Common use of Collateral Release Clause in Contracts

Collateral Release. A. As of December 1, 2013 or 31 days from the date of loss, whichever is later, the parties shall determine how much collateral will be required to be maintained within the Trust Fund, less any amount required under the Reserves Article. This calculation will be performed on a monthly basis until all liability has been extinguished. B. For the purposes of paragraph C below, "Loss Amount" shall be defined as the sum of: 1. Losses and allocated loss adjustment expense paid by the Company; plus 2. Reserves for losses reported and outstanding; plus 3. Reserves for allocated loss adjustment expense reported and outstanding; plus 4. Reserves for losses incurred but not reported - to be mutually agreed in good faith. C. For each potentially covered loss hereunder, the Company shall multiply the Loss Amount by the appropriate Buffer Loss Multiplier from the table below, based on the number of days which have elapsed since the loss occurrence. The product of this calculation shall be defined as the Buffered Loss Amount ('BLA'). D. With respect to each loss occurrence for which the BLA exceeds the Company's retention as defined under the Retention and Limit Article, an amount equal to the Reinsurer's share of the lesser of (1) the amount by which the BLA exceeds the Company's retention as defined under the Retention and Limit Article, or (2) the Reinsurer's per occurrence limit as defined under the Retention and Limit Article, shall be deemed to equal the event specific collateral amount at the calculation date (the 'Event Collateral Amount' or the 'ECA'). E. In respect of all events for which an ECA exceeds $0, the aggregate amount of the required collateral to be held in the Trust Fund shall be equal to the amount by which the lesser of (1) the sum of the ECAs, or (2) the Reinsurer's term limit as defined under the Reinstatement Article, exceeds amounts paid to date by the Reinsurer. Such aggregate amount shall be deemed to be the 'Aggregate Collateral Obligation' or the 'ACO.' F. At any month-end at which there is any security on deposit in the Trust Fund, the Company shall perform this calculation within 10 days after the end of such month and report to the Reinsurer and Trustee named in the Trust Agreement information supporting any BLA, ECA and ACO amounts greater than $0. The Assets in the Trust Fund will be adjusted monthly based on this calculation. In the event the balance of the Trust Fund is greater than the amount required to fully fund the Obligations, as defined by the ACO, the Company shall promptly, within 10 days, authorize a return of such excess amount to the Reinsurer. Similarly, in the event the balance of the Trust Fund falls below the amount required to fully fund the Obligations, the Reinsurer shall promptly, within 10 days, add assets to the Trust Fund to eliminate such shortfall."

Collateral Release. A. As of December 1, 2013 2011 or 31 days from the date of loss, whichever is later, the parties shall determine how much collateral will be required to be maintained within the Trust Fund, less any amount required under the Reserves Article. This calculation will be performed on a monthly basis until all liability has been extinguished. B. For the purposes of paragraph C below, "Loss Amount" shall be defined as the sum of: 1. Losses and allocated loss adjustment expense paid by the Company; plus 2. Reserves for losses reported and outstanding; plus 3. Reserves for allocated loss adjustment expense reported and outstanding; plus 4. Reserves for losses incurred but not reported - to be mutually agreed in good faith. C. For each potentially covered loss hereunder, the Company shall multiply the Loss Amount by the appropriate Buffer Loss Multiplier from the table below, based on the number of days which have elapsed since the loss occurrenceevent. The product of this calculation shall be defined as the Buffered Loss Amount ('"BLA'"). D. With respect to each loss occurrence event for which the BLA exceeds the Company's retention as defined under the Retention and Limit Article, an amount equal to the Reinsurer's share of the lesser of (1) the amount by which the BLA exceeds the Company's retention as defined under the Retention and Limit Article, or (2) the Reinsurer's per occurrence limit as defined under the Retention and Limit Article, shall be deemed to equal the event specific collateral amount at the calculation date (the '"Event Collateral Amount' " or the '"ECA'"). E. In respect of all events for which an ECA exceeds $0, the aggregate amount of the required collateral to be held in the Trust Fund shall be equal to the amount by which the lesser of (1) the sum of the ECAs, or (2) the Reinsurer's term limit as defined under the Reinstatement Retention and Limit Article, exceeds amounts paid to date by the Reinsurer. Such aggregate amount shall be deemed to be the '"Aggregate Collateral Obligation' " or the '"ACO.'" F. At any month-end at which there is any security on deposit in the Trust Fund, the Company shall perform this calculation within 10 days after the end of such month and report to the Reinsurer and Trustee named in the Trust Agreement information supporting any BLA, ECA and ACO amounts greater than $0. The Assets in the Trust Fund will be adjusted monthly based on this calculation. In the event the balance of the Trust Fund is greater than the amount required to fully fund the Obligations, as defined by the ACO, the Company shall promptly, within 10 days, authorize a return of such excess amount to the Reinsurer. Similarly, in the event the balance of the Trust Fund falls below the amount required to fully fund the Obligations, the Reinsurer shall promptly, within 10 days, add assets to the Trust Fund to eliminate such shortfall."

