1998 1 of 14
ARTICLE 2
COMMENCEMENT AND TERMINATION
Covering Incurred Losses from 12:01 a.m. Standard Time, September 1, 1998 (the
"Effective Date") through 12:01 a.m., Standard Time, September 1, 2004 (the
"Termination Date"). "Standard Time" shall mean the time as described in the
Policies. This Agreement shall not terminate until all of the obligations by
both parties to the Agreement have been fulfilled.
ARTICLE 3
BUSINESS AND TERRITORY COVERED
This Agreement shall cover all Policies attaching on or after the Effective Date
that provide insurance against financial loss by reason of nonpayment or
regularly scheduled principal and interest obligations arising under Issues sold
by Issuers domiciled anywhere in the world.
The liability of the Reinsurer shall be subject in all respects to all the
general and specific stipulations, clauses, waivers, extensions, modifications
and endorsements of any of the Policies of the Company's liability, subject to
the exclusions set forth in the Exclusions Article and the other terms and
conditions of this Agreement as set forth herein.
ARTICLE 4
EXCLUSIONS
The exclusions shall be as per the original Policies.
ARTICLE 5
REINSURANCE CLAUSE
Subject to the Aggregate Limit, the Reinsurer shall pay up to $50,000,000
Ultimate Net Loss in excess of $0 Ultimate Net Loss each and every Occurrence
Incurred during the term of this Agreement. The Reinsurer shall pay to the
Company as Ultimate Net Loss recoverable hereunder is Incurred. The Aggregate
Limit of this Agreement is $50,000,000.
ARTICLE 6
DEFINITIONS
A. "Allocated Loss Adjustment Expenses" as used in this Agreement means all
court costs, interest upon judgments, and mitigation, investigation,
adjustment, and legal expenses
Effective: September 1, 1998 2 of 14
chargeable to: (i) the mitigation, investigation, negotiation, settlement
of or defense against a Loss, (ii) loss prevention, mitigation or
investigation in respect of Policies as to which the Company has posted a
loss reserve, (iii) the investigation and workout of a potential Loss, or
(iv) the protection, perfection and exercise of any subrogation or salvage
or reimbursement rights or security interests with respect to a Policy.
Allocated Loss Adjustment Expenses shall exclude all office expenses and
salaries of officials and employees of the Company.
B. "Incurred Loss" as used in this Agreement means the date and time of the
Loss recorded on the books and records of the Company with respect to the
estimated amount of default of the Issuer's obligation to pay principal or
interest pursuant to the terms of a bond, note, or other instrument insured
by a Policy.
C. "Issue" as used in this Agreement means all obligations of one Issuer sold
simultaneously, secured by a single revenue source (with essentially the
same structure) or, in the case of structured finance or asset-backed
securities, secured by a common pool of assets and, in either case, covered
by a Policy. The Company shall be the sole judge of what constitutes one
Issue.
D. "Issuer" as used in this Agreement means, with respect to an Issue, the
entity issuing the bonds, notes, or other instruments comprising the Issue.
The Company shall be the sole judge of what constitutes one Issuer.
E. "Loss" as used in this Agreement means the actual or, in the Company's best
judgment, anticipated amounts of principal and interest for which the
Company is liable with respect to all claims under all Policies.
F. "Occurrence" as used in this Agreement means an actual or, in the Company's
best judgment, anticipated default by an individual Issuer.
G. "Ultimate Net Loss" as used herein shall mean the Company's initial
estimate of the sum of Loss and Allocated Loss Adjustment Expense Incurred
by the Company less inuring reinsurance, if any, plus any upward
adjustments in such estimates. The Reinsurer agrees that any downward
adjustments in the Company's Loss and Allocated Loss Adjustment Expense
shall be disregarded when calculating Ultimate Net Loss hereunder.
The following shall apply with respect to Ultimate Net Loss herein:
I. Nothing in this Definition shall be construed as meaning the Reinsurer
shall not pay the amount of reinsurance recoverable hereunder until
the actual Ultimate Net Loss has been determined.
