QUOTA SHARE REINSURANCE AGREEMENT
Exhibit (10)(PP)
THIS QUOTA SHARE REINSURANCE AGREEMENT (this “Agreement”) is dated as of this 6th
day of December, 2010, but effective as of December 1, 2010 (the “Effective Date”) between MICHIGAN
INSURANCE COMPANY, a Michigan corporation with its principal office in Grand Rapids, Michigan
(“MICO”), and DONEGAL MUTUAL INSURANCE COMPANY, a Pennsylvania mutual fire insurance company with
its principal office in Marietta, Pennsylvania (“Donegal Mutual”).
WITNESSETH:
WHEREAS, Donegal Mutual has offered to provide reinsurance to MICO to the extent and on the
terms and conditions and subject to the exceptions, exclusions and limitations set forth in this
Agreement and nothing stated in this Agreement shall in any manner create any obligations or
establish any rights against Donegal Mutual in favor of any person not a party to this Agreement;
WHEREAS, MICO has agreed to place such reinsurance with Donegal Mutual to the extent and on
the terms and conditions and subject to the exceptions, exclusions and limitations set forth in
this Agreement; and
WHEREAS, this Agreement shall constitute the entire contract between Donegal Mutual and MICO
related to such reinsurance and provides no guarantee of profit, directly or indirectly, to either
Donegal Mutual or MICO;
NOW, THEREFORE, in consideration of the mutual covenants set forth in this Agreement, and
intending to be legally bound hereby, Donegal Mutual and MICO agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions.
As used in this Agreement:
“Allocated Loss Adjustment Expenses” shall mean all court costs, interest upon judgments and
mitigation, investigation, adjustment and legal expenses chargeable to or incurred in (i) the
mitigation, investigation, negotiation, settlement of or defense against a Loss under a Covered
Policy, (ii) loss prevention mitigation or investigation in respect of any Covered Policy as to
which MICO has posted a loss reserve, (iii) the investigation, prevention and workout of a
potential Loss under a Covered Policy, (iv) the protection, perfection and exercise of any
subrogation or salvage or rights of reimbursement with respect to any
Covered Policy or (v) any deficiency resulting from the loss settlement or the workout of a
potential Loss under a Covered Policy. Allocated Loss Adjustment Expenses shall exclude all
office expenses and salaries of officers and employees of MICO. All loss adjustment expenses that
are not Allocated Loss Adjustment Expenses shall constitute Unallocated Loss Adjustment Expenses.
“Ceding Commission” shall have the meaning set forth in Section 8.1.
“Covered Policies” shall mean an insurance policy first issued by MICO on or after 12:01 a.m.
on December 1, 2010. Donegal Mutual is not assuming any liability from any insurance policy MICO
first issued on or before 12:01 a.m. on December 1, 2010.
“Donegal Mutual” shall have the meaning set forth in the introductory paragraph of this
Agreement.
“Effective Date” shall have the meaning set forth in the Preamble.
“Exclusions” shall have the meaning set forth in Section 3.2.
“Extra Contractual Obligations” shall mean all liabilities (i) for compensatory,
consequential, exemplary, punitive or similar damages which directly relate to any alleged or
actual act, error, omission, fraud or misrepresentation by any Person, any of its affiliates or any
of its or its affiliates’ officers or employees, whether intentional or otherwise, in connection
with the Covered Policies or (ii) from any alleged or actual reckless conduct or bad faith by any
Person, any of its affiliates or any of its or its affiliates’ officers or employees in connection
with such Person’s handling of any claim under any of the Covered Policies, including the
settlement, defense of or appeal of any claim or in connection with the issuance, offer, sale,
delivery, cancellation or administration by any Person or any of its affiliates or any of its or
its affiliates’ officers or employees under any of the Covered Policies.
