EXHIBIT 10.16
AGREEMENT OF REINSURANCE
NO. 8206
between
GENERAL REINSURANCE CORPORATION
a Delaware corporation
having its principal offices at
Financial Centre
000 Xxxx Xxxx Xxxxxx P.O. Box 10350
Stamford, Connecticut 06904-2350
(herein referred to as the "Reinsurer")
and
PENN-AMERICA INSURANCE COMPANY
000 Xxxxx Xxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
(herein referred to as the "Company")
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In consideration of the promises set forth in this Agreement, the parties agree
as follows:
Article I - SCOPE OF AGREEMENT
As a condition precedent to the Reinsurer's obligations under this
Agreement, the Company shall cede to the Reinsurer the business described in
this Agreement, and the Reinsurer shall accept such business as reinsurance from
the Company.
This Agreement is comprised of General Articles I through XII and the
Exhibit(s) listed below and each Exhibit which may be made a part of this
Agreement. The terms of the General Articles and of the Exhibit(s) shall
determine the rights and obligations of the parties. The terms of the General
Articles shall apply to each Exhibit unless specifically amended therein. In the
event of termination of all the Exhibits made a part of this Agreement, the
General Articles shall automatically terminate when the liability of the
Reinsurer under said Exhibits ceases.
EXHIBIT A - EXCESS OF LOSS REINSURANCE
of
Liability Business
GENERAL REINSURANCE CORPORATION
EXHIBIT B - EXCESS OF LOSS REINSURANCE
of
Property Business
Article II - PARTIES TO THE AGREEMENT
This Agreement is solely between the Company and the Reinsurer. When
more than one Company is named as a party to this Agreement, the first Company
named shall be the agent of the other companies as to all matters pertaining to
this Agreement. Performance of the obligations of each party under this
Agreement shall be rendered solely to the other party. However, if the Company
becomes insolvent, the liability of the Reinsurer shall be modified to the
extent set forth in the article entitled INSOLVENCY OF THE COMPANY. In no
instance shall any insured of the Company or any claimant against an insured of
the Company have any rights under this Agreement.
Article III - MANAGEMENT OF CLAIMS AND LOSSES
The Company shall investigate and settle or defend all claims and
losses. When requested by the Reinsurer, the Company shall permit the Reinsurer,
at the expense of the Reinsurer, to be associated with the Company in the
defense or control of any claim, loss, or legal proceeding which involves or is
likely to involve the Reinsurer. All payments of claims or losses by the Company
within the terms and limits of its policies which are within the limits set
forth in the applicable Exhibit shall be binding on the Reinsurer, subject to
the terms of this Agreement.
Article IV - RECOVERIES
The Company shall pay to or credit the Reinsurer with the Reinsurer's
portion of any recovery obtained from salvage, subrogation, or other insurance.
Adjustment expenses for recoveries shall be deducted from the amount recovered.
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GENERAL REINSURANCE CORPORATION
The Reinsurer shall be subrogated to the rights of the Company to the
extent of its loss payments to the Company. The Company agrees to enforce its
rights of salvage, subrogation, and its rights against insurers or to assign
these rights to the Reinsurer.
If the reinsurance under an Exhibit is on a share basis, the
recoveries shall be apportioned between the parties in the same ratio as the
amounts of their liabilities bear to the loss. If the reinsurance under an
Exhibit is on an excess basis, recoveries shall be distributed to the parties in
an order inverse to that in which their liabilities accrued.
Article V - PREMIUM REPORTS AND REMITTANCES
All reinsurance premium reports required by the Exhibit(s) attached
hereto may be sent to:
ASD Treaty Accounting Department
General Reinsurance Corporation
Financial Centre
X.X. Xxx 00000
Xxxxxxxx, XX 00000-00 53
All reinsurance premiums and any other amounts due the Reinsurer may
be remitted to the following lockbox address:
General Reinsurance Corporation
X.X. Xxx 00000
Xxxxxxx, XX 00000-0000
Article VI - ERRORS AND OMISSIONS
The Reinsurer shall not be relieved of liability because of an error
or accidental omission of the Company in reporting any claim or loss or any
business reinsured under this Agreement, provided that the error or omission is
rectified promptly after discovery. The Reinsurer shall be obligated only for
the return of the premium paid for business reported but not reinsured under
this Agreement.
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GENERAL REINSURANCE CORPORATION
Article VII - SPECIAL ACCEPTANCES
Business not within the terms of this Agreement may be submitted to
the Reinsurer for special acceptance and, if accepted by the Reinsurer, shall be
subject to all of the terms of this Agreement except as modified by the special
acceptance.
Article VIII - RESERVES AND TAXES
The Reinsurer shall maintain the required reserves as to the
Reinsurer's portion~ of unearned premium, claims, losses, and adjustment
expense.
The Company shall be liable for all premium taxes on premium ceded to
the Reinsurer under this Agreement. If the Reinsurer is obligated to pay any
premium taxes on this premium, the Company shall reimburse the Reinsurer;
however, the Company shall not be required to pay taxes twice on the same
premium.
Article IX - OFFSET
The Company or the Reinsurer 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 Company and the
Reinsurer.
Article X - INSPECTION OF RECORDS
The Company shall allow the Reinsurer to inspect, at reasonable times,
the records of the Company relevant to the business reinsured under this
Agreement, including Company files concerning claims, losses, or legal
proceedings which involve or are likely to involve the Reinsurer.
Article XI - ARBITRATION
Any unresolved difference of opinion between the Reinsurer and the
Company shall be submitted to arbitration by three arbitrators. One arbitrator
shall be chosen by the Reinsurer,
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GENERAL REINSURANCE CORPORATION
and one shall be chosen by the Company. The third arbitrator shall be chosen by
the other two arbitrators within ten (10) days after they have been appointed.
If the two arbitrators cannot agree upon a third arbitrator, each arbitrator
shall nominate three persons of whom the other shall reject two. The third
arbitrator shall then be chosen by drawing lots. If either party fails to choose
an arbitrator within thirty (30) days after receiving the written request of the
other party to do so, the latter shall choose both arbitrators, who shall choose
the third arbitrator. The arbitrators shall be impartial and shall be active or
retired persons whose principal occupation is or was as an officer of property
and casualty insurance or reinsurance companies.
The party requesting arbitration (the "Petitioner") shall submit its
brief to the arbitrators within thirty (30) days after notice of the selection
of the third arbitrator. Upon receipt of the Petitioner's brief, the other party
(the "Respondent") shall have thirty (30) days to file a reply brief On receipt
of the Respondent's brief, the Petitioner shall have twenty (20) days to file a
rebuttal brief Respondent shall have twenty (20) days from the receipt of
Petitioner's rebuttal brief to file its rebuttal brief The arbitrators may
extend the time for filing of briefs at the request of either party.
