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Exhibit 10.29
SPECIAL ACCIDENT REINSURANCE FACILITY
QUOTA SHARE REINSURANCE RETROCESSION
(hereinafter referred to as "Agreement")
In consideration of the mutual covenants hereinafter
contained and upon the terms and conditions
hereinafter set forth
UNUM LIFE INSURANCE COMPANY
(hereinafter referred to as the "Retrocessionaire(s)")
does hereby indemnify, as herein provided and specified
business underwritten by
XXXXXXXXX & XXXX, INC.
(hereinafter referred to as "Underwriting Manager")
on behalf of
TRENWICK AMERICA REINSURANCE CORPORATION
(hereinafter referred to as the "Retrocedant")
Article I - INSURING CLAUSE
The Retrocessionaire shall indemnify the Retrocedant for Reinsurance paid
under benefits classified as Special Accident Programs reinsured by the
Retrocedant.
Article II - TERRITORY
This Agreement shall apply to losses occurring within the territorial
limits of the Retrocedant's contracts.
Article III - TERM AND CANCELLATION
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This Agreement shall take effect for a one year period commencing October
1, 1996 and is continuous in nature and shall apply to all policies coming
within the scope of the Agreement and to claims incurred, on and after October
1, 1996. The Retrocedant or the Retrocessionaire(s) may cancel this Agreement at
12:01 A.M. at September 30, 1997, or any September 30th thereafter, by giving
the other at least ninety (90) days prior notice in writing by Certified Mail.
The Retrocessionaire(s) shall continue to participate in all business coming
within the terms of the Agreement during the said period of ninety (90) days.
In the event of cancellation of this Agreement, the Retrocessionaire's(s')
liability on business in force shall continue in connection with any policy the
subject of cession hereunder and any endorsement thereto whether issued after
the date of cancellation or not and whether subject to additional premium or
not. Notwithstanding the foregoing, the Retrocessionaire(s) shall be liable for
their share of any loss reported during a discovery period granted to the
original Insured under a policy which expires or is cancelled during or at the
end of the period of the Retrocessionaire's(s') liability hereunder.
Article IV - UNDERWRITING MANAGER
The business subject to this Agreement shall be underwritten by Xxxxxxxxx
& Xxxx, Inc. on behalf of the Trenwick America Reinsurance Corporation
(Retrocedant).
Article V - RETENTION
The Retrocedant agrees to cede and the Retrocessionaire(s) agrees to
accept under this Agreement the quota share percentage specified in the attached
Interest and Liabilities Agreement for liability as identified in the attached
Exhibit I assumed by the Retrocedant for Special Accident Programs.
Article VI - LIABILITY OF RETROCESSIONAIRE(S)
The liability of the Retrocessionaire(s) shall begin obligatorily and
simultaneously with that of the Retrocedant and all reinsurance ceded hereunder
shall be subject to the same clauses, rates, terms, conditions and endorsements
as the original policies, binders, or contracts insofar as they relate to the
business Reinsured hereunder, the true intent of this Agreement being that the
Retrocessionaire(s) shall, in every case to which this Agreement applies and in
the proportions specified herein, follow the fortunes of the Retrocedant.
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Article VII - PREMIUM AND COMMISSIONS
The premium payable to the Retrocessionaire(s) will be calculated on the
original gross reinsurance rates less the following:
Retrocedant Expense: 2 % of Gross Written Premium
Underwriting
Manager's Fee: Up to 7 1/2% of Gross Written Premium.
Article VIII - PROFIT COMMISSION
Annually, the Retrocessionaire(s) will pay the Retrocedant Profit
Commission equal to twenty (20%) of the profits accruing on business ceded under
this Agreement. Computation of the Profit Commission shall be on an Underwriting
Year basis. Each Underwriting Year shall encompass all transactions relating to
reinsurance ceded under this Agreement during the period.
The first calculation of a Profit Commission shall be made following
September 30, 1997, for the Underwriting Year ending that date. Calculation of
the Profit Commission shall be made following September 30th of each
Underwriting Year that this Agreement remains in effect until each Underwriting
Year is fully developed.
