Exhibit 10.59
EXCESS OF LOSS RETROCESSION AGREEMENT
BY AND BETWEEN
PLATINUM RE (UK) LIMITED
(RETROCEDANT)
and
PLATINUM UNDERWRITERS REINSURANCE, INC.
(RETROCESSIONAIRE)
DATED AS OF January 1, 2006
ARTICLE 1 - BUSINESS COVERED
This Agreement is to indemnify the Retrocedant in respect of the net excess
liability as a result of any loss or losses which may occur during the term of
this Agreement under any Original Reinsurance Contracts written by the
Retrocedant covering all perils as assumed under the original contracts
including wind, flood, earthquake, and earthquake fire expense insurance.
ARTICLE 2 - COMMENCEMENT AND TERMINATION
This Agreement shall take effect and shall apply to all losses occurring during
the period 1st January 2006 to 31st December 2006 both days inclusive, Local
Standard Time, at the place where the loss occurs.
If this Agreement terminates while an occurrence covered hereunder is in
progress, it is agreed that subject to the other conditions of this Agreement,
the Retrocessionaires shall indemnify the Retrocedant as if the entire loss had
occurred during the term of this Agreement.
ARTICLE 3 - EXCLUSIONS
The following Exclusion Clauses are attached to and form part of this Agreement:
1. Nuclear Energy Risks Exclusion Clause (Reinsurance) (Worldwide
Excluding U.S.A. & Canada) (Japanese Amendment)
2. Pools, Associations, and Syndicates.
3. War Risk Exclusion Clause.
4. Insolvency Funds Exclusion Clause.
ARTICLE 4 - TERRITORY
Coverage applies within the territorial limits of Europe and Japan.
ARTICLE 5 - INURING REINSURANCE
It is understood and agreed that when the Retrocedant warrants that it is in the
best interest of the Retrocedant and the Retrocessionaire, Retrocedant may
purchase facultative reinsurance and/or any other treaty reinsurance.
All Reinsurance in place at January 1, 2006, or acquired after that date,
including the Quota Share with Platinum Underwriters Bermuda, Ltd, and the Quota
Share with Arrow Capital Re inures to the benefit of this program unless
otherwise specified in Appendix 1.
ARTICLE 6 - LIMIT AND RETENTION
The Retrocessionaires shall be liable in respect of each and every loss
occurrence over and above an initial Ultimate Net Loss of $35,000,000 each and
every loss each and every loss occurrence, subject to a limit of liability to
the Retrocessionaires of $50,000,000 Ultimate Net Loss each and every loss or
series of losses arising our of one loss occurrence. Nevertheless, the limit of
liability to Retrocessionaires for all occurrences arising under this Agreement
shall be limited to $100,000,000.
ARTICLE 7 - REINSTATEMENT
Each loss hereon reduces the amount of indemnity provided under this Agreement
by the amount paid. Any amount so exhausted shall be automatically reinstated
from the time of the occurrence of loss and for each amount so reinstated, the
Retrocedant agrees to pay an additional premium calculated at pro rata of the
annual premium as respects the fraction of indemnity exhausted and 100% of the
annual premium regardless of the unexpired term of this Agreement. Nevertheless,
the Retrocessionaire's liability shall not exceed $100,000,000 with respect to
all Loss Occurrences during the term of the Agreement.
ARTICLE 8 - PREMIUM
The premium for this Agreement shall be a flat premium of $1,000,000 payable in
two equal installments on January 1, 2005 and July 1, 2005.
ARTICLE 9 - ULTIMATE NET LOSS
Ultimate Net Loss shall mean the actual loss paid by the Retrocedant, or for
which the Retrocedant becomes liable to pay, such loss to include 100% of any
Extra Contractual Obligations and 100% of any Excess of Policy Limits loss, and
expenses of litigation and interest, if any, and all other loss expenses covered
under Original Reinsurance Contract, and such expenses of the Retrocedant
incurred in the handling of loss arising out of Original Reinsurance Contracts
including subrogation, salvage and recovery expenses (office expenses and
salaries of officials and employees not classified as loss adjusters are not
chargeable as expenses for purpose of this paragraph), but salvages and all
recoveries, including recoveries
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under all reinsurances which inure to the benefit of this agreement (whether
recovered or not), shall be first deducted from such loss to arrive at the
amount of liability attaching hereunder.