The arbitrators are relieved from judicial formalities and, in
addition to considering the rules of law and the customs and practices of the
insurance and reinsurance business, shall make their award with a view to
effecting the intent of this Agreement. The decision of the majority shall be
final and binding upon the parties. The costs of arbitration, including the fees
of the arbitrators, shall be shared equally unless the arbitrators decide
otherwise. The arbitration shall be held at the times and places agreed upon by
the arbitrators.
Article XII - INSOLVENCY OF THE COMPANY
In the event of the insolvency of the Company, the reinsurance
proceeds will be paid to the Company or the liquidator on the basis of the
amount of the claim allowed in the insolvency proceeding without diminution by
reason of the inability of the Company to pay all or part of the claim.
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GENERAL REINSURANCE CORPORATION
The Reinsurer shall be given written notice of the pendency of each
claim against the Company on the policy(ies) reinsured hereunder within a
reasonable time after such claim is filed in the insolvency proceedings. The
Reinsurer shall have the right to investigate each such claim and to interpose,
at its own expense, in the proceeding where such claim is to be adjudicated, any
defenses which it may deem available to the Company or its liquidator. The
expense thus incurred by the Reinsurer shall be chargeable, subject to court
approval, against the insolvent Company as part of the expense of liquidation to
the extent of a proportionate share of the benefit which may accrue to the
Company solely as a result of the defense undertaken by the Reinsurer.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in duplicate, this 7th day of May, 1996,
GENERAL REINSURANCE CORPORATION
/s/ Xxxx XxXxxxxx
Vice President
Attest: /s/ Illegible
And this 7th day of May, 1996
PENN-AMERICA INSURANCE COMPANY
/s/ Xxx Xxxxxxxx
President
Attest: /s/ Xxxx XxXxxxx
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Agreement No. 8206
GENERAL REINSURANCE CORPORATION
EXHIBIT A
Attached to and made a part of
Agreement of Reinsurance No. 8206
EXCESS OF LOSS REINSURANCE
of
Liability Business
Section 1 - LIABILITY OF THE REINSURER
The Reinsurer shall pay to the Company, with respect to liability
business of the Company, the amount of net loss each occurrence in excess of the
Company Retention but not exceeding the Limit of Liability of the Reinsurer as
set forth in the Schedule of Reinsurance.
SCHEDULE OF REINSURANCE
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Company
Class of Business Retention Limit of Liability of the Reinsurer
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Liability Business $500,000 $2,500,000
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Section 2 - COMBINATION COVER
If an occurrence takes place which involves the liability business
reinsured hereunder and one property risk reinsured under Exhibit B to this
Agreement in combination, the Reinsurer shall pay to the Company the amount of
net loss in excess of a Company Retention of $500,000 with respect to such
occurrence, but not exceeding a Limit of Liability of the Reinsurer of $200,000.
The Limit of Liability of the Reinsurer specified in this Section shall be in
addition to the Limits of Liability of the Reinsurer set forth in the sections
entitled LIABILITY OF THE REINSURER of this Exhibit and said Exhibit B.
Section 3 - LOSS IN EXCESS OF POLICY LIMITS
Notwithstanding the provisions of the article entitled MANAGEMENT OF
CLAIMS AND LOSSES, if a third party claimant is awarded an amount in excess of
the Company's
GENERAL REINSURANCE CORPORATION
policy limit and, as a result of the Company's failure to settle within the
policy limit or of the Company's alleged or actual negligence 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 in the preparation or prosecution of
an appeal consequent upon such action, an action is taken by the insured or
assignee which could impose legal liability on the Company for an amount in
excess of the Company's policy limit, 100% of that portion of the award made to
the third party claimant which is in excess of the Company's policy limit shall
be added to the Company's net loss from the occurrence and the total shall be
allocated in accordance with the section entitled LIABILITY OF THE REINSURER.
However, this Section shall not apply where the loss has been incurred
due to the fraud or criminal conduct of a member of the Board of Directors, a
corporate officer of the Company, or any other employee 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.
Any insurance or reinsurance, whether collectible or not, which
indemnifies or protects the Company against claims which are the subject matter
of this Section and any contribution, subrogation or recovery shall inure to the
benefit of the Reinsurer and shall be deducted to arrive at the amount of the
Company's net loss.
Section 4 - EXTRA CONTRACTUAL OBLIGATIONS
Notwithstanding the provisions of the article entitled MANAGEMENT OF
CLAIMS AND LOSSES, if the Company incurs an extra contractual obligation, 80% of
the extra contractual obligation shall be added to the Company's net loss from
the occurrence and the total shall be allocated in accordance with the section
entitled LIABILITY OF THE REINSURER.
For purposes of this Section, the term "extra contractual obligation"
shall mean a loss which the Company may be legally liable to pay, which is not
covered under any other provision of this Exhibit and which arises from the
Company's handling of any claim on the policies
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GENERAL REINSURANCE CORPORATION
reinsured hereunder which have limits of liability or amounts of insurance
greater than the Company Retention.
The date on which an extra contractual obligation is incurred by the
Company shall be deemed, in all circumstances, to be the date of the original
occurrence.
This Section shall not apply where the extra contractual obligation
has been incurred due to the fraud or criminal conduct of a member of the Board
of Directors, a corporate officer of the Company, or any other employee of the
Company, acting individually or collectively or in collusion with any individual
or corporation or any other organization or party involved in the investigation,
defense or settlement of any claim covered hereunder.
Any insurance or reinsurance, whether collectible or not, which
indemnifies or protects the Company against claims which are the subject matter
of this Section and any contribution, subrogation, or recovery shall inure to
the benefit of the Reinsurer and shall be deducted to arrive at the amount of
the Company's net loss.
Section 5 - OTHER REINSURANCE
The obligations of the Company to reinsure business falling within the
scope of this Exhibit and of the Reinsurer to accept such reinsurance are
mandatory and no other reinsurance (either facultative or treaty) is permitted,
except as provided for below.
The Company may purchase facultative excess of loss reinsurance or
facultative share reinsurance within the liability of the Reinsurer, if, in the
underwriting judgment of the Company, the Reinsurer will be benefited thereby.
In no event, however, shall the amount required with respect to the Company
Retention be reduced.
