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EXHIBIT 10(c)
FLORIDA PHYSICIANS INSURANCE COMPANY
HEALTH CARE FACILITY
CASUALTY FIRST THROUGH FOURTH EXCESS OF LOSS
REINSURANCE AGREEMENT
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FINAL PLACEMENT SLIP
COMPANY: Florida Physicians Insurance Company
a Florida corporation
PERIOD: Continuous and to take effect 12:01 a.m., Eastern
Standard Time, January 1, 1996 (including prior acts),
as respects claims made (or losses occurring as respects
General Liability only) on and after 12:01 a.m., Eastern
Standard Time, January 1, 1996, on policies attaching on
and after 12:01 a.m., Eastern Standard Time, January 1,
1996.
CANCELLATION: At any January 1 by either party via 90 days notice by
certified or registered mail. In the event of
cancellation, each policy in force at cancellation date
will be run off until its cancellation, natural
expiration, or next anniversary date, whichever first
occurs. Alternatively, the Company may elect to cancel
the Reinsurers' liability on a cut-off basis as of the
date of cancellation, and the Reinsurers will not be
liable for any losses occurring and/or claims made on or
after the cancellation date.
Regardless of the cancellation method, Reinsurers'
liability will continue in the event any extended
reporting period options are exercised in accordance
with the Company's claims made policies and/or in the
event the Company is bound by statute or regulation to
continue coverage.
BUSINESS
COVERED: All business written and classified by the Company as
Health Care Facility Liability Insurance, including
General Liability written in conjunction with such
business.
The Company's policies will not exceed 12 months
duration and will contain a warranty to the effect that
there have been no known incidents likely to give rise
to a claim, other than those already reported to the
Company.
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FLORIDA PHYSICIANS INSURANCE COMPANY
HEALTH CARE FACILITIES CASUALTY EXCESS OF LOSS
AR 4303
DEFINITIONS: "Claims made" as used in this Agreement will mean those
claims first made against the insured during the policy
period and occurring on or after the retroactive date, if
any. The date on which a claim is made or reported will
be understood to be the earlier of the date on which a
written notice of claim is received by the Company, or a
report by telephone is made to the Company by the insured
or their representative.
"Retroactive date" as used in this Agreement will mean
the date prescribed in the Company's policy, which is the
earliest date losses can actually occur for which an
insured can claim coverage.
"Extended reporting period" as used in this Agreement
will mean a time period after a policy's termination date
within which claims may be made with respect to
occurrences happening between the original retroactive
date, if any, and the original termination date of the
policy.
EXCLUSIONS: As attached.
TERRITORY: To follow the Company's policies.
RETENTION First Layer
AND
LIMIT: $500,000 ultimate net loss each and every loss,
each and every insured, each and every policy,
excess of
$500,000 ultimate net loss each and every loss,
each and every insured, each and every policy.
Second Layer
$1,000,000 ultimate net loss each and every loss,
each and every insured, each and every policy,
excess of
$1,000,000 ultimate net loss each and every loss,
each and every insured, each and every policy.
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FLORIDA PHYSICIANS INSURANCE COMPANY
HEALTH CARE FACILITIES CASUALTY EXCESS OF LOSS
AR 4303
Third Layer
$4,000,000 ultimate net loss each and every
loss, each and every insured, each and every
policy,
excess of
$2,000,000 ultimate net loss each and every
loss, each and every insured, each and every
policy.
Fourth Layer
$5,000,000 ultimate net loss each and every
loss, each and every insured, each and every
policy,
excess of
$6,000,000 ultimate net loss each and every
loss, each and every insured, each and every
policy.
PREMIUM The Company will pay the Reinsurers the following
AND percentages of the gross written premium on all
CEDING policies written or renewed with an effective date on or
COMMISSION: after the inception of this Agreement:
FIRST LAYER
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Counties of Dade,
Location of Insured Broward, and Balance of
Palm Beach State
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Rate applied to gross written
premium charged by the Company
for the first $500,000 of 29% 18%
limits
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SECOND THROUGH FOURTH LAYERS
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Counties of Dade, Balance of
Location of Insured Broward, and State
Palm Beach
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Rate applied to gross written Second:......25%.........15%
premium charged by the Company Third:.......41%.........21%
for the first $1,000,000 of Fourth:......30%.........15%
limits
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FLORIDA PHYSICIANS INSURANCE COMPANY
HEALTH CARE FACILITIES CASUALTY EXCESS OF LOSS
AR 4303
ALL LAYERS
25% flat ceding commission on gross written
premium ceded.
