Commutation Clause Samples
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Commutation. 1. Except as provided in subparagraph 3., not less than 36 months or more than 60 months after the end of the Contract Year, the Company shall file a final Proof of Loss Report(s), with the exception of Companies having no reportable Losses as described in sub-subparagraph a. Otherwise, the final Proof of Loss Report(s) is required as specified in sub-subparagraph b. The Company and SBA may mutually agree to initiate commutation after 36 months and prior to 60 months after the end of the Contract Year. The commutation negotiations shall begin at the later of 60 months after the end of the Contract Year or upon completion of the FHCF claims examination for the Company and the resolution of all outstanding examination issues.
a. If the Company’s most recently submitted Proof of Loss Report(s) indicates that it has no Losses resulting from Covered Events during the Contract Year, the SBA shall after 36 months request that the Company execute a final commutation agreement. The final commutation agreement shall constitute a complete and final release of all obligations of the SBA with respect to Losses. If the Company chooses not to execute a final commutation agreement, the SBA shall be released from all obligations 60 months following the end of the Contract Year if no Proof of Loss Report indicating reimbursable Losses had been filed and the commutation shall be deemed concluded. However, during this time, if the Company determines that it does have Losses to report for FHCF reimbursement, the Company must submit an updated Proof of Loss Report prior to the end of 60 months after the Contract Year and the Company shall be required to follow the commutation provisions and time frames otherwise specified in this section.
b. If the Company has submitted a Proof of Loss Report indicating that it does have Losses resulting from a Covered Event during the Contract Year, the SBA may require the Company to submit within 30 days an updated, current Proof of Loss Report for each Covered Event during the Contract Year. The Proof of Loss Report must include all paid Losses as well as all outstanding Losses and incurred but not reported Losses, which are not finally settled and which may be reimbursable Losses under this Contract, and must be accompanied by supporting documentation (at a minimum an adjuster’s summary report or equivalent details) and a copy of a written opinion on the present value of the outstanding Losses and incurred but not reported Losses by the Com...
Commutation. This term means the estimation, payment, and complete discharge of all future obligations for Losses, regardless of future loss development. The final Commutation shall constitute a complete and final release of all obligations of the SBA with respect to Losses. Commutation may be per Covered Event or by Contract Year as determined by the FHCF.
Commutation. By mutual agreement, after termination of the Agreement the Company shall submit a statement to the Reinsurer listing amounts paid, and reserves, in respect of all incurred losses known, and reported to the Company subject to this Agreement. This statement shall form the basis of a final agreed value for all such losses. The amounts of reserves contained therein shall be determined by employing one or more of the following alternatives:
A. A calculation based on the following criteria:
1. In respect of all "index linked" benefits, annuity values shall be calculated based upon annual discount of 0%, and an annual escalation of 0%.
2. In respect of all un-indexed benefits, annuity values shall be calculated based upon annual discount of 4%.
3. In respect of all future medical costs, annuity calculation shall be based upon the Company's evaluation of long term medical care and rehabilitation requirements, using an annual discount of 0% and an annual escalation of 0%.
4. Where applicable, survivor's life expectancy as well as remarriage probability shall be reflected in the calculation by employing tables recommended by a mutually acceptable actuarial consultant.
B. Any other method of calculating the agreed value of one or more losses, as mutually agreed between the Company and the Reinsurer. Such calculation shall be considered the final and agreed value of all known losses subject to this Agreement and the resulting loss, if any, shall be accepted by the Company in full settlement of the Reinsurer's liability for all such losses. Notwithstanding, if the Reinsurer and the Company cannot reach a settlement by mutual agreement, then the Reinsurer and the Company shall mutually appoint an independent actuary who shall investigate, determine and capitalize the present value of any such unsettled claims under the excess layer. Cost of any independent actuary shall be shared on an equal basis by the Reinsurer and the Company. In the event the Reinsurer and the Company cannot reach an agreement on an independent actuary, each party shall appoint an actuary. The two chosen actuaries shall then select a third actuary. If either party refuses or neglects to appoint an actuary within 30 days after settlement cannot be reached, the requesting party may appoint a second actuary. If the two actuaries fail to agree on the selection of a third actuary within 30 days after their appointment, each of them shall name three individuals, of whom the other shall decline two, and ...
Commutation. A. Within sixty (60) days following twenty four (24) months after the close of any one annual period of this Contract, the Company may commute all liability for said annual period hereunder.
B. The Company shall report to the Reinsurer the commuted value of such claims for the applicable annual period, which shall be deemed to be the positive balance of:
1. Reinsurance premiums paid or payable hereunder for the applicable annual period; less
2. Expenses incurred by the Reinsurer at a rate of twenty seven point zero percent (27.0%) of the Net Written Premium for the applicable annual period hereof: less
3. Reinsurance recoveries previously made hereunder for Policies allocated to this Contract for the applicable annual period.
C. The Reinsurer shall remit payment to the Company of the commuted value (as determined above) within thirty (30) days following receipt of the Company's report. Such payment shall constitute a full and final release of all liability (known or unknown) under this Contract for the applicable annual period.
Commutation. 1 Employees who are entitled to supplementary, continued or follow-on benefit may ask the governing board to commute their benefit into a lump-sum payment in lieu of the remaining benefit duration.