Section 6 - COMPANY POLICY AMOUNTS
For the purpose of determining the Company Retention and the Limits of
Liability of the Reinsurer, the limits of liability of the Company with respect
to any one policy shall be deemed not to exceed:
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GENERAL REINSURANCE CORPORATION
(a) Personal Automobile Liability Minimum Statutory Limits
Combined Single Limit
(b) Uninsured and Underinsured Motorists Minimum Statutory Limits
Coverages
(c) Personal Injury Protection Coverage Statutory Limits
(d) Other Liability Combined Single Limit $1,000,000 each occurrence
(Including Non-Owned and Hired Autos)
(e) Section II Liability under Commercial $1,000,000 each occurrence
Multiple Peril
(f) Garage Liability $1,000,000 each occurrence
Section 7 - DEFINITIONS
(a) Liability Business
This term shall mean insurance classified as personal automobile
liability, personal automobile uninsured motorists, personal
automobile personal injury protection, other liability
(including hired and non-owned automobile liability), section II
under commercial multiple peril, and garage liability (not to
include garage keepers legal liability) and described in the
manuals of the Insurance Services Office, as respects insureds
domiciled in the United States of America, its territories and
possessions, or in Canada.
(b) Company Retention
This term shall mean the amount the Company shall retain for its
own account; however, this requirement shall be satisfied if
this amount is retained by the Company or its affiliated
companies under common management or common ownership.
(c) Net Loss
This term shall mean all payments by the Company within the
terms and limits of its policies in settlement of claims or
losses, payment of benefits, or satisfaction of judgments or
awards, including adjustment expense, after deduction of
subrogation and other recoveries and after deduction of amounts
due from all other reinsurance, whether collectible or not. If
the Company becomes insolvent, this definition shall be modified
to the
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GENERAL REINSURANCE CORPORATION
extent set forth in the article entitled INSOLVENCY OF THE
COMPANY.
(d) Adjustment Expense
This term shall mean expenditures by the Company within the
terms of its policies in the direct defense of claims and as
allocated to an individual claim or loss (other than for
office expenses and for the salaries and expenses of
employees of the Company or of any subsidiary or related or
wholly owned company of the Company) made in connection with
the disposition of a claim, loss, or legal proceeding
including investigation, negotiation, and legal expenses,
court costs; prejudgment interest or delayed damages; and
interest on any judgment or award.
(e) Prejudgment Interest or Delayed Damages
This term shall mean interest or damages added to a settlement,
verdict, award, or judgment based on the amount of time prior to
the settlement, verdict, award, or judgment whether or not made
part of the settlement, verdict, award, or judgment.
(f) Occurrence
This term shall mean each accident or occurrence or series of
accidents or occurrences arising out of one event, whether
involving one or several of the Company's policies. All bodily
injury or property damage arising out of continuous or repeated
exposure to substantially the same general conditions shall be
considered as arising out of one occurrence. The date of
occurrence shall be deemed to be the following:
(1) As respects a loss involving one or more policies written
on an occurrence basis, the date on which bodily injury or
property damage occurs.
(2) As respects a loss involving one or more policies written
on a claims-made basis, the date when notice of claim is
received and recorded by the Company or the insured,
whichever comes first, and any related claims reported
subsequent to such date shall be included in such loss.
However, if notice of claim is received and recorded by the
Company or the insured during an Extended Reporting Period,
the date of occurrence shall be deemed to be the last day
of the policy period.
(3) As respects a loss involving one or more policies written
on an occurrence basis and one or more policies written on
a claims-made basis, the date on which bodily injury or
property damage occurs, and any related claims reported
subsequent to such date
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GENERAL REINSURANCE CORPORATION
shall be included in such loss whether they are covered
under occurrence or claims-made policies.
(g) Subject Premium
This term shall mean the Company's premium for the business
reinsured under this Exhibit, other than the Company's premium
for personal automobile liability, personal automobile uninsured
motorists, personal automobile personal injury protection, after
deduction of the premium paid for reinsurance which inures to
the benefit of this Exhibit.
Section 8 - EXCLUSIONS
This Exhibit does not apply to:
(a) Reinsurance assumed by the Company, excepting reinsurance of
primary business assumed from affiliated companies;
(b) Any loss or damage which is occasioned by war, invasion,
hostilities, acts of foreign enemies, civil war, rebellion,
insurrection, military or usurped power, or martial law, or
confiscation by order of any government or public authority, but
not excluding loss or damage which would be covered under a
standard form of policy containing a standard war exclusion
clause;
(c) Any loss or liability accruing to the Company directly or
indirectly from any insurance written by or through any pool,
association, or syndicate, including pools, associations, or
syndicates in which membership by the Company is required under
any statute or regulation;
(d) Any 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, which provides for any assessment of,
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;
(e) Nuclear Incident as provided in the Nuclear Incident Exclusion
Clause - Liability - Reinsurance, which is attached to and made
a part of this Exhibit;
(f) Policies written on a co-indemnity basis not controlled by the
Company;
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GENERAL REINSURANCE CORPORATION
(g) Fidelity, surety, aviation, ocean marine, system performance,
boiler and machinery, political risk, kidnap, xxxxxx and
extortion, credit, retroactive liability, financial guarantee
and insolvency business, or strike insurance;
(h) Policies written to apply in excess of a deductible or self
insured amount of more than $10,000 or policies written to apply
specifically in excess over underlying insurance;
(i) Pollution liability or environmental impairment liability with
respect to new and renewal policies written on and after January
1, 1986, but this exclusion does not preclude liability for
loss, damage, costs, or expenses which are covered under
Insurance Services Office wordings promulgated on or after
January 1, 1986. However, if the insured elects to purchase any
"buy back" or additional coverage options, such options shall
not be covered under this Exhibit even if such options are
provided by or covered under such Insurance Services Office
wordings;
(j) "Self-insurance" or "self-insured obligations", howsoever
styled, of the Company, its affiliates or subsidiaries, or any
insurance wherein the Company, its affiliates or subsidiaries,
are named as the insured party, either alone or jointly with
some other party, notwithstanding that no legal liability may
arise in respect thereof by reason of the fact that the Company,
its affiliates or subsidiaries, may not be obligated by law to
pay a claim to itself, its affiliates or subsidiaries;
(k) Policies written on a claims made basis where the retroactive
date of such policies precedes the effective date of the
original insured's first claims made policy;
(l) Liability arising out of the manufacturing, mining,
transportation, distribution, use, removal, encapsulation, or
exposure to asbestos, asbestos products, asbestos fibers, or
asbestos dust;
(m) Policies covering liability of any original insured whose annual
gross sales, receipts, or revenues exceed $250,000,000;
