Exhibit 10.16
UNDERWRITING MANAGEMENT AND SERVICES AGREEMENT
THIS AGREEMENT ("Agreement"), made as of the 5th day of May, 2005,
among Darwin Select Insurance Company, a stock insurance company organized under
the laws of Arkansas ("Insurer"), and Darwin Professional Underwriters, Inc., a
corporation organized under the laws of Delaware ("Darwin").
WITNESSETH:
WHEREAS, Insurer is qualified to the business of insurance in certain
states and jurisdictions of the United States;
WHEREAS, Insurer wishes that Darwin underwrite and administer the
Policies (as defined below) and perform related services;
NOW THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
APPOINTMENT OF MANAGER
Insurer does hereby nominate, constitute and appoint Darwin as its
underwriting manager with respect to procuring contracts and policies of
[directors' and officers' liability insurance, errors and omissions insurance,
professional liability insurance, employment practices liability insurance,
fiduciary insurance, assumed facultative and treaty reinsurance of the foregoing
lines of business] and such other types of insurance as may be mutually agreed
to by the parties hereto, in the states and jurisdictions where Insurer is
qualified from time to time to write such insurance (the "Policies"). Darwin
hereby accepts such appointment.
ARTICLE II
TERM
This Agreement shall commence and be effective from the date first
above written and shall terminate when cancelled by either party hereto upon 30
days written notice to the other.
ARTICLE III
DUTIES, POWERS AND AUTHORITY OF THE MANAGER
Darwin shall receive applications for Policies pertaining to risks and
render underwriting management and related services in connection with such
applications in accordance with applicable law and in accordance with all the
underwriting and claims guides, rules, bulletins or other written instructions
now in force or as may be issued by Insurer from time to time and in a manner
consistent with the terms of this Agreement. Without limiting the generality of
the foregoing, Darwin shall have the responsibility, power and authority to act
on Insurer's behalf as follows:
(a) To solicit and produce applications for Policies;
(b) To provide insurance underwriting functions in connection with the
issuance of Policies;
(c) To issue, bind and execute Policies on behalf of Insurer;
(d) To report claims to Insurer and administer, settle and maintain
records of claims submitted for payment under Policies;
(e) To negotiate, bind and execute agreements of ceded reinsurance with
respect to the Policies; and
(f) To perform administrative, finance and accounting services in
connection with the foregoing functions.
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ARTICLE IV
ADMINISTRATION OF THE POLICIES
Insurer does hereby grant to Darwin authority in all matters relating
to risk management and policy administration of the Policies (to the extent such
authority may be granted pursuant to applicable law), including, without
limitation, the power, without reservation, to xxxx and collect all premiums for
the Policies, to pay all amounts owing to agents or brokers in respect of the
policies, to adjust, to defend, to settle and to pay all claims, and to recover
(by way of subrogation or otherwise) any losses, incurred under any of the
Policies, and to take such other and further actions as may be necessary or
desirable to effect the transactions contemplated by this Agreement. Insurer
also grants to Darwin authority and discretion with respect to all matters
relating to claims settlement, salvage and subrogation and litigation concerning
the Policies, including, but not limited to, the selection of counsel therefor.
Darwin agrees to remit to Insurer promptly upon receipt thereof (a) all premium
payments, (b) any salvage, subrogation or other recoveries received by it in
respect of the Policies and (c) all notices of claims, losses or any other
information whatsoever relating to the Policies.
ARTICLE V
EXPENSE REIMBURSEMENT AND INCENTIVE COMPENSATION PAYMENTS
Darwin shall be entitled to expense reimbursements and incentive
compensation payments as provided for in Appendix I hereto.
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ARTICLE VI
BOOKS, RECORDS AND ACCOUNTS
Darwin shall prepare and keep all books and records as are necessary
to reflect accurately all underwriting, claims, administrative, financial and
accounting services rendered in connection with the Policies issued by Insurer
pursuant to this Agreement. Such books and records shall be open to inspection
by any person authorized by Insurer at all reasonable times upon reasonable
prior notice during the teen of this Agreement. Upon termination of this
Agreement, such books and records shall be transferred to and become the
property of Insurer.
ARTICLE VII
OTHER AGREEMENTS
Insurer and Darwin agree that:
(a) During the term of this Agreement, Darwin shall not be prohibited from
engaging in any area of the insurance or reinsurance business with
respect to others;
(b) It shall not be a violation of the terms of this Agreement for Darwin
to comply in good faith with the instructions or rulings of the
insurance departments of the various states or jurisdictions of the
United States of America;
(c) The services of Darwin to Insurer hereunder are not to be deemed
exclusive, and Darwin shall continue to be free to act in a similar or
other capacity in respect to others;
(d) Darwin may utilize the resources of any affiliate, as well as its
employees, in order to fulfill all of Darwin's obligations under this
Agreement, but Darwin shall remain liable for the performance of all
of its obligations hereunder; and
(e) Darwin shall perform its duties hereunder as an independent
contractor.
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ARTICLE VIII
GOVERNING LAW; JURISDICTION
This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware.
ARTICLE IX
GENERAL PROVISIONS
(a) Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, sent by
facsimile transmission (with immediate confirmation thereafter), or sent by
certified, registered or express mail, postage prepaid or by a nationally
recognized overnight courier service, marked for overnight delivery. Any such
notice shall be deemed given when received and shall be addressed:
If to Insurer: Darwin National Assurance Company
00 Xxxxxxxxx Xxxx Xxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxx
If to Darwin: Darwin Professional Underwriters Inc.
00 Xxxxxxxxx Xxxx Xxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxx
(b) Invalidity. The invalidity or unenforceability of any provision or
portion of this Agreement shall not affect the validity or unenforceability of
the other provisions or portions of this Agreement.
(c) Counterparts. This Agreement may be executed in counterparts, each
of which shall he deemed an original and all of which shall constitute one and
the same instrument.
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(d) Assignment. This Agreement may not be assigned by either party
hereto without the written consent of the other party hereto.
(e) Amendments. This Agreement may not be amended except pursuant to a
written instrument agreed to by both parties hereto.
IN WITNESS WHEREOF, each of the undersigned parties have caused this
Agreement to be duly executed by its duly authorized representative as of the
date first written above.
Darwin Select Insurance Company
By: /s/ Xxxx X. Xxxxxxx, Xx.
------------------------------------
Name: Xxxx X. Xxxxxxx, Xx.
Title: Chief Financial Officer &
Treasurer
Darwin Professional Underwriters, Inc.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President & Chief Executive
Officer
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