EXHIBIT 10 (a)
ADDENDUM NO. 1
to the
QUOTA SHARE RETROCESSION AGREEMENT
Effective: July 1, 2000
entered into by and between
AMERICAN HALLMARK INSURANCE COMPANY OF TEXAS
Dallas, Texas
and
DORINCO REINSURANCE COMPANY
Midland, Michigan
IT IS HEREBY AGREED, effective January 1, 2001, that paragraph B of
ARTICLE 9 - COMMISSION ADJUSTMENT shall be deleted and the following
substituted therefor:
"B. The adjusted ceding commission shall be calculated as follows:
1. As respects the first Underwriting Year calculation, the following
shall apply:
a. For the period from July 1, 2000 to December 31, 2000, if
the ratio of losses incurred to premium earned is 64.5% or
higher, then the adjusted ceding commission shall be 31.0%.
If the ratio of losses incurred to premium earned is less
than 64.5%, then the adjusted commission shall be determined
by adding one percentage point to the ceding commission for
each percentage point reduction loss ratio subject to a
ceding commission of 41.0% at a loss ratio of 54.5% or less.
If the ratio of losses incurred to premium earned is greater
than 64.5% or less than 54.5%, the difference between the
actual loss ratio and 64.5% or 54.5%, as the case may be,
will be multiplied by the earned premium for the Underwriting
Year and carried forward as a debit or credit to the ensuing
Underwriting Year calculation.
b. For the period from January 1, 2001 to February 28, 2001, if
the ratio of losses incurred to premium earned is 64.0% or
higher, then the adjusted ceding commission shall be 31.0%.
If the ratio of losses incurred to premium earned is less
than 64.0%, then the adjusted commission shall be determined
by adding one percentage point to the ceding commission for
each percentage point reduction loss ratio subject to a
ceding commission of 41.0% at a loss ratio of 54.0% or less.
If the ratio of losses incurred to premium earned is greater
than 64.0% or less than 54.0%, the difference between the
actual loss ratio and 64.0% or 54.0%, as the case may be,
will be multiplied by the earned premium for the Underwriting
Year and carried forward as a debit or credit to the ensuing
Underwriting Year calculation.
c. For the period from March 1, 2001 to June 30, 2001, if
the ratio of losses incurred to premium earned is 69.0% or
higher, then the adjusted ceding commission shall be 26.0%.
If the ratio of losses incurred to premium earned is less
than 69.0%, then the adjusted commission shall be determined
by adding one percentage point to the ceding commission for
each percentage point reduction loss ratio subject to a
ceding commission of 41.0% at a loss ratio of 54.0% or less.
If the ratio of losses incurred to premium earned is greater
than 69.0% or less than 54.0%, the difference between the
actual loss ratio and 69.0% or 54.0%, as the case may be,
will be multiplied by the earned premium for the Underwriting
Year and carried forward as a debit or credit to the ensuing
Underwriting Year calculation.
2. As respects the second and subsequent Underwriting Years
hereunder, if the ratio of losses incurred to premium earned
is 69.0% or higher, then the adjusted ceding commission shall
be 26.0%. If the ratio of losses incurred to premium earned is
less than 69.0%, then the adjusted commission shall be determined
by adding one percentage point to the ceding commission for
each percentage point reduction loss ratio subject to a ceding
commission of 41.0% at a loss ratio of 54.0% or less. If the
ratio of losses incurred to premium earned is greater than 69.0%
or less than 54.0%, the difference between the actual loss ratio
and 69.0% or 54.0%, as the case may be, will be multiplied by the
earned premium for the Underwriting Year and carried forward as
a debit or credit to the ensuing Underwriting Year calculation.
Following termination of this Agreement any debit or credit
carryforward remaining after the final adjustment of the concluding
Underwriting Year will be null and void."
The provisions of this Contract shall remain otherwise unchanged.
IN WITNESS WHEREOF the parties hereto have caused this Addendum to be
executed by their duly authorized representatives at:
Dallas, Texas, this ___________ day of_________________________, 20__.
_______________________________________________________
AMERICAN HALLMARK INSURANCE COMPANY OF TEXAS
Midland, Michigan, this __________ day of______________________, 20__.
_______________________________________________________
DORINCO REINSURANCE COMPANY