(n) Automobile liability insurance, except for the following
classes: personal automobile liability, non owned and hired
automobile liability when written as part of a general liability
policy, and garage liability (however, garagekeepers legal
liability is excluded);
(o) Automobile liability insurance relating to the ownership,
maintenance, or use of automobiles used in organized speed
contests;
(p) Liability other than automobile insurance relating to risks
involving:
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(1) Wrecking of buildings or structures, except when three
stories or less in height;
(2) Amusement parks, amusement devices, fairs, exhibitions,
carnivals, circuses, and zoos, except when written within
the guidelines of the Company's Special Events Program;
(3) Sports or other entertainment events with an expected
capacity, at any one time, of 10,000 or more people;
(4) Arenas, grandstands, stadiums, theatres, halls and any other
indoor venues with an expected capacity, at any one time, of
5,000 or more people;
(5) Blasting operations;
(6) Motion picture production;
(7) All mining or quarrying operations;
(8) Subway construction or tunnelling, other than sewer
construction;
(9) Navigation, towing, construction, repair, conversion,
cleaning, work on, stevedoring, demolition, wrecking,
uprighting, or salvage of any commercial vessel, barge, dry
dock, oil rig, and any other commercial vessel;
(10) Offshore or subaqueous operations;
(11) Railroads, including street railways, except sidetrack
agreements;
(12) Aircraft, helicopters, airports, or flight operations;
(13) Governmental subdivisions, bodies, authorities, or agencies
over 10,000 in population, except OL&T related exposures;
(14) Storage, production, marketing, handling, refinement,
distribution, or transmission of natural or artificial
fuels, except with respect to:
(i) Wholesale distribution of gasoline, kerosene, or fuel
oils;
(ii) Storage of gasoline, kerosene, or fuel oils with a
combined total capacity of less than 75,000 gallons at
any one location; and,
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(iii) Retail sales of gasoline or diesel fuel or fuel oil;
(15) Manufacture, transportation, marketing, handling, storage,
or use of explosives (Note: An explosive substance is
defined as any substance manufactured for the express
purpose of exploding as differentiated from other
commodities used industrially which are fortuitously
explosive such as gasoline, celluloid, fuel gases, and
dyestuffs), caps, primers, or detonators and other similar
materials, fireworks, ammunition, or ammonium nitrate;
(16) Gas, electric, and water utility companies;
(17) Shoring, underpinning, or moving of buildings or structures;
(18) Manufacture, marketing, blending, mixing, repackaging or
relabeling of agricultural and industrial chemicals;
(19) Steeple or chimney shaft work (other than residential
chimney sweep operations) and tower construction;
(20) Construction or maintenance of cofferdams;
(21) Malpractice or professional liability and/or errors and
omissions insurance including liability of any insurer or
reinsurer for alleged misconduct in the handling of claims
or in any of its dealings with policyholders, except for
beauticians, barbers, morticians, opticians, optometrists,
hearing aid specialists clergymen counseling, animal
grooming, exercise studios, day care centers and those
classes mutually agreed upon in writing;
(22) Directors and officers, public officials, Security Exchange
Commission, and ERISA liability;
(23) Broadcasters, telecasters, and publishers liability;
(24) Liquor law liability other than the following: host liquor,
and liquor law liability when written in conjunction with
the Company's Restaurant Pak program;
(25) Products recall, products integrity, or products impairment
insurance;
(26) Products and completed operations as respects:
(i) The manufacture, sale, handling, or distribution of
aircraft, aerospacecrafl, satellites, and missiles and
parts for or
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GENERAL REINSURANCE CORPORATION
components of, aircraft, aerospacecraft, satellites,
and missiles;
(ii) The manufacture, blending, mixing, repackaging,
relabeling, or importing of ethical and non-ethical
drugs, and cosmetics;
(iii) The manufacture, or wholesale distribution of tobacco
based products;
(iv) The manufacture of all motorized vehicles, mobile
equipment, heavy equipment or machinery, home power
tools, and oil drilling equipment;
(v) The manufacture, blending, mixing, repackaging, or
relabeling of farm animal feed.
(27) Oil or gas pipelines, xxxxx, or drilling operations;
(28) Ship building, ship repair yards, dry docks, and marinas;
(q) Homeowners Section II and comprehensive personal liability;
(r) Liability insurance afforded for watercraft; however, this
exclusion shall not apply to coverage afforded by ISO Commercial
General Liability Coverage Form CG 00 01 (Ed. 11/85) or as
subsequently amended.
If the Company provides insurance for an insured with respect to the
ownership, maintenance, or use of the vehicles listed in exclusion (o) and if
such ownership, maintenance, or use constitutes only a minor and incidental part
of the ownership, maintenance, or use of all vehicles of the insured, such
exclusion(s) shall not apply.
If the Company provides insurance for an insured with respect to any
premises, operations, products, or completed operations listed in exclusion (p)
items (1), (2), (5), (7), (14), (15), (17), (19), (26)(ii) and (26)(v), and (r)
above and if such premises, operations, products, or completed operations
constitute only a minor and incidental part of the total premises, operations,
products, or completed operations of the insured, such exclusion(s) shall not
apply.
If the Company is bound, without the knowledge of and contrary to the
instructions of the Company's supervisory underwriting personnel, on any
business falling within the scope of exclusions (o), (p) items (1), (2), (5),
(7), (14), (15), (17), (19), (26)(ii) and (26)(v), and (r),
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these exclusions be suspended with respect to such business until 30 days after
an underwriting supervisor of the Company acquires knowledge of such business.
Section 9 - RELNSURANCE PREMIUM AND COMMISSION
As a condition precedent to the Reinsurer's obligations hereunder, the
Company shall pay to the Reinsurer:
(a) With respect to business in force at the effective time and date
of this Exhibit, 7.9 17% of the Company's subject unearned
premium, calculated on the monthly pro rata basis as of the
effective time and date of this Exhibit;
(b) With respect to business becoming effective at and after the
effective time and date of this Exhibit, 7.917% of the Company's
subject written premium.
The reinsurance premiums in (a) and (b) above are subject to a fixed
commission of 40%.
Section 10 - REPORTS AND REMITTANCES
(a) Reinsurance Premium
Within 45 days after the commencement of this Exhibit, the
Company shall render to the Reinsurer a report of the reinsurance
premium with respect to the business of the Company in force at
the effective time and date of this Exhibit, summarizing the
reinsurance premium by line of insurance, by term, and by month
and year of expiration; and the amount due the Reinsurer shall be
remitted within 45 days after the commencement of this Exhibit.
Within 45 days after the close of each calendar quarter, the
Company shall render to the Reinsurer a report of the reinsurance
premium for the quarter with respect to business of the Company
written during the quarter, summarizing the reinsurance premium
by line of insurance; and the amount due the Reinsurer shall be
remitted within 45 days after the close of the quarter.
Within 45 days after the close of each calendar quarter, the
Company shall also render to the Reinsurer a report of the
reinsurance premium unearned by line of insurance and the
contribution for the quarter to the
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reinsurance premium in force by line of insurance, by term and by
month and year of expiration.