The profits, for each Underwriting Year to which the 20% Profit Commission
will apply, shall be equal to the excess of A over B where:
(A) INCOME is equal to the sum of:
1. Gross Written Premium during the Underwriting Year; and
2. Unearned premium reserve at beginning of period; and
3. A reserve for incurred, but not reported, loss development at
beginning of period; and
4. A reserve for outstanding losses at beginning of period; and
5. Recoveries from any excess of loss protection contracts that
may be arranged by
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the Underwriting Manager to protect the Retrocedant; and
6. Investment Income on the average amount of reserve funds held
by the Retrocessionaire(s) during the current Underwriting
Year, valued as of the date of distribution, based on the
monthly prime interest rate during the subject period
published in The Wall Street Journal less one-half percent.
(B) OUTGO is equal to the sum of:
1. All losses and loss expenses paid less salvages applicable to
the Underwriting Years; and
2. Outstanding Loss Reserve at the close of the Underwriting Year;
and
3. Loss Development Reserve at the close of the Underwriting Year;
and
4. Acquisition Cost (Commission and Brokerage Earned); and
5. Unearned Premium Reserve for the current Underwriting Year; and
6. An allowance of 2% for all business for Retrocedant's Expense.
7. An allowance of up to seven and one half (7 1/2%) of the Gross
Written Premium for Underwriting Managers Fee.
8. An allowance of 3/4 of 1% of Gross Written Premium for
Retrocessionaires Expense.
In the event of an underwriting loss on the total results of any one
Underwriting Year, the amount of such loss shall be debited to the profit
commission statement for the ensuing Underwriting Year. Should a debit balance
still remain, such balance shall be reduced by 50% and debited against further
Underwriting Year(s), but not exceeding three years in all, and no profit
commission shall be considered as earned under this Agreement until a credit
balance is restored. The first calculation of profit commission under this
Agreement shall be made as of September 30, 1997 and shall apply to all business
transacted from the inception of this Agreement. Subsequent calculations and
recalculations of each year's profit commission shall be made as of the last day
of each Underwriting Year. In this Agreement, no further calculation of profit
commission shall be made until all liability has been terminated and all claims
settled.
Article IX - CURRENCY
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Wherever the sign "$" appears in this Agreement it shall mean United
States Dollars. Premiums and losses are payable hereunder in United States
Dollars.
Article X - RETROCESSIONAL PREMIUM, CLAIMS, AND REPORTS
The Retrocedant shall report to the Retrocessionaires within seventy-five
(75) days following the close of each quarter the gross premiums collected for
the quarter less claims paid, acquisition expense, Retrocedant's and
Underwriting Manager's Fee, and at such time any balances due the
Retrocessionaires or Retrocedant shall be due and immediately payable.
In addition, the Retrocedant shall furnish such other information as may
be required by the Retrocessionaires for the completion of the Retrocessionaires
quarterly and annual statements.
Article XI - LOSSES
The Retrocedant alone and at its full discretion shall adjust, settle or
compromise all claims and losses. All such adjustments, settlements and
compromises shall be binding on the Retrocessionaire in proportion to its
participation. The Retrocedant shall likewise at its sole discretion commence,
continue, defend, compromise, settle or withdraw from actions, suits or
proceedings and generally make decisions involving all aspects and matters
relating to any claim or loss as in its judgement may be beneficial or
expedient; and all loss payments made shall be shared by the Retrocessionaire(s)
proportionately. The Retrocessionaire(s) shall, on the other hand, benefit
proportionately from all reductions of losses by salvage, compromise or
otherwise.
The Retrocessionaire(s) shall be liable for its proportionate share of all
expenses incurred by the Company in connection with the investigation and
settlement or contesting the validity of specific claims or losses or alleged
losses.
Losses due by the Retrocessionaire(s) to the Retrocedant shall be carried
to account.
Article XII - CLAIMS CO-OPERATION CLAUSE
The Retrocedant shall advise the Retrocessionaire(s) with reasonable
promptitude of any loss or losses in which the Retrocessionaire(s) is likely to
be involved and shall provide the Retrocessionaire(s) with full information
relative thereto. However, inadvertent failure to give such reasonably prompt
advice shall not affect the Retrocedant's rights under this Agreement.