“Insolvency Fund” shall mean any guaranty fund, insolvency fund, plan, pool, association or
other arrangement, however denominated, established or governed, which provides for any assessment
of or payment or assumption by MICO of part or all of any claim, debt, charge, fee or other
obligation of an insurer or its successors or assigns which any competent authority has declared to
be insolvent or which is otherwise deemed unable to meet any claim, debt, fee, charge or other
obligation in whole or in part.
“Loss” shall mean (i) amounts incurred by MICO in settlement or satisfaction of claims under
or in respect of the Covered Policies, (ii) any and all Allocated Loss Adjustment Expenses MICO
incurs under or in respect of the Covered Policies, (iii) amounts payable to reinsurers other than
Donegal Mutual under or with respect to the Covered Policies and (iv) Extra Contractual Obligations
arising after the Effective Date from the acts of Donegal Mutual, in each case net of amounts
actually collected by Donegal Mutual or MICO under Third Party Reinsurance Agreements.
“Occurrence” shall be the definition of said term as set forth in MICO’s Covered Policies,
provided, however, in the event “Occurrence” is not defined in any Covered Policy that is reinsured
pursuant to this Agreement, then, as to such policy, the term “each Occurrence” shall mean each
accident or Occurrence or series of accidents or Occurrences arising out of one event, and shall
include aggregate limits of liability for a period not exceeding 12 months when a Covered Policy
applies in excess of aggregate limits. If MICO and Donegal Mutual cannot specifically determine
the date of any Loss, accident, casualty or loss Occurrence, the date of such Loss, accident,
casualty or loss Occurrence shall be the inception date of the original Covered Policy reinsured
pursuant to this Agreement, provided that such policy period shall be deemed not to exceed 12
calendar months.
“Person” shall mean any individual, corporation, limited liability company, association,
joint-stock company, business trust or other similar organization, partnership, joint venture,
trust, unincorporated association or government or any agency, instrumentality or political
subdivision of a government.
“Quota Share” shall mean 25%.
“Recovery shall mean any amount actually received by MICO in respect of any Loss covered by
Donegal Mutual under this Agreement, whether by subrogation, salvage, reimbursement or other
recovery.
“Recovery Expenses” shall mean any expense, including court costs and legal expenses MICO
incurs for purposes of obtaining a Recovery with respect to Losses, but excluding the expenses and
salaries of the officers and employees of MICO or its affiliates or normal overhead expenses of
MICO and its affiliates and excluding any expense that would constitute an Allocated Loss
Adjustment Expense.
“MICO” shall have the meaning set forth in the introductory paragraph of this Agreement.
“Termination Date” shall have the meaning assigned to it in Section 16.1.
“Third-Party Reinsurance Agreements” shall mean, to the extent such treaties or agreements
relate to Covered Policies, (i) all reinsurance treaties and agreements under which MICO is a
ceding party that were in force on the date of this Agreement, and (ii) any such treaty or
agreement that is terminated or expired but under which MICO may continue to receive reinsurance
coverage.
“Unallocated Loss Adjustment Expenses” shall have the meaning set forth in the definition of
Allocated Loss Adjustment Expenses.
“Ultimate Net Loss” as used in this Agreement means the actual loss MICO pays or that MICO
becomes liable to pay under the Covered Policies reinsured pursuant to this Agreement, including
all loss adjustment expense, 100% of any Extra Contractual Obligation and 100% of any Loss in
Excess of Policy Limits as defined in Sections 11.1 and 11.2 of this
Agreement. “Ultimate Net Loss” shall include any expenses of litigation, accrued interest
where such accrued interest is a part of any judgment, and all other loss expenses of MICO
including legal expenses and costs incurred in connection with coverage and validity issues and any
legal proceedings with respect thereto that are allocable to a Covered Policy.
ARTICLE 2
APPLICATION OF AGREEMENT
2.1 Business Covered. This Agreement applies to all insurance policies MICO issues
after the Effective Date and which MICO issues during the term of this Agreement until 11:59 p.m.
on the Termination Date.
