Excess Catastrophe
Reinsurance Contract
Effective: July 1, 1999
issued to
Condor Insurance Company
Calabasas, California
Amwest Surety Insurance Company
Omaha, Nebraska
and
Far West Insurance Company
Omaha, Nebraska
Excess Catastrophe
Reinsurance Contract
Effective: July 1, 1999
issued to
Condor Insurance Company
Calabasas, California
Amwest Surety Insurance Company
Omaha, Nebraska
and
Far West Insurance Company
Omaha, Nebraska
(hereinafter referred to collectively as the "Company")
by
The Subscribing Reinsurer(s) Executing the
Interests and Liabilities Agreement(s)
Attached Hereto
(hereinafter referred to as the "Reinsurer")
Table of Contents
Article Page
I Classes of Business Reinsured 3
II Commencement and Xxxxxxxxxxx 0
XXX Xxxxxxxxx (XXXX 00X) 3
IV Exclusions 4
V Retention and Limit 6
VI Reinstatement 6
VII Definitions 7
VIII Other Reinsurance 10
IX Florida Hurricane Catastrophe Fund 10
X Loss Notices and Settlements 10
XI Salvage and Subrogation 11
XII Reinsurance Premium 11
XIII Offset (BRMA 36C) 11
XIV Access to Records (BRMA 1D) 11
XV Liability of the Reinsurer 12
XVI Net Retained Lines (BRMA 32E) 12
XVII Errors and Omissions (BRMA 14F) 12
XVIII Currency (BRMA 12A) 12
XIX Taxes (BRMA 50B) 13
XX Federal Excise Tax (BRMA 17A) 13
XXI Loss Reserves 13
XXII Insolvency 15
XXIII Arbitration 15
XXIV Service of Suit (BRMA 49C) 16
XXV Agency Agreement 17
XXVI Intermediary (BRMA 23A) 17
Article I - Classes of Business Reinsured
A. By this Contract the Reinsurer agrees to reinsure the excess liability
which may accrue to the Company under its policies, contracts and binders
of insurance or reinsurance (hereinafter called "policies") in force on
the effective date hereof or issued or renewed on or after that date, and
classified by the Company as Fire, Allied Lines, Homeowners (property
sections only), Mobile Homeowners (property sections only), Inland Marine,
Earthquake, Private Passenger Automobile Physical Damage and Commercial
Automobile Physical Damage business, subject to the terms, conditions and
limitations hereinafter set forth.
B. It is understood that the classes of business reinsured under this Contract
are deemed to include:
1. Coverages required for non-resident drivers under the motor vehicle
financial responsibility law or the motor vehicle compulsory
insurance law or any similar law of any state or province, following
the provisions of the Company's policies when they include or are
deemed to include so-called "Out of State Insurance" provisions;
2. Coverages required under Section 30 of the Motor Carrier Act of 1980
and/or any amendments thereto.
Article II - Commencement and Termination
A. This Contract shall become effective on July 1, 1999, with respect to
losses arising out of loss occurrences commencing on or after that date,
and shall remain in force until June 30, 2000, both days inclusive.
B. If this Contract expires while a loss occurrence covered hereunder is in
progress, the Reinsurer's liability hereunder shall, subject to the other
terms and conditions of this Contract, be determined as if the entire loss
occurrence had occurred prior to the expiration of this Contract, provided
that no part of such loss occurrence is claimed against any renewal or
replacement of this Contract.
C. In the event negotiations for the renewal of this Contract are not
completed by June 30, 2000, this Contract shall, at the Company's option,
be extended to 15 months.
Article III - Territory (BRMA 51A)
The territorial limits of this Contract shall be identical with those of the
Company's policies.
Article IV - Exclusions
A. This Contract does not apply to and specifically excludes the following:
1. Reinsurance assumed by the Company, except inter-company reinsurance
between any of the reinsured companies hereunder.
2. Financial guarantee and insolvency.
3. Business written by the Company on a co-indemnity basis where the
Company is not the controlling carrier.
4. Nuclear risks as defined in the "Nuclear Incident Exclusion Clause -
Physical Damage - Reinsurance (U.S.A.)"and the "Nuclear Incident
Exclusion Clause - Physical Damage - Reinsurance (Canada)" attached
to and forming part of this Contract.
5. Liability as a member, subscriber or reinsurer of any Pool,
Syndicate or Association; and any combination of insurers or
reinsurers formed for the purpose of covering specific perils,
specific classes of business or for the purpose of insuring risks
located
in specific geographical areas. However, this exclusion shall not
apply to residual market mechanisms, including but not limited to
FAIR Plans, Joint Underwriting Associations, Assigned Risk Plans, or
to Coastal Pools, Beach Plans or similar plans, however styled. It
is understood and agreed, however, that this reinsurance does not
include any increase in liability to the Company resulting from (a)
the inability of any other participant in a residual market
mechanism, including but not limited to a FAIR Plan, Joint
Underwriting Association, Assigned Risk Plan, Coastal Pool, Beach
Plan or similar plan, to meet its liability, or (b) any claim
against such a residual market mechanism, including but not limited
to a FAIR Plan, Joint Underwriting Association, Assigned Risk Plan,
Coastal Pool, Beach Plan or similar plan, or any participant
therein, including the Company, whether by way of subrogation or
otherwise, brought by or on behalf of any insolvency fund.