II. The Company shall make quarterly adjustments to the estimates of
Ultimate Net Loss beginning in the third quarter of 1998. The final
adjustment to any estimates of Ultimate Net Loss Incurred during the
Term of this Agreement shall be made seven years after the Company
sets its initial Ultimate Net Loss estimate for each
Effective: September 1, 1998 3 of 14
Occurrence hereunder (or by mutual agreement at some other time). Such
final calculation of Ultimate Net Loss shall be based upon the Company's
estimate of Ultimate Net Loss as entered on the Company's books at that
time.
III. At each adjustment of Ultimate Net Loss, the amount of reinsurance
recoverable hereunder shall be recalculated based on such calculation of
Ultimate Net Loss. All amounts due the Company shall be payable in
accordance with the Accounts, Reports and Payments and the Retention and
Limits Articles hereunder.
ARTICLE 7
PREMIUM
The Company shall pay to the Reinsurer a flat premium equal to $2,000,000,
payable no later than 30 days after binding coverage with the Reinsurer.
ARTICLE 8
ACCOUNTS, REPORTS AND PAYMENTS
A. The Company shall furnish to the Reinsurer quarterly accounts of business
ceded hereunder within 25 days after the close of each calendar year
quarter, showing: the sums of Incurred Loss, Allocated Loss Adjustment
Expense and Ultimate Net Loss hereunder, as well as adjustments to the
amount of reinsurance recoverable hereunder.
B. The amount of reinsurance recoverable hereunder shall be calculated by
taking the Ultimate Net Loss and deducting $0 of Ultimate Net Loss each and
every Occurrence but shall never exceed the Aggregate Limit of $5O,OOO,OOO.
C. To the extent that the amount of reinsurance recoverable hereunder
increases, the Reinsurer shall owe the Company such increase in amount of
reinsurance recoverable hereunder over that recoverable under the prior
account.
D. Such net balance shown shall be payable within 10 days of the Reinsurer's
receipt of the account.
ARTICLE 9
DUE DILIGENCE
Prior to ceding any business to the Reinsurer hereunder, the Company agrees to
provide the Reinsurer with sufficient information for the Reinsurer to complete
an underwriting due diligence of the Company. Such "sufficient information"
shall be comprised of a presentation by the Company reviewing the Company's
underwriting process for each segment of business
Effective: September 1, 1998 4 of 14
contemplated being ceded to the Reinsurer hereunder and sufficient access to
underwriting files in each of those segments to ensure that such underwriting
processes are in fact being observed within the Company's underwriting of its
business. In the event that such due diligence conducted by the Reinsurer
results in a determination not to proceed with the Agreement, the Reinsurer
reserves the right to terminate this Agreement upon written notice to the
Company. Such determination to terminate this Agreement shall be advised within
two business days of completion of said due diligence.
ARTICLE 10
CLAIMS AND LOSSES
(1) The Company shall have complete and sole control of and direction of all
efforts to: (i) mitigate, investigate, negotiate, settle or defend a Loss,
(ii) prevent, mitigate, or investigate a probable Loss under Policies as to
which the Company has posted a loss reserve, (iii) investigate and work out
a potential Loss, and (iv) to protect, perfect and exercise any
subrogation, salvage or reimbursement rights or security interests with
respect to any Policy, and may take any action as it may deem advisable
with respect thereto. All Loss settlements by the Company, all salvage and
subrogation settlements, and all settlements with an Issuer (or with an
underlying obligor of that Issuer), shall be final, conclusive and
unconditionally binding upon the Reinsurer.
(2) The Reinsurer shall pay to the Company the Reinsurer's Proportionate Share
of any loss within ten business days following receipt of notice from the
Company that the Company has made payment of the Loss. The Reinsurer shall
effect payment by wire transfer of federal funds to the party designated by
the Company in the notice. Details of the Loss will be provided to the
Reinsurer by the Company promptly by mail, or by such other means as
requested by the Reinsurer.