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The Retrocessionaire(s), through its appointed representatives, shall have
the right to cooperate at its own expense with the Retrocedant in the defense
and/or settlement of any claims in which they may be interested.
All settlements made by the Retrocedant shall be binding on the
Retrocessionaire(s) and the Retrocessionaire(s) agrees to pay any amounts that
may be recoverable under this Agreement as soon as reasonably practical after
the receipt of the necessary papers proving the loss.
Article XIII - OFFSET
The Retrocedant or the Retrocessionaire(s) may offset any balance, whether
on account of premium, commission, claims or losses, adjustment expense,
salvage, or otherwise, due from one party to the other under this Agreement or
under any other agreement heretofore or hereafter entered into between the
Retrocedant and the Retrocessionaire.
Article XIV - TAX PROVISIONS
In consideration of the terms under which the agreement is issued, the
Retrocessionaire(s) shall participate up to its proportionate share in State
Taxes which might be applicable for business ceded hereunder.
Article XV - ACCESS TO RETROCEDANT'S RECORDS
The Retrocessionaire or its designated representatives shall have free
access at any reasonable time to all records of the Retrocedant which pertain in
any way to this Agreement.
Article XVI - EXTRA CONTRACTUAL AND PUNITIVE DAMAGES
In no event shall the Retrocessionaire(s) participate in any extra or
non-contractual damages, nor legal fees and expenses attendant to the defense
thereof, including but not limited to compensatory, exemplary and punitive
damages, nor fines or Statutory Penalties which are awarded against the original
reinsured as a result of an act, omission or course of conduct committed by or
for which the original reinsured shall be held responsible in connection with
the reinsurance retroceded under this Agreement, unless the Retrocessionaire(s)
shall have concurred in writing with the proposed act, omission or course
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of conduct to be taken by the original reinsured which lead to the awarding of
such damages.
If the Retrocessionaire(s) furnishes such written concurrence, payment of
such awarded damages will be shared by the Retrocedant and the
Retrocessionaire(s) in the same proportion as the parties are sharing the claim
out of which such extra contractual obligation arises.
Article XVII - ERRORS AND OMISSIONS
Any inadvertent error, omission or delay in complying with the terms and
conditions of this Agreement shall not be held to relieve either party hereto
from any liability which would attach to it hereunder if such error, omission or
delay had not been made, provided such error, omission or delay is rectified
immediately upon discovery.
Article XVIII - INSOLVENCY
In the event of the insolvency of the Retrocedant, this Reinsurance shall
be payable directly (except where the policy of insurance or this Agreement
specifically provides another payee of such reinsurance in the event of the
insolvency of the Retrocedant) 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 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(s) of the pendency of a claim against the Retrocedant
indicating the policy retroceded, which claim would involve a possible liability
on the part of the Retrocessionaire(s) 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(s) 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(s) 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
proportionate share of the benefit which may accrue to the Retrocedant solely as
a result of the defense undertaken by the Retrocessionaire(s).
Article XIX - ARBITRATION
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All differences between the Retrocedant and the Retrocessionaire(s) on
which agreement cannot be reached will be decided by arbitration. The
arbitrators will determine the interpretation of this Agreement in accordance
with usual business and reinsurance practices rather than strict technicalities.
Three arbitrators will decide any differences. They must be professionals of the
life or Property and Casualty insurance industry and other than the two parties
to this Agreement. One of the arbitrators is to be appointed by the Retrocedant
and one by the Retrocessionaire(s) and these two will select a third. If the two
are not able to agree on a third, the choice will be left to the President of
the American Council of Life Insurance or its successors. The arbitration
procedure shall follow the rules of the American Arbitration Association. The
arbitration shall be conducted in the State of New York and under mutually
agreed upon procedures. If the parties cannot reach agreement on procedures,
either party may petition the American Arbitration Association, or its'
successor, to conduct such arbitration. Any required filing fee will be the sole
responsibility of the petitioner. This Agreement shall be deemed binding upon
the arbitrators for terms expressly agreed to herein. The arbitrator's decision
will be by majority vote, and no appeal will be taken from it. The judgment
rendered by the arbitrators may be entered in any court having proper
jurisdiction. Expenses and fees for the arbitrators shall be borne equally by
the Retrocedant and Retrocessionaire(s) except as mentioned concerning
petitioning fee to the American Arbitration Association.
