Common use of Deficiency Reserves Clause in Contracts

Deficiency Reserves. The Company and the Reinsurer agree that the terms of this reinsurance have been determined on the mutual assumption that Reinsurer will not be required to hold any amount of U.S. "statutory deficiency reserves" for the business ceded hereunder by virtue of the assurances provided in Sections (1), (2), (3) and (4) above. Should this language prove insufficient and the Reinsurer is or may be required to establish or maintain any such deficiency reserve amounts for the business ceded hereunder by an insurance regulatory authority, upon the receipt of Reinsurer's written notice to the Company thereof, Paragraph A will be automatically amended to delete Section (2) above without any further formalities or actions. For purposes of clarity, this agreement is premised upon it not causing the Reinsurer to hold deficiency reserves. Should Section 2 of Paragraph A be deleted as provided above, the parties will make a good faith effort to revise Paragraph A of this article so that the Reinsurer will not be required to hold deficiency reserves while maintaining the spirit of the provision.