All salvages, recoveries or payments recovered or received subsequent to loss
settlement hereunder shall be applied as if recovered or received prior to the
aforesaid settlement and all necessary adjustments shall be made by the parties
hereto.
For purposes of this article, the phrase "becomes liable to pay" shall mean the
existence of a judgment or award, which the Retrocedant does not intend to
appeal or a release has been obtained by the Retrocedant, or the Retrocedant has
accepted a proof of loss.
Nothing in this clause shall be construed to mean that losses are not
recoverable hereunder until the Retrocedant's net loss has been ascertained.
ARTICLE 10 - EXTRA CONTRACTUAL OBLIGATIONS
This Agreement shall protect the Retrocedant and any original reinsured, within
the limits hereof, where the loss includes any Extra Contractual Obligations.
The term "Extra Contractual Obligations" is defined as those liabilities not
covered under any other provision of this Agreement and which arise from the
handling of any claim on business covered hereunder, such liabilities arising
because of, but not limited to, the following: failure by any original reinsured
to settle within the policy limit, or by reason of alleged or actual negligence,
fraud, or bad faith in rejecting an offer of settlement or in the preparation of
the defense or in the trial of any action against its insured or reinsured or in
the preparation or prosecution of an appeal consequent upon such action.
The date on which any Extra Contractual Obligation is incurred by any original
reinsured shall be deemed, in all circumstances, to be the date of the original
disaster and/or casualty.
However, this Article shall not apply where the loss has been incurred due (i)
solely to the acts, or failure to act, of the Retrocedant in handling its claims
or (ii) to fraud by a member of the Board of Directors or a corporate officer of
any original reinsured 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.
ARTICLE 11 - EXCESS OF ORIGINAL POLICY LIMITS
This Agreement shall protect the Retrocedant and any original reinsured, within
the limits hereof, in connection with loss in excess of the limit of its
original policy, such loss in excess of the limit having been incurred because
of failure of the original reinsured to settle within the policy limit or by
reason of alleged or actual negligence, fraud, or bad faith in rejecting an
offer of settlement or in the preparation of the defense or in the trial of any
action against its insured or reinsured or in the preparation or prosecution of
an appeal consequent upon such action.
However, this Article shall not apply where the loss has been incurred due (i)
solely to the acts, or failure to act, of the Retrocedant in handling its claims
or (ii) to fraud by a member of the Board of Directors or a corporate officer of
the original reinsured acting individually or
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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.
For the purpose of this Article, the word "loss" shall mean any amounts for
which the original reinsured or Retrocedant would have been contractually liable
to pay had it not been for the limit of the original policy.
ARTICLE 12 - NET RETAINED LINES
This Agreement applies only to that portion of any reinsurance or any Extra
Contractual Obligations or Excess of Original Policy Limits which the
Retrocedant retains net for its own account, and in calculating the amount of
any loss hereunder and also in computing the amount or amounts in excess of
which this Agreement attaches, only loss or losses in respect of that portion of
any reinsurance or any Extra Contractual Obligations or Excess of Original
Policy Limits which the Retrocedant retains nets for its own account shall be
included.
The amount of the Retrocessionaires liability hereunder in respect of any loss
or losses shall not be increased by reason of the inability of the Retrocedant
to collect from any other Retrocessionaire, whether specific or general, any
amounts which may have become due from them, whether such inability arises from
the insolvency of such other Retrocessionaire or otherwise.
ARTICLE 13- NOTICE OF LOSS AND LOSS SETTLEMENTS
The Retrocedant shall advise the Retrocessionaire promptly of any Loss
Occurrence which, in the opinion of the Retrocedant may result in a claim
hereunder and of all subsequent developments thereto which, in the opinion of
the Retrocedant may materially affect the position of the Retrocessionaire.