(b) Claims and Losses
The Company shall report promptly to the Reinsurer each claim or
loss for which the Company's estimated amount of net loss is 50%
or more of the amount of the Company Retention and shall also
report all cases of serious injury which, regardless of
considerations of liability or coverage, might involve this
reinsurance, including but not limited to the following:
(1) Cord injury - paraplegia, quadriplegia;
(2) Amputations - requiring a prosthesis;
(3) Brain damage affecting mentality or central nervous system
- such as permanent disorientation, behavior disorder,
personality change, seizures, motor deficit, inability to
speak (aphasia), hemiplegia or unconsciousness (comatose);
(4) Blindness;
(5) Xxxxx - involving over 10% of body with third degree or 30%
of body with second degree;
(6) Multiple fractures - involving more than one member or
non-union~
(7) Fracture of both heel bones (fractured bilateral os calcis);
(8) Nerve damage causing paralysis and loss of sensation in arm
and hand (brachial plexus nerve damage);
(9) Massive internal injuries affecting body organs;
(10) Injury to nerves at base of spinal canal (Cauda Equina) or
any other back injury resulting in incontinence of bowel
and/or bladder;
(11) Fatalities;
(12) Any other serious injury which, in the judgment of the
Company, might involve the Reinsurer.
The Company shall advise the Reinsurer of the estimated amount of
net loss in connection with each such claim or loss and of any
subsequent changes in such estimates.
A-12
GENERAL REINSURANCE CORPORATION
Promptly upon receipt of a definitive statement of net loss from
the Company, but within no more than 25 days, the Reinsurer shall
pay to the Company the Reinsurer's portion of net loss. The
Company shall report to the Reinsurer any subsequent changes in
the amount of net loss, and the amount due either party shall be
remitted promptly, but within no more than 25 days.
(c) General
In addition to the reports required in (a) and (b) above, the
Company shall furnish such other information as may be required
by the Reinsurer for the completion of the Reinsurer's quarterly
and annual statements and internal records.
All reports shall be rendered on forms or in format acceptable to
the Company and the Reinsurer.
Section 11 - COMMENCEMENT AND TERMINATION
This Exhibit shall apply to new and renewal policies of the Company
becoming effective at and after 12:01 A.M., May 1, 1996, and to policies of the
Company in force at 12:01 A.M., May 1,1996, with respect to claims or losses
resulting from occurrences taking place at and after the aforesaid time and date
insured under coverages written on an occurrence basis and with respect to
claims received and recorded by the Company or the insured at and after the
aforesaid time and date under coverages written on a claims made basis. However,
this Exhibit shall not apply to claims received and recorded by the Company or
the insured during any extended reporting period in force at such time and date.
Either party may terminate this Exhibit by sending to the other, by
registered mail to its principal office, notice stating the time and date when,
not less than 90 days after the date of mailing of such notice, termination
shall be effective. As respects coverages written on an occurrence basis, the
Reinsurer shall not be liable for claims and losses resulting from occurrences
taking place at and after the effective time and date of termination. As
respects coverages written on a claims-made basis, the Reinsurer shall not be
liable for claims received and
A-13
GENERAL REINSURANCE CORPORATION
recorded by the Company or the insured at and after the effective time and date
of termination, unless such claim is received and recorded by the Company or the
insured during an extended reporting period in force at the time and date of
termination.
The Reinsurer shall return to the Company the reinsurance premium
unearned calculated on the monthly pro rata basis as of the effective time and
date of termination, less the commission previously allowed thereon.
X-00
Xxxxxxxxx Xx. 0000
GENERAL REINSURANCE CORPORATION
EXHIBIT B
Attached to and made a part of
Agreement of Reinsurance No. 8206
EXCESS OF LOSS REINSURANCE
of
Property Business
--------------------------------------------------------------------------------
Section 1 - LIABILITY OF THE REINSURER
The Reinsurer shall pay to the Company, with respect to each risk of
the Company, the amount of net loss sustained by the Company in excess of the
Company Retention but not exceeding the Limits of Liability of the Reinsurer as
set forth in the Schedule of Reinsurance.
The Limit of Liability of the Reinsurer under this Exhibit shall not
exceed a total payment of net loss of $2,400,000 on all risks involved in one
occurrence.
SCHEDULE OF REINSURANCE
--------------------------------------------------------------------------------
Company
Class of Business Retention Limit of Liability of the Reinsurer
--------------------------------------------------------------------------------
Property Business $200,000 $800,000
--------------------------------------------------------------------------------
All insurance written under one or more policies of the Company
against the same peril on the same risk shall be combined, and the Company
Retention and the Limit of Liability of the Reinsurer shall be determined on the
basis of the sum of all insurance against the same peril and on the same risk
which is in force at the time of a claim or loss.
Section 2 - COMBINATION COVER
If an occurrence takes place which involves one property risk
reinsured under this Exhibit and the liability business reinsured under Exhibit
A in combination, the provisions of the section entitled COMBINATION COVER of
said Exhibit A shall apply.
GENERAL REINSURANCE CORPORATION
Section 3 - EXTRA CONTRACTUAL OBLIGATIONS
Notwithstanding the provisions of the article entitled MANAGEMENT OF
CLAIMS AND LOSSES, if the Company incurs an extra contractual obligation, 80% of
the extra contractual obligation shall be added to the Company's net loss from
the occurrence and the total shall be allocated in accordance with the section
entitled LIABILITY OF THE REINSURER.
For purposes of this Section, the term "extra contractual obligation"
shall mean a loss which the Company may be legally liable to pay, which is not
covered under any other provision of this Exhibit and which arises from the
Company's handling of any claim on the policies reinsured hereunder which have
limits of liability or amounts of insurance greater than the Company Retention.
The date on which an extra contractual obligation is incurred by the
Company shall be deemed, in all circumstances, to be the date of the original
occurrence.
This Section shall not apply where the extra contractual obligation
has been incurred due to the fraud or criminal conduct of a member of the Board
of Directors, a corporate officer of the Company, or any other employee of the
Company, acting individually or collectively or in collusion with any individual
or corporation or any other organization or party involved in the investigation,
defense or settlement of any claim covered hereunder.
Any insurance or reinsurance, whether collectible or not, which
indemnifies or protects the Company against claims which are the subject matter
of this Section and any contribution, subrogation, or recovery shall inure to
the benefit of the Reinsurer and shall be deducted to arrive at the amount of
the Company's net loss.
Section 4 - OTHER REINSURANCE
The obligations of the Company to reinsure business falling within the
scope of this Exhibit and of the Reinsurer to accept such reinsurance are
mandatory and no other reinsurance (either facultative or treaty) is permitted,
except as provided for below.