Notwithstanding the foregoing, this exclusion shall not apply to
loss assessments made against the Company by the Hawaii Hurricane
Relief Fund or loss adjustment expenses incurred by the Company on
Hawaii Hurricane Relief Fund policies issued by the Company.
6. All liability of the Company arising by contract, operation of law, or
otherwise, from its participation or membership, whether voluntary or
involuntary, in any insolvency fund. "Insolvency fund" includes any
guaranty fund, insolvency fund, plan, pool, association, fund or other
arrangement, however denominated, established or governed, which provides
for any assessment of or payment or assumption by the Company of part or
all of any claim, debt, charge, fee or other obligation of an insurer, or
its successors or assigns, which has been declared by any competent
authority to be insolvent, or which is otherwise deemed unable to meet any
claim, debt, charge, fee or other obligation in whole or in part.
7. Seepage and pollution in accordance with the full ISO Seepage and
Pollution Exclusion, except when such loss is due to explosion or
hostile fire, unless otherwise restricted by state law. However,
where a court renders an adverse judgment interpreting the ISO
Exclusion wording, the Reinsurer will cover that portion of the
judgment regarding losses due to pollution.
8. Business produced under the New York Motorcycle Program.
B. The Company shall have the option to exclude a class of business subject
to this Contract by providing the Reinsurer with prior written notice.
Article V - Retention and Limit
A. The Company shall retain and be liable for $3,000,000 of ultimate net loss
arising out of each loss occurrence. The Reinsurer shall then be liable
for the amount by which such ultimate net loss exceeds the Company's
retention, but the liability of the Reinsurer under each excess layer
shall not exceed $2,000,000 as respects any one loss occurrence.
B. No claim shall be made hereunder unless two or more risks are involved in the
same loss occurrence.
C. The Company shall be the sole judge of what constitutes one risk.
Article VI - Reinstatement
A. In the event all or any portion of the reinsurance hereunder is exhausted
by loss, the amount so exhausted shall be reinstated immediately from the
time the loss occurrence commences hereon. For each amount so reinstated
the Company agrees to pay additional premium equal to the product of the
following:
1. The percentage of the occurrence limit reinstated (based on the loss
paid by the Reinsurer); times
2. The earned reinsurance premium for the term of this Contract
(exclusive of reinstatement premium).
B. Whenever the Company requests payment by the Reinsurer of any loss
hereunder, the Company shall submit a statement to the Reinsurer of
reinstatement premium due the Reinsurer. If the earned reinsurance premium
for the term of this Contract has not been finally determined as of the
date of any such statement, the calculation of reinstatement premium due
shall be based on the annual deposit premium and shall be readjusted when
the earned reinsurance premium for the term of this Contract has been
finally determined. Any reinstatement premium shown to be due the Reinsurer
as reflected by any such statement (less prior payments, if any) shall be
payable by the Company concurrently with payment by the Reinsurer of the
requested loss. Any return reinstatement premium shown to be due the
Company shall be remitted by the Reinsurer as promptly as possible after
receipt and verification of the Company's statement.
C. Notwithstanding anything stated herein, the liability of the Reinsurer
shall not exceed $2,000,000 as respects loss or losses arising out of any
one loss occurrence, or $4,000,000 in all during the term of this
Contract.
Article VII - Definitions
A. "Ultimate net loss" as used herein is defined as the sum or sums
(including loss in excess of policy limits, extra contractual obligations
and any loss adjustment expense, as hereinafter defined) paid or payable
by the Company in settlement of claims and in satisfaction of judgments
rendered on account of such claims, after deduction of all salvage, all
recoveries and all claims on inuring insurance or reinsurance, whether
collectible or not. Nothing herein shall be construed to mean that losses
under this Contract are not recoverable until the Company's ultimate net
loss has been ascertained.
B. "Loss in excess of policy limits" and "extra contractual obligations" as
used herein shall be defined as follows:
1. "Loss in excess of policy limits" shall mean 90% of any amount paid
or payable by the Company in excess of its policy limits, but
otherwise within the terms of its policy, as a result of an action
against it by its insured or its insured's assignee to recover
damages the insured is legally obligated to pay because of the
Company's alleged or actual negligence or bad faith in rejecting a
settlement within policy limits, or in discharging its duty to
defend or prepare the defense in the trial of an action against its
insured, or in discharging its duty to prepare or prosecute an
appeal consequent upon such an action.
2. "Extra contractual obligations" shall mean 90% of any punitive,
exemplary, compensatory or consequential damages, other than loss in
excess of policy limits, paid or payable by the Company as a result
of an action against it by its insured or its insured's assignee,
which action alleges negligence or bad faith on the part of the
Company in handling a claim under a policy subject to this Contract.
An extra contractual obligation shall be deemed to have occurred on
the same date as the loss covered or alleged to be covered under the
policy.
However, loss in excess of policy limits and extra contractual obligations
arising out of any one loss occurrence shall not exceed an amount equal to
25.0% of the contractual loss under all policies involved in that loss
occurrence.
Notwithstanding anything stated herein, this Contract shall not apply to
any loss in excess of policy limits or any extra contractual obligation
incurred by the Company as a result of any fraudulent and/or criminal act
by any officer or director of the Company acting individually or
collectively or in collusion with any individual or corporation or any
other organization or party involved in the presentation, defense or
settlement of any claim covered hereunder.
