EXHIBIT 10.28
SURPLUS LINES PROGRAM ADMINISTRATOR AGREEMENT
by and between
NEWMARKET UNDERWRITERS INSURANCE COMPANY
(the "Company")
and
CHUBB CUSTOM MARKET INC.
(the "Program Administrator")
TABLE OF CONTENTS
Section Page
------- ----
1. Appointment 2
2. Authority 2
3. Definitions 2
4. Representations and Warranties 2
5. The Program Administrator's Services 3
6. Limitation of Program Administrator's Powers 4
7. Company's Duties 5
8. No Claims Authority 6
9. Premiums 6
10. Program Administrator's Expense 7
11. Fees and Commissions 8
12. Maintenance of Files 8
13. Access to Files and Audits 8
14. Term and Termination 9
15. Confidentiality 9
16. Indemnification 10
17. Governing Law 10
18. Independent Contractor 10
19. Notices 11
20. Territory 11
21. Currency 11
22. Errors and Omissions; Fidelity Bond; Other Insurance 12
23. Advertising and Representation 12
24. Licensing 12
25. Employee Non-solicitation 13
26. Supplies 13
27. Company's Right to Cancel or Non-Renew 13
28. Regulatory Notices 13
29. Arbitration 13
30. General Provisions 15
EXHIBIT A. Underwriting Guidelines 17
SURPLUS LINES PROGRAM ADMINISTRATOR AGREEMENT
This Program Administrator Agreement ("Agreement") is effective June 11, 2002
between Newmarket Underwriters Insurance Company a New Hampshire corporation
with its statutory offices at 0 Xxxxxxx Xxxxxx, Xxxxxxx, Xxx Xxxxxxxxx 00000
(the "Company"), and Chubb Custom Market, Inc. a New Jersey corporation with
offices at 00 Xxxxxxxx Xxxx Xxxx, Xxxxxx, Xxx Xxxxxx 00000 (the "Program
Administrator").
In consideration of the mutual promises and covenants herein contained and other
good and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, and subject to all terms and conditions hereof, the Company and
the Program Administrator agree as follows:
SECTION 1 - APPOINTMENT
The Company appoints the Program Administrator to act as a program administrator
to perform Services on the Company's behalf with respect to the Business. The
Program Administrator accepts such appointment, and agrees to perform the
Services on the Company's behalf with respect to the Business, to comply with
the requisite underwriting guidelines contained in the Underwriting Guidelines,
and strive to achieve an underwriting profit with regards to same.
SECTION 2 - AUTHORITY
The Company hereby grants to the Program Administrator the authority to perform
on the Company's behalf any and all of the Services set forth in Section 5, as
well as any and all necessary or appropriate services related thereto (the
"Authority"). This Authority is governed by the Agreement, including the
Underwriting Guidelines, state laws and regulations, and instructions given by
the Company from time to time.
SECTION 3 - DEFINITIONS
The term "Business", wherever used in this Agreement, shall mean the lines of
insurance delineated in Exhibit A to this Agreement, together with any
amendments or supplements thereto as prepared and provided in writing by the
Company to the Program Administrator in accordance with the provisions of
Section 30 (d) hereof.
The term "Policy" or "Policies", wherever used in this Agreement, shall mean
insurance contracts and declaration pages, including any addenda or endorsements
attached thereto, issued by the Company under this Agreement.
The term "Underwriting Guidelines" wherever used in this Agreement, shall mean
the underwriting guidelines as delineated in Exhibit A to this Agreement,
together with any amendments or supplements thereto provided in writing by the
Company to the Program Administrator in accordance with the provisions of
Section 30 (d) hereof.
SECTION 4 - REPRESENTATIONS AND WARRANTIES
(a) The Program Administrator represents and warrants that it is a
corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation, with full
corporate power and authority to
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conduct its business as it is now being conducted, to own or use the
properties or assets that it purports to own or use, and to perform
all of its obligations under this Agreement.
(b) The Program Administrator represents and warrants that it has taken
all corporate action necessary, in order to execute, deliver and
perform fully its obligation under this Agreement and to consummate
the transactions contemplated herein.