All loss settlements made by the Retrocedant, provided they are within the terms
of this Agreement, shall be unconditionally binding upon the Retrocessionaire
who agrees to pay all amounts for which it may be liable immediately upon being
furnished by the Retrocedant with reasonable evidence of the amount due or to be
due. In addition, the Retrocessionaire agrees to abide by court and/or
arbitration decisions affecting the Retrocedant's Original Reinsurance
Contracts.
ARTICLE 14 - ARBITRATION
All disputes and differences arising under or in connection with this Agreement
shall be referred to arbitration under XXXXX Arbitration Rules.
The Arbitration Tribunal shall consist of three arbitrators, one to be appointed
by the Claimant, one to be appointed by the Respondent and the third to be
appointed by the two appointed arbitrators.
The third member of the Tribunal shall be appointed as soon as practicable (and
no later than 28 days) after the appointment of the two party-appointed
arbitrators. The Tribunal shall be constituted upon the appointment of the third
arbitrator.
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The Arbitrators shall be persons (including those who have retired) with not
less than ten years' experience of insurance or reinsurance within the industry
or as lawyers or other professional advisers serving the industry.
Where a party fails to appoint an arbitrator within 14 days of being called upon
to do so or where the two party-appointed arbitrators fail to appoint a third
within 28 days of their appointment, then upon application XXXXX (UK) will
appoint an arbitrator to fill the vacancy. At any time prior to the appointment
by XXXXX (UK) the party or arbitrators in default may make such appointment.
The Tribunal may in its sole discretion make such orders and directions as it
considers to be necessary for the final determination of the matters in dispute.
The Tribunal shall have the widest discretion permitted under the law governing
the arbitral procedure when making such orders or directions.
The seat of arbitration shall be London, England.
The proper law of this Agreement shall be the law of England.
ARTICLE 15 - CURRENCY
For purposes of this Agreement, where the Retrocedant receives premiums or pays
losses in currencies other than United States dollars, such premiums or losses
shall be converted into United States dollars at the actual rates of exchange at
which these premiums or losses are entered in the Retrocedant's books.
ARTICLE 16 - ACCESS TO RECORDS
The Retrocedant shall place at the disposal of the Retrocessionaire at all
reasonable times, and the Retrocessionaire shall have the right to inspect
through its designated representatives, during the term of this Agreement and
thereafter, all books, records and papers of the Retrocedant in connection with
any reinsurance hereunder, or the subject matter hereof.
The Retrocessionaire, except with the express prior written consent of the
Retrocedant, shall not directly or indirectly, communicate, disclose or divulge
to any third party, any knowledge or information that may be acquired either
directly or indirectly as a result of the inspection of the Retrocedant's books,
records and papers. The restrictions as outlined in this Article shall not apply
to communication or disclosures that the Retrocessionaire is required to make to
its statutory auditors, retrocessionaires, legal counsel, arbitrators involved
in any arbitration procedures under this Agreement or disclosures required upon
subpoena or other duly-issued order of a court or other governmental agency or
regulatory authority.
ARTICLE 17 - INSOLVENCY
In the event of the insolvency of the Retrocedant, this reinsurance shall be
payable directly to the Retrocedant, or to its liquidator, receiver, conservator
or statutory successor on the basis of the liability of the Retrocedant without
diminution because of the insolvency of the Retrocedant or
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because the liquidator, receiver, conservator or statutory successor of the
Retrocedant 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 Retrocedant shall give written notice to the Retrocessionaire
of the pendency of a claim against the Retrocedant indicating the Reinsurance
Contract reinsured, which claim would involve a possible liability on the part
of the Retrocessionaire 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 Retrocessionaire 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
Retrocedant or its liquidator, receiver, conservator or statutory successor. The
expense thus incurred by the Retrocessionaire shall be chargeable, subject to
the approval of the court, against the Retrocedant 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 Retrocedant solely as a result of the defense undertaken
by the Retrocessionaire.
As to all reinsurance made, ceded, renewed or otherwise becoming effective under
this Agreement, the reinsurance shall be payable as set forth above by the
Retrocessionaire to the Retrocedant or to its liquidator, receiver, conservator
or statutory successor, except (1) where the Reinsurance Contracts specifically
provide another payee in the event of the insolvency of the Retrocedant, or (2)
where the Retrocessionaire with the consent of the insured or reinsureds, has
assumed such Reinsurance Contract obligations of the Retrocedant as direct
obligations of the Retrocessionaire to the payees under such Reinsurance
Contracts and in substitution for the obligations of the Retrocedant to such
payees.