ARTICLE 3
COVER
3.1 Quota Share Reinsurance. Subject to the terms and conditions of this Agreement:
(a) MICO hereby cedes to Donegal Mutual, and Donegal Mutual hereby accepts and reinsures from
MICO, the Quota Share of any Losses under the Covered Policies net of any losses covered by the
Third-Party Reinsurance Agreements of MICO. Such Losses are sometimes referred to in this
Agreement as the “Reinsured Liabilities.” All liabilities of MICO other than the Reinsured
Liabilities under the Covered Policies shall remain the liabilities of MICO (the “Retained
Liabilities”), and Donegal Mutual shall have no responsibility for the Retained Liabilities by
reason of entering into this Agreement or otherwise. MICO hereby agrees to indemnify Donegal
Mutual and hold Donegal Mutual harmless from and against the Retained Liabilities.
(b) For the avoidance of doubt, Donegal Mutual hereby assumes the risk that any third-party
reinsurance maintained by MICO is not collected, and Donegal Mutual has no obligation to pay or to
reimburse MICO for losses MICO paid or liabilities MICO first incurred prior to the Effective Date
or after the Termination Date.
3.2 Exclusions. This Agreement shall not apply to, and the Reinsured Liabilities
shall specifically exclude, loss, damage, cost or expense of any nature directly or indirectly
caused by, resulting from or in connection with any of the following liabilities of MICO,
regardless of any other cause or event contributing currently or in any other sequence to the loss,
damage, cost or expense (the “Exclusions”), all of which shall remain the exclusive responsibility
of MICO:
(a) all liability of MICO arising by agreement, assessment, operation of law or otherwise from
MICO’s participation or membership, whether voluntary or involuntary, in any Insolvency Fund,
coastal or wind storm authority or similar association; and
(b) all liability of MICO arising after the Effective Date arising from the acts, errors or
omissions of MICO.
ARTICLE 4
REINSURANCE FOLLOWS ORIGINAL POLICIES
4.1 Follow the Fortunes. Except to the extent specifically otherwise provided in this
Agreement or as MICO and Donegal Mutual may agree in writing, all reinsurance under this Agreement
shall be subject in all respects to the same rates, terms, conditions, waivers and interpretations,
and to the same modifications, cancellations and alterations as the Covered Policies, the true
intent of this Agreement being that Donegal Mutual shall, in every case to which this Agreement
applies, follow the fortunes of MICO; provided, however, that the Agreement shall not be construed
to expand the liability of Donegal Mutual beyond the liabilities Donegal Mutual has specifically
assumed pursuant to this Agreement.
4.2 Third-Party Rights. Except as set forth in Sections 6.1 or 12.1, nothing in this
Agreement shall in any manner create any obligations or establish any rights against Donegal Mutual
in favor of any Person not a party to this Agreement.
ARTICLE 5
CHANGE IN POLICY FORMS
5.1 Policy Forms. MICO and Donegal Mutual have agreed on the forms of Covered
Policies that MICO will issue and that Donegal Mutual will reinsure pursuant to this Agreement.
MICO shall advise Donegal Mutual of any change in any form of any Covered Policy no less than 90
days prior to the implementation of any such change, and such change shall not be implemented
unless Donegal Mutual shall have approved such change in writing within 30 days after receipt of
such notice from MICO, such approval not to be unreasonably withheld by Donegal Mutual.
ARTICLE 6
LOSSES AND LOSS ADJUSTMENT EXPENSES
6.1 Payment to MICO for Ultimate Net Losses. Donegal Mutual shall pay to MICO the
Quota Share of sums actually paid by MICO in settlement of the Ultimate Net Losses under the
Covered Policies, on and after the Effective Date; provided, however, that in the event of the
insolvency of MICO, Donegal Mutual shall pay such amount to the liquidator, receiver or statutory
successor of MICO in accordance with the provisions of Article 12 of this Agreement.
6.2 Expenses to be Borne by Donegal Mutual. Donegal Mutual shall bear its Quota Share
of all external loss adjustment expenses MICO incurs in the investigation, adjustment and
litigation of all claims under the Covered Policies.
