Exhibit 10.13 (17)
ADDENDUM NO. 2
to
AGGREGATE LOSS RATIO REINSURANCE AGREEMENT
between
NATIONAL UNION FIRE INSURANCE COMPANY OF
PITTSBURGH, PA
(hereinafter called the "Retrocedent")
and
GRANITE REINSURANCE COMPANY, LTD.
(hereinafter called the "Retrocessionaire")
It is understood and agreed that addendum numbers 4 and 5 to the Underlying
Agreements, copies attached hereto, are accepted as part of the Underlying
Agreements.
It is understood and agreed that effective January 1st, 2002 the following
articles are amended to read as follows:
ARTICLE IV COVERAGE
The Retrocessionaire shall be liable separately for each Reinsurance Agreement,
for losses incurred (including all Loss Adjustment Expenses) in excess of a loss
ratio of (1) 79% for business effective prior to 2002, or (2) 78.625% for
business effective in 2002. Exposures that have been commuted shall not be
included in determining the loss ratio if the loss ratios are less than 79% and
78.625% respectively. All terms and conditions of the Underlying Agreements,
copies attached hereto, shall apply.
ARTICLE VI PREMIUMS
For business effective prior to 2002:
The Retrocedent shall pay an initial deposit premium of $10,000 within 15 days
of receipt of the first cash premium payment received on any of the Underlying
Agreements. The final premium shall be 12.5% of the premium cash payments
received. The difference between that premium and the deposit premium shall be
paid to the Retrocessionaire. In addition the Retrocedent shall pay 100% of the
payment received upon the finalization of the liabilities in accordance with the
Underlying Agreements. The aforementioned payments shall be made within 30 days
of the finalization of all liabilities on the Underlying Agreements and this
Agreement. However, no payment shall be made after the deposit premium unless
all conditions of this agreement have been complied with.
For business effective 2002:
The final premium shall be .375% of the premiums reported on the account
statement(s) of the Underlying Agreements. In addition the Retrocedent shall
pay 100% of the Profit Account Balance. The aforementioned payments shall be
made within 30 days of finalization of all liabilities on the Underlying
Agreements and this Agreement. However no payment shall be made after the
deposit premium unless all conditions of this Agreement have been complied with.
ARTICLE VII DEFINITIONS
Loss Ratio shall mean losses paid and outstanding, including IBNR and allocated
loss adjustment expenses, divided by earned premium calculated separately for
business effective prior to 2002 and business effective in 2002 for each
Underlying Agreement. Exposures that are commuted are not to be included in
determining loss ratio if the results are less than 79% and 78.625%
respectively.
For business effective in 2002:
Profit Account Balance shall mean:
Cash payments received by the Retrocedent on the Underlying Agreements,
minus
3.375% of the total premiums reported on the Underlying Agreements, minus
Cash payments made on the Underlying Agreements
ARTICLE VIII REPORTS AND ACOCUNTING
The Retrocedent shall forward to the Retrocessionaire a copy of all reports
received in accordance with the Underlying Agreements within 30 days of their
receipt. In the event the paid loss (including all loss adjustment expenses)
are in excess of (1) 79% on business effective prior to 2002, or (2) 78.625% on
business effective in 2002, of the earned premium on any individual agreement,
the Retrocessionaire shall pay such excess within 30 days of receipt of the
account statement, however, not in excess of the limit of liability.
Furthermore, no payment shall be made in excess of an amount that would result
in a profit return to the Retrocedent in excess of 3.375% of the premium ceded
of the Underlying Agreements. Any amounts otherwise due shall be reduced by the
amount of Investment Allowance in the Underlying Agreement that would have been
due but was not paid.
IN WITNESS WHEREOF: the parties hereto have caused this Agreement to be
executed by their Authorized representatives.
In:_________________________________this_________day of__________________2002
NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA
By:_________________________________Title:______________________________
And in:_____________________________this__________day of_________________2002
GRANITE REINSURANCE COMPANY, LTD.
By:_________________________________Title:______________________________