(3) The Reinsurer shall pay to the Company the Reinsurer's Proportionate Share
of any Allocated Loss Adjustment Expenses paid by the Company at the times
and in the manner specified in the Accounts, Reports and Payments Article.
ARTICLE 11
REINSURANCE FOLLOWS ORIGINAL POLICIES
This Agreement shall be construed as an honorable undertaking between the
parties hereto and shall not be defeated by technical legal construction, it
being the intention of this Agreement that the fortunes of the Reinsurer shall
follow the fortunes of the Company. Nothing herein shall in
Effective: September 1, 1998 5 of 14
any manner create any obligations or establish any rights against the Reinsurer
in favor of any third parties or any persons not parties to this Reinsurance
Agreement.
ARTICLE 12
REINSURANCE TAX
In consideration of the terms under which this Agreement is issued, the Company
undertakes not to claim any deduction of the premium hereon when making Canadian
tax returns or when making tax returns, other than Income or Profits Tax
returns, to any state or territory in the United States of America or to the
District of Columbia.
ARTICLE 13
FEDERAL EXCISE TAX
(This Article applies only to those reinsurers domiciled outside of the United
States of America who are not exempt from the Federal Excise Tax.)
The Reinsurer has agreed to allow for the purpose of paying the Federal Excise
Tax the percentage specified by United States law of the premium payable hereon
to the extent such premium is subject to Federal Excise Tax.
In the event of any return of premium becoming due hereunder, the Reinsurer will
deduct the percentage specified by United States law from the amount of the
return and the Company or its agent should take steps to recover the Tax from
the United States Government.
ARTICLE 14
ACCESS TO RECORDS
The Reinsurer shall have the right to inspect at all reasonable times during the
currency of the Agreement and thereafter, the books, records and documents of
the Company with respect to its participation in the insurance or reinsurance
provided by the Company.
ARTICLE 15
CURRENCY
Where the word "dollars" and/or the sign "$" appear in this Agreement, they
shall mean United States dollars, except in those cases where the original
policy is issued by the Company in Canadian dollars, in which case they shall
mean Canadian dollars.
Effective: September 1, 1998 6 of 14
For purposes of this Agreement, where the Company receives premiums or pays
losses in currencies other than United States or Canadian currency, 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 the Company's
books.
ARTICLE 16
SERVICE OF SUIT
(This Article shall apply only if the Reinsurer is domiciled outside of the
United States of America or if the Reinsurer is not authorized in the State of
New York.)
(1) In the event of the failure of the Reinsurer to pay any amount claimed to
be due hereunder, the Reinsurer, at the request of the Company, will submit
to the jurisdiction of a court of competent jurisdiction within the United
States of America. Nothing in this Article constitutes or should be
understood to constitute a waiver of the Reinsurer's rights to commence an
action in any court of competent jurisdiction in the United States of
America, to remove an action to a district court of the United States of
America, or to seek a transfer of a case to another court as permitted by
the laws of the United States of America or of any State in the United
States of America. It is further agreed that service of process on the
Reinsurer in such suit may be made upon Messrs. Mendes & Mount, 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 (or other agent previously designated
by the Reinsurer which designation has been previously notified to the
Company), and that in any suit instituted against the Reinsurer, the
Reinsurer will abide by the final decision of such court or, in the case of
an appeal, the appellate court.
(2) The above-named firm is authorized and directed to accept service of
process on behalf of the Reinsurer in any such suit and/or upon the request
of the Company to give written undertaking to the Company that such firm
will enter a general appearance upon the Reinsurer's behalf in the event
such a suit shall be instituted.
(3) Further, pursuant to any statute of any state, territory or district of the
United States of America which makes provision therefor, the Reinsurer
hereon hereby designates the superintendent, commissioner or director of
insurance or other officer specified for that purpose in the statute, or
his successor or successors in office, as its true and lawful attorney upon
whom may be served any lawful process in action, suit or proceeding
instituted by or on behalf of the Company or any beneficiary hereunder
arising out of this Agreement, and hereby designates the above named as the
person to whom the said officer is authorized to mail such process or a
true copy thereof.