6.3 Salvage. Donegal Mutual shall receive its Quota Share of all salvage, recoveries
and payments received subsequent to a Loss settlement under this Agreement whether received before
or after the final adjudication of any claim under the Covered Policies.
6.4 Loss Development. MICO shall advise Donegal Mutual promptly of all claims and any
subsequent developments pertaining to those claims that may develop into Losses under the Covered
Policies reinsured pursuant to this Agreement.
6.5 Defense of Claims. MICO shall investigate and, to the extent that may be required
by the Covered Policies reinsured under this Agreement, defend any claim affecting the reinsurance
provided by this Agreement and pursue such claim to final determination.
6.6 Donegal Mutual Participation. MICO agrees, upon the request of Donegal Mutual,
that when so requested, MICO will afford Donegal Mutual an opportunity to participate with MICO, at
the expense of Donegal Mutual, in the defense or control of any claim, suit or proceeding involving
the reinsurance provided pursuant to this Agreement; and MICO and Donegal Mutual shall cooperate in
all material respects in the defense of such suit, claim or proceeding.
ARTICLE 7
PREMIUM
7.1 Payment of Direct Written Premium. During the term of this Agreement, Donegal
Mutual shall assume from MICO 25% of MICO’s net written premiums applicable to its liability under
the Covered Policies for the reinsurance provided pursuant to this Agreement. MICO shall pay such
premiums, net of any premiums for third-party reinsurance.
7.2 Summary Statements. As soon as possible after the end of each month, MICO shall
submit to Donegal Mutual a statement that summarizes the net premiums ceded, return premiums and
conversions on MICO’s net written business, the actual premiums due, net of commission, and MICO
shall pay to Donegal Mutual any amount due within 15 days of MICO’s delivery of such statement to
Donegal Mutual. MICO shall furnish quarterly to Donegal Mutual, MICO’s unearned premium reserve on
the Covered Policies. MICO shall compute its unearned premium reserve on the daily pro rata basis.
7.3 Payment of Losses. Donegal Mutual shall pay its proportion of Loss and loss
expenses paid by MICO to MICO within 15 days after MICO renders a monthly account summarizing the
Losses and loss expenses. Donegal Mutual shall have the right, at its option, to offset the amount
of such Loss or loss expense as provided in Article 13.
ARTICLE 8
CEDING COMMISSION
8.1 Payment of Ceding Commission. Donegal Mutual shall pay a ceding commission of 33%
to MICO on the net written premiums MICO cedes to Donegal Mutual under this Agreement. On all
return premiums, MICO shall promptly return to Donegal Mutual the Ceding Commission applicable to
such returned premium.
8.2 Statement of Ceding Commission. As soon as possible after the end of each month,
Donegal Mutual shall submit to MICO a statement that sets forth the Ceding Commission fees, and
Donegal Mutual shall pay any amount due within fifteen (15) days of Donegal Mutual’s receipt of the
monthly statements required by Section 7.2.
8.3 Taxes. The Ceding Commission allowance that Donegal Mutual pays to MICO on the
Covered Policies reinsured pursuant to this Agreement includes provision for all premium taxes,
licenses and fees with the exception of service charges, assessments and any other expenses
whatsoever, except external loss adjustment expenses.
ARTICLE 9
INSPECTION
9.1 Right of Inspection. MICO shall place at the disposal of Donegal Mutual and
Donegal Mutual shall have the right to inspect, through its authorized representatives, at all
reasonable times during the term of this Agreement and thereafter, the books, records and papers of
MICO pertaining to the reinsurance provided pursuant to this Agreement and all claims made in
connection therewith.
ARTICLE 10
RESERVES AND TAXES
10.1 Maintenance of Reserves. Donegal Mutual shall maintain legal reserves with
respect to the unearned premiums and claims it assumed pursuant to this Agreement.