SECTION 5 - THE PROGRAM ADMINISTRATOR'S SERVICES
The Program Administrator will perform and shall have the authority to perform
the following services ("Services") with respect to Business placed with the
Company under this Agreement:
(a) Solicit and receive applications for insurance, evaluate, negotiate,
rate, underwrite and bind insurance on behalf of, and in the name of
the Company, issue quotes, cover notes and binders consistent the
Underwriting Guidelines, subject to the applicable surplus lines
insurance laws and regulations, and instructions given by the Company
from time to time;
(b) Develop and maintain proper files on Business placed under this
Agreement, which will be the joint property of the Company and the
Program Administrator, except as to the ownership of expirations as
set forth in Section 14 (e) hereof;
(c) Provide proper and timely cancellation or non-renewal and increase in
premium or reduction in coverage notice to policyholders, certificate
holders and regulatory bodies as required by the Policy, any
applicable statute or regulation, any applicable regulatory order, or
the Company;
(d) Collect and account for premiums and endorse checks payable to the
Company, if such checks are received by the Program Administrator in
the regular course of its duties, to collect premium monies on the
Company's behalf;
(e) To remit premiums received, net of the compensation due to the Program
Administrator in accordance with the provisions of Section 9 hereof,
and to return unearned premiums when appropriate;
(f) To cancel Policies for non-payment of premium;
(g) Secure and maintain any and all licenses for the Program Administrator
as may be required by applicable law;
(h) Insure that all surplus lines taxes, fees, assessments, and charges on
premiums are paid in full and on a timely basis;
(i) Cooperate fully with the Company to facilitate the investigation and
adjustment of any claims when requested by the Company;
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(j) Meet all service level objectives contained in the Underwriting
Guidelines;
(k) Issue Policies, endorsements on those Policies, certificates of
insurance under those Policies, or any addendum under those Policies,
where Company is a quota share participant on any risk underwritten
pursuant to the authority granted by this Agreement. Company will
provide appropriate electronic or other documentation containing the
following Signatory Authority: Xx. Xxxxxx X. Xxxxxxx, of Manchester,
New Hampshire, being President and CEO of the Company, with
Administrative Offices at 000 Xxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxxx, Xxx
Xxxxxxxxx, 00000-0000;
(l) Request that the Company issue, for all Policies where Company is not
a quota share participant on a risk, such Policies, endorsements on
those Policies, certificates of insurance under those Policies or any
addendum under those Policies. Company will issue the aforementioned
Policy documents in accordance with the service standards specified in
Section 7 (b) hereof;
(m) Cooperate fully with the Company in performing all aspects of this
Agreement, and faithfully promote and safeguard the Company's best
interests at all times; and
(n) Maintain adequate facilities, equipment, and staff with the skill,
knowledge and ability to support and carry out the Program
Administrator's obligations under this Agreement.
SECTION 6 - LIMITATION OF PROGRAM ADMINISTRATOR'S POWERS
In addition to any other limitations contained in this Agreement, any exhibit
hereto or any Underwriting Guidelines or written instruction which may be issued
from time to time by the Company to the Program Administrator, the Program
Administrator will have no power to do, nor will it represent itself as having
power to do, nor will it do, any of the following:
(a) Directly or indirectly solicit, sell, offer, bind, issue or deliver
any insurance at any reduction or deviation from the rates, terms or
conditions specified in writing therefore by the Company, or deviate,
in any manner, from the written rates and forms promulgated by the
Company;
(b) Purport to effect coverage subsequent to the effective date of the
Policy without the prior written approval of the Company, except (i)
for new business, during the 15-day period after the coverage
effective date, and (ii) for renewal business, during the 30-day
period after the coverage effective date, but in each case only if the
insured has warranted in writing that there are no known losses;
(c) Cede to any facultative reinsurer any risk, or portion of a risk which
is written on a surplus lines basis and is eligible for placement
under this Agreement, until the Company's capacity is exhausted;
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(d) Effect or authorize a flat cancellation more than 30 days after the
effective date of the Policy without prior written approval of the
Company, except where the premium has not been collected in full;
(e) Issue any binder or cover note other than in accordance with the
Underwriting Guidelines without prior approval of the Company;
(f) Waive a forfeiture or issue a guaranty, unless specifically authorized
to do so by the Company;
(g) Extend the time for the payment of premiums or other monies due to
Company;
(h) Waive any premium payment;
(i) Withhold any monies or property of or owing to the Company;
(j) Offer or pay any rebate of premium to any party;
(k) Make, alter or discharge any of the terms and conditions of any
Policy, contract or receipt of the Company without the prior approval
of the Company;