OTHER Company permitted to purchase facultative reinsurance
REINSURANCE: and to deduct the premium therefor; Company permitted to
purchase other treaty reinsurance, and to deduct the
premium therefor if it inures to the benefit of this
Agreement.
FUNDING OF Letters of Credit required from unauthorized Reinsurers
RESERVES: as respects outstanding case and bulk losses, expenses,
recoverables, and unearned premium.
LOSS EXPENSE: Pro rata in addition to the ultimate net loss.
DECLARATORY
JUDGMENT Included hereunder, whether or not a loss is sustained
EXPENSE: as a result of the action, as per the definition
attached.
REPORTS Reports and remittances within 60 days following the
AND end of each quarter, to include all information required
REMITTANCES: by Reinsurers for completion of their NAIC reports.
OTHER Reinsurers will be subject to terms, conditions,
PROVISIONS: interpretations, waivers, modifications, and alterations
of the Company's policies that are the subject of this
Agreement.
Access to Records Clause
Amendments Clause
Aon Re Inc. Intermediary Clause (does not apply to
General Re)
Arbitration Clause
Delays, Errors, or Omissions Clause
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FLORIDA PHYSICIANS INSURANCE COMPANY
HEALTH CARE FACILITIES CASUALTY EXCESS OF LOSS
AR 4303
Claims Review Clause
Correspondence and Payments Clause (applicable to
General Re only)
Excess of Original Policy Limits (90%)/Extra
Contractual Obligations (90%) Clause -
as attached.
Insolvency Clause
Loss Notices and Settlements Clause - as attached Net
Retained Liability Clause Offset Clause (all Agreements)
Subrogation Clause Service of Suit Clause (NMA 1998)
Ultimate Net Loss, Loss Expense, Declaratory Judgment
Expense, and Right of Appeals Clause - as attached
UNDERWRITING
INFORMATION: The maximum schedule credit that the Company will allow
in respect of the base premiums to which the above rates
will be applied will be 15%.
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FLORIDA PHYSICIANS INSURANCE COMPANY
HEALTH CARE FACILITIES CASUALTY EXCESS OF LOSS
AR 4303
In accordance with your instructions we have placed reinsurance with the
Reinsurer(s) listed hereon, subject to the terms and conditions hereinabove
stated. We ask that you promptly advise us if the terms, conditions, or
Reinsurer(s) vary in any respect from your instructions. Aon Re Inc. will not be
responsible for the financial or other obligations of any Reinsurer(s). Should
you desire financial information regarding the Reinsurer(s) listed hereon,
please contact us and we will furnish it.
REINSURED WITH:
PERCENTAGE
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1ST & 2ND THIRD FOURTH
LAYER LAYER LAYER
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DOMESTIC REINSURERS:
General Reinsurance Corp. 50.00% 50.00% 50.00%
TIG Reinsurance Company 10.91% 10.91% 10.91%
TOTAL FOR DOMESTIC REINSURERS: 60.91% 60.91% 60.91%
FOREIGN REINSURERS:
CNA International Reins. Co. Ltd. 5.21% 9.54% 12.34%
Xxxxx Und Xxxxx 1.04% 0.95% 1.24%
Hannover Ruck - Germany 4.17% 3.81% 4.94%
Terra Nova Ins. - England 2.61% 2.54% 2.06%
Unionamerica Ins. Co. - England 5.21% 9.54% 6.17%
Zurich Re (UK) Ltd. London, England 20.85% 12.71% 12.34%
TOTAL FOR FOREIGN REINSURERS: 39.09% 39.09% 39.09%
TOTAL FOR ALL PARTICIPANTS: 100.00% 100.00% 100.00%
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The Reinsurers' obligations under this Agreement are several and not joint and
are limited solely to the extent of their individual participations. The
Reinsurers are not responsible for the participation of any co-subscribing
Reinsurer who for any reason does not satisfy all or part of its obligations.
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FLORIDA PHYSICIANS INSURANCE COMPANY
HEALTH CARE FACILITIES CASUALTY EXCESS OF LOSS
AR 4303
Assuming that you find everything in order, please indicate your acceptance and
approval by signing and returning this Placement Slip to Aon Re Inc., 000
Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000.
ACCEPTED &
APPROVED:
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REFERENCE
NUMBER: DATED:
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(For processing purposes it is important that you provide your Company's
reference number for this program.)
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FLORIDA PHYSICIANS INSURANCE COMPANY
HEALTH CARE FACILITIES CASUALTY EXCESS OF LOSS
AR 4303
EXCLUSION LIST
No reinsurance indemnity will be afforded under this Agreement for:
A. 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, howsoever 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 of 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, fee, or other obligation in whole or in
part.