ARTICLE 18 - OFFSET
The Retrocedant and the Retrocessionaire shall have the right to offset any
balance or amounts due from one party to the other under the terms of this
Agreement. The party asserting the right of offset may exercise such right at
any time whether the balances due are on account of premiums, losses or
otherwise.
ARTICLE 19 - ERRORS AND OMISSIONS
Any inadvertent delay, omission, error or failure made in connection with this
Agreement shall not relieve either party hereto from any liability which would
attach hereunder if such delay, omission, error or failure had not been made,
provided such delay, omission, error or failure is rectified as soon as
reasonably practicable after discovery.
ARTICLE 20- MISCELLANEOUS PROVISIONS
SECTION 20.01 Severability. If any term or provision of this Agreement
shall be held void, illegal, or unenforceable, the validity of the remaining
portions or provisions shall not be affected thereby.
SECTION 20.02 Successors and Assigns. This Agreement may not be
assigned by either party without the prior written consent of the other. The
provisions of this
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Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto and their respective successors and assigns as permitted
herein.
SECTION 20.03 Execution in Counterparts. This Agreement may be
executed by the parties hereto in any number of counterparts and by each of the
parties hereto in separate counterparts, each of which counterparts, when so
executed and delivered, shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
SECTION 20.04 Headings. Headings used herein are not a part of this
Agreement and shall not affect the terms hereof.
SECTION 20.05 Amendments; Entire Agreement. This Agreement may be
amended only by written agreement of the parties. This Agreement supersedes all
prior discussions and written and oral agreements and constitutes the sole and
entire agreement between the parties with respect to the subject matter hereof.
SECTION 20.06 Negotiated Agreement. This Agreement has been negotiated
at arm's-length, and the fact that the initial and final drafts will have been
prepared by either party will not give rise to any presumption for or against
any party to this Agreement or be used in any respect or forum in the
construction or interpretation of this Agreement or any of its provisions.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
in duplicate by their respective officers duly authorized so to do, on the date
set forth below.
Platinum Re (UK) Limited
By: /s/ Xxx Xxxxxx
------------------------------------
Name: Xxx Xxxxxx
Title: Underwriting Manager
Date: February 22, 2006
Platinum Underwriters Reinsurance, Inc.
By: /s/ Xxxxxx Xxxxxx
------------------------------------
Name: Xxxxxx Xxxxxx
Title: Senior Vice President
Date: February 22, 2006
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NUCLEAR ENERGY RISKS EXCLUSION CLAUSE (REINSURANCE) (1994)
(WORLDWIDE EXCLUDING U.S.A. AND CANADA)
(INCLUDES JAPANESE AMENDMENT)
This agreement shall exclude Nuclear Energy Risks whether such risks are
written directly and/or by way of reinsurance and/or via Pools and/or
Associations.
For all purposes of this agreement Nuclear Energy Risks shall mean all
first party and/or third party insurances or reinsurances (other than
Workers' Compensation and Employers' Liability) in respect of:
(I) All Property on the site of a nuclear power station. Nuclear
Reactors, reactor buildings and plant and equipment therein on
any site other than a nuclear power station.
(II) All Property, on any site (including but not limited to the sites
referred to in (I) above) used or having been used for:
(a) the generation of nuclear energy; or
(b) the Production, Use or Storage of Nuclear Material.
(III) Any other Property eligible for insurance by the relevant local
Nuclear Insurance Pool and/or Association but only to the extent
of the requirements of that local Pool and/or Association.
(IV) The supply of goods and services to any of the sites, described
in (I) to (III) above, unless such insurances or reinsurances
shall exclude the perils of irradiation and contamination by
Nuclear Material.