(l) Reinstate Policies or certificates cancelled by the Company (other
than for non-payment of premium) without the prior approval of the
Company;
(m) Negotiate or place any reinsurance on behalf of the Company,
irrespective of whether such reinsurance is elective or required by
the Underwriting Guidelines;
(n) Make any agreements rendering or purporting to render the Company
liable for the payment or repayment of expense, commissions,
administrative fees or service fees, or any other sum without the
prior approval of the Company;
(o) Make, accept or endorse notes or otherwise incur any liability on
behalf of the Company, other than the insurance expressly described in
Exhibit A hereto, for which the Program Administrator is authorized;
(p) Transact business in contravention of the rules and regulations of any
insurance department or any governmental authority having jurisdiction
over any of the matters pertaining to this Agreement;
(q) Transact business in contravention of any written instructions issued
by the Company;
(r) Engage any attorney to represent the Company for any purpose
whatsoever without the Company's prior written approval; and
(s) Assign or delegate its rights and duties hereunder or appoint any
producer without prior approval of the Company, provided, that the
Program Administrator may employ other entities to assist it in
performance of its duties under this Agreement:
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SECTION 7 - COMPANY'S DUTIES
The Company will have the following duties in connection with this Agreement:
(a) To cooperate fully with the Program Administrator in all aspects of
this Agreement, including but not limited to the Program
Administrator's performance of the Services with respect to the
Business;
(b) To send to the Program Administrator all Policies and other documents
requested within 30 days of the Program Administrator's receipt of the
binder or request;
(c) To maintain adequate facilities and adequate staff (including but not
limited to claims, accounting and the like) with the necessary skill,
knowledge and ability to support and carry out the Company's
obligations under the Business written by the Program Administrator
pursuant to this Agreement;
(d) To maintain files as necessary and appropriate to perform its
obligation's hereunder and the Business written by the Program
Administrator pursuant to this Agreement;
(e) To maintain at all times in full force and effect all licenses,
certificates of authority and approvals required for it to transact
surplus lines insurance and otherwise to perform all of its
obligations under this Agreement;
(f) To pay promptly all commissions due to the Program Administrator under
this Agreement; and
(g) To fulfill in good faith all obligations under the Business written by
the Program Administrator on the Company's behalf pursuant to this
Agreement.
SECTION 8 - NO CLAIMS AUTHORITY
The Program Administrator has no authority to adjust or settle any claim or suit
under the Policies written or bound under this Agreement. The Program
Administrator, when notified of a claim or suit, will promptly report to the
Company all such claims or suits, and forward copies of all legal process or
other claim related communications promptly on receipt.
SECTION 9 - PREMIUMS
(a) The Program Administrator will prepare and submit to the Company a
monthly statement of all premiums written and premium adjustments made
(whether additional or return) with respect to all business and
transactions effective in that month (the "Account Current") within
the 21st day following the end of the month;
(b) The Program Administrator agrees to pay to the Company all premiums
collected by the Program Administrator under this Agreement, net of
commissions, not later than the 45th day following the end of the
month in which the policy is written. If there is non-payment of
premium for a Policy, the Program Administrator will cancel the
Policy, such cancellation to be effective not later than 20 days after
the Program Administrator
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becomes aware of the non-payment and will make reasonable attempts to
collect any earned premium. The Program Administrator shall be liable
for any uncollected premium where a cancellation cannot be
accomplished retroactive to inception;
(c) All premiums received by the Program Administrator pursuant to this
Agreement will be held by the Program Administrator in a fiduciary
capacity in an interest bearing bank account in a bank reasonably
acceptable to the Company. Interest earned there on shall accrue
exclusively to the Program Administrator. The Program Administrator
will not commingle any premium monies collected pursuant to this
Agreement with operating funds or funds held by the Program
Administrator in any other capacity;
(d) The Program Administrator will send to the Company all binders, cover
notes and cancellations within 30 days of the date the binder, cover
note or cancellation was effective;
(e) The Program Administrator agrees to provide the Company with the
following information:
1. Monthly Summary Report for New Business which will include the
following elements and will be sorted by Line of Business and
effective date and listed by account name:
- line of business
- effective date
- Account name
- Policy Limits
- Attachment Point
- Premium
- Broker Commission
- Producer/Broker Name & Location
- Policy Term
- Account Description Number
2. A monthly Account Current report (Bordereau) of status of
collections and on open items reflecting accounting.