Effective: September 1, 1998 7 of 14
ARTICLE 17
ARBITRATION
(1) As a condition precedent to any right of action hereunder, any dispute
arising out of or related to this Agreement shall be submitted to the
decision of a board of arbitration composed of two arbitrators and an
umpire, meeting in Armonk, New York, unless otherwise agreed.
(2) The members of the board of arbitration shall be active or retired
disinterested officials of insurance or reinsurance companies. Each party
shall appoint its arbitrator, and the two arbitrators shall choose an
umpire before instituting the hearing. If the respondent fails to appoint
its arbitrator within four weeks after being requested to do so by the
claimant, the latter shall also appoint the second arbitrator. If the two
arbitrators fail to agree upon the appointment of an umpire within four
weeks after their nominations, the umpire shall be selected by the regional
director of the American Arbitration Association in New York, New York, or
the regional director's delegate.
(3) The claimant shall submit its initial brief within 20 days from appointment
of the umpire. The respondent shall submit its brief within 20 days after
receipt of the claimant's brief and the claimant shall submit a reply brief
within 10 days after receipt of the respondent's brief.
(4) The board shall make its decision with regard to the custom and usage of
the insurance and reinsurance business. The board shall issue its decision
in writing based upon a hearing in which evidence may be introduced without
following strict rules of evidence but in which cross-examination and
rebuttal shall be allowed. The board shall make its decision within 60 days
following the termination of the hearings unless the parties consent to an
extension. The majority decision of the board shall be final and binding
upon all parties to the proceeding. Judgment may be entered upon the award
of the board in any court having jurisdiction thereof.
(5) If more than one reinsurer 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 the 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 under the terms of this Agreement from several to joint.
(6) Each party shall bear the expense of its own arbitrator and shall jointly
and equally bear with the other party the expense of the umpire. The
remaining costs of the arbitration proceedings shall be allocated by the
board.
(7) Unless prohibited by applicable law, an arbitral award hereunder and any
judgment thereon shall bear interest from the date the arbitral award was
rendered at the rate equal from time to time to the rate publicly announced
by Citibank, N. A., as its base rate plus 2%.
Effective: September 1, 1998 8 of 14
(8) The parties consent to the jurisdiction of the Supreme Court of the State
of New York, County of New York, and of the United States District Court
for the Southern District of New York, for all purposes in connection with
such arbitration, including without limitation any application to compel
arbitration or to confirm an arbitration award. The parties consent that
any process or notice of motion or other application to either of said
Courts, and any paper in connection with arbitration, may be served by
certified mail, return receipt requested, or by personal service or in such
other manner as may be permissible under the rules of the applicable court
or panel provided a reasonable time for appearances is allowed. Service
upon the Company shall be directed to the Company, in care of the Company's
General Counsel. Service upon the Reinsurer shall be directed to the
Reinsurer in care of its President.
ARTICLE 18
INDEMNIFICATION AND ERRORS AND OMISSIONS
Any recitals in this Agreement to the terms and provisions of any original
insurance or reinsurance are merely descriptive. The Reinsurer is reinsuring, to
the amount herein provided, the obligations of the Company under any original
insurance or reinsurance. The Company shall be the sole judge as to:
(a) what shall constitute a claim or loss covered under any original
insurance or reinsurance written by the Company;
(b) the Company's liability thereunder; and
(c) the amount or amounts which it shall be proper for the Company to pay
thereunder.
The Reinsurer shall be bound by the judgment of the Company as to the
obligation(s) and liability(ies) of the Company under any original insurance or
reinsurance.
Any inadvertent error, omission or delay in complying with the terms and
conditions of this Agreement shall not be held to relieve either party hereto
from any liability which would attach to it hereunder if such error, omission or
delay had not been made, provided such error, omission or delay is rectified
immediately upon discovery.