C. "Loss occurrence" as used herein is defined as all individual losses
directly occasioned by any one disaster, occurrence or loss or series of
disasters, occurrences or losses arising out of one occurrence which
occurs anywhere in the world, but limited in the United States of America
and Canada to any one state of the United States or province of Canada and
states or provinces contiguous thereto and to one another. However, the
duration and extent of any one "loss occurrence" shall be limited to all
individual losses sustained by the Company occurring during any period of
168 consecutive hours arising out of and directly occasioned by the same
event, except that the term "loss occurrence" shall be further defined as
follows:
1. As regards windstorm, hail, tornado, hurricane, cyclone, including
ensuing collapse and water damage, all individual losses sustained
by the Company occurring during any period of 72 consecutive hours
arising out of and directly occasioned by the same loss occurrence.
However, the loss occurrence need not be limited to one state or
province or states or provinces contiguous thereto.
2. As regards riot, riot attending a strike, civil commotion, vandalism
and malicious mischief, all individual losses sustained by the
Company occurring during any period of 72 consecutive hours within
the area of one municipality or county and the municipalities or
counties contiguous thereto arising out of and directly occasioned
by the same loss occurrence. The maximum duration of 72 consecutive
hours may be extended in respect of individual losses which occur
beyond such 72 consecutive hours during the continued occupation of
an assured's premises by strikers, provided such occupation
commenced during the aforesaid period.
3. As regards earthquake (the epicenter of which need not necessarily
be within the territorial confines referred to above) and fire
following directly occasioned by the earthquake, only those
individual fire losses which commence during the period of 168
consecutive hours may be included in the Company's "loss
occurrence."
4. As regards "freeze," only individual losses directly occasioned by
collapse, breakage of glass and water damage (caused by bursting
frozen pipes and tanks and melting snow) may be included in the
Company's "loss occurrence."
Except for those "loss occurrences" referred to in subparagraphs (1)
and (2) above, the Company may choose the date and time when any
such period of consecutive hours commences, provided that it is not
earlier than the date and time of the occurrence of the first
recorded individual loss sustained by the Company arising out of
that disaster, occurrence or loss, and provided that only one such
period of 168 consecutive hours shall apply with respect to one loss
occurrence.
However, as respects those "loss occurrences" referred to in
subparagraphs (1) and (2) above, if the disaster, occurrence or loss
occasioned by the occurrence is of greater duration than 72
consecutive hours, then the Company may divide that disaster,
occurrence or loss into two or more "loss occurrences," provided
that no two periods overlap and no individual loss is included in
more than one such period, and provided that no period commences
earlier than the date and time of the occurrence of the first
recorded individual loss sustained by the Company arising out of
that disaster, occurrence or loss.
No individual losses occasioned by an event that would be covered by
72 hours clauses may be included in any "loss occurrence" claimed
under the 168 hours provision.
Losses arising from the date change to the year 2000, or any other
date change, including leap year calculations, shall not in and of
themselves be regarded as a "loss occurrence" for purposes of this
Contract. Such losses shall include any loss, damage, cost, claim or
expense, whether preventative, remedial or otherwise, directly or
indirectly arising out of or relating to:
a. The calculation, comparison, differentiation, sequencing or
processing of data involving the date change to the year 2000,
or any other date change, including leap year calculations, by
any computer system, hardware, program or software and/or any
microchip, integrated circuit or similar device in computer
equipment or non-computer equipment, whether the property of
the insured or not; or
b. Any change, alteration or modification involving the date
change to the year 2000 or any other date change, including
leap year calculations, to any such computer system, hardware,
program or software or any microchip, integrated circuit or
similar device in computer equipment or non-computer
equipment, whether the property of the insured or not.
This subparagraph applies regardless of any other cause or event
that contributes concurrently or in any sequence to the loss,
damage, cost claim or expense.
However, this subparagraph shall not apply in respect of physical
damage occurring at the insured's premises arising out of the perils
covered by this Contract. None of the circumstances described in
subparagraphs (a) and (b) above shall, in and of itself, constitute
an event for purposes of this Contract.
D. "Loss adjustment expense" as used herein shall mean expenses allocable to
the investigation, defense and/or settlement of specific claims, including
litigation expenses, interest on judgments, and declaratory judgments
expenses incurred in connection with claims under policies reinsured
hereunder, but not including office expenses or salaries of the Company's
regular employees.
E. "Net earned premium" as used herein is defined as gross earned premium of
the Company for the classes of business reinsured hereunder, less the
earned portion of premiums ceded by the Company for reinsurance which
inures to the benefit of this Contract.
Article VIII - Other Reinsurance
The Company shall be permitted to carry other reinsurance, recoveries under
which shall inure to the benefit of the Company and be entirely disregarded in
applying all of the provisions of this Contract.
Article IX - Florida Hurricane Catastrophe Fund
A. Any loss reimbursement the Company receives under the Florida Hurricane
Catastrophe Fund (FHCF) as a result of loss occurrences commencing during
the term of this Contract shall be deemed to be salvage received by the
Company in determining ultimate net loss under this Contract. If the
salvage amount is based on the Company's losses in more than one loss
occurrence and the FHCF does not designate the amount allocable to each
loss occurrence, the salvage amount shall be prorated in the proportion
that the Company's losses in each loss occurrence bear to the Company's
total losses arising out of all loss occurrences to which the salvage
applies. If, as a result of such salvage, the loss to the Reinsurer under
any excess layer of this Contract in any one loss occurrences is less than
the amount previously paid by the Reinsurer under that excess layer, the
Company shall promptly remit the difference to the Reinsurer.