B. Reinsurance assumed by the Company other than inter-company
reinsurance.
C. Loss or liability excluded by the provisions of the Nuclear
Incident Exclusion Clause - Liability - Reinsurance - U.S.A. -
attached to this Agreement, or as may be revised hereafter by the
Lloyd's Underwriters' Non-Marine Association.
D. Managed Care Errors and Omissions insurance.
E. The following types of business:
1. SIR business or business with deductibles greater than
$250,000.
2. Business attaching in excess of insurance written by
other carriers.
3. Any risk with a reported loss greater than $1,000,000 in
any one year or a combined incurred loss ratio of more
than 95% for the preceding three years.
4. Risks located in Dade, Broward, or Palm Beach counties.
5. Any risks with an experience modification factor greater
than 1.150 (15% debit).
6. All risks involving:
a. Multiple location hospitals.
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FLORIDA PHYSICIANS INSURANCE COMPANY
HEALTH CARE FACILITIES CASUALTY EXCESS OF LOSS
AR 4303
b. Hospitals with more than 400 beds.
c. Hospitals producing more than $500,000 in
premiums.
Should the Company, by reason of an inadvertent act, error, or omission,
be bound to afford coverage excluded under exclusions E 1 through 6 above, or
should an existing insured extend its operations to include coverage excluded
under exclusions E 1 through 6 above, the Reinsurers will waive the
exclusion(s). The duration of said waiver will not extend beyond the time that
notice of such coverage has been received by the responsible underwriting
authority of the Company plus:
A. The minimum time period required thereafter for the Company to
obtain special acceptance from the Reinsurers (as provided in the
following paragraph); or
B. If special acceptance is not granted by the Reinsurers, the
minimum time period required thereafter for the Company to
terminate such coverage.
The Company may submit to the Reinsurers, for special acceptance
hereunder, business excluded by exclusions E 1 through 6. If said business is
accepted by the Reinsurers, it will be subject to the terms of this Agreement,
except as such terms are modified by such acceptance. Any special acceptance
business covered under the reinsurance Agreement being replaced by this
Agreement will be automatically covered hereunder. Further, should Reinsurers
become a party to this Agreement subsequent to the acceptance of any business
not normally covered hereunder, they will automatically accept same as being a
part of this Agreement.
LOSS NOTICES AND SETTLEMENTS
The Company will advise the Reinsurers promptly of all losses reserved
at $100,000 from the ground up, or that, in the opinion of the Company, may
involve the Reinsurers under this Agreement, and of all subsequent developments
pertaining thereto that may materially affect them as well; however, such losses
will be reported to the Second and higher Layers only if a cession has been made
to the Layer in question. Inadvertent omission in dispatching the aforementioned
notices will in no way affect the obligation of the Reinsurers under this
Agreement, provided the Company informs the Reinsurers of such omission promptly
upon discovery.
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FLORIDA PHYSICIANS INSURANCE COMPANY
HEALTH CARE FACILITIES CASUALTY EXCESS OF LOSS
AR 4303
The Company will have the right to settle all claims under its policies.
The settlements, provided they are within the terms of the Company's policies
and of this Agreement, will be unconditionally binding on the Reinsurers in
proportion to their participation in this Agreement. The Company will likewise,
at its sole discretion, commence, continue, defend, or withdraw from actions,
suits, or proceedings and generally handle all matters related to all claims and
losses, and all payments made and costs and expenses incurred in connection
therewith, or in taking legal advice therefor, will be shared by the Reinsurers.
When so requested, however, the Company will afford the Reinsurers, at the
Reinsurers' own expense, an opportunity to be associated with the Company in the
defense of any claim, suit, or proceeding involving this Agreement, and the
Company and the Reinsurers will cooperate in every respect in such defense.
Amounts due the Company hereunder in the settlement of ultimate net loss and
loss expense will be payable by the Reinsurers immediately upon being furnished
by the Company with reasonable evidence of the amount paid or to be paid in
excess of the Company's retention as set forth in the Retention and Limit
Sections of the Exhibits attached hereto.
EXTRA CONTRACTUAL OBLIGATIONS AND EXCESS LIMITS LIABILITY
This Agreement will extend to cover any losses arising from
claims-related extra contractual obligations and/or excess limits liability:
A. In the case of the First and Second Layers, provided a cession
has been made to this Agreement in respect of the policy under
which the extra contractual obligations and/or excess limits
liability loss arises;
B. In the case of the Third and Fourth Layers, provided a cession
has been made to the Layer in question in respect of the policy
under which the extra contractual obligations and/or excess
limits liability loss arises.