Commutation. If the Beneficiary designated is the executor or administrator of the Participant or a corporation, association, partnership or trustee, any Retirement Annuity payments to which the beneficiary becomes entitled will be commuted and paid in one sum. If a Beneficiary dies after having become entitled to receive Retirement Annuity payments, any remainder of such payments will, unless otherwise provided by the Participant, be commuted and paid in one sum to the executor or administrator of the Beneficiary. A Participant may elect that any Retirement Annuity payments to which his/her Beneficiary becomes entitled will be commuted and paid in one sum; or, in the absence of such election and unless otherwise provided by the Participant, a Beneficiary who is entitled to receive the Retirement Annuity payments may elect that the remainder of such payments be commuted and paid in one sum. Any such commutation will be made at the rate of interest, compounded annually, used in computing the annuity purchase liability or the premium paid for the Retirement Annuity.
Commutation. The Company or the Reinsurers may, at any time express their desire to the other party to commute all losses applicable to this Agreement and which are still unsettled. In such event the Company and the Reinsurers shall mutually determine and evaluate such losses and the payment by the Reinsurers of their proportion of the amount so ascertained and mutually agreed to be the value of such losses shall relieve them of all further liability, in respect of this Agreement in respect of such known and/or unknown losses. If the Company and Reinsurers are unable to eventually agree upon the value of said losses, no commutation of such losses shall be made.
Commutation. 1. Not less than 36 months or more than 60 months after the end of the Contract Year, the Company shall report to the FHCF all claims and losses, both reported and unreported, for the Contract Year which are not finally settled and which may be reimbursable losses under this Contract. The Company and the SBA or their respective representatives may, by mutual agreement, determine the capitalized value of all claims and losses, both reported and unreported, resulting from Loss Occurrences commencing during the Contract Year, and the Company shall provide the SBA with a copy of a written opinion on such capitalized value by the Company’s certifying actuary. Payment by the SBA of its portion of any amount or amounts so mutually agreed and certified by the Company’s certifying actuary shall constitute a complete and final release of the SBA in respect of all claims and losses, both reported and unreported, under this Contract.
2. If agreement on capitalized value cannot be reached within 60 days after the Company reports its claims and losses to the FHCF, the Company and the SBA may mutually appoint an actuary or appraiser to investigate, determine and capitalize such claims or losses. If both parties then agree, the SBA shall pay its portion of the amount so determined to be the capitalized value of such claims or losses.
3. If the parties fail to agree, then any difference shall be settled by a panel of three actuaries, one to be chosen by each party and the third by the two so chosen. If either party does not appoint an actuary within 30 days, the other party may appoint two actuaries. If the two actuaries fail to agree on the selection of a third actuary within 30 days of their appointment, each of them shall name two, of whom the other shall decline one and the decision shall be made by drawing lots. All the actuaries shall be regularly engaged in the valuation of property claims and losses and shall be members of the Casualty Actuarial Society and of the American Academy of Actuaries. None of the actuaries shall be under the control of either party to this Contract. Each party shall submit its case to its actuary within 30 days of the appointment of the third actuary. The decision in writing of any two actuaries, when filed with the parties hereto, shall be final and binding on both parties.
4. The reasonable and customary expense of the actuaries and of the commutation (as a result of 2. and 3. above) shall be equally divided between the two parties. Sai...
Commutation. The governing in- strument must prohibit commutation (prepayment) of the term holder’s in- terest.
Commutation. A. The Reinsurer may cancel and commute this Contract at any time with 90 calendar days advance written notice by certified mail, but only in the event(s) of:
1. Payment by the Reinsurer of the overall aggregate limit; or
2. Failure by the Company to pay any amounts when due under this Contract, if such default is not cured within 30 calendar days following receipt by certified mail by the Company of notice of such default from the subscribing reinsurer.
B. At any time after expiration or termination of this Contract the Company may commute this Contract with 90 calendar days advance written notice by certified mail, but only if the Notional Experience Account balance is greater than zero.
C. As provided within the SPECIAL TERMINATION ARTICLE, upon the Company’s termination of a subscribing reinsurer’s share in the Contract upon the happening of any one of the enumerated circumstances, the Company has the option, but not the obligation, to commute this Contract with written notice.
D. Upon Commutation by the Reinsurer in accordance with paragraph A, above, or Commutation by the Company in accordance with paragraph B, above, the following shall occur:
1. The Notional Experience Account balance shall be calculated as stipulated in the NOTIONAL EXPERIENCE ACCOUNT ARTICLE, as of the date of commutation.
2. The “Commutation Settlement Amount” will be equal to the amount under paragraph D.1, above, and the Reinsurer shall remit to the Company this Commutation Settlement Amount within 5 U.S. business days following such calculation.
3. Upon receipt of the Commutation Settlement Amount, the Company shall provide the Reinsurer with a complete and final release of any further liability under this Contract, or so deemed; concurrently, the Company shall release any Letters of Credit provided by the Reinsurer under the UNAUTHORIZED REINSURANCE ARTICLE. In the event that any or all Letters of Credit have not been released within 5 business days of the receipt of the Commutation Settlement Amount, it is agreed that the Reinsurer can ▇▇▇▇ the Company at any time and the Company has to pay to the Reinsurer an annualized fee of 200 bps on the amount of any Letters of Credit not released 5 business days after the receipt of the Commutation Settlement Amount.
E. Upon Commutation by the Company in accordance with paragraph C above and the SPECIAL TERMINATION ARTICLE, the Commutation Settlement Amount shall be the greater of the amount calculated in paragraph D or the net prese...