B. Any return reinstatement premium due the Company under any excess layer of
this Contract as a result of a salvage payment made to the Reinsurer under
that excess layer in accordance with paragraph A shall be payable by the
Reinsurer concurrently with payment by the Company of the salvage amount.
C. Any reimbursement premiums or emergency assessment paid by the Company
under the FHCF shall be deemed to be premiums paid for inuring
reinsurance.
Article X - Loss Notices and Settlements
A. Whenever losses sustained by the Company appear likely to result in a
claim hereunder, the Company shall notify the Reinsurer, and the Reinsurer
shall have the right to participate in the adjustment of such losses at
its own expense.
B. All loss settlements made by the Company, provided they are within the
terms of this Contract, shall be binding upon the Reinsurer, and the
Reinsurer agrees to pay all amounts for which it may be liable upon
receipt of reasonable evidence of the amount paid (or scheduled to be
paid) by the Company.
Article XI - Salvage and Subrogation
The Reinsurer shall be credited with salvage (i.e., reimbursement obtained or
recovery made by the Company, less the actual cost, excluding salaries of
officials and employees of the Company and sums paid to attorneys as retainer,
of obtaining such reimbursement or making such recovery) on account of claims
and settlements involving reinsurance hereunder. Salvage thereon shall always be
used to reimburse the excess carriers in the reverse order of their priority
according to their participation before being used in any way to reimburse the
Company for its primary loss. The Company hereby agrees to enforce its rights to
salvage or subrogation relating to any loss, a part of which loss was sustained
by the Reinsurer, and to prosecute all claims arising out of such rights.
Article XII - Reinsurance Premium
A. As premium for the reinsurance provided hereunder, the Company shall pay
the Reinsurer 1.26% of its net earned premium for the term of this
Contract, subject to a minimum premium of $126,000.
B. The Company shall pay the Reinsurer a deposit premium of $180,000 in four
equal installments of $45,000 on July 1 and October 1, 1999 and January 1
and April 1, 2000.
C. Within 60 days after the expiration of this Contract, the Company shall
provide a report to the Reinsurer setting forth the premium due hereunder,
computed in accordance with paragraph A, and any additional premium due
the Reinsurer or return premium due the Company shall be remitted
promptly.
Article XIII - Offset (BRMA 36C)
The Company and the Reinsurer shall have the right to offset any balance or
amounts due from one party to the other under the terms of this Contract. The
party asserting the right of offset may exercise such right any time whether the
balances due are on account of premiums or losses or otherwise.
Article XIV - Access to Records (BRMA 1D)
The Reinsurer or its designated representatives shall have access at any
reasonable time to all records of the Company which pertain in any way to this
reinsurance.
Article XV - Liability of the Reinsurer
A. The liability of the Reinsurer shall follow that of the Company in every
case and be subject in all respects to all the general and specific
stipulations, clauses, waivers and modifications of the Company's policies
and any endorsements thereon. However, in no event shall this be construed
in any way to provide coverage outside the terms and conditions set forth
in this Contract.
B. Nothing herein shall in any manner create any obligations or establish any
rights against the Reinsurer in favor of any third party or any persons
not parties to this Contract.
Article XVI - Net Retained Lines (BRMA 32E)
A. This Contract applies only to that portion of any policy which the Company
retains net for its own account (prior to deduction of any underlying
reinsurance specifically permitted in this Contract), and in calculating
the amount of any loss hereunder and also in computing the amount or
amounts in excess of which this Contract attaches, only loss or losses in
respect of that portion of any policy which the Company retains net for
its own account shall be included.
B. The amount of the Reinsurer's liability hereunder in respect of any loss
or losses shall not be increased by reason of the inability of the Company
to collect from any other reinsurer(s), whether specific or general, any
amounts which may have become due from such reinsurer(s), whether such
inability arises from the insolvency of such other reinsurer(s) or
otherwise.
Article XVII - Errors and Omissions (BRMA 14F)
Inadvertent delays, errors or omissions made in connection with this Contract or
any transaction hereunder shall not relieve either party from any liability
which would have attached had such delay, error or omission not occurred,
provided always that such error or omission is rectified as soon as possible
after discovery.
Article XVIII - Currency (BRMA 12A)
A. Whenever the word "Dollars" or the "$" sign appears in this Contract, they
shall be construed to mean United States Dollars and all transactions
under this Contract shall be in United States Dollars.
B. Amounts paid or received by the Company in any other currency shall be
converted to United States Dollars at the rate of exchange at the date
such transaction is entered on the books of the Company.
Article XIX - Taxes (BRMA 50B)
In consideration of the terms under which this Contract is issued, the Company
will not claim a deduction in respect of the premium hereon when making tax
returns, other than income or profits tax returns, to any state or territory of
the United States of America or the District of Columbia.
Article XX - Federal Excise Tax (BRMA 17A)
(Applicable to those reinsurers, excepting Underwriters at Lloyd's London and
other reinsurers exempt from Federal Excise Tax, who are domiciled outside the
United States of America.)
A. The Reinsurer has agreed to allow for the purpose of paying the Federal
Excise Tax the applicable percentage of the premium payable hereon (as
imposed under Section 4371 of the Internal Revenue Code) to the extent
such premium is subject to the Federal Excise Tax.
B. In the event of any return of premium becoming due hereunder the Reinsurer
will deduct the applicable percentage from the return premium payable
hereon and the Company or its agent should take steps to recover the tax
from the United States Government.