Article XX - PROPORTION
This Agreement of the undersigned Retrocessionaire(s) is for and covers
its share of the foregoing interests and liabilities.
The share of the Retrocessionaire(s) shall be separate and apart from the
shares of any other reinsurers, and Retrocessionaires(s) shall in no event
participate in the interests and liabilities of such other reinsurers.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed, in duplicate, by their duly authorized representatives this day of
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UNUM LIFE INSURANCE COMPANY
BY: _______________________________________
TITLE: ____________________________________
Signed on this day of 19 .
By XXXXXXXXX & XXXX, INC.
On Behalf of:
TRENWICK AMERICA REINSURANCE CORPORATION
(Retrocedant)
BY: _______________________________________
TITLE: ____________________________________
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INTEREST AND LIABILITIES AGREEMENT
It is hereby mutually agreed by
UNUM LIFE INSURANCE COMPANY
(hereinafter referred to as the "Subscribing Retrocessionaire(s)")
and
TRENWICK AMERICA REINSURANCE CORPORATION
(hereinafter referred to as the "Retrocedant")
That the Subscribing Retrocessionaire(s) shall have a 100% participation in
the Interest and Liabilities underwritten on behalf of the Retrocedant as set
forth in the instrument attached hereto entitled, Special Accident Reinsurance
Facility Quota Share Reinsurance Retrocession.
Such participation shall be several and not joint with the participation of
other Subscribing Retrocessionaire(s) and the Subscribing Retrocessionaire(s)
shall under no circumstances participate in the Interest and Liabilities of the
other Retrocessionaire(s) in said instrument.
The Retrocedant shall pay to the Subscribing Retrocessionaire(s) 100% of
all premiums due or which may become due the Retrocessionaire(s) under the
provisions of the instrument attached. This Agreement shall attach October 1,
1996 and is subject to the Term provision contained in Article III of the
attached instrument which are hereby incorporated by reference into this
Agreement and which shall apply as though they had been specifically provided
for herein.
The instrument to which this Agreement is attached and, therefore, the
Interest and Liabilities of the Subscribing Retrocessionaire(s) therein, may be
changed, altered and amended as the parties may agree, provided such change,
alteration and amendment is evidenced by endorsement to this Agreement executed
by the Retrocedant and the Subscribing Retrocessionaire(s).
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed, in duplicate, by their duly authorized representatives.
THE SUBSCRIBING RETROCESSIONAIRE(S)
Signed in
this day of 19 .
UNUM LIFE INSURANCE COMPANY
BY: _______________________________________
TITLE: ____________________________________
AND
THE RETROCEDANT
Signed in
this day of 19 .
By XXXXXXXXX & XXXX, INC.
On Behalf of:
TRENWICK AMERICA REINSURANCE CORPORATION
(Retrocedant)
BY: _______________________________________
TITLE: ____________________________________
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EXHIBIT I
of the
SPECIAL ACCIDENT REINSURANCE FACILITY
QUOTA SHARE REINSURANCE RETROCESSION
between
TRENWICK AMERICA REINSURANCE CORPORATION
and
UNUM LIFE INSURANCE COMPANY
Business Covered: Occupational Accident Insurance and
Reinsurance
100% Authorized Limits $ 5,000,000 Per Life
$10,000,000 Per Occurrence
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Addendum No. 1 to the
SPECIAL ACCIDENT REINSURANCE FACILITY
QUOTA SHARE REINSURANCE RETROCESSION
(hereinafter referred to as "Agreement")
In consideration of the mutual covenants hereinafter
contained and upon the terms and conditions
hereinafter set forth
UNUM LIFE INSURANCE COMPANY
(hereinafter referred to as the "Retrocessionaire(s)")
does hereby indemnify, as herein provided and specified
business underwritten by
XXXXXXXXX & XXXX, INC.
