ADDENDUM NO. 2 TO QUOTA SHARE REINSURANCE AGREEMENT
Exhibit
10.1
ADDENDUM
NO. 2 TO QUOTA SHARE REINSURANCE AGREEMENT
THIS
ADDENDUM NO. 2
(this
“Addendum”) to the Quota Share Reinsurance Agreement (the “Agreement”),
effective as of July 1, 2007, by and between AMTRUST INTERNATIONAL INSURANCE,
LTD, of Hamilton, Bermuda (the “Company”) and MAIDEN INSURANCE COMPANY, LTD, of
Hamilton, Bermuda (the “Reinsurer”), is made and entered into as of June 1, 2008
(the “Effective Time”) by and between the Company and the
Reinsurer.
WHEREAS,
pursuant to Article I of the Agreement, the Company and the Reinsurer may
mutually agree to reinsure Additional Business pursuant to the Agreement;
WHEREAS,
effective June 1, 2008, AmTrust Financial Services, Inc. (“AmTrust”) acquired
from Trinity Universal Insurance Company, a subsidiary of Unitrin, Inc., its
Unitrin Business Insurance unit (“UBI”), which included the acquisition of
Milwaukee Casualty Insurance Co., Trinity Universal Insurance Company of Kansas,
Inc., Security National Insurance Company and Trinity Lloyd’s Insurance
Company;
WHEREAS,
UBI
writes commercial lines business, including commercial package, commercial
umbrella, commercial property, commercial general liability, workers’
compensation (offered as part of a commercial package policy), inland marine
and
farm/ranchowner insurance through retail agents (“Retail Commercial Package
Business”);
WHEREAS,
pursuant
to the Agreement, Retail Commercial Package Business is not included in the
definition of Covered Business;
WHEREAS,
pursuant
to Paragraph B of Article I of the Agreement, the Company is required to offer
the Reinsurer the opportunity to reinsure the Retail Commercial Package Business
written by Affiliates, subject to agreement on a ceding commission for the
cession of such business; and
WHEREAS,
the Company and the Reinsurer desire to set forth the terms under which the
Reinsurer will reinsure Retail Commercial Package Business written by
Affiliates;
NOW,
THEREFORE,
in
consideration of the premises and mutual covenants contained herein, the Company
and the Reinsurer hereby agree as follows:
ARTICLE
I
DEFINITIONS
AND USAGE
|
1.01
|
Definitions.
Capitalized terms used but not defined herein shall have the meaning
set
forth in the Agreement.
|
|
1.02
|
Headings.
The headings contained in this Addendum are for reference purposes
only
and shall not affect the meaning or interpretation of this
Addendum.
|
ARTICLE
II
ADDENDUM
|
A.
|
Effective
as of the Effective Time, Paragraph A of Article IV - Definitions
is
amended to provide:
|
“Affiliate”
means Rochdale, Wesco, Technology, IGI, AIU, Associated Industries Insurance
Company (“AIIC”), Milwaukee Casualty Insurance Co. (“MCIC”), Trinity Universal
Insurance Company of Kansas, Inc. (“TUK”), Security National Insurance Company
(“SNIC”) and Trinity Lloyd’s Insurance Company (“TLIC”) and each other insurance
company more than fifty percent (50%) of the voting securities of which are
directly or indirectly controlled by AmTrust Financial Services, Inc.
(“AmTrust”), for so long as AmTrust continues to so directly or indirectly
control such entity.
|
B.
|
Company
agrees to cede and Reinsurer agrees to accept and reinsure, the Ultimate
Net Loss equal to 100% of the Affiliate Ultimate Net Loss (net of
inuring
reinsurance) with respect to unearned premium (“UBI UEP”) assumed by
Technology, MCIC, TUK, SNIC and TLIC from Trinity Universal Insurance
Company (“TUIC”) as of June 1, 2008 and ceded to Company, in connection
with AmTrust’s acquisition of Unitrin, Inc.’s Unitrin Business Insurance
unit (“UBI”) from TUIC.
|
|
C.
|
Company
agrees to cede and Reinsurer agrees to accept and reinsure 40% of
the
Affiliate Ultimate Net Loss (net of inuring reinsurance) with respect
to
Retail Commercial Package Business, which is written or renewed on
or
after the Effective Time, ceded to the Company by each Affiliate.
|
|
D.
|
The
reinsurance of Retail Commercial Package Business provided for in
this
Addendum shall not be subject to the maximum liability for a single
loss
under a Policy set forth in Paragraph A of Article
V.
|
|
E.
|
The
Company shall cede to the Reinsurer 100% of the UBI UEP (net of the
cost
of inuring reinsurance) ceded to it by Technology, MCIC, TUK, SNIC
and
TLIC no later than 30 days after the approval the cession of the
UBI UEP
to the Company (to the extent it has been collected) and shall cede
to the
Reinsurer the balance of the premium related to UBI UEP (net of the
cost
of inuring reinsurance) upon collection and the Subject Premium (net
of
the cost of inuring reinsurance) related to Retail Commercial Package
Business in accordance with the Agreement and this Addendum.
|
|
F.
|
The
Reinsurer shall allow the Company a 34.375% commission on the UBI
UEP and
Subject Premium related to Retail Commercial Package
Business.
|
|
G.
|
The
reinsurance of Retail Commercial Package Business hereunder is subject
to
the required regulatory approvals of the reinsurance by the Company
of the
UBI UEP and Subject Premium related to Retail Commercial Package
Business
assumed, written and renewed by Technology, MCIC, TUK, SNIC and
TLIC.
|
ARTICLE
III
MISCELLANEOUS
|
A.
|
Confirmation
of the Agreement.
Except as amended by this Addendum, the Agreement remains in full
force
and effect, without modification or amendment.
|
|
B.
|
Governing
Law.
This Addendum shall be governed by the laws of the State of New York,
without giving effect to its conflict of laws
principles.
|
|
C.
|
Counterparts.
This Addendum may be executed in one or more counterparts, and such
counterparts together shall constitute one and the same
agreement.
|
[Remainder
of page intentionally left blank]
IN
WITNESS WHEREOF the parties hereto, by their respective duly authorized
officers, have executed this Addendum, in duplicate, as of the dates recorded
below:
|
AMTRUST
INTERNATIONAL INSURANCE, LTD.
|
|
|
By:
|
/s/
Xxxxxxx Xxxx
|
|
Dated:
June 12, 2008
|
|
|
MAIDEN
INSURANCE COMPANY, LTD.
|
|
|
By:
|
/s/
Xxxxxxxx X. Xxxxx
|