Except as undernoted, Nuclear Energy Risks shall not include:
(i) Any insurance or reinsurance in respect of the construction or
erection or installation or replacement or repair or maintenance
or decommissioning of Property as described in (I) to (III) above
(including contractors' plant and equipment);
(ii) Any Machinery Breakdown or other Engineering insurance or
reinsurance not coming within the scope of (i) above;
Provided always that such insurance or reinsurance shall exclude the perils
of irradiation and contamination by Nuclear Material.
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However, the above exemption shall not extend to:
(1) The provision of any insurance or reinsurance whatsoever in
respect of:
(a) Nuclear Material;
(b) Any Property in the High Radioactivity Zone or Area of any Nuclear
Installation as from the introduction of Nuclear Material or - for reactor
installations - as from fuel loading or first criticality where so agreed
with the relevant local Nuclear Insurance Pool and/or Association.
(2) The provision of any insurance or reinsurance for the undernoted
perils:
- Fire, lightning, explosion;
- Earthquake;
- Aircraft and other aerial devices or articles dropped
therefrom;
- Irradiation and radioactive contamination;
- Any other peril insured by the relevant local Nuclear
Insurance Pool and/or
Association;
in respect of any other Property not specified in (1) above which
directly involves the Production, Use or Storage of Nuclear
Material as from the introduction of Nuclear Material into such
Property.
Definitions
"Nuclear Material" means:
(i) Nuclear fuel, other than natural uranium and depleted uranium,
capable of producing energy by a self-sustaining chain process of
nuclear fission outside a Nuclear Reactor, either alone or in
combination with some other material; and
(ii) Radioactive Products or Waste.
"Radioactive Products or Waste" means any radioactive material produced in,
or any material made radioactive by exposure to the radiation incidental to
the production or utilization of nuclear fuel, but does not include
radioisotopes which have reached the final stage of fabrication so as to be
usable for any scientific, medical, agricultural, commercial or industrial
purpose.
"Nuclear Installation" means:
(i) Any Nuclear Reactor;
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(ii) Any factory using nuclear fuel for the production of Nuclear
Material, or any factory for the processing of Nuclear Material,
including any factory for the reprocessing of irradiated nuclear
fuel; and
(iii) Any facility where Nuclear Material is stored, other than
storage incidental to the carriage of such material.
"Nuclear Reactor" means any structure containing nuclear fuel in such an
arrangement that a self-sustaining chain process of nuclear fission can
occur therein without an additional source of neutrons.
"Production, Use or Storage of Nuclear Material" means the production,
manufacture, enrichment, conditioning, processing, reprocessing, use,
storage, handling and disposal of Nuclear Material.
"Property" shall mean all land, buildings, structures, plant, equipment,
vehicles, contents (including but not limited to liquids and gases) and all
materials of whatever description whether fixed or not.
"High Radioactivity Zone or Area" means:
(i) For nuclear power stations and Nuclear Reactors, the vessel or
structure which immediately contains the core (including its
supports and shrouding) and all the contents thereof, the fuel
elements, the control rods and the irradiated fuel store; and
(ii) For non-reactor Nuclear Installations, any area where the level
of radioactivity requires the provision of a biological shield.
Notwithstanding the provisions of this Clause, certain liabilities the type
of which by market practice and custom have not been declared to the
Japanese Nuclear Pool are covered hereunder.
N.M.A. 1975a (10/3/94) (with Japanese Amendment added).
Approved by Lloyd's Underwriters' Non-Marine Association.
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WAR AND CIVIL WAR EXCLUSION CLAUSE
This Agreement excludes loss or damage directly or indirectly occasioned by,
happening through or in consequence of War, Invasion, Acts of Foreign Enemies,
Hostilities (whether War be declared or not), Civil War, Rebellion, Revolution,
Insurrection, Military or Usurped Power, or confiscation or nationalization or
requisition or destruction of or damage to property by or under the order of any
government or public or local authority, but this exclusion shall not apply to
business written in accordance with the Market War and Civil War Risks Exclusion
Agreement nor to business outside the scope of such Agreement.
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INSOLVENCY FUNDS EXCLUSION CLAUSE
This Agreement excludes 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, howsoever denominated, established, or governed, that 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.
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APPENDIX 1
Reinsurance protection that inures to the sole benefit of the Retrocedant
None
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