B-2
GENERAL REINSURANCE CORPORATION
When the amount of insurance written by the Company on an individual
risk exceeds $1 ,000,000, permission is granted the Company to purchase
facultative excess of loss or share reinsurance for the excess amount on such
risk. If the Company does not purchase either facultative excess of loss or
share reinsurance for the excess amount on such risk, the net loss for the
purpose of computing the Company Retention and the Limit of Liability of the
Reinsurer shall be reduced as if facultative share reinsurance had been in force
at the time of the loss for the excess amount on such risk.
The Company may also purchase facultative excess of loss reinsurance
or facultative share reinsurance within the liability of the Reinsurer, if, in
the underwriting judgment of the Company, the Reinsurer will be benefited
thereby. In no event, however, shall the amount required with respect to the
Company Retention be reduced.
Recoveries from catastrophe reinsurance shall be deemed not to reduce
the amount required with respect to the Company Retention.
Section 5 - DEFINITIONS
(a) Property Business
This term shall mean insurance which is classified in the NAIC
form of annual statement as fire, allied lines, inland marine, or
commercial multiple peril (property coverages), except those
lines specifically excluded in the section entitled EXCLUSIONS,
on risks wherever located in the United States of America, its
territories and possessions, or in Canada.
(b) Company Retention
This term shall mean the amount the Company shall retain for its
own account; however, this requirement shall be satisfied if this
amount is retained by the Company or its affiliated companies
under common management or common ownership.
(c) Net Loss
This term shall mean all payments by the Company within the terms
and limits of its policies in settlement of claims or losses,
including adjustment
B-3
GENERAL REINSURANCE CORPORATION
expense, after deduction of salvage and other recoveries and
after deduction of amounts due from all other reinsurance, except
catastrophe reinsurance, whether collectible or not. If the
Company becomes insolvent, this definition shall be modified to
the extent set forth in the article entitled INSOLVENCY OF THE
COMPANY.
(d) Adjustment Expense
This term shall mean expenditures by the Company within the terms
of its policies in the direct defense of claims and as allocated
to an individual claim or loss (other than for office expenses
and for the salaries and expenses of employees of the Company or
of any subsidiary or related or wholly owned company of the
Company) made in connection with the disposition of a claim,
loss, or legal proceeding including investigation, negotiation,
and legal expenses; court costs; prejudgment interest or delayed
damages; and interest on any judgment or award.
(e) Prejudgment Interest or Delayed Damages
This term shall mean interest or damages added to a settlement,
verdict, award, or judgment based on the amount of time prior to
the settlement, verdict, award, or judgment whether or not made
part of the settlement, verdict, award, or judgment.
(f) Risk
The Company shall establish what constitutes one risk, provided:
(1) a building and its contents, including time element
coverages, shall never be considered more than one risk;
(2) when two or more buildings and their contents are situated
at the same general location, the Company shall identify on
its records at the time of acceptance by the Company those
individual buildings and their contents that are considered
to constitute each risk; if such identification is not made,
each building and its contents shall be considered to be a
separate risk.
(g) Building
This term shall mean each structure that is considered by the
local fire insurance rating organization to be a separate
building for rate making purposes. With reference to structures
not rated specifically by the local fire insurance rating
organization, the term building shall mean each separately roofed
structure enclosed within exterior walls.
B-4
GENERAL REINSURANCE CORPORATION
(h) Occurrence
This term shall mean each occurrence or series of occurrences
arising out of one event.
(i) Subject Premium
This term shall mean the Company's premium for the business
reinsured under this Exhibit after deduction of the premium paid
for reinsurance which inures to the benefit of this Exhibit.
Section 6 - EXCLUSIONS
This Agreement does not apply to:
(a) Reinsurance assumed by the Company, excepting reinsurance of
primary business assumed from affiliated companies;
(b) Any loss or damage which is occasioned by war, invasion,
hostilities, acts of foreign enemies, civil war, rebellion,
insurrection, military or usurped power, or martial law, or
confiscation by order of any government or public authority, but
not excluding loss or damage which would be covered under a
standard form of policy containing a standard war exclusion
clause
(c) Any loss or liability accruing to the Company directly or
indirectly from any insurance written by or through any pool,
association, or syndicate, including pools, associations, or
syndicates in which membership by the Company is required under
any statute or regulation;
(d) Any 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, which provides for any assessment of,
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;
(e) Nuclear Incident as provided in the Nuclear Incident Exclusion
Clause - Physical Damage - Reinsurance, which are attached to and
made a part of this Exhibit
B-5
GENERAL REINSURANCE CORPORATION
(f) Policies written on a co-indemnity basis not controlled by the
Company;
(g) Fidelity, surety, aviation, ocean marine, system performance,
boiler and machinery, political risk, kidnap, xxxxxx and
extortion, credit, retroactive liability, financial guarantee and
insolvency business, or strike insurance;
(h) Policies written to apply in excess of a deductible or self
insured amount of more than $10,000 or policies written to apply
specifically in excess over underlying insurance;
(i) Loss, damage costs, or expenses arising out of the release,
discharge, dispersal, or escape of pollutants; the extraction,
removal, clean up, containment, monitoring, or detoxification of
pollutants; or, the removal, restoration, or replacement of
polluted land or water. However, this exclusion does not preclude
liability for loss, damage, costs, or expenses which are covered
under Insurance Services Office wordings promulgated on or after
April 1, 1986. Nevertheless, if the insured elects to purchase
any "buy-back" or additional coverage options, such options shall
not be covered under this Exhibit even if such options are
provided by or covered under such Insurance Services Office
wordings;
(j) "Self-insurance" or "self-insured obligations", howsoever styled,
of the Company, its affiliates or subsidiaries, or any insurance
wherein the Company, its affiliates or subsidiaries, are named as
the insured party, either alone or jointly with some other party,
notwithstanding that no legal liability may arise in respect
thereof by reason of the fact that the Company, its affiliates or
subsidiaries, may not be obligated by law to pay a claim to
itself, its affiliates or subsidiaries;
(k) The following kinds of insurance and risks classified by the
Company as property business:
(1) The perils of flood, surface water, waves, tidal water or
tidal wave, overflow of streams, or other bodies of water or
spray from any of the foregoing, all whether driven by wind
or not, when written as such;
(2) The peril of earthquake, when written as such;
(3) Difference in conditions insurance or similar kinds of
insurance, howsoever styled;
(4) Insurance on growing or standing crops, or timber;
B-6
GENERAL REINSURANCE CORPORATION
(5) Mortgage impairment insurance and similar kinds of
insurance, howsoever styled;
(6) Risks having a total insurable value of more than
$50,000,000;
(7) Any collection of fine arts with an insurable value of
$5,000,000 or more;
(8) All bridges, tunnels, and dams;
(9) Mobile homes, when written on a personal lines policy;
(10) All offshore property risks;
(11) Railroad property;
(12) Automobile physical damage business;
(13) Inland marine business with respect to the following:
(i) Cargo insurance with respect to ocean, lake, or
inland waterway vessels;
(ii) Motor-truck cargo insurance written for common
carriers operating beyond a radius of 1,000 miles, or
that require an ICC, PUC or similar filing;
(iii) Commercial negative film insurance and cast and/or
non-appearance insurance;
(iv) Drilling and/or production rigs and all machinery and
equipment used in the exploration of natural fuels;
(v) Furriers' customers and garment contractors policies;
(vi) Insurance on livestock birds, or other animals under
so-called "mortality policies";
(vii) Jewelers' block policies and furriers' block
policies;
(viii) Mining equipment while underground;
(ix) Radio and television broadcasting towers, exceeding
100 feet in height;
B-7
GENERAL REINSURANCE CORPORATION
(x) Registered mail and armored car insurance;
(xi) Watercraft, other than watercraft insured under
personal property floaters, yacht, or outboard
policies.