"Extra contractual obligations" as used in this Agreement will mean
those liabilities not covered under any other provision of this Agreement, which
arise from the handling of any claim on business covered hereunder; such
liabilities arising because of, but not limited to, the following: failure to
settle within the policy limit, by reason of alleged or actual negligence,
fraud, or bad faith in rejecting an offer of settlement, in the preparation of
the defense, in the trial of any action against the insured or reinsured, or in
the preparation or prosecution of an appeal consequent upon such action.
"Excess limits liability" as used in this Agreement will mean damages
payable in excess of the policy limit as a result of alleged or actual
negligence, fraud, or bad faith in
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FLORIDA PHYSICIANS INSURANCE COMPANY
HEALTH CARE FACILITIES CASUALTY EXCESS OF LOSS
AR 4303
failing to settle and/or rejecting a settlement within the policy limit, in the
preparation of the defense, in the trial of any action against the insured or
reinsured, or in the preparation or prosecution of an appeal consequent upon
such action. Excess limits liability is any amount for which the Company would
have been contractually liable to pay had it not been for the limits of the
reinsured policy.
There will be no recovery hereunder where the extra contractual
obligation or excess limits liability has been incurred due to fraud committed
by a member of the board of directors or a corporate officer of the Company,
acting individually, collectively, or in collusion with a member of the board of
directors, a corporate officer, or a partner of any other corporation,
partnership, or organization involved in the defense or settlement of a claim on
behalf of the Company.
The date on which any extra contractual obligation and/or excess limits
liability is incurred by the Company will be deemed, in all circumstances, to be
the date of the original loss (as respects occurrence-basis policies), or the
first claim made against the Company's policy (in the case of claims-made-basis
policies). Nothing in this Article will be construed to create a separate or
distinct loss apart from the original covered loss that gave rise to the extra
contractual obligations and/or excess limits liability discussed in the
preceding paragraphs. In no event will the total liability of the Reinsurers
exceed their applicable limit of liability as set forth in the Retention and
Limit Sections of the Exhibits attached hereto.
ULTIMATE NET LOSS, LOSS EXPENSE AND
DECLARATORY JUDGMENT EXPENSE
"Ultimate net loss" as used in this Agreement will mean the amount of
any settlement, award, or judgment paid by the Company or for which the Company
has become liable to pay, including: plaintiff's attorney fees where applicable;
interest accrued prior to final judgment if included as part of loss on
reinsured policies; 90% of any claims-related extra contractual obligations
where applicable and/or 90% of any claims-related excess limits liability where
applicable (however, the maximum contribution to ultimate net loss as respects
any one extra contractual obligations and/or excess limits liability action will
be $2,000,000); and declaratory judgment expense where the Company has not paid
or has not become liable to pay any settlement, award, or judgment under its
policy. Ultimate net loss will also include any coinsurance retention,
deductible, or self-insured retention paid by the insured. Ultimate net loss
will not include loss expense. All recoveries and subrogations which are
actually recovered, and inuring reinsurance whether recovered or not, will be
deducted from the amount of the ultimate net loss. Nothing, however, in this
Agreement will be construed as meaning that losses are not recoverable hereunder
until the actual loss to the Company has been ascertained.
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FLORIDA PHYSICIANS INSURANCE COMPANY
HEALTH CARE FACILITIES CASUALTY EXCESS OF LOSS
AR 4303
"Loss expense" as used in this Agreement will mean all expenses
incurred by the Company in the investigation, appraisal, adjustment, litigation
and/or defense of claims under policies reinsured hereunder, including court
costs, interest accrued prior to judgment if included as part of expense on
reinsured policies, and interest accrued after final judgment, but excluding
internal office expenses, salaries, per diem, and other remuneration of regular
Company employees. Loss expense will also include declaratory judgment expense
incurred by the Company in an action that results in a loss to the Company
(however, the maximum contribution to loss expense as respects declaratory
judgment expense arising from any one declaratory judgment action will be
$2,000,000). Loss expense where incurred in connection with claims involving
this Agreement will be apportioned between the Company and the Reinsurers in
proportion to their respective interests as finally determined.
"Declaratory judgment expense" as used in this Agreement will mean all
expenses incurred by the Company in connection with declaratory judgment actions
brought to determine the Company's defense and/or indemnification obligations
that are allocable to specific policies and claims subject to this Agreement.
Declaratory judgment expense will be deemed to have been fully incurred by the
Company on the date of the actual or alleged loss under the Company's policy
giving rise to the action.
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