10.2 Premium Taxes. MICO shall be liable for all taxes on premiums reported to
Donegal Mutual under this Agreement and MICO shall reimburse Donegal Mutual for such taxes where
Donegal Mutual is required to pay the same.
ARTICLE 11
EXTRA CONTRACTUAL OBLIGATIONS/EXCESS OF POLICY LIMITS
11.1 Extra Contractual Obligations. The obligations reinsured pursuant to this
Agreement shall include Extra Contractual Obligations under the Covered Policies.
11.2 Losses In Excess of Policy Limits. The obligations reinsured pursuant to this
Agreement shall include Loss in Excess of Policy Limits with respect to any Covered Policy. “Loss
in Excess of Policy Limits” shall mean losses in excess of the policy limit, having been incurred
because of, but not limited to, failure by MICO to settle within the Covered Policy limit or by
reason of alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement or
in 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.
11.3 Date of Occurrence. An Extra Contractual Obligation and Loss in Excess of Policy
Limits shall be deemed to have occurred on the same date as the Loss covered under a Covered
Policy, and shall constitute part of the original Loss.
11.4 Meaning of Loss. For the purposes of the Loss in Excess of Policy Limits
coverage under this Agreement, the word “Loss” shall mean any amount for which MICO would have been
contractually liable to pay had it not been for the limit of the Covered Policy.
11.5 Loss Adjustment Expense. Loss adjustment expense in respect of Extra Contractual
Obligations and Loss in Excess of Policy Limits shall be covered under this Agreement in the same
manner as other loss adjustment expense.
11.6 Fraud. However, this Article 11 shall not apply where the Loss has been incurred
due to final legal adjudication of fraud of a member of the board of directors or an officer of
MICO 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 under this Agreement.
11.7 Michigan Law. In no event shall Donegal Mutual provide reinsurance to MICO to
the extent not permitted under the laws of Michigan.
ARTICLE 12
INSOLVENCY CLAUSE
12.1 Insolvency. In the event of the insolvency and the appointment of a conservator,
rehabilitator, liquidator or statutory successor of MICO,
(a) the reinsurance provided by this Agreement and each and every reinsurance agreement
heretofore or hereafter entered into between Donegal Mutual and MICO shall be payable, subject to
Section 12.1(b), by Donegal Mutual directly to MICO or to its conservator, rehabilitator,
liquidator, receiver or statutory successor on the basis of the liability of MICO under the Covered
Policies without diminution because of the insolvency of MICO or because the conservator,
rehabilitator, liquidator, receiver, or statutory successor has failed to pay all or any portion of
any claims.
(b) Donegal Mutual shall make the payments as set forth above directly to MICO or to its
conservator, rehabilitator, liquidator, receiver or statutory successor. If an insured under a
Covered Policy submits a claim to MICO’s conservator, rehabilitator, liquidator, receiver or
statutory successor, Donegal Mutual shall have the right, in lieu of making a payment to such
conservator, rehabilitator, liquidator, receiver or statutory successor, to make a payment on the
claim directly to the insured. Any such payment by Donegal Mutual shall discharge Donegal Mutual
from its related payment obligation under such Covered Policy.
(c) In the event of the insolvency of MICO, the rehabilitator, liquidator, receiver,
conservator or statutory successor of MICO shall give written notice to Donegal Mutual of the
pendency of each claim against MICO on each Covered Policy within a reasonable time after such
claim is filed in the insolvency proceeding; and, during the pendency of such claim, Donegal Mutual
may investigate such claim and interpose, at its own expense, in the proceeding where such claim is
to be adjudicated, any defense which Donegal Mutual may deem available to MICO, its rehabilitator,
liquidator, receiver, conservator or statutory successor. The expense Donegal Mutual thus incurs
shall be chargeable, subject to court approval, against MICO as part of the expense of liquidation
or rehabilitation to the extent of the share of the benefit that may accrue to MICO solely as a
result of the defense undertaken by Donegal Mutual.