Section 7 - REINSURANCE PREMIUM AND COMMISSION
As a condition precedent to the Reinsurer's obligations hereunder, the
Company shall pay to the Reinsurer:
(a) With respect to business in force at the effective time and date
of this Exhibit, 10.833% of the Company's subject unearned
premium, calculated on the monthly pro rata basis as of the
effective time and date of this Exhibit; and
(b) With respect to business becoming effective at and after the
effective time and date of this Exhibit, 10.833% of the Company's
subject written premium.
The reinsurance premiums in (a) and (b) above shall be subject to a
fixed commission allowance of 40%.
Section 8 - REPORTS AND REMITTANCES
(a) Reinsurance Premium
Within 45 days after the commencement of this Exhibit, the
Company shall render to the Reinsurer a report of the reinsurance
premium with respect to the business of the Company in force at
the effective time and date of this Exhibit, summarizing the
reinsurance premium by line of insurance, by term, and by month
and year of expiration; and the amount due the Reinsurer shall be
remitted within 45 days after the commencement of this Exhibit.
Within 45 days after the close of each calendar quarter, the
Company shall render to the Reinsurer a report of the reinsurance
premium for the quarter with respect to business of the Company
written during the quarter, summarizing the reinsurance premium
by line of insurance; and the amount due the Reinsurer shall be
remitted within 45 days after the close of the quarter.
B-8
GENERAL REINSURANCE CORPORATION
Within 45 days after the close of each calendar quarter, the
Company shall also render to the Reinsurer a report of the
reinsurance premium unearned by line of insurance and the
contribution for the quarter to the reinsurance premium in force
by line of insurance, by term and by month and year of
expiration.
(b) Claims and Losses
The Company shall report promptly to the Reinsurer each claim or
loss which, in the Company's opinion, may involve the reinsurance
afforded by this Exhibit. The Company shall advise the Reinsurer
of the estimated amount of net loss in connection with each such
claim or loss and of any subsequent changes in such estimates.
Promptly upon receipt of a definitive statement of net loss from
the Company, but within no more than 25 days, the Reinsurer shall
pay to the Company the Reinsurer's portion of net loss. The
Company shall report to the Reinsurer any subsequent changes in
the amount of net loss, and the amount due either party shall be
remitted promptly, but within no more than 25 days.
(c) P.C.S. Catastrophe Bulletins
The Company shall furnish to the Reinsurer, upon request, the
following information with respect to each catastrophe set forth
in the Catastrophe Bulletins published by the Property Claim
Services:
(1) The preliminary estimates of the amount recoverable from the
Reinsurer;
(2) The Reinsurer's portion of claims, losses, and adjustment
expenses paid less salvage recovered during each calendar
quarter;
(3) The Reinsurers portion of reserves for claims, losses, and
adjustment expenses at the end of each calendar quarter.
(d) General
In addition to the reports required by (a), (b), and (c) above,
the Company shall furnish such other information as may be
required by the Reinsurer for the completion of the Reinsurer's
quarterly and annual statements and internal records.
B-9
GENERAL REINSURANCE CORPORATION
All reports shall be rendered on forms or in format acceptable to
the Company and the Reinsurer.
Section 9 - COMMENCEMENT AND TERMINATION
This Exhibit shall apply to new and renewal policies of the Company
becoming effective at and after 12:01 A.M., May 1, 1996, and to policies of the
Company in force at 12:01 A.M., May 1, 1996, with respect to losses resulting
from occurrences taking place at and after the aforesaid time and date.
Either party may terminate this Exhibit by sending to the other, by
registered mail to its principal office, notice stating the time and date when,
not less than 90 days after the date of mailing of such notice, termination
shall be effective. The Reinsurer shall not be liable for any claims or losses
resulting from occurrences taking place at and after the effective time and date
of termination.
The Reinsurer shall return to the Company the reinsurance premium
unearned calculated on the monthly pro rata basis as of the effective time and
date of termination, less the commission previously allowed thereon.
B-10
Agreement No. 8206
GENERAL REINSURANCE CORPORATION
NUCLEAR INCIDENT EXCLUSION CLAUSE - LIABILITY - REINSURANCE - USA
(1) This Agreement does not cover any loss or liability accruing to the
Company as a member of, or subscriber to, any association of insurers or
reinsurers formed for the purpose of covering nuclear energy risks or as a
direct or indirect reinsurer of any such member, subscriber or association.
(2) Without in any way restricting the operation of paragraph (1) of this
Clause it ii understood and agreed that for all purposes of this Agreement all
the original policies of the Company (new, renewal and replacement) of the
classes specified in Clause (ii) of this paragraph (2) from the time specified
in Clause (iii) in this paragraph (2) shall be deemed to include the following
provision (specified as the Limited Exclusion Provision):
Limited Exclusion Provision*
(i) It is agreed that the policy does not apply under any liability
coverage, to injury, sickness, disease, death or destruction bodily
injury or property damage with respect to which an insured under the
policy is also an insured under a nuclear energy liability policy
issued by Nuclear Energy Liability Insurance Association, Mutual
Atomic Energy Liability Underwriters or Nuclear Insurance Association
of Canada, or would be an insured under any such policy but for its
termination upon exhaustion of its limit of liability.
(ii) Family Automobile Policies (liability only), Special Automobile
Policies (private passenger automobiles, liability only) Farmers
Comprehensive Personal Liability Policies (liability only),
Comprehensive Personal Liability Policies (liability only) or
policies of a similar nature; and the liability portion of
combination forms related to the four classes of policies stated
above, such as the Comprehensive Dwelling Policy and the applicable
types of Homeowners Policies.