Article XXI - Loss Reserves
A. If the Reinsurer is unauthorized in any state of the United States of
America or the District of Columbia or the Reinsurer has an A. M. Best
rating equal to or below B++, the Reinsurer agrees to fund its share of
the Company's ceded outstanding loss and loss adjustment expense reserves
(including all case reserves plus any reasonable amount estimated to be
unreported from known loss occurrences) by:
1. Clean, irrevocable and unconditional letters of credit issued and
confirmed, if confirmation is required by the insurance regulatory
authorities involved, by a bank or banks meeting the NAIC Securities
Valuation Office credit standards for issuers of letters of credit
and acceptable to said insurance regulatory authorities; and/or
2. Escrow accounts for the benefit of the Company; and/or
3. Cash advances;
if, without such funding, a penalty would accrue to the Company on any
financial statement it is required to file with the insurance regulatory
authorities involved. The Reinsurer, at its sole option, may fund in other
than cash if its method and form of funding are acceptable to the
insurance regulatory authorities involved.
B. With regard to funding in whole or in part by letters of credit, it is
agreed that each letter of credit will be in a form acceptable to insurance
regulatory authorities involved, will be issued for a term of at least one
year and will include an "evergreen clause," which automatically extends
the term for at least one additional year at each expiration date unless
written notice of non-renewal is given to the Company not less than 30 days
prior to said expiration date. The Company and the Reinsurer further agree,
notwithstanding anything to the contrary in this Contract, that said
letters of credit may be drawn upon by the Company or its successors in
interest at any time, without diminution because of the insolvency of the
Company or the Reinsurer, but only for one or more of the following
purposes:
1. To reimburse itself for the Reinsurer's share of losses and/or loss
adjustment expense paid under the terms of policies reinsured
hereunder, unless paid in cash by the Reinsurer;
2. To reimburse itself for the Reinsurer's share of any other amounts
claimed to be due hereunder, unless paid in cash by the Reinsurer;
3. To fund a cash account in an amount equal to the Reinsurer's share
of any ceded outstanding loss and loss adjustment expense reserves
reserves (including all case reserves plus any reasonable amount
estimated to be unreported from known loss occurrences) funded by
means of a letter of credit which is under non-renewal notice, if
said letter of credit has not been renewed or replaced by the
Reinsurer 10 days prior to its expiration date;
4. To refund to the Reinsurer any sum in excess of the actual amount
required to fund the Reinsurer's share of the Company's ceded
outstanding loss and loss adjustment expense reserves reserves
(including all case reserves plus any reasonable amount estimated to
be unreported from known loss occurrences), if so requested by the
Reinsurer.
In the event the amount drawn by the Company on any letter of credit is in
excess of the actual amount required for B(1) or B(3), or in the case of
B(2), the actual amount determined to be due, the Company shall promptly
return to the Reinsurer the excess amount so drawn.
Article XXII - Insolvency
A. In the event of the insolvency of one or more of the reinsured companies,
this reinsurance shall be payable directly to the company or to its
liquidator, receiver, conservator or statutory successor immediately upon
demand, with reasonable provision for verification, on the basis of the
liability of the company without diminution because of the insolvency of
the company or because the liquidator, receiver, conservator or statutory
successor of the company has failed to pay all or a portion of any claim.
It is agreed, however, that the liquidator, receiver, conservator or
statutory successor of the company shall give written notice to the
Reinsurer of the pendency of a claim against the company indicating the
policy or bond reinsured which claim would involve a possible liability on
the part of the Reinsurer within a reasonable time after such claim is
filed in the conservation or liquidation proceeding or in the receivership,
and that during the pendency of such claim, the Reinsurer may investigate
such claim and interpose, at its own expense, in the proceeding where such
claim is to be adjudicated, any defense or defenses that it may deem
available to the company or its liquidator, receiver, conservator or
statutory successor. The expense thus incurred by the Reinsurer shall be
chargeable, subject to the approval of the Court, against the company as
part of the expense of conservation or liquidation to the extent of a pro
rata share of the benefit which may accrue to the company solely as a
result of the defense undertaken by the Reinsurer.
B. Where two or more reinsurers are involved in the same claim and a majority
in interest elect to interpose defense to such claim, the expense shall be
apportioned in accordance with the terms of this Contract as though such
expense had been incurred by the company.
C. It is further understood and agreed that, in the event of the insolvency of
one or more of the reinsured companies, the reinsurance under this Contract
shall be payable directly by the Reinsurer to the company or to its
liquidator, receiver or statutory successor, except as provided by Section
4118(a) of the New York Insurance Law or except (1) where this Contract
specifically provides another payee of such reinsurance in the event of the
insolvency of the company or (2) where the Reinsurer with the consent of
the direct insured or insureds has assumed such policy obligations of the
company as direct obligations of the Reinsurer to the payees under such
policies and in substitution for the obligations of the company to such
payees.
Article XXIII - Arbitration
A. As a condition precedent to any right of action hereunder, in the event of
any dispute or difference of opinion hereafter arising with respect to this
Contract, it is hereby mutually agreed that such dispute or difference of
opinion shall be submitted to arbitration. One Arbiter shall be chosen by
the Company, the other by the Reinsurer, and an Umpire shall be chosen by
the two Arbiters before they enter upon arbitration, all of whom shall be
active or retired disinterested executive officers of insurance or
reinsurance companies or Lloyd's London Underwriters. In the event that
either party should fail to choose an Arbiter within 30 days following a
written request by the other party to do so, the requesting party may
choose two Arbiters who shall in turn choose an Umpire before entering upon
arbitration. If the two Arbiters fail to agree upon the selection of an
Umpire within 30 days following their appointment, each Arbiter shall
nominate three candidates within 10 days thereafter, two of whom the other
shall decline, and the decision shall be made by drawing lots.
