Common use of Claims Settlements Clause in Contracts

Claims Settlements. (a) With respect to Reinsured Policies that are not Novated Policies, the Company agrees that it will provide prompt notice to the Reinsurer of its intention to litigate a claim with respect to such Reinsured Policy, along with copies of all pleadings and reports of investigation with respect thereto. The Reinsurer shall have the right, at its own expense, to participate jointly with the Company in the investigation, adjustment or defense of such litigation. (b) With respect to Novated Policies, the Company agrees that it will provide prompt notice to the Reinsurer of its intention to contest, compromise or litigate a claim with respect to a Novated Policy, along with copies of all pleadings and reports of investigation with respect thereto. The Reinsurer shall have the right, at its own expense, to participate jointly with the Company in the investigation, adjustment or defense of such claims with respect to Novated Policies. In addition, in the event that litigation arises against the Company in connection with a claim with respect to a Novated Policy which seeks damages in excess of $1 million or other remedies deemed material to the Reinsurer, the Reinsurer may, upon written notice to the Company, assume the defense thereof with counsel selected by the Reinsurer and reasonably satisfactory to the Company. If the Reinsurer assumes such defense, the Company shall have the right, at its own expense, to participate jointly with the Reinsurer in the defense thereof. If the Reinsurer assumes the defense of litigation, the Reinsurer shall not settle such litigation without the Company’s prior written consent (which consent shall not be unreasonably withheld or delayed) unless (i) there is no finding or admission of any violation of law or any violation of the rights of any Person, (ii) such settlement would not reasonably be expected to have material adverse precedential consequences to the Company and (iii) the sole relief provided is monetary damages that are paid in full by the Reinsurer.