Exhibit 10.12
UNDERWRITING MANAGEMENT AGREEMENT
THIS UNDERWRITING MANAGEMENT AGREEMENT (this "AGREEMENT"), made as of [ ],
2002, between St. Xxxx Fire and Marine Insurance Company, a Minnesota insurance
company (referred to herein as the "COMPANY"), and Platinum Underwriters
Reinsurance, Inc., a Maryland insurance company (referred to herein as the
"MANAGER").
ARTICLE I
UNDERWRITING AND PRODUCTION MANAGER
Subject to the terms and conditions of this Agreement, the Company hereby
grants Manager full authority to act and the Manager accepts and agrees to act
as underwriting and production manager for the Company for the purpose of
conducting an assumed reinsurance business, subject to the limitations set forth
herein.
ARTICLE II
SCOPE OF AUTHORITY
Subject to the direction and control of the Company, the Manager is hereby
authorized to take and shall undertake all customary and reasonable actions
required on behalf of and in the name of the Company, including but not limited
to soliciting, negotiating, underwriting and executing, on behalf of the
Company, new and renewal assumed reinsurance contracts, subject to Article III,
Underwriting Limits (the "MANAGED CONTRACTS").
ARTICLE III
UNDERWRITING LIMITS
(a) Subject to the provisions of Article II hereof, Manager is authorized
on behalf of the Company to underwrite issuances and renewals of such
traditional reinsurance contracts as determined by the Manager; provided, that
all such issuances and renewals are covered under the one hundred percent (100%)
Quota Share Retrocession Agreement (traditional) between the Company and the
Manager; provided further, that such issuances and renewals shall be
underwritten only in cases where the Manager is unable to underwrite such
contracts itself because: (1) it has not received a necessary or desirable
regulatory license or approval notwithstanding its reasonable best efforts to
obtain it since the date of this agreement, or (2) it has not yet been approved
as a reinsurer by the cedent nothwithstanding its reasonable best efforts to
obtain such approval since the date of this agreement. Prior to the effective
date of any such contract, Manager shall provide to the individual designated
from time to time by the Company in writing a description of the contract to be
issued or renewed, and evidence indicating that the above-stated condition
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has been met. Manager shall be authorized to underwrite such reinsurance
contracts for a period of one year from the date hereof.
(b) Manager shall on behalf of the Company underwrite renewals of finite
reinsurance contracts specified on Schedules A and B attached hereto on such
terms as may be specifically agreed to by the Company. Manager shall have the
discretion to reinsure such contacts under a 100% Quota Share Retrocession
Agreement (non-traditional) between the Company and the Manager. With respect to
the finite reinsurance contracts specified on Schedule B attached hereto,
Manager shall propose a fair market premium to the Company for the one hundred
percent (100%) quota share reinsurance of such renewals and the Company may
elect, at its sole discretion, whether or not to accept such reinsurance.
ARTICLE IV
REPORTS AND RECORDS
(a) Manager shall provide to the Company no later than thirty days after
the end of each month, reports in the form as set forth in Exhibit C attached
hereto, or as otherwise agreed to by the parties, in hard copy and electronic
form.
(b) Manager shall keep and maintain proper books and records wherein shall
be recorded all business transacted by it on behalf of the Company and shall
retain such books and records as may be required by applicable law or in
accordance with the record retention policies of the Company, whichever is
longer. All records of the Manager relating to the Managed Contracts of the
Company shall be open to inspection by the Company or its representatives during
regular business hours and Manager shall provide copies of all such books and
records as may be requested by the Company at the expense of Manager.
ARTICLE V
COSTS AND EXPENSES
Manager shall bear all charges and expenses incurred by it in underwriting
and administering the business with respect to the Managed Contracts reinsured
by it. With respect to services provided hereunder for contracts not reinsured
by Manager, the Company shall pay to Manager the "actual cost" to Manager (which
shall consist of Manager's direct and reasonable indirect costs), as the case
may be, as certified in good faith by Manager.
For greater certainty, the parties agree that "actual cost" will include
any incremental and out-of-pocket costs incurred by Manager in connection with
the Services, 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.
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ARTICLE VI
TERM
This Agreement shall take effect as of the date hereof and shall continue
for a period of three years. The Company will have the option to renew this
Agreement for another two years upon written notice to the Manager no later than
two months prior to the third anniversary hereof.
ARTICLE VII
AUDIT RIGHTS
(a) Upon reasonable prior notice, the Company shall have full access
to any books and records maintained by the Manager and its affiliates insofar as
reasonably necessary for the purposes of confirming amounts properly payable
hereunder or satisfying any duty imposed hereby or resulting herefrom.
(b) The Manager shall permit and co-operate with any inspection by the
regulator or appointee of the regulator of the Company in relation to the
provision of any of the services hereunder.
(c) As soon as reasonably practicable following any request (or, in
the case of access required by the regulator of the Company, whether with or
without notice being given by such regulator), access shall be provided to
auditors, other nominated inspectors of the Company or the regulator or the
appointee of the regulator to relevant facilities where records are maintained
and provision shall be made for such auditors, other inspectors or the regulator
or the appointee of the regulator to receive such assistance as they shall
reasonably request in relation thereto.
(d) In particular, the Manager shall make available to the Company all
information, data and materials:
(i) reasonably requested by the Company so as to enable it to
evaluate the appropriateness of any charges and expenses payable
hereunder; or
(ii) requested by the regulator of the Company or the appointee
of such regulator in connection with any regulatory inspection.
(e) the Manager acknowledge that an audit may be required for
regulatory purposes and shall maintain all relevant records in such manner and
to such standard as may reasonably be requested by the Company for the purposes
of compliance with any regulatory requirements
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ARTICLE VIII
GOVERNING LAW
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the state of New York without regard to its conflict
of laws principles.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed in their names.
ST. XXXX FIRE AND MARINE
INSURANCE COMPANY
By:
-----------------------------
Title:
--------------------------
PLATINUM UNDERWRITERS
REINSURANCE, INC.
By:
-----------------------------
Title:
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EXHIBIT A
FINITE REINSURANCE CONTRACTS
Non-Deficit Balance Contracts
A
EXHIBIT B
FINITE REINSURANCE CONTRACTS
Deficit Balance Contracts
B
EXHIBIT C
REPORT OF MANAGER
C