(hereinafter referred to as "Underwriting Manager")
on behalf of
TRENWICK AMERICA REINSURANCE CORPORATION
(hereinafter referred to as the "Retrocedant")
It is hereby mutually understood and agreed that the following changes are made
to this Agreement effective October 1, 1998:
Article VIII - PROFIT COMMISSION
Annually, the Retrocessionaire(s) will pay the Retrocedant Profit
Commission equal to thirty (30%) of the profits accruing on business ceded under
this Agreement. Computation of the Profit Commission shall be on an Underwriting
Year basis. Each Underwriting Year shall encompass all transactions relating to
reinsurance ceded under this Agreement during the period.
The first calculation of a Profit Commission shall be made following
September 30, 1999, for the Underwriting Year ending that date. Calculation of
the Profit Commission shall be made following September 30th of each
Underwriting Year that this Agreement remains in effect until each Underwriting
Year is fully developed.
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The profits, for each Underwriting Year to which the 30% Profit Commission
will apply, shall be equal to the excess of A over B where:
(A) INCOME is equal to the sum of:
1. Gross Written Premium during the Underwriting Year; and
2. Unearned premium reserve at beginning of period; and
3. A reserve for incurred, but not reported, loss development at
beginning of period; and
4. A reserve for outstanding losses at beginning of period; and
5. Recoveries from any excess of loss protection contracts that may
be arranged by the Underwriting Manager to protect the
Retrocedant; and
6. Investment Income on the average amount of reserve funds held by
the Retrocessionaire(s) during the current Underwriting Year,
valued as of the date of distribution, based on the monthly
prime interest rate during the subject period published in The
Wall Street Journal less one-half percent.
(B) OUTGO is equal to the sum of:
1. All losses and loss expenses paid less salvages applicable to
the Underwriting Years; and
2. Outstanding Loss Reserve at the close of the Underwriting Year;
and
3. Loss Development Reserve at the close of the Underwriting Year;
and
4. Acquisition Cost (Commission and Brokerage Earned); and
5. Unearned Premium Reserve for the current Underwriting Year; and
6. An allowance of up to 2% for all business for Retrocedant's
Expense.
7. An allowance of seven and one half (7 1/2%) of the Gross Written
Premium for Underwriting Managers Fee.
8. An allowance of 3/4 of 1% of Gross Written Premium for
Retrocessionaires Expense.
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In the event of an underwriting loss on the total results of any one
Underwriting Year, the amount of such loss shall be debited to the profit
commission statement for the ensuing Underwriting Year. Should a debit balance
still remain, such balance shall be reduced by 50% and debited against further
Underwriting Year(s), but not exceeding three years in all, and no profit
commission shall be considered as earned under this Agreement until a credit
balance is restored. The first calculation of profit commission under this
Agreement shall be made as of September 30, 1999 and shall apply to all business
transacted from the inception of this Agreement. Subsequent calculations and
recalculations of each year's profit commission shall be made as of the last day
of each Underwriting Year. In this Agreement, no further calculation of profit
commission shall be made until all liability has been terminated and all claims
settled.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
signed, in duplicate, by their duly authorized representatives.
THE SUBSCRIBING RETROCESSIONAIRE(S)
Signed in
this day of 19 .
UNUM LIFE INSURANCE COMPANY
BY: _______________________________________
TITLE: ____________________________________
AND
THE RETROCEDANT
Signed in
this day of 19 .
By XXXXXXXXX & XXXX, INC.
On Behalf of:
TRENWICK AMERICA REINSURANCE CORPORATION
(Retrocedant)
BY: _______________________________________
TITLE: ____________________________________
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EXHIBIT I
of the
SPECIAL ACCIDENT REINSURANCE FACILITY
QUOTA SHARE REINSURANCE RETROCESSION
between
UNUM LIFE INSURANCE COMPANY
and
TRENWICK AMERICA REINSURANCE CORPORATION
Business Covered: Occupational Accident Insurance and
Reinsurance
100% Authorized Limits $10,000,000 Per Life
$10,000,000 Per Occurrence