B. Each party shall present its case to the Arbiters within 30 days following
the date of appointment of the Umpire. The Arbiters shall consider this
Contract as an honorable engagement rather than merely as a legal
obligation and they are relieved of all judicial formalities and may
abstain from following the strict rules of law. The decision of the
Arbiters shall be final and binding on both parties; but failing to agree,
they shall call in the Umpire and the decision of the majority shall be
final and binding upon both parties. Judgment upon the final decision of
the Arbiters may be entered in any court of competent jurisdiction.
C. If more than one reinsurer is involved in the same dispute, all such
reinsurers shall constitute and act as one party for purposes of this
Article and communications shall be made by the Company to each of the
reinsurers constituting one party, provided, however, that nothing herein
shall impair the rights of such reinsurers to assert several, rather than
joint, defenses or claims, nor be construed as changing the liability of
the reinsurers participating under the terms of this Contract from several
to joint.
D. Each party shall bear the expense of its own Arbiter, and shall jointly
and equally bear with the other the expense of the Umpire and of the
arbitration. In the event that the two Arbiters are chosen by one party,
as above provided, the expense of the Arbiters, the Umpire and the
arbitration shall be equally divided between the two parties.
E. Any arbitration proceedings shall take place at El Segundo, California
unless otherwise mutually agreed upon by the parties to this Contract, but
notwithstanding the location of the arbitration, all proceedings pursuant
hereto shall be governed by the law of the state in which the Company has
its principal office.
Article XXIV - Service of Suit (BRMA 49C)
(Applicable if the Reinsurer is not domiciled in the United States of America,
and/or is not authorized in any State, Territory or District of the United
States where authorization is required by insurance regulatory authorities)
A. It is agreed that in the event the Reinsurer fails to pay any amount
claimed to be due hereunder, the Reinsurer, at the request of the Company,
will submit to the jurisdiction of a court of competent jurisdiction
within the United States. Nothing in this Article constitutes or should be
understood to constitute a waiver of the Reinsurer's rights to commence an
action in any court of competent jurisdiction in the United States, to
remove an action to a United States District Court, or to seek a transfer
of a case to another court as permitted by the laws of the United States
or of any state in the United States.
B. Further, pursuant to any statute of any state, territory or district of
the United States which makes provision therefor, the Reinsurer hereby
designates the party named in its Interests and Liabilities Agreement, or
if no party is named therein, the Superintendent, Commissioner or Director
of Insurance or other officer specified for that purpose in the statute,
or his successor or successors in office, as its true and lawful attorney
upon whom may be served any lawful process in any action, suit or
proceeding instituted by or on behalf of the Company or any beneficiary
hereunder arising out of this Contract.
Article XXV - Agency Agreement
If more than one reinsured company is named as a party to this Contract, the
first named company shall be deemed the agent of the other reinsured companies
for purposes of sending or receiving notices required by the terms and
conditions of this Contract, and for purposes of remitting or receiving any
monies due any party.
Article XXVI - Intermediary (BRMA 23A)
X. X. Xxxxxx Co., Inc. is hereby recognized as the Intermediary negotiating this
Contract for all business hereunder. All communications (including but not
limited to notices, statements, premium, return premium, commissions, taxes,
losses, loss adjustment expense, salvages and loss settlements) relating thereto
shall be transmitted to the Company or the Reinsurer through X. X. Xxxxxx Co.,
Inc., 0000 Xxxx 00xx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000. Payments by the
Company to the Intermediary shall be deemed to constitute payment to the
Reinsurer. Payments by the Reinsurer to the Intermediary shall be deemed to
constitute payment to the Company only to the extent that such payments are
actually received by the Company.
In Witness Whereof, the Company by its duly authorized representative has
executed this Contract as of the date undermentioned at:
Calabasas, California, this ____ day of _______________ in the year _____.
---------------------------------------------------
Condor Insurance Company
Amwest Surety Insurance Company
Far West Insurance Company
U.S.A.
NUCLEAR INCIDENT EXCLUSION CLAUSE - PHYSICAL DAMAGE - REINSURANCE
1. This Reinsurance does not cover any loss or liability accruing to the
Reassured, directly or indirectly and whether as Insurer or Reinsurer, from any
Pool of Insurers or Reinsurers formed for the purpose of covering Atomic or
Nuclear Energy risks.
2. Without in any way restricting the operation of paragraph (1) of this
Clause, this Reinsurance does not cover any loss or liability accruing to the
Reassured, directly or indirectly and whether as Insurer or Reinsurer, from any
insurance against Physical Damage (including business interruption or
consequential loss arising out of such Physical Damage) to:
I. Nuclear reactor power plants including all auxiliary property on
the site, or II. Any other nuclear reactor installation,
including laboratories handling radioactive materials in
connection with reactor installations, and "critical facilities"
as such, or
III. Installations for fabricating complete fuel elements or for
processing substantial quantities of
"special nuclear material," and for reprocessing, salvaging,
chemically separating, storing or disposing of "spent" nuclear
fuel or waste materials, or
IV. Installations other than those listed in paragraph (2) III above
using substantial quantities of radioactive isotopes or other
products of nuclear fission.