(f) The Program Administrator is not responsible to remit premiums due for
premium audits if the Program Administrator makes all reasonable
efforts to collect the audit premium due but is unable to do so, and
so informs the Company of that fact within 30 days of the date of the
premium audit. In such event, the Program Administrator will not
receive any commissions for any amounts subsequently collected by the
Company; and
(g) The Program Administrator shall not make any charge or demand any
payment from any insured or insured's representative for any Policy
placed with the Company under this Agreement, except for: (1) the
gross Policy premium specified in the Company's contract of insurance,
(2) the applicable state tax(es), and (3) any Policy fee, service
charge, or similar charge
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expressly authorized by the appropriate state insurance supervisory
official(s) or the laws or regulations of the applicable state.
SECTION 10 - PROGRAM ADMINISTRATOR'S EXPENSES
The Program Administrator will be responsible for all expenses incurred by it in
the performance of its obligations under this Agreement including all expenses
of its offices, and including commissions to producing brokers or agents, and
other fees and expense of whatever kind.
SECTION 11 - FEES AND COMMISSIONS
(a) The Program Administrator's remuneration for the Services provided
under this Agreement will be commissions as indicated below or as may
individually negotiated:
LINE OF BUSINESS COMMISSION
---------------- ----------
All Lines 7.5% plus broker commissions paid,
the total not to exceed 20%
The Program Administrator shall deduct and retain commission on "net
written premiums" collected hereunder. For the purpose of this
Agreement, "net written premiums" means gross premiums written less
cancellation and return premiums.
(b) For premiums collected directly by the Company, the Company shall
prepare and submit to the Program Administrator within fifteen (15)
days after the end of each month a detailed statement of all premiums
collected and premium adjustments made (whether additional or return)
with respect to the Business transacted pursuant to this Agreement,
and stating the commission thereon at the rate specified in paragraph
(a) of this Section. Payment of the stated commission shall accompany
the statement.
SECTION 12 - MAINTENANCE OF FILES
The Program Administrator shall maintain files of the Business transacted by it
pursuant to this Agreement. Such files will be turned over to the Company
promptly on the termination of this Agreement. The Program Administrator may
retain copies of such files.
SECTION 13 - ACCESS TO FILES AND AUDITS
(a) Upon written notice being given to the Program Administrator, the
Company shall have access at any reasonable time during the term of
this Agreement and subsequent to its termination to all files of the
Program Administrator which pertain to this Agreement. At the
Company's expense, copies of the whole or part of any such files will
be provided, subject to Section 15 of this Agreement. The Company may
audit the performance of the Program Administrator under this
Agreement and may perform a financial audit of the Program
Administrator's records under this Agreement upon thirty (30) days
prior written notice to the Program Administrator.
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(b) Upon written notice being given to the Company, the Program
Administrator shall have access at any reasonable time during the term
of this Agreement and subsequent to its termination to all files of
the Company which pertain in any way to this Agreement including the
Program Administrator's commission under this Agreement. At the
Program Administrator's expense, copies of the whole or part of any
such files will be provided, subject to Section 15 of this Agreement.
SECTION 14 - TERM AND TERMINATION
(a) This Agreement shall remain in force from the effective date set forth
in the first paragraph on page 2 hereof until terminated as set forth
in this Section 14.
(b) This Agreement may be terminated at any time by either party giving
written notice sent in accordance with Section 19 hereof specifying
the effective date of termination, which shall not be less than sixty
(60) days thereafter.
(c) Except where the parties agree that there is a good faith dispute,
either party may terminate this Agreement at any time in the event
that the other party fails to account for or pay monies due under this
Agreement by giving written notice sent in accordance with Section 19
hereof specifying the effective date of termination, which shall not
be less than ten (10) days thereafter. Such termination will not
become effective if the other party accounts for and pays all monies
due prior to the effective date of the termination.