ARTICLE 13
OFFSET CLAUSE
13.1 Offset. Except for payments to be made pursuant to Section 6.1, which may only
be offset against each other, Donegal Mutual and MICO shall each have, and may exercise at any time
and from time to time, the right to offset any balance or amount, whether on account of premiums,
premium adjustments, commissions, claims, Losses, Recoveries or otherwise, due from such party to
the other party hereto under this Agreement. The party asserting the right of offset shall have
and may exercise such right at any time whether the balance or balances due or to become due to
such party from the other are on account of premiums or on account of Losses or otherwise. If
Donegal Mutual is required to make a payment directly to an insured under a Covered Policy, no
offset shall be allowed between Donegal Mutual and the insured under a Covered Policy, provided,
however, that Donegal Mutual shall continue to maintain its offset rights against MICO pursuant to
this Agreement.
ARTICLE 14
ARBITRATION
14.1 Arbitration. Should an irreconcilable difference of opinion arise between MICO
and Donegal Mutual as to the interpretation of this Agreement or the transactions this Agreement
contemplates, as a condition precedent to any right of action under this Agreement, such difference
shall be submitted to arbitration to the decision of a board of
arbitration composed of two arbitrators and an umpire, meeting in Lansing, Michigan under the
rules of the American Arbitration Association.
14.2 Identity of Arbitrators. The members of the board of arbitration shall be active
or retired disinterested executive officers of insurance or reinsurance companies. Each party
shall appoint one arbitrator and the two arbitrators shall choose an umpire before they enter into
arbitration. If either party fails to appoint its arbitrator within four weeks after being
requested to do so, the other party shall also appoint the second arbitrator. If the two
arbitrators fail to agree upon the appointment of an umpire within four weeks after their
nominations, each of them shall name three nominees for umpire, of whom each arbitrator shall
decline two nominees and the decision among the two remaining nominees shall be made by the
claimant party drawing lots.
14.3 Default Selection. In the event that either party shall fail to choose an
arbitrator within four weeks following a request by Donegal Mutual or MICO for arbitration, the
requesting party shall choose two arbitrators who shall choose the umpire.
14.4 Submission of Initial Brief. The claimant shall submit its initial brief within
20 days from appointment of the umpire. The respondent shall submit its brief within 20 days after
receipt of the claimant’s brief and the claimant may submit a reply brief within 10 days after
receipt of the respondent’s brief.
14.5 Arbitrator Decision. The board of arbitration shall make its decision with
regard to the custom and usage of the insurance and reinsurance business. The board of arbitration
shall issue its decision in writing based upon a hearing in which evidence may be introduced
without following strict rules of evidence but in which cross examination and rebuttal shall be
allowed. The board of arbitration shall make its decision within 60 days following the conclusion
of the hearings unless the parties consent to an extension. The majority decision of the board of
arbitration shall be final and binding upon all parties to the proceeding. Judgment may be
entered upon the award of the board of arbitration in any court having jurisdiction thereof.
14.6 Multiple Reinsurers. 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 clause and
communications shall be made by MICO to each of the reinsurers constituting the one party,
provided, however, that nothing therein 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 under the terms of this Agreement from several to joint.
14.7 Arbitration Expenses. Each party shall bear the expense of its own arbitrator
and shall jointly and equally bear with the other party the expense of the umpire. The remaining
costs of the arbitration proceedings shall be allocated by the board of arbitration.
14.8 No Judicial Foundation. The arbitrators shall be relieved of all judicial
formalities and may abstain from strict rules of law, interpreting this Agreement as an honorable
obligation rather than as merely a legal obligation.
ARTICLE 15
GOVERNING LAW AND REGULATORY APPROVAL
15.1 Governing Law. This Agreement shall be interpreted under and pursuant to the
laws of the State of Michigan in all respects.
15.2 Regulatory Approval. Any changes or amendments to this Agreement shall be
subject to the receipt of prior written approval from the Michigan Office of Financial and
Insurance Regulation and the Pennsylvania Insurance Department.