(iii) The inception dates and thereafter of all original policies as
described in (ii) above, whether new, renewal or replacement, being
policies which either
(a) become effective on or after 1st May, 1960, or
(b) become effective before that date and contain the Limited
Exclusion Provision set out above;
provided this paragraph (2) shall not be applicable to Family
Automobile Policies, Special Automobile Policies, or policies or
combination policies of a similar nature, issued by the Company on
New York risks, until 90 days following approval of the Limited
Exclusion Provision by the Governmental Authority having jurisdiction
thereof.
(3) Except for those classes of policies specified in Clause (ii) of
paragraph (2) and without in any way restricting the operation of paragraph (1)
of this Clause, it is understood and agreed that for all purposes of this
Agreement the original liability policies of the Company (new, renewal and
replacement) affording the following coverages:
Owners, Landlords and Tenants Liability, Contractual Liability, Elevator
Liability, Owners or Contractors (inducing railroad) Protective Liability,
Manufacturers and Contractors Liability, Product Liability, Professional
arid Malpractice Liability, Storekeepers Liability, Garage Liability,
Automobile Liability (including Massachusetts Motor Vehicle or Garage
Liability)
shall be deemed to include, with respect to such coverages, from the time
specified in Clause (v) of this paragraph (3), the following provision
(specified as the Broad Exclusion Provision):
Broad Exclusion Provision*
It is agreed that the policy does not apply:
(i) Under any Liability Coverage, to injury, sickness, disease, death or
destruction bodily injury or property damage:
(a) with respect to which an insured under the policy is also an
insured under a nuclear energy liability policy issued by Nuclear
Energy Liability Insurance Association, Mutual Atomic Energy
Liability Underwriters or Nuclear Insurance Association of
Canada, or would be an insured under any such policy but for its
termination upon exhaustion of its limit of liability; or
(b) resulting from the hazardous properties of nuclear material and
with respect to which (1) any person or organization as required
to maintain financial protection pursuant to the Atomic Energy
Act of 1954, or any law amendatory thereof; or (2) the insured
is, or had this policy not been issued would be, entitled to
indemnity from the United States of America, or agency thereof,
under any agreement entered into by the United States of America,
or any agency thereof, with any person or organization.
(ii) Under any Medical Payments Coverage, or under any Supplementary
Payments Provision relating to immediate medical or surgical relief
first aid to expenses incurred with respect to bodily injury,
sickness, disease or death bodily injury resulting from the hazardous
properties of nuclear material and arising out of the operation of a
nuclear facility any person or organization.
(iii) Under any Liability Coverage, to injury, sickness, disease, death or
destruction bodily injury or property damage resulting from the
hazardous properties of nuclear material if
(a) the nuclear material (1) is at any nuclear facility owned by, or
operated by or on behalf of, an insured or (2) has been
discharged or dispersed therefrom;
(b) the nuclear material is contained in spent fuel or waste at any
time possessed, handled, used, processed, stored, transported or
disposed of by or on behalf of an insured; or
(c) the injury, sickness, disease, death or destruction bodily injury
or property damage arises out of the furnishing by an insured of
services, materials, parts or equipment in connection with the
planning, construction, maintenance, operation or use of any
nuclear facility, but if such facility is located within the
United States of America, its territories, or possessions or
Canada, this exclusion (c) applies only to injury to or
destruction of property at such nuclear facility property damage
to such nuclear facility and any property thereat.
(iv) As used in this endorsement:
"hazardous properties" include radioactive, toxic or explosive
properties; "nuclear material" means source material, special nuclear
material or byproduct material; "source material", "special nuclear
material", and "byproduct material" have the meanings given them in
the Atomic Energy Act of 1954 or in any law amendatory thereof; "spent
fuel" means any fuel element or fuel component, solid or liquid, which
has been used or exposed to radiation in a nuclear reactor, "waste"
means any waste material (1) containing byproduct material and (2)
resulting from the operation by any person or organization of any
nuclear facility included within the definition of nuclear facility
under paragraph (a) or (b) thereof; "nuclear facility" means
(a) any nuclear reactor,
(b) any equipment or device designed or used for (1) separating the
isotopes of uranium or plutonium, (2) processing or utilizing
spent fuel, or (3) handling, processing or packaging waste,
(c) any equipment or device used for the processing, fabricating or
alloying of special nuclear material if at any time the total
amount of such material in the custody of the insured at the
premises where such equipment or device is located consists of or
contains more than 25 grams of plutonium or uranium 233 or any
combination thereof, or more than 250 grams of uranium 235,
(d) any structure, basin, excavation, premises or place prepared or
used for the storage or disposal of waste
and includes the site on which any of the foregoing is located, all
operations conducted on such site and all premises used for such
operations; "nuclear reactor" means any apparatus designed or used to
sustain nuclear fission in a self-supporting chain reaction or to
contain a xxxxxxxx xxxx of fissionable material;
With respect to injury to or destruction of property the word "injury"
or "destruction" includes all forms of radioactive contamination of
property.
"Property damage" includes all forms of radioactive contamination of
property.
(v) The inception dates and thereafter of all original policies affording
coverages specified in this paragraph (3), whether new, renewal or
replacement, being policies which become effective on or after 1st
May, 1960, provided this paragraph (3) shall not be applicable to
1. Garage and Automobile Policies issued by the Company on New
York risks, or
2. statutory liability insurance required under Chapter 90,
General Laws of Massachusetts, until 90 days following approval of the
Broad Exclusion Provision by the Governmental Authority having
jurisdiction thereof.
(4) Without in any way restricting the operation of paragraph (1) of this
Clause, it is understood and agreed that paragraphs (2) and (3) above are not
applicable to original liability policies of the Company in Canada and that with
respect to such policies this Clause shall be deemed to include the Nuclear
Energy Liability Exclusion Provisions adopted by the Canadian Underwriters'
Association or the Independent Insurance Conference of Canada.
*NOTE. The words underlined in the Limited Exclusion Provision and in
the Broad Exclusion Provision shall apply only in relation to original liability
policies which include a Limited Exclusion Provision or a Broad Exclusion
Provision containing those words.
Page 2 of 2
NUCLEAR INCIDENT EXCLUSION CLAUSE - PHYSICAL DAMAGE - REINSURANCE - USA
(1) This Agreement does not cover any loss or liability accruing to the
Company 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
Company, 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 Agreement does not cover any loss or liability by radioactive
contamination accruing to the Company, 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 Company 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 subparagraph (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 (l),(2)
and hereof, this Agreement does not cover any loss or liability by radioactive
contamination accruing to the Company, 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 Company 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 amendatoty thereof.
(7) The Company 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 Company 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
Company 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.