(d) At either party's option, this Agreement shall terminate automatically
upon (i) the liquidation or dissolution of all or a substantial
portion of either party's business, (ii) the insolvency or bankruptcy
of either party, (iii) the commission of an act of bankruptcy by
either party, (iv) the making of an assignment for the benefit of
creditors by either party, (v) the institution of any proceeding by or
against either party (A) seeking to adjudicate it a bankrupt or
insolvent, or (B) seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or
its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, which proceeding is not dismissed
within 30 days, or (vi) the institution of any proceeding by or
against either party seeking the entry of an order for relief or the
appointment of a receiver, trustee, or other similar official for it
or for any substantial part of its property.
(e) After the effective date of termination of this Agreement, the Program
Administrator shall not (i) issue any quotes, cover notes, policies of
insurance or certificates of insurance having an inception date
subsequent to the effective date of such termination, or (ii) extend,
renew or increase the Company's liability on any existing Policy or
contract. Notwithstanding the termination of this Agreement, the
Company and the Program Administrator shall remain subject to this
Agreement as respect the Business bound prior to the effective date of
the termination. Expirations on the Business written pursuant to this
Agreement prior to its termination will be and remain the
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property of the Program Administrator, provided the Program
Administrator has paid all moneys owed to the Company under this
Agreement.
(f) The provisions of Section 12, 15, 16 and 17 hereof shall survive any
termination of this Agreement.
SECTION 15 - CONFIDENTIALITY
Each party acknowledges that it may receive confidential or proprietary
information or trade secrets (collectively "Confidential Information") of the
other party. Each party agrees (i) to hold such Confidential Information in
confidence and to protect such Confidential Information with at least the same
degree of care as it normally exercises to protect its own confidential or
proprietary information or trade secrets of a similar nature, (ii) to use such
Confidential Information solely for the purpose of performing its obligations
under this Agreement, (iii) to reproduce such Confidential Information only to
the extent necessary for such purpose, (iv) to restrict disclosure of such
Confidential Information to its employees, officers, directors, shareholders,
consultants and agents with a need to know for the purposes of performing its
obligations under this Agreement and to inform such employees, officers,
directors, shareholders, consultants and agents of its confidentiality
obligations under this Agreement, and (v) not to disclose such Confidential
Information to any third party (including, without limitation, in any public
statement or announcement) without the prior written approval of the other
party. These restrictions on the use or disclosure of Confidential Information
shall not apply to any Confidential Information (i) after it has become
generally available to the public without breach of this Agreement, (ii) which
is disclosed by a party under legal process (with reasonable prior notice to the
other party) provided such disclosure is not protected by a confidentiality
agreement or order, or (iii) which a party agrees in writing is free of such
restrictions.
SECTION 16 - INDEMNIFICATION
(a) The Program Administrator agrees to indemnify and hold the Company and
its officers, directors, and employees harmless from any damage and
against any liability for loss, cost, expenses, fines, penalties,
including punitive or exemplary damages, and all cost of defense: (i)
resulting from any act, error, or omission, whether intentional or
unintentional, by the Program Administrator and its officers,
directors, employees, and its producers, related to or which arise out
of the business covered by this Agreement, or (ii) resulting from any
obligation, act, or transaction created or performed by the Program
Administrator in violation of, in excess of, or in contravention of
the power and authority of the Program Administrator set forth in this
Agreement.
(b) The Company agrees to indemnify and hold the Program Administrator and
its officers, directors, employees, and its producers harmless from
any damage and against any liability for loss, cost, expenses, fines,
penalties, including punitive or exemplary damages, and all cost of
defense: (i) resulting from any act, error, or omission, whether
intentional or unintentional, by the Company and its officers,
directors, and employees, related to or which arise out of the
business covered by this Agreement, or (ii) resulting from any
obligation, act, or transaction created or performed by the Company in
violation of, in excess of, or in contravention of the power and
authority of the Company set forth in this Agreement.
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SECTION 17 - GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws of
the State of New York, without giving effect to the principles of conflict of
laws thereof.
SECTION 18 - INDEPENDENT CONTRACTOR
The Program Administrator's status will be that of an independent contractor in
all relations with the Company. Nothing in this Agreement will be construed as
creating the relation of employer and employee between the Program Administrator
and the Company, or between the Company and any of the Program Administrator's
directors, officers, employees or representatives. The Program Administrator
will not represent that it is, or that any of its employees are an employee of
the Company. The Program Administrator will be free to exercise independent
judgment as to the time, place and manner of developing business to be placed
under this Agreement and servicing policyholders.
