Adjustment of Security and Withdrawals Clause Samples
The Adjustment of Security and Withdrawals clause governs how the amount of security, such as a deposit or bond, can be modified and under what circumstances withdrawals from this security are permitted. Typically, this clause outlines the process for increasing or decreasing the security based on changes in project scope, contract value, or risk assessment, and specifies the conditions under which a party may access or release funds from the security. Its core practical function is to ensure that the security remains appropriate to the contractual obligations and to provide a clear mechanism for accessing or returning funds, thereby managing financial risk and preventing disputes over security adequacy.
Adjustment of Security and Withdrawals. Subject to Section 7.7, the amount of security provided by the Reinsurer shall be adjusted following the end of each Monthly Accounting Period to be equal to the Required Balance as of the end of such Monthly Accounting Period (such amounts to be calculated by the Reinsurer and a report thereof to be furnished to the Company no later than ten (10) Business Days following the end of such Monthly Accounting Period) as follows:
(a) If the aggregate Value of the Eligible Assets held in the Trust Account at the end of any Monthly Accounting Period is less than the Required Balance, calculated based on the most recent Monthly Accounting Period report, the Reinsurer shall, no later than ten (10) Business Days following delivery of the relevant report, transfer additional Eligible Assets to the Trust Account so that the aggregate Value of the Eligible Assets held in the Trust Account is not less than the Required Balance as of the end of such Monthly Accounting Period.
(b) If the aggregate Value of the Eligible Assets in the Trust Account at the end of any Monthly Accounting Period exceeds 100% of the Required Balance, calculated based on the most recent Monthly Accounting Period report, then the Reinsurer shall have the right to withdraw the excess from the Trust Account in accordance with the terms of the Trust Agreement; provided, however, that after a Change in Control the 100% amount above shall become 102%.
(c) The report required to be delivered by the Reinsurer as described in this Section 7.6 shall include a listing of each asset in the Trust Account and the Reinsurer Statutory Book Value and Fair Market Value of each such asset as of the end of the relevant Monthly Accounting Period.
(d) The Company may withdraw the assets held in the Trust Account only in accordance with the terms of the Trust Agreement to pay to the Company amounts that are (i) due to the Company from the Reinsurer under this Agreement, but not yet recovered from the Reinsurer, (ii) not the subject of a good faith dispute and (iii) not paid by the Reinsurer within ten (10) Business Days after the Reinsurer has received written notice of such failure to pay from the Company.
(e) The amount of any withdrawal from the Trust Account in excess of amounts permitted under the terms of the Trust Agreement shall be held in trust by the Company and maintained in a segregated account, separate and apart from the assets of the Company for the benefit of the Reinsurer and promptly returned to the R...
Adjustment of Security and Withdrawals. The amount of security provided by the Reinsurer shall be adjusted following the end of each Accounting Period as provided herein.
(a) If the aggregate Fair Market Value of the Eligible Assets held in the Trust Account at the end of any Accounting Period is less than the Required Balance, calculated based on the most recent Accounting Report, the Reinsurer shall, no later than five (5) calendar days following delivery of the Accounting Report provided pursuant to the terms hereof, transfer additional Eligible Assets to the Trust Account so that the aggregate Fair Market Value of the Eligible Assets held in the Trust Account is not less than the Required Balance.
(b) If the aggregate Fair Market Value of the Eligible Assets in the Trust Account at the end of any Accounting Period exceeds one hundred and two percent (102%) of the Required Balance, then the Reinsurer shall have the right to seek approval (which shall not be unreasonably or arbitrarily withheld) from the Ceding Company to withdraw the excess. For the purposes of the foregoing sentence, in the event that a Recapture Triggering Event has occurred, the Parties acknowledge and agree that it shall not be unreasonable for the Ceding Company to withhold its consent to any such withdrawal of any amounts over one hundred and two percent (102%).
Adjustment of Security and Withdrawals. (a) The Reinsurer shall furnish a report (a “Month-End Required Balance Report”) to the Ceding Company following the end of each calendar month containing (i) the Reinsurer’s calculation of the Required Balance as of the end of such calendar month, in each case prepared in accordance with the Required Balance Model and Calculation Methodologies, the Ceding Company Statutory Reserves report received by the Reinsurer pursuant to this Section 5.8(a) and the other terms and conditions of this Agreement (in each case, the “Month-End Required Balance”), (ii) an updated Reinsurer Sensitivity Grid prepared in accordance with Schedule F-1 for use in calculating the Required Balances used for purposes of rebalancing the Trust Account on the applicable Monthly Funding Date [***] thereafter until such time as the Month-End Required Balance and the Reinsurer Sensitivity Grid are subsequently updated in accordance with this Section 5.8(a), and (iii) a calculation of the Required Balance as of the end of the Business Day immediately preceding the date upon which the Month-End Required Balance Report is furnished to the Ceding Company, calculated using such Month-End Required Balance, as adjusted by the updated Reinsurer Sensitivity Grid and, if applicable, the Ceding Company Sensitivity Grid (the “Adjusted Month-End Required Balance”). The Reinsurer shall deliver each Month-End Required Balance Report no later than 6:00 p.m. (New York time) on the tenth (10th) Business Day following the end of each calendar month; provided, however, that for each calendar month ending during a continuation of a FMV Triggering Event, the Reinsurer shall deliver the Month-End Required Balance Report no later than 6:00 p.m. (New York time) on the earlier of (x) the second (2nd) Business Day following the day on which the Reinsurer receives from the Ceding Company the Ceding Company’s calculation of the Ceding Company Statutory Reserves and the updated Ceding Company Sensitivity Grid for such calendar month and (y) the sixteenth (16th) Business Day following the end of each calendar month; provided, that in no event shall the Reinsurer be required to deliver the Month-End Required Balance Report prior to the tenth (10th) Business Day following the end of each calendar month. In order for the Reinsurer to prepare the Month-End Required Balance Reports for each calendar month during a continuation of a FMV Triggering Event, no later than fifteen (15) Business Days following the end of each cal...