ARTICLE 19
INSOLVENCY
(1) In the event of the insolvency of the Company, the reinsurance provided by
this Agreement shall be payable by the Reinsurer on the basis of the
liability of the Company under the Policies ceded without diminution
because of the insolvency of the Company or because its liquidator,
receiver, conservator or statutory successor (hereinafter referred to as
the
Effective: September 1, 1998 9 of 14
"Liquidator") has failed to pay all or a portion of any claim. The
Liquidator shall give written notice to the Reinsurer of the pendency of a
claim against the Company under any Policy ceded to Reinsurers and covered
by this Agreement within a reasonable time after such claim is filed in the
conservation or liquidation proceeding or in the receivership. During the
pendency of such claim, the Reinsurer 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 the Liquidator. The expense thus incurred by the Reinsurer 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
Proportionate Share of the benefit which may accrue to the Company solely
as a result of the defense undertaken by the Reinsurer.
(2) Where two or more 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 Agreement as though such
expense has been incurred by the Company.
(3) The reinsurance provided by this Agreement shall be payable by the
Reinsurer to the Company or to the Liquidator, except (a) where the Policy
specifically provides another payee of such reinsurance in the event of the
insolvency of the Company, and (b) where the Reinsurer with the consent of
the direct insured(s) has assumed the obligations of the Company under the
Policies as the direct obligations of the Reinsurer to the payees under
such Policies and in substitution for the obligations of the Company to
such payees.
ARTICLE 20
SECURITY
(l) When a governing body of any jurisdiction in which the Company legally
operates or to which it submits, requires as a condition to credit for the
reinsurance provided by this Agreement that the Reinsurer post a Letter of
Credit for the benefit of the Company, establish a Trust Account for the
benefit of the Company or deposit funds under the control of the Company,
the Reinsurer shall post and maintain such a Letter of Credit, establish
such a Trust Account, or deposit such funds in the form and amount
necessary to permit the Company to avoid on any statutory financial
statement filed by the Company the penalty to surplus which would result
from the loss of credit for the reinsurance.
(2) Notwithstanding any other provisions of this Agreement, it is agreed that
any Letter of Credit provided under section (1) of this Article, shall be
drawn upon and utilized by the Company or its successors in interest only
for one or more of the following purposes:
(a) to reimburse the Company for the Reinsurer's Proportionate Share of
Losses and Allocated Loss Adjustment Expenses paid by the Company
under this Agreement;
Effective: September 1, 1998 10 of 14
(b) to reimburse the Company for the Reinsurer's Proportionate Share of
Refunding Debits;
(c) if this Agreement has been terminated pursuant to the Commencement and
Termination Article, to reimburse the Company for unearned premium due
to the Company;
(d) to fund an account with the Company in an amount at least equal to the
deduction allowed for the reinsurance provided by this Agreement, from
the Company's liabilities for Policies ceded under the Agreement, such
amount to include, if applicable, but not be limited to, amounts for
contingency reserves, loss reserves for paid, reported and incurred
but not reported ("IBNR") losses, allocated loss adjustment expense
reserves and unearned premium reserves; or
(e) to pay any other amounts the Company claims are due under the
Agreement.
All of the foregoing should be applied without diminution because of
insolvency on the part of the Company or Reinsurer.
(3) If the Reinsurer elects to provide a Letter of Credit under section (1) of
this Article, the Reinsurer shall cause the Letter of Credit to be issued,
in place and effective no later than the "as of date" of the first
quarterly filing prepared by the Company for the appropriate regulatory
authority after the effective date of this Agreement.