SECTION 19 - NOTICES
All notices and other communications required or permitted to be given under
this Agreement shall be in writing and will be deemed to have been duly given on
the date delivered by hand, by overnight courier service, by messenger, or upon
delivery by registered or certified mail (return receipt requested) postage
prepaid, to either party hereunder at the following addresses, unless a party
has specified a different address in writing:
If to the Program Administrator:
Chubb Custom Market, Inc.
00 Xxxxxxxx Xxxx Xxxx,
Xxxxxx, Xxx Xxxxxx 00000
Attention: Xxxx Xxxxxxxx
If to the Company:
Newmarket Underwriters Insurance Company
c/o 000 Xxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attn: Xx. Xxxxxx X. Xxxxxxx
With a copy to:
Allied World Assurance Company, Ltd.
The Bermuda Commercial Bank Building
00 Xxxxxxxx Xxxxxx
Xxxxxxxx XX 00, Xxxxxxx
Xxxxxxxxx: Xxxxx Xxxxxxx
SECTION 20 - TERRITORY
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The authority of Program Administrator shall apply only to risks located in the
United States of America as delineated in Exhibit A to this Agreement. Such
territory is not assigned exclusively to the Program Administrator and the
Company reserves the right to administer any insurance procured by an insured or
as a result of another producer's or administrator's efforts.
SECTION 21 - CURRENCY
Unless otherwise agreed by the parties in writing, all transactions will be
reported and paid in U.S. dollars.
SECTION 22 - ERRORS AND OMISSIONS: FIDELITY BOND; OTHER INSURANCE
(a) The Program Administrator warrants that it now has and will maintain
during the term of this Agreement insurance coverage for errors and
omission liability in amounts not less than that indicated on Exhibit
B to this Agreement, with an insurer (the "E&O Carrier") that is
reasonably acceptable to the Company. The Program Administrator shall
provide the Company with a certificate of insurance in its name
containing the following provision: "The Company will receive 30 days'
written notice of any change, cancellation or other termination of
this policy."
(b) The Program Administrator will maintain a fidelity bond covering all
operations and employees, servicing the business of this Agreement, in
an amount indicated on Exhibit B to this Agreement, with an insurer,
and on a form and with a deductible that is reasonably satisfactory to
the Company. The Program Administrator will provide the Company with a
certificate for the fidelity bond in its name containing the following
provision: "The Company will receive 30 days' written notice of any
change, cancellation or other termination of this policy."
(c) The Program Administrator will also maintain General Liability
Insurance, Automobile Liability Insurance, and Worker's Compensation
Insurance in amounts adequate and customary for the conduct of the
Program Administrator's business and as required by law.
SECTION 23 - ADVERTISING AND REPRESENTATION
The Program Administrator and the Company shall not in any advertising, sales
literature or press release (i) use the name of the other party, or the other
party's parent, or any subsidiary, affiliates or member companies or associated
companies of the other party (collectively "Other Party), or (ii) use the Other
Parties logos, trademarks, tradenames or service marks, unless prior written
consent of the Other Party having ownership of said materials has been obtained.
Any such approval will not, in any event, be construed as charging or binding
the Other Party to bear any part of the cost or expense thereof. Use of the
Other Parties logos, trademarks, tradenames, or service marks in conjunction
with materials connected with any program or Policy shall not be construed to
mean that the party using such materials has acquired any ownership interest in
any of the Other Parties logos, trademarks, tradenames, or service marks.
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SECTION 24 - LICENSING
The Program Administrator warrants that it understands the requirements of the
surplus lines insurance laws of the several states in its dealings with the
Company on a non-admitted basis; is responsible for the proper filing of surplus
lines affidavits and payment of surplus lines taxes and compliance with all
other insurance laws applicable to surplus lines, including those requiring
notice of cancellation, notice of non-renewal, increase in premium or decrease
in coverage; and now has and shall maintain during the term of this Agreement
the license or licenses necessary to place the surplus lines business described
in this Agreement. If the Program Administrator complies with such licensing
laws by using the license of a principal, director, officer, or other employee
of the Program Administrator, the Program Administrator will be responsible for
ensuring that the licensee complies with all requirements of this Agreement and
specifically with this Section.
