Exhibit 10.31
XXXXXXXX
(Logo omitted)
TREATY PROPERTY REINSURANCE BINDER
REINSURED
COMPANY: Quanta Reinsurance Ltd, Quanta Indemnity Company, Quanta
Reinsurance US Ltd. and Quanta Specialty Lines Insurance
Company, hereinafter referred to as "Company".
REINSURER: Arch Reinsurance Ltd.
BUSINESS COVERED: The Reinsurer will accept a 100% QS of the Company's
property reinsurance assumed portfolio except as detailed
below.
TERM: October 1, 2005 until the natural expiration of all
business.
TERRITORY: As per original treaties.
EXCLUSIONS: 1) Any losses from Hurricane Xxxxx
2) The following contracts will not be subject to this
agreement:
GMAC Aggregate Cover
Manitoba Crop Cover
PREMIUM: The Company will pay the Reinsurer 100% of the UEP as of
10/1/05 and 100% of the written premium on or after
10/1/05 on all assumed contracts subject to this
agreement. Further, Quanta shall cede 100% of the assumed
written premium from the SV Stuttgart Aggregate XOL
cover.
The Net Cash received to date by the Company on Business
Covered will be paid in full to the Reinsurer on
11/28/05. The Reinsurer and the Company will use their
best efforts to execute formal reinsurance contract by
11/28/05.
In respect of both the Technical Property & Treaty
Property Treaties ("Treaties"), a $500,000 non refundable
Commitment Fee will be paid in full within 24 hours of an
executed binder and the remaining Premium will be paid on
11/28/05. The Reinsurer and the Company will use their
best efforts to execute formal reinsurance contracts by
the premium due date of 11/28/05.
In the event that either Treaties are not executed, by
reason of the Company not executing the contract, Arch Re
will retain the above mentioned Commitment Fee.
Arch Re to receive its proportional share of any premium
adjustments to the business covered hereunder.
INURING REINSURANCE: All inuring reinsurance treaties purchased by the Company
as described below will be endorsed to add the Reinsurer
as an additional beneficiary. The endorsements shall take
effect as of the inception date of coverage granted by
the Reinsured hereunder and the UEP for the Inuring
Reinsurances will be split as per the following schedule:
Expiration 100% USD 100% USD Total Ceded
Description Date Limit Attachment Premium
----------- ---------- --------- ---------- -----------
PX Re Retro Purchase EQ 04/04/06 2,500,000 10,000 -151,247
PX Re Retro Cover EQ 04/04/06 2,500,000 10,000 -81,925
Odyssey Re Retro Purchase EQ 04/04/06 2,500,000 10,000 -138,643
MS Frontier Re Retro Cover EQ 04/04/06 2,500,000 10,000 -78,774
Sompo Retro -- 40B CA only EQ ILW 07/01/06 5,000,000 25,000 -82,648
----------
-533,237
----------
Xxxxxx Retro Cover -- TX wind 2.5B ILW 07/01/06 5,000,000 10,000 -523,562
Odyssey Re Retro -- 15B US Wind ILW 07/01/06 2,500,000 10,000 -299,178
Glacier Re Retro -- 20B Wind US ILW 07/01/06 6,000,000 10,000 -504,863
PX Re Retro Cover 04/05/06 7,500,000 15,000,000 -982,498
----------
-2,310,100
---------- ----------
50% -1,155,050
---------- ----------
UEP to UEP to
Company Reinsurer
-1,155,050 -1,688,287
Note: With respect to PX Re Retro Cover, should the
Company exhaust any of the limit remaining for any event
occurring prior to 10/31/05, the Company will reimburse
the Reinsurer its proportionate share of the UEP for that
inuring reinsurance contract (i.e. 50% of 982,498 X the
amount of limit exhausted).
Note: With respect to Odyssey Re Retro, 15B US Wind ILW,
should the Company exhaust the limit with respect to
Hurricane Xxxxx, the Company will reimburse the Reinsurer
its proportionate share of the UEP for that inuring
reinsurance contract (i.e. 100% X 299,178).
ADJUSTMENT
FEATURES: - Proportional contracts covered hereunder will be
settled based upon the following formula: (UEP + WP
after 10/2/005) X (1 less final ceding commission at
year end, less attritional loss ratio at year end,
less 100% of all PCS losses occurring on these
contracts after 10/1/05 excluding Hurricane Xxxxx,
less FET, less brokerage). Interim adjustments will
be based on the selected non-cat loss ratio used
when the Company bound the deal, and the provisional
ceding commission. The definition of "attritional
losses" and "attritional loss ratio" for these
purposes must be agreed by the Reinsurer and is
subject to due diligence that may be conducted by
the Reinsurer. The projected attritional loss ratio
will be estimated for these purposes as at 10/1/05
and is subject to adjustment on final settlement of
any balances due to the Company always subject to
agreement by the Reinsurer.
WARRANTY: - Losses on Risk XOL contracts will be settled as
follows: Losses occurring on or after 10/1/2005 will
be assumed by the Reinsurer.
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XXXXXXXX XXXXX XXXXXXXX, INC.
- The Company will cede the Net Cash received as
respects all premiums subject to this Binder &
collected to date. Net Cash to be defined as Gross
Unearned Premium less paid losses, less Arch's share
of inuring reinsurance, less brokerage, less ceding
commission, less FET.
- Quarterly reporting periods starting 12/31/05, with
reports due 30 days after the end of the quarter and
with cash settlements 45 days from the end of the
quarter.
- The Company will post an LOC for the differential
between expected cash receipts and actual payment
made at binding.
All premiums ceded are deemed collectible.
Failure to pay deposit premium by 11/28/05 will result in
cancellation of the Binder and Arch Re Ltd shall retain
the Commitment Fee.
Subject to further due diligence by Arch Re Ltd.
BROKERAGE: 1.5% of UEP.
QUANTA REINSURANCE LTD/QUANTA ARCH REINSURANCE LTD.
INDEMNITY COMPANY/QUANTA SPECIALTY
LINES INSURANCE COMPANY/QUANTA
REINSURANCE US LTD
Authorized Authorized
Signature: /s/ Xxxxxxxx X.X. Xxxx Signature: /s/ Xxxxxxx X. Xxxxxxxxxx
--------------------------- ----------------------------
Title: Interim Chief Financial Officer Title: US Underwriter
Date 18/11/05 Date November 18, 2005
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XXXXXXXX XXXXX XXXXXXXX, INC.