ARTICLE 21
CONFIDENTIALITY
The Reinsurer and its affiliated companies agree that they will maintain the
confidentiality of the all infor nation (the "Information") presented as a
result of this Agreement including, but not limited to the bonds, the basic
agreements, the reinsurance undertaken with respect to the bonds, all underlying
transactions and underlying obligations, and all certificates, reports,
agreements, notices, and communications of any sort relating to any of the
foregoing in its communications with third parties, except to the extent
required by law, regulation, or order, and except as may be made to the
Reinsurer's legal counsel, auditors, and accountants, to Standard & Poor's
Corporation, Xxxxx'x Investor Services, Inc., Duff & Xxxxxx Corporation, or any
other rating agency in connection with their rating of the Reinsurer and except
as may be necessary or appropriate in connection with any retrocession. The
Reinsurer shall require its retrocessionaires to maintain the confidentiality of
the Information. The Reinsurer and its legal counsel, auditors, and accountants
will have no obligation of confidentiality in respect or any information that
may be available to the public or become available to the public through no
fault of such person.
Effective: September 1, 1998 11 of 14
ARTICLE 22
OFFSET
Each party hereto shall have, and may exercise at any time and from time to
time, the right to offset balance or balances, whether on account of premiums or
on account of Losses or otherwise, due from such party to the other party hereto
under this Agreement or under any other reinsurance heretofore or hereafter
entered into by and between them, and may offset the same against any balance or
balances due or to become due to the former from the latter under the same or
any other reinsurance agreement between them. The party asserting the right of
offset shall have and may exercise such right whether the balance(s) due or to
become due to such party from the other are on account of premiums or on account
of Losses or otherwise and regardless of the capacity, whether as assuming
reinsurer or as ceding company, in which each party acted under the agreement
or, if more than one, the different agreements involved. In the event of the
insolvency of a party hereto, offsets shall be allowed only in accordance with
the provisions of Section 7427 of the Insurance Law of the State of New York.
ARTICLE 23
GOVERNING LAW
This Agreement shall be governed by the laws of the State of New York.
ARTICLE 24
INTERMEDIARY
Xxx Xxxxxxxxx & Company, Inc., Xxx Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx,
00000, is hereby recognized as the Intermediary by which this Agreement was
negotiated and through which all communications relating hereto including, but
not limited to, notices, statements, premiums, return premiums, commissions,
taxes, Losses, Allocated Loss Adjustment Expenses, salvage and Loss settlements,
shall be transmitted to both parties, except as may be otherwise specified in
respect of a wire transfer payment of a Loss (section (2) of the Claims and
Losses Article). It is understood, as regards remittances due either party
hereunder, that payment by the Company to the Intermediary shall constitute
payment to the Reinsurer, but payment by the Reinsurer to the Intermediary shall
constitute payment to the Company only to the extent such payments are actually
received by the Company.
Effective: September 1, 1998 12 of 14
ARTICLE 25
PARTICIPATION
The Reinsurer's Percentage Share of the Interests and Liabilities set out in
this Agreement is 100% of up to $50,000,000.
IN WITNESS WHEREOF the parties hereto, by their respective duly authorized
officers, have executed this SPECIAL EXCESS OF LOSS REINSURANCE AGREEMENT, in
triplicate, as of the dates recorded below:
ACCEPTED:
At: Armonk, New York
this 30th day of December, 1998.
MBIA INSURANCE CORPORATION
MBIA Assurance, S. A.
and/or any other insurance or reinsurance company subsidiaries
of MBIA Inc. listed in Exhibit No. 1 attached to this Agreement
/s/ Xxxxxxxxx X. Xxxxxxx
-------------------------------------------
and at: Munich
this 23rd day of December, 1998
MUENCHENER RUECKVERSICHERUNGS-GESELLSHAFT
/s/ I.V. [ILLEGIBLE]
-------------------------------------------
Effective: September 1, 1998 13 of 14
EXHIBIT NO. 1
Insurance and/or Reinsurance Company Subsidiaries
Included within the Definition of Company hereunder
MBIA Assurance S. A.
MBIA Insurance Corporation
MBIA Insurance Corp. of Illinois
Capital Markets Assurance Corporation
Effective: September 1, 1998 14 of 14