SECTION 25 - EMPLOYEE NON-SOLICITATION
The Program Administrator and the Company covenant and agree that they will not,
based upon the transactions contemplated herein, for a period of three years
from and after the date this Agreement is executed, solicit for employment,
advise or encourage any employee of the other party to terminate employment with
the other party, or knowingly interfere or attempt to interfere with the
employment relationship between the other party and any of its employees who
perform services for it.
SECTION 26 - SUPPLIES
The ownership of all books, supplies, undelivered policies or other property
furnished by the Company to the Program Administrator will be vested in the
Company, and such items will be delivered to the Company or its authorized
representatives promptly upon the termination of this Agreement or at any time
upon the request of the Company. The Program Administrator agrees, without
expense to the Company, to surrender such items upon termination of this
Agreement or upon request. The Program Administrator has no authority to release
blank policy or certificate supplies to subproducers.
SECTION 27 - COMPANY'S RIGHT TO CANCEL OR NON-RENEW
In accordance with the laws of any applicable jurisdictions, the Company will
have the right, at any time, and from time to time, to cancel or non-renew any
Policies or contracts of insurance placed by the Program Administrator under
this Agreement. The Company will notify the Program Administrator when the
Company cancels or non-renews any such Policies or contracts of insurance.
Further, the Company reserves the right to withdraw the Program Administrator's
power to place any one or more particular programs, Policies, or particular
lines or classes of insurance at any time for any reason. The Company's right to
withdraw the Program Administrator's power or to decline particular risks or
classes of risk may be exercised by the Company at any time upon written notice
to the Program Administrator at the address and in the manner specified in
Section 19.
SECTION 28 - REGULATORY NOTICES
The Program Administrator will forward promptly to the Company all
correspondence pertaining to this Agreement received from any government
regulatory agency at the address and in the manner specified in Section 19.
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SECTION 29 - ARBITRATION
(a) Resolution of Disputes, Choice of Law & Venue - As a condition
precedent to any right arising hereunder, any dispute not resolved by
mediation between the Company and the Program Administrator arising
out of the provisions of this Agreement or concerning its
interpretation or validity, whether arising before or after
termination of this Agreement, shall be submitted to arbitration in
the manner hereinafter set forth, and shall be governed by and
construed in accordance with the laws of the State of New York,
without giving effect to the principles of conflict of laws thereof.
The arbitration shall be held in the State of New Jersey.
(b) Composition of Panel - Unless the parties agree upon a single
arbitrator within fifteen (15) days after the receipt of a notice of
intention to arbitrate, all disputes shall be submitted to an
arbitration panel composed of two arbitrators and an umpire chosen in
accordance with Paragraph C. hereof.
(c) Appointment of Arbitrators - The members of the arbitration panel
shall be chosen from persons knowledgeable in the insurance business.
Unless a single arbitrator is agreed upon, the party requesting
arbitration (hereinafter referred to as the "claimant") shall appoint
an arbitrator and give written notice thereof by certified mail, to
the other party (hereinafter referred to as the "respondent") together
with his notice of intention to arbitrate. Within thirty (30) days
after receiving such notice, the respondent shall also appoint an
arbitrator and notify the claimant thereof by certified mail. Before
instituting a hearing, the two arbitrators so appointed shall choose
an umpire. If, within twenty (20) days after the appointment of the
arbitrator chosen by the respondent, the two arbitrators fail to agree
upon the appointment of any umpire, each of them shall nominate three
individuals to serve as umpire, of whom the other shall decline two
and the umpire shall be chosen from the remaining two by drawing lots.
The name of the individual first drawn shall be the umpire.
(d) Failure of Party to Appoint an Arbitrator - If the respondent fails to
appoint an arbitrator within thirty (30) days after receiving a notice
of intention to arbitrate, the claimant's arbitrator shall appoint an
arbitrator on behalf of the respondent, such arbitrator shall then,
together with the claimant's arbitrators, choose an umpire as provided
in paragraph (c) of this Section.
(e) Submission of Dispute to Panel - Unless otherwise extended by the
arbitration panel or agreed to by the parties, each party shall submit
its case to the panel within thirty (30) days after the selection of
the umpire.