ARTICLE 16
COMMENCEMENT AND TERMINATION
16.1 Effective Time. This Agreement shall take effect as of 12:01 A.M. on the
Effective Date and is entered into for an unlimited term, but either party may terminate the term
of this Agreement at any time by giving not less than 90 days notice in writing to the other party
of a date of termination of this Agreement (the “Termination Date”).
16.2 Participation Until Termination. Donegal Mutual shall participate in business
coming within the terms of this Agreement until the date of termination of this Agreement.
16.3 Run-Off. In the event either party terminates this Agreement the reinsurance
assumed pursuant to this Agreement shall be provided on a “run-off” basis for all policies written
after the Effective Date of this Agreement and prior to the Termination Date until all liabilities
under the Covered Policies have been satisfied in full.
ARTICLE 17
CURRENCY OF PAYMENT
17.1 Currency of Payment. All payments under this Agreement shall be made in the
currency of the United States of America.
ARTICLE 18
ACCESS TO RECORDS
18.1 Access to Records. Donegal Mutual, by its duly appointed representatives, shall
have the right at any reasonable time, to examine all papers in the possession of MICO that relate
to the Covered Policies that Donegal Mutual has reinsured pursuant to this Agreement.
ARTICLE 19
STATISTICS
19.1 Statistics. MICO shall furnish Donegal Mutual such statistics as may be
necessary to comply with statutory requirements and in such form as Donegal Mutual may reasonably
request from MICO.
ARTICLE 20
ERRORS AND OMISSIONS
20.1 Errors and Omissions. Any inadvertent delay, omission or error by either party
shall not relieve the other party from any liability that would have attached under this Agreement,
provided that such delay, omission or error shall not impose any greater liability on Donegal
Mutual than would have attached under this Agreement if such act, delay, omission or error had not
occurred, and such act, delay, omission or error is promptly and reasonably rectified upon
discovery by the responsible party.
ARTICLE 21
MISCELLANEOUS
21.1 Notices. All reports, remittances, notices, letters, financial statements or any
other communications between the parties to this Agreement shall be addressed as follows:
To Donegal Mutual:
Donegal Mutual Insurance Company
0000 Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000
Attention: President
Facsimile: (000) 000-0000
0000 Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000
Attention: President
Facsimile: (000) 000-0000
To MICO:
Michigan Insurance Company
0000 Xxxx Xxxxxxxx X.X., Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxx 00000
Attention: President
Facsimile: (000) 000-0000
0000 Xxxx Xxxxxxxx X.X., Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxx 00000
Attention: President
Facsimile: (000) 000-0000
21.2 Assignment. Neither this Agreement nor any rights or obligations under this
Agreement may be assigned or otherwise transferred by any party to this Agreement, including by
operation of law, without the consent of the other party to this Agreement and the prior approval
of the Commissioner of Insurance of the State of Michigan; provided,
however, that Donegal Mutual may assign its rights or obligations under this Agreement to any
entity that has a current A.M. Best rating equal to or greater than A.
21.3 Severability. If any provision of this Agreement shall be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not
affect any other provision of this Agreement and this Agreement shall be construed as if such
invalid, illegal or unenforceable provision had never been part of this Agreement unless the
deletion of such provision would result in such a material change as to cause completion or
continuation of the transactions contemplated by this Agreement to be unreasonable or materially
frustrate the objectives of MICO and Donegal Mutual as expressed in this Agreement.
21.4 Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be an original, but such counterparts together shall constitute one and the same
agreement.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed in duplicate
and delivered as of the day and year first above written.
| DONEGAL MUTUAL INSURANCE COMPANY |
||||
| By: | /s/ Xxxxxx X. Xxxxxxxx | |||
| Xxxxxx X. Xxxxxxxx, President | ||||
| MICHIGAN INSURANCE COMPANY |
||||
| By: | /s/ Xxxxx X. Xxxxxxx | |||
| Xxxxx X. Xxxxxxx, President | ||||