Collateral Release. A. As of December 1, 2013 2012 or 31 days from the date of lossthe loss occurrence under the Original Contract for which reinstatement premium is due from the Company, whichever is later, the parties shall determine how much collateral will be required to be maintained within the Trust Fund, less any amount required under the Reserves Article. This calculation will be performed on a monthly basis until all liability has been extinguished. B. For the purposes of paragraph C belowthis Article, "'Loss Amount" ' shall be defined as the sum of: 1. Losses and allocated loss adjustment expense paid by the CompanyCompany under the Original Contract; plus 2. Reserves for losses reported and outstandingoutstanding under the Original Contract; plus 3. Reserves for allocated loss adjustment expense reported and outstandingoutstanding under the Original Contract; plus 4. Reserves for losses incurred but not reported - to be mutually agreed in good faithunder the Original Contract. C. For each loss occurrence potentially covered loss generating reinstatement premium hereunder, the Company shall multiply the Loss Amount by the appropriate Buffer Loss Multiplier from the table below, based on the number of days which have elapsed since the loss occurrence. The product of this calculation shall be defined as the Buffered Loss Amount ('BLA'). D. With respect to each loss occurrence for which the BLA exceeds the Company's retention as defined would result in reinstatement premium covered under the Retention and Limit ArticleOriginal Contract, an amount equal to the Reinsurer's share of the lesser of (1) the amount by which the reinstatement premium associated with such BLA exceeds the Company's retention as defined under the Retention and Limit Article, or (2) the Reinsurer's per occurrence limit as defined under the Retention and Limit Article, for that excess layer shall be deemed to equal the event specific collateral amount at the calculation date (the 'Event Collateral Amount' or the 'ECA'). E. In respect of all events for which an ECA exceeds $0, the aggregate amount of the required collateral to be held in the Trust Fund shall be equal to the amount by which the lesser of (1) the sum of the ECAs, or (2) the Reinsurer's term limit as defined share of an amount equal to the annual deposit premium due under the Reinstatement ArticleOriginal Contract for that excess layer (i.e., the aggregate limit hereunder), exceeds the amounts paid to date by the Reinsurer. Such aggregate amount shall be deemed to be the 'Aggregate Collateral Obligation' or the 'ACO.' F. At any month-end at which there is any security on deposit in the Trust Fund, the Company shall perform this calculation within 10 days after the end of such month and report to the Reinsurer and Trustee named in the Trust Agreement information supporting any BLA, ECA and ACO amounts greater than $0. The Assets in the Trust Fund will be adjusted monthly based on this calculation. In the event the balance of the Trust Fund is greater than the amount required to fully fund the Obligations, as defined by the ACO, the Company shall promptly, within 10 days, authorize a return of such excess amount to the Reinsurer. Similarly, in the event the balance of the Trust Fund falls below the amount required to fully fund the Obligations, the Reinsurer shall promptly, within 10 days, add assets to the Trust Fund to eliminate such shortfall."