Adjustment of Security and Withdrawals. (a) No later than thirty (30) days following the end of each calendar quarter (the “Security Reporting Date”), the Reinsurer shall furnish a report to the Ceding Company setting forth (x) the Required Balance as of the end of such calendar quarter calculated by the Reinsurer as Administrator and (y) the Statutory Book Value of Eligible Assets as of the end of such calendar quarter (the “Security Funding Report”). The amount of security held in the Trust Account shall be adjusted as follows:
(i) In the Absence of a Triggering
Adjustment of Security and Withdrawals. The Reinsurer shall maintain Eligible Assets in the SLD Reserve Trust Account with an aggregate fair market value at least equal the Required Balance. The amount of assets held in the SLD Reserve Trust Account shall be adjusted following the end of each calendar quarter.
(a) If the aggregate fair market value of the Eligible Assets held in the SLD Reserve Trust Account at the end of any calendar quarter is less than the Required Balance, the Reinsurer shall, no later than 15 calendar days following delivery of the reserve report included in the quarterly report provided pursuant to the Administrative Services Agreement, transfer additional Eligible Assets to the SLD Reserve Trust Account so that the aggregate fair market value of the Eligible Assets held in the SLD Reserve Trust Account is not less than the Required Balance.
(b) If the aggregate fair market value of the Eligible Assets in the SLD Reserve Trust Account at the end of any calendar quarter exceeds 102% of the Required Balance, then the Reinsurer shall have the right to seek approval (which shall not be unreasonably or arbitrarily withheld) from the Company to withdraw the excess. For the purposes of the foregoing sentence, in the event that a Triggering Event has occurred, the parties acknowledge and agree that it shall not be unreasonable for the Company to withhold its consent to any such withdrawal.
Adjustment of Security and Withdrawals. The Reinsurer shall maintain Eligible Assets in the FAFLIC Trust Account with an aggregate fair market value at least equal to the Required Balance. The amount of assets held in the FAFLIC Trust Account shall be adjusted following the end of each calendar month.
(i) If the aggregate fair market value of the Eligible Assets held in the FAFLIC Trust Account at the end of any calendar month is less than the Required Balance, the Reinsurer shall, no later than fifteen (15) calendar days following delivery of the reserve report included in the monthly report provided pursuant to Section 5.03, transfer additional Eligible Assets to the FAFLIC Trust Account so that the aggregate fair market value of the Eligible Assets held in the FAFLIC Trust Account is not less than the Required Balance.
(ii) If the aggregate fair market value of the Eligible Assets in the FAFLIC Trust Account at the end of any calendar month exceeds the Required Balance, then the Reinsurer shall have the right to seek approval (which shall not be unreasonably or arbitrarily withheld, delayed or conditioned) from FAFLIC to withdraw the excess. For the purposes of the foregoing sentence, in the event that a Triggering Event has occurred, the parties acknowledge and agree that it shall not be unreasonable for FAFLIC to withhold its consent to any such withdrawal. FAFLIC shall be the sole judge as to the application of this provision, but shall not unreasonably or arbitrarily withhold its approval.
Adjustment of Security and Withdrawals. The amount of security required to be provided by the Reinsurer shall be adjusted following the end of each Accounting Period based on the Required Balance as of the end of such Accounting Period (such amounts to be calculated by the Reinsurer and a report thereof to be furnished to the Ceding Company no later than the twentieth (20th) Business Day following the end of such Accounting Period) and the Statutory Book Value or the Fair Market Value, as applicable, of Eligible Assets then in the Trust Account and will be further adjusted as follows:
(a) Prior to the occurrence of a Triggering Event or a Reserve Credit Event: (i) If the aggregate Statutory Book Value of the Eligible Assets held in the Trust Account at the end of any Accounting Period is less than the Required Balance, calculated based on the most recent Accounting Period report, the Reinsurer shall, no later than five (5) calendar days following the date on which the relevant report is required to be delivered pursuant to this Section 4.6, transfer additional Eligible Assets to the Trust Account so that the aggregate Statutory Book Value of the Eligible Assets held in the Trust Account is not less than the Required Balance.
Adjustment of Security and Withdrawals. (a) The amount of security required to be provided by the Reinsurer hereunder shall be adjusted following the end of each Quarterly Accounting Period ending after the Effective Time based on (i) the Ceding Company Statutory Reserves as of the end of such Quarterly Accounting Period and furnished by the Ceding Company to the Reinsurer in a report (the “Ceding Company Statutory Reserves Report”) no later than ten (10) Business Days following the end of such Quarterly Accounting Period; and (ii) the Required Balance and the aggregate Statutory Book Value, in each case as of the end of such Quarterly Accounting Period as calculated and furnished by the Reinsurer to the Ceding Company in a report (the “Required Balance and Security Funding Report”) no later than five (5) Business Days of the Reinsurer’s receipt of the Ceding Company Statutory Reserves Report (the “Security Funding Reporting Date”).