3. Without in any way restricting the operations of paragraphs (1) and (2)
hereof, this Reinsurance does not cover any loss or liability by radioactive
contamination accruing to the Reassured, directly or indirectly, and whether as
Insurer or Reinsurer, from any insurance on property which is on the same site
as a nuclear reactor power plant or other nuclear installation and which
normally would be insured therewith except that this paragraph (3) shall not
operate
(a) where Reassured does not have knowledge of such nuclear
reactor power plant or nuclear installation, or
(b) where said insurance contains a provision excluding coverage
for damage to property caused by or resulting from radioactive
contamination, however caused. However on and after 1st
January 1960 this sub-paragraph (b) shall only apply provided
the said radioactive contamination exclusion provision has
been approved by the Governmental Authority having
jurisdiction thereof.
4. Without in any way restricting the operations of paragraphs (1), (2)
and (3) hereof, this Reinsurance does not cover any loss or liability by
radioactive contamination accruing to the Reassured, directly or indirectly, and
whether as Insurer or Reinsurer, when such radioactive contamination is a named
hazard specifically insured against.
5. It is understood and agreed that this Clause shall not extend to risks
using radioactive isotopes in any form where the nuclear exposure is not
considered by the Reassured to be the primary hazard.
6. The term "special nuclear material" shall have the meaning given it in
the Atomic Energy Act of 1954 or by any law amendatory thereof.
7. Reassured to be sole judge of what constitutes:
(a) substantial quantities, and (b) the extent of installation, plant
or site.
Note.-Without in any way restricting the operation of paragraph (1) hereof, it
is understood and agreed that
(a) all policies issued by the Reassured on or before 31st
December 1957 shall be free from the application of the other
provisions of this Clause until expiry date or 31st December
1960 whichever first occurs whereupon all the provisions of
this Clause shall apply.
(b) with respect to any risk located in Canada policies issued by
the Reassured on or before 31st December 1958 shall be free
from the application of the other provisions of this Clause
until expiry date or 31st December 1960 whichever first occurs
whereupon all the provisions of this Clause shall apply.
12/12/57
N.M.A. 1119
BRMA 35B
NUCLEAR INCIDENT EXCLUSION CLAUSE - PHYSICAL DAMAGE - REINSURANCE
CANADA
1. This Agreement does not cover any loss or liability accruing to the
Reinsured, directly or indirectly, and whether as Insurer or Reinsurer, from any
Pool of Insurers or Reinsurers formed for the purpose of covering Atomic or
Nuclear Energy risks.
2. Without in any way restricting the operation of paragraph 1 of this clause,
this Agreement does not cover any loss or liability accruing to the Reinsured,
directly or indirectly, and whether as Insurer or Reinsurer, from any insurance
against Physical Damage (including business interruption or consequential loss
arising out of such Physical Damage) to:
(a) nuclear reactor power plants including all auxiliary property
on the site, or
(b) any other nuclear reactor installation, including laboratories
handling radioactive materials in connection with reactor
installations, and critical facilities as such, or
(c) installations for fabricating complete fuel elements or for
processing substantial quantities of prescribed substances,
and for reprocessing, salvaging, chemically separating,
storing or disposing of spent nuclear fuel or waste materials,
or
(d) installations other than those listed in (c) above using
substantial quantities of radioactive isotopes or other
products of nuclear fission.
3. Without in any way restricting the operation of paragraphs 1 and 2 of this
clause, this Agreement does not cover any loss or liability by radioactive
contamination accruing to the Reinsured, directly or indirectly, and whether as
Insurer or Reinsurer, from any insurance on property which is on the same site
as a nuclear reactor power plant or other nuclear installation and which
normally would be insured therewith, except that this paragraph 3 shall not
operate:
(a) where the Reinsured does not have knowledge of such nuclear
reactor power plant or nuclear installation, or
(b) where the said insurance contains a provision excluding
coverage for damage to property caused by or resulting from
radioactive contamination, however caused.
4. Without in any way restricting the operation of paragraphs 1, 2 and 3 of this
clause, this Agreement does not cover any loss or liability by radioactive
contamination accruing to the Reinsured, directly or indirectly, and whether as
Insurer or Reinsurer, when such radioactive contamination is a named hazard
specifically insured against.
5. This clause shall not extend to risks using radioactive isotopes in any form
where the nuclear exposure is not considered by the Reinsured to be the primary
hazard.
6. The term "prescribed substances" shall have the meaning given to it by the
Atomic Energy Control Act R.S.C. 1985(c), A-16 or by any law amendatory thereof.
7. Reinsured to be sole judge of what constitutes:
(a) substantial quantities, and
(b) the extent of installation, plant or site.
8. Without in any way restricting the operation of paragraphs 1, 2, 3 and 4 of
this clause, this Agreement does not cover any loss or liability accruing to the
Reinsured, directly or indirectly, and whether as Insurer or Reinsurer, caused:
(1) by any nuclear incident, as defined in the Nuclear Liability
Act or any other nuclear liability act, law or statute, or any
law amendatory thereof or nuclear explosion, except for
ensuing loss or damage which results directly from fire,
lightning or explosion of natural, coal or manufactured gas;
(2) by contamination by radioactive material.