(f) Procedure Governing Arbitration - All proceedings before the panel
shall be informal and the panel shall not be bound by the formal rules
of evidence. The panel shall have the power to fix all procedural
rules relating to the arbitration proceeding. In reaching any
decision, the panel shall give due consideration to the customs and
usage's of the insurance business.
(g) Arbitration Award - The arbitration panel shall render its decision
within thirty (30) days after termination of the proceeding, which
decision shall be in
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writing, stating the reasons therefore. The decision of the majority
of the panel shall be final and binding on the parties to the
proceeding.
(h) Cost of Arbitration - Unless otherwise allocated by the panel, each
party shall bear the expense of its own arbitrator and shall jointly
and equally bear with the other parties the expense of the umpire and
the arbitration.
SECTION 30 - GENERAL PROVISIONS
(a) WAIVER. No failure or delay in exercising any right, power and
privilege under this Agreement will operate as a waiver thereof. No
waiver on the part of any party of any right, power or privilege under
this Agreement, nor any single or partial exercise of any such right,
power or privilege, will preclude any other or further exercise
thereof or the exercise of any other such right, power or privilege.
No waiver or modification of this Agreement shall be effective unless
it be in writing and signed by an officer of the Company.
(b) ENTIRE AGREEMENT. This Agreement, including all exhibits hereto which
are made a part hereof by reference thereto, constitutes the entire
agreement and understanding between the parties with respect to the
subject matter hereof. Each party understands that all prior
understandings or agreements, whether written or oral, by any party
hereto or by any director, officer, employee, Program Administrator or
representative of any party hereto, are hereby superseded.
(c) COUNTERPARTS. This Agreement may be executed in counterparts, each of
which is deemed to be an original, and all such counterparts shall
together constitute the same agreement.
(d) AMENDMENTS. This Agreement may be modified or amended only by written
agreement signed by authorized representatives of both parties. Any
and all changes to the Underwriting Guidelines shall be mutually
agreed upon by the parties and shall be by written agreement signed by
authorized representatives of both parties.
(e) SEVERABILITY. If any provision of this Agreement shall be rendered
illegal or unenforceable by the laws, regulations or public policy of
any jurisdiction, such provision shall be considered void in that
jurisdiction, but this shall not affect the validity or enforceability
of any other provision of this Agreement or the enforceability of such
provision in any other jurisdiction.
(f) CAPTIONS. All headings in this Agreement are provided for convenience
of reference and are not to be considered in the construction or
interpretation of any provision of this Agreement.
(g) NO THIRD PARTY RIGHTS. Nothing in this Agreement, express or implied,
is intended to confer upon any person other than the parties hereto
any rights or remedies of any nature whatsoever under or by reason of
this Agreement or any provision of this Agreement.
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(h) INTERPRETATION. This Agreement shall be construed neither against nor
in favor of either party, but rather in accordance with the fair
meaning of its provisions.
(i) ASSIGNMENT. Neither party may assign its rights or responsibilities
under this Agreement without the prior written consent of the other
party, which consent shall not be unreasonably withheld.
(j) OFFSET. The Company and the Program Administrator may offset any
balance or amount due from one party to the other under this
Agreement; however, in the event of insolvency of any party hereto,
offset shall only be allowed in accordance with applicable statutes
and regulations. If the Company is comprised of more than one entity,
all such entities will be considered the Company for purposes of
offset.
(k) SUCCESSORS & ASSIGNS. This Agreement and all of its provisions and
conditions are for the sole and exclusive benefit of the parties
hereto, their successors and permitted assigns.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of the
date indicated below.
NEWMARKET UNDERWRITERS INSURANCE CHUBB CUSTOM MARKET INC.
COMPANY
BY: /s/ Xxxxx X. Xxxxxxxx BY: /s/ Xxxx X. Xxxxxxxx
--------------------------------- ------------------------------------
Signature Signature
Xxxxx X. Xxxxxxxx Xxxx X. Xxxxxxxx
------------------------------------- ----------------------------------------
(Type or print name) (Type or print name)
Title: Vice President & Assistant Title: President - Chubb Custom
Secretary Insurance Company
Date: June 14, 2002 Date: June 11, 2002
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