NOTE: Without in any way restricting the operation of paragraphs 1, 2, 3
and 4 of this clause, paragraph 8 of this clause shall only apply
to all original contracts of the Reinsured, whether new, renewal
or replacement, which become effective on or after December 31,
1992.
Addendum No. 1
to the
Excess Catastrophe
Reinsurance Contract
Effective: July 1, 1999
issued to
Condor Insurance Company
Calabasas, California
Amwest Surety Insurance Company
Omaha, Nebraska
and
Far West Insurance Company
Omaha, Nebraska
(hereinafter referred to collectively as the "Company")
It is Hereby Agreed, effective October 1, 1999, that subparagraph 8 of paragraph
A of Article IV - Exclusions - shall be deleted and the following substituted
therefor:
"8. Business produced under the California and New York Motorcycle Program."
The provisions of this Contract shall remain otherwise unchanged.
In Witness Whereof, the Company by its duly authorized representative has
executed this Addendum as of the date undermentioned at:
Calabasas, California, this _____ day of ______________ in the year _____.
---------------------------------------------------
Condor Insurance Company
Amwest Surety Insurance Company
Far West Insurance Company
Addendum No. 1
to the
Interests and Liabilities Agreement
of
Xxxxxxx Global Reinsurance
Corporation of America
New York, New York
(hereinafter referred to as the "Subscribing Reinsurer")
with respect to the
Excess Catastrophe
Reinsurance Contract
Effective: July 1, 1999
issued to
Condor Insurance Company
Calabasas, California
Amwest Surety Insurance Company
Omaha, Nebraska
and
Far West Insurance Company
Omaha, Nebraska
(hereinafter referred to collectively as the "Company")
The Subscribing Reinsurer hereby accepts Addendum No. 1, as duly executed by the
Company, as part of the Contract, effective October 1, 1999.
In Witness Whereof, the Subscribing Reinsurer by its duly authorized
representative has executed this Addendum as of the date undermentioned at:
New York, New York, this ____ day of ________________ in the year ____.
---------------------------------------------------
Xxxxxxx Global Reinsurance Corporation of America
Addendum No. 1
to the
Interests and Liabilities Agreement
of
Hannover Ruckversicherungs-Aktiengesellschaft
Hannover, Germany
(hereinafter referred to as the "Subscribing Reinsurer")
with respect to the
Excess Catastrophe
Reinsurance Contract
Effective: July 1, 1999
issued to
Condor Insurance Company
Calabasas, California
Amwest Surety Insurance Company
Omaha, Nebraska
and
Far West Insurance Company
Omaha, Nebraska
(hereinafter referred to collectively as the "Company")
The Subscribing Reinsurer hereby accepts Addendum No. 1, as duly executed by the
Company, as part of the Contract, effective October 1, 1999.
In Witness Whereof, the Subscribing Reinsurer by its duly authorized
representative has executed this Addendum as of the date undermentioned at:
Hannover, Germany, this ____ day of ________________ in the year ____.
---------------------------------------------------
Hannover Ruckversicherungs-Aktiengesellschaft
Addendum No. 1
to the
Interests and Liabilities Agreement
of
Underwriters Reinsurance Company
Concord, New Hampshire
(hereinafter referred to as the "Subscribing Reinsurer")
with respect to the
Excess Catastrophe
Reinsurance Contract
Effective: July 1, 1999
issued to
Condor Insurance Company
Calabasas, California
Amwest Surety Insurance Company
Omaha, Nebraska
and
Far West Insurance Company
Omaha, Nebraska
(hereinafter referred to collectively as the "Company")
The Subscribing Reinsurer hereby accepts Addendum No. 1, as duly executed by the
Company, as part of the Contract, effective October 1, 1999.
In Witness Whereof, the Subscribing Reinsurer by its duly authorized
representative has executed this Addendum as of the date undermentioned at:
Calabasas, California, this ____ day of ________________ in the year ____.
---------------------------------------------------
Underwriters Reinsurance Company
Addendum No. 1
to the
Interests and Liabilities Agreement
of
Certain Underwriting Members of Lloyd's
shown in the Signing Schedule attached hereto
(hereinafter referred to as the "Subscribing Reinsurer")
with respect to the
Excess Catastrophe
Reinsurance Contract
Effective: July 1, 1999
issued to
Condor Insurance Company
Calabasas, California
Amwest Surety Insurance Company
Omaha, Nebraska
and
Far West Insurance Company
Omaha, Nebraska
(hereinafter referred to collectively as the "Company")
The Subscribing Reinsurer hereby accepts Addendum No. 1, as duly executed by the
Company, as part of the Contract, effective October 1, 1999.
Signed for and on behalf of the Subscribing Reinsurer in the Signing Schedule
attached hereto.
Addendum No. 1
to the
Interests and Liabilities Agreement
of
Certain Insurance Companies
shown in the Signing Schedule(s) attached hereto
(hereinafter referred to as the "Subscribing Reinsurer")
with respect to the
Excess Catastrophe
Reinsurance Contract
Effective: July 1, 1999
issued to
Condor Insurance Company
Calabasas, California
Amwest Surety Insurance Company
Omaha, Nebraska
and
Far West Insurance Company
Omaha, Nebraska
(hereinafter referred to collectively as the "Company")
The Subscribing Reinsurer hereby accepts Addendum No. 1, as duly executed by the
Company, as part of the Contract, effective October 1, 1999.
Signed for and on behalf of the Subscribing Reinsurer in the Signing Schedule(s)